Project Management

Project Management
1 Introduction Objectives This module introduces the main concepts and philosophies of project management. These areas are then explored in greater depth, and additional ideas introduced, in the remaining modules. By the time you have finished this module you should be familiar with: the concept of project management; how project management differs from traditional management and the different organisation structures employed; the potential benefits and challenges of using a project management approach; the history and origins of project management. A project is a one-off process with a single definable end-result or product. Some examples include building a house, introducing new human resources practices, and developing new IT systems. It is difficult to provide an example of a typical project because project management techniques are now applied so widely that listing their possible applications would take a volume as large as this text! In addition, new uses are being found regularly. One reason for this growth in popularity is that project management is a very practical tool when used for change management purposes. The ever-increasing rate of change in the environments in which organisations operate requires them to transform themselves regularly if they are to survive and have the possibility of prosperity. Hence the continued growth in interest in project management. Much of project management is concerned with planning and controlling the three key variables associated with projects. These variables are time, cost, and quality. They are interrelated and a change in any single variable frequently has a significant impact on the others. Since project management is concerned with managing change, within the constraints of the three key variables of time, cost and quality, organisational structures for managing projects can be expected to differ from traditional organisational structures, which were developed to help managers manage in more stable environments. Organisation structures for managing projects are examined and contrasted with more traditional management organisation structures. Projects have a finite life cycle, i.e. definite starting and completion points, and it follows that any project team or organisation structure set up to manage a project will have a finite life cycle. Project management is a truly unique international and multidisciplinary profession. This characteristic has led to the development of international generic standards and is managed by a new kind of professional who operates in a different way from traditional functional managers. After studying this module, you should be able to define those main differences and understand their advantages and disadvantages compared with traditional approaches. The module also gives a brief review of how project management evolved from more traditional management structures in response to changing industrial and economic conditions. A major influence has been the tendency for projects to become larger and more complex. As a result, the penalties for failure and the rewards for success have changed significantly.
1.1 What Is a Project? 1.2 What Is Project Management? 1.3 Characteristics of Project Management 1.4 Potential Benefits and Challenges of Project Management 1.5 The History of Project Management 1.6 Project Management Today
2008 Edinburgh Business School
Summary
What is a Project?
Along with mass production and batch production, a project is one type of standard production system. Projects are characterised by having one-off and unique objectives and characteristics.
What is Project Management?

Project management involves devising, managing and controlling the process required to achieve safe completion of a project on time, within cost and to the required standards of quality. Traditional planning and control techniques consider time, cost and quality planning and control, but project management seeks to consider and evaluate each one concurrently. Generally, as industry has evolved, it has become more complex. This has resulted in more and more complex projects, which created a need for more effective ways to manage them. The project manager's role has evolved to be able to view a project's time, cost and quality variables within the context of the whole operating system. In most cases, the objective of the project team is to meet the success criteria for the project and then to disband. Few other aspects of enterprises have such requirements. Project management operates largely within existing organisations. Projects operating within functional structures offer good flexibility in the use of people. Staff are primarily employed to perform a functional task, but are temporarily assigned to a project that requires their particular expertise. In addition, individual experts can be used effectively on a number of projects. If there is a broad base of expertise within a functional department, it can be employed on different projects with relative ease. The within function structure also has the advantage that specialist knowledge can be easily shared within the function and utilised effectively by the project team. Continuity of expertise, procedures and administration is maintained within the function, despite any personnel changes that might occur. The project manager heads the project organisation and operates independently of the normal chain of command. The project manager is the single focal point for bringing together all efforts in pursuit of the project objectives. The project manager is responsible for integrating people from different functional disciplines who are working on the project. The project manager negotiates directly with functional managers for support. Functional managers usually remain responsible for individual work tasks and personnel within the project, while the project manager is responsible for integrating and overseeing the start and completion of activities. The project focuses on delivering a particular product or service at a certain time and cost, and to a particular quality standard. In contrast, functional units must maintain an ongoing pool of resources to support their organisation's goals. As a result, conflict may occur between functional and project interests. Decision making, accountability, outcomes and rewards are shared among members of the project team and the functional units. Though the project organisation is temporary, the functional units from which it is formed may be permanent. When a project ends, the project organisation is disbanded and people return to their functional units or are assigned to new projects. Projects can originate at different places in the organisation. Product development and related projects tend to originate from marketing, whereas technology applications originate in research and development, and so on. Project management sets into motion numerous other support functions, such as personnel
evaluation, accounting, and information systems. Given the temporary nature of a project, an organisation working on projects must be flexible so that it can alter structure and resources to meet the shifting requirements of different projects. In a project system, the product is a one-off non-repetitive element. As a result of this, there is no learning curve and high levels of complex management planning and control are required. The concept of project management has evolved in order to plan, co-ordinate and control the many complex and often diverse activities involved in modern-day commercial projects. Project management is principally the general management of an organisation within an organisation. Good project management requires the effective application of all the general manager's skills to achieve the projects goals. Project management employs the whole range of functional management areas, and skills are often required in each of these areas in order to secure project success. Project teams are set up to undertake projects of every type. They may deal with single projects where all resources are dedicated to achieving the objective of that project, or they may be responsible for multiple projects where the resources have to be managed across projects. Projects can be external where they are carried out for a client outside the organisation. These are normally defined by a binding contract and are usually a main revenue source for the organisation. Projects can be internal where they are generally set up to improve the operations of the organisation and the client would be an internal client.
Characteristics of Project Management

Project management is unique in that it uses both international and specific industry benchmarks. Project management is also unique in that it represents an entirely new profession that gives professional advice in relation to the full life cycle of a project, from inception to completion. Project management assumes responsibility for optimising time, cost and quality performance for a project. Under the project management philosophy, it is not acceptable to consider any of these variables in isolation, because each of them has a bearing on the eventual performance of the others. Project management is concerned with ensuring that the project success criteria are met. However, project management recognises that there is more than one success criterion. There is no point in completing on time and on cost if the quality of the finished product is lower than specified by the client. For each of the variables of time, cost and quality, there should be a minimum acceptable condition. Project management is concerned with meeting or exceeding these minimum criteria in all cases. Project management often involves using fully trained project management professionals to run projects, rather than designers or others acting as managers. The modern concept of project management includes the evolution of the professional project manager.
Potential Benefits and Challenges of Project Management

Some of the obvious benefits of using a project management approach are that it makes more efficient use of company resources, it offers reduced disruption of routine operational activities, and it offers greater motivation potential for people working in projects. Project management also offers greater visibility of strategies and concepts within the organisation as a whole, the promotion of healthy competition between organisation projects, and full life cycle cost consideration at each stage. Project management can provide clearer management, individual accountability and responsibility, a shorter time from development to market, clearer control of expenditure, and better use of resources. Project management can also provide clearer communication on progress and input to strategic plans, improved control and security of classified and sensitive information, and improved team building and team spirit. There are also challenges to using project management as an approach. In order for a project
management system to work, key staff are taken from functional units for a proportion of their time. If not properly controlled, this could damage the performance of the functional unit. Projects will inevitably compete, at least to some extent, for limited and finite organisational resources. Functional managers tend to be less visible and flexible than project managers. Increased staff flexibility is also required. Staff have to be re-deployed when the project terminates. There may be problems with this if the functional staff have been working on the project to a large extent, and/or for a significant amount of time.
The History of Project Management

Modern project management has evolved from the basic principles established during the development of the Los Alamos project in the USA in 1944. The atomic bomb project was the first really complex, high-technology project operated by mankind, and the need for a new management approach was identified. By the mid 1950s, the size and complexity of many projects had increased to such an extent that the well developed management techniques of the first half of the twentieth century were unable to cope. The US defence industry was finding it difficult to control the costs and time schedules of its largescale weapons systems projects, and some very large cost and time overruns occurred. The solution was to further develop the Los Alamos principles into what we now call project management. The discipline was developed and led to the formation of the Project Management Institute in the USA and the Association for Project Management (APM) in the UK in the 1960s. Throughout the 1960s, additional methods emerged to help project managers; but the next real milestone was the development of cheap and reliable computers in the early 1980s. The APM produced its Body of Knowledge in 1988, and assisted greatly in the preparation of BS6079 in 1996 and ISO10006 in 1997. These reference works document British and European standards for project management practice and in many ways mark the frontiers of the development of the discipline as a profession today.
Project Management Today

Project management is now used by numerous different disciplines, and has evolved into an integral management component for a wide range of industries. Project managers are increasingly being accepted as fundamental contributors to the operational process. Project management today has evolved into an internationally important discipline. As a profession, it is growing rapidly in many countries. 2 Individual and Team Issues Objectives By the time you have completed this module you will be familiar with: the concept of what a project manager is; the typical position and role of the project manager; the essential project management skills; the concept of what a project team is and how it works; project team staffing and profiling; project team life cycles and evolution; project team communication and motivation; project team stress and conflict.
2.1 Introduction
2.2 The Project Manager 2.3 The Project Team 2.4 Project Team Staffing Profile and Operation 2.5 Project Team Evolution 2.6 Project Team Motivation 2.7 Project Team Communications 2.8 Project Team Stress 2.9 Conflict Identification and Resolution
Summary
The Project Manager

There is no one single model for a project manager. Different projects require different approaches. Project managers tend to operate across the usual vertical functional boundaries within organisations. Their projects tend to be of relatively short life span and the position of the project manager is always temporary. The temporary nature of a project, and the cross-functional nature of the project administration, tend to limit the project manager's authority. The official authority of the project manager is often lower than the project requires. Frequently, there is a mismatch between the project manager's level of responsibility and level of authority. The project manager needs to have a good range of managerial, professional and technical skills. These skills must be applied within the overall success and failure criteria for the project. These criteria usually revolve around time, cost, performance and safety limits. Project managers work across interfaces. Project managers have to be good at interface management. Project managers are usually either converted functional managers or, increasingly, specially trained professionals. The primary requirements for effective project management are planning, authorising, organising, controlling, directing, team building, leading, and the provision of life-cycle leadership. Project management involves numerous applications for the planning of a project. Technical planning is required for project planning and control (see Module PR05), cost planning and control (see Module PR06) and quality management (see Module PR07). In addition, the project manager has a responsibility for planning individual and team authority and communication relationships. Project management is a special condition in terms of organisational authority. The project manager is in a unique position and the project manager has to operate within the constraints of the project management chair (see Module PR0202). Project managers and functional managers might have completely different views on how their organisation works and should be structured. Different approaches can be considered from viewpoints arising from empirical, behavioural, decision and systems theories. Project managers must be able to control. This skill involves targeting, measuring, evaluating and correcting. Most forms of controlling used in project management are based on historical variance analysis and forecasting the future. Project managers have to be good at directing people. This function involves achieving organisational goals through the use of organisational and project resources. The function also involves directing other people in order to ensure that their actions are appropriate to achieving the overall aims and objectives of the organisation. Team building in a project management context is the process of taking a series of individuals from different functional specialisations and welding them together into a unified project team. The process involves establishing commitment, developing team spirit, obtaining necessary resources, establishing success and failure criteria, securing senior management support, developing good
leadership and communications, and establishing reward and conflict controls. Project managers have to be good leaders. Leadership skill requirements vary from project to project. Classical leadership traits are decision-making ability, problem-solving ability, an ability to integrate new members, interpersonal skills, an ability to handle conflict, communication skills, interface management skills and factor balancing skills. Project management leadership is involved with the life cyle of the project. The leadership demands and style change through the course of the project life cycle. The general trend of leadership evolution from high task/low relationship to low task/low relationship is a characteristic of the development of any project team.
Project Team Processes

Many projects teams operate as individual entities within functional departments. Larger ones operate across functional departments. Some operate externally. In most project-management applications, project teams are set up within existing functional organisational groups and therefore lie somewhere between the purely functional and purely project extremes. Although projects carried out in this environment may be strategically important to the organisation, they are highly unlikely to be the reason for its existence. The projects are likely to be developmental in nature and would tend to be projects to improve systems, procedures, methods or products and would tend to be internal projects for the benefit of the organisation's effectiveness. Project teams tend to be unusual in that they are often highly multidisciplinary. The project manager assembles specialists from a number of different functional groups and then welds them into a project team. Project teams tend to exhibit pronounced sentience, interdependence and differentiation. The project team is subject to individual and group behavioural variations. Individuals behave and function differently when they are on their own than when they are acting as part of a team. The strongest factors in determining a multidisciplinary group's performance are heterogeneity and cohesion.
Project Team Staffing Profile and Operation

Most frequently, the project manager recruits people from different functional teams within the organisation (see Module PR04). The project manager does this by assembling some kind of estimated schedule of resources required and then seeks senior management approval to implement it. Simultaneously, the project manager has to negotiate with the various functional managers in order to secure the people desired for the team. The team requires a balance of technical and management skills, with the appropriate blend of individual specialisations. The project team is the group of people contributing to meet the objectives of the project. Some team members for example, specialists whose expertise is only required for a particular activity will have very small parts to play in the project and probably will not see that they are a part of the close body of people who have more active and longer-lasting roles. The senior manager on the project team acts like a managing director, financial director and operations director of the business that is the project. Although knowledge of the technology underpinning the project is vital in performing each of these roles, the primary function in each position is a project management one. The project management team members should cover the main areas of the project in terms of skills and expertise, or at the very least should recognise and explicitly state any gaps or weaknesses. This identified shortfall will draw special attention to that area and is important because any aspect of the project without a competent project management team member supervising and supporting it is in danger of running out of control without the fact being recognised.
Project Team Evolution

All projects have a life cycle, including a definite start and completion point. The life cycle represents the phases of development and evolution through which the project passes. There are four generally recognised stages of group development. These are summarised by Tuckman as forming, storming, norming and performing. Groupthink is one possible stage of project team evolution. It occurs as a result of the normal performing process. Groupthink tends to occur in highly cohesive and motivated groups and can lead to undesirable behaviours that can compromise the project's chances of success on occasions.
Project Team Motivation

Project managers are responsible for developing high motivation levels within their teams. There are a wide range of models and theories that can be used to guide them in this process. McGregor's Theory X and Theory Y model offers one approach to motivation theory. Theory X states that operatives are basically lazy and unmotivated, disliking work and avoiding it if at all possible. Theory Y states that operatives are willing to work and complete the job without close supervision; they want to do well at their jobs, they find work stimulating and satisfying, and they want to improve themselves and generate greater self-respect. Problems occur when one manager regards a member of staff as a Theory X employee and another manager regards the same person as a Theory Y employee. Maslow's hierarchy of needs is an alternative viewpoint. This theory suggests there are different levels of need depending on the relative position of the individual within the needs hierarchy. The different levels of needs are termed and physiology, safety, belongingness, esteem and selfactualisation. Equity theory is another approach to motivation theory. It is based on the perceptions of individuals in relation to what they do and how they are rewarded versus how other employees or groups are treated. Any perception of unfair personal reward generates a feeling of inequity. Expectancy theory is another approach, based on the idea that motivation is related to personal goals and objectives. Expectancy theory allows project managers to motivate project team members, even where there is no immediate or direct financial incentive from the project itself. Individual employees can be motivated provided that the successful completion of the project can in some way be linked to achieving the personal goals of the individual.
Project Team Communications

Successful projects are often characterised by good communication and high-quality information sharing and exchange. Good communication implies a system for effectively integrating the efforts of project participants. Inadequate project communications can be a significant factor in project failure. Problems often stem from poor-quality information, inaccuracies, out-of-date information, or from information that is ineffectively collected or distributed. There are four principal categories of communications: formal, informal, internal and external. Formal lines of communication are set up with the purpose of ensuring that project stakeholders get whatever information they need, delivered in a suitable format, when and where they need it, and that there is a means of providing a reciprocal service by delivering accurate and timely information into the system as required. Informal communications systems are much less easy to manage and control. They are nevertheless essential to the project team from a social and integrative perspective. The informal communication system in most projects and organisations tends to revolve around the grapevine and whilst it is largely impossible to control the grapevine, it is possible to influence it. Good internal communications rely on team members' willingness to openly communicate and disseminate information, particularly that relating to problem areas and issues. Good external communication requires absolute control over the dissemination of information.
Project Team Stress

Stress is more than just an unpleasant aspect of a demanding work environment. Stress leads to real losses in productivity and efficiency. Employees who are subject to high levels of stress take more time off work and are less efficient than employees who are subjected to tolerable levels of stress. Project team stress can originate from numerous sources. The three main sources are personal stress, work stress and environmental stress. Personal stress originates from within the project team member concerned. Work stresses originate from the work environment. Environmental stresses originate from outside both the individual and the workplace.
Conflict Identification and Resolution

The greater the heterogeneity or multidisciplinary nature of the team, the greater the potential for project team conflict. This tendency is almost certainly because the greater the range of backgrounds and opinions, the greater the probability of differences of opinion arising. The lower the project manager's degree of power and authority within the functional organisation, the greater the degree of potential for project team conflict. The lower the degree of specified and quantifiable objectives, the greater the degree of potential project team conflict. The lower the level of individual communication and accountability within the project team, the higher the degree of potential project team conflict. Conflict tends to be at its greatest during the highly active phases of a project and is lower at both the start and the end. Other than this, it is difficult to generalise on the nature of conflict within the project environment. 3 Project Risk Management Objectives By the time you have finished this module, you should understand: what risk is and why it is important; the difference between certainty, risk and uncertainty; how decisions can be made under each condition; the concept of risk management; the basic components of a risk management system; the basics of contract theory and how contracts are used to transfer risk.
3.1 Introduction 3.2 Background to Risk 3.3 Risk Handling 3.4 Types of Risk 3.5 Risk Conditions and Decision making 3.6 The Concept of Risk Management 3.7 Risk, Contracts and Procurement
Summary
The Concept of Risk

Risk is all around us and plays a part in virtually everything that we do.
Risk management originated in the US and the UK during the design of the first nuclear power stations. Risk management has to consider both individual risks and also the overall collective effect of other risks. The net impact of individual and collective risks can be quite different. Risk is a measure of the probability and consequence of not achieving a specific project goal. It therefore depends both on the likelihood (probability) of an event occurring and on the consequences (impact) of that event should it occur. Risk is a function of the probability of an event occurring and the consequences of the event if it does happen. . Risk is also a function of the level of hazard represented by an event and the degree of safeguard that is put in place to counter it. . An organisation's sensitivity to risk is a function of three elements. These are: the degree of exposure (or vulnerability) to particular risk impacts. the significance (or severity) of the enterprise's exposures to the realisation of different events. the firm's ability to manage the implications of those different possible events, should they occur. Sensitivity is therefore a measure of likelihood and impact, modified to some extent by the ability of the organisation to manage these variables. The use of risks to create value is changing. The profile of risk management and the risks defined by organisations in decision making are also changing. This is an uncertain world. Very few things are certain apart from taxes and death. In such an environment, all investments must be subject to some degree of uncertainty and therefore risk. Risk management is a key element of the management of investment and the generation of return. Risk and opportunity go hand in hand. Everybody is on the lookout for a good opportunity. Opportunities exist within an uncertain world and are therefore subject to uncertainty and risk. The relevant risks have to be effectively managed if opportunities are to be exploited. Risk intimidates competitors. It prevents them from taking advantage of market opportunities that exhibit hazard above a certain level. Risk and risk management should not be seen as purely static. Risk management is not just about identifying potential negative events and then taking precautions against them. It is about looking at the complex world of business and analysing the myriad opportunities that present themselves and then making an informed decision on which are the best ones to commit to. In order to succeed, companies have to take risks. They have to commit scarce and expensive resources to uncertain business activities. The more research and analysis that can be put into the risks that underlie those activities the better. Risk is therefore both a good thing and a bad thing. It is the driving force behind innovation and enterprise, but it is also a threat if not properly evaluated and managed. It is particularly significant in a project context, where the work is typically complex and does not form part of a repetitive cycle.
The Human Cognitive Process

Decision making and risk are fundamental elements of the human cognitive process. People make decisions in relation to perceived rewards and risk; the decision-making process is largely dependent upon perceived rewards and risks. Perception of risk varies from person to person and in relation to the potential effects of the risk event. Most aspects of the human cognitive process make a subjective evaluation of risk. This ability is a basic survival tool and has been essential for human development. Pattern recognition is where the brain takes incoming information and stores it temporarily at a superficial level, and then compares that information to previously stored information in order to make an assessment of what the new information represents. Bounded rationality is based on the philosophy that a being will generally opt for rational behaviour within constraints.
The relationship between possible actions and acceptable outcomes determines what actions are to be considered as part of the decision-making process. Possible actions are subject to the constraints of acceptable outcomes, and satisfactory outcomes are not necessarily optimal outcomes. Prediction momentum allows forward projections based on current events and past experience to be made. Any forecasting technique is only as accurate as the data that are used in developing it and operating it. The primary determinants of prediction model development and application are time scale, cost of production, and lack of bias about future events. Intuition can be both individual and organisational. Companies store and use collective experience in much the same way as individuals do.
Risk Handling
Risk control is particularly important in monitoring the evolution of risks. Risks change in terms of probability and impact over time; it is imperative that any such evolutions are monitored and controlled in modern business.
Types of Risk
Market risk is dynamic. It is concerned with both positive and negative values, or potential gains and losses. Static risk considers losses only. It looks at the potential losses that could occur and seeks to implement safeguards and protection in order to minimise the extent of loss. External risk originates and operates outside the organisation. Typically, the organisation has little or no control over external risk. Internal risks originate from within the organisation; at least in theory, the company should have some control over them. Predictable risks are known unknown risks, such as changes in interest rates during times of fluctuations in the economy. Unpredictable risks are the unknown unknowns such as the collapse of a major bank. These are unforeseeable.
Risk Conditions and Decision Making

In general terms, there are three possible circumstances under which decisions can be made. These are conditions of certainty, conditions of risk and conditions of uncertainty. Decision making under conditions of certainty implies that the decision maker knows with 100 per cent accuracy what the outcome will be. In other words, all the necessary decision-making data and information are available to assist the decision maker in making the right decision. There will be one dominant strategy or risk that will produce larger gains or smaller losses than any other risk, for all states of nature. There are no probabilities assigned to each state of nature (equal likelihood of occurrence). Decision making under conditions of risk implies that the level of risk can be assessed and quantified in some way. The difference between conditions of uncertainty and conditions of risk is that under risk there are assigned probabilities. These relate to the known unknowns. Under conditions of uncertainty, it is not possible to predict what state of nature will apply. There are several uncertainty criteria that can be considered. These are Hurwicz, Wald, Savage and Laplace. The Hurwicz criterion is sometimes referred to as the maximax criterion. The decision maker is always optimistic and seeks to maximise profits by an all-or-nothing approach. The decision maker is not concerned with how much he or she can afford to lose.
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The Wald criterion is sometimes referred to as the maximin criterion. The decision maker is pessimistic and seeks to minimise losses. The decision maker is concerned with how much he or she can afford to lose. He or she will consider only the minimum profits (not losses); losses are not considered to be an option. The Savage criterion is sometimes referred to as the minimax criterion. The decision maker is a bad loser. He or she therefore attempts to minimise the maximum regret. The maximum regret is the largest regret for each strategy, and the largest regret is the greatest difference within a state of nature column in the pay-off matrix. The Laplace criterion attempts to convert decision making under uncertainty into decision making under risk.
The Concept of Risk Management

Risk can be a good thing. Without risk there is no reward, and risk breeds innovation. Risk is therefore to be encouraged within an organisation, but it is also dangerous and therefore it has to be managed. A risk management system aims to identify the primary risks that an organisation is exposed to, so that an informed assessment and proper decisions can be made to safeguard the organisation. Most Risk Management systems contain five distinct areas. risk identification; risk classification; risk analysis; risk attitude; risk response. Risk sources are often classified in terms of objective and subjective sources. Objective sources use the sum total of past experience of past projects in relation to the current project. This source is sometimes referred to as experience. Subjective sources use the sum total of current knowledge based on current experience. Estimates of current performance are made based on optimistic, likely and pessimistic estimates, relevant to current estimates. Risk identification often makes use of brainstorming techniques. Most work on classifying risk is linked (at least in part) to so-called portfolio theory. Risk can be primarily classified in terms of: risk type; risk extent; risk impact. Once the risks have been identified and classified, they have then to be analysed. Risk analysis is based on the identification of all feasible options and data relating to the various risks, and to the analysis of the various outcomes of any decision. Most risk analysis approaches involve the identification of risk drivers. The risk drivers are all the factors that influence the impact and probability of the identified risk. The process of risk mapping is sometimes referred to as risk profiling or even risk footprinting. It is basically a process for showing the relationship between risk probability and impact for a range of given risks, as a function of time. A basic risk map has four quadrants; it is relatively easy to expand this to more sectors. Quadrant 1 (red zone: high impact/high probability) represents the dangerous risks. No business can survive accepting these risks at this critical level over the long term. They have to be addressed at once and immediate action has to be taken. They are strategically important and appropriate action is immediately required. Quadrant 2 (upper yellow zone: high impact/low probability) represents risks that are not as crucial as those in the red zone. However, they require close attention as they include the severe effects of extraordinary events.
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Quadrant 3 (lower yellow zone: low impact/high probability) represents risks that often related to day-to-day operations and compliance issues. They are the unmanaged hurricanes. Quadrant 4 (green zone: low impact/low probability) represents risks that are not of sufficient stature to allocate specific resources. They are generally insignificant and are acceptable at their present level. The attitude of the risk taker is obviously an element in risk management. Much risk evaluation is subjective and therefore the perceived level or risk involved with a course of action depends on the attitude of the risk taker. Different types of people and even different professions characteristically exhibit different standard risk-attitude characteristics. Risk response basically centres on risk distribution. Obvious risk responses include: risk retention; risk reduction; risk transfer; risk avoidance; seek additional information about the risk. Ignoring the risk is obviously itself a high-risk strategy. Informed risk retention is another consideration. This is most suited to risks that are characterised by small and repetitive losses. Risk may be reduced by a number of means. It may be possible to engineer risk out of the equation. In addition, risk may be reduced by training and development, or by redefining the aims and objectives of the project. Risk transfer involves transferring the risk to others. There are numerous ways in which this can be done. Liability could be transferred through contractual clauses or through negotiation. Probably the most common way of transferring risk is through an insurance contract. Not all risks can be transferred, and there may be some risks where it is not economical to do so. Risk avoidance means removing the risk in all forms from the project. Risk avoidance is synonymous with refusal to accept risks. It is normally associated with pre-contract negotiations. Risk may sometimes be avoided or reduced by seeking additional decision-relevant information. Some uncertainty is caused by a lack of relevant information; and the level of perceived risk may be reduced if more information is made available.
Risk, Contracts and Procurement

A contract is a classic way of managing risk. It is simply a formal agreement between two or more parties. It records the rights and obligations of each party to the contract. A contract is therefore a tool for risk transfer and mitigation. A contract also allows risk to be controlled. In addition, it provides guidance for each party in the event of a dispute or conflict. In order for a contract to exist there must be: offer and acceptance (mutual agreement); consideration i.e. some form of payment (depending on the legal system); capacity; intention to create legal relations; communication. Alternatives to performance include the following: breach; frustration; rescission; rectification; illegality; voider;
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termination/determination. If variations occur, or if the project is delayed or changed for other reasons, the parties to the contract might have recourse to seek reimbursement from the party that has caused the delay or change. This is usually done through the assembly and submission of a direct claim. If this is disputed, the party might seek recourse through litigation, in which case the claim would be converted into a claim for damages. Most standard forms of contract list items that are acceptable as the basis for a contractor claim. These are items that the contractor has no control over and therefore have to be classified as client risk. Typical examples of client risk include: failure to provide information within a reasonable time of the contractor requesting it; late instructions; errors or omissions in the contract documents; delays caused by nominated subcontractors; delays caused by client consultants; changes in statute; non-availability of labour; civil commotion and disruption; declaration of war and/or war damage; exceptionally adverse weather (where appropriate); determination of contract by contractor. 4 Project Management Organisational Structures and Standards Objectives This section discusses the various organisational structures that may be appropriate for organisations that are using project management. Organisations can be structured in many different ways, and project management structures can take numerous forms and can exist within or outside existing organisational structures. The organisational structure that is most appropriate for a given scenario depends on a range of factors; there may be no one specific organisational design that is most appropriate for the demands of a given application. These factors include project size, team size, production system and internal or external status. Project management structures and operational systems are also heavily influenced by standards. Project management as a global profession is regulated by these standards; they act as links or gateways into corresponding professional levels within other professional associations that have project management specialisations. Project management standards operate at a number of levels, from global to national to sector and even to company-specific. By the time you have finished this module, you should be familiar with the following: the concept of project management organisational structures; the difference between internal and external systems; the organisational links that bind these systems together; the Association for Project Management Body of Knowledge and BS6079; the concept of the BS6079 Generic or Strategic Project Plan (SPP); the way in which these standards combine to establish operational procedures.
4.1 Introduction 4.2 Organisational Theory and Structures 4.3 Examples of Organisational Structures 4.4 Project Management Standards
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Summary
Organisational Theory and Structures

The design of the organisational structure is important because the most important single element in making a project a success is the people that work in the project team. In most cases, people make projects succeed or fail. Most organisations naturally tend to split themselves up into functional units. Each functional unit has a functional specialisation and there is often relatively little communication between the functional units. Organisations tend to have authority levels. These run horizontally through the system and identify power and status bands. Functional boundaries run vertically. Authority boundaries run horizontally. The end result is a series of operational islands that work relatively independently. Functional systems offer good flexibility in the use of people. Staff are primarily employed to perform a functional job but may be temporarily assigned to a project that requires their particular expertise. Functional systems allow individual experts to be effectively used on a number of projects. If there is a broad base of expertise within a functional department, they can be employed on different projects with relative ease. Functional systems allow specialist knowledge to be easily shared within the function and effectively utilised by the project team. This assists in the development of continuity in the sense that expertise, procedures and administration are maintained within the function despite any personnel changes that may occur. The function provides the most secure career path for an individual. Whilst projects may generate a degree of satisfaction, the functional department probably offers more prospect of promotion. The function will tend to have more power than the project. The department will need to continue to operate as normal and any individual assigned to a project will probably be an important part of the department's operations. A functional department tends to be process-oriented rather than goal-oriented, which a project must be in order to be successful. People working within this type of structure may find it difficult to adapt to the needs of the project environment. In functional systems, full project responsibility can be difficult to assign, particularly in crossfunctional projects, and is therefore often avoided. In functional systems, there is a tendency to sub-optimise the project. Project issues directly within the interest of the functional discipline would tend to be dealt with much more diligently than those from other areas. Project management offers a solution by forming horizontal project teams that run through the operational islands. Project systems can operate as pure projects within a functional organisation. A pure project would comprise a group of specialists who were drawn from functional units but allocated sole (as opposed to shared) responsibility for working on the project. Pure project systems may be a satellite of a parent that has been set up specifically to deliver projects and could be linked to the parent company by a reporting system. Project organisations often have total freedom within the limits of final accountability; others have functional support assigned to them by their parent company. In pure project systems, the project manager not only has full authority over the project but has a dedicated project team working under, and reporting only, to him or her. In effect, the project manager is the managing director of the business that is the project. In pure project systems, the project team members report only to the project manager. They are not responsible to a functional department. Pure project systems tend to have shorter and clearer communication linkages as there is no
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functional structure to navigate. The project manager reports directly to someone in the organisation's senior management. Pure project systems can be particularly effective when there are a number of pure projects operating at any one time within an organisation. This allows the project organisation to build specific skills and expertise in these areas, which can result in distinct competitive advantages being built up within the organisation. These skills will not be tempered by functional duties. In pure project systems, the project team can develop a strong sense of identity and motivation; commitment to the project is often high. In pure project systems, authority is centralised and the project team can therefore make quick decisions and react rapidly to changing circumstances. Pure project systems offer the advantage that each member of the project team only has one boss, and this unity of command ensures that he or she never has to choose between the functional boss and the project boss. The organisational structure is simple, flexible and easy to understand and administer. In pure project systems, it is easy to see the project as a whole, with less of a tendency to focus on sub-systems thus losing touch with the whole project. Pure project systems that are running a number of consecutive projects may duplicate a considerable amount of work in many areas of the project. Staffing costs in pure project systems can be very high because each project has full-time functional capability whether required or not. In pure project systems, there might be a tendency to stockpile resources for future use. Pure project staff may become highly competent project workers, but absence from the functional department for extended periods could result in their losing touch with developments within the functional disciplines. The functional department may be better positioned to keep up to date with developments. Deadlines for pure projects often foster administrative corner-cutting, and policies and procedures can be left by the wayside. It becomes very difficult to maintain standard procedures across project teams who are given complete freedom to run the project. Pure project systems can lead to a them-and-us mentality and can foster groupthink and political infighting. When staff are employed solely within a project team, there is understandable concern about their positions after the project has finished. There is a tendency towards the end of a project for important team members to leave to take up longer-term, more secure positions. This can put the project in jeopardy and is often countered by the award of a project completion bonus paid to those team members still there at the end. A matrix system attempts to combine the benefits of the functional organisation with those of the pure project organisation, whilst at the same time eliminating the disadvantages. The matrix structure is the pure project structure overlaid on the functional divisions of a parent organisation. Matrix structures may be very strong or very weak, or anywhere in between, depending upon the nature of the projects undertaken. Strong matrix structures veer towards pure project structures and tend to be used on large projects where employees are assigned to projects on a long-term, full-time basis. Weak structures exist where the only full-time employee on a project is the project manager and everyone else used on the project is commissioned on a short-term basis. This is common on smaller, shorter-term projects such as those carried out by advertising agencies. Projects undertaken in this environment could be undertaken within the most appropriate functional unit. For example, a packaging redesign or product launch would be the responsibility of the different sections of the marketing department. Alternatively, they could run across different functional units as for example, in a police crime investigation that uses specialists from a number of individual functional specialisations.
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Although projects carried out in this environment may be strategically important to the organisation, they are highly unlikely to be the reason for its existence. They are likely to be developmental in nature; they will tend to be projects to improve systems, procedures, methods or products and to be internal rather than external projects for the benefit of the organisation's effectiveness. Internal or non-executive project management is an example of a matrix system. It involves a project system operating within the boundary of a larger functional system. Internal project management systems require a project sponsor, who is there to act as a moderator on the project manager and the functional manager(s). Internal project management generates interfaces. Interfaces are points where organisational linkages cross either internal or external project, function or authority boundaries. Interface management is the management of the processes of communication and action across and within the various organisational interfaces. Internal project management relies on accurate time and cost-centre recharging between functional and project systems. In matrix systems generally, the project is the point of focus and has a single person (i.e. the project manager) responsible for its success. The matrix system also means that the project has reasonable access to the total capability of each of the functional areas and is well placed to draw on the services of any of the specialists across all the organisation's departments. Even though strong matrix structures support a truly committed project team, there is little anxiety or insecurity as the end of the project nears, because team members are generally assured of their place back in the functional department. The project within the matrix structure is flexible and can respond rapidly to the demands of the client in a way that the functional organisation cannot. Close links to the functional departments ensure that organisational policy, procedures and systems are well adhered to and are consistent across all projects. This benefits project team members when they move from project to project and do not have to familiarise themselves with new ways of doing things on every project. Where there are several projects running simultaneously, a matrix structure enables better balancing of resources to meet the demands of the organisation as well as the demands of each of the projects. The matrix structure offers total flexibility between pure project and pure functional organisation and can be adapted to suit any project. There is a power-balancing issue between the project and the functional department and when the balance is delicate, as in the case of a power struggle between project manager and functional head, the project will suffer. Project management is a complex task in general and the matrix structure adds a new dimension to that complexity. Project completion in strong matrix structures is difficult. Killing off the project identity built up during the project life cycle is often resisted, and project team members may suffer a sense of loss at the prospect. The matrix structure demands project managers with strong diplomacy and negotiating skills. Without this, they may quickly find themselves at odds with the heads of the functional departments. In the matrix structure, project team members have two bosses. There is no way around this and the split in loyalty between the project and the department, which results from this situation, is the single biggest disadvantage of the matrix structure and almost always affects the project in some way. Pure functional and pure project organisations can also coexist as components of a hybrid structure. There are many forms that the structure of an organisation may take to support a project. Commonly, a hybrid will be the most suitable option given the existing structure and working procedures. Project management structures are not limited to those that can operate within existing functional structures. An external project management system could comprise only internal people but be managed by an
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external project management consultant; it could also comprise a mixture of internal people and external consultants, all of whom are managed by the consultant project manager; or it could comprise only external consultants, some or all of whom have been appointed by the consultant project manager. The extent to which external people or consultants are involved, and the degree to which they make up a project team, depends upon the degree of surrogacy involved. Some clients want to hire a consultant project manager who will take over everything and run the whole show in return for a fee; in such cases the client wants minimum involvement and only wishes to see the end criteria met with minimum interim involvement. Other clients might want to retain more of a grip on the evolution of the project; these clients may have commissioned similar works before and know some of the problems that can occur. External Project Management tends to be more applicable to smaller organisations. It is a far more flexible approach and is much more suited to organisations with variable workloads. External project management structures are sometimes referred to as executive project management structures. In an external system, different consultants act as agents on behalf of a client. Some or all of the consultants could work for different organisations. An external project manager, similarly, could work for a specialist project management consultancy, and could offer overall project management services, including control and co-ordination of the design team, as part of the management package. External project management systems are susceptible to the problems of differentiation and sentience. External project management systems also tend to be subject to much more open and competitive fee structures than internal systems. External systems tend to have much more developed organisational linkages than any of the internal forms. External project management systems tend to have a much wider range of formal contractual arrangements that internal systems. Authority links define the power and control structure that operates within the system. Authority links are not the same as contractual links; they need not necessarily follow the same routes through the organisational structure. Communication links define the lines of communication in the system. Again, communication links might follow the same paths as contractual and authority links, but they may also follow different paths.
Project Management Standards

Project management standards are governed by national professional bodies. The Association for Project Management (APM) is the professional body for project management practice in the UK. The various national professional bodies are governed, in turn, by the International Project Management Association (IPMA). The various national professional bodies have established benchmarks for project management practice. Once such example is the Association for Project Management Body of Knowledge. This is often abbreviated to the APM BoK. The APM BoK is the UK equivalent of the US (PMI) model. It is generic and is applicable to all industries. It establishes the standards and areas of responsibility for project managers in all industrial sectors. In the UK, the other main project management benchmark is BS6079. The first international code for some aspects of project management has appeared as ISO10006. In addition to these generic international documents, there has been a recent proliferation of industry-specific responses, where professional associations or industrial bodies have attempted to produce industry-specific responses to generic standards.
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Numerous large UK organisations, such as the British Broadcasting Corporation and British Telecom, have developed within their own organisations their own specific codes of practice and summaries of project management practice and application. For any given industry or profession, there are effectively three standards that govern project management practice in the UK. There is the internationally-based APM BoK, the national BS6079, and the industry-specific version. Anyone who is involved in project management must at least be aware of what these standards are and how they work together. 5 Project Time Planning and Control Objectives The objective of this module is to develop an understanding of the time planning process. This process involves breaking the project down into individual components and then allocating times or duration values to each component. The next stage is to link these components together in a logical progression. Models are then generated to ascertain likely completion dates for individual and collective activities. Finally, further models may need to be generated to allow for replanning and change. By the time that you have completed this section you should be able to: understand the process for generating a work breakdown structure (WBS); understand the basic sequence of works necessary to produce a precedence diagram; appreciate the basic mechanics of scheduling using the critical path method (CPM); appreciate the basic mechanics of Program Evaluation and Review Technique (PERT); clearly define the differences, advantages and disadvantages of CPM and PERT; generate and execute crash scenarios; generate and present trade-off scenarios. Time planning and control cannot be considered in isolation. Time, cost and quality planning and control are intrinsically linked and must be considered collectively and as part of the project management three-way continuum. Time planning will therefore be examined as one aspect of the overall, or generic, strategic project planning exercise.
5.1 The Concept of Project Time Planning and Control 5.2 The Process of Project Time Planning 5.3 Project Replanning 5.4 Trade-off Analysis 5.5 Resource Scheduling 5.6 Project Planning Software
Summary
The Concept of Project Time Planning and Control

Project time planning and control are essential project management skills. In order to be able to deliver on time, cost and quality limits for any process, planning and control are always prerequisites. Planning is essential to most enterprises, and it is taken for granted in the management of everything from football teams to construction projects. Most aspects of an enterprise can be planned, and the planning process can aim at several different objective criteria. Most projects evaluate success in terms of the optimisation of time, cost and quality criteria. As a result, most project management planning and control tends to centre on these three variables. Other variables may also be considered, such as safety and reputation, but most of the immediate and
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non-statutory success objectives are related to time, cost and quality optimisation. Planning as a discipline effectively sets targets. These targets may subsequently be achieved or not, depending on the success of the project. The project manager attempts to ensure that these targets are met through project control procedures. Project control procedures examine actual performance and track it over a period of time. They then compare actual performance with theoretical performance in order to isolate variances. These variances are then used as the basis for management reporting. Planning is also a way of establishing where the project should be, in terms of time, cost and quality performance, at any particular moment in time. A project manager can then use this information to identify where problems are likely to arise in the future for example, where existing performance is likely to cause problems in the future. Variations in project success and failure criteria will affect the time planning and control process. If the value of quality suddenly increases, this will almost certainly generate an increased time requirement. The project time planning and control process is only part of the contents of the generic project plan or strategic project plan (SPP). The SPP is a project document that includes all the information relevant to the planning process for the entire project. The project SPP includes separate planning and control processes for time, cost and quality, and also a wide range of other planning elements including communications planning, marketing planning, financial planning, benefits planning and risk planning. Separate plans are required for each of the foregoing elements, and also for the others listed in the SPP pro forma in BS6079 (see Module PR04). The collective assembly of all these individual subplans forms the generic SPP. A project plan must be established for all projects if effective project management techniques are to be applied. The project time planning and control system is only one of numerous planning and control systems that collectively form the generic project plan. Project time planning involves identifying, sequencing and scheduling information. Depending on the nature and size of the project, this information can range from just a few activities and resources to, in the case of large capital projects, many thousands of activities with complex interdependencies and resources. The planning process must be robust enough to withstand rigorous testing and yet take account of the constantly changing environment in which the project exists. Planning is carried out throughout the project life cycle. The intensity of planning activity varies over the life of the project. Traditionally, planning is most intense in the early stages. Major changes during the project will result in increased planning activity no matter what stage the project is at. This replanning is a central requirement on most projects and can be one of the most complex areas that the project manager has to manage. Time replanning tends to become more complex as the project progresses. In most projects, large changes at later stages in the project life cycle can have critical effects.
The Process of Project Time Planning

The time planning process will vary in relation to a number of factors. These factors influence the data and assumptions that are used in developing the planning and control system. Typical examples include sources of time planning data, project uniqueness, people issues, large project complexity, project uncertainty, competence in planning and communicating the plan Most project planners base their time estimates for individual activities on their own knowledge and experience. In cases where similar projects have been run in the past, it is usually possible to derive reasonably accurate estimates for most activity durations. No two projects are exactly the same and it is generally necessary to plan every project independently. This applies more to some applications than to others. Construction projects in particular tend to be more or less unique.
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Project planning involves a systematic approach to working that not everyone is comfortable with. It requires an ability to look ahead and effectively integrate uncertainty with the more tangible aspects of planning such as estimating and scheduling. Good project planning also requires considerable imagination and creativity and these characteristics are not universal. Perhaps the most difficult part of any planner's job is to predict the activities required to complete the project with any reasonable degree of accuracy. The risk of uncertainty is inherent throughout any project plan as in any plan. As well as the global uncertainties surrounding the project as a whole, there are elements of uncertainty within each of the planned activities and all of the assumptions made during the planning process. Planning large projects is a highly complex and specialised skill. It requires an in-depth knowledge of sophisticated planning techniques and systems. To achieve good workable plans, the planning skill is best complimented by a good operational and technological understanding of the project itself. If a project plan is to be effectively implemented, stakeholders must be fully informed of all their responsibilities. The information must be issued in a format that is clear, understandable and unambiguous.
The Planning Process

Irrespective of whether the project manager is developing time, cost or quality plans, the same basic procedure is adopted up to a point. This involves breaking the project down into some kind of work packages where individual targets for performance can be set for each such package. The level of definition of work package will depend on the nature and type of project. Project work packages might vary in relation to the planning and control system concerned. A package for cost control purposes might not match the packages defined for quality management purposes. This process is sometimes referred to as the top-down strategic (TDS) approach to project planning. It is a top-down approach in that it takes the work at the project level and breaks it down into individual work packages or components that can be subjected to individual and independent time, cost and quality control. Planning is strategic in that work packages are projected forward so that an overall sequence of execution can be derived. This sequence will determine the time, cost and quality planning and control characteristics of the project. The Statement of Work (SOW) is the descriptive document that defines the overall content and limits of the project. In practice, nearly all projects have a SOW, as they cannot be efficiently managed or executed unless the managers and administrators can define the boundaries and limits of the project. The SOW includes all the work that has to be done in order to complete the project. However, the project cannot be planned or controlled at this level as it is too big. It is necessary to break the whole down into individual components that can be individually evaluated and managed. For a US or European project, the SOW is usually contained in the contract documents. In the UK this would comprise a full set of production information, a specification, all schedules and some kind of measurement or quantification of the works to be done, assembled in such a way that it can be accurately priced by a tenderer. A work breakdown structure (WBS) is a representation of how large tasks can be broken down into smaller and more manageable sub-tasks. The number of WBS levels required increases with the size and complexity of the project and is determined by the need to define tasks at a level where they are manageable and achievable. Small projects such as preparing a simple brochure may require as few as three levels, whereas a project such as a launching a global marketing campaign for a consumer product may have six or more levels. Project logic evaluation (PLE) is the process of taking the WBS work packages that have already been identified, and showing the sequence in which they are to be carried out. This is important for time, cost or quality evaluation.
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Networking is the process of defining project logic in terms of the sequence of required activities, and then assigning durations to these activities. Scheduling is the process of calculating individual activity times in order to allow an estimate for the completion date to be calculated. The end result of the scheduling process is the Draft Master Schedule (DMS). The DMS is a complete network analysis or programme for the project showing start and finish times for each activity. By using specific analysis techniques, it is also possible to calculate start and finish times for groups of activities, for sections of the project and for the project as a whole. The DMS also identifies the project's critical path, namely the path through the project that has the longest total activity duration times. It is therefore the path of activities that determines the overall project completion date. In terms of assigning activity durations, there are two primary alternatives. These are based on the critical path method (CPM) or on the programme evaluation and review technique (PERT). Both approaches use an essentially similar concept, but the calculations used and applications of each are quite different. CPM is used where deterministic calculations can be used. Deterministic values are applicable where times for activities can be calculated or are known with reasonable accuracy for example, the times taken to execute each of the stages in making a cup of tea. The critical path through any network diagram is the longest path. The duration of the critical path defines the expected duration of the project under normal circumstances. The most popular method for producing a draft master schedule (DMS) from a precedence diagram or network is to use the critical path method (CPM). PERT is used where component activity times cannot be accurately calculated or are not known, such as making a cup of tea with a faulty kettle that may or may not work properly. In both CPM and PERT cases, the calculations are used as the basis for evaluating the individual and overall times that are applicable to the project. They are not simply used once to arrive at overall and individual completion dates. They are also used as the basis for the replanning process, which is an essential feature of most project planning and control. Replanning is often necessary because the Draft Master Schedule produced by the project manager is just that a draft. It is presented to the client as one possible solution for the planning and control of the project; it may or may not be acceptable. Typical reasons why it might not be acceptable are that it finishes the project too late and time savings are required, or it is too heavily resourced and the overall cost has to be reduced. The replanning process is just as important as the initial planning process. As soon as a schedule has been produced, there will be immediate requirements to change it. Change notices and variation orders will be issued throughout the project execution phase, client requirements may change, planning regulations may alter etc. Replanning tends to be a complex operation and is one of the main reasons why project planning software, as opposed to manual methods, is used almost exclusively.
Project Replanning
In crash analysis, a project manager offers replanning advice based on the functional relationship between time and cost. The objective is to look at that relationship for the process concerned and to generate a curve showing alternative cost and time scenarios. The client can look at this curve and can see how much it will cost to meet a range of different time options. The cost of crashing is a function of resources limits and availability. In addition, resources on an activity can only be increased up to a point. Additional resources may be immediately available at the same or greater unit cost, available later at the same or increased unit cost, etc. The crash sequence will usually start with the cheapest unit crash-cost item and progress to the most expensive unit crash-cost item. This will generally appear as a negative curve, rising more and more steeply away from the origin (original project time and cost). The curve should always rise more and
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more steeply as the unit crash cost increases for the later items and the cumulative effect is significant. The other major consideration is the critical path. There is no point in crashing non-critical items as any time saved on these items will not reduce the overall project or package completion date. It is therefore essential that the crash sequence contains only those items that are on the project or package critical path.
Trade-Off Analysis
Crash analysis is one aspect of trade-off analysis. The crash example in the text considered the tradeoff between time and cost. There can also be trade-offs between time and performance and cost and performance. Each scenario seeks to establish the functional relationship between two of these variables while assuming that the third element is fixed or constant. A requirement for trade-off occurs because project conflicts arise. This could be because of changes to project objectives, success and failure criteria, incompatibilities, errors etc. The main types of causes for trade-offs are human error and mechanical failure, problems of uncertainty and totally unexpected problems. Changes in project environment, changes in company corporate strategy, new statutes and codes of practice, and inaccurate original forecasts and planning are all potential sources for conflict and a requirement for trade-off analysis.
Gantt Charts
In its simplest form, the Gantt chart consists of a horizontal time scale, a vertical list of tasks and a horizontal line or bar drawn to scale to represent the time needed to complete each task or activity. Gantt charts provide an effective tool for planning and monitoring. They require little training to produce and give a very easy to understand visual image.
Resource Scheduling
Most organisations do not have idle staff and equipment waiting to carry out a particular activity on a particular project. What is likely is that they are also required for other jobs, and some degree of prioritisation will be required. Resource scheduling is critical in any resource-driven application. Resource levelling allows peaks and troughs in resource demand to be evened out allowing more consistent use of resources.
Project Planning Software

In contemporary project management, virtually all project planning and control is carried out using proprietary software. The use of project planning software offers advantages of speed, capacity, efficiency, economy, accuracy and the ability to cope with large amounts of complex data. Disadvantages include the systems management requirement, information overload, isolation, and dependency. 6 Project Cost Planning and Control Objectives By the time that you have completed this section you should: understand the basis of project budgeting; understand the concept of project cost control systems; be able to summarise the essential sections and components of a PCCS; be familiar with the concepts of project estimating and budgeting;
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appreciate the main components of the PCCS planning cycle; understand the main components of the PCCS control cycle; understand the concept of computerised database estimating systems (CDES); understand the mechanics and application of earned value analysis; understand the mechanics and application of project variance analysis reporting.
6.1 Introduction 6.2 Project Cost Planning and Control Systems 6.3 The Project Cost Control System
Summary
Project Cost Planning and Control Systems

Cost planning and control is another essential project management function. Cost performance is often the primary criterion by which project success or failure is evaluated. In order to set up any kind of cost control system, it is first essential that some kind of accurate estimating takes place. This establishes the target or budget costs for individual activities. Actual costs are then compared with budgeted costs in order to generate variances. These variances measure the extent to which the project is running over or under on costs. For most practical purposes, the time and cost planning processes are intrinsically linked and use the same basic work-package elements as derived in the initial development of the project's work breakdown structure (WBS). Cost control is similar in concept to time control and quality control. It involves the establishment of cost targets that are approved by the project team and act as project success criteria. Actual performance is then monitored against these targets in order to determine how close actual performance is in comparison with planned performance. Once variances have been identified, it is the responsibility of the project manager to take control of the situation and try to check adverse anomalies as early, as efficiently and as effectively as possible. In almost every case, the project manager will have to call on his or her general managerial skills to address any variances. A cost control system has to be accurate. The budget plan is only as accurate as the information that is used to assemble it. In order to be able to prepare accurate budgets, it is crucial that all the work input to a particular work package or task has been thoroughly and carefully considered, and that all the relevant information has been taken into account. The cost control system is only as accurate as the estimating process used to prepare it. Cost planning should be based on detailed calculations and good use of established data in order to produce accurate, fair and workable estimates of the required involvement of plant, materials and labour. In order to budget accurately, the parameters of the task must be clearly and unambiguously determined. The budget has to be fair and reasonable, and must accurately reflect the likely costs of performing within budget in a proficient manner. In order to control expenditure against budget, there must be a clear and unambiguous system of authorisation. In order to work, the cost control system has to be dynamic. The accuracy of the output from a cost control system will be a function of the frequency at which analysis takes place. It is therefore important to design the cost control system so that it can perform rapid and frequent analyses of the data.
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Cybernetic control is the most common basic approach. This is the most common method of control and its key feature is its automatic response mechanism. To control the project, the outputs must be monitored and compared against a set of standards. Most cost control systems cannot operate as simple low-level systems. The main reason for this is that projects continually evolve and change as the factors influencing the project characteristics change. Typical factors causing change are client requirements, variation orders, and changing internal and external environmental conditions. While a high-level cybernetic control system is appropriate for tracking and controlling overall project performance, or at least performance of large work packages or sectors well up the WBS structure, an analogue system can be used on almost every aspect of a project. Analogue controls take a form of testing that determines whether specific preconditions are met and for many facets of the project it is sufficient to know whether the pre-conditions have or have not been met. In practice, most projects incorporate some form of analogue control system in the form of gateways. Cybernetic controls are designed to be automatic and will operate as often as they are designed to, whereas an analogue control system will only operate when and if the people who are controlling the project use them. Cybernetic and analogue controls are directed towards accomplishing the goals of an ongoing project; feedback controls are applied after the project has finished, so as to improve the chances for future projects to meet their objectives. Feedback control takes an evaluation of performance on an existing project and uses this as a form of learning to try to improve control procedures for future projects. In preparing overall project budgets and estimates, it is necessary to consider the different types of costs that may or may not be incurred during the project and the allowances that should be included to mitigate the inherent risk of projects. Direct costs are the costs directly attributable to the job or project task; direct costs include the labour, materials and equipment charges directly related to carrying out that task. Materials, components and expenses directly attributable to a particular project should be classed as direct. Very often companies will take on projects at a sales price that only covers direct costs in order to achieve some strategic objective for example, to increase market share or to try out a new technology. Factory costs are applicable to manufacturing projects and are the total costs of the project before any additional mark-up for profit. They include all direct and indirect costs for materials, facilities, labour, equipment and expenses. Fixed costs are fixed and will continue to be incurred irrespective of the level of activity on the project. These include management and administrative salaries, rent, rates, heating, insurance and so on. Fixed costs tend to form the major part of a project's indirect (or overhead) cost. Indirect costs or overheads include the facilities, services and personnel costs that exist in a company irrespective of the project. They include such costs as factories, office accommodation, personnel, training, accounts and marketing. In project organisations, the indirect costs must be recovered through the projects and they are often a serious cause of disagreement with project managers. The recovery of indirect costs is spread over a company's projects and it is a matter for often heated debate as to how much should be attributable to any one project. Variable costs are those costs that are incurred at a rate that depends on the level of work activity. These are usually direct costs, but some may have a small indirect content. For example, if temporary administration staff have to be employed at head office for the duration of a particular part of a project, these may be classed as variable and indirect. Contingency allowance covers additional costs that are inevitable as a result of the highly unpredictable nature of projects.
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Historical data from previous projects usually provide a reasonable indicator of how much to add to a project for contingencies. Cost escalation is generally more relevant to longer-term projects and is the direct result of inflation. It is fairly easy to predict short-term rises in labour, materials and equipment costs in stable economies, although even they are not totally immune to surprises. Provisional sums are estimated to cover work that might arise during the course of a project. The project contractor may include a provisional cost to be added to the project price for work that is foreseen but not clearly defined at the outset. Foreign currencies are often problematical. Projects are often undertaken overseas or involve a number of overseas companies either as suppliers or project partners. It is sensible to price, be paid for, and pay subcontractors and suppliers in the client's own currency (irrespective of the location of the project) so as to protect the price against any currency fluctuations that may occur during the course of the project. Life cycle costing (LCC) can be defined as the total cost of ownership of a product, structure or system over its useful life. The LCC approach considers the costs of the whole life cycle of the project, not simply the costs of the work package or element that is being considered as part of an individual exercise. LCC is needed because decisions made during the early stages of a design process invariably have an impact on longer-term performance in the later stages. LCC encourages long-range considerations. As with strategic planning, LCC forces the client and the design team people to look ahead and to consider costs well into the future, rather than restricting the consideration to straightforward development and construction costs. LCC encourages subsequent strategic budgeting and (theoretically) produces high-quality early estimates. This allows budgets to be imposed well in advance (strategic budgeting). LCC influences the overall cost viability of a project. A project is no longer seen as being in a cost window in real time: the execution phase becomes only one window of many. LCC influences early-stage decision making. For example, the capital costs of two products may be similar but the maintenance costs may be totally different. It would be wrong to consider them evenly matched in terms of the initial capital cost only. LCC relies on the assumption of a known and deterministic life cycle. Some projects may not have a wholly deterministic life cycle, and it is not always possible to predict the overall length of each lifecycle phase and therefore it might not be possible to cost each phase accurately.
The Project Cost Control System (PCCS)

Most researchers represent the PCCS as a two-cycle system. The first cycle is the planning cycle. This includes all aspects of pricing, estimating, establishing targets and budgets, and setting up accurate cost plans. The second cycle is the operating cycle. This involves a number of separate phases. In its most simple form, an operating cycle contains some kind of work-release mechanism, a methodology for observing and collecting cost data from the system so that actual costs can be compared with targets, a comparison system, and a reporting system. The planning cycle includes PCCS Phase 1, which is the planning process. Some texts refer to Phase 1 as the planning and control system. It consists of breaking down the project into separately controllable packages and then calculating a cost target or budget limit for each one. Initially, a project budget is developed from the original cost estimates used in the project proposal. This is then reviewed and adjusted until the final version becomes the approved authorised limit for spending on the project. This version is itself modified once the actual costs of the various work packages are established. The project budget is usually developed from scratch using some form of statement of works (SOW). It establishes budget totals or cost limits for each work package within the project. The budget should spread across the project WBS so that there is a specific budget for each work package.
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Budgets are generally not static, particularly in large projects where the exact scope of work is difficult to define clearly at the outset. They change throughout the life cycle of a project, and with every agreed project scope variation (or change order) there is an associated variation in cost that has to be budgeted for. Most changes to project budgets are necessitated by the issue of change notices. These are variation orders that are issued by the project manager or design team members. In large projects, changes to the project budget are often formalised through the issue of a cost accounting variation notice (CAVN). This section of the project's configuration management system (CMS) stores and monitors all the various sections of the project budget plan and corresponding cost accounting code (CAC) values. As a change is authorised, the budget plan is upgraded and the CAC entries that are affected are increased or decreased accordingly. This ensures that the budget plan remains up to date as changes occur. Any project budget plan is only as accurate as the estimated costs that have been allocated against each work package. The estimated costs must be accurate if the budget plan is to be realistic. It is generally accepted that the better the project is defined, the less chance there is for making estimating errors. The estimating process involves the preparation of an accurate estimate of the cost of a work package or element by allowing for the costs of individual components of the package. Once the project or work package has been approved in principle, the next stage is to prepare the bid for approval by senior management. In most cases, obtaining project approval for proceeding with a project (or subsections of a project) either internally or externally will involve some kind of bidding process. The bid for resources must include an estimate of what the actual works that are contained within the project SOW are going to cost. Estimating accurate tender submissions is notoriously difficult. Contractor and supplier pricing policies are very fickle and can change from day to day. In most project applications there are three estimate types, each with a characteristic level of input and accuracy. The types are the order-of-magnitude estimates, the indicative estimate and the definitive estimate. The definitive estimate is produced from reasonable standard drawings, supplier quotes, contractor and subcontractor prices, etc. It duplicates the process that the bidder will eventually carry out in pricing the contract documentation. It should be accurate within 5 per cent. Sources of estimating data include estimating manuals, published data, databases and own records. A typical medium-sized project generates a need for a number of reports. Generally, there will be a requirement for a report to senior management detailing the revised estimate total and comparing this to the budget plan total from the overall SPP. Top-down estimating is very common and involves senior management setting the overall project budget. They do this by estimating the overall project costs, as well as the significant sub-project costs that comprise it, on the basis of their experience and knowledge and of accessible project data. Top-down estimate budgets are often fixed and then handed down to lower-level managers to break down the costs into individual activity and work-package level. They then allocate budgets to these activities. Bottom-up budgeting relies upon the project budget being developed from individual activity level upwards. In bottom-up estimating, each activity is estimated as accurately as possible in terms of labour hours, materials and equipment required to complete the task. These estimates are then converted into the financial cost estimate. Computerised database estimating systems (CDES) are used during the estimate measurement process. In manufacturing/engineering/construction projects, drawing information is transcribed directly into the CDES either by manual measurement or by scanning directly from drawings using a digitiser. The CDES then stores an electronic version of the drawing data and builds up an automatic electronic budget plan.
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A CDES is usually configured so that information is taken from the drawings or other SOW information according to a standard method of measurement. The CDES usually has a series of alternative databases available. Each database contains a complete library of standard descriptions that are taken directly from a standard method of measurement. The project cost control system (PCCS) comprises planning and control cycles. The control cycle consists of work initiation, cost data collection, generation of variances and reporting phases. Most PCCS cost data analysis is based on earned value analysis (EVA). This takes place in phases 3 and 4 of the operating cycle. Variance analysis is designed to show how different parts of the budget plan are performing at any one time. The main variables measured in EVA are actual cost of the works performed (ACWP), budgeted cost of the works performed (BCWP), budgeted cost of works scheduled (BCWS), scheduled time for work performed (STWP), actual time for work performed (ATWP), cost variance (CV), schedule variance (SV), budget at completion (BAC), estimate at completion (EAC) and variance at completion (VAC). The actual cost of the works performed (ACWP) is the actual cost (in terms of payments or other legally-committed amounts) expended in order to get the project to its current level of development. The budgeted cost of the works performed (BCWP) is sometimes known as the actual earned value. It represents the budgeted cost (in terms of priced bill or CDES values) that should have been required in order to get the project to its current level of development. The budgeted cost of the works scheduled (BCWS) is sometimes known as the planned earned value. It represents the budgeted cost that should be required in order to get the project to any specified level of completion. The scheduled time for work performed (STWP) is the estimated time required to perform a defined amount of work. The actual time for work performed (ATWP) is the actual time taken to perform that work. The variance at completion (VAC) is the difference between the planned and actual project cost. The cost variance is the result of a comparison of how much the work has cost in comparison with what it was budgeted to cost, both in relation to works actually completed. Schedule variance (SV) is the difference between budgeted cost for the works completed and performed and the budgeted cost of the works scheduled. The budget at completion (BAC) is the sum of all the individual budgets (BCWS) that make up the project. It is sometimes known as the project baseline. The estimate at completion (EAC) is the estimated total cost of the project. It is the sum of all direct and indirect costs to date plus authorised work remaining. The EAC can also be expressed in terms of a revised estimate. The cost accounting process of the PCCS involves looking at cost variance (CV) and schedule variance (SV) in order to assess the performance of individual packages and groups of packages. This can be done in several ways. The two most common are by direct evaluation of the variances themselves or by conversion of the variances to indices. The critical ratio can often be used to trigger alarm bells if project performance falls below a certain level. The critical ratio is equivalent to (actual progress / scheduled progress) (budget cost / actual cost) A critical ratio of unity or more is good and means that actual performance is better than planned performance. Conversely, a critical ratio less than unity is poor and is an indication of underperformance. There are five main types of report required for competent project management: routine reports, development review reports, exception reports, subject-specific reports and PVAR reports. Routine reports are those issued regularly on a periodic basis; in some cases these may be submitted on a monthly, weekly or even daily basis. They may be triggered by regular project meetings or by
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milestones. Exception reports are useful where they are directly oriented to project management decision making, and they should be distributed to the project team members who have responsibility for these decisions or who have a clear need to know. The reports may also be issued when a decision is made on an exception basis, and it is desirable to inform other managers as well as to document the decision. Subject-specific reports are used to disseminate the results of special studies that are conducted as part of the project or that arise in a relevant way during the project. These reports are usually distributed to anyone who may be interested and may include issues pertinent to the project, such as alternative materials, new software capability, new government legislation and so on. The end result of the PCCS process is a report (or set of reports) for project variance analysis reporting (PVAR). The PVAR report itself would typically show WBS code, date, authorisations, cost centre/cost accounting number, item description/work package, BCWS, BCWP, ACWP performance data, scheduled and actual costs for variance, estimated budget, EAC and VAC variance, problem cause and impact, proposed corrective action, estimated extent of recovery (with dates), and all associated dates and signatures. 7 Project Quality Management Objectives By the time that you have completed this section, you should be able to: understand the concept of quality management; understand the concept of configuration management; understand the main principles of concurrent engineering; define and discuss the quality management six pack; summarise the primary quality-control tools; understand the main principles of total quality management (TQM); summarise the main historical TQM guru approaches; understand the concept of quality function deployment.
7.1 Introduction 7.2 Quality Management as a Concept 7.3 The Quality Gurus 7.4 The Quality Management Six Pack 7.5 Total Quality Management 7.6 Configuration Management 7.7 Concurrent Engineering and Time-Based Competition
Summary
Quality Management as a Concept

Quality implies providing products and services that are perceived to meet or exceed the expectations of the customer at a cost that represents outstanding value. Quality management is about the design and implementation of monitoring and control systems that enable the producer to manufacture goods to a guaranteed standard of quality for a given price. Quality cannot in most cases be considered in isolation from time and cost. There is virtually always a trade-off to be made in setting standards for one or more of these variables. Most qualitycost curves are curvilinear, with the cost per unit of quality increasing more and more
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rapidly as the process approaches zero defects. For this reason, most organisations assess their production systems, decide on a reasonable level of defects and cover the defect occurrences with warranties and guarantees. Acceptable defect rates will vary depending on the product and consequences of a defect occurring. The true cost of defects is much higher than the actual cost of replacing defective goods under warranties or guarantees. Customer loyalty and confidence can have a very high value. Perrier and Pan American Airways are examples of companies that have experienced the true cost of defects. The true value of payback can be far higher than current net income. The balance between preventive and responsive strategies is a choice that faces most quality managers at some point. Generally, preventive systems are very expensive if high-quality standards are required. Generally, preventive defect management is better than responsive defect management. Quality improvement management is a matter of improving the whole business process from one end to the other. It is far less effective if its application is anything less than universal. BS5750 was until recently an important British standard for quality management. It has now been superseded by ISO9000. This is the latest attempt at a generic international quality standard that is applicable throughout Western Europe. ISO9000 is basically a never-ending cycle including planning, controlling and documentation. However, as with the former BS5750, the fact that a company is ISO9000-accredited does not mean that the company produces only high-quality products. It merely shows that the necessary procedures are in place or at least were at the time that the appropriate inspections were carried out.
The Quality Gurus

Most contemporary quality management and TQM theory has evolved from the earlier workings of a number of quality gurus. Gurus are people who advance knowledge largely by inspiration and original thought, as opposed to classical researchers who base any advancement on existing literature. The main quality gurus have been Deming, Juran, Crosby and Imai. The gurus all agree that quality management and performance improvement have to be applied throughout the organisation. It is no use improving the performance of 90 per cent of the company if the remaining 10 per cent lets it down. The gurus all agree on the fact that most problems with quality relate to the process rather than the operatives. If the process is set up correctly, the chances are that the people who use the process will use it effectively. There is general agreement that any production process has to be broken down into its component elements so that individual aspects that are causing problems can be isolated Another area of general agreement is on the importance of the customer. The end result of the whole process is sales, and sales depend on the product being in line with customer expectations. The gurus all agree that the quality approach has to be applied at all levels throughout the organisation and that each section and individual has to want it to succeed. The Deming approach is very much worker-oriented and appeals to the democratic-type manager. It has a core of statistical analysis supporting a fourteen-point plan for managers. Juran's approach suggested that senior management must establish top-level strategic and annual plans for annual improvement in quality. It is a highly structured and co-ordinated approach based on complex planning and implementation control. It is far more controlled than the Deming approach. Juran's approach tends to appeal more to boss-type managers who identify with a rigid control system. Crosby, like Deming, produced a fourteen-stage process for quality improvement. Its emphasis is on preventing defects at source by designing and constructing a production system that has inbuilt quality.
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The Imai approach assumes that, by continually improving processes and systems, the organisation will inevitably arrive at a better product or service. The Imai approach is highly structured and is aimed at structured production type managers. Imai's theories became known as the P approach (the process approach) because they concentrate on the process rather than the results. This was at odds with the approach of the classical motivational theorists, who tended to assume an R approach (the results approach).
The Quality Management Six Pack

Quality management is the process of managing quality in order to ensure that certain established standards are achieved. The quality management six pack comprises quality policy, quality objectives, quality assurance, quality control, quality audit, and quality assurance plan and review. Quality policy is a statement of the policy of the organisation on quality, defining the organisation's attitude and approaches to quality and setting out overall targets for performance. Increasingly, organisations are issuing quality policies in the form of charters. Hospitals operating as independent trusts might issue a patients' charter that specifies performance levels in areas of greatest concern to patients. Obvious examples would include limits on waiting times to see a consultant or for operations, or for providing transport or special access. The primary components of a quality policy would be organisational quality objectives, minimum levels of acceptable quality, and individual organisation member's responsibility for implementation. The quality policy should be (and should be seen to be) in the interests of senior management. Measurable performance criteria should be established so that actual performance levels can be determined. Quality objectives are effectively part of the quality policy. The objectives convert the main aspects of the policy into individual statements of what has to be done by individual sections in order to achieve the overall policy outcomes. Quality objectives should be achievable, be based around specific goals, be related to overall specific standards or deadlines, and be suitably resourced. Quality assurance is a collective term applied to a wide range of activities and processes that are used as drivers to ensure that the system performs and produces results complying with what has been specified. Quality assurance also includes the collection and use of information from outside the manufacturing process, and even from outside the organisation. This information is used for comparative purposes and as feedback or input for improving the system. Generally, a good quality-assurance system will identify objectives in relation to workable standards. It will be multifunctional and will operate as part of a continual cycle for system improvement. Quality control is another collective term. It is usually applied to a range of processes and activities that are intended to create specific quality performance characteristics. Such processes include continuous sampling, with results being supplied by some form of statistical analysis. These results are then compared to the standards established as part of the quality assurance system in order to evaluate the performance of different levels of the OBS. A quality management system must have an audit process. The idea of this is that a high-level check is carried out by independent personnel in order to ensure that the project's quality-performance standards are being met. The quality management plan is analogous to the PMS and project cost plan. It breaks down the quality objectives of the organisation and expresses them in terms of individual targets for different sections of the organisation. The quality assurance plan itself can be formulated fairly easily by producing a quality assurance matrix using combined OBS and WBS elements, broken down into work packages and assigned using a TRM. The quality assurance matrix is generally developed by a project quality assurance team (if this
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exists as a separate entity) or, alternatively, by the project manager. It shows what is required, who is responsible for achieving it and how that person is to achieve his or her objectives. It is essentially a TRM applied to quality management. Data tables provide a simple method for collecting and arranging quality data. The main applications are in repetitive operations, where the same materials are being produced by the same suppliers and are being consumed by the same client or customer. They provide a consistent and reliable method for collecting and analysing quality data. A pareto diagram is a type of histogram. The objective is to produce a graphical representation that identifies problem areas. It also gives an approximation of the relative value or size of the problem area. It isolates areas of nonconformity in data presentations and, by doing so, it draws the attention towards the most frequently occurring element. Scatter diagrams analyse the correlation between two quality variables. They are based on the concept of having dependent and independent variables. Variations in one as a function of the other are shown on a simple two-axis graph. Control charts are an example of a preventive approach. They attempt to prevent defects, rather than detecting and isolating them after they have occurred. Most forms of control chart are based upon a standard normal distribution. Cause and effect analysis uses a six-stage process to isolate a problem and then traces back through the system to identify possible origins for the problem. The process is then reversed to provide a route to converting remedial measures to an improved system. Trend analysis is a method for determining the equation that best fits the data in a scatter plot. It quantifies the relationships of the data, determines the equation, and measures the fit of the equation to the data.
Total Quality Management

TQM is increasingly becoming a standard component of all UK organisational endeavour. TQM is especially important in project management because quality has to be considered as an engineerable entity alongside project time and cost. TQM is a structured approach to the creation of organisation-wide participation in planning and implementing a continuous improvement process that exceeds the expectations of the customer. Any TQM system has to be planned and researched before it can be implemented. TQM planning comprises eight primary phases. These are the commitment phase, mission phase, customer phase, process phase, vision phase, planning phase, risk management phase, and breakthrough and implementation phase. TQM implementation has three major components: breakthrough, daily management and crossfunctional management. Breakthroughs are generally large-scale, fundamental quality improvements. They may involve significant investments by the organisation perhaps in new plant and resources, training courses, procedure changes and so on. Daily management is the long-term implementation of the system. It is a process of continual assessment and monitoring in order to assess performance and then comparing this with the progress required in the plan to meet the overall goals and end vision. Cross-functional management is the integration of team activities across functional divisions and departments in order to meet organisational goals. It ensures that all groups within the organisation are working together towards a common purpose.
Configuration Management
Configuration management or configuration change control, is one aspect of any good quality management system. It is also one of the most important functions of the project manager, particularly on larger or more complex projects. Configuration management is about controlling change. In particular, it is about controlling the
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information that relates to change. Configuration management is a control technique for formal review and approval of change on a project. If properly executed, a good configuration management system (CMS) provides a comprehensive change-control and management system. It also acts as a focus for change proposal and consideration and as an interface for client and contractor responses and communications. The main components of a CMS are configuration format and layout, configuration identification specification, configuration change control system, configuration status accounting and reporting, and configuration auditing and feedback. Configuration selection is the way in which the CMS is assembled in relation to its environment and the characteristics of the project. The CMS will depend on the limitations that are applied to the project. Typical configuration item information that might be useful to the project manager, which the CMS can readily provide, might be date of drawing issue, drawing revision number, drawing author and authoriser, date when drawing received by project team members, and similar. Configuration identification specification comprises the allocation of codes to the identified items. The codes are designed to provide a range of specific information unique to each configuration item. A configuration change control system typically includes facilities for preparation of a change request, evaluation of a change request and management of the implementation of approved changes. Configuration status accounting and reporting (CSAR) provides for the updated recording of current configuration identification (including all baselines and configuration items) and historical baselines and approved changes. It also acts as a register of pending change and reports on the status of implementation of approved changes. Configuration auditing and feedback includes a review of development test plans and test results as well as a summary of required tests not yet performed. It also provides details on deviation from plan, and waivers.
Concurrent Engineering and Time-Based Competition

Concurrent engineering is basically an approach to support time-based competition. Time-based competition is about developing new products and then getting them to the market before the competition does. Concurrent engineering allows the project development and construction phases to develop and run concurrently. The actual phases may not operate in parallel, but the contributions from the various members of the design team are made in parallel as opposed to serially. Phased concurrent engineering occurs where the project is separated into individual work packages and each package retains a separate design and execution phase. However, the sequential arrangement of the packages is blurred and some overlap takes place between the various packages; in each case, however, package design is complete before package execution commences. Fast-track concurrent engineering occurs where individual package design and execution overlap and also each individual work package overlaps. 8 Case Study 8.1 Aims and Objectives of the Case Study 8.2 Introduction (Module 1) 8.3 Individual and Team Issues (Module 2) 8.4 Risk Management (Module 3) 8.5 Case Study First Supplement 8.6 Organisational Structures (Module 4) 8.7 Case Study Second Supplement 8.8 Time Planning and Control (Module 5) 8.9 Cost Planning and Control (Module 6)
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8.10 Quality Management (Module 7)
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Project Management

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Project Management

2008 Edinburgh Business School

What is Project Management?

2008 Edinburgh Business School

Characteristics of Project Management

Potential Benefits and Challenges of Project Management

2008 Edinburgh Business School

The History of Project Management