Topic 1 Introduction to the Fundamentals of Project Management LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the nature of projects; 2. Identify the project life cycle; 3. Define project management; 4. Describe the management process and the concepts involved; 5. Explain the characteristics of PLOC as consisting of key aspects of the management process; and 6. Explain the adoption of PLOC in integrated project management system. INTRODUCTION As a future project manager, it is integral that you are acquainted firstly with the fundamentals of project management. Let us see how this topic can benefit you in managing projects effectively and successfully. Topic 1 gives you an overview of the fundamentals of Project Management. This will enable you to achieve an understanding of the basic definitions involved in project management and the
2 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS general features of a project. This topic also discusses and identifies the phases involved in project life cycle. You will come across a detailed explanation of the concepts of management and project management, which are essentially the core of this topic. The basic management process involving planning, leading, organising and controlling (PLOC) is emphasised. Finally, the adoption of PLOC in integrated project management system is explained. 1.1 PROJECT CHARACTERISTICS A number of professional bodies and organisations have sought to define the term project, some of which are presented as follows: Table 1.1: Some Definitions of Project Professional Bodies/Organisations The Project Management Institute (PMI), USA The UK Association of Project Managers The British Standards Institute Turner (1992) Definition a temporary endeavour undertaken to create a unique product or service. a discreet undertaking with defined objectives often including time, cost and quality (performance) goals. a unique set of co-ordinated activities, with definite starting and finishing points, undertaken by an individual or organisation to meet specific objectives with defined schedule cost and performance parameters. an endeavour in which human, material and financial resources are organised in a novel way to undertake unique constraints of cost and time, so as to achieve beneficial change defined by quantitative and qualitative objectives. From the above definitions, we may conclude that a project has the following characteristics:
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 3 Figure 1.1: Characteristics of Project Thus a project can be defined as a process to achieve a specific objective and every project objective should be established at the initial stage of the project. The uniqueness of a project comes together with its objectives. For example, a company s objective is to construct the tallest twin tower building in the world. This will then make it unique, which is a non-routine activity to carry out the specified objective. To complete the objectives, the project should bear in mind the following aspects: A time limit stating when the project should start and when the project should be completed. Time duration is crucial for project managers to plan the work schedule. In addition, project managers also need to consider the resources needed, for example human resources, as well as materials and financial resources that are required for completing the schedule. Unlike most organisational work that is divided according to functional specialty, a project typically requires the combined efforts of a variety of specialists. Often, engineers, marketing professionals, quality control specialists, and key specialists from other engineering disciplines work closely together under the guidance of a project manager to complete a project.
4 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS All projects are subject to uncertainty during the delivery process. In consequence to this uncertainty, risks may be generated from factors external to the project (e.g. political change, market demand) or internally from the project activities (e.g. effects of delays due to defects, human resource constraints). The nature of risk is that it can have both positive and negative effects on the project which are termed as upside and downside risks. SELF-CHECK 1.1 1. Explain project in your own words. 2. List down the SIX characteristics of a project. Using your own words, explain each of the characteristics. 1.2 THE PROJECT LIFE CYCLE Another way of illustrating the unique nature of project work is in terms of the project having a definite life cycle. Because the project has a beginning and an end, it is said to have a life cycle. A number of writers have sought to define this life cycle in terms of a set of discrete phases through which the project passes. For example, Rustain and Estes (1995) define a life cycle as commencing with a concept phase and concluding with a post accomplishment phase as shown in Figure 1.1, in which four intermediate stages are identified: (a) Defining or Proposing Preparation Stage The starting point begins the moment the project is given the go-ahead. Project intensity (effort) as shown in Figure 1.2, starts slowly, builds to a peak, and then declines to delivery of the project to the customer. In the defining stage, specifications and project objectives are defined. Teams and the roles and responsibilities for each member are established in this stage. (b) Planning Stage The level of intensity increases in the planning stage. Plans are developed to determine 5W s, namely: (i) What the project will consist of; (ii) When it will be scheduled; (iii) Whom it will benefit; (iv) What quality level should be maintained; and (v) What the budget will be. (c) Executing Stage Next, a major portion of the project work takes place at the executing stage. Both physical and mental resources are needed at the executing stage to produce a physical product. At this stage, control becomes crucial in terms of time, cost and quality.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 5 (d) Delivering Stage The final stage is the delivering stage, which includes the two main activities of delivering the project product to the customer and redeploying project resources. Figure 1.2: Idealised project life cycle Figure 1.3: Level of activity intensity for an ideal project life cycle Source: Clifford F. Gray & Erik W. Larson. (2006) Project Management the Managerial Process. (3rd ed.) McGraw Hill. pg. 6
6 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS In respect to the nature and scale of activity changing at each stage, Wearne (1973) defines the life cycle as shown in Figure 1.3. He adds that whilst there are discrete stages, there may be time delays between each stage or, indeed the stages may overlap. The economic purpose of these stages is to contribute to a useful result, so that each stage should not be considered for itself but as work to enable the next to proceed. Figure 1.4: Cycle stages of work for a project SELF-CHECK 1.2 Draw the Level of Activity Intensity diagram for an ideal project life cycle and briefly describe each of the activities. All life cycle models have a common theme that each succeeding phase is more concrete than the preceding one, as the project matures from an overall concept to a set of task that in their totality accomplish the project. This point is emphasised by consideration of the typical work content of each project stage. Let us take civil engineering project as an example. Table 1.1 illustrates an example of project stages and typical activities in civil projects.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 7 Table 1.2: Project Stages and Typical Activities in Civil Engineering Projects Project Stages Appraisal Definition Design Construction Commissioning Operation Activities Assess alternative strategies for meeting needs Establish technical and economic feasibility Derive master plan Statement of project objectives Conceptual design and associated cost estimates Design review Arrange project funding Sanction Detailed design Design review Contract strategy report and definition of contract packages Detailed cost estimates Procurement/ tendering Contract award Site construction Offsite construction and fabrication Installation Quality control Expediting Construction management Contract administration Engineering and performance tests Acceptance Organisation and operation and maintenance Project review activity 1.1 Give an example of project stages and the activities based on your own field of expertise. Does it have the same stages as the example above? Why? Discuss with your coursemates and tutor.
8 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 1.3 WHAT IS THE PROJECT MANAGEMENT? The definition of project management stems from the definition of a project and implies some form of control over the planned process of explicit change. The following are several definitions that can give you some description about project management. Table 1.3: Some Definitions of Project Management PMI, USA Professional Bodies/ Organisations UK Association of Project Managers The British Standards Institute Definition the art of directing and coordinating human and material resources through the life of a project by using modern management techniques to achieve predetermined goals of scope, cost, time, quality and participant satisfaction the planning, organising, monitoring and controlling of all aspects of a project and the motivation of all involved to achieve the project objectives safely and within agreed time, cost and performance criteria the planning, monitoring and controlling of all aspects of a project and the motivation of all those involved to achieve the project objectives on time, cost, quality and performance The common theme is that project management is the management of change, but explicitly planned change; such that from initial concept, the change is directed towards the unique creation of a functioning system. In contrast, general or operations management also involves the management of change, but their purpose is to minimise and control the effects of change in an already constructed system. Therefore, project management directs all the elements that are necessary to reach the project objectives, and minimise the elements that will hinder the development of the project. We can be conclude that project management requires the application of knowledge, skills, tools and techniques to manage project activities in order to meet or exceed stakeholders needs and expectations. It involves balancing competing demands for meeting the requirements of: Scope, time, cost and quality. Stakeholders with different needs and expectations. Identified requirements and unidentified requirements. Risk.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 9 And it should not, of course, be forgotten that projects are managed with and through people. SELF-CHECK 1.3 In your own words, define what project management means. 1.4 FUNDAMENTALS OF THE MANAGEMENT PROCESS From the above definitions of project management, we can say that managers give direction to their organisations, provide leadership and decide how to use organisational resources to accomplish goals. Such descriptions give you some idea of what managers do. In addition to those tasks, managers today must deal with conflict resolution, create trust in an atmosphere where trust has been badly shaken and help create balance between work lives and family lives. Managers must also effectively and efficiently use organisational resources such as employees, financial, information, machineries, buildings, equipments, supplies, etc. to meet project objectives. Managers are often required to look at the big picture and their decisions make a major difference in organisations. Figure 1.5: Process of Management Figure 1.4 depicts the process of management being practised by managers in any organisation regardless whether they are profit oriented or non-profit oriented. As is evident from the figure, there are basic concepts or functions that you should remember in management process, namely: Planning Leading PLOC Organising Controlling
10 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 1.4.1 Planning Planning is the first and arguably the most important step in any project. It includes anticipating trends and determining the best strategies and tactics to achieve organisational goals and objectives. The need for good planning may be self-evident, but in practice, it is often difficult to anticipate all the areas in which forethought is essential. There are four forms of planning for project management, as shown in Figure 1.6. Figure 1.6: Planning for Project Management Source: Nickels, McHugh & McHugh. (2005) Understanding Business. (7 th ed.). McGraw Hill. pg 217. (a) Strategic Planning In strategic planning stage, broad and long range goal setting for the construction project is done by the top managers (e.g. the president and the vice president of the organisation). This stage provides the foundation for the policies, procedures and strategies for obtaining and using resources to achieve those goals. (b) Tactical Planning The tactical planning stage is where the specific short-range objectives or identification for the project will be set by the lower-level managers (e.g. project managers) to accommodate the plans of the top manager. Examples under this planning stage are handling of human resources, project execution, what equipment is needed, costing estimates etc. (c) Operational Planning Meanwhile, all work standards and schedules for the project will be set during the operational planning stage. Gantt charts can be used herein to represent the timing of tasks required to complete a project.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 11 (d) Contingency Planning Contingency planning on the other hand, is the preparation of backup plans in the event that the primary plans fail. Planning is a key management function because the other functions depend heavily on having a good plan. Good planning for any project, even for managers who have successfully completed previous projects, requires a large number of decisions on questions, such as the ones shown in Figure 1.7. Figure 1.7: Questions to consider in planning This kind of planning is one of the most intellectually challenging of the project tasks and may be time-consuming, but at least the planner has the tools to bring together an expert group of staff and consultants and create an effective framework within which they can work together. activity 1.2 1. List FOUR types of planning. From the list, choose one type that you had been involved before, either in your family lives or work lives and describe the activities that you performed. 2. What is the difference between strategic, tactical and operational planning?
12 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 1.4.2 Leading Leading means creating a vision for the organisation and communicating, guiding, training, coaching and motivating others to work effectively to achieve the organisation s goal and objectives. Leaders must have vision, are able to set a good example, as well as attract and retain good people. Managers and leaders are two different entities. Managers derive their authority from occupying higher positions within the organisation. Leaders on the other hand, have the power of influence over people. Their power is attained by earning employees respect and admiration. However, some leadership skills can be learnt. Managers with good leadership qualities are the most valuable to their employers. 1.4.3 Organising The process of organising includes designing the structure of the organisation and creating conditions and systems in which everyone and everything works together to achieve the organisational goal and objectives. Briefly, it is the arrangement of resources in a systematic manner to fit with the project plan. SELF-CHECK 1.4 What is the difference between leaders and managers? Give example based on your experience and discuss with your coursemates and tutor. 1.4.4 Controlling Controlling a project is by means of establishing clear standards to determine whether an organisation is progressing towards its goals and objectives, rewarding people for doing a good job and taking corrective action if they are not. Basically, it means measuring whether what actually occurs meets the organisation s goals. (a) Controlling the Time This is the timing and sequence of all tasks to be performed in the project work. Scheduling gives a detailed picture of the step-by-step progress and problems encountered, with a clear indication of the status and its effect on future progress. It tracks and analyses the project by some period (months, weeks or days) and by function to ensure the project is progressing as planned, by measuring actual work done versus the schedule.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 13 Schedule slippage is commonplace and should be a major concern of project managers. Slippage occurs one day at a time and project managers need to be ever alert to keep slippage from accumulating to an unacceptable level. Slippage can be caused by complacency or lack of credibility, incorrect or missing information, lack of understanding as well as incompetence and conditions beyond one s control, such as too much work to do. (b) Controlling the Cost Cost of the project refers to the total cost of tasks undertaken to produce the desired outcomes. However, cost control is the managerial task of keeping the cost of the project within the budget. Developing the project budget generally means calculating labour costs, any required equipment and materials costs, and budgets for staffing training, retraining, project management task and control functions, and space requirements for each task and subtask. (c) Controlling the Quality Every project is supposed to achieve desired outcomes with minimum defects. Quality is conformance with requirements and meeting or exceeding customer s expectations. Project managers must determine what level of human performance is required to achieve the quality desired for the specific deliverable. Written acceptance criteria for deliverables should be developed to keep cost and schedule in line because they help clarify when tasks are completed. Milestones and deliverables can be used to access the quality of end product at several points during the life cycle of the project, and to ensure satisfaction with the work being performed. The project management team partition or divide the project into manageable phases using milestones. At least one deliverable will signal the completion of each milestone. The project management team will document the milestones and the associated deliverables in the work plan. A thorough understanding of a project s deliverables is the key to effective project management. The lack of good project management principles can cause inefficiencies, delays and higher costs. The Project Manager is constantly concerned with three aspects of the project, namely: Is the project delivering what it promised to deliver or more? Is it making delivery at or below the promised cost? Is it making delivery at or before the promised time? These three aspects are referred to as the basic components that need to be focused on concurrently in order to achieve Total Quality Control (TQC) as shown in Figure 1.8.
14 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS Figure 1.8: The Triangle of TQC activity 1.3 1. Describe the process of management using your understanding of Project Management as practiced in your particular field of work. Comment briefly on the level of integration of the key aspects of the management process. 2. In your opinion, can PLOC be used/adopted in Integrated Project Management System? Discuss in the mylms. 3. Othet than risk and expectation of stakeholders, time, cost and quality are the most imporrtant aspects that need to be balanced. Using the triangle of TQC, explain how time, cost and quality are interrelated, 1.5 INTEGRATED PROJECT MANAGEMENT SYSTEM The four functions of PLOC are the heart of management, so, let us explore them in more detail on how they can be integrated in the project management system. In project management, aspects of quality, cost, time, information and risk should be properly controlled or otherwise the project will face major problems. Therefore, an integrated project management system is the best solution. This system is one in which all of the parts are interrelated. A change in a part will influence the whole. Figure 1.9 explains how the integrated project management system works by adopting the fundamentals of PLOC. The integrated management of projects focuses on two areas: aligning the projects with the strategic plan; and the integration of the management process of actual projects.
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 15 In the planning phase, mission, objectives and strategies of the project are set to meet the needs of customers or stakeholders. Development of mission, objectives and project strategies depend on the external and internal environmental factors. External refers to political, social, economical and technological factors. Internal factors can be classified as strengths and weaknesses, such as management, facilities, core competencies and financial condition of the organisation. Next is the organising phase in which the focus is on structure and mechanisms for the arrangement of resources in a systematic manner to fit the project plan and put things or actions according to priorities. During this phase, the manager should possess good leadership skills to implement plans and strategies drafted in the planning phase. Strategies are typically implemented throughout the duration of the project. Prioritising and balancing between system and environment are crucial in this phase to ensure that the projects run smoothly in the future. Once the projects start to be implemented, controlling the project will be the main focus for achieving the organisational goals and objectives. Figure 1.9: Integrated Project Management System
16 TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS activity 1.4 1. What is the difference between internal and external factors and explain how these factors can influence project strategies in the planning stage. SUMMARY There are six basic features of a project: (a) it has specific objectives; (b) unique in some way; (c) has a definite start and finish; (d) the commitment of resources, human, material and financial; (e) management of diversity; and (f) management of risk and uncertainty. Ideally, project consists of four work stages, which start from defining stage, followed by planning stage, then executing stage and finally delivering stage. Each of the stages has different levels of activity intensity depending upon duration of the project. Project management is conceptually about managing an organisation using internal and external resources to achieve the organisational goals and objectives. Four management functions in the management process are planning, leading, organising and controlling (PLOC) and amongst all, planning is the heart of the management process. PLOC is the framework of an integrated project management system. Level of Activity Intensity PLOC Total Quality Control (TQC)
TOPIC 1 INTRODUCTION TO THE FUNDAMENTALS 17 references British Standards Institute. (1996). BS 6079: Guide to Project Management. BSI. Project Management Institute. (1996). A guide to the project management body of knowledge. PMI. Rustain, A.M. & Estes, W.E. (1995). What every engineer should know about project management. Marcel Dekker, The Association of Project Managers. (1996). Body of Knowledge. APM. Turner, R. (1992). The handbook of project based management. McGraw Hill. Wearne, S. H. (1973). Principles of engineering organisation. Edward Arnold.