Fundamentals of Project Management

This document provides an overview of the fundamentals of project management, focusing on a case study of AF PLC. It covers topics such as the importance of iron triangle parameters, identifying project risks, planning and costs, and managing progress and spending. The document also includes a network diagram, Gantt chart, and details of the overall project budget and projected net profit.

Fundamentals of Project
Management

Table of Contents
EXECUTIVE SUMMARY..................................................................................................................3
INTRODUCTION.............................................................................................................................4
TASK 1.............................................................................................................................................4
A. Importance of various parameters of iron triangle in determining the overall Project
objectives and goals...................................................................................................................4
B. Identify the risks that are likely to emerge during the course of project
implementation by AF Plc with the help of risk registers........................................................5
2. Planning and costs...................................................................................................................9
a) Prepare a network diagram showing the critical path and planned duration of the project.9
b) Prepare a Gantt chart for the project...................................................................................9
c) Detail of overall project budget and projected net profit of the contract..........................10
3. Managing progress and spending..........................................................................................14
a) Create a table comparing the planned progress against the actual progress values...........14
b) Produce a revised Gantt chart and indentify the new completion date.............................14
4. Earned value analysis and acceleration.................................................................................16
a) Using EVA determine planned % percentage complete and compare with actual
percentage complete..............................................................................................................16
b) Create a projected completion date for the entire project using EAC...............................17
c) Recommendation...............................................................................................................18
REFERENCES..............................................................................................................................19

EXECUTIVE SUMMARY
Automatic Futures (AF) PLC is a company which deals with development of software products
and technology consulting for various clients and companies with an objective of increasing the
level of automation in the operational processes of the organization. The following project report
consists of a case study of AF PLC on four different aspects of project management. In the first
aspect, an attempt is being made to identify the various project constraints and risk which could
potentially exist for the company. The second aspect deals with defining project schedule by the
help of using Gantt chart and network diagram. A detailed budget analysis is being done in the
third aspect of the report to determine and ascertain the profitability of the contract. In the last
part of the report, a new project timeline is being scheduled after comparing the actual progress
with the planned progress and aims to provide recommendations for the managers of the
company in choosing a suitable acceleration option.

INTRODUCTION
Project management is a concept which involves controlling, coordinating planning,
evaluating and monitoring the task and performances of team with an objective of achieving the
task requirements of a project within a limited time schedule. This project report deal with the
case study of AF PLC, a technology consulting and contracting firm with software development
specialization. In the following project report, different aspects related to project management
which includes identification of risk, mapping out the project schedule and ascertaining the
profitability of the contract are being covered.
TASK 1
A. Importance of various parameters of iron triangle in determining the
overall Project objectives and goals.
Iron triangle is a very important tool of project management which assists the project manager in
identifying the constraints which may hinder the successful execution of project. It is also
referred as Triple Constraints or Project Management Triangle. There are three different factors
which usually determine the success of any project which are time, scope and cost of the project
upon which delivered quality of the project depends. These three factors are interdependent and
connected and if any change is done in any of these factors, some other factor must change with
equal magnitude. Iron triangle suggests that every project should be completed in the time limit
which has been described, cost incurred should not be more than the budget and all the
requirements and scope of the project should be duly covered (Greene and Stellman, 2018).
Cost:
Cost refers to the total amount of expenditure which has been incurred in a project. Before
commencing every project, a budget is prepared by the project managers and the client who act
as guidance and controlling tool. In some projects, cost is not the main concern and emphasis is
laid on the quality of the project (McKevitt, Carbery and Lyons, 2017).
Time:

The managers of every project undertake the task of mapping out the whole project schedule so
that the project can be completed within the fixes time limit. Time is one of the major constraints
which can hinder the successful delivery of any project. In the context of AF PLC, the managers
of the company have task to meet the time deadline of the project as a result of which cost is
increasing.
Scope:
Scope refers to the task requirements and main objectives of the project. A very wide scope often
leads to mismanagement of the project. Quality of the project depends a great deal on the scope
covered in the project. Every project does not necessarily have a predefined and fix scope due to
which many projects fail at this stage.
Iron triangle suggests if changes are made in any of the factor, some other factor with equal
magnitude must be altered. For example, if the managers of AF PLC want to decrease the time
required to complete the project, either cost incurred in the project needs to be increased or the
scope of the project needs to be reduced (Andersen and Grude, 2018). Similarly to decrease the
cost incurred in the project, either the time required needs to be shortened or the scope of the
project has to be reduced. Although, one box process of project management of AF PLC meet its
current requirements but it can be used for every client with different requirements and
expectation. Iron triangle is one of the most important tool of project management which
provides the managers with guidelines of factors which are to be kept in mind for ensuring a
successful execution of any project.
B. Identify the risks that are likely to emerge during the course of project
implementation by AF Plc with the help of risk registers.
Success or quality of any project can be significantly improved with the help of a risk register
which helps the project manager to identify the risks which have the potential of becoming an
obstacle in the path of successful project execution. Risk register is a tool which is used to
identify the risks which are likely to emerge during the course of a project and the relative
importance of each risk is ascertained with the help of determining the likelihood of risk
occurrence and the impact of the risk in the event of its occurrence. In the context of AF PLC,
risks which are most likely to emerge during the project implementation are safety risk of

workers, shortage of labor and raw materials, legal complexities due to poorly drafted contracts,
change in client expectations, inefficient management and monitoring of the project etcetera (Li,
Akintoye and Holt, 2017). Risk register is a tool of utmost importance which has potential to
determine the quality and success of a project with the help of early determination of risks and
development of a mitigation plan which can reduce the severity of the risk and its impact on
project. A risk register from the context of AF PLC is as follows
RISK
(Potential
Risk which
may arise
during the
project)
LIKELI
HOOD
(1-5), 1
being
least
chances
and 5
being the
highest
chance.
IMPACT
(1-5), 1
being the
least
impact and
5 being
the highest
impact
RATIN
G
(Increasi
ng order
where an
increased
number
denotes
higher
overall
risk)
OWNE
R
(Respons
ible for
mitigatin
g of risk)
MITIGATION PLAN
(Management plan for reducing
risk likelihood and impact)
Health and
Safety risk
for
workers
3 4 12 Project
supervis
or
A complete arrangement for the
security of workers while
working on the project should
be done. All the machines and
equipments used during the
project should be as per the
health and safety standards
(Batselier and Vanhoucke,
2017).
Labor
Shortages
3 4 12 Project
supervis
or
A plan should be prepared by
making provisions for sourcing
and acquiring additional labour

in contingent situations that may
arise.
Unexpected
increasing
material
costs
2 3 6 Purchase
departme
nt
Supplier should be selected after
a proper evaluation and a
contract should be made to
undermine the chances of any
sudden increase in costs.
Poorly
drafted
contracts
3 5 15 Legal
departme
nt
Legal department of the
company should check the
various segments of the contract
and ensure its reliability.
Natural
disasters
1 4 4 Manage
ment
Company should get insurance
by a trusted insurance agent or
company to minimize the
adverse impact of natural
disasters (Martinsuo and
Hoverfält, 2018).
Theft of
equipment
3 4 12 Project
supervis
or
Installation of devices such as
cameras and CCTV can be done
to set-up a proper monitoring
and guarding arrangement for
the machines and equipments at
the contract site.
Unknown
site
conditions
3 3 9 Project
Supervis
or
A complete inspection and
examination of the site should
be done to get familiar with the
site conditions.
Change in 3 3 9 Project Clear expectation setting with

orders manager the client and having a properly
drafted contract with clauses for
change in orders can be used
effectively to undermine the risk
and impact of future change in
orders.
Availability
of
materials
2 4 8 Purchase
departme
nt
A proper adequate inventory of
material should be kept to
ensure smooth production
process and arrangements
should be made with other
suppliers as well to meet
contingent material
requirements.
Mismanage
ment of the
project
2 4 12 Project
manager
For ensuring a better project
management, various tools of
project management such as
Gantt chart and network
diagram which help the
managers to map out the entire
project schedule should be used.
The entire task should be
divided into small fragments for
better monitoring.

2. Planning and costs
a) Prepare a network diagram showing the critical path and planned duration of the
project
A system chart is a graphical portrayal of the work breakdown structure; Which delineates the
ancestor and replacement exercises and furthermore outlines the basic way under which the
whole undertaking will end. In light of the system chart, it was discovered that an aggregate of
58 weeks would be the length to finish the undertaking (Bresnen, 2016). The system chart is
given beneath:
In the above chart; the red line demonstrates the basic way of the venture that will be taken by
AF contractual workers for a base time. The absolute time required to finish the undertaking is
58 weeks.
b) Prepare a Gantt chart for the project
Gantt chart is a type of bar chart that shows a project schedule. The Gantt chart initially describes
and finishes the dates of terminal elements and summary elements of a project. The terminal
elements and summary elements project work includes breakdown structure. Some Gantt charts
also reveal the dependency (i.e., precedence network) relationship between activities. Below is
the Gantt chart of estimated project which is 58 weeks (Keegan, Ringhofer and Huemann, 2018).

Therefore, the completion period of the given project is estimated to be August 7, 2020 without
any modification in the given schedule.
c) Detail of overall project budget and projected net profit of the contract
Budget: A budget is a spending limit of a conventional articulation of anticipated salary and use
dependent on tentative arrangements and targets. As such, a financial limit is an archive that
administration makes for organizations to evaluate income and costs for the coming time frame
dependent on their objectives (Jiang, Klein and Fernandez, 2018).
Surplus and deficit budget: When estimated costs is more than actual; this situation called
surplus budget and when estimated cost is less that actual expenses, this is called deficit budget.

The details of projects overall estimated cost and projected net profit from the contract has been
calculated below:
Task
s
Fixed
cost
£M (A)
No.
of
Eng
.
No.
of
Sta
ff
Total
week
s
Days
/wee
k
Hr
s
Enginee
r cost
£/h
Sta
ff
cost
£/h
Total
eng.
Cost (B)
Total
staff
cost (C)
Total cost
(B+C) £
X 0.2 0 0 1 0 0 0 0 0 0 0
A 2.8 10 5 3 5 8 69 39 £82,800 £23,400 £106,200
B 1.6 10 5 2 5 8 69 39 £55,200 £15,600 £70,800
C 1.5 10 5 1 5 8 69 39 £27,600 £7,800 £35,400
D 3.8 10 5 8 5 8 69 39
£220,80
0 £62,400 £283,200
E 5.4 20 10 8 5 8 69 39
£441,60
0
£124,80
0 £566,400
F 3.4 10 5 10 5 8 69 39
£276,00
0 £78,000 £354,000
G 6.4 20 50 10 5 8 69 39 £20,000 / week £200,000
H 4 30 40 9 5 8 69 39
£745,20
0
£561,60
0
£1,306,80
0
I 3.5 10 60 8 5 8 69 39
£220,80
0
£748,80
0 £969,600
J 2.2 8 20 6 5 8 69 39
£132,48
0
£187,20
0 £319,680
K 2.5 10 5 4 5 8 69 39
£110,40
0 £31,200 £141,600
L 3.1 25 50 6 5 8 69 39
£414,00
0
£468,00
0 £882,000
M 2.2 10 5 4 5 8 69 39
£110,40
0 £31,200 £141,600
N 2.7 10 6 5 5 8 69 39
£138,00
0 £46,800 £184,800
O 2.1 6 20 6 5 8 69 39 £99,360
£187,20
0 £286,560
P 1.2 6 16 6 5 8 69 39 £99,360
£149,76
0 £249,120
£48.6
M
£6,097,76
0
Other adjustments to task costs:
Less:
Christmas off 10 60 2 5 8 69 39 £55,200
£187,20
0 £242,400
Add: other staff cost £462,250
£48.6
M £6.31M

Total cost of the project tasks = £48.6M + £6.31M
= £54.91M
Other staff costs:
Project management
support
Project manager
Project
planne
r
Rate
£/Wee
k
No.
of
week
s
Total
cost
2 2 5,500 17 £93,500
1 1 2,000 40 £80,000
Commercial Manager
1 2,750 17 £46,750
2 2,750 44
£242,00
0
£462,25
0
Revenue:
Since it is estimated that project will be finished on 7th Aug, 2020
Hence, the bonus will be get for 18th Sep, 2020 - 7th Aug,2020 is 42 days
Bonus / working day No. of days earlier Total extra bonus
Bonus £50,000 42 £2,100,000
Budget allotted £58,500,000
Total Revenue £60,600,000
Less: Total cost £54,917,610
Surplus: £5,682,390
Less: 50% to
client £2,841,195.0
Estimated profit £2,841,195.0

Indication of what budget components could impact the point at which project become
loss making
The budget has two components. The first is income and the second is expenditure. There are
two types of income. First is revenue income and second is capital income. Some of the
components of budget include: Material budget, labor budget, and production budget;
Material budget: The purchasing department would be able to plan the purchase of raw materials
at different times. This is the minimum stock level of content, the maximum stock level
(Maximum Stock level), re-ordered level, and determined Delivers scalability. Raw material
purchasing budget can be determined. The budgeted cost of raw materials can be determined.
Labor budget: According to the production budget, each item according to the category of
workers required labor is determined. The labor that goes into every work, process and
operation- Time is determined with the help of 'time study' and 'speed study'. All Labor costs are
calculated by multiplying the labor time by the labor rate including allowances. If labor
motivational schemes are in use, labor rates are suitably increased. If behavior the rate system is
being used according to the work of payment of wages, then budgeted units find the labor cost
multiplied by the labor rate per unit. Labor budget for production is helpful to estimate the
required labor time. With its help the department is also able to recruit workers (Palmer-Trew
and Taylor, 2019).
Production budget: The production budget plan is set up concerning the business spending plan.
It is basic that the number to be sold is created from the second it is conveyed to the customer on
schedule. It is along these lines a creation figure for the spending time frame. The creation
spending plan is likewise arranged for the quantity of units to be delivered and the expenses
brought about for materials, work, and manufacturing plant overheads. Two significant things
are engaged with setting up the creation spending plan: a) What ought to be delivered? B) when
to create?
Insight:
• If there is a lack of the workforce due to over-nonattendance during work, it might affect the
task by expanding the span and postponement of the undertaking; which may lessen income or
misfortune because of installment of fixed expenses and punishments for delays (Newton, 2016).

• If no material is required to finish the task available, the venture might be postponed. The all
out expense and punishment for late appearances will increment with each single working day.
3. Managing progress and spending
a) Create a table comparing the planned progress against the actual progress values
This comparison table will show the difference between planned progresses with respect to
actual progress up to 17weeks:
Up to 17 Weeks
Task Actual Progress % Planned progress % Variance
PI 100 100 0
A 100 100 0
B 100 100 0
C 100 100 0
D 80 100 20%
E 100 100 0
F 35 40 5%
G 35 40 5%
H 50 34 -16%
Analyses: After investigation of both real advancement and arranged advancement; this
demonstrates Tasks D, F, G and H which are the gritty plan of the plant; Commissioning and
creating programming for robotics of gear and inverter items; Manufacture of computerization
hardware; and assembling particular production line units indicated fluctuation subsequent to
examining the procedure for the seventeenth week (Flouris and Lock, 2016). However, task H is
preparing a lot quicker than arranged; Personal dealing with by the Air Force; Other capacities
are subject to TECHRES, causing delays.
b) Produce a revised Gantt chart and indentify the new completion date
There is a contrast between arranged advancement and genuine advancement; which influences
the whole calendar of the task. Beforehand it was finished on August 7, 2020, which was the
58th week , yet in the wake of testing the seventeenth week process it was discovered that the
amended consummation period is presently 59 weeks. The overhauled Gantt graph is given
below:

It is obvious from the outline that; the task takes around 59 weeks because of deferrals in D, F
and G works (Kerzner, H. and Saladis, F.P., 2017). The whole task was postponed by seven
days; which influenced the net income of the venture. The inexact finish time is August 14,
2020; previously it was August 07, 2020. The impact on evaluated net benefit is determined
beneath:
Other staff
costs:
Project management support
Project
manager
Project
planne
r
Rate
£/Wee
k
No.
of
week
s
Total
cost
2 2 5,500 17 £93,500
1 1 2,000 41 £82,000
Commercial
Manager
1 2,750 17 £46,750
2 2,750 45
£247,50
0
£469,75
0
Total cost of the project tasks = £48.6M + £6.31M
= £54.92M

Revenue:
Since it is estimated that project will be finished on 7th Aug, 2020
Hence, the bonus will be get for 18th Sep, 2020 - 14th Aug,2020 is 35 days
Bonus / working day No. of days earlier Total extra bonus
Bonus £50,000 35 £1,750,000
Budget allotted £58,500,000
Total Revenue £60,250,000
Less: Total cost £54,925,110
Surplus: £5,324,890
Less: 50% to
client £2,662,445.0
Estimated profit £2,662,445.0
Analyses: The impact of term can be seen on the figuring of other staff costs; where the
remainder of the week after the main seventeenth was just 40, yet after the examining; The
update is 59 weeks in full. This has expanded the general expense and decreased the reward by 7
days; because the span of the arranged task has finished 42 days prior, yet after the update; this is
just 35 days, this has diminished the reward salary (Teo, M.M. and Loosemore, M., 2017).
So; is the contrast between net assessed pay when estimation; £ 178,750. The Air Force is still in
a productive position; however the distinction demonstrates a potential misfortune to the
organization because of task delays. All out expenses likewise expanded from £ 54.91M to £
54.92M; Multi week late. It can subsequently be inferred that the absolute expense every week in
the task is £ 100,000.
4. Earned value analysis and acceleration
a) Using EVA determine planned % percentage complete and compare with actual
percentage complete
Essential features of any EVM implementation include: EVM implementations for large or
complex projects include many more features, such as indicators and forecasts of cost
performance over budget or under budget and behind schedule or ahead of schedule. However,
the most basic requirement of an EVM system is that it determines progress using PV and EV. It
is helpful to see an example of project tracking that does not involve earned value performance

management. Consider a project in which detail is planned for all elements of the work,
including spending time to time (Martínez-Rojas, Marín and Vila, 2016).
EV is calculated by multiplying the completed% of each task or its planned value in progress.
Moving EVM from simple to advanced implementation depending on the size or complexity of
the project. However, the implementation of EVMs can vary greatly depending on the
circumstances. In many cases, organizations do not establish an all-or-nothing boundary;
Projects above the threshold require a full-featured EVM system and projects below the
threshold are exempted. Another approach that is gaining favor is to scale the EVM
implementation according to the project and skill level of the project team (Turner and Ledwith,
2018).
Progress calculated at 1st Nov, 2019
Tas
k
Actual
Progress
%
Planned
progress
%
BCWS
£m
BCWP
£m
ACW
P £m CPI SPI
X 100 100 0.2 0.2 0.2 1 1
A 100 100 2.8 2.8 2.91
0.962
2 1
B 100 100 1.6 1.6 1.72
0.930
2 1
C 100 100 1.5 1.5 1.53
0.980
4 1
D 80 100 3.8 3.04 3.264
0.931
4 0.8
E 100 100 5.4 5.4 5.97
0.904
5 1
F 35 40 1.36 1.19 0.462
2.575
8
0.87
5
G 35 40 2.6 2.275 0.966
2.355
1
0.87
5
H 50 34 1.36 2 1.375
1.454
5
1.47
1
CPI = BCWP/ACWP
SPI = BCWP/BCWS
b) Create a projected completion date for the entire project using EAC
£M
Budget at Completion (BAC) 58.5

Actual Cost (AC) 54.91
Planned Value (PV) @ 90% 52.65
Earned value 58.5
CPI (EV/AC) 1.06538
Estimate at completion (EAC)
BAC/CPI 54.91
Original contract value 58.5
EAC 54.91
Projected net profit 3.59
c) Recommendation
For the purpose of evaluation of multiple options available for the managers of AF PLC for
acceleration, cost per week and bonus per week have been determined in the above table.
Although the cost per week is minimum for activity P which is £17.5k but the management
cannot go forward this option for acceleration of the project only on the basis of lowest cost per
week. Despite of having the lowest cost per week, Activity P has a profitability of £465k which
is not the highest. Profitability of an acceleration option is an important factor which influences
the decision of choosing an alternative. It has been observed that activity G is the most profitable
activity with the profit margin of £645K and hence it can be concluded that the management of
AF PLC should choose activity G as the acceleration option for meeting the scheduled deadline
of the project (Clark, 2018).

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