Ppac Session 1
Ppac Session 1
Ppac Session 1
MFC
Project planning : Appraisal and Control
Semester - 3
Session - 1
Dr Loveleen
Module 1
Module I: Planning of Projects
Introduction to Capital and Infrastructure
Projects, Overview and Resource Allocation
Framework,
Generation and Screening of Project Ideas,
Project Identification.
Planning of Projects
Project management is a professional
discipline combining systems, techniques
and people to achieve a business objective
within defined parameters of time, budget
and quality.
An important aspect of project management is
the building and maintaining of effective
relationships with all those involved in the project
through a participative and open communication
process.
Origin
Project management first became popular in the early
1960s, driven by businesses which realized that there
were benefits to be gained from organizing work into
separate, definable units and from co-coordinating
different kinds of skills across departments and
professions.
One of the first major uses of project management was
to handle the US space programmed, and
governments, military organizations, and the
corporate world have all since adopted the discipline.
Temporary Project
Project Parameters:
The parameters that influence a project which is generally complex in nature
are:Scope (Covers all activities, financial/human resources, end-products, target
outcomes, customers, outputs, work, etc.)
Quality (Requires satisfying product and process quality. Tools and
techniques of quality management to be used ISO standards SQC, JIT, TQM,
etc.)
Time (Time is inversely proportional to cost. If time decreases, cost increases.
Time is managed by activity scheduling).
Cost (Cost is associated with all the activities in both planning and
implementation process).
Resources (People, fiancs, physical resources, and information required to
perform project activities).
Project Management
Project management is the application of
knowledge, skills, tools, and techniques to
project
activities
to
meet
project
requirements.
Project management is accomplished
through the use of the processes such as:
initiating, planning, executing, controlling,
and closing.
Resource Sharing
Project management is required when the services of specialized
professionals, which may be in scarcity in the organization and also
expensive are required for the project. Project management techniques help
in keeping the resources fully employed, thus reducing both direct and
indirect costs, while ensuring the delivery of the needed services.
Importance of project
Set up of separate project management department depends on the
importance of project to the organization. A project should be viewed upon
as something that contributes to the ability of the organization in succeeding
in its future as well. It should be considered as an opportunity to achieve a
target that is yet another step towards its goals achieving its mission.
Project size
Project size is a relative factor but it can be said that
when an organization requires substantiallymore
resources than it normally uses, project management
can be gainfully used.
Uniqueness of project
Lack of familiarity or precedent to follow usually creates
insecurity and disagreement, particularly among those at
the middle and lower levels of management.
Market Volatility
Organizations performing projects will usually divide each project into several
project phases to improve management control and provide for links to the
ongoing operations of the performing organization. Collectively, the project
phases are known as the project life cycle.
Each project phase is marked by completion of one or more deliverables. A
deliverable is a tangible, verifiable work product such as a feasibility study, a
detail design, or a working prototype. The deliverables, and hence the phases,
are part of a generally sequential logic designed to ensure proper definition of
the product of the project.
The conclusion of a project phase is generally marked by a review of both key
deliverables and project performance to date, to a) determine if the project
should continue into its next phase and b) detect and correct errors cost
effectively. These phase-end reviews are often called phase exits, stage
gates, or kill points.
Risk in Projects
A risk response plan can help the project. It identifies the risks that
might affect the project, determines their effect on the project and
includes agreed-upon responses for each risk.
Environment Analysis:
Various techniques are used to analyze the various
components or factors in the environment.
Pest and Porters five forces model is the best to analyze
environment.
PEST Analysis:
Environment is divided into four components;
1. Political factors
2. Economic factor
3. Socio-cultural factor
4. Technological factor
Strategic capabilities
analysis:
1. Resource Audit: The firm considers what all the resources available to it
are. Classifying wherever possible into those that are readily available and
those that can be obtained when required. Both quality and quantity being
consider.
2. Value Chain Analysis: The value chain is a systematic approach to
examining the development of competitive advantage. It was created by M.
E. Porter in his book, Competitive Advantage (1980). The chain consists of
a series of activities that create and build value. They culminate in the total
value delivered by an organization. The 'margin depicted in the diagram is
the same as added value. The organization is split into 'primary activities'
and 'support activities.'
Primary Activities
Inbound Logistics
Here goods are received from a company's suppliers. They are stored until they are needed on
the production/assembly line. Goods are moved around the organisation.
Operations
This is where goods are manufactured or assembled. Individual operations could include room
service in a hotel, packing of books/videos/games by an online retailer, or the final tune for a
new car's engine.
Outbound Logistics
The goods are now finished, and they need to be sent along the supply chain to wholesalers,
retailers or the final consumer.
Marketing and Sales
In true customer orientated fashion, at this stage the organisation prepares the offering to meet
the needs of targeted customers. This area focuses strongly upon marketing communications
and the promotions mix.
Service
This includes all areas of service such as installation, after-sales service, complaints handling,
training and so on.
Support Activities
Procurement
This function is responsible for all purchasing of goods, services and materials. The aim is to secure
the lowest possible price for purchases of the highest possible quality. They will be responsible for
outsourcing (components or operations that would normally be done in-house are done by other
organisations), and ePurchasing (using IT and web-based technologies to achieve procurement
aims).
Technology Development
Technology is an important source of competitive advantage. Companies need to innovate to reduce
costs and to protect and sustain competitive advantage. This could include production technology,
Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and
many other technological developments.
Human Resource Management (HRM)
Employees are an expensive and vital resource. An organisation would manage recruitment and s
election, training and development, and rewards and remuneration. The mission and objectives of the
organisation would be driving force behind the HRM strategy.
Firm Infrastructure
This activity includes and is driven by corporate or strategic planning. It includes the Management
Information System (MIS), and other mechanisms for planning and control such as the accounting
department.
Portfolio Analysis
The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston
Matrix, Boston Consulting Group analysis) is a chart that had been created
by Bruce Henderson for the Boston Consulting Group in 1970 to help
corporations with analyzing their business units or product lines. This helps
the company allocate resources and is used as an analytical tool in brand
marketing, product management, strategic management, and portfolio
analysis.
Cash cows are units with high market share in a slow-growing industry.
These units typically generate cash in excess of the amount of cash needed
to maintain the business.
Dogs, or more charitably called pets, are units with low market share in a
mature, slow growing industry. These units typically "break even",
generating barely enough cash to maintain the business's market share.
Individual Creativity:
1. Attribute Listing (Listing of attributes attached to the final products and
designing the products based on these attributes).
2. Checklist (Checklist of questions to be prepared and trying to find solutions
to the same).
3. Black Box (Available and required inputs as well as desired outputs are listed
and an attempt is made to envision how the outputs are possible from the
inputs).
4. Directed Dreaming (The problem solver tries to go to sleep while thinking of
the problems, with the hope that the subconscious will through up a solution).
Group Creativity:
1. Brainstorming (A group sitting together and go on generating
solutions to the problems on hand, welcoming improvement of ideas and
synthesizing two or more ideas).
2. Delphi (Estimates are called from a panel of experts, who are not
allowed to meet and discuss or debate each others opinions. Individual
experts are asked to give their opinions independently. A panel of
coordinators reconciles after second round of opinions and consensus).
3. Nominal Group Technique (It is a structured technique administered
by a coordinator based on the 5 steps: Silent idea generation, Roundrobin presentation, Idea classification, Voting and ranking, and
Discussion of results. The ideas generated are ranked and the best is
chosen
Project Identification
The key feature of this activity is recognizing that identifying candidate
projects is something that an organization should do on a regular basis,
not just once each year.
Process Description
Project Identification is a repeatable process for documenting,
validating, ranking and approving candidate projects within an
organization.
Process Purpose
Due to the changing financial conditions within the total organization, it
is necessary to establish a stable process for approving projects for
initiation.
Process Flow
CERTIFY BUSINESS CASE
1. Document Business Case Evaluate all Candidate Project Information that has
been provided by the requesting organization or that has been gathered by a
technical analyst. If additional information is needed, issue an Information
Request to the requester. Format this information into a Business Case. Assign the
Candidate Project a new Project Code.
2. Review Business Case The Business Case will be examined by a screening body
with the corporate authority to accept or reject a Candidate Project. When a
Business Case is accepted, the Candidate Project is captured in a repository for
ranking and selection. If additional information is required on a Business Case,
note it as pending and issue an Information Request to the requester. If a
Business Case is rejected, send the information to the requester with an
explanation for the rejection. Remain this information in a repository.
3. Update Business Case When additional information is received on a Candidate
Project, obtain the pending Business Case from the repository and revise the data.
This Business Case should now be reconsidered by process.
Approve Project
1. Select Project Based on the information provided by the ranking process, the Core
Process Owners of the business will authorize a specific project for initiation. This project
should now be removed as a Candidate Project.
2. Assign Resources Even though a project has been selected, it does not become an
active project until resources are approved and deployed against it. It is critical to
remember that when resources are assigned from the Skills Inventory, this deployment
has a proportionate impact on the resources availability. The organization must be very
careful to not over-commit limited resources in an attempt to look more productive.
Questions
1. Which of the following statement is true?
a. A project is an ad hoc activity of the firm.
b. A project should be viewed as the main activity of the
firm.
c. A project should be viewed as something that contributes
to the ability of the organization
d. A project is a thing which contributes to the ability of the
project manager.
e. None of these