PM-Essentials - Project Management Research Institute

What is a project?

Projects are temporary endeavors. They are temporary in nature. After the completion of the project, the project team is dispersed.
They deliver unique products or service as an output. Designing a new car is a project where as manufacturing that car shift after shift is not a project, it is an operation. Operations are ongoing in nature. Operations deliver standard products or service as output, where as projects deliver unique products or service as the output.
Projects are constrained by the limited resources of time, cost and scope. Projects are considered as successful, if they completed the scope of work on time, within budget, met the business goal of the project for which they were undertaken.
Progressive elaboration – Projects are progressively elaborated. When we start with a project we have very less information about it. As we progress, we gain more and more insight about the project. My dream house project started with a one line requirement ‘We need a good house to live the rest of our life’. Then during the course of the project, this one liner got elaborated into detailed requirements, design, drawings etc, before starting the construction work.
Projects are managed by project managers. Or, anyone who manages a project is a project manager.
Project manager is appointed by the Owner of the project, or by the consultant appointed by him. For a project like writing a book, the owner and the project manager can be same where as while constructing a metro rail, generally the owner and the project manager will be different.

Step#1 Validating the idea (Business case)

If you have a project idea, the first thing you must do is to work out the business case of the project. Business case explains the investment required, the expenses, the income and the net cash flow month after month. If the income from the project is more than the expenses, then the project has a business case. When people approach me with project ideas, very often I play the devil’s advocate. I rip their ideas apart for want of viable business case to support their ideas. On the one side I am really unhappy to kill their enthusiasm, where as on the the other side I have the gratification of helping them not to waste lot of hard earned money and effort on wasteful projects. Lack of business case is the biggest killer of projects.

How to write a business case?

It is very simple. A typical business case contain;

The total investment required to complete the project
Monthly cash flow analysis – Sum of cash inflows minus the sum of cash outflows
Payback period – The number of months or years required to recover the initial investment

If you are convinced about the business case of the project, then proceed to the next step of defining the scope of the project.

Apart from writing down the business case, it is a good idea to think through the major business risks as well. Risks can be of two types, negative and positive risks. While negative risks are threats to your project, positive risks are opportunities, which if not exploited is an opportunity lost.

Step#2 Define the scope of the project

Most of the projects start with a high level scope statement like ‘I want to construct a new house’. This has to be elaborated further before it can be used for cost estimation and duration estimation. The scope definition involve two steps;

Collect detailed requirements
Define the scope (baseline the scope)
- Product scope (Product Breakdown Structure – PBS)
- Project Scope (Work Breakdown Structure – WBS)

Step#3 Decompose the Work Packages into activities

Once the Work Breakdown Structure of the project is developed, the next step is to decompose the work packages into activities.

Step#4 Estimate costs & Determine budget

Once the work packages and activities are known, the next step is estimating costs and determining the budget of the project

Step#5 Develop Schedule

Once the work packages are decomposed into activities, the next step is to develop the schedule of the project which involve;

Developing activity sequence diagrams by sequencing activities based on their dependencies
Identify the critical path
Optimize the schedule
Baseline the schedule