Unformatted text preview: Project Management
CEM 601 Dr. Hesham A. Aziz Dr. Hesham A. Aziz 1 The business Organization
The Three Basic Functions
-Providing Funds Operations
- Producing Goods
- Providing Services Dr. Hesham A. Aziz Marketing
-Consumer Wants &
-Selling & Promoting 2 Business Operations Overlap Operations Marketing Finance •Significant interfacing and collaboration among them all.
•Exchange of information and cooperative decision making.
Dr. Hesham A. Aziz 3 Operations Interfaces
Engineering Maintenance Distribution Purchasing Operations Legal
Accounting Public Relations
Dr. Hesham A. Aziz 4 Decision Area Strategic Decisions Affects Product and service design Costs, quality liability and environmental Capacity Cost structure, flexibility Process selection and layout Costs, flexibility, skill level, capacity Work design Quality of work life, employee safety, productivity Location Costs, visibility Quality Ability to meet or exceed customer expectations Inventory Costs, shortages Maintenance Costs, equipment reliability, productivity Scheduling Flexibility, efficiency Supply chains Costs, quality, agility, shortages, vendor relations Projects Costs, new products, services, or operating
Dr. Hesham A. Aziz 5 Why Some Organizations Fail
• Too much emphasis on short-term financial performance
Failing to take advantage of strengths and opportunities
Neglecting operations strategy
Failing to recognize competitive threats
Too much emphasis in product and service design and not
enough on improvement
• Neglecting investments in capital and human resources
• Failing to establish good internal communications
• Failing to consider customer wants and needs Dr. Hesham A. Aziz 6 Competitiveness, Strategy, and Productivity
Mission Planning and Decision Making Goals
Functional Goals Finance
Dr. Hesham A. Aziz Operations
Mission Strategy Tactics How does mission, strategies and tactics relate to
decision making and distinctive competencies? Dr. Hesham A. Aziz 8 • Mission Strategy – The reason for existence for an organization • Mission Statement
– States the purpose of an organization • Goals
– Provide detail and scope of mission
– Plans for achieving organizational goals • Tactics
– The methods and actions taken to accomplish strategies
Dr. Hesham A. Aziz 9 Japanese View in Planning & quality management:
In the 1970s, the Japanese used European and US goods as models.
By making effective use of quality management they were able to produce the following :- 1. Same product 2. + Same quality Invest in quality 5.
6. Better quality
Much better quality Much better quality Slightly less price Customer Satisfaction 3. Invest more in quality
4. + Sales increased + Less price + Same price + Same price
Dr. Hesham A. Aziz Sales increased
10 Missions vs. Strategic Visions
• A mission statement focuses on current business activities – “who we are and what we
– Current product and service offerings
Customer needs being served
Technological and business capabilities • A strategic vision concerns a firm’s future business path – “where we are going”
– Markets to be pursued
– Future technology
– Kind of company that management is trying to create Dr. Hesham A. Aziz 11 The Hows That Define a Firm's Strategy
• How to grow the business • How to please customers • How to out-compete rivals • How to respond to changing
market conditions • How to manage each functional piece of the business and
develop needed organizational capabilities • How to achieve strategic and financial objectives Dr. Hesham A. Aziz Strategy
to . . . 12 Types of Objectives Required
Strategic Objectives Financial Objectives
Outcomes focused on improving financial performance Outcomes focused on improving longterm, competitive business position $ Dr. Hesham A. Aziz 13 Establishing Performance Measures
Key Performance Indicator “ KPI”
• Performance measures should be in line with the Performance
evaluation • Targets should be selected and decided on according to the
guidelines of the evaluation methodology.
Activities Task 1. Resource Due date 1. Performance indicator Target 2.
4. Dr. Hesham A. Aziz 14 Strategy Formulation • Environmental scanning “ The considering of events and trends that
present threats or opportunities for a company”
• SWOT “Strength, weakness, opportunities threats “ Dr. Hesham A. Aziz 15 Company Strengths, Competencies, and
• A company must have or be able to acquire the resources, competencies, and competitive capabilities needed to execute the chosen strategy
• Resource deficiencies, gaps in skills, and weaknesses in competitive position make pursuit of certain strategies risky or altogether unwise Dr. Hesham A. Aziz 16 Company Opportunities and Threats
• For strategy to be successful, it has to
– Be well matched to capturing a
company’s best opportunities – And help counteract threats to the
company’s well-being Dr. Hesham A. Aziz 17 Environmental
Scanning Dr. Hesham A. Aziz 18 Key External Factors
• Economic conditions
Markets Key Internal Factors
• Human Resources
Facilities and equipment
Products and services
Suppliers Dr. Hesham A. Aziz 19 Internal Capabilities
Marketing Capability Non-Marketing Capability
Financial position, management&
Leadership, HRM, R&D, operations
Production capabilities and supply
Coordination & responsiveness
And competitive position.
Implications Management Marketing strategies
& performance •Marketing organization
•Marketing planning &
control process Marketing strategies
__________ Strengths Rating Weaknesses Rating
Note. Rating is based on 5-point scale degree of significance and for likelihood of occurrence:
extremely significant (5) quite to highly significant (4) significant (3) reasonably significant (2) and
not very significant (1)
Dr. Hesham A. Aziz External Environment
1. Economic forces
2. Sociocultural forces
3. Political-legal forces
4. Technological forces
5. Natural environment forces
Scenario / Description
Implications Near environment:
1. Market review
2. Competitive review
3. Distribution channels and buyers
4. End user customers
5. Supply : _____________
: __________ Opportunities Rating Threats Rating
Note : Rating is based on a 5-point scale degree of significance and for likelihood of occurrence:
Extremely significant’ (5), quite to highly significant, (4) significant, (3) reasonably significant,
(2) and not very significant (1)The probability of occurrence ranges form high probability of occurrence,
(5) to not likely to occur in This time horizon (1). For example a rating of 5-3 represents an extremely
significant opportunity Or threat that has a reasonable likelihood of occurrence
Dr. Hesham A. Aziz Goal & Objective Setting Dr. Hesham A. Aziz 22 * Small number
* Start a product
* Then shut
down the system * To improve condition
* To Improve organizational
* Improve efficiency
* Change configuration
* Increasing quantity &
Production When to start a
Project? MOVE * Large
* Continuity Mass
- Only one time
- Non repetitive
- Not rely on previously
Dr. Hesham A. Aziz 23 What is a Project?
• Project Defined
– A complex, nonroutine, onetime effort limited by time, budget, resources, and performance specifications designed to meet customer needs.
• Major Characteristics of a Project
– Has an established objective.
– Has a defined life span with a beginning and an end.
– Requires acrosstheorganizational participation.
– Involves doing something never been done before.
– Has specific time, cost, and performance requirements.
Dr. Hesham A. Aziz 24 The Challenge of Project Management
• The Project Manager
– Manages temporary, non-repetitive activities and
frequently acts independently of the formal organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration to the project
• Is responsible for performance and success of the project. – Must induce the right people at the right time to address
the right issues and make the right decisions.
Dr. Hesham A. Aziz 25 Comparison of Routine Work with Projects
Routine, Repetitive Work Projects Taking class notes Writing a term paper Daily entering sales receipts into
the accounting ledger Setting up a sales kiosk for a
professional accounting meeting Responding to a supply-chain
request Developing a supply-chain
information system Practicing scales on the piano Writing a new piano piece Routine manufacture of an Apple
iPod Designing an iPod that is
approximately 2 X 4 inches,
interfaces with PC, and stores
10,000 songs Attaching tags on a
manufactured product Wire-tag projects for GE and
Wal-Mart Dr. Hesham A. Aziz TABLE 1.1
26 Integrated Management of Projects Dr. Hesham A. Aziz 27 The Technical and Sociocultural Dimensions
of the Project Management Process Dr. Hesham A. Aziz 28 Sources of data Dr. Hesham A. Aziz 29 Definition of Project Management
# The process of planning and executing a piece of work
from inception to completion to achieve safe achievement of
objectives on time, within cost limits and to the specified
standards of quality
#The organizing, planning, directing, coordinating and
controlling of all project resources from inception to completion
to achieve project objectives on time, within cost, and to
required quality standards.
# Most authors agree that project management is about
achieving time, cost and quality targets, within the context of
overall strategic and tactical client requirements, by using
Dr. Hesham A. Aziz 30 ● Project management offers a structured approach to managing projects . ● The project manager is the single point of responsibility, it is the project manager’s job to set up a management structure which not only meets the needs of the project, but the needs of the organization, the needs of the stakeholders and the needs of the individuals working on the project as well . Dr. Hesham A. Aziz 31 Project Planning Goals
Time cost and quality Cost Time Quality
Dr. Hesham A. Aziz 32 OBS
needs ( OBS = Organization Breakdown Structure ) Dr. Hesham A. Aziz 33 Quality Cost
Cheapest Best Economical Adequate Reasonable Planning Goals
Goals are essentially incompatible Fastest Time The art is to maintain a proper balance between Time, Cost and Quality. Quality is not sacrificed for either time or cost. Dr. Hesham A. Aziz 34 Time cost and quality
T C Time Cost
Acceptable range Acceptable range Q (min) Quality Acceptable range Dr. Hesham A. Aziz 35 Time cost and quality
Q (min) Too slow and too
expensive T C Time Cost
Acceptable range Acceptable range Unacceptable
Too slow Too
Dr. Hesham A. Aziz 36 Project Life Cycle Dr. Hesham A. Aziz 37 Project Life Cycle. Dr. Hesham A. Aziz 38 Dr. Hesham A. Aziz 39 IDENTIGYING THE KEY FEATURES OF PROJECTS
FEATURES POINTS TO NOTE DEFINED START AND
END •Some projects are repeated often, but they are
not processes because they have clear start and
•Routine work can be distinguished from projects
because it is recurring, and there is no clear end
to the process. All projects have start-up and closedown stages. ORGANIZED PLAN A planned, methodical approach is
used to meet project objectives. SEPARATE RESOUCES Projects are allocated time, people,
and money on their own merits. •Good planning ensures a project is completed on
time and within budget – having delivered the
• An effective plan provides a template that
guides the project an details the work that needs
to be done.
•Some projects operate outside the normal
routine of business life, others within it- but they
all require separate resources.
•Working within agreed resources is vital to
Dr. Hesham A. Aziz IDENTIGYING THE KEY FEATURES OF PROJECTS
•Project teams take responsibility for and
TEAMWORK Projects usually require a
team of people to get the job
GOALS Projects bring results in terms
of quality and/or performance. gain
satisfaction from their own objectives, while
contributing to the success of the organization as a
•Projects offer new challenges and experiences for
•A project often results in a new way of working, or
creates something that did not previously exist.
•Objectives must be identified for all those involved in
the project. Dr. Hesham A. Aziz 41 An Overview of Project Management . Dr. Hesham A. Aziz 42 The topdown strategic approach to project planning Dr. Hesham A. Aziz 43 Dr. Hesham A. Aziz 44 Planning and Scheduling Gantt Chart MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Locate new
Hire and train staff
Select and order
Remodel and install
Move in/startup Dr. Hesham A. Aziz 45 Project Management
6 weeks 8 weeks
fac 2 4 r
11 weeks re
time estimates 1 In
te 4 weeks rv
ie 3 weeks 5
9 weeks w Move
1 week 6 3 Dr. Hesham A. Aziz 46 Typical functional arrangement Dr. Hesham A. Aziz 47 Typical project team operating across
functional boundaries Dr. Hesham A. Aziz 48 Typical external project management arrangement Dr. Hesham A. Aziz 49 A Load Chart Dr. Hesham A. Aziz 50 Dr. Hesham A. Aziz 51 Cost types Dr. Hesham A. Aziz 52 Dr. Hesham A. Aziz 53 Earned value performance measurement chart. Dr. Hesham A. Aziz 54 Dr. Hesham A. Aziz 55 Network of Stakeholders Dr. Hesham A. Aziz 56 Dr. Hesham A. Aziz 57 IDENTIFYING KEY PLAYERS AND THEIR ROLES
•Ensures that the project is of real relevance
SPONSOR Initiates a project, adds to the organization.
team’s authority, and is the •Helps in setting objectives and constraints.
•Acts as an inspirational figurehead.
most senior team member.
•May provide resources. to the •Produces a detailed plan of action.
Responsible for achieving the •Motivates and develops project team.
project’s overall objectives and •Communicates project information to stakeholders and
other interested parties.
leading the project team.
•Monitors progress to keep project on track. Project Manager Stakeholder Any other party who is
interested in, or affected by, the
outcome of the project. •Contributes to various stages of the planning process by
•Might only be involved from time to time.
•May not be a stakeholder for the entire project if his or her
contribution is complete.
Dr. Hesham A. Aziz 58 IDENTIFYING KEY PLAYERS AND THEIR ROLES
•Makes a major contribution in examining
Key Team member feasibility and Assists the project manager and planning a project.
of •Lends technical expertise when needed.
•Is directly responsible for project being completed on time
and within budget. •Takes responsibility for completing activities as set out in
Full or part-time person who the project plan.
has actions to carry out in the •Fulfils a specialized role if involved as a consultant, or as
an individual who is only needed for part of the project.
project plan. Team member •Strongly influences the objectives of the project and how its
Internal or external person who success is measured.
•Dictates how and when some activities are carried out.
benefits from changes brought
•Provides direction for the project manager.
about by the project. Customer •Can become very involved with, and supportive of, the
Provider of materials, products, project.
or services needed to carry out •Delivers supplies on time and provides services or goods at
a fixed cost, agreed with the project manager at the outset.
the project. Supplier Dr. Hesham A. Aziz 59 The PMBOK describes project management under the
following nine knowledge areas : ● Project Integration: integrates the three main project
management processes of planning, execution and control – where inputs
from several Knowledge areas are brought together . ● Project Scope Management : It is primarily concerned with
defining and controlling what is or is not included in the project , It
consists of authorisation, scope planning, scope definition, scope
change management and scope verification . ● Project Time Management : It consists of activity definition,
activity sequencing, duration estimating, establishing the calendar,
schedule development and time control . ● Project Cost Management : the project is completed within the
approved budget. It consists of resource planning, cost estimating, cost
budgeting, cash-flow and cost control . ● Project Quality Management : includes the process required
to ensure that the project will satisfy the needs for which it was
undertaken. It consists of determining the required condition, quality
planning, quality assurance and quality control . ● Project Human Resource Management : includes the
process required to make the most effective use of the people involved
with the project. It consists of organisation planning, staff acquisition and
team development . ● Project Communication Management : includes the process required to ensure proper collection and dissemination of
project information . It consists of communication planning, information
distribution, project meetings, progress reporting and administrative
closure . ● Project Risk Management : includes the process concerned
with identifying, analyzing, and responding to project risk. It consists of
risk identification, risk quantification and impact, response development
and risk control . ● Project Procurement Management : include the process
required to acquire goods and services from outside the performing
project team or organisation . It consists of procurement planning,
solicitation planning, solicitation, source selection, contract administration
and contract closeout . Economic
Feature Strategic Importance Market Size Small markets don’t tend to attract new firms; large markets
attract firms looking to acquire rivals with established
positions in attractive industries Market growth
rate Fast growth breeds new entry; slow growth spawns increased
rivalry & shake-out of weak rivals Capacity
shortages Surpluses push prices & profit margins down; shortages pull
them up Industry
profitability High-profit industries attract new entrants; depressed
conditions lead to exit Entry/exit
barriers High barriers protect positions and profits of existing firms;
low barriers make existing firms vulnerable to entry
Dr. Hesham A. Aziz Economic
Feature Strategic Importance Product is bigticket item for
buyers More buyers will shop for lowest price Standard
products Buyers have more power because it’s easier to switch
from seller to seller Rapid
integration Raises risk; investments in technology
facilities/equipment may become obsolete before they
Big requirements make investment decisions critical;
timing becomes important; creates a barrier to entry and
Raises capital requirements; often creates competitive &
cost differences among fully vs. partially vs. nonintegrated firms Economies of
scale Increases volume & market share needed to be cost
competitive Rapid product
innovation Shortens product life cycle; increases risk because of
Dr. Hesham A. Aziz
opportunities for leapfrogging Capital
requirements Thank You Dr. Hesham A. Aziz 65 ...
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This note was uploaded on 03/17/2012 for the course CEM 661 taught by Professor Dr.heshama.aziz during the Spring '10 term at American University in Cairo.
- Spring '10