Basics of
Project Management
New Pattern for
UPSC ESE Exam
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IES MASTER PUBLICATION F-126, (Lower Basement), Katwaria Sarai, New Delhi-110016 Phone : 011-26522064, Mobile : 8130909220, 9711853908 E-mail : info@iesmasterpublications.com, info@iesmaster.org Web : iesmasterpublications.com, iesmaster.org
All rights reserved. Copyright Š 2017, by IES MASTER Publications. No part of this booklet may be reproduced, or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior permission of IES MASTER, New Delhi. Violates are liable to be legally prosecuted.
First Edition : 2016 Second Edition (Revised) : 2017
Typeset at : IES Master Publication, New Delhi-110016
PREFACE
Project management is a logical and proven method to plan and guide the project process right from the beginning till the end. In another words, we can say the project starts from definition of project and ends with goal achievement. It can be art or science or may be considered as both. The science consists of a systematic approach using a standard methodology. The art consists of “soft skills” including leadership, trust, credibility, problem solving, and managing expectations. This scientific technique helps in smooth and error less execution of the project. The book “Basics of Project Management” has been written to address the need of students appearing for UPSC Engineering Services Exam (ESE). Most of the books on this subject have been written too extensively and with a particular branch of engineering in focus, which makes most of the part of the book irrelevant for the exam. In this book we have tried to cover all the relevant topics pertinent to the exam and have introduced important informations in boxes to attract special attention and to clarify important concepts. Objective questions have been introduced at the end for practice and to discover the extent of students knowledge. IES Master Publication is thankful to Mr. Ankit Sharma for his extensive contribution in generating, shaping, editing and production of this book. We also thank the staff at IES Master Publication and all those who have assisted by providing informations on the topics and advice in the production of the Book.
IES Master Publication New Delhi, 2017
CONTENTS
Preface Chapter 1
Chapter 2
(iii)
FUNDAMENTALS OF PROJECT MANAGEMENT 1.1
INTRODUCTION …(1)
1.2
WHAT IS PROJECT? …(2)
1.3
PROJECT MANAGEMENT ORGANISATIONS AND THEIR BOOKS OF KNOWLEDGE …(3)
1.4
TYPES OF PROJECTS
1.5
CHARACTERISTICS/FEATURES OF PROJECTS …(4)
1.6
OPERATIONS …(5)
1.7
STAKEHOLDERS …(5)
1.8
PROJECT CONSTRAINTS …(6)
1.9
WHY PROJECT MANAGEMENT IS NEEDED? …(7)
1.10
WHAT IS PROJECT MANAGEMENT? …(7)
1.11
OBJECTIVES OF PROJECT MANAGEMENT …(8)
1.12
PROJECT MANAGEMENT MATURITY
1.13
PROJECT MANAGEMENT OFFICE …(9)
1.14
FUNCTIONS OF PROJECT MANAGEMENT
1.15
PROJECT, PROGRAM AND PORTFOLIO …(10)
1.16
PROJECT LIFE CYCLE …(11)
1.17
PHASES OF PROJECT LIFE CYCLE …(12)
1.18
PROJECT MANAGER
1.19
ORGANIZATIONAL STRUCTURES
1.20
POWERS OF PROJECT MANAGER
1.21
PHASE TO PHASE RELATIONSHIP …(18)
1.22
TYPES OF PROJECTS LIFE CYCLES …(18)
1.23
PROJECT SUCCESS …(20)
1.24
SOURCES OF CONFLICT IN PROJECTS …(20)
1.25
CONFLICT RESOLUTION TECHNIQUES …(20)
01 – 34
…(3)
…(8)
…(9)
…(13) …(14) …(17)
PROCESS GROUP AND KNOWLEDGE AREAS 2.1
INTRODUCTION …(35)
2.2
WHAT IS “PROCESS GROUPS”? …(36)
2.3
WHAT IS “KNOWLEDGE AREAS”? …(36)
2.4
PROCESS GROUPS …(37)
2.5
KNOWLEDGE AREAS …(38)
35 – 48
Contents Chapter 3
Chapter 4
Chapter 5
PROJECT INITIATION
(v)
49 – 79
3.1
INTRODUCTION …(49)
3.2
PROJECT IDENTIFICATION …(50)
3.3
PRE-FEASIBILITY STUDIES …(50)
3.4
PROJECT FEASIBILITY OR FORMULATION STUDIES …(51)
3.5
MARKET FEASIBILITY
3.6
FINANCIAL FEASIBILITY
3.7
TECHNICAL FEASIBILITY
3.8
SOCIO-ECONOMIC FEASIBILITY
3.9
ENVIRONMENTAL/ECOLOGICAL FEASIBILITY
3.10
DETAILED PROJECT REPORT
3.11
PROJECT APPRAISAL/EVALUATION …(68)
3.12
PROJECT SELECTION/DECISION …(68)
3.13
PROJECT CHARTER
…(51) …(55) …(63) …(65) …(67)
…(68)
…(70)
PROJECT PLANNING
80 – 119
4.1
PROJECT PLANNING
…(80)
4.2
STEPS OF PROJECT PLANNING
4.3
PROJECT KICKOFF MEETING
4.4
DEFINING SCOPE OF WORK …(81)
4.5
WORK BREAKDOWN STRUCTURE (WBS) …(81)
4.6
ROLE ASSIGNMENT
4.7
PROJECT SCHEDULING
4.8
NETWORK ANALYSIS TECHNIQUE …(4.8)
4.9
PERT ANALYSIS
…(85)
4.10
CPM ANALYSIS
…(92)
4.11
GERT
4.12
ACTIVITY ON NODE NETWORK SYSTEM
4.13
ESTIMATION OF PROJECT COST
4.14
BUDGET PLANNING
4.15
RESOURCE ALLOCATION …(99)
4.16
PROJECT SUPPORT PLANS …(100)
…(80)
…(81)
…(82) …(82)
…(95) …(95)
…(96)
…(99)
RISK MANAGEMENT
120 – 138
5.1
INTRODUCTION
5.2
SOURCES OF RISK
5.3
STEPS OF RISK MANAGEMENT
…(122)
5.4
RISK MANAGEMENT PLANNING
…(122)
5.5
RISK IDENTIFICATION …(123)
5.6
RISK ANALYSIS …(124)
5.7
RISK RESPONSE PLANNING
5.8
RISK MONITORING AND CONTROLLING
5.9
REVIEW
…(129)
…(120) …(121)
…(128) …(129)
(vi) Contents Chapter 6
Chapter 7
Chapter 8
PROJECT EXECUTION
139 – 147
6.1
INTRODUCTION
…(139)
6.2
OBJECTIVES OF EXECUTION PHASE …(140)
6.3
APPROACHES TO PROJECT EXECUTION …(140)
6.4
MANAGING PROJECT EXECUTION …(140)
6.5
TOOLS REQUIRED FOR EXECUTION …(141)
6.6
ORGANISING SYSTEMS AND PROCEDURES FOR PROJECT EXECUTION …(141)
6.7
SYSTEMS REQUIRED FOR THE EXECUTION OF A PROJECT
6.8
PROJECT CONTROL PROCESS …(142)
6.9
ISSUES IN PROJECT EXECUTION …(143)
6.10
FACTORS AFFECTING PROJECT EXECUTION …(143)
6.11
FACTORS LEADING TO POOR EXECUTION …(143)
…(141)
PROJECT MONITORING AND CONTROL
148 – 167
7.1
INTRODUCTION
…(148)
7.2
PROJECT MONITORING
7.3
TOOLS AND TECHNIQUES FOR MONITORING
7.4
PROJECT MANAGEMENT INFORMATION SYSTEM (PMIS)
7.5
PROJECT CONTROL …(153)
7.6
PURPOSE OF CONTROL …(154)
7.7
ELEMENT OF CONTROL IN PROJECT
7.8
TYPE OF CONTROL SYSTEMS
…(148) …(149) …(153)
…(154)
…(155)
PROJECT CLOSURE AND REVIEW
168 – 180
8.1
INTRODUCTION
…(168)
8.2
OBJECTIVES/BENEFITS OF PROJECT CLOSING
8.3
STEPS PROJECT CLOSING
8.4
ENSURING PHYSICAL COMPLETION …(169)
8.5
CLOSING PROCUREMENT OR OTHER CONTRACTS …(169)
8.6
HANDING OVER OF OUTPUT AND OBTAINING FORMAL ACCEPTANCE …(169)
8.7
DOCUMENTING PROJECT RECORDS …(169)
8.8
PERFORMING FINANCIAL CLOSURE …(169)
8.9
DOCUMENTING LESSONS LEARNED …(170)
8.10
RELEASING/REDISTRIBUTION OF RESOURCES …(170)
8.11
PERFORMING POST IMPLEMENTATION REVIEW …(170)
8.12
ARCHIVING PROJECT RECORDS …(171)
8.13
PROJECT AUDIT
8.14
TYPES FOR PROJECT CLOSING AND TERMINATION …(172)
8.15
CHALLENGES IN PROJECT CLOSING
…(168)
…(169)
…(171)
…(174)
APPENDIX - I
181-182
APPENDIX - II
183-184
GLOSSARY
185-190
FUNDAMENTALS
OF
PROJECT MANAGEMENT
| 21
Questions 1.
2.
During project planning in a matrix organization, the project manager determines that additional human resources are needed. From whom would he request these resources? (a)
Project manager
(b)
Functional manager
(c)
Team
(d)
Project scope
Collectively, the project phases are known as the project life cycle
(c)
The project lifecycle is regarded as a sequence of project activities while phases are defined to control the overlapping of activities.
5.
10.
A project is a unique service undertaken to create a temporary product
An example of a project is: (a)
Billing customers
(b)
Managing an organization
(c)
Constructing a building or facility
(d)
Providing technical support
The project manager should be assigned during what phase (a)
Initiation
(b)
Project planning
(c)
Scope planning
(d)
Scope definition
Which of the following is most important in virtual team environment. (a)
Requirements planning
(b)
Formal procurements
(c)
Network diagramming
(d)
Communication planning
What is triple constraints of project according to the Dr. Martin Barne’s _______ (a)
Quality, performance, time
(b)
Performance, cost, time
(c)
Performance, people, time
(d)
Quality, cost, time
According to the Diusmare the second and fourth level of the project maturity are (a)
Initial Repeatable
A project is a unique endeavor undertaken to create a temporary service
(b)
Repeatable Define
(c)
Repeatable Managed
(c)
A project is a temporary endeavor undertaken to create a unique product or service.
(d)
Optimizing Managed
(d)
A project is a temporary product undertaken to create a unique endeavor or service
(b)
4.
9.
The project lifecycle contains the repetitive elements inside a project phase
Which is true regarding projects? (a)
8.
The project lifecycle contains the iterative incremental elements inside a project phase.
(b)
(d)
3.
7.
Which of the following statements describes the relationship between project phases and the project life cycle? (a)
6.
11.
Quasi-Project are manage through which tool– (a)
Gantt chart; cost/benefit ratio, rolling wave
(b)
Network diagram, Gantt chart prototyping
At what stage in the project life cycle would costs be the lowest?
(c)
Prototyping, phase-getting, Rolling wave, agile Produce management
(a)
Concept
(b)
Development
(d)
Cost/Benefit Ratio, phase getting prototyping
(c)
Implementation
(d)
Close out
12.
The example of quasi project are–
Project Managers have least power in which organization structure
(a)
Construction/Machine design
(b)
equipment installation/software development
(a)
Matrix
(b)
Functional
(c)
making high rise building/website design
(c)
Projectized
(d)
Balanced
(d)
Website design/Architecture design
22 | 13.
14.
15.
16.
17.
18.
BASICS
OF
PROJECT MANAGEMENT
Functional manager use ____ approach and Project manager use ____ approach.
19.
Which of the following is not a organisational process assets
(a)
Analytical, systematic
(a)
knowledge bases
(b)
Systematic, analytical
(b)
project management methodology
(c)
Analytical, Analytical
(c)
Project management software
(d)
Systematic, Systematic
(d)
Financial control and reporting structure
Analytical approach follow which type of process _____
20.
What is primary role of portfolio manager (a)
To deliver unique product, service, or result of the project
Work break down system
(b)
to provide project governance and sponsorship
(c)
Understand the whole component of the project at a time
(c)
To directly manage people assigned to several different projects
(d)
Consider the environment of the project
(d)
To assess all potential projects against known organizational strategic goals.
(a)
Working on whole project
(b)
In a weak matrix organisation the (a)
Most of the power belongs to functional manager
(b)
Most of the power belongs to project manager
(c)
Both have equal power
(d)
No one have power
21.
22.
Which type of power comes under the category of positional power ______ (a)
Reward power, coercive power, expert power
(b)
Expert power, Referent power Reward power
(c)
Legitimate power, Reward power, Coercive power
(d)
expert power, legitimate power, coercive power
23.
What is best role for a project management office with low level of project management maturity? (a)
Directive
(b)
Controlling
(c)
Supporting
(d)
Enabling
What is name for group of related projects managed in a coordinated way to obtain a synergy between them which is not found by managing them individually (a)
Multi project
(b)
Portfolio
(c)
Program
(d)
Strategy
Which of the following can be included under ancillary goals 1.
Achieving performance target
2.
Improving organisation project management competency and methods
3.
Gaining a Foot hold in a new market
For ongoing operations which type of organisation structure is most suitable _____
4.
Improving managerial Experiences through project management
(a)
Projectised organisation
(a)
1 and 2
(b)
2 and 3
(b)
Functional organisation
(c)
2, 3 and 4
(d)
All of above
(c)
Matrix organisation
(d)
All
24.
Match the following levels of project management maturity level with explanation
Which organisation violets the principal of unity
(A) 1st level (Initial)
(a)
Projectised organisation
(B) 2nd level (Repeatable)
(b)
Functional organisation
(C) 3rd level (Defined)
(c)
Matrix organisation
(D) 4th level (managed)
(d)
None
(E) 5th level (optimized)
FUNDAMENTALS
PROJECT MANAGEMENT
OF
| 31
ANSWER KEY 1.
(b)
18.
(c)
35.
(d)
52.
(c)
69.
(a)
86.
(b)
2.
(b)
19.
(c)
36.
(d)
53.
(c)
70.
(c)
87.
(b)
3.
(c)
20.
(d)
37.
(c)
54.
(d)
71.
(c)
88.
(b)
4.
(a)
21.
(c)
38.
(c)
55.
(a)
72.
(d)
89.
(d)
5.
(b)
22.
(c)
39.
(b)
56.
(d)
73.
(c)
90.
(b)
6.
(c)
23.
(c)
40.
(d)
57.
(c)
74.
(b)
91.
(a)
7.
(a)
24.
(c)
41.
(a)
58.
(d)
75.
(c)
92.
(d)
8.
(d)
25.
(d)
42.
(b)
59.
(c)
76.
(b)
93.
(a)
9.
(d)
26.
(a)
43.
(d)
60.
(d)
77.
(a)
94.
(d)
10.
(c)
27.
(b)
44.
(a)
61.
(b)
78.
(c)
95.
(b)
11.
(c)
28.
(d)
45.
(b)
62.
(a)
79.
(d)
96.
(b)
12.
(d)
29.
(a)
46.
(a)
63.
(a)
80.
(c)
97.
(b)
13.
(a)
30.
(c)
47.
(c)
64.
(d)
81.
(c)
98.
(b)
14.
(b)
31.
(b)
48.
(d)
65.
(b)
82.
(d)
99.
(b)
15.
(a)
32.
(b)
49.
(d)
66.
(c)
83.
(d)
16.
(c)
33.
(c)
50.
(c)
67.
(c)
84.
(c)
17.
(b)
34.
(c)
51.
(d)
68.
(c)
85.
(a)
EXPLANATIONS 1.
Cost and staffing level are low at the start of the project it increases progressively during planning reaches to peak in execution phase a finally it drops rapidly in closing phase.
(b) Functional manager is in charge of firms functional department such as marketing, engineering, HR, finance etc. so resources are requested from functional manager. (b)
Planning Phase
Project life cycle generally consist of four phases
3.
(i) Initiation
(ii) Planning
(iii) Execution
(iv) Closing
(c) PMBOK definition of project says a project is a temporary endeavor undertaken to create a unique project, service or result.
Execution Phase
Project Charter
Project Management Plan Project Time
4.
(a)
Closing Phase
Cost and Staffing Level
2.
Initiation phase
Accepted Archived Deliverables Project Documents
32 | 5.
BASICS
OF
PROJECT MANAGEMENT
(b)
13.
Matrix organization has power distributed between project managers and functional mangers.Depending on type of matrix.
Systems Approach: System approach considers organisation as a dynamic and inter related set of parts. Each part represents a department or a sub-system. Each sub part has its components further each components has its elements continuous and effective interaction of sub parts, components and elements help to attain goals of larger system.
Stronger matrix – Most power is in the hands of PM Balance matrix equal distribution between FM and PM Weak matrix – Most power is in hands of FM In projectized organization all powers belongs to PM
Project manager use systematic approached and functional manager uses analytic approach. 14.
In functional organizations all power belongs to functional managers. 6.
7.
8.
15.
16.
It is of following subtypes (i)
(iii) Coercive power 18.
Lev el 3 – organizational standards and institutionalized processes
19.
11.
20.
(c)
These don’t have a well defined project scope. So they require iterative approach, rolling wave techniques to accommodate changing nature of projects and prototyping for validating the product.
or, He is a person who manages financial institutions assets and labilities and are ultimately responsible for establishing or investment strategy, selecting appropriate investments and allocating each investment properly for an investment fund or assets management vehicle.
(d) Construction/machine design, equipment installation, software development, meeting high rise building has well defined project and product scope while website design or architecture design don’t have well defined scope.
(d) A portfolio manager is a person or group of people responsible for investment in a mutual, exchange – traded or closed end fund’s assets, implementing its investment strategy and managing dry – to day portfolio trading.
Quasi-Project are without specific targets or deliverables.
12.
(c) PMS is generally considered to be an enterprise environmental factor because it is usually licensed rather than owned.
Level 4 – Managed process Level 5 – Optimized process
(c) Principal of command of unity say that no person need to report more than one boss.
Level 1 – initial Level 2 – structured process and standards
Legitimate power
(ii) Reward power
(c) According to diusmare project management maturity level are:
(c) Positional power comes the hierarchical position of that person in any organization.
(d) The base of v irtual team is eff ectiv e communication as team member are at different places may be different countries.
10.
(a) Weak matrix organization has most features of functional organization FM has most of powers compared to PM in weak matrix.
(a) Project Manager is formally authorized by project charter in initial phase.
(b) Analytic Approach: Analytic approach is use of an appropriate process to break down a problem in necessary smaller pieces to solve it. Each piece becomes smaller and easier problem to solve.
(c) Definition of project says a project is a temporary endeavor undertaken to create a unique product service or result. Clearly constructing a building or facility is temporary endeavor and it give a unique product building.
(a)
21.
(c) Directive PMO are best in organisation with high level of project management maturity.