Applied Project Management Concepts

Prologue

The author wishes to thank all contributors, known and unknown, for their contributions.

For those who will realise their contribution compiling this book: THANK YOU.

May the readers of this book have a better understanding of Project Management, as it is a ‘Science’, and not a mere ‘Management’ function. Therefore, it is my contribution to life, to improve and create a vision of understanding.

Author:

Dr. Theunis L. Enslin - D.B.A. (PM) C.I.P.M. / F.A.A.P.M.

1st Edition

QUOTE:

"The worth of this book is to be measured by ‘WHAT YOU CAN CARRY AWAY FROM IT’ - James Bryce (1838 -1922)

CONTENTS

Prologue

Dedications

Preface

1 The Need

2 User Requirement Specification (URS)

3 Project Execution Plan (PEP)

4 Project Integration Management Plan

5 Project Scope Management

6 Project Time Management – Planning, Scheduling, Estimating

7 Project Cost Management

8 Project Quality Management

9 Project Human Resources Management

10 Project Communications Management

11 Project Risk Management

12 Project Procurement Management

13 Project Contract Management

14 Project Financial Management

15 Project Construction and Operations Management

16 Project Commissioning Management

17.1 Project Close-Out Report (PCR)

17.2 Project Completion Audit (PCA)

18 Project Knowledge Management

19 Project Document Management

20 Project Change Control Management

21 External Project Social, Environmental, Occupational, Health and Safety Management

22 Earned Value Management (EVM)

23 Document Control

24 Project Document Data Book – Project Handover

25 Project Management – A Guideline for Project Managers, Core Project Management Skills

Epilogue – Note from the Author

Abbreviations – Acronyms – Definitions

Sources - References

Dedications

Reynette – my wife and partner

Gabriella Enslin - our precious grand daughter

QUOTE:

"CARPE DIEM" (Siege the Day) - Horace (65 – 8 bce)

Preface

1. Introduction

The Applied Project Management Concept book comprises of recommended requirements for corporate policies, strategies, standards, procedures which represent the minimum to be in place for a project.

A specific Project Management Document – Project Execution Plan (P.E.P.), which will provide for detailed project, construction operation – specific policies, procedures, specifications, will be developed for each project by a dedicated project team.

2. Purpose

The purpose of this Project Management System is to:

Achieve cost and productive effective Project Management Execution.

Provide the Client with common cost effective and productive direction in the execution of projects.

Guide the development of suitable project and professional organisation structures.

Provide guidelines for the achievement of continuous improvement in ROI Asset Management.

Projects delivered on ‘Time’ – ‘Cost’ – ‘Quality’- ‘Risk’ and to the required requirements for the benefit of the Investor, Client, Stakeholders and Society.

3. Responsibilities

The author may change, alter or review the context of this book without any warning, and are not responsible for any loss, legal implications that may occur.

QUOTE:

"May this Book be a Guideline for those, If I do not know that I do not know – do not proceed with the unknown - Theunis Enslin (2005)

1

The Need

Index

1. What is a Project?

2. Project Management

3. General Management

4. A Project = Need of the Client and Stakeholders

4.1 Pre-Feasibility Study = Business Case (Corporate)

4.2 Feasibility Study – Analysis and Report

1. Introduction

2. Scope

3. References

4. Definitions

5. Feasibility Study Report

6. Format of the Document

7. Commercial

5. Project Feasibility Study Guideline

5.1 Scope of a Feasibility Study

5.2 When should a Feasibility Study be Conducted

5.3 Composition of a Feasibility Team

5.4 Checklist of a Feasibility Study Modules

QUOTE:

"Only dull People are brilliant at Breakfast" - Oscar Wilde (1854 - 1900)

Notes:

1. What is a Project?

"A Project is a temporary endeavour undertaken to create a unique ‘Product’ or ‘Service’".

"Temporary means that every project has a definite Beginning and a definite End"

"Unique" means that the ‘Product’ and/or ‘Service’ is different in a distinguishing way from all other Products or Services.

A Project is temporary and unique, and operations are ongoing and repetitive.

2. Project Management

"Project Management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Meeting or exceeding stakeholder needs and expectations" irrevocably normally involves balancing competing demands amongst, but not limited to:

Scope – Time – Cost – Quality – Risk

Stakeholders with different "needs and expectations"

Identified requirements (needs)

Unidentified requirements (expectations)

S - Scope

C - Cost

T - Time

Q - Quality

R - Risk

bp - burning point

3. General Management and Functional Management

General Management and Functional Management encompasses planning, organising, staffing, financial, executing and controlling the operations of ongoing operations, supporting disciplines such as programming, statistics, theory, logistics and personnel. If the influence of such people may influence the progress of the Project, it "NEEDS" to be identified and any possible precautionary actions to be reviewed and communicate to the relevant responsible Project Management Authority.

4. A Project = Need of the Client and Stakeholders

A ‘NEED’ is to establish whether there is a ‘NEED’ for a ‘Project’ to commence to deliver a unique ‘PRODUCT’ or ‘SERVICE’.

A ‘Business Case’ and ‘Business Plan’ needs to be developed to identify project activities, objectives and deliverables in order to meet or exceed Stakeholder / Client Needs and Expectations.

The ‘Business Case’ and ‘Business Plan’ consists of a:

Pre- Feasibility Study (Business Case)

Feasibility Study (Business Plan)

4.1 Pre-Feasibility Study = Business Case (Corporate)

Business Planning – (Management)

Identify opportunities (Business Development)

Access Uncertainties and Risks (Business Development and Financial)

Company Strategy and alignment (Corporate)

Market Need (Business Development)

Legal Framework (Legal & Economics)

Approval & Authorisation (Corporate)

4.2 Feasibility Study – Analysis and Report

1. Introduction

To Provide detailed requirements for the preparation of a Feasibility Study Report.

2. Scope

The Project under Authority of Corporate Directives.

3. References:

(i) Pre-feasibility Report

(ii) Market Needs; Product, Price, Place, Product Life Cycle (PLC).

(iii) Project Economic Evaluation Studies

(iv) Project Concept Statements

(v) Work Breakdown Structure (WBS)

(vi) Cost Breakdown Structure (CBS)

(vi) Cost Benefit Analysis (CBA)

4. Definitions

(i) Feasibility Study

The preparation of Designs, Budgets, Financial and Economic Evaluations, Contract Documentation, WBS & CBS for the implementation of a proposed Project.

(ii) Owner

Group where the Capital Expenditure of the Project will be entered into the Books of Account as an Asset.

5. Feasibility Study Report

The Purpose of a Feasibility Study is to bring "DEFINITION and VALIDATION in the SYSTEMS LIFE CYCLE" of a project to the stage where all substantive decisions with respect to the Market, Economic, Financial, Technical, Environmental and Social details have been taken, and the Project is ready for Final Approval and Implementation.

This implies that all Designs, Cost and Benefit Estimated, Financial and Economic evaluations, Scope and Timing of the Project haven determined, and a recommendation for proceeding with the Project can be made.

The Feasibility Study is not whether the Project is worthwhile or not (subject of the Pre-Feasibility Study) rather will the project successfully be carried out through implementation and operational phases.

6. Format of the Document

The Feasibility Study report in the form of a bound MASTER REPORT, with separate appendices, Design Calculations, Drawings, Schedules, Contract Documents containing whatever detail is necessary to fully describe the project.

The Master Report should contain as a minimum but not limited to:

Introduction

Strategy

Synopsis

Technical Scope of Work

Commercial Evaluation

Economic Evaluation

Financial Analysis

Cost Analysis

Legal Issues

Social & Environmental Impact Assessments

Technical Report

Financial & Commercial Report

Implementation Programme and Vote

General

Summary and Conclusions

Executive Summary

7. Commercial

(i) Capital Expenditure

Budgeted Schedules of Capital Expenditure payments, on monthly or annual basis as appropriate, together with retention monies for each contract must be given in tabular form.

Example:

(ii) Equipment, Vehicles and Furniture

Requirements for all Equipment, including Machines, Tools, Computers, etc. that do not form part of the expenditure should be listed together with their unit costs.

(iii) Working Capital Requirements

Working Capital covers items such as stores, Spare Parts, material, Fuel stocks, lubricants and debtors. The requirements under each heading should be given in monetary values and quantities.

(iv) Operating and Maintenance Costs

Annual Costs should be quoted in the monetary values of the year in which the Feasibility Study is done and should be classified according to functions (i.e. Maintenance, Administration) and according to the resource type (i.e. Labour, Fuel, etc.). These should be tabulated as shown in below EXAMPLE.

(v) Economical Evaluation

The Economic Evaluation must be clearly stating the values assumed for the key Economic Parameters:

Inflation Rate

Discount Rate

Rate of Change

(vi) Financial Analysis

The Financial Analysis of a Project consists of projections of the changes to the FINANCIAL STATEMENTS that will be brought about by the realisation of the Project over it’s ‘ECONOMIC LYFE CYCLE’.

(vii) Implementation Programme and Vote

It must contain a discussion of the internal Managerial and other resources that will be required to bring the Project to fruition: Include a Bar Chart of key activities, the Project Management Team, and detailed Budget of Costs.

(viii) Summary and Conclusion

A concise summary of key features of the project covering its purpose, the main technical and economic features such as Capacity, Capital Cost, NETT PRESENT VALUE (NPV) and INTERNAL RATE OF RETURN, and date of commissioning approval for Project Implementation.

(ix) Executive Summary

The Executive Summary is an overview of the project (one page). Requested from an Executive / Executive Steering Committee / Board of Directors.

Technical Report

Financial Report

Economic Analysis

(x) General

Attachments:

Ref documents Project Feasibility Study

Ref documents "Project Feasibility Study Guideline

5. Project Feasibility Study Guideline

5.1 Scope of a Feasibility Study

Economic Evaluation

Financial Analysis

Cost Analysis

Technical Analysis

Legal, Social and Environment

Checklists

5.2 When should a Feasibility Study be Conducted

The Market

The Economical Climate

The Need – Commodities / Product

The Value

The Financial Gain

The Expansion of the Company / Corporation Asset Base

The Return on Investment (ROI)

5.3 Composition of a Feasibility Team

Team Leader (Senior Manager – Appointed by Executive Management)

Project Manager

Engineering Manager

Financial – Commercial – Cost – Q.S.

Team Co-ordinator

Consultants

Service Providers

Administration Support

Disciplines

Geology

Surveying (Land)

Environmental

Health and Safety

Quantity Surveying

Legal

Process

Civic

Mechanical

Electrical

Control & Instrumentation

Planning

Document Control

5.4 Checklist of a Feasibility Study Modules

Executive Summary

Background & History

Resources

Engineering & Technology

Administration and Overhead Costs

Human Resources

Financial & Commercial Status

Legal Status

Insurance

Tax

1 Executive Summary Contents

The Operation

General indicators – objectives, strategies, strength, weaknesses, opportunities

Resources

Revenue

Planning

Environmental Impact

Engineering, Technology and Capacities

Administration & Overheads

Resources

Financial & Commercial Analysis

Legal Status – Environmental – OHS

Contract verification

Implementation Philosophy

2 Background & History

Describe the tasks in context of the Economic, Industrial, Financial and Social policies applied.

Describe International, National, Regional area & Local relationships.

The Operation – Corporate set-up, Affiliations, Competitors, History – Development, Construction, Expansion, Investigations, etc.

3 Resources

Location

Programmes

Estimations

4 Environmental

Location

Site Conditions

Environmental Impact Study

Health & Safety

5 Engineering & Technology

Project Programme