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SIKKIM MANIPAL UNIVERSITY DEPARTMENT OF DISTANCE EDUCATION ASSIGNMENT SEMESTER 2 FULL NAME ROLL NUMBER LEARNING CENTER SUBJECT NAME SUBJECT CODE BOOK ID MODULE NO : Galchar Pankaj N : 521113886 : 1771 : Project Management : MB0049 : B1138 : SET 2

DATE OF SUBMISSION AT THE LEARNING CENTRE : 19-June-2012 FACULTY SIGNATURE :

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Master of Business Administration-MBA Semester 2nd MB0049 Project Management -4 Credits Assignment Set - 2
Q.1 What are the various phases of project management life cycle ? Explain Ans.
Introduction The economy of India has been growing over the last few years. Many industries have come up in various sectors. The government is always looking for growth of the country. In such a booming market, a huge amount of money is being invested in various projects. In this perspective it becomes very important for managers to manage the projects effectively in order to maximise the returns. Faced with unprecedented growth in business, todays corporate world needs proper and effective project management. Hence efficient and effective project managers have become the need of the hour. More and more companies across the globe are adopting the practices of managing projects and looking out for skilled managers and practitioners. This has increased the demand for project managers globally. Hence, we advise you to read and understand the concepts of project management as discussed in this book. This book focuses on the development, maintenance, evaluation, promotion and administration of projects. You will be able to understand the concepts in project management and prepare yourselves to handle projects since most of the concepts in this book are explained adopting practical approach. You will also be able to understand the application process in project management.
In this unit, we would first attempt to explain project management through a preview of globally recognised best practices. These best practices form a part of managing projects of all sizes and types in virtually any domain of business. Various sections and sub-sections of this unit would cover key aspects, definition and basics of project management.

Definition
Project A project is a set of activities which are networked in an order and aimed at achieving the defined goals for which the project is undertaken. Upon completion of all the activities, the goals of the project would have been achieved. Project Cycle A project cycle basically consists of the various activities of operations, resources and the limitations imposed on them.

The Project Life Cycle

The Project Life Cycle refers to a logical sequence of activities to accomplish the projects goals or objectives. Irrespective of the complexities of the project, a life cycle of a project consists of

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a) Understanding the scope and objectives of the project b) Formulating and planning various activities d) Executing the project d) Monitoring the project and controlling the project resources

Phases of Project Management Life Cycle

The various phases in project management life cycle are Analysis and evaluation
Marketing Design Inspecting, testing and delivery Post completion analysis

shows the phases in a sequence.

Let us now discuss each of these phases. 1 Analysis and Evaluation Phase It starts with receiving a request to analyse the problem from the customer. The project manager conducts the analysis of the problem and submits a detailed report to the top management. The report should consist of what the problem is, ways of solving the problem, the objectives to be achieved, and the success rate of achieving the goal. 2 Marketing Phase A project proposal is prepared by a group of people including the project manager. This proposal has to contain the strategies adopted to market the product to the customers. 3 Design Phase Based on the inputs received in the form of project feasibility study, preliminary project evaluation, project proposal and customer interviews, following outputs are produced: System design specification
Program functional specification Program design specification Project plan

4 Inspecting, Testing and Delivery Phase During this phase, the project team works under the guidance of the project manager. The project manager has to ensure that the team working under him implements the project designs accurately. The project has to be tracked or monitored through its cost, manpower and schedule. The tasks involved in these phases are: 3|Page

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Managing the customer Marketing the future work Performing quality control work

5 Post Completion Analysis Phase After delivery or completion of the project, the staff performance has to be evaluated. The tasks involved in this phase are: Documenting the lessons learnt from the project
Analysing project feedback Preparing project execution report Analysing the problems encountered during the project

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Q. 2 Write brief note on project planning and scoping. Ans :Introduction It is well known that organisations continue to grow year by year. As there is a need to grow, it becomes necessary for a growing organisation to resort to effective growth plan. The plan eeds to be properly prepared. It is possible to prepare proper plans only if the manager has sufficient knowledge of the various processes of the project. The manager has to work on the various project life cycle stages and apply necessary planning tools to come out with a proper growth plan for the company. The project manager needs to be meticulously aware of the various techniques of identifying the project items, work break down structure of the project, task duration, and estimation. This unit deals with the various techniques and methodologies of project planning. Project Planning and Scoping
Before you create a project plan, you need to define the project scope. A project scope provides the information that you need to complete the project plan. The purpose of project planning and scoping is to first identify the areas of the project work and the forces affecting the project and then to define the boundaries of the project. In addition, the scoping has to be explicitly stated on the line of the project objectives. It also has to implicitly provide directions to the project. The planning and scoping should be such that the project manager is able to assess every stage of the project and also enabling the assessment of the quality of the deliverable of the project at every stage. Fist, let us list the steps involved in project scoping. These steps include: i) Identifying the various parametric forces relevant to the project and its stages ii) Enabling the team members to work on tools to keep track of the stages and thereby proceed in the planned manner iii) Avoiding areas of problems which may affect the progress of the project iv) Eliminating the factors responsible for inducing the problems v) Analysing the financial implications and cost factor at various stages of the project vi) Understanding and developing the various designs required at various stages of the project vii) Identifying the key areas to be included in the scope through various meetings, discussion, and interviews with the clients viii) Providing a base and track to enable alignment of project with the organisation and its business objectives ix) Finding out the dimensions applicable to the project and also the ones not applicable to the project x) Listing out all the limitations, boundary values and constraints in the project xi) Understanding the assumptions made in defining the scope

After completing the project scoping, you can start your project plan. Project planning involves three processes as shown in the

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Let us now list the steps involved in each process of project planning. a) The identification process The main steps in the identification process of any project are: i) Identifying initial requirements ii) Validating them against the project objective iii) Identifying the criteria such as quality objectives and quantitative requirements for assessing the success of both the final product and the process used to create it iv) Identifying the framework of the solution v) Preparing a template of the frame work of solution to illustrate the project feasibility vi) Preparing relevant charts to demonstrate the techniques of executing the project and its different stages vii) Preparing a proper project schema of achieving the defined business requirements for the project viii) Identifying training requirement ix) Making a list of the training program necessary for the personnel working on the project x) Identifying the training needs of the individuals working in various functions responsible in the project xi) Preparing a training plan and a training calendar xii) Assessing the capabilities and skills of all those identified as part of the project organisation b) The review Process The main steps in the review process of any project are: i) Establishing a training plan to acquaint the project team members with the methodologies, technologies and business areas under study ii) Updating the project schedule to accommodate scheduled training activities iii) Identifying the needs for review and reviewing the project scope iv) Reviewing a project with respect to its stages and progress by preparing a plan for the review, fixing an agenda to review the project progress and keeping the reports ready for discussion about stage performance v) Reviewing the project scope, the objective statement, the non conformances in the project stages and identifying the need to use the project plan vi) Preparing a proper project plan indicating all the requirements from start to finish of the project and also at every stage of the project 6|Page

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vii) Preparing a checklist of items to be monitored and controlled during the course of execution of the project c) The analysis process The main steps in the analysis process of any project are: i) Comparing the actual details with that in the plan with reference to project stages. ii) Measuring various components of the project and its stages frequently to control the project from deviating and also monitor the performance. iii) Deciding how the task, the effort and the defects are to be tracked, what tools to be used, what reporting structure and frequency will be followed at various stages. iv) Identifying the preventive and corrective steps to be taken in case of any variance v) Performing root cause analysis for all problems encountered. If all the above steps are performed, scoping and planning become effective and the ideal outcome are achieved.

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Q.3 What is Return on Investmet (ROI) ? Explain its importance Ans:

What Is Return on Investment?

Lets suppose that the management team for the company represented by our second income statement, with sales of $3,125,000 and profits of $500,000, runs a company with assetsplant, equipment, inventories, and other itemsworth $20,000,000. Does this new information change our opinion of the performance of the management team? Of course it does: $500,000 is only 2.5 percent of $20,000,000. A 2.5 percent return on an investment of $20,000,000 is not acceptable! Owners would be better off with their funds invested in treasury bills (T-bills) or even in a savings accountthe return would be better, and there woul be no risk. A company must generate a much higher return than T-bills or savings accounts to justify the risk involved in doing business. As our example shows, return on investment, or ROI, is calculated as follows:

Lets suppose, instead, that the $500,000 profit was earned using only $2,000,000 in assets, rather than $20,000,000.ROI is now 25 percent. This return is much higher than the ROI one expects from T-bills, government bonds, or a bank savings account, and is thus much more acceptable to owners and creditors. The relationship between profit and the investment that generates the profit is one of the most widely used measures of company performance. As a quantitative measure of investment and results, ROI providesa companys management (as well as the owners and creditors)
T h e I m p o r t a n c e o f R e t u r n o n I n v e s t m e n t with a simple tool for examining performance.ROI allows management to cut out the guesswork and replace it with mathematical calculation, which can then be used to compare alternative uses of invested capital. (Should we increase inventory? Or pay off debt?) Creditors and owners can always invest in government securities that yield a low rate of return but are essentially risk-free. Riskier investments require higher rates of return (reward) to attract potential investors.ROI relates profits (the rewards) to the size of the investment used to generate it.

How Can ROI Be Useful?

Profits happen when a company operates effectively. We can tell that the management team is doing its job well if the company prospers, obtains funding, and rewards the suppliers of its funds.ROI is the principal tool used to evaluate how well (or poorly) management performs.

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Creditors and Owners
ROI is used by creditors and owners to do the following:
1. Assess the companys ability to earn an adequate rate of return. Creditors and owners

can compare the ROI of a company to other companies and to industry benchmarks or norms. ROI provides information about a companys financial health.
2. Provide information about the effectiveness of management. Tracking ROI over a

period of time assists in determining whether a company has capable management.

3. Project future earnings. Potential suppliers of capital assess present

and future investment and the return expected from that investment.

Managers
But ROI can do more than measure a companys performance. Managers can use ROI at different levels to help them make decisions regarding how best to maximize profits and add value to the company. Managers use ROI to do the following:
1. Measure the performance of individual company segments when each segment is

treated as an investment center. In an investment center, each segment manager controls both profit and an investment base. ROI is the basic tool used to assess both profitability and performance.
2. Evaluate capital expenditure proposals. Capital budgeting is longterm planning for

such items as renewal, replacement, or expansion of plant facilities. Most capital budgeting decisions rely heavily on discounted cash flow techniques.
3. Assist in setting management goals. Budgeting quantifies a managers plans. Most

effective approaches to goal setting use a budgeting process in which each manager participates in setting goals and standards and in establishing operating budgets that meet these goals and standards. Most budgeting efforts begin or end with a target ROI.

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Q. 4 Discuss the role of effective data management in the success of project management. ANS: The Role of Effective Data Management in the Success of Project Management :Data management consists of conducting activities which facilitate acquiring data, processing it and distributing it. Acquisition of data is the primary function. To be useful,

data should have three important characteristics timeliness, sufficiency and relevancy. Management of acquisition lies in ensuring that these are satisfied before they are stored for processing and decisions taken on the analysis.

There should be data about customers, suppliers, market conditions, new technology, opportunities, human resources, economic activities, government regulations, political upheavals, all of which affect the way you function. Most of the data go on changing because the aforesaid sources have uncertainty inherent in them. So updating data is a very important aspect of their management. Storing what is relevant in a form that is available to concerned persons is also important. When a project is underway dataflow from all members of the team will be flowing with the progress of activities. The data may be about some shortfalls for which the member is seeking instructions. A project manager will have to analyse them, discover further data from other sources and see how he can use them and take decisions. Many times he will have to inform and seek sanction from top management. The management will have to study the impact on the overall organisational goals and strategies and convey their decisions to the manager for implementation. For example, Bill of Materials is a very important document in Project Management. It contains details about all materials that go into the project at various stages and has to be continuously updated as all members of the project depend upon it for providing materials for their apportioned areas of execution. Since information is shared by all members, there is an opportunity for utilising some of them when others do not need them. To ascertain availability at some future point of time, information about orders placed, backlogs, lead times are important for all the members. A proper MIS will take care of all these aspects. ERP packages too help in integrating data from all sources and present them to individual

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members in the way they require. When all these are done efficiently the project will have no hold ups an assure success.

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Q.5 What is Project risk management? Explain its significance. Ans:

Introduction It is well known that organisations continue to grow year by year. As there is a need to grow, it becomes necessary for a growing organisation to resort to effective growth plan. The plan needs to be properly prepared. It is possible to prepare proper plans only if the manager has sufficient knowledge of the various processes of the project. The manager has to work on the various project life cycle stages and apply necessary planning tools to come out with a proper growth plan for the company. The project manager needs to be meticulously aware of the various techniques of identifying the project items, work break down structure of the project, task duration, and estimation. This unit deals with the various techniques and methodologies of project planning.
Classification and Categories :Risk management may be classified and categorised as 1. Risk assessment and identification The assessment and identification focuses on enumerating possible risks to the project. Methods that can aid risk identification include checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, process and work products. The project manager can also use the process database to get information about risks and risk management on similar projects. 2. Risk prioritisation Focus on the highest risk. Prioritisation requires analysing the possible effects of the risk event in case it actually occurs. This approach requires a quantitative assessment of the risk probability and the risk consequences. For each risk rate, the probability of its happening as low, medium or high. If necessary, assign probability values in the ranges given for each rating. For each risk, assess its impact on the project as low, medium, high or very high. Rank the risk based on the probability. Select the top few risk items for mitigation and tracking. 3. Risk Control: The main task is to identify the actions needed to minimise the risk consequences, generally called risk mitigation steps. Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the PM and select a suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating them into the project schedule. In addition to monitoring the progress of the planned risk mitigation steps periodically revisit the risk perception for the entire project. The results of this review are reported in each milestone analysis report. To prepare this report, make fresh risk analysis to determine whether the priorities have changed.

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Q. 6 Write brief note on project management application software.

Introduction Project Management has become so complex in modern times that project teams have started to realise the challenges of handling such a formidable mix of business processes. The sheer volumes had earlier led to suspended animation of several large projects till a number of leading software firms, led by Microsoft, came up with an ITintegrated approach with well-designed standardised software solution for Project Management.
Apart from breathing easy, project team members sensed the opportunity to exhibit better efficiency and a greater level of adherence to schedules when a bulk of their manual processes were automated to a great extent. They are able to simulate various scenarios and accurately estimate the parameters like resources consumption, time and cost. Undisputedly, today these software applications have become an integral part of any project management in all industries. In this unit, therefore, we would attempt to understand Project Management Application Software through a cursory look at the features and capabilities of leading software solutions like MS PROJECT, ODETTE, INNOVATEUR and AGILE. While this just serves to understand the concepts, you are advised to visit their websites and download demo versions to understand how they work. This unit will really enhance your understanding and practicality of project management. Various sections and subsections of this unit would cover details of the following: Project Management Application Software ODETTE ARIS Web Publisher Microsoft Project 2002 AGILE Project Management System apart from writing a winning Business Plan

Odette Documentation System Specifications

The ODETTE project was started in June 2000 as part of the IST framework programme 5 financed by the European Commission. The main goal of the project was to develop object-oriented hardware design methodology. This new design methodology was combined with a class library of basic building blocks and a tool-set that provides synthesis and simulation support The prime deliverable of the ODETTE is a system for object-

oriented hardware design based on System C(TM) system description language, which provides a migration path from object-oriented system specifications to efficient hardware implementations.
ARIS Web Publisher: ARIS Web Publisher supports you in rapidly and internationally communicating your process models via Internet and intranet. Use ARIS Web Publisher to generate quality information systems quickly and easily, and to communicate SAP R/3 processes throughout the company. Users can also run mySAP transactions and other routines from their browsers. The multilingual aspect breaks down language barriers and facilitates cooperation in international teams. The Webbased interface provides the opportunity for 13 | P a g e

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attractive design and easy navigation of published content. Time and space restrictions on the distribution of information have been overcome. Whether you are a project manager or not, project management techniques are extremely helpful in meeting goals and objects. Project management techniques define a path to a specified goal and then supervise the implementation. Microsoft Project 2002 :MS Project can help you establish your initial plan as well as monitor progress. MS Project can quickly produce reports and other information that will help keep management, customers, and your project team informed. To get the most from MS Project, not only do you need to understand project management terminology, you also need to be familiar with the software itself. Therefore, do not attempt to quickly finish the lab, but take your time and read all instructions carefully.

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