PROJECT PLANNING
Effective management of projects is key to the progress of an economy because development itself is the outcome of a series successfully managed projects. To avoid project schedule slippages and cost overruns, a project needs to be meticulously planned, effectively implemented and professionally managed in order to accomplish the objectives of time, cost and performance.
The term ‘project’ has a wider meaning to include a set of activities. For example, construction of a house is a project. It includes many activities like digging of foundation pits, construction of foundations, construction of walls, construction of roof, fixing of doors and windows, fixing of sanitary fitting, wiring etc. Further, project is the non-routine nature of activities.
In fact, a project is an organized programme of pre-determined group of activities that are non-routine in nature and that must be completed within the given time limit. It is a non-routine, non-repetitive, one-off undertaking, normally with discrete time, financial and technical performance goals.
The distinguishing features of a project are :
Purpose: A project is usually a one-time activity with a well-defined set of desired end results. It can be divided into subtasks that must be accomplished in order to achieve the project goals. The project is complex enough that the subtasks require careful coordination and control in terms of timing, precedence, cost, and performance. The project itself must often be coordinated with other projects being carried out by the same parent organization.
Life Cycle : Like organic entites, projects have a life cycle. From a slow beginning they progress to a buildup of size, then peak, begin a decline, and finally must be terminated. (Also like other organic entities, they often resist termination.) Some projects end by being phased into the normal, ongoing operations of the parent organization.
Single Entity : A project is one entity and is normally entrusted in one responsibility centre while the participants in the project are many. Interdependencies : Projects often interact with other projects carried out simultaneously by their parent organization; but projects always interact with the parent’s standard, ongoing operations. While the functional departments of an organization (marketing, finance, manufacturing, and the like) interact with one another in regular, patterned ways, the patterns of interaction between projects and these departments tend to be changing. Marketing may be involved at the beginning and end of a project, but not in the middle. Manufacturing may have major involvement throughout. Finance is often involved at the beginning and accounting (the controller) at the end, as well as at periodic reporting times. The project manager must keep all these interactions clear and maintain the appropriate interrelationships with all external groups.
Uniqueness : Every project has some elements that are unique. No two construction or R&D projects are precisely alike. Though it is clear that construction projects are usually more routine than research and development projects, some degree of customization is a distinct feature of a project. In addition to the presence of risk, as noted above, a project may be unique in nature, which can not be completely reduced to routine. The project manager’s importance is emphasized because, as a devotee of management by exception, the manager will find there are a great many exceptions to manage by.
Complexity : A rich project represents a complex set of activities pertaining to diverse areas. Technology survey, choice of the appropriate technology, procuring the appropriate machinery and equipment, hiring the right kind of people, arranging the financial resources, execution of the projects in time by proper scheduling of various activities contribute to the complexity of the project.
Team Work : Successful completion of a project calls for teamwork. The team is constituted of members who are specialists in relevant fields.
Risk and Uncertainty : Risk and uncertainty are inherent in every project. However, degree of risk and uncertainty will depend on how a project passes through its various life cycle phases.
Customer Specific : A project has always to be customer specific so as to cater to the needs of customers. As such, the organization should go for projects that are suited to customers.
CLASSIFICATION OF PROJECTS
Projects can be categorized according to type of activity, location, time, ownership, size and need.
According to Type of Activity : Under this category, projects can be classified as industrial and non-industrial projects Industrial projects are set up for the production of some goods. Non-Industrial projects comprise health care projects, educational projects, irrigation projects, soil conservation projects, highway projects etc.
According to Location : Location wise, projects can be categorized as national and international projects. National projects are those set up in the national boundaries of a country, while international projects are set up by the government of private sector across the globe.
According to Completion Time : Projects under this category can be divided into two types, viz; normal and crash projects. In case of normal projects there is no time constraint. Crash projects are those which are to be completed within a stipulated time, even at the cost of ending up with a higher project cost.
According to Ownership : Projects under this category can be grouped into public, private and joint sector projects. Public sector projects are owned by the Government. In private sector projects ownership is in the hands of the project promoters and investors. Joint sector projects are those in which ownership is shared by the Government and private entrepreneurs.
According to Size : Based on size, there may be three categories of projects, viz; small, medium and large. As per the present guideline of the Government, projects with investment on plant and machinery upto Rs. 1 crore are classified as small and those with investment in plant and machinery above Rs. 100 crores are categorized as large scale projects. Those with investment limit between these groups are medium scale projects.
According to Need : Based on the need for the project, projects can be classified as new balancing, expansion, modernization, replacement, diversification, backward integration and forward integration projects.
THE PROJECT LIFE CYCLE
Performance, time, and cost goals remain constant throughout the project's life cycle and are the main factors to be taken into account. Performance is prioritized in the early stages of the life cycle. The team members concentrate on how to meet the performance objectives of the project. We refer to the precise strategies used to achieve these objectives as the project's technology because they call for the use of a science or an art.
When the major "how" issues are resolved, project staff can get preoccupied with performance improvement, frequently going above and beyond what was called for in the initial specifications. The timeline is pushed back and the prices are raised as a result of this search for more performance.
A growing preoccupation with cost containment is a hallmark of the middle stages of the life cycle. The emphasis of attention shifts to time during the last phases of the life cycle. As projects near completion, there is typically more cost flexibility and efforts are focused on keeping everything as close to the agreed timeline as feasible, even if doing so results in cost penalties.
If one could forecast with certainty at the beginning of a situation, it would be a wonderful source of comfort.
PROJECT MANAGEMENT
Project management is the process of identifying project possibilities, creating profitable project profiles, obtaining funding for project implementation, planning project activities to be completed with the least amount of effort and expense, and monitoring the project once it has been completed.
Project management has to define what needs to be done and make sure it is done and performed as requested within the time and cost budgets set for it utilising a modular work strategy and resources from within and outside the company.
PLANNING PROJECT WORK
Six different planning sequences are represented by project planning. The first step is preliminary coordination, during which the various project participants gather and make early decisions about what will be accomplished (the project's objectives) and by whom. These preliminary plans form the framework for a thorough explanation of the numerous tasks that must be carried out and completed in order to meet the project's goals. Additionally, the participants become more committed to the project just by participating in the preliminary planning phase.
These work plans are utilized to determine the project budget and schedule for the third and fourth sequences. The project work plan, which includes a detailed description of the project's tasks, and the timeline both directly reflect the level of information (or lack thereof) in the plan. The fifth planning sequence provides detailed information on all project status reports, including when they must be produced, what they must include, and who will receive them. Final step: Project termination plans that outline how the project's components will be transferred after its intended purpose has been achieved must be prepared.
But before we get started, we make the assumption that planning's main goal is to make its objectives easier to achieve. There are many plans in the world that are never carried out. The planning strategies discussed here are meant to make the transition from idea to completion easier. Plans serve as a road map for the difficult process of managing a project. The map must be basic enough for workers to understand yet detailed enough to know what has to be done next.
Initial Project Coordination
The project's goals must be explicitly linked to the company's broader vision and mission. Senior management should identify the project's scope, discuss its goals, and explain why the company decided to take on the project. Project planning is prone to error without a defined start. As a clear indication of high management's commitment to the initiative, a senior manager must convene the first coordinating meeting and be present.
Potential participants are given enough information about the project at the meeting to have a basic idea of what is required. The meeting will be brief and routine if the project is one of many such projects, more of a "touching base"with other interested units. If the project is unique in most of its aspects, extensive discussion may be required.
No matter how the process is carried out, the following outcomes are required: (1) technical objectives must be established (though they may not be "cast in concrete"), (2) the participants must accept the fundamental performance responsibility areas, and (3) some tentative schedules and budgets must be specified. Each person or unit taking on responsibility for a particular aspect of the project should undertake to present, by the following project meeting, a rough but comprehensive plan outlining how that obligation will be carried out. Such plans ought to include timelines, budgets, and descriptions of the necessary tasks.
Following group evaluation, a composite project plan is created from these individual plans. Each participating group, the project manager, and finally senior organisational management all provide their approval to the composite plan, which is still not quite finalised. Once senior management has approved the plan, any further changes must be made by processing a formal change order. Each subsequent approval "hardens" the plan somewhat. However, informal written notes can take the place of the modification order if the project is not very vast or complicated. The key issue is that when high management has given its blessing, no important project adjustments are made without written notice. Depending on the details and parties involved, "significant" might mean different things in different contexts.
Project Plan Elements
Given the project plan, approvals really amount to a series of authorizations. The project manager is authorized to direct activities, spend monies (usually within preset limits), request resources and personnel, and start the project on its way to completion. Senior management’s approval not only signals its willingness to fund and support the project, it also notifies sub-units in the organization that they may commit resources to the project.
The process of developing the project plan varies from organization to organization, but any project plan must contain the following elements:
Overview: This is a short summary of the objectives and scope of the project. It is directed to top management and contains a statement of the goals of the project, a brief explanation of their relationship to the firm’s objectives, a description of the managerial structure that will be used for the project, and a list of the major milestones in the project schedule.
Objectives: This contains a more detailed statement of the general goals noted in the overview section. The statement should include profit and competitive aims as well as technical goals.
General Approach: This section describes both the managerial and the technical approaches to the work. The technical discussion describes the relationship of the project to available technologies. For example, it might note that this project is an extension of work done by the company for an earlier project. The subsection on the managerial approach takes note of any deviation from routine procedure, for instance, the use of subcontractors for some parts of the work.
Contractual Aspects: This critical section of the plan includes a complete list and description of all reporting requirements, customer-supplied resources, liaison arrangements, advisory committees project review and cancellation procedures, proprietary requirements, any specific management agreements (eg., use of subcontractors), as well as the technical deliverables and their specifications and delivery schedule. Completeness is a necessity in this section. If in doubt about whether an item should be included or not, the wise planner will include it.
Schedules : This section outlines the various schedules and lists all milestone events. The estimated time for each task should be obtained from those who will do the work. The project master schedule is constructed from these inputs. The responsible person or department head should sign off on the final, agreedon schedule.
Resources: There are two primary aspects to this section. The first is the budget. Both capital and expense requirements are detailed by task, which makes this a project budget. One-time costs are separated from recurring project costs. Second, cost monitoring and control procedures should be described. In addition to the usual routine cost elements, the monitoring and control procedures must be designed to cover special resource requirements for the project, such as special machines, test equipment, laboratory usage or construction, logistics, field facilities and special materials.
Personnel : This section lists the expected personnel requirements of the project. Special skills, types of training needed, possible recruiting problems, legal or policy restrictions on work-force composition, and any other special requirements, such as security clearances, should be noted here. It is helpful to index personnel needed for the project schedule. This makes clear when the various types of contributors are needed and in what numbers. These manpower projections are important element of the budget, so the personnel, schedule, and resources sections can be cross-checked with one another to ensure consistency.
Evaluation Methods : Every project should be evaluated against standards and by methods established at the project’s inception. This section contains a brief description of the procedure to be followed in monitoring, collecting, storing, and evaluating the history of the project.
Potential Problems: Sometimes it is difficult to convince planners to make a serious attempt to anticipate potential difficulties. One or more such possible disasters as subcontractor’s default, technical failure, strikes, bad weather, sudden required breakthroughs, critical sequences of tasks, tight deadlines, resource limitations, complex coordination requirements, insufficient authority in some areas, and new, complex, or unfamiliar tasks are certain to occur. The only uncertainties are which ones will occur and when. In fact, the timing of these disasters is not random. There are times, conditions, and events in the life of every project when progress depends on subcontractors, or the weather, or coordination, or resource availability, and plans to deal with unfavourable contingencies should be developed early in the project’s life cycle. Some Project managers disdain this section of the plan on the grounds that crises can not be predicted. Further, they claim to be very effective “fire fighters.” It is quite possible that when one finds such a Project manager, one has discovered an “arsonist.” No amount of current planning can solve the current crisis, but pre planning may avert some.
These are the elements that constitute the project plan and are the basis for a more detailed planning of the budgets, schedules, work plan, and general management of the project. Once this basic plan is fully developed and approved, it is disseminated to all interested parties.
System integration (sometimes called systems engineering) plays a crucial role in the performance aspect of the project. We are using this phrase to include any technical specialist in the science or art of the project who is capable of performing the role of integrating the technical disciplines to achieve the customer’s objectives. As such, systems integration is concerned with three major objectives.
Performance: Performance is what a system does. It includes system design, reliability, maintainability, and reparability. Obviously, these are not separate, independent elements of the system, but are highly interrelated qualities. Any of these system performance characteristics is subject to over-design as well as undersign but must fall within the design parameters established by the client. If the client approves, we may give the client more than the specifications require simply because we have already designed to some capability, and giving the client an over designed system is faster and less expensive than delivering precisely to specification. At times, the aesthetic qualities of a system may be specified, typically through a requirement that the appearance of the system must be acceptable to the client.
Effectiveness: The objective is to design the individual components of a system to achieve the desired performance in an optimal manner. This is accomplished through the following guideline: Require no component performance specification unless necessary to meet one or more systems requirements. Every component requirement should be traceable to one or more systems requirements. Design components to optimize system performance, not the performance of a subsystem.
Cost: Systems integration considers cost to be a design parameter, and costs can be accumulated in several areas. Added design cost may lead to decreased component cost, leaving performance and effectiveness otherwise unchanged. Added design cost may yield decreased production cost, and production cost may be trade-off against unit cost for materials. Value engineering examines all these cost trade-offs and is an important aspect of systems integration. It can be used in any project where the relevant cost trade-offs can be estimated. It is simply the consistent and thorough use of cost/effectiveness analysis. For an application of value engineering techniques applied to disease control projects.
Systems integration plays a major role in the success or failure of any project. If a risky approach is taken by system integration, it may delay the project. If the approach is too conservative, we forego opportunities for enhanced project capabilities or advantageous project economics. A good design will take all these trade-offs into account in the initial stages of the technical approach. And it will avoid locking the project into a rigid solution with little flexibility or adaptability in case problems occur later on or changes in the environment demand changes in project performance or effectiveness.
Sorting Out the Project
In order to ensure a successful completion of a Project we need to know exactly what is to be done, by whom, and when. All activities required to complete the project must be precisely delineated and coordinated. The necessary resources must be available when and where they are needed, and in the correct amounts. Some activities must be done sequentially, but some may be done simultaneously. If a large project is to come in on time and within cost, a great many things must happen when and how they are supposed to happen. In this section, we propose a simple method to assist in sorting out and planning all this detail.
To accomplish any specified project, there are several major activities that must be completed. First, list them in the general order in which they would normally occur. A reasonable number of major activities might be anywhere between two and twenty. Break each of these major activities into two to twenty subtasks. There is nothing sacred about the “two to twenty” limits. Two is the minimum possible breakdown and twenty is about the largest number of interelated items that can be comfortably sorted and scheduled at a given level of task aggregation. Second, preparing a network from this information, is much more difficult if the number of activities is significantly greater than twenty.
Sometimes a problem arises because some managers tend to think of outcomes (events) when planning and other think of specific tasks (activities). Many mix the two. The problem is to develop a list of both activities and outcomes that represents an exhaustive, non redundant set of results to be accomplished (outcomes) and the work to be done (activities) in order to complete the project.
The procedure proposed here is a heirarchical planning system. First, the goals must be specified. This will aid the planner in identifying the set of required activities for the goals to be met, the project Action Plan. Each activity has an outcome (event) associated with it, and these activities and events can be decomposed into sub-activities and sub-events, which may, in turn, be subdivided again. The Project Plan is the set of these Action Plans. The advantage of the Project Plan is that it contains all planning information in one document.
The Work Breakdown Structure and Linear Responsibility Charts
The Work Breakdown Structure (WBS) used in project management is a type of Gozinto chart and is constructed directly from the project’s Action Plans. The WBS may also be perceived as an organization chart with tasks substituted for people It pictures a project subdivided into heirarchical units of tasks, work packages, and work units. The end results is a collection of work units each of which is relatively short in time span. Each has definite beginning and ending points along with specific criteria for evaluating performance. Each part of the project down to the smallest subtask elements is budgetable in terms of money, man hours, and other requisite resources. Each is a single, meaningful job for which individual responsibility can be assigned. Each can be scheduled as one of the many jobs that the organization must undertake and complete.
In constructing the WBS, it is wise to contact the managers and workers who will be directly responsible for each of the work packages. These people can develop a hierarchical plan for the package delegated to them.
The WBS can be used to illustrate how each piece of the project is tied to the whole in terms of performance, responsibility, budgeting, and scheduling. The following general steps explain the procedure for designing and using the WBS as it would be used on a large project. For small or moderate-size projects, some of the steps might be skipped, combined, or handled less formally than our explanation indicates, particularly if the project is of a type familiar to the organization.
1) Using information obtained from the people who will perform the work, break project tasks down into successively finer levels of detail. Continue the decomposition of work until all meaningful tasks have been identified and each task can be individually planned, scheduled, budgeted, monitored, and controlled.
2) For each such work element:
Make up a work statement that includes the necessary inputs, the specification reference, particular contractual stipulations, and specific end results to be achieved. List any vendors, contract, and subcontractors who are or may be involved. Identify detailed end item specifications for each work element regardless of the nature of the end item, whether hardware, software, test results, reports, etc.
Establish cost account numbers.
Identify the resource needs, such as manpower, equipment facilities, support, funds, and materials. Cost estimators can assist the Project Manager in constructing a task budget composed of costs for materials, manufacturing operations, freight, engineering, contingency reserves, and other appropriate charges.
List the personnel and organizations responsible for each task. It is helpful to construct a linear responsibility chart (sometimes called a responsibility matrix) to show who is responsible for what. This chart also shows critical interfaces between units that may require special managerial coordination. With it, the Project Manager can keep track of who must approve what and who must report to whom.
3) The WBS, budget, and time estimates are reviewed with the people or organizations who have responsibility for doing or supporting the work. The purpose of this review is to verify the WBS’s accuracy, budget, schedule, and to check interdependency of tasks, resources, and personnel. The WBS may be revised as necessary, but the planner must be sure to check significant revisions with all individuals who have previously made inputs. When agreement is reached, individuals should sign off on their individual elements of the project plan.
4) Resource requirements, time schedules, and subtask relationships are now integrated to form the next higher level of the WBS; and so it continues at each succeeding level of the WBS hierarchy. Thus, each succeeding level of the WBS will contain the same kinds of information regarding resources, budgets, schedules, and responsibilities as the levels below it. The only difference is that the information is aggregated to one higher level.
5) At the uppermost level of the WBS, we have a summary of the project budget. For the purpose of pricing a proposal, or determining profit and loss, the total project budget should consist of four elements: direct budgets from each task as described above; an indirect cost budget for the project, which includes general and administrative overhead costs (G&A), marketing costs, potential penalty charges and other expenses not attributable to particular tasks; a project “contigency” reserve for unexpected emergencies; and any residual, which includes the profit derived from the project, which may, on occasion, be intentionally negative.
6) Similarly, schedule information and milestone events can be aggregated into a project master schedule. The master schedule integrates the many different schedules relevant to the various parts of the project. It is comprehensive and must include contractual commitments, key interfaces and sequencing, milestone events, and progress reports. In addition, a time contingency reserve for unforeseeable delays should be included.
This series of steps complete the use of the WBS as a project planning document. The WBS is also a key document for implementing, monitoring, and controlling the project. The remaining steps concern its use for these purposes.
7) One can now compare required task performance and outputs specified in the WBS with those specified in the basic project plan in order to identify potential misunderstandings, problem, and schedule slippages, and then design corrective actions.
8) As the project is carried out, step by step, the Project Manager can continually examine actual resource use, by work element, work package, task, and so on up to the full project level. By comparing actual against planned resource usage to a given point in time, the Project Manager can identify problems, harden the estimates of final cost, and make sure that relevant corrective actions have been designed and are ready to implement if needed. It is necessary to examine resource usage in relation to results achieved because, while the project may be over budget, the results may be further along than expected. Similarly, the expenses may be exactly as planned, or even lower, but actual progress may be much less than planned.
9) Finally, the project schedule must be subjected to the same comparisons as the project budget. Actual progress is compared to scheduled progress, by work element, package, task, and complete project, to identify problems and take corrective action. Additional resources may be brought to those tasks behind schedule so as to expedite them. These added funds may come out of the budget reserve or from other tasks that are ahead of schedule.
