Project Management for Business - Desklib

This document covers the principles of project management, project evaluation techniques, project management system and procedure, and more. It also includes the roles and responsibilities of personnel resources, financial resources, and the skills required by project leaders. The document is relevant for students studying project management in business courses.

Project management for
business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Background and principles of project management..............................................................1
1.2 project evaluation techniques................................................................................................2
1.3 Principle behind project management system and procedure................................................4
1.4 Key elements considered while terminating project..............................................................5
TASK 2............................................................................................................................................5
2.1 Identifying most appropriate organizational structure, roles and responsibilities.................5
2.2 Control and coordinating a project........................................................................................6
2.3 Assess project leadership requirements and qualities............................................................6
2.4 Plan and specify human resources and requirement for a project.........................................7
TASK 3............................................................................................................................................9
3.1 Preparing project plan and establishing.................................................................................9
3.2 Applying project scheduling, estimation and control technique.........................................12
3.3 Methods used to measure project performance...................................................................13
3.4 Explain project change control procedures..........................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Project management plays crucial role in every organization as through this it becomes
easy for every organization to carry out overall operations in effective manner. Further, it is well
known fact that for effective management of project different type of resources are required and
by considering each resource it is possible for business enterprise to carry out operations in
effective manner (Dey, Clegg and Bennett, 2010). Further, to appraise viability of each project it
is must for business enterprise to consider the investment appraisal techniques which are net
present value, internal rate of return, payback period etc. Such techniques are effective in every
possible manner and allow business to invest funds in right project. For conducting the present
study organization chosen is Ramboll which is one of the biggest consultancy firm based in
London. At present business has received contract from university of Bergen where firm has to
transform industrial building into functional one for its arts faculty. Various tasks have been
covered in the study which involves background and principles of project management,
appraising viability of project etc.
TASK 1
1.1 Background and principles of project management
With the advancement in technology new and advanced technology has came into
existence where every business enterprise has started to work with the advanced tools for its
betterment. Further, in development of different type of technologies business enterprise has to
indulge into different type of activities (Dorfman and Cather, 2012). Absence of project
management principles may have adverse impact on business and it may become difficult for
organization to perform better. Moreover, in past companies were not able to control project
cost. Therefore, to deal with all these major issues concept of project management has been
introduced and under this discipline large number of techniques are present which involves
PERT, CPM etc. Further, five principles of project management are present which are as
follows:
 Project planning process: It is considered as first most important principle of project
management which is associated with organizational growth. Further, in this stage scope
of project is determined which is determined by manager of the project. Further,
objectives are set and overall activities are decided which takes place in proper sequence.
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Therefore, this principle is considered to be most important (Fan, Thomas and
Anantatmula, 2014).
 Initiating process: This principle highlights that project is developed of various tasks
which are complex in nature. Further, in case if project is defined appropriately then it is
possible for managers to draft outline of project for its implementation. Apart from this
during its commencement permission has to be taken from government.
 Execution process: By complying with this principle it is possible for project manager to
carry out project in appropriate manner. Further, it is required to determine sequence of
the activities that are followed during the execution stage. Therefore, managers have to
consider different factors for conducting project in effective manner (Fowler, Lindahl and
Sköld, 2015).
 Monitoring and control: This stage is also regarded to be important where project
manager has to monitor each and every activity so as to know whether they are carried
out in proper sequence or not. Further, control measures are taken if project undertaken is
not carried out appropriately.
 Closing stage: It is the last principle where information linked with completion of project
is shared with top authorities of firm and this helps in knowing whether aims linked with
project have been accomplished or not.
1.2 project evaluation techniques
Project
Initial investment -100000
1 60000 -40000
2 60000 20000
3 60000 80000
4 83333 163333
5 83333 246666
6 83333 329999
Interpretation: Payback period supports in knowing the time period in which entire amount of
investment can be recovered (Garon, 2006). Through applicability of this technique it has been
found that amount of investment can be recovered in 1 year time period. Further, it is
representing that proposal considered will be profitable for company. Therefore, it can be said
that investment proposal is feasible for Ramboll.
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Project A
Initial investment 100000
1 60000
2 60000
3 60000
4 83333
5 83333
6 83333
Total 429999
Average 85999.8
ARR 86.00
Interpretation: Technique of average rate of return helps in knowing the average return which
proposal can easily earn on the invested amount. Further, by applying this tool it has been found
that projects are having good return. Therefore, by investing funds it is possible to earn higher
profits.
Project A PV @4% Present value
Initial investment 100000
1 60000 0.961 57660
2 60000 0.925 55500
3 60000 0.889 53340
4 83333 0.855 71249.715
5 83333 0.822 68499.726
6 83333 0.79 65833.07
Total 372082.511
NPV 272082.511
Interpretation: Technique of net present value helps in knowing the value of the proposal where
initial investment is deducted from the present value of the cash flow and it supports in knowing
the net present value of the proposal (Kumaraswamy, 2011). Further, NPV of present project is
high and positive too. Therefore, investing in this project is feasible for firm.
Project A
Initial investment -100000
1 60000
2 60000
3 60000
4 83333
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5 83333
6 83333
IRR 60.79%
Interpretation: Internal rate of return is considered as the actual return which can be easily
earned on the invested amount. Further, IRR of the proposal is 60.79% which is quite high. Due
to presence of higher rate of return funds can be easily allocated in this project.
Reason for success of project
 Appropriate planning: This factor plays very important role in the success of the project
and through this it is possible to accomplish main objective of the proposal by carrying
out planned activities in proper manner (Levy, 2009).
 Effective teamwork: Every project is made up of complex activities and to carry out
range of activities proper teamwork is necessary. It can enhance coordination and can
build trust. Therefore, good teamwork is the key to success of firm.
Causes of failure
 Vagueness in aims: Sometime it may be possible that presence of vagueness associated
with team objectives. Further, it is possible that objectives of team may deviate from
actual path and before implementing any project it is necessary that aims must be quite
clear.
1.3 Principle behind project management system and procedure
Project management system is composed of large number of principles and is associated
with resource allocation so that it can provide base in implementation of project in proper
manner. Some of the key principles are as follows:
 Principles of project management states that all the tasks associated with project must be
implemented in appropriate manner. Further, no issues may come from client’s side.
 All the crucial resources such as financial, human etc must be allocated in appropriate
manner so that they can be utilized in efficient manner (Olsson, 2008).
 Further, as per project management system it is the duty of project management team to
focus on quality of work and cost reduction.
So, these are some of the most important principles of project management system and
procedure on which success and failure of entire project depends.
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1.4 Key elements considered while terminating project
At the time of terminating any specific project large numbers of factors are considered
which are as follows:
 In case when termination takes place naturally then the major cause can be natural
disaster such as infrastructure is destroyed. Therefore, occurrence of natural disaster can
be one of the main reasons behind termination (Shelley, 2015).
 Project can be terminated due to some other reasons also as many time it is possible that
cost of project increases due to rise in cost. Further, ineffective skills may prevent
employees from carrying out project in appropriate manner and it can act as hurdle during
implementation phase. So, these can be some of the possible reasons behind termination.
All these reasons can be considered by Ramboll so that project undertaken may not be
terminated.
Post project appraisal
After project is completed then appraisal takes place. Further, various techniques are
present such as variance analysis. By considering this method actual results are compared with
projected one. Positive variance shows favorable results and vice versa. Therefore, it is the first
and foremost duty of management to take corrective actions if project is representing negative
variance.
TASK 2
2.1 Identifying most appropriate organizational structure, roles and responsibilities
One of the most effective organizational structures is functional one which is applicable
in case of Ramboll. Further, separate departments are present where tasks of similar nature are
grouped in single department. Further, managers of every department reports to top managers
which is associated with the performance given by different departments during implementation.
It supports in proper management of project (Hobbs, 2009). In case of Ramboll, crucial roles are
project manager, construction manager, quality analyst, architecture and designer. Roles and
responsibilities are discussed below:
Project manager
Role
 To lead the department managers and giving order for implementation of the project in
effective manner
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Responsibilities
 Ensuring completion of project on time
 Identifying whether project is carrying out step by step or not
2.2 Control and coordinating a project
Different methods are present which are undertaken during project implementation phase.
Such techniques are as follows:
 Gantt chart: it helps in knowing the proper sequence in which activities of project are
carried out by the project team. Further, it supports in knowing the time period in which
entire project can be completed easily and in appropriate manner (Leach, 2014).
 WBS: Work breakdown structure is an effective technique where entire proposal is
segregated into different parts. Further, it supports in knowing whether entire project is
being carried out as per plan and is implemented properly. By undertaking this tool key
resources such as financial, human can be used in appropriate manner. Moreover, through
this Ramboll can utilize all the resources in effective manner.
2.3 Assess project leadership requirements and qualities
Different roles and responsibilities have to be carried out by individuals as per nature of
project and it supports in accomplishment of desired aims (Saadé, Dong and Wan, 2015).
Considering the present scenario Ramboll has undertaken the project of renovation of university
building of Bergen, Norway. Therefore, to carry out project in appropriate manner project
manager should have unique qualities which are as follows:
 Time management: It is the first and foremost duty of project leader of Ramboll to
schedule all the activities in accordance with proper time. Further, it is required to ensure
that project can be completed on time. Duration of the entire project is from
28thSeptember 2015 to 8thof January 2016.
 Resource planner: Project leader must be efficient enough in planning for the key
resources and main stress must be on optimum utilization. Through this entire project
associated with renovation can be carried out in appropriate manner.
 Planning and defining scope: Before implementing project leader must plan all the
activities in proper sequence as per requirement (Turner, 2014). Further, defining scope
of the project is also must. As per the present case project leader must plan for the
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renovation and can define the scope so that all the objectives can be accomplished easily
as per plan.
 Risk analysis: It is well known fact that every project is adversely affected due to risk
associated with it. Further, project leader has to determine risks in advance and must take
corrective actions for the same. By dealing with all the risk linked with renovation project
efficiency of the entire project can be enhanced easily.
Therefore, these are some of the key skills required by project leader so that
implementation of project is easy and it is for the betterment of the company.
2.4 Plan and specify human resources and requirement for a project
For successful implementation of project associated with renovation different type of
resources are required which are as follows:
Human resource
PERSONNEL RESOURCES
Roles Names
Project Manager Anubhav
Architecture Insiya
Construction manager and Team Tanu
Designer Pushpa
Quality Analyst Nivadit
Financial resource
FINANCIAL RESOURCES
Resources Estimated costs (£000)
Personnel Resources 220
Equipment costs 480
Total 700
Equipments
EQUIPMENT RESOURCES
Equipment’s Estimated Costs (£000)
Construction materials 200
Computers and software’s 150
New furniture’s 30
Office supplies 20
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Total 400
Responsibility assignment matrix of the University building project
WBS element Project team members
R-Responsible
A- Accountable
C-Consulted
I-Informed
Anubhav
[Project
Manager]
Insiya
[Architecture
]
Tanu
[Constructor
manager]
Pushpa
[Designer ]
Nivadit
[Quality
Analyst]
1.1
Determination of
project aim and
objectives
R A C C
1.2 Planning of
Project
R I C R A
1.2.1 Designing of
entire renovation
project
R C I A
1.3 Implementing
the planned
strategies
R I
1.3.1
Accumulation of
essential resources
R I A I
1.3.2 Application
of project plan
R A A
1.3.3 Renovation
of building
R C I R I
1.4 Controlling
the project
R A R I
1.4.1 Monitoring R A C I R
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the activities
1.4.2 Measuring
the performance
R C A I R
1.4.3 Execution
1.4.4 Project
closer
R I
From the above responsibility assigned matrix it can be said that project manager of the
company named Ramboll has assigned roles and responsibilities to every individual associated
with the project. Further, each and every member has its own significance in carrying out the
renovation tasks in proper manner. Apart from this, with the help of above table it has been
identified that project manager is responsible for each and every activity.
TASK 3
3.1 Preparing project plan and establishing
Task
Mode Task Name Duration Start Finish Predecessors
1 Construction project of
RAMBOLL company 75 days Mon 9/28/15 Fri 1/8/16
1.1 Assessing aims and
objectives of the project 5 days Mon 9/28/15 Fri 10/2/15
1.2 Preparing Plan for the
project 10 days Mon 10/5/15 Fri 10/16/15
1.2.1
Designing entire
range of renovation
project
10 days Mon 10/5/15 Fri 10/16/15 2
1.3 Implementation of the
planned strategies 35 days Mon 10/19/15 Fri 12/4/15
1.3.1 Gathering the key
resources 15 days Mon 10/19/15 Fri 11/6/15 4
1.3.2 Application of 10 days Mon 10/19/15 Fri 10/30/15 4
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RAMBOLL Project plan
1.3.3 Renovation of
Building 20 days Mon 11/9/15 Fri 12/4/15 6
1.4 Controlling project 25 days Mon 12/7/15 Fri 1/8/16
1.4.1 Monitoring all the
activities 5 days Mon 12/7/15 Fri 12/11/15 8,7
1.4.2 Performance
measurement 5 days Mon 12/14/15 Fri 12/18/15 10
1.4.3 Execution 8 days Mon 12/21/15 Wed 12/30/15 10,11
1.4.4 Project closure 7 days Thu 12/31/15 Fri 1/8/16 12
Gantt chart
Network diagram
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After applying project management tool, scheduling of the renovation project has been
carried out in proper manner. Further, with the help of Gantt chart proper information has been
delivered linked with start and finish date of the project. Apart from this network diagram has
supported in knowing the range of activities along with project flows. As per the case provided
RAMBOLL has developed proper project plan with the motive of renovation. Further, the
estimated time period for project completion is 90 days or 3 months. Further, project will start
from 28th Sep 2015 to 8th Jan 2016. Critical path for the project is 2-4-6-8-10-11-12-13 which is
75 days. So, this time period of 75 days is required by project manager to carry out project in
appropriate manner.
3.2 Applying project scheduling, estimation and control technique
Project scheduling is regarded as the basic term of milestone, project listing and tasks
which are required for project (Chandler and Arizona, 2013). Further, it is the responsibility of
project manager to define proper tasks so that scheduling can be carried out. Different effective
ways are present with the help of which project manager can measure project cost which is
necessary when carrying out entire project such as crashing and PERT.
PERT and crashing
They are regarded as statistical tool which supports in knowing the key tasks associated
with the project. Further, it provides idea regarding the time period in which project can be
completed. On the other hand, crashing is also effective technique which highlights extra
expenditure through which time required for completion of project can be reduced.
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3.3 Methods used to measure project performance
Through project management cycle it is possible to modify and maintain the data
associated with assets of project in proper manner. Further, through this cycle RAMBOLL has
determined different resources which are required for undertaking the project and it takes into
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consideration equipment, human resource etc. Further, through this cycle objectives of the
project can be known and they are effective enough of comparing actual performance against the
aims set.
Two effective techniques are present through which performance of project can be
measured and they are as follows:
 Earned value analysis: This technique assists in knowing the time required for
completion of project and the expected cost of overall project. Further, main advantage of
adopting this method is that it assists in analyzing the entire project at different
parameters (Methods of project evaluation. 2015).
 Gantt chart: It is considered as one of the most effective approach of evaluating project
and with the help of this method it is possible for project manager of RAMBOLL to
know the progress of the tasks as per their deadline.
Considering the present project technique of Earned value analysis can be applied by
manager of RAMBOLL to complete the project on time and as per cost.
3.4 Explain project change control procedures
Project change control procedure considers series of stages which are as follows:
 In the first stage manager of RAMBOLL should determine change request by knowing
the reason which are affecting entire range of activities.
 In the second stage manager should determine suitability of change request so that
duration of project can be known (Shelley, 2015)
 In the third stage analysis of change request must be undertaken so that its impact can be
known.
 After analyzing the change request it must be sent to the board of directors for approval
 In the last stage closure process must be undertaken so that expected outcomes can be
offered to clients
CONCLUSION
The entire study being carried out has supported in knowing the significance of project
management. Further, through project management tools such as PERT, Gantt chart it is possible
to carry out the entire project in appropriate manner. Further, project of renovation can be carried
out in appropriate manner by considering all the activities as per plan and they can support in
accomplishing long term goals along with objectives. Apart from this, for measuring project
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performance technique such as earned value analysis is effective and overall effectiveness of the
proposal can be known easily through this.
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REFERENCES
Books and Journals
Dey, K. P., Clegg, T. and Bennett, J. D., 2010. Managing enterprise resource planning projects.
Business Process Management Journal. 16(2). pp.282–296.
Dorfman, M. S. and Cather, D., 2012. Introduction to risk management and insurance. Pearson
Higher Ed.
Fan, Y., Thomas, M. and Anantatmula, V., 2014. A Longitudinal Study of the Required Skills of
Project Managers. The Journal of Modern Project Management. 1(3).
Fowler, N., Lindahl, M. and Sköld, D., 2015. The projectification of university research: A study
of resistance and accommodation of project management tools & techniques. International
Journal of Managing Projects in Business. 8(1). pp.9–32.
Garon, S., 2006. Space project management lessons learned: a powerful tool for success. Journal
of Knowledge Management. 10(2). pp.103–112.
Hobbs, P., 2009. Project Management. Dorling Kindersley Limited.
Kumaraswamy, M., 2011. Editorial: integrating infrastructure project management with its built
asset management. Built Environment Project and Asset Management. 1(1). pp.5 – 13.
Leach, L. P., 2014. Critical chain project management. Artech House.
Levy, B., 2009. Legal Project Management: Control Costs, Meet Schedules. Manage Risks, and
Maintain Sanity.
Olsson, R., 2008. Risk management in a multi‐project environment: An approach to manage
portfolio risks. International Journal of Quality and Reliability Management. 25(1). pp. 60
– 71.
Saadé, R. G., Dong, H. and Wan, J., 2015. Factors of Project Manager Success. IJIKM, 10.
pp.12-15.
Shelley, A.W., 2015. Project management and leadership education facilitated as projects.
International Journal of Managing Projects in Business. 8(3). pp. 478 – 490.
Turner, J. R., 2014. The handbook of project-based management (Vol. 92). McGraw-hill.
Online
Chandler and Arizona, 2013. Project Management Methodology. [PDF]. Available through:
<https://www.chandleraz.gov/Content/PM000PMMethodologyGDE.pdf>. [Accessed on
28th Dec 2015].
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Methods of project evaluation. 2015. [PDF]. Available through:
<http://ocw.mit.edu/courses/nuclear-engineering/22-812j-managing-nuclear-technology-
spring-2004/lecture-notes/lec09slides.pdf>. [Accessed on 28th Dec 2015].
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