Fundamentals of Project Management

This project report provides an in-depth understanding of project management and its techniques. It covers topics like iron triangle parameters, risk management, network diagrams, Gantt charts, and more. The report is based on a case study of Automation Futures Company and includes a consultancy report and challenges encountered by the company.

Fundamentals of Project
Management

Contents
EXECUTIVE SUMMARY.............................................................................................................3
Project definition and risks (Question 1).........................................................................................1
(a) Discussing the relative importance of the various iron triangle parameters..........................1
(b) Creating a risk register...........................................................................................................2
Planning and costs (Question 2)......................................................................................................5
(a) Preparing a network diagram showing the critical path.........................................................5
(b) Preparing a Gantt chart..........................................................................................................5
(c) Calculating project Budget and the projected Net profit for the contract..............................7
Managing progress and spending (Question 3)...............................................................................8
(a) Creating a TABLE comparing the planned progress against the actual progress values.......8
(b) Producing a revised Gantt chart and identifying the new completion date...........................9
Earned Value Analysis and Acceleration (Question 4).................................................................11
(a) Create an Earned Value Analysis table................................................................................11
(b) Earned Value Analysis computations..................................................................................12
(c) Recommendations................................................................................................................12
REFERENCES..............................................................................................................................14

EXECUTIVE SUMMARY
This project report is based on the case study of Automation Futures Company; where company
has a railway contract with its clients for one year. This project is discussed evaluate in two
parts; Part A and B. Part A covers consultancy Report categorised in four sections; gantt chart,
network diagram, EVA and risk register. On the other hand; Part B covers all the challenges
encountered by company throughout the module.

INTRODUCTION
Project management is the concept of managing and controlling a project from its initial
point of planning to the end point of following up (Chatterji and Fabrizio, 2014). The main aim
of this report is to build an understanding regarding project management and its techniques. For
this purpose, the case study of AF Plc. is selected. AF Plc. is a fictitious company which is
engaged in the operations of business consultancy. This company has taken the project of TTF
ltd which is a train manufacturing company. The project is related to new engineering
automation plant.
This report is divided into two parts. In the first part of this report, iron triangle is
explained along with project management using Gantt charts, network diagrams and timescales.
In this section, overall planned budget for this project is also prepared along with earned value
analysis. In the second part of this report, a reflection is developed using challenges encountered
throughout the Module, difficulties producing the assessment, clear personal development goals
and defining characteristics of a Good Project Manager.
PART A - PROJECT MANAGEMENT CONSULTANCY REPORT
Project definition and risks (Question 1)
(a) Discussing the relative importance of the various iron triangle parameters
The iron triangle is the project management supporting constraints which helps a project
manager to manage all the aspects of a project (Heagney, 2016). There are four parameter of this
iron triangle which are cost, time and scope (triangle sides) and quality (triangle area). All these
parameters are important for a project manager to understand so that project can be suitably
planned. All these parameters are analysed elbow:
Cost – This is the financial constraint of project management which allows a project
manager to develop a budget for overall project. In this parameter, all the costs which can be
incurred during the completion of the project are included (Kerzner, 2017). These costs include
both variable and fixed costs. Mainly these costs are incurred in a project in order to satisfy the
needs of the resources; these resources are equipment for the project, material and skilled
employees for the project. This parameter is highly important for a successful project
management as it helps in limiting the spending limit of the project manager. This constraint also
helps in providing the information about which alternative of supplier is better. Using this
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parameter, the scope of negotiation also expands. This parameter ensures that there will be
project manager company receives a suitable amount of profit.
Time – This is the scheduling parameter of the project management according to which
each task in the project is allotted a certain time in which that activity must be completed in order
to the project in planned time (Larson and Gray, 2013). As a project manager of AF Plc. for the
project of new engineering automation plant, the time constraint will be controlled and managed
using Gantt chart, timescales and network diagram which will be developed from Microsoft
Project application. The parameter of time is important as it helps in restricting the time limit so
that no penalty can be charged for delayed project. Also, this constraint helps in analysing the
chances due to which project can be delayed.
Scope – This is the third constraint and third side of the triangle. This parameter provides
the scope of a project by defining the objectives of the project and the resources which will be
required for the completion of these objectives (Larson and Gray, 2011). As a project manager of
AF Plc., the objective for the project of new engineering automation plant is to complete the
project in budgeted amount and planned schedule so that bonus for early completion of work can
be gained.
Quality – This is the last constraint of project management which defines the level of
quality of the delivered project as per the requirement of client (Leach, 2014). In the case of AF
Plc., this parameter is even more important as if the project of automation plant resulted in any
faults within the last weeks of the completion date then AF Plc. has to pay for damages which
can impact project’s profits.
All the parameters analysed above are related with each other as in absence of one
parameter, the whole project will break down (Burke, 2013).
(b) Creating a risk register
AF Plc. is currently engaged in a large scale project of TTF Plc. in which various risks can
be faced. In order to ensure that all risks are pre identified and there will be no contingencies, a
risk register comprising 7 estimated risks is developed below:
Name of the risk Causes of the
risk
Probability of
the risk
occurrence
Impact of the
risk
Actions for
mitigation
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Lack of financial
resources
This risk can
occur due to
high prices of
raw materials
and high labour
rates (Levitt,
2011).
Low High Raw materials
suppliers and
labour will be
procured on
contract basis so
that risk of high
costs in future
can be
eliminated.
Lack of raw
material
This risk can
occur due to
more wastage of
raw material
than expected.
High Low For this risk, AF
Plc. can create
reserves for raw
material which
can be used in
the case of
contingencies.
Negligence of
employees
Internal and
external
distractions can
create
negligence of
employees
Medium Medium This risk can be
mitigated by
appointing
supervisor for
each activity
which can
control the
employees
(Marchewka,
2016).
Strike of labours This risk can be
caused due to
decisions of
trade union and
Low High AF Plc. will
procure labours
using contracts
so that no such
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high labour rate
demand.
contingency can
occur.
Communication
issues
This risk can be
faced due to
technical errors
in network.
High Low An additional
employee will be
appointed who
will ensure
proper
communication
through the
project.
Natural disaster This risk can be
caused due to
environment
changes
Low High AF Plc. can
develop reserves
for such
contingency
(Pinto, 2013).
Accident at site Due to
negligence of
employees and
technical issues
in machinery
(Ojiako and
et.al, 2011).
Low High AF Plc. can
procure health
insurance of
each of the
employee and
also make sure
medical facilities
at site.
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Planning and costs (Question 2)
(a) Preparing a network diagram showing the critical path
Using software application of MS Project, network diagram of AF Plc.’s project is
developed. The network diagram which is developed shows a path marked with pink which is
ctitical path that is the fastest method to complete the project and it involves all the critical tasks.
Critical paths cannot has a float, but in this case non critical paths also does not have any float
time as there is no difference between late and early finish time (Portny, 2017).
(b) Preparing a Gantt chart
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From the above Gantt chart and timescales, it has been seen that if the new engineering
automation project is strated at 8 July, 2019 then it will end at 14 August 2020. In this period
christmas breaks are not included as chritmas breaks were not allowed to contract labour.
(c) Calculating project Budget and the projected Net profit for the contract
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Working notes:
Bonus for early completion: Amount in pounds
Number of days of early completion 42
Bonus for each day of early completion 50000
Total bonus 2100000
Using all the activities, a budget for TTF’s project is developed which includes all fixed
expenses. It has been assumed that all the cost expenses in procuring the employees of contract
labour and external PM team are included in these fixed costs. As the planned project will be
completed on time, AF will be entitled to receive a bonus. The total profit for this project is
budgeted as 13.85 million. The components which can delay the work and impact the net profit
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of this project is Manufacture Automation equipment as it is a critical task and delaying of this
project will result into delay of entire project.
Managing progress and spending (Question 3)
(a) Creating a TABLE comparing the planned progress against the actual progress values
Gantt chart having only tasks and % complete columns:
Comparison table:
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(b) Producing a revised Gantt chart and identifying the new completion date
Task Duration Start Finish Predecessors %
Complete
Actual work
complete %
PI 1 wk
Mon
08-07-
19
Fri 12-
07-19 100% 100%
A 3 wks
Mon
15-07-
19
Fri 02-
08-19 1 100% 100%
B 2 wks
Mon
15-07-
19
Fri 26-
07-19 1 100% 100%
C 1 wk
Mon
15-07-
19
Fri 19-
07-19 1 100% 100%
D 10 wks
Mon
05-08-
19
Fri 11-
10-19 2 100% 80%
E 8 wks
Mon
29-07-
19
Fri 20-
09-19 3,4 100% 100%
F 17 wks
Mon
23-09-
19
Fri 17-
01-20 6 60% 35%
G 17 wks
Mon
23-09-
19
Fri 17-
01-20 6 60% 35%
H 10 wks Mon Fri 06- 5,6 56% 50%
10

30-09-
19 12-19
I 8 wks
Mon
09-12-
19
Fri 31-
01-20 9 0% 0%
J 6 wks
Mon
20-01-
20
Fri 28-
02-20 7,8 0% 0%
K 4 wks
Mon
02-03-
20
Fri 27-
03-20 11 0% 0%
L 6 wks
Mon
30-03-
20
Fri 08-
05-20 10,12 0% 0%
M 4 wks
Mon
11-05-
20
Fri 05-
06-20 13 0% 0%
N 5 wks
Mon
08-06-
20
Fri 10-
07-20 7,14 0% 0%
O 6 wks
Mon
13-07-
20
Fri 21-
08-20 14,15 0% 0%
P 6 wks
Mon
24-08-
20
Fri 02-
10-20 16 0% 0%
PC 0 wks Fri 02-
10-20
Fri 02-
10-20 17 0% 0%
Due to delay in few project activities the project completion date has been changed from 14-
08-20 to 02-10-20. This delay will impact the profitability of the company, as now the work is
delayed than 25 September due to which company has to bear penalty.
Earned Value Analysis and Acceleration (Question 4)
(a) Create an Earned Value Analysis table
EVA table:
Tasks % of work
completion
Budgeted Cost of Work
Performed (BCWP) or
Earned value (BCWS *
Actual Cost of
Work Performed
(ACWP)
Budgeted Cost of
Work Scheduled
(BCWS)
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completion %)
PI 100 20 0.2 0.2
A 100 280 2.91 2.8
B 100 160 1.72 1.6
C 100 150 1.53 1.5
D 80 304 4.08 3.8
E 100 540 5.97 5.4
F 35 119 1.32 3.4
G 35 227.5 2.76 6.5
H 50 200 2.75 4
Total 2000.5 23.24 29.2 (BAC)
Cumulativ
e Planned
Value
(PV)
Cumulativ
e Actual
Cost (AC)
Cumulative
Earned
Value (EV)
Cost
Variance
(EV - AC)
Schedul
e
Varianc
e (EV -
PV)
Cost
Performanc
e Index
(CPI =
EV/AC)
Schedule
Performanc
e Index
(SPI =
EV/PV)
200000 200000 200000 0 0 1 1
3000000 3110000 3000000 -110000 0 0.96 1
4600000 4830000 4600000 -230000 0 0.95 1
6100000 6360000 6100000 -260000 0 0.96 1
9900000 10440000 9140000 -1300000 -760000 0030.88 0.92
15300000 16410000 14540000 -1870000 -760000 0.89 0.95
18700000 17730000 15730000 -2000000 -
2970000 0.89 0.84
25200000 20490000 18005000 -2485000 -
7195000 0.88 0.71
29200000 23240000 20005000 -3235000 -
9195000 0.86 0.69
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(b) Earned Value Analysis computations
Projected completion date using EVA:
ECD = start _ date + ED (Schwalbe, 2015)
8th July 2019 + ED
ECD = 02 October 20
Projected final spend using EVA:
Estimate at completion (EAC) = Actual cost (AC) + ((Budget at completion (BAC) – Earned
value (EV)) / (Cost performance index (CPI) * Schedule performance index (SPI)))
Estimate at completion (EAC) = 2,32,40,000 + (2,92,00,000 - 2,00,05,000) / 0.86 * 40.01
2,32,40,000 + 9195000/ 0.86 * 40.01
32435000 / 0.86 * 40.01
32435000 / 34.4086
= 942642.24
Comparison:
The planned completion date calculated was 14 August 2020 but the current estimated
completion date is 02 October 2020. This date is after the delaine date of 15 September 2020 due
to which company has to pay the penalty of 7 days as £700k.
The planned fixed cost at the completion of project was calculated as 48.7 million pounds
and the actual estimated cost at completion is 94.2 million pounds.
(c) Recommendations
There are 5 different options available with AF Plc to reduce the time period by spending a
certain amount of money to speed up the project. These five options have been evaluated on a
cost and benefit criteria basis. The table of cost and benefit analysis is given below:
Tas
k Weeks
Cost
£'000
Cost/Week
(A) Bonus /Week
Total bonus
(B)
Total
benefit (A-
B)
F 3 200 66.66666667 250 750 550
G 3 105 35 250 750 645
I 2 75 37.5 250 500 425
N 1 25 25 250 250 225
P 2 35 17.5 250 500 465
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All costs are calculated for the cost / week; the total cost for this is divided by the number of
weeks. The best option based on this analysis was P; which costs just £ 17.5K per week; which is
the minimum cost (Slack, 2015). But the bonus of every opening period cannot be ignored.
Because of this reason; the total cost has been deducted from the total bonus amount to achieve
profitability (Walker, 2015). Thus the result shows that; Task G has maximum profitability
which is £ 645K; And so on this basis, task G will be chosen as an acceleration option for the
project and the rest of the options will be rejected. Hence it is recommended that AF Plc should
implement option G to accelerate the project; as company is receiving optimized benefit and
profit with the installation of this option.
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REFERENCES
Books and Journals
Burke, R., 2013. Project management: planning and control techniques. New Jersey, USA. 26.
Chatterji, A. K. and Fabrizio, K. R., 2014. Using users: When does external knowledge enhance
corporate product innovation? Strategic Management Journal 35 This might be helpful in
supporting the need for RCC to understand their customers
Heagney, J., 2016. Fundamentals of project management. Amacom.
Kerzner, H., 2017. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Larson, E. and Gray, C., 2013. Project management: The managerial process with MS project.
McGraw-Hill Education.
Larson, E.W. and Gray, C.F., 2011. Project management: The managerial process.
Leach, L.P., 2014. Critical chain project management. Artech House.
Levitt, R.E., 2011. Towards project management 2.0. Engineering project organization
journal. 1(3). pp.197-210.
Marchewka, J.T., 2016. Information technology project management: Providing measurable
organizational value. John Wiley & Sons.
Ojiako, U and et.al., 2011. Learning and teaching challenges in project
management. International Journal of Project Management. 29(3). pp.268-278.
Pinto, J.K., 2013. Project management: achieving competitive advantage (No. s 57). Upper
Saddle River, NJ: Pearson.
Portny, S.E., 2017. Project management for dummies. John Wiley & Sons.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Slack, N., 2015 Operations Strategy, Pearson Education, Harlow
Walker, A., 2015. Project management in construction. John Wiley & Sons.
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PART B - REFLECTIVE ESSAY
The whole project covers all essential part of project management. Making Gantt chart and
network diagram with finding critical path was not an easy task. But with good reference books
and online video tutorial it becomes possible to complete all tasks of project successfully. There
are some challenges which were encountered while applying principals of project management;
these challenges are discussed below:
Project management is the application of knowledge, skills, tools and techniques to project
activities to meet project requirements. Simply put, project management is the practice of
identifying an idea, planning to uncover that idea, and then carrying out the plan until the idea is
successfully completed. There are many different solutions out there and it can be confusing
which one to choose. A proper cloud-based solution will improve your team's projects and tasks.
Without the right tools for your needs, you will waste time and energy doubling your efforts, yet
not optimizing your work. In the case of a project management options, which includes more or
more project management methods, techniques (for budgeting and planning), standards and
guidelines (documentation and reporting) and tools (planning software, documentation
templates). It was hard to implement these principals on present case study; but this toolbox
holds up well (might be a carpenter after all, without the proper hammer and nail?), But a good
tool is not a good project yet (not everyone with a hammer and nail Ko is after all a good
carpenter!).
It is clear that managing your project on spreadsheets and keeping documentation in various
folders is now outdated and inefficient. As construction project management software has
improved over the years, it has served to improve various processes and keep valuable
documents in order. Project management software also provides a great overview of ongoing
project processes, and allows keeping all paperwork securely in one place, with easy access from
anywhere and at any time. Another outstanding advantage is that it allows for other company
team units, such as accounting integration. This reduces paperwork, data delays and data
mismatch.
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Clear personal development goals:
Every project manager should have following personal development goals for their
improvement:
1. Finish project on time: Timely finished project shows efficiency and good mentor ability of
project manager. Finishing on time, not early not late; shows precision and estimation power of
manager. More variation indicates failure of project manager in managing activities and tasks.
2. Be a good communicator: Project can only finish on time; if clear objectives and goals of
assignments are clearly discussed with stakeholders in a precise way. Clear tasks can do project
must faster as compared to complicated events.
3. Control budget and scope: Budgetary control is the system in which a budget is prepared and a
constant comparison is made between actual and budgetary figures to achieve the desired result.
With this technology, the project manager can make the best possible use of resources. In
addition, management can monitor organizational activities by evaluating deviations that is,
analyzing the differences between actual performance and standard performance.
4. Ensure quality: Whether it is a product, process, service or a system, quality is of supreme
importance. Quality control and quality assurance are two terms that occur frequently in any
organization and people are often confused by the difference between these two words. Although
closely related, and inherently related to quality, these are different approaches taken to achieve
similar forms. This article will highlight the features of quality assurance and quality control to
better appreciate the conditions.
5. Understand financial impacts: Finance gives another minute and detailed study of the various
products available in the market which are used for circulation of money. It gives us information
about various channels available for investment to optimize profits. Understanding the impact of
finance on projects helps project manager in evaluating project on the basis of cost and benefit
analysis.
Characteristics of good project manager:
The project manager is responsible for the success or failure of the project. They include many
aspects and duties in planning, execution, monitoring, tracking and project achievement, and the
role regardless of the specific area.
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1. Creating a plan: Once an idea or project is decided; they need to find a way or solution to do
so. It is important to keep the project organized, but also have the ability to think ahead.
2. Setting a time for the project: Putting together a team that is able to understand the process
of working the project and complete the project. It also means that writing skills are needed
to keep the project documented from beginning to end.
3. Leading a team: Project managers must keep the team motivated, solve whatever problems
arise and sometimes make important decisions on behalf of other workers. Needless to say
those solid leadership skills are a must.
4. Budget management and tracking: Monitoring the cost of the job is an important task to
complete any project on time and according to budget. How money will be spent and
controlled spending is important, so math and analytical skills are highly important.
5. Adding stakeholders: If the project has any impact, the project manager needs to give a clear
picture to the stakeholders about what changes will be made and how it affects them.
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