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Let us first take a quick glance at the important concepts and methodologies taught in every project management course and project management diploma study.
For this we first define and give examples of Project Management
The project management is essential for the organizational success. Project management is a part of the organizational workflow, and it is necessary to maintain efficiency in the tasks carried out.
Gaddis (1959)1 defines the project as “an organization unit dedicated to the attainment of a goal”. PMBOK (1987)2 defines Project Management as a “formal discipline that has been developed to manage projects”. Project management involves planning, scheduling, and controlling of various activities to meet the project objectives.
The examples of the project management include:
Planning and providing responsibilities in project management:
Scheduling in project management:
Reporting & Controlling:
Project management is carried out in a wider environment than the project itself. Therefore, the guiding processes are important. The following are some of the widely used the Project Management Methodologies:
Waterfall: It is suitable for industrial firms, mostly in product development and construction.
PRINCE2: This project management methodology is based on the product, so its processes are focused on obtaining concrete results rather than on the planning of activities.
AGILE Project Management Methodology: It assures flexibility and ability to modify the product throughout the project. By progressively, completing the different phases, the final product is obtained. It is based on the principle whatever works. It is suitable for IT sector.
Scrum: A short-term methodology, suitable for software development. There is no project manager here; everything will be handled by the Scrum Master, who initiates, controls and monitors all the work done.
Kanban: The KANBAN system is an agile project management methodology, that has its origin in the JIT production processes. It makes use of the labels and cards to identify the needs. It follows traditional approach.
PMBOK: PMBOK presents several phases of a project in a linear way where the need/solution, the scope and the planning is established in the initial phases. It cannot be used in combination with other more agile and flexible methodologies. It follows traditional approach.
LEAN: Used by Toyota in 70’s, it is suitable for industrial setting that aims at efficient production. The management specifies what to produce so that the teams can start working towards those goals (Guide PMBOK, 2004).
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Time Management Skills: The time is an important element in the project. Keeping track of the time and the project is critical to making a project successful.
Teamwork: Being able towards the team objective over the individual object is a critical skill that is required to flourish in an organisation.
Communication Skills: It is necessary to be an excellent communicator to ensure that all people understand what is expected of them, know the message and the implications and can also expect to be understood by the higher levels. For instance, effectively communicating the project needs to help the end user to prepare for the outcomes of the project.
Leadership skills: Leadership motivates all their actions and transmits these values to the teams, who get their enthusiasm and identify with the goals set. A good leader can change the course of a project.
Attention to detail: Project management is based on the details. Each element causes an impact on the final result. The success of the project depends on the ability to interpret those signals and make decisions on time (Frame, 1999)4.
The Project Management Plan is defined as “a detailed framework of the Project, the records, the work order files, the change requests, the reports and everything we generate after the day in the Project documentation” (Dam, 1999)5. Before we start planning the Project, an object of the process to develop the Project Management Plan, we need the Project Manager and the Sponsor in a strictly internal document to agree on a mutual commitment. The Project Management Plan establishes "what", "when" and by "who" carries out the tasks of the Project.
Now next let us help you understand project risk management definition, process of project risk management along with suitable examples of project risk management
Risks are defined as the uncertainties associated with a project. Project risk stems from the uncertainty of any project. Project Risk Management is defined as “a wholesome activity that involves monitoring and controlling the various uncertainties associated with a project.” (Lu & Lu, 1999)6 The level of uncertainty is the highest and, therefore, the risk of not complying with the objectives are higher at the beginning of the project.
The various steps in project risk management involved, identifying risks, implementing risk analysis, planning risk response and controlling risk. The goal of project risk management is to increase the probability and impact of positive events in the project and to reduce the probability and impact of negative events in the project.
The lean project management follows these set of objectives “quality, speed and alignment with customer expectation” (Riis,1999)7. Lean project management seeks to eliminate everything that is not adding value to be able to focus only on what is necessary in the present moment.
It is a part of agile methodology discussed above. The main benefit of the agile methodology applied to project management is for the reduction of bottlenecks. Although in its origins it was of exclusive application to IT projects, today its use has been extended to many other areas that enjoy its advantages, some shared with the lean methodology.
Project Procurement Management includes the process of purchasing or obtaining the required products, services or results from outside the project team. It also includes contract management and change control process. The project schedule has a significant impact on the planning of procurement strategy in the planning of procurement management. The main role of this process is to ensure that buyers and sellers fulfil their legal agreements to meet their procurement needs (Judd, 2012)8.
The life cycle of the project defines the phases that connect the beginning of a project with its end. (Pinto, 1988)
The life cycle of the project can help the project manager to determine if one should treat the feasibility study as the first phase of the project or as a separate and independent project. The phases of the life cycle of a project are Initiation→ Planning → Execution → Monitoring →Project closure. The transition from one phase to another which includes preparation, control of the work, the execution and a closure of the project.
The project life cycle defines:
At the beginning of the project we have to make much effort, but we have very few costs, the staff is small, and the costs are also reduced to be able to carry out the product. However, when we move on to the execution of the project the costs increase as well as the required time.
M. Goldratt proposed the Theory of Constraints in the management. It aims at providing mechanisms to gain some control over their operations in the project. Theory of constraints is defined as “…a systemic way to identify constraints that hinder system’s success and to effect the changes to remove them.” (Goldratt, 1990)10.
The theory of constraints consists of various concepts such as the performance measurement, logical thinking and logistics process. By integrating all three concepts, a five-step process was developed.
The Project Management planning process consists of:
A milestone is a tool that helps the stakeholders involved in the project knowing the progress of the project. A milestone symbolises an important achievement in the project. These milestones will serve as communication tools for others involved. The milestones are the most comprehensive way of monitoring the execution of a project. These milestones carry significant importance as it can be used to assess the effectiveness of the team and with the time management. In this way, the board can define all their projects with the help of the words milestone. For example, the milestones that we have crossed, which is nearby, which is behind, etc.
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Creating a project proposal
There are seven steps in creating the project proposal. They are
Submitting a project proposal
Submitting a project proposal involves the following
There are five famous Project Management Software
The dependencies of a project refer to the projects that cannot be done without the other project is completed, started or at least in-progress. It can be formal or informal and helps the project manager to manage a project to completion effectively.
The Contingencies in a project are the resources designated for a specific project. They are earmarked for that particular task, and it cannot be used anywhere. Most of the time, these resources will be held in reserve. The contingencies of a project are mostly financial resources, and most of the time it mentions the cash flow. It is also used as a risk mitigating mechanism on a project.
Budget and time play a big part in Project Management. The budgeting lays down the financial constraints that one may face in a project. The financial analysis in general analyses the profitability of the business and the economic analysis that analyses the profitability of the company or industry in which it is a part of. Therefore, the macroeconomic aspects are also given some level of importance.
The financial planning is critical as it can be used to identify and regulate the cash flow in a project. Dependencies & Contingencies in a project are mostly responsible if the financial plan of a project fails to materialise. Before the preparation of an investment project and its financial planning, all economic analysis work must be carried out. It must be done with the aim of formalising concrete ideas on which are the priority projects for the development can be selected among the available options.
There are a variety of financial tools used before selection of projects such as Present Net Value (NPV), Internal Rate of Return (IRR), Pay Back period etc.
The cash flow resulting from the project is more important than the profitability associated with a project. Projects are part of the larger project in an organisation. Moreover, therefore, the cash flow management on a project is paramount.
For instance, the cash flow of a project will look like this
The project selection, in general, will be done based on the present value of the future cash flow among many other things. There are three important factors to be considered on managing the project cash flow. They are fund utilization, budget implementation and evaluation of results. These are the three critical aspects in managing the financial and cash flow part of the analysis.
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