Project Management Principles and Challenges

This assignment is a student's report on their experience with project management principles during a DBCL construction project. The report discusses the importance of managing time, cost, and quality in projects, as well as the challenges faced by the student, including limited financial resources and lack of knowledge about risk management. Despite these challenges, the student was able to apply project management principles to successfully complete the project and learned valuable lessons that can be applied to future projects.

FUNDAMENTAL OF PROJECT
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
A) Importance of iron triangle parameters..................................................................................1
B) Create risk register..................................................................................................................3
C) Network diagram and critical path.........................................................................................8
D) Gantt chart..............................................................................................................................9
E) Calculate projected gross profit............................................................................................11
F) Compare planned progress (%) and actual progress (%)......................................................12
G) Earned value analyses..........................................................................................................14
H) Completion (schedule) method derived from the Earned Value Analysis...........................15
I) Suitable acceleration options.................................................................................................15
PART B.........................................................................................................................................16
Reflective essay.........................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Project management can be defined as application of knowledge and techniques that
supports project manager (PM) in meeting with the requirements of any project. It is
responsibility of manager that to plan schedule and execute it well. Individual has to monitor
each task closely and have to make effective control over it (Fleming and Koppelman, 2016).
This aids in managing project successfully and meeting with its actual goal. Current project is
based on DBCL engineering that works in marine and offshore construction industry. Team of
engineers are working for Pretoria Oil to build topsides module for new offshore production
platform. Current assignment will explain importance of iron triangle parameters that will need
to be managed by DBCL project manager. Furthermore, it will create risk register and will
describe major ten risks that are faced by DBCL. Study will prepare network diagram, Gantt
chart and will calculate gross profit.
PART A
A) Importance of iron triangle parameters
Project management triangles are the major constraints that have negative impact on entire
project and its success. Due to these constrains PM fails to meet the actual requirements
successfully. There are several triangle parameters:
 Time
 Cost
 Quality or scope
All these elements have impact on delivery of project to great extent. The major objective
of DBCL project is to build the topsides module for new offshore production platform. Entity has
hired skilled engineers those who are well aware with designing and construction
activities.8weeks have been decided for entire project (Walker, 2015). Importance of these iron
triangle parameters are described as below:
Time
This most essential element in project management. Project manager has to ensure
starting the task on time and completion of project within given period of time. DBCL project
manager involves skilled employees in the activities those who have good knowledge of
construction projects and have great understanding related to similar proposals. This may help
the project manger of DBCL that to ensure completion period of this project (Kerzner, 2018).
1

Individual ensures involving skilled people and adequate number of employees those who can
manage this DBCL project successfully within stipulated period of time. As it is clearly denoted
that if PM fails to accomplish this project on time then company will have to pay penalty for
Pretoria oil liquidated damages of £500,000 (Sears and et.al., 2015).
Cost
Budget and actual cost of entire project is the great iron parameter that determines
success of entire project. Target price of this contract was 59.5M. PM has to ensure allocation of
resources in efficient manner so that it can manage cost well. Project manager that to ensure
minimising unnecessary cost otherwise individual will not be able to accomplish it within pre-
decided budget (Bradley, 2016).
Scope
This is another most important iron parameter that influences overall success of project to
great extent. It determines outcome of overall activities. Project manager of DBCL has to ensure
that this project meet with its scope and can meet the objective as well.
Relationship between Iron parameters
Time, cost, scope are most essential iron parameters of project, it is responsibility of
project manager that to schedule the task carefully and manage it well so that entire project can
get success. If PM fails to schedule the activities properly then it may increase completion time,
in such condition PM will have to pay more amounts to all employees to work more on this task.
In such condition cost of entire DBCL project will get increased (Lu and et.al., 2015).
Furthermore, if project manager manage the activities well then it will help in controlling over
cost and finishing entire task within allotted budget. Furthermore, if scope or quality is missing
then project will not be able to meet with its objectives. In such condition PM may have to face
difficulties. Quality affects the cost of PM. Both iron parameters have close interrelationship, if
PM has to raise quality then individual is required to monitor it well and have to implement latest
technologies. In such condition overall cost of project may get increased to great extent. This
significant relationship between quality and time as well, if project manager of DBCL has
notices that quality is not maintained then individual will have to make changes in activities that
will enhance completion time (Chang, 2016). In such condition project will not get finished
within set duration. In such situation project manager will have to hold employees for more
period and will have to pay extra charges for additional time. This would increase cost as well.
2

Thus, all these parameters are highly connected and impact on overall project’s success to great
extent (Peltier, 2016).
B) Create risk register
Risk register is the document that needs to be prepared by project manager, this helps in
identifying the probability, impact of constrains on particular project.
Risk response
S.
No
Risk Description of
risk
Probability
(1=poor,5
= high)
Impa
ct
(1=po
or,5=
high)
Priority Risk
score
Risk
response
Responsible person
1 Financial risk If project
manager of
DBCL fails to
complete this
project on time
then company
will have to
pay huge
penalty that
may increase
economic
burden on
business.
High (5) High
(5)
25 25 Effectiv
e
resource
allocatio
n and
close
monitori
ng of
activitie
s so that
it can
get
complet
ed
within
stipulate
d period
of time.
Finance manager,
project manager,
engineers
2 Communication
risk
As it is
construction
Moderate
(3)
Mode
rate
9 9 Conduct
meeting
Project manager
3

project and
employees
need to have
great
coordination
with each
other. If there
is
communication
issue then it
might create
problem in
completing
task effectively
(Ercan and
Khan,2017).
(3) time to
time and
share all
updated
details.
Two
way
commun
ication
needs to
be done
so that
no
confusio
n takes
place.
3 Scheduling risk There is
possibility that
this
construction
project may get
delay and do
not get finished
on time
Moderate
(3)
High
(4)
12 12 Close
monitori
ng and
effective
controlli
ng
Project manager
4 Human
resource risk
It is essential
for project
manager of
DBCL that to
involve skilled
and
experienced
Moderate
(3)
High
(4)
12 12 Effectiv
e
recruitm
ent,
training
to staff
and
Project manager
4

people those
who can work
on construction
project
efficiently. If
employees are
not satisfied
and if they
don’t have
adequate skills
then they will
not be able to
meet the
quality
parameter (Lee
and Lee,
2015).
taking
feedbac
k time to
time to
ensure
people
are
satisfied
in
workpla
ce.
5 Scope risk There is
possibility that
DBCL project
fails to meet
the quality
aspect and
scope as well.
High (5) Mode
rate
(3)
15 15 Close
monitori
ng and
controlli
ng
Project manager,
engineers,
technicians
6 Legal risk If any changes
occur in laws
related to
construction
then it might
create issue in
managing the
Low (1) mode
rate(3
)
3 3 Continu
ous
monitori
ng over
market
conditio
n and
Project manager
5

project well.
Because PM
will have to
make changes
in activities
according to
new guideline.
legislati
on.
Further
more,
make
pre-
continge
ncy plan
for such
kind of
sudden
changes.
7 Designing risk If PM fails to
design this new
Pretoria oil to
build topsides
module
effectively
then it might
create issue in
meeting the
quality aspects.
High (4) High
(4)
16 16 Pre
testing is
essential
and it is
also
importa
nt that
design is
to be
approve
d by
higher
authoriti
es.
Project manager
and quality
manager
8 Technical risk As in this
DBCL
construction
project, PM is
required huge
Moderate
(3)
High
(5)
15 15 Effectiv
e
impleme
ntation
of
Project manager
6

technologies so
that topsides
can be built up.
Technical issue
may affect
quality and
cost as well.
technolo
gies and
close
monitori
ng
9 Supplier risk As PM will
require raw
material to
complete this
project, if
supplier fails to
deliver quality
material then it
might affect
the quality and
cost as well of
this
construction
project
Moderate
(3)
High
(4)
12 12 Strong
relations
hip with
supplier
s and
selection
of
supplier
s need to
be done
carefully
Project manager
10 Weather risk It is possibility
that weather
condition gets
worst, in such
situation PM
will fail to
complete the
project on
time.
Moderate
(3)
High
(5)
15 15 Conting
ency
plan
needs to
be
prepared
in
advance
so that if
weather
Project manager
7

does not
support
then
continge
ncy plan
can be
impleme
nted to
complet
e this
DBCL
project
C) Network diagram and critical path
Critical path
Float
8

D) Gantt chart
Task Name Duration Start Finish Predecessors
fabricate upper deck 4 wks Mon 1/1/18 Fri 1/26/18
Fabricate cellar deck 2 wks Mon 1/1/18 Fri 1/12/18
Turbine generators 6 wks Mon 1/29/18 Fri 3/9/18 1
Fuel gas systems 2 wks Mon 1/15/18 Fri 1/26/18 2
Fabricate flare boom 4 wks Mon 1/15/18 Fri 2/9/18 2
Cooling systems 8 wks Mon 3/12/18 Fri 5/4/18 3
Seawater pumping systems 12 wks Mon 3/12/18 Fri 6/1/18 3
Connect both decks 2 wks Mon 3/12/18 Fri 3/23/18 3,4
Install flare boom 6 wks Mon 3/26/18 Fri 5/4/18 5,8
Coalescer systems 4 wks Mon 5/7/18 Fri 6/1/18 6
9

Gas dehydration systems 4 wks Mon 6/4/18 Fri 6/29/18 10
Water injection systems 6 wks Mon 6/4/18 Fri 7/13/18 7,8
Gas compression systems 6 wks Mon 5/7/18 Fri 6/15/18 9
Onshore commissioning 8 wks Mon 7/16/18 Fri 9/7/18 11,12,13
For the present DBCL project starting date is 01/01/2018 and its completion date is
09/07/2018. Hence, there is high possibility that this project gets completed within stipulated
period of time.
It is assumed that DBCL project will start on Monday 8 January 2018 then in would be
completed on 14/09/2018.
Condition: Gantt chart if project starts on 8 Jan 2018
Task Name Duration Start Finish Predecessors
fabricate upper deck 4 wks Mon 1/8/18 Fri 2/2/18
Fabricate cellar deck 2 wks Mon 1/1/18 Fri 1/12/18
Turbine generators 6 wks Mon 2/5/18 Fri 3/16/18 1
Fuel gas systems 2 wks Mon 1/15/18 Fri 1/26/18 2
Fabricate flare boom 4 wks Mon 1/15/18 Fri 2/9/18 2
10

Cooling systems 8 wks Mon 3/19/18 Fri 5/11/18 3
Seawater pumping systems 12 wks Mon 3/19/18 Fri 6/8/18 3
Connect both decks 2 wks Mon 3/19/18 Fri 3/30/18 3,4
Install flare boom 6 wks Mon 4/2/18 Fri 5/11/18 5,8
Coalescer systems 4 wks Mon 5/14/18 Fri 6/8/18 6
Gas dehydration systems 4 wks Mon 6/11/18 Fri 7/6/18 10
Water injection systems 6 wks Mon 6/11/18 Fri 7/20/18 7,8
Gas compression systems 6 wks Mon 5/14/18 Fri 6/22/18 9
Onshore commissioning 8 wks Mon 7/23/18 Fri 9/14/18 11,12,13
E) Calculate projected gross profit
The actual target price for this DBCL project is 59.5M and overall cost for this project is
53291840.By calculating the amount it is found that overall gross profit for this project is
6208160 (How to display ES, LS, EF, LF in numbers using MS Project, Network Diagram,
2018).
Activity Cost of project
A 8,653,600.00
B 7,317,920.00
C 2,786,080.00
D 2,891,680.00
E 4,159,840.00
F 4,933,920.00
G 3,185,440.00
H 3,279,680.00
I 2,615,680.00
J 2,346,720.00
K 2,761,840.00
L 3,288,640.00
M 3,405,920.00
N 1,603,040.00
Total cost 53230000
Target price 59500000
gross profit 6270000
11

late payment charges per
day 1 -500000
2 -500000
3 -500000
4 -500000
5 -500000
6 -500000
7 -500000
8 -500000
9 -500000
10 -500000
11 -500000
12 -500000
13 -500000
total 270000
As DBCL will have to pay 500000 per day charges if it gets late to complete this project
on time. From calculating the days it is identified that for 12 days entity will be able to manage
profit but on 13th day it would have to bear loss.
F) Compare planned progress (%) and actual progress (%)
Planned progress (%)
TASK Number1 Number2 Text10
A 9600 9600 100%
B 4800 4800 100%
C 14400 14400 100%
D 4800 4800 100%
E 9600 9600 100%
F 19200 19200 100%
G 28800 28800 100%
H 4800 4800 100%
I 14400 14400 100%
J 9600 9600 100%
H 9600 9600 100%
I 14400 14400 100%
J 14400 14400 100%
K 19200 19200 100%
12

Actual progress (%)
Task Actual progress to date (%) Total expenditure incurred to date (£m)
A 100 8.15
B 100 7.2
C 100 2.56
D 100 3.18
E 100 4.43
F 75 4.29
G 35 1.67
H 90 4.03
I 20 0.78
From the above tables it has been observed that there is difference between actual and
planned progress percentage. It has been observed that F task has been completed actually by
75%whereas planned value for this task was 100%.On other hand G task was actually completed
35% but planned value for the same was 100%. Same it happens with H and I as well. As H was
actually completed by 90% and I was completed by 20%.Thus,it can be said that Delivery date
would be changed that would commercially impact on cost and image of construction company
to great extent.
Rescheduling
Task Name Duration Start Finish Predecessors
fabricate upper deck 4 wks Mon 1/29/18 Fri 2/23/18 100%
Fabricate cellar deck 2 wks Mon 1/1/18 Fri 1/12/18 100%
Turbine generators 6 wks Mon 2/26/18 Fri 4/6/18 1 100%
Fuel gas systems 2 wks Mon 1/15/18 Fri 1/26/18 2 100%
Fabricate flare boom 4 wks Mon 1/15/18 Fri 2/9/18 2 100%
Cooling systems 8 wks Mon 7/16/18 Fri 9/7/18 3 100%
Seawater pumping
systems 12 wks Mon 4/9/18 Fri 6/29/18 3 100%
Connect both decks 2 wks Mon 4/9/18 Fri 4/20/18 3,4 100%
Install flare boom 6 wks Mon 4/23/18 Fri 6/1/18 5,8 100%
Coalescer systems 4 wks Mon 9/10/18 Fri 10/5/18 6 100%
Gas dehydration systems 4 wks Mon 10/8/18 Fri 11/2/18 10 100%
Water injection systems 6 wks Mon 7/2/18 Fri 8/10/18 7,8 100%
Gas compression systems 6 wks Mon 6/4/18 Fri 7/13/18 9 100%
Onshore commissioning 8 wks Mon 11/5/18 Fri 12/28/18 11,12,13 54%
From the above table it has been identified rescheduling will make changes in completion
duration, As earlier it was supposed to complete on 07 Sep 2018 but now after rescheduling it
13

would be completed on 28 Dec 2018. For extra time, entity will have to bear cost that would
create loss to business and will decrease its profit.
G) Earned value analyses
Earned value management (EVM) is the technique that helps project manager in
integrating scope, cost and schedule efficiently.
Task Name
Planned
Value - PV
(BCWS)
Earned Value
- EV
(BCWP)
CV CV
%
CP
I BAC EAC VAC TCP
I
fabricate
upper deck
£8,653,600.0
0
£8,653,600.0
0
£0.0
0 0% 1 £8,653,600.0
0
£8,653,600.0
0
£0.0
0 1
Fabricate
cellar deck
£7,317,920.0
0
£7,317,920.0
0
£0.0
0 0% 1 £7,317,920.0
0
£7,317,920.0
0
£0.0
0 1
Turbine
generators
£2,786,080.0
0
£2,786,080.0
0
£0.0
0 0% 1 £2,786,080.0
0
£2,786,080.0
0
£0.0
0 1
Fuel gas
systems
£2,891,680.0
0
£2,891,680.0
0
£0.0
0 0% 1 £2,891,680.0
0
£2,891,680.0
0
£0.0
0 1
Fabricate flare
boom
£4,159,840.0
0
£4,159,840.0
0
£0.0
0 0% 1 £4,159,840.0
0
£4,159,840.0
0
£0.0
0 1
Cooling
systems
£4,933,920.0
0
£3,700,440.0
0
£0.0
0 0% 1 £4,933,920.0
0
£4,933,920.0
0
£0.0
0 1
Seawater
pumping
systems
£3,185,440.0
0
£1,114,904.0
0
£0.0
0 0% 1 £3,185,440.0
0
£3,185,440.0
0
£0.0
0 1
Connect both
decks
£3,279,680.0
0
£2,951,712.0
0
£0.0
0 0% 1 £3,279,680.0
0
£3,279,680.0
0
£0.0
0 1
Install flare
boom
£2,615,680.0
0 £523,136.00 £0.0
0 0% 1 £2,615,680.0
0
£2,615,680.0
0
£0.0
0 1
Coalescer
systems
£2,346,720.0
0 £0.00 £0.0
0 0% 0 £2,346,720.0
0
£2,346,720.0
0
£0.0
0 1
Gas
dehydration
systems
£2,823,680.0
0 £0.00 £0.0
0 0% 0 £2,823,680.0
0
£2,823,680.0
0
£0.0
0 1
Water
injection
systems
£3,288,640.0
0 £0.00 £0.0
0 0% 0 £3,288,640.0
0
£3,288,640.0
0
£0.0
0 1
Gas
compression
systems
£3,405,920.0
0 £0.00 £0.0
0 0% 0 £3,405,920.0
0
£3,405,920.0
0
£0.0
0 1
Onshore
commissionin
g
£1,603,040.0
0 £0.00 £0.0
0 0% 0 £1,603,040.0
0
£1,603,040.0
0
£0.0
0 1
14

H) Completion (schedule) method derived from the Earned Value Analysis
Total budget= 59500000
BCWS = 53,291,840.00
BCWP =34,099,312.00
Duration=16weks
Actual%=(BCWS/BSWP*duration)
Week= 25.00
Difference between weeks of completion = 9 weeks
Thus, completion date would be 10th Nov 2018, hence approx finishing date would be Nov 10.
ACWP = 34,099,312.24
Total spend of project=(ACWP / BCWP x Budget)
Total spend of project=59500000.42
Overspend =59500000.42 - 59500000
% difference in spending= 41.877%
Hence, there is 41.877% more than the original budget. If entire project gets over budget then
profit of firm will get reduced to some extent.
15

I) Suitable acceleration options
There are various acceleration options available for the DBCL project, but individual has to
select bets option that may help in gaining more profit and completing project within stipulated
period of time. If activity K has been altered and system is being simplified that it would help in
saving 2 weeks that means actual completion date will be 2week early but it will cost £80000
per week. In such situation gross profit of construction firm would be £6110000. Another option
available is that changes in activity M that would save 3 week but will enhance cost £150000 per
week. In such condition Gross profit will reach to597000. Furthermore, another option is
changes in activity L that would reduce working period by 4 weeks but enhance cost by 150000
per week. In such condition overall gross profit would be £6215000. At last another acceleration
option is K, after making modification gross profit would be £5895000.
Thus, the most suitable acceleration option would be activity M that means if this option
has been implemented then DBCL construction project will be able to gain profit of 6215000.
This is commercially more beneficial acceleration option because buy this way overall profit
would reach from 6270000 to 6215000 that means it is manageable situation. Critical path and
project plan in new situation is described as below:
Critical path
Project plan
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PART B
Reflective essay
From the above report I have learnt many things about scheduling tasks, managing projects
successfully. I was unable to make effective communication with others but as I had to
coordinate with my team members and supervisory authority to finish this project. Thus, this
study has helped me in improving my interaction skill. Furthermore, my technical skill has been
improved to great extent. As earlier to this, I have never worked on such kind of project alone.
Though I have worked earlier on MS project but my supervisory authorities have done more
work on these projects. But it was first time when I had to handle the entire software. I have
learnt a lot and my understanding towards managing projects and fundamentals of project
management has been improved to great extent.
Working on construction project was really a great experience for me, I learnt activities
that need to me performed to completed an construction project and what kinds of things need to
be remembered by the project manager to meet the goal of project. But still I have faced so
many difficulties. One of the major challenges for me was calculating earned value analyses on
MS project. I had to search a lot for the same, thus, it has consumed my huge time. Earlier to
this, I believed that adding time duration may calculate the actual completion date but I
understood importance of cost, and quality for making the project successful. I was having
17

limited financial resources, that was the major difficulty for me because due to which I was
unable to manage my work. Limited time was another major challenge for me because in such
short duration I had to learn many things and had to apply in this DBCL construction project.
I have learnt the importance and interrelationship between Iron parameters. I realised that
if quality, cost and time are managed then project manager can meet the project goal
significantly. Initially managing risk was so difficult because I was no having great knowledge
of risk related to construction projects. But I have worked on it and have improved to some
extent.
But still I believe there are many areas on which I need to work more. These areas are
managing time in project management, developing knowledge about designing and architecture
in construction projects. My goal is to complete construction project individually and develop
better knowledge about construction work.
CONCLUSION
From the above report it can be concluded that project management principles are helpful in
scheduling task properly and completing entire projects on time.PM has to ensure that cost and
quality remain maintains. Time, cost and scope are highly connected, changes in any parameter
may affect success of entire projects to great extent.
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REFERENCES
Books and Journals
Bradley, G., 2016. Benefit Realisation Management: A practical guide to achieving benefits
through change. Routledge.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Ercan, M. F. and Khan, R., 2017, December. Teamwork as a fundamental skill for engineering
graduates. In Teaching, Assessment, and Learning for Engineering (TALE), 2017 IEEE
6th International Conference on (pp. 24-28). IEEE.
Fleming, Q. W. and Koppelman, J. M., 2016, December. Earned value project management.
Project Management Institute.
Kerzner, H., 2018. Project management best practices: Achieving global excellence. John Wiley
& Sons.
Lee, I. and Lee, K., 2015. The Internet of Things (IoT): Applications, investments, and
challenges for enterprises. Business Horizons. 58(4). pp.431-440.
Lu, P. and et.al., 2015. The effectiveness of contractual and relational governances in
construction projects in China. International Journal of Project Management. 33(1).
pp.212-222.
Peltier, T. R., 2016. Information Security Policies, Procedures, and Standards: guidelines for
effective information security management. Auerbach Publications.
Sears, S. K. and et.al., 2015. Construction project management. John Wiley & Sons.
Walker, A., 2015. Project management in construction. John Wiley & Sons.
Online
How to display ES, LS, EF, LF in numbers using MS Project, Network Diagram. 2018. [Online].
Available through <https://pm.stackexchange.com/questions/21381/how-to-display-es-ls-
ef-lf-in-numbers-using-ms-project-network-diagram>
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