BBA Year 3 Business Administration 3C July 2016

BACHELOR OF BUSINESS ADMINISTRATION
(YEAR 3)
BUSINESS ADMINISTRATION 3C
STUDY GUIDE
Copyright 2016
MANAGEMENT COLLEGE OF SOUTHERN AFRICA
All rights reserved; no part of this book may be reproduced in any form or by any means, including photocopying
machines, without the written permission of the publisher.
Please report all errors and omissions to the following email address: modulefeedback@mancosa.co.za
Business Administration 3C
Table of Contents
PROJECT MANAGEMENT CONCEPTS ....................................................................................4
PROJECT LIFE CYCLE PROCESS .........................................................................................22
INITIATING A PROJECT ..........................................................................................................28
PROJECT PLANNING PART 1 .................................................................................................44
PROJECT PLANNING PART 2 .................................................................................................71
PROJECT EXECUTION............................................................................................................92
PROJECT MONITORING AND CONTROLLING ....................................................................102
PROJECT CLOSURE .............................................................................................................113
BIBLIOGRAPHY .....................................................................................................................119
TYPICAL EXAM QUESTIONS ................................................................................................121
MANCOSA BBA Year 3 i

Aims of the Module

The aims of this Module are:
To broaden the students knowledge of Project Management so that he/she is able to
relate to a real business situation.
To enhance the technical and management aspects associated with effectively
managing projects.
To enable students to plan, establish and manage a simple to moderately complex
project and project team whilst using a variety of routine and non-routine processes.
To ensure students are able to select from a wide choice of standard and non-standard
procedures (PMBOK).
Equip students with the necessary skills so that they are able to take full responsibility
for the nature, quantity and quality of output.
To enhance students skills and ability to confidently take responsibility for work group
output as required.
Equip students with a wide range of scholastic and/or technical skills applicable in the
field of project management.
Outcomes of the Module

At the end of this course the student will be able to:
Initiate and plan a project.
Execute, monitor and control a project.
Hand over and close a project.
Use and apply concepts and terminology of project management
Recall various documentation required in the various phases of a project
1 MANCOSA BBA Year 3

How to use this Study Guide
This study guide is a snap shot of the topics discussed here. It describes the topics covered in
little detail and its objective is to focus and guide students in their learning of the syllabus
content.
The study guide must be used in conjunction with the prescribed book where students will get
the details of the subject matter. To broaden their knowledge base, students are encouraged to
cover material in the recommended books, journals, papers and any other material they can
find covering the project management subject.
At the beginning of each section, you will find a list of outcomes. These outcomes outline the
main points that you should understand when you have completed the section
Avoid reading all the material at one time. Each study session should be no longer than two
hours without a break.
In the module sections, you will find the following symbols and instructions. These are designed
to help you study.
THINK POINT
A think point asks you to stop and think about an issue. Sometimes you are asked to apply a
concept to your own experience or to think of an example.
MANCOSA BBA Year 3 2

SELF ASSESSMENT ACTIVITY

You may come across some activities, which ask you to carry out specific tasks or answer
some questions. The aim of these activities is to give you an opportunity to apply that which
will test your understanding of what you have learnt up to that point.
The following websites are among the many websites that can be visited to gain more
exposure in the field of project management:
www.pmi.com
www.pmisa.org.za
TEXTBOOKS
Prescribed Textbook:
Gido and Clements (2015). Successful Project Management. 6th edition South-Western
Cengage Learning.
Recommended Reading:
A Guide to the Project Management Body of Knowledge (PMBOK Guide). Third Edition.
American National Standard. Project Management Institute, 2004
Schwalbe, K (2009). Introduction to Project Management. Cengage Learning.

SECTION ONE
PROJECT MANAGEMENT
CONCEPTS

PROJECT MANAGEMENT CONCEPTS
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:
Understand the growing importance of project management.

Define a project and it attributes
Define project management and its application.
Describe project management and key elements of the project management
framework.
Understand the nine knowledge areas
Discuss the relationship between project, programme, and portfolio management
and their contribution to organisational success
Benefits of Project Management
READING
This section is to be read in conjunction with the following textbooks:
Cengage Learning.
A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition.
Newtonw Square, PA: Project Management Institute, 2004

1.1 Introduction
Project Management is the way of living; it is the way we manage our lives and affairs to
achieve our goals. The difference is that we plan and execute these activities without
realizing so.
Many organisations are now more aware of the benefits of restructuring themselves into
a project type environment because projects by their very nature implement and realize
programmes and portfolios, which can achieve the strategic objectives of these firms.
Project management is seen by many professionals as a step up towards a project

management career. These professionals start their careers as IT specialists, Engineers,
Accountants, Medical Doctors and others, however, as they gain more experience in the
field of project management they tend to improve their competencies by enrolling for
project management programmes such as this one.
One of the biggest advantages project management has is that it can be applied across a
range of disciplines, industries, professions whilst the basic methodology remains
generic across such disciplines.
1.2 What is a Project?
A project is a temporary endeavour undertaken to create a unique product, service or

result (Gido and Clements, 2015:04).
If one draws a comparison between projects and operations, it is notable that operations
are repetitive in nature and are ongoing. Therefore operations have dedicated resources,
and have a longer lifespan than projects. The objectives of operations are to sustain
businesses.
On the other hand, projects are undertaken to address specific operational challenges
and as mentioned above, they have a definite start and end date.
Projects are authorized as a result of the following strategic intents (adapted from Gido
and Clements (2015):

A market demand e.g. building of a new cement plant to supply cement shortages for
infrastructure projects.
A legal requirement e.g. the government authorizes a new project to legislate
use of unleaded fuel to substitute leaded fuel.
An organisational need e.g. an organisation authorizes a project management

course for its employees to improve its project competencies;
A customer request e.g. a body corporate of a townhouse complex authorizes a

project to build a crche to serve its tenants.
A technological advance e.g. the department of transport authorizes the eNatis

project to automate its business processes.
The environmental consideration e.g. the mining company authorizes a project to

rehabilitate a closed down mining operation.
Projects come in different forms. For example there are IT, engineering, energy and
research and development projects, to mention a few. All these projects have different
characteristics. For example energy projects such as designing and building of power
stations take a long time to execute because of the capital expenditure, risks and
complexities involved. Research and development projects can be open ended projects
with uncertain contract values and periods because of their long term approach.
The following are some of the significant projects undertaken in the recent past both
locally and internationally:
Y2K projects. Organisations globally authorized Y2K projects to ensure their

computer software interprets year 2000 appropriately.
Gautrain Project. This project was authorized to alleviate road traffic between
Pretoria and Johannesburg.

2010 FIFA World Cup. The construction of soccer stadia to ensure that South
Africa has world class facilities for the world cup.
Coega Industrial Development Zone. The South African government authorized

this project to stimulate local economic development.
Projects vary in size, monetary value, and time durations depending on their
complexities. Normally complex projects have high financial values, and involve high
risks, which demand a high level of planning. For example, hosting a FIFA soccer world
cup is a complex project with a high budget. Therefore this project would demand a high
level of planning compared to building a house. Even though different projects require
different levels of planning, the basic project management principles remain the same.
Projects demand that thorough planning is conducted to reduce risks and increase the
probability of success. When organisations undertake projects, not only do they stand to
lose money if they dont succeed but also their reputation and goodwill. An organisations
reputation is built over time and if it is lost it can take a lifetime to re-gain it. Therefore this
means that projects are not just about schedules and budgets but also about the ability of
firms to execute them successfully.
1.3 Attributes of Projects
According to Gido and Clements (2015:4-6) there are a number of attributes that define a
project:
A project has a clear objective that establishes what is to be accomplished
A project is carried through a series of interdependent tasks - that is a number of
non-repetitive tasks that need to be accomplished in a certain sequence in order
to achieve the project objective.
A project has a specific time frame, or finite life span.
A project may be unique or a one-time endeavor.
A project has a sponsor or customer.
A project involves a degree of uncertainty.

THINK POINT
What is the difference between a project and an operation? Give examples of both.
1.4 Project Management
Project Management is the application of knowledge, skills, tools and techniques to

satisfy stakeholder expectations from a project (PMBOK Guide, 2004:8).
Project management is achieved by applying and integrating project management

processes which include: initiating, planning, executing, control and monitoring, and
closing. These are referred to as process groups and they dictate the life cycle of a
project.
Apart from process groups there are knowledge areas, which are the backbone and
knowledge base of project management. The knowledge areas consist of project
integration, scope, time, cost, quality, human resources, communications, risk,
procurement management, and stakeholder management.
These different knowledge base focus areas have to be applied to specific parts of the
project. It must always be remembered that in a project environment, knowledge areas
are applied concurrently to different project areas and are not applied in isolation.
1.5 Project Stakeholders
Project stakeholders include organisations and individuals who are interested or affected
by the project being executed. Stakeholders may have an influence over the project
objectives or outcomes. The success of the project is dependent on the stakeholders as
they may decide to embrace and support it or they may also decide to stop the project.
For example if a property development company wants to build a golf course in a tribal
land. If such a project is to succeed, the property company as a client must identify and
recognize the local community as a major stakeholder for the project otherwise the local
community can actually impede the project.

It is the responsibility of the project management team to identify stakeholders, and to

determine their roles, requirements and expectations, so that they are able to analyse
and manage them properly in the interest of the project.
Stakeholders cannot be classified under one umbrella as they have varying levels of
authority and responsibilities, which is why the project management team needs to
conduct an analysis of its stakeholders so that they understand each stakeholders needs
and interest.
There are positive stakeholders who have a positive influence on the project. These are
the stakeholders who tend to benefit from the project or see some benefit of the project.
In the golf course example, these would be people hoping to open businesses as a result
of the traffic that will be caused by the building of the golf course, or people hoping to get
employment from the golf course.
On the other hand negative stakeholders have a negative influence on the project
because they feel threatened by it. These may be people who have vested interest in the
area such as indigenous people who have been living in the area for a long time with
their ancestors graves in the area, for example.
The project management team needs to focus more energy on the negative stakeholders
to ensure buy-in from them and success of the project. The following is a list of typical
key stakeholders in any industry or sector:
Project Sponsor The person that provides the financial resources for the
project.
Project Manager The single point responsibility of a project.
PMO The project management office provides support to the project.
Customer or user This is the person or entity that will use the projects product.

Project management team the members of the project team who are directly
involved in executing the project management functions.
Influencers People or groups who are directly or indirectly interested or affected by

the project. They can also influence the project positively or negatively.
Investors A person or entity making the investment in a project.
Contractor A contractor is normally the person or organisation that is entrusted with

supplying the services and/or goods to achieve project deliverables.
Government The government is in most cases a stakeholder in projects whether

they are public or private sector projects because it has an interest in the project, e.g.
collecting taxes.
1.6 Programmes and Project Portfolio Management
Project programmes and portfolios are tactics used by organisations to implement their
corporate and business strategies. The objective of programmes and portfolios is to
breakdown business strategies into manageable chunks so that specific resources can
be allocated to them. Following that, Programme Managers and Portfolio Managers are
assigned to take charge of these initiatives.
1.6.1 Programmes and Programme Management
A programme is a group of related projects clustered together with the programme

manager taking overall group management responsibility.
Programmes use a co-ordinated approach to manage projects and they exploit resource
synergies across the projects, thereby reducing the overall costs.
An example of a programme is the South African governments infrastructural group of

projects. The group consists of various tar road upgrades across the country. These

projects have separate project teams including separate contractors, however they are
managed as a programme because they are inter-related. Refer to Figure 1-5 for a
sample programme (Schwalbe, 2009:14).
1.6.2 Portfolios and Portfolio Management
A portfolio is a collection of projects or programs and other work that are grouped
together to facilitate effective management of that work to meet strategic business
objectives (PMBOK Guide, 2004:16). Unlike a programme, the projects or programmes
in a portfolio may not necessarily be related or inter-dependent. Portfolio managers must
always ensure that projects and programmes included in a portfolio support the business
strategy and improves profitability of an organisation. Portfolio managers are likely to be
senior managers or senior management teams and they focus on the big picture of the
organisation.
The difference between Portfolio management and Programme management is that
projects or programmes in a portfolio do not have to be related to each other compared
to a Programme where projects are related or inter-dependent.
1.7 The Community of Project Management
Project Management has grown significantly as a profession. There are a number of

associations worldwide representing various countries. Some of these are covered
below:
Project Management Institute (PMI) in the US.
Project Management South Africa (PMSA).
Association for Project Management (APM) in the UK, also in Netherlands and
Scandinavian countries as well as other European countries.
International Project Management Association (IPMA)
Australian Institute of Project Management (AIPM).
Even though there are a number of bodies of knowledge (BOK) such as the one
developed by the APM in the nineties, there seems to be some agreement globally that

the PMIs project management body of knowledge (PMBOK) is an international

benchmark for project management.
1.8 PMBOK and the ten knowledge areas
PMI publishes A Guide to the Project Management Body of Knowledge (PMBOK Guide)
which provides the framework of processes and guidelines for the association of project
management concepts, practices and techniques.
PMBOK recognises five basic process groups and nine knowledge areas typical of
almost all projects. The basic concepts are applicable to projects, programmes and
operations. The five basic process groups are:
1. Initiating
2. Planning
3. Executing
4. Monitoring and Controlling
5. Closing
Processes overlap and interact throughout a project or phase. Processes are

described in terms of:
Inputs (documents, plans, designs, etc.)
Tools and Techniques (mechanisms applied to inputs)
Outputs (documents, products, etc.)
The ten knowledge areas are:

1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resource Management
7. Project Communications Management
8. Project Risk Management
9. Project Procurement Management
10. Stakeholder Management

TIP: A way of remembering the ten knowledge areas are via the following mnemonic:
I Saw The Contented Queen Humming while Chewing Raisin Pudding and Salads
The body of knowledge can be subdivided into four core elements which determine the
deliverable objectives of the project:
Scope
Time
Cost
Quality
The other knowledge areas provide the means of achieving the deliverable objectives, namely:
Integration
Human resources
Communication
Risk
Procurement.
The PMBOK (2004) describes project management under the following nine knowledge areas:
Project Scope Management: Deals with the processes required to ensure that the
project includes all the work required, and only the work required, to complete the
project successfully. It is primarily concerned with defining and controlling what is or is
not included in the project, to meet the clients and stakeholders' goals and objectives.
It consists of authorisation, scope planning, scope definition, scope change
management and scope verification.
Project Time Management: Includes the process required to ensure timely
performance of the project. It consists of activity definition, activity sequencing,
duration estimating, schedule development and time control
Project Cost Management: Includes the process required to ensure that 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, assurance and 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 Communications 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,
quantifying, and responding to project risk. It consists of controlling the risk
management plan and being prepared for disaster recovery.
Project Procurement Management: Includes the process required to acquire goods
and services from outside the company. It consists of procurement planning,
solicitation, source selection, contract administration and contract closeout.
Project Integration: Integrates the three main project management processes of
planning, execution and control - where inputs from several knowledge areas are brought
together.

The diagram below best illustrates the relationship between the project life cycle and the
nine knowledge areas:
Knowledge Area Project Management Process Groups
Initiating Planning Executing Monitoring & Closing

Controlling
Integration Project charter Project management Direct and Monitor and control Close
Management Prelim scope plan manage project work, integrate project
statement execution change control
Scope Plan scope, def ine Verif y scope, control

Management scope, WBS scope
Time Activity seq, estimate, Control schedule

Management resources, duration,
develop schedule
Cost Estimate, cost, Cost Control Cost
Management budget
Quality Plan f or QA Perf orma QA Perf orm QC

Management
HR Management Develop HR plan Acquire & Manage team

develop team
Risk Plan risk Monitor and control

Management management, identif y risk
risks, perf orm
qualitative rand
quantitative risk
analysis ,plan risk
response
Communications Plan f or Distribute inf o Report perf ormance,
Management communication manage stakeholders
Procurement Procurement Procurement contract change Contract

Management management plan, document control systems, closure
RFQ packages buyer perf ormance
&contracts reviews, claims
administration,
records management
Figure 1: The relationship between the Knowledge Areas and Project Life Cycle. Adapted from
PMBOK (2004)
This module is structured as per the table above. Study this Table thoroughly as it will aid in
your overall understanding of project management

1.9 The Triple Constraint
Like any human undertaking, projects need to be performed and delivered under certain
constraints. Traditionally, these constraints have been listed as "scope," "time," and cost".
These are also referred to as the "project management triangle" or the Triple Constraint, where
each side represents a constraint. One side of the triangle cannot be changed without affecting
the others. A further refinement of the constraints separates product "quality" or "performance"
from scope, and turns quality into a fourth constraint.
Figure 2: The Triple Constraint
The time constraint refers to the amount of time available to complete a project. The cost
constraint refers to the budgeted amount available for the project. The scope constraint refers
to what must be done to produce the project's end result. These three constraints are often
competing constraints: increased scope typically means increased time and increased cost, a
tight time constraint could mean increased costs and reduced scope, and a tight budget could
mean increased time and reduced scope.

Successful completion of a project requires finishing the scope of work within budget and a
certain time frame whilst managing resource utilization, meeting quality expectations and
managing risks. All this must be done while assuring customer satisfaction. This is explained
more clearly in Figure 3 below:
Scope
Budget Quality
Factors
constraining Schedule
Risk
Project
Success
Resource Customer
s Satisfaction
Figure 3: Factors constraining Project Success. (Adapted from Gido and Clements (2015:8))
1.10 The Project Manager
A project manager is the person responsible for accomplishing the stated project objectives.
Key project management responsibilities include creating clear and attainable project
objectives, building the project requirements, and managing the triple constraint for projects,
which are cost, time, and scope.
A project manager is often a client representative and has to determine and implement the
exact needs of the client, based on knowledge of the firm they are representing. The ability to
adapt to the various internal procedures of the contracting party, and to form close links with
the nominated representatives, is essential in ensuring that the key issues of cost, time, quality
and above all, client satisfaction, can be realized.

The term and title 'project manager' has come to be used generically to describe anyone given
responsibility to complete a project. However, it is more properly used to describe a person with
full responsibility and the same level of authority required to complete a project. If a person
does not have high levels of both responsibility and authority then they are better described as
a project administrator, coordinator, facilitator or expeditor.
1.10.1 The Project Managers Skills
Today many people are referred to as project managers, and at the same time a lot of
projects fail.
According to Gido and Clements (2015: 324-334) the project manager must have the
following skills
Leadership ability
This is getting things done through others. It involves inspiring people / project team
to work as a team and achieve the project objectives. This is done via the
empowerment and involvement of the project team.
General management skills

These include financial management, marketing management, human resources
management, operations management, strategic management, contracts and
commercial law, logistics, supply chain and procurement, information technology,
health and safety practices. The general management skills enable a project
manager to have the capacity to make prompt decisions in the interest of the project.
Interpersonal skills
A project manager must be able to work with people because he / she spends a large
percent of his time communicating with stakeholders. He / She therefore needs to
communicate effectively, resolve conflicts and problems timeously, negotiate contracts,
allocate resources, persuade people to buy into the project, influence stakeholders,
motivate the team, and play an overall leadership role for the project.

Communication skills
A project manager must be a good communicator and be able to communicate
regularly to the project team. Communication needs to be timely, honest and
unambiguous.
Able to handle stress

A project manager must be able to handle stress effectively. Stress can arise
when the project is in jeopardy of not meetings its objective due to cost overrun, a
schedule delay or technical problems.
Problem solving skills

He/she needs to be a good problem solver by identifying the problems early.
The project managers needs to encourage the team to identify problems early
and solve them on their own.
Negotiating skills
Good negotiating skills are essential for project managers. The goal of
negotiating is for 2 or more people to or parties to arrive at a mutually acceptable
agreement on an issue. It is a form of problem solving and required
effective listening skills.
Time management skills

The project manager must manger his/her time well. Project require a lot of
energy because of the concurrent activities and unexpected events. Project
managers therefore need to have self-discipline, to be able to priortise and show a
willingness to delegate.
Based on the above analysis, it can be seen that a project manager is somebody who
has a variety of skills and their interest is not only the project deliverables but also the
people and resources under their control.

In addition to the above skills a project manager must be well versed and continuously
informed about the profession and its development in the local and global context. He /
She must understand international economics and their impact on the domestic markets.

1. After reading Chapter 1 of your prescribed textbook, what is the
ultimate benefit of Project management?
2. What is the Triple Constraint? Explain with the aid of a simple sketch.
3. Give some examples of resources used in a project
Solution to Think Point:

In any organization, only two aspects of work existon-going operations and projects. Projects
are defined as unique, temporary endeavors with a specific beginning and end. Operations
constitute an organization's on-going, repetitive activities, such as accounting or production.
Since all work and/or efforts performed within an organization are characterized as either
operations or projects, all of the costs of an organization must be distributed to either
operations or projects.
An example of a project would be the construction of the Moses Mabida Stadium and an
operation would be the Shell Operation in Europe.
Solution to Self- Assessment Activity

1. Answer on page 22 of your prescribed textbook
2. Answer on page 19-22 of this module.
3. Answer on page 4 of your prescribed textbook.

SECTION TWO
PROJECT LIFE CYCLE PROCESS

PROJECT LIFE CYCLE PROCESS

LEARNING OBJECTIVES
Identify the different stages of a project life cycle.
READING
This section is to be read in conjunction with the following prescribed textbook:
Clements, J.P and Gido, C (2015). Successful Project Management. 6rth edition South-Western
Cengage Learning

2.1 Introduction
The project life cycle refers to the different stages undertaken in a project to achieve its goals
and objectives. The project life cycle is different from operations life cycle or product life cycle in
that it is normally of a shorter duration. It is also different because a project has a specific time
frame with start and end dates.
The nature and type of project informs the project life cycle process and the stages needed for
a specific project. Similar projects can have different lifecycles because the approach and
perhaps the project implementation plans are different.
2.2 The Project Life Cycle Process
Gido and Clements (2015:10) maintain that there are four phases in a typical project life cycle:
initiating, planning, performing and closing of the project. The four phases are depicted in
Figure 4 below:
Effort
Initiating Planning Performing Closing
Project Baseline Accepted Archive

Charter Plan Deliverables Project
Documents
Time
Figure 4: Project Life Cycle (Source: Gido and Clements, 2015:10)

Initiating Phase
In the initiating phase projects are identified and selected. This phase relates to a project set-up
and it facilitates the formal authorization to start a new project or phase. The result of this
process is the development of a project charter and a preliminary scope of the project. The
project charter ensures that all stakeholders involved in the project are aligned regarding the
purpose and objectives of the project.
This process includes mobilizing the project team, resources, work areas, holding a kick-off
meeting and alignment sessions to ensure that all involved understand the business problem
that the project is striving to address at this early stage.
This process is critical in defining the real business problem, which the main reason why the
project was initiated. Many projects fail because the business problem is not defined thoroughly
and the project ends up addressing the symptoms and not the real cause of the problem that
the organisation intends to resolve.
Planning Phase
The objective of this phase is to plan and manage various activities with the ultimate result of
achieving set goals for the project within specified time frames. The output of the project
planning process is the development of a project management plan, which incorporates
different area plans such as the controls, scope management plan, budgets, schedules, risks,
communications plan, procurement strategy, human resources plan, and quality plans.
The different plans are integrated into one under the project management plan. The project
management plan has different terminology in various industries, it can also be known as
Project execution plan, or project implementation manual.
Stakeholders play a vital role in this phase of the project as their input and influence is high. As
the project progresses and plans are implemented the influence of stakeholders diminishes
because the confidence of the project grows and uncertainty is reduced.

Executing / Performing Phase
The Performing / Executing Phase ensures that the project management plans deliverables
are executed accordingly. This process group involves proper allocation, co-ordination and
management of human resources and other resources such as material, equipment, and
budgets. The level of integration of activities will determine the success of project execution.
The focus of the execution plan is the methodology to be followed to execute the project. The
greater percentage of the project budget is spent on this process group therefore it indicates
the level of significance it has in the entire lifecycle.
Closing Phase
The closing phase is concerned with formalizing acceptance of the product or service and
brings the project or phase to an orderly end. This process verifies that all the other process
groups have been completed, and formally establishes that the project or project phase is
completed.
The closing process group consists of two sub-processes. The Administrative closure ensures
that all the documentation regarding the project including a close out report is issued. The
second sub-process is Contract closure, which ensures that all contracts in a project are
settled, outstanding issues are resolved and that they are closed.
In the entire project life cycle the closing phase is the most ignored as a result many projects
are not closed off properly.
Monitoring and Controlling
Throughout the life cycle of the project there must be continual monitoring and controlling. This
involves comparing the actual work done against the project management plan.
Variances are continuously monitored and where they exist, corrective action is implemented to
ensure that the project parameters set in the project management plan are achieved.

THINK POINT
Think of a project that you have been involved in or familiar with. Can you break the project
down into the respective life cycle phases?
1. With the aid of a diagram, explain the project life cycle.
Solution to Self-Assessment Activity

1. Answer on page 9 of your prescribed textbook or Section 2.2 of your
module.

SECTION THREE
INITIATING A PROJECT

INITIATING A PROJECT
LEARNING OBJECTIVES
Discuss how projects are identified, selected, authorized and outsourced.

Explain how projects and prioritized and selected.
Explain the process of project selection.
Summarise the various methods used to evaluate projects for selection.
Discuss the various project initiating tasks and outputs
READING
This section was written using the following textbook:
Gido and Clements (2015). Successful Project Management. 6rth edition South-Western
Cengage Learning.
Newtown Square, PA: Project Management Institute, 2004

3.1 Introduction
The fundamental objective of many organisations is to make a profit. In order for these
organisations to achieve this fundamental goal, they have to implement projects and
programmes that will support their business strategies in order to improve their profitability.
The question we will look into in this chapter is how do organisations select the appropriate
projects that will support their business strategies?
Projects cannot be selected based on ones intuition or popularity. A selection process must be
carried out and the numbers must decide which projects qualify to be selected.
According to Gido and Clements (2015:39) project selection involves evaluating the potential
projects and then deciding which of these should move forward to be implemented.
3.2 Aligning Projects with Business Strategy
Organisations must continuously ensure that their projects and programmes support their
business strategy at all times. When projects and programmes become misaligned to the
business strategy they should be terminated. A business strategy exists to focus the
organisations resources in achieving it.
Global conditions are continuously undergoing a process of change and so too are those of
organisations. Business strategies are dynamic because they are affected by the external
forces. An example of this is the global financial crisis that banks in the United States and
Europe were afflicted with in 2009. These had a negative impact on the rest of the world
particularly the developing world and have forced organisations to review their business
strategies to deal with this phenomenon.
The above illustrates the importance of aligning projects with business strategy, as some of the
most significant projects had to be put on hold or terminated during this depression phase
because they did not support the business strategy any longer.

3.2.1 Strategic Planning
Strategic planning refers to the process of reviewing the current status of a business by
analyzing the internal and external environments and determining long term objectives. In a
new business venture a similar process is followed except that the emphasis will be more on
the existing players at the time.
Strategic plans are cascaded down to tactical plans which inform the project selection process.
In order for an organisation to craft a new strategy it should first conduct its own internal
analysis to identify its strengths and weaknesses. At the same time the organisation should
conduct its external analysis to identify opportunities it can exploit and threats that hinder it
from achieving its objectives. SWOT (Strengths, Opportunities, Weakness, Threats) analysis,
as the above process in known, is used to make a holistic analysis of the organisation in order
for it to counter the weaknesses and threats and use its strengths to exploit opportunities.
Let us suppose that an established Australian based mining company, Paladin Energy wants to
invest in the mining industry in South Africa. In their view, will such an investment bear good
returns?
To assist the company to make a decision, a SWOT analysis might be undertaken. Below is an
example of the way the SWOT analysis could be carried out:
Strengths (companys strengths internal analysis)

Strong mining background (have key competences).
Have the capital to invest.
Already have a customer base for commodities.
Weaknesses
Do not know the South African mining environment well.
Need to adapt to the laws of the host country including the Mining
Charter.
Do not have presence in SA.

Opportunities
Mineral resources in abundance.
Low cost of production.
South Africa is a stable country.
Threats
Call by some stakeholders to nationalize the mining industry.
Falling commodity prices.
Stringent regulations regarding rehabilitation processes after mining.
Having gone through this process Paladin might want to continue to invest in mining in South
Africa because of the attractiveness of business.
3.3 Steps in the Project Selection Process

Gido and Clements (2015:39-40) explain in detail the steps involved in selecting projects.
A summary of the steps is given below:
1. Develop a set of criteria against which the project will be evaluated. These
could include:
Alignment with company goals
Anticipated sales volume
Increase in market share
Establishment of new markets
Investment required
Human resource impact
Regulatory approval
Risks
Return on Investment
Estimated manufacturing cost per unit
Technology development required
2. List assumptions that will be used as a basis for each project.
3. Gather data and information for each project to help ensure an intelligent
decision regarding project selection.

4. Evaluate each project against the criteria.
3.4 Project Selection Methods
Now that the organisation has a pool of potential projects, which it believes should support the
organisations strategy, managers are now faced with the challenge of deciding on the final list
of projects to be authorized.
There are a number of methods used to select a project namely:

Focus on strategy and organisational needs
Performing a financial model
Using the weighted scoring model
Implementing a balanced scorecard
Addressing problems, opportunities and directives
Considering project time frames, and
Considering project priorities.
These will be discussed further below:
3.4.1 Focus on Strategy and organisational needs
Under this method the emphasis is on aligning selected projects to strategy and organisational
needs. Projects that address competitive strategy are more likely to be successful because
they add value to the organisations needs. For example, if one takes the example of the best
company to work for as a strategy, a project to recognize the best performing employees will
support the business strategy.
A project such as, improving employee safety will be aligned to broad organisational needs. It
is not easy to estimate the value of such a project, however all stakeholders might agree that
such a project will add value.

3.4.2 Financial Methods
Financial methods are often used as part of the selection process. The advantage about these
financial methods is that their analysis is objective and based on the projected cash flows and
operating costs of the project, which means that the integrity of the numbers being used to
arrive at the costs and cash flows need to be high.
Most companies prepare business cases for projects to be approved for selection, and part of
the business case is the financial projections of the project. In this module we are going to
discuss the Net Present Value (NPV) analysis, Return on Investment (ROI), and Pay Back
analysis.
Net Present Value Analysis
Net Present Value analysis is a method of calculating the expected net value (gain or loss) by
discounting all expected future cash inflows and outflows to the present time.
If financial consideration is a key decider for a project selection, then companies should only
consider a project under the following:
If the NPV is greater than or equal to zero rands, accept the project.
If the NPV is less than zero rands, reject the project.
Accept projects with higher NPVs than lower NPVs if all other factors are equal.
A positive value of NPV indicates that the firm will earn a return equal to or greater than its cost
of capital.
Return on Investment
Return on investment is the rate of return (in percentage) an investor receives out of an
investment commitment. This percentage is the result of subtracting the project costs from the

benefits accrued and then dividing by the costs. For example, if an investment of R500 is made
today and it is worth R550 the following year, the ROI is calculated as follows:
ROI = (550 500)/500 = 0.10 or 10%
The ROI is always represented in percentage. Projects with higher ROI are selected having
considered all the other economic factors. Many organisations stipulate an acceptable rate of
return for projects.
Payback Analysis
Payback analysis is used to determine the amount of time it will take to recoup (net cash
inflows) the total investment made on a project. Payback analysis shows the time that will pass
before realized benefits overtake accrued and continuing costs. Payback occurs in the year
when the cumulative benefits minus costs reach zero. The project owners are interested in
those projects with the shortest payback periods.
3.4.3 Using a Weighted Scoring Model
A weighted scoring model is a tool that facilitates the systematic process for selecting projects
based on a combination of different criteria. Possible criteria may include such factors as
meeting strategic goals or specific organisational needs, addressing specific problems or
opportunities, the amount of time it will take to complete the project, the overall priority of the
project, and the projected financial performance of the project. The first step in creating a
weighted scoring model is to identify the criteria that are considered important to the project
selection process. Reaching agreement of these criteria does not happen overnight but often
takes time to develop. Holding facilitated brainstorming sessions or using software to exchange
ideas can aid in developing these criteria. Once the criteria have been identified, a weight is
assigned to each criterion such that the weights for all the criteria add up to 100 percent. The
next step is to assign numerical scores to each criterion for each project. The final step is to
calculate the weighted scores by multiplying the weight for each criterion by its score and
adding the resulting values.

3.4.4 Implementing a Balanced scorecard
Dr. Robert Kaplan and Dr. David Norton developed the balanced scorecard approach to assist
select and manage projects that align with business strategy.
The balanced scorecard is a methodology that converts an organisations core values such as
customer service, innovation, operational efficiency and financial performance to a series of
defined metrics.
MORE READING
The website www.balancedscorecard.org contains more information regarding this subject and
students are encouraged to visit it.
3.4.5 Project time frame
Another approach to project selection is based on the time it will take to complete a project or
the date by which it must be done. For example, some potential projects must be finished
within a specific time period; like the construction of world cup stadia. If such projects cannot be
finished by this set date, the projects become invalid. Some projects can be completed very
quickly, even within a few weeks. However, even though many projects can be completed
quickly, it is still important to prioritise them.
THINK POINT
How does an organisation select the appropriate projects that will support their business
strategies?
What financial models are used in your organisation?

3.5 Project Initiation Tasks and Outputs
The project initiating process group consists of processes that facilitate the formal authorization
to start a new project or project phase.
Some of the objectives of initiating a project are:

Agree on whether there is sufficient justification to proceed with the project.
Document and confirm that an acceptable business case exists for the project.
Agree to commit resources to initiate the project.
Provide baseline information for decision making processes required during the
projects life.
Ensure that the project will return the investment committed, taking into account
risks associated with the project.
It is good practice to set up the project properly from the beginning as this ensures smooth
running and sound controls at a later stage. Once the project is authorized, it is the
responsibility of senior managers to carry out some tasks prior to the normal tasks relating to
the initiating process group. Some of these important tasks are as follows:
Determine the high level scope, time frame, budget for the project.
Identify the Project Sponsor and Project Manager.
Discuss the project with the Project Manager.
Determine the high level implementation approach of the project.
The Project Manager must be appointed to take ownership of the project at this early stage.
Once he/she is appointed he must ensure that the required resources at this stage are brought
in so that the following tasks are undertaken:
Stakeholder identification and analysis.

Compile a Business Case.
Create a Project Charter.
Organise a Kick-off meeting.
Compile a preliminary scope statement
Request for Proposal

3.5.1 Stakeholder identification and analysis
Project stakeholders are individuals or companies/entities involved, affected or interested in the

project. There are internal and external stakeholders and internal stakeholders include: senior
management, project sponsor, project team, project office staff, functional managers, and other
project managers.
External stakeholders include customers, government, suppliers, and communities around the
project, business people, and any other external person or companies that are potentially
involved or affected by the project.
The stakeholders analysis is about the stakeholders demands and expectations of the project.
This information is critical because it enables the project manager to manage the stakeholders.
Stakeholders are different and all expect something from the project therefore it is important to
understand them.
The stakeholder analyses include information such as: names and organisations of key
stakeholders, their roles and responsibilities on the project, their profile, their level of influence
on the project. Out of the analysis the project manager must compile a strategy to manage
stakeholder relationships. Some of the information about the stakeholders can be confidential
therefore this document cannot be in the public domain.
The risk of project failure is at its highest during the initiating phase of the project because there
are many unknowns and the thinking of stakeholders is at a macro level at this stage with no
details.
This results in the ability of stakeholders to influence the final scope and characteristics of the
projects product and the final cost of the project being very high. As the project progresses the
stakeholders influence in the project decreases because the changes are minimal.
3.5.2 Preparing a business case for the project
The cornerstone of any successful project is to define its business problem that it is seeking to
address thoroughly. Organisations have various business needs based on their strategic
intents and it is imperative that correct projects are selected during the project selection

process. The best way to select correct projects to achieve organisational goals is through the
presentation of business cases. The business case answers the following question: why must
the organisation invest in this project?
Business cases can come in various forms, however the following content is found in most
business cases:
Introduction / Background.
Business Objectives.
Current Situation and Problem/Opportunity Statement.
Critical Assumptions and Constraints.
Analysis of Options and Recommendation.
Preliminary Project Requirements/Budget Estimate and Financial Analysis.
Schedule Estimate.
Potential Risks.
Exhibits.
The business case must indicate the attractiveness of the project in terms of the rate of
investment return to stakeholders. It acts as a basis for investors to make a go or no go
decision.
3.5.3 Creating a Project Charter
The project charter authorizes project initiation. It is one of the outputs of the project initiation
process group. It documents the business needs and the new product, service, or other desired
results that the project is intended to achieve. PMBOK(2004:81) defines the project charter as;
the document that formally authorizes a project. This document provides the project
manager with the authority to commit organisational resources to project activities.
The project charter terminology is the most common terminology acceptable worldwide,
however, it can also be called terms of reference, or project mission. It is imperative that the
project charter is signed-off by all the key stakeholders to signify its validity.

The contents of the project charter should include among other information the following:
Project Title and date of authorization.

Background to the project.
Key assumptions.
Business needs and other commercial needs.
Scope of work.
Key milestones.
Project scheduling including estimated start and finish dates.
Project estimated budget.
Approach.
Roles and responsibilities of project team and project organisation.
MORE READING
Refer to Gido and Clements (2015:45) for a detailed description and example of a Project
Charter.
3.5.4 Holding a Project Kick-off Meeting
One of the most important project meetings is the kick-off meeting. A lot can go wrong in a
project just because of not having held a proper kick-off. This is the first meeting where key
stakeholders meet each other formally and deliberate about the project.
The primary purpose of the kick-off meeting is to integrate and align all stakeholders so that the
entire team has a common understanding of the projects objectives. This ensures that all the
stakeholders direct and focus their resources for a common good.

A typical agenda for a kick off meeting is depicted in Figure 5.

Project Name: Construction of the Moses Mabida Stadium in Durban
Meeting objective: Get the project off to an effective start by introducing key stakeholders,
reviewing project goals and discussing future plans.
Agenda
1. Introduction of attendees
2. Review of the project background
3. Review of project related documents (i.e. business case, project charter)
4. Discussion of project organisational structure
5.Disucssion of project scope, time and cost goals
6.Disucssion of other important items
7. List of action items from meeting
Action Item Assigned To: Due Date
Date and time of next meeting:

Figure 5: Agenda for a Project Kick-Off Meeting.
3.5.5 Developing a preliminary scope statement
According to PMBOK this is the process necessary for producing a preliminary high-level
definition of the project using the Project Charter with other inputs of the initiating processes. It
is an important step in the building blocks of a project plan because it translates the business
needs into tangible deliverables. It defines the product or service requirements, boundaries or
battery limits of a project, methods of acceptance, and high level scope control.
The following are typical contents of a scope statement:

The product or service requirements and characteristics.
Scope of work included.
Boundaries/battery limits.
Scope of work excluded.
Deliverables.
References to related documents.

The contents and length of a preliminary scope statement will depend of the nature and size of
a project.
3.5.6 Request for Proposal (RFP)

In some cases the organisation does not have the expertise or staff capacity to plan and
perform the project or major portions of the project; therefore it decides to outsource the work to
an external resource /contractor (Gido and Clements: 2015, 47).
The purpose of a preparing a request for proposal is to state, comprehensively and in detail
what is required, from the sponsors/customers point of view, to address the identified need.
MORE READING
Refer to Gido and Clements (2015:47-53) for the guidelines to construct a RFP and an
example of a typical RFP.
1. Compile a project charter for a project of your choice using the

example
on page 45-47 of your prescribed textbook
2. What are some of the elements that need to be included in a Request
for proposal?
3. Discuss the numeric project selection methods.
4. What are the disadvantages and advantages of the payback method?

Solution to Think Point:

Students to obtain answers from their relevant organisations and compare it to the theory
discussed.
Solution to Self-Assessment Activity

1. Students to use the example in Clement and Gido (2012:42-47) and construct their
own Project Charter.
2. Answer on page 41- 43 of your prescribed textbook
3. Numeric methods are the financial methods discussed in this chapter.
4. The advantages and disadvantages of the payback period method of project
appraisal are set out below.
Advantages
easy to understand
widely used
helps to minimise risk by giving greater weight to earlier cash flows.
Disadvantages
simple payback does not take into account the time value of money
it ignores cash flows received after the end of the payback period
it does not take into account the overall profitability of the project.

SECTION FOUR
PROJECT PLANNING PART 1


LEARNING OBJECTIVES
Define and understand Project Integration Management

Understand Project Scope Management
Create a work breakdown structure
Explore the Project Time Management.
Draw network diagrams
Understand Project Cost Management.
READING
Clements, J.P. and Gido, C. (2012). Effective Project Management. 6rth edition South-Western
Cengage Learning
A Guide to the Project Management Body of Knowledge (PMBOK Guide). Third Edition.

4.1 Introduction
Projects are unique and complex and as a result they require a great deal of effort to plan. The
diverse and separate activities that need to be performed, the different resources required at
differing times and the many groups of people involved can create implementation and control
problems.
The primary purpose of planning is to ensure that project objectives are met, risks mitigated
and that the probability of success of the project is improved. Planning determines the amount
of resources, time, and effort required to implement the project. Without a plan the team would
not be able to implement the project successfully.
A project plan is not a static document, it is a working document because things change during
the duration of the project. There could be unforeseen strikes by workers, global economic
crises, interest rate instability, foreign exchange volatility, excessive inclement weather e.g.
tsunami, political instability, and changes in the market conditions reducing the demand of the
projects product. These are all real examples which would impact directly on the projects
viability. Some of these risks can be covered to an extent, for example, foreign exchange
volatility can be covered by the forward cover at a cost, however, no one anticipated the
unprecedented fall of world markets due to the global financial crisis in late 2008.
All of the above illustrates the importance of planning. If it is done thoroughly the probability of
failure is reduced. Unforeseen circumstances and acts can always be factored in to the
planning process.
4.2 Project Integration Management
Project Integration Management refers to the integration of all the nine knowledge areas and
five project phases, co-coordinating project activities to ensure that the team is working in a
consolidated fashion. This ensures that project resources are focused on delivery throughout
its life cycle.

Developing a detailed project plan is important for among other reasons the following:
It guides project execution and gives direction to the project.

It acts as basis for managing change during the project.
It facilitates communication among stakeholders.
It documents planning decisions with regards to the alternatives chosen.
It documents project planning assumptions and outlines reasons for assumptions,
which can be tested at a later stage.
It provides a means to measure progress and control.
It verifies the final delivered projects product against the project plan.
Integration management is the only knowledge area that includes processes from each of the
five process groups.
The main project integration management tasks include:
the development of the project charter (described in Chapter 3) part of project
initiating
the creation of team contracts part of project planning
the development of a project management plan - part of project planning
Directing and managing project execution part of project execution
Monitoring and controlling project work part of project monitoring and control
Performing integrated project control part of project monitoring and control
Closing project or phase part of project closure
4.2.1 Team Contracts
Team contracts assist in promoting teamwork and clarifying team communication channels. A
team contract outlines the ground rules for a project team. The process normally includes the core
project team members reviewing a template and then working in small groups to prepare inputs
for their team contract. Benefits include promoting buy-in, commitment, and common values as
well as setting clear expectations and procedures for making decisions
The project manager should act as a coach or facilitator, observing the different personalities of
team members and seeing how well they work together. Everyone involved in creating the team

contract should sign it, and as new project team members are added, the project manager
should review ground rules with them and have them read and sign the contract as well.
Team contracts should be customized to meet the needs of the project and the team. However,
there are some general topics that should be covered, as follows:
Code of Conduct
Participation
Communication
Problem Solving
Meeting Guidelines
A sample team contract is shown in Figure 6 below.

Sample Team Contract

A. Code of Conduct
As a project team, we will:
1. Work proactively, anticipating potential problems and working to prevent them
2. Keep other team members informed of information related to the project
3. Focus on what is best for the whole project team
4. See the team project through to completion
B. Participation
We will:
1. Be honest and open during all project activities
2. Encourage diversity in team work
3. Provide the opportunity for equal participation
4. Be open to new approaches and consider new ideas
5. Have one discussion at a time
6. Let the project manager know well in advance if a team member has to miss a meeting or
may have trouble meeting a deadline for a given task
C. Communication
We will:
1. Decide as a team on the best way to communicate various information
2. Focus on solving problems, not blaming people
3. Present ideas clearly and concisely
4. Keep discussions on track
5. Have one discussion at a time
D. Problem Solving
We will:
1. Encourage everyone to participate in solving problems
2. Only use constructive criticism
3. Strive to build on each others ideas
E. Meeting Guidelines
We will:
1. Plan to meet ten minutes before every class period in our classroom
2. Rotate who will record meeting minutes and send them out via e-mail within 24 hours of all
project meetings
3. Develop an agenda before all meetings with our project sponsor
4. Document major issues and decisions related to the project and send them out via e-mail
to all team members and the project sponsor
Figure 6: Sample Team Contract. (Adapted from Source Griffin Gate Templates -
http://www.pmtraining.com.tw/member_pmp/Team%20Contract%202.0.pdf)

4.2.2 Project Management Plans

A project management plan is a document used to coordinate all project planning documents
and to assist guide the projects execution and control. Plans created in the other knowledge
areas are the subsidiary parts of the overall project management plan and provide more
detailed information about that knowledge area.
Project management plans facilitate communication among stakeholders and provide a

baseline for the progress measurement and project control. A baseline is a starting point, a
measurement, or an observation that is documented so that it can be used for future
comparison, also defined as the original project plan plus approved changes. Project
management plans should be dynamic, flexible, and receptive to change if and when the
environment or project changes. It is important to tailor all planning documentation to the needs
of specific projects.
The following are common elements in project management plans:

Introduction/overview of the project
Project organisation
Management and technical processes
Work to be performed
Schedule information
Budget information
References to other project planning documents
The project management plan is a simple document that entails adequate and useful
information about the project.
THINK POINT
Why are team contracts important?

4.3 Project Scope Management

Project Scope Management focuses on defining the business problem or need. Enough time
must be dedicated here to define the project scope thoroughly to ensure that the business
problem is addressed.
The project scope defines all what needs to be done. It is all the work that must be done to
product all the project deliverables, satisfy the sponsor or customer that all the work and
deliverables meet the requirements or acceptance criteria and accomplish the project objective.
The project charter establishes the framework for further elaboration of the project scope.
Project Scope Management can be broken down into the following processes:
Scope planning which will be discussed in this chapter
Scope definition part of planning phase.
Creating the WBS part of the planning phase
Scope Verification part of monitoring and controlling phase
Scope Control part of monitoring and controlling phase
The main documents produced in the planning phase are a scope management plan, scope
statement, WBS, and WBS dictionary.
4.3.1 Scope Planning and the Scope Management Plan
A projects size, complexity, importance as well as other factors determines the amount of effort
to be spent on the scope planning. The main output of scope planning is a scope management
plan. The scope management plan documents include:
A process to prepare a detailed project scope statement based upon the preliminary
project scope statement.
A process that enables the creation of the WBS from the detailed scope statement, and
establishes how the WBS will be maintained and approved.
A process that specifies how formal verification and acceptance of the completed
project deliverables will be obtained.

A process to control how requests for changes to the detailed project scope statement
will be processed. This process is directly linked to the integrated change control
process.
An example of the Scope Management Plan can be seen in Figure 7 below:

Example of a Scope Management Plan
Project Name:
e.g. xxx Project
Introduction:
e.g. the purpose and suggestions or guidance
Creating the Work Breakdown Structure (WBS):

e.g. the tasks required to complete each deliverable and a guideline for determining the level of
detail necessary.
Verifying Completion of Project Deliverables:

e.g. develop a process and determine who is responsible, the project manager or a steering
committee
Managing Requests for Changes to Project Scope:

e.g. formal change-control procedures to follow to prevent project creep
Figure 7: Scope Management Plan
4.3.2 Scope Definition and Scope Statement
The WBS is a basis for the estimating of project cost, schedule, and resources. In order for
these estimates to be accurate the WBS needs to be detailed and represents a true scope of
work, and this is only possible if the project scope is defined thoroughly.
The scope definition and scope statement (Figure 8) are also basis for performance
measurement, project control, and assist in communicating clear work responsibilities.
When this process is being undertaken project teams need to observe the following:

Work that is not part of the scope statement should not be included.
The main output of scope definition is project scope statement.
The preliminary project scope statement should provide basic scope information, and
subsequent scope statements should clarify and provide more specific information.
Example of a Scope Statement

Project Title e.g. xxx Training Project
Project Justification e.g. improving productivity and reducing costs by developing a training
program to look at key topics or areas of improvement
Product Characteristics and Requirements e.g. supplier management training, negotiating

skills training
Deliverables:
Project Management-Related Deliverables e.g. team contract, project management plan, scope
management plan, scope statement, WBS
Product-Related Deliverables e.g. a needs assessment for training, research, partnerships,

course development
Project Success Criteria e.g. Quality outcomes and standards to be met.

Substantial effort should go into initiating projects as it is crucial to get them off to a good start.
Figure 8: Scope Statement
4.3.3 Creating the Work Breakdown Structure (WBS)
According to Gido and Clements (2015:111), the WBS is a deliverable-oriented hierarchical

decomposition of the project work scope into work packages that produce the required project
deliverables.

The WBS cascades the entire project scope into smaller manageable pieces of work. These
are arranged in a hierarchical form with the bottom level more detailed than the upper one. The
lowest level of the WBS components are referred to as work packages and they can be treated
as mini projects, schedules, cost estimates, and can be monitored and controlled separately.
The WBS is a foundation document of the project which is a base for the rest of the planning
process. Therefore it makes sense to say that the WBSs accuracy level needs to be taken
seriously during its creation.
Examples of work breakdown structures are illustrated in Figures 4.1, 4.2 and 4.3 of Gido and
Clements (2015:112-115).
It takes a lot of effort and time to create a good WBS. A fair amount of time must have been
spent in the scope definition to create a detailed WBS. The project manager and the team must
decide on how to organize the project work and the number of levels that need to be included
in the WBS. The approved project scope statement and its associated WBS and WBS
dictionary form the scope baseline.
A WBS dictionary is a document that describes each WBS task in detail. The format can vary
based on project needs. It might be appropriate to have a short paragraph describing each
work package. For a more complex project, an entire page or more might be needed for the
work package descriptions. The typical information contained in the WBS dictionary might
include: responsible person or organisation, resource requirements, estimated costs, and other
information.
Steps to create a WBS:

Identify all the project deliverables and artifacts. Keep the list textual at this stage
rather than graphical. Level 0 of the WBS will be the project. Look for any
inherent categorization and rearrange the list necessary to organize it under main
categories. These categories will be the first level of the hierarchy in the WBS.
Dont forget to include the project management or other related activities. They
are also requirements of the project.
Decompose the deliverables down into the major activities needed to produce
them.

Continue decomposing until you have a level of work packages that are
applicable to the project that can be assigned, scheduled, estimated and
managed.
Review the list of deliverables, components and work packages.
Create the graphical WBS from the textual lists. Review it for clarity and visual
aesthetics.
4.3.4 Scope Baseline
The scope baseline is defined as the approved project scope statement and its associated
WBS and WBS dictionary. The scope baseline acts as the basis for measuring project
performance.
4.3.5 Scope Creep

Scope creep is informally making changes to the project scope without appropriate approval.
Many projects overspend their budget or are not completed on time due to scope creep caused
by additional work that was not documented or approved, or was not communicated and in turn
caused errors or rework for other elements of the project.
4.4 Project Time Management
Project Time Management involves the process of defining, sequencing and estimating
durations to project activities with the view of creating a project schedule.
Project Time management processes include:

Activity definition
Activity sequencing
Estimating activity resources and durations
Develop the schedule
The above processes fall under the planning phase

Controlling the schedule part of monitoring and controlling phase

Activity Definition
Using the WBS, the project team must define the activities that need to be performed to
produce the deliverables of each work package. An activity also referred to as a task is a
defined piece of work that consumes time (Gido and Clements, 2015: 117). It does not
necessarily require the expenditure of effort by people for example waiting for concrete to
harden can take several days but does not require any human effort.
4.4.1 Creating the Activity List and Attributes
The activity list is a comprehensive list of activities that are planned to be included on a project.
It should include the activity name, an activity identifier or number, and a brief description of the
activity, such as predecessors, successors, logical relationships, leads and lags, resource
requirements, constraints, imposed dates, and assumptions related to the activity. Both should
be in agreement with the WBS and WBS dictionary and be reviewed by key project
stakeholders.
4.4.2 Creating a Milestone List
A milestone identifies important events or checkpoints in the projects life at which specific
reviews can be undertaken. There is usually no cost or duration for a milestone. Senior
managers and Project sponsors are normally interested in the milestone achievements rather
than activities because milestones signify a key achievement.
Milestones for many projects include: Sign off key documents e.g. project hand-over certificate,
completion of specific products, and completion of important process related work, such as
awarding a contract to a supplier.
4.4.3 Activity Sequencing
Activity sequencing involves identifying and documenting the logical relationships among
schedule activities. Schedule activities can be logically sequenced with proper precedence
relationships, as well as leads and lags to support late development of a realistic and
achievable project schedule. A dependency or relationship relates to the sequencing of project
activities or tasks.

Activity sequencing has a significant impact on developing and managing a project schedule.
There are three main types of dependencies,

Mandatory dependencies, which are inherent in the nature of the work being performed
on a project, for example, on a building project you cannot pour concrete before
digging the trenches.
Discretionary dependencies, which are procedural issues defined by the project team.
A project team might follow the practice of not starting detailed design work until key
stakeholders sign off all the analysis work.
External dependencies which involve relationships between project and non-project
activities. The installation of new software might depend on delivery of new hardware
from an external supplier.
A network diagram is a tool that arranges specific activities into an appropriate sequence and
defines their dependent relationship.
4.4.4 Gantt Chart
Gantt charts provide a standard format for displaying schedule information by listing activities
with their corresponding start and finish dates with a calendar. The activities listed should
coincide with the information on the WBS, activity and milestone lists.
A low cost, easy to understand method using horizontal bars to depict each project activity
along a time line to make sure:
1) all activities are planned for
2) their order of performance is accounted for
3) activity time estimates are recorded.
4) overall project time is developed
However they do not adequately illustrate interrelationships and dependencies between

activities and resources.

A Gantt chart must be developed as a time structure for the procurement schedule, resource
histogram and the cash flow statement. The activities or scope of work are listed in the left
hand column, with a time scale along the top. Scheduling for each activity is represented by a
horizontal line showing start to finish. The calendar time scale can be shown in days or weeks,
as well as hours or months or sometimes years.
In the example below, there is a list of activity data for a house-building project. The information
is taken and depicted with a calendar time scale.
Activity Description Duration Start Date Finish Date

Lay foundations 4 days 1 March 4 March
Build walls 7 days 5 March 11 March
Install roof 3 days 12 March 14 March
A simple Gantt chart

Activity Mon Tue 2 Wed Thur Fri 5 Sat 6 Sun 7 Mon Tue 9 Wed Thur Fri 12 Sat Sun
1 3 4 8 10 11 13 14
Description
Lay foundations
Build walls
Install roof
Figure 9: Gantt Chart: House Building Project
4.4.5 Network Diagrams
As mentioned in the section above, network diagrams are the preferred technique for showing
activity sequencing. A network diagram is a schematic display of the logical relationships
among, or sequencing of, project activities.
There are two types of network diagrams:
Activity-on-Arrow (AOA)
Activity-on-Node (AON)

In the Activity-on-Arrow (AOA) approach, or the Arrow Diagramming Method (ADM), activities
are represented by arrows and connected at points called nodes (starting and ending point of
an activity) to illustrate the sequence of activities.
An example of an AOA diagram can be seen in Figure 9 below:
6 weeks
4
B 3 weeks
8 weeks 2 E
D
A 11 weeks G
1 5 6
C 1 week
4 weeks
F 9 weeks
Figure 10: AOA Diagram
The AOA only uses the finish-to-start dependency.

AOA uses a dummy activity to clarify the logic, but it is possible to have a double dummy that is
illogical.
The precedence diagramming method (PDM) (Refer to Figure 11 below) is a network

diagramming technique in which boxes (here circles have been used) represent activities and is
also known as Activity-on-Node (AON) technique. These are more widely used as they can
show all dependency types.
A E
St D G
C F
Figure 11: AON Diagram

The benefits of Precedence Diagramming Method (PDM) AON:
PDM offers a number of logical relationships between the activities, such as start-to-
start, where activity A cannot start until activity B starts. Finish-to-finish relationship,
which means activity A, must finish before activity B finishes. Other relationships are
finish-to-start with activity A finishing before activity B starting, and start-to-finish where
activity A must start before activity B can be finished. This overcomes the AOAs need
for dummy activities.
Guidelines for creating an AON Network diagram
Find all of the activities that start at Node 1. Draw their finish nodes, and draw arrows
between Node 1 and each of those finish nodes. Put the activity letter or name on the
associated arrow. If you have duration estimate write it next to the activity letter or
name.
Continue drawing the network diagram working from left to right. Look for bursts and
merges. Bursts occur when two or more activities follow a single node. A merge occurs
when two or more nodes precede a single node.
Continue drawing the AON network diagram until all activities with dependencies are
included on the diagram.
As a rule of thumb all arrowheads should face toward the right, and no arrows should
cross on an AON network diagram. You might need to redraw the diagram to make it
look presentable.
Keep in mind that the network diagram represents activities that must be done to complete the
project. It is not the race to get from the first node to the last. Every activity on the network
diagram must be completed for the project to finish. Not every item on the WBS needs to be on
the network diagram, only activities with dependencies need to be shown on the network
diagram.

4.4.6 Critical Path Analysis
The critical path method (CPM) is a schedule network analysis technique that is performed
using the schedule model. The critical path method calculates the theoretical early start and
finishes dates and late start and finish dates.
The main difference between the CPM and PERT is how they address activity time duration.
The accuracy of an activitys time estimate usually depends on the information available from
previous projects. If an activity has been performed before, its duration can be reasonably
accurately estimated. However, activities with a new scope of work, which are difficult to
measure or dependent on other uncertain variables, may have a range of possible time
duration.
A critical path of a project is the series of activities that determines the earliest time by which
the project can be completed. It is the longest path through the network diagram and has the
least amount of slack or float. Slack or float is the amount of time an activity may be delayed
without delaying a succeeding activity or the project finish date. The longest path or the path
containing the critical tasks drives the completion date of the project.
Steps involved in calculating the critical path:

Once the network diagram is completed, identify all paths from the start that will lead you
to the end.
Calculate the durations of each path
Select the path with the longest duration, which will be the critical path.

If we had to calculate the critical path of the AON diagram - Figure 11 using the steps
mentioned above, and using the following information:
Activity Duration
A 8
B 4
C 3
D 5
E 1
F 2
G 2
The identified paths will be:
Path 1: A-B-E-G = 8+4+1+2 = 15

Path 2: A-D-G=8+5+2 =15
Path 3: C-F-G = 3+2+2=7
Path 1 and 2 will be the critical paths due to the longest duration of 15.
THINK POINT
Will the AOA and AON diagrams of the same project yield the identical critical paths?
4.4.7 Float and Slack

Float also referred to as slack is how much leeway an activitys duration has before it causes
delays in successor activities or the project itself.
4.4.8 Activity Resource Estimation
Estimating schedule activity resources involves determining what resources (people,

equipment, or material). It is important to know the full scope of work and have a WBS when

undertaking this process as that determines the accuracy of the process. Experienced
personnel in similar projects can add value in this process because they can source the
relevant information easier.
Some of the points to consider during this process are listed below:
How difficult will it be to perform specific activities on this project?

Is there some uniqueness covered under the projects scope statement that can have
an impact on resources?
What is the organisations experience and track record in undertaking similar activities?
Does the organization possess appropriate resources to carry out the work? Are there
any organizational policies that might affect the availability of resources?
Does the organization need to acquire more resources to accomplish the work? Is
outsourcing an option?
The above questions will provide a base within which to start planning. A closer look at the
Human Resources is important because it involves salaries and benefits, and these are a
source of disputes in many projects which could lead to unnecessary industrial action.
The key output of the activity resource estimating is activity resource requirements, which
identifies and describe the types and quantities of resources required for each schedule activity
in a work package.
Other outputs are activity attributes, resource breakdown structure, resource calendar, and
requested changes.
4.4.9 Activity Duration Estimation
Now that the activities have been defined and listed, sequenced, with successors and
predecessors, network diagrams drawn, resources estimated, it is time to estimate the duration
of each activity.
The activity duration is the amount of time it takes to achieve such activity and is not to be
confused with the effort. For example the activity Building layout plans for extensions to your

house is not just to draw the plans, it also involves the approval process undertaken by the
municipality. The house cannot be built if the plans are not approved yet.
This process includes estimates of schedule activity durations using information on schedule
activity scope of work, required resource types, estimated resource quantities, and resource
calendars with resource availabilities.
The outputs of activity duration estimating are activity duration estimates and updated activity
attributes.
Among other tools and techniques used in the activity duration estimating process, a three
point estimate is used. The three point estimate includes an optimistic, most likely, and
pessimistic estimates. The optimistic estimate is the best scenario, while pessimistic and most
likely estimates are the worst case and the most realistic estimates respectively.
4.4.9.1 Program Evaluation and Review Technique (PERT)
Program Evaluation and Review Technique is a network analysis technique used to estimate
project duration when there is a high degree of uncertainty about the individual activity duration
estimates.
4.4.10 Schedule Development
Schedule development determines planned start and finish dates for project activities.
Schedule development can require that duration estimates and resource estimates to be
reviewed and revised to create an approved project schedule that can serve as a baseline
against which progress can be tracked.
It uses the results of all the preceding project time management processes to determine the
start and end dates of project activities and of the entire project. The resulting project schedule
is often shown on a Gantt chart, a standard format for displaying project schedule information
by listing project activities and their corresponding start and finish dates in a calendar format.
The ultimate goal of schedule development is to create a realistic project schedule that
provides a basis for monitoring project progress for the time duration of the project.

4.5 Project Cost Management
Project Cost Management refers to the process of preparing a project budget. This is done
through estimating the identified activities and resources.
Project Cost Management involves:

Cost estimating part of project planning
Cost budgeting part of project planning
Cost Control Part of Cost Control
4.5.1 Cost Estimating
Cost estimating involves the process of developing an approximation of the costs of the
resources needed to complete project activities. Project teams normally prepare cost estimates
at various stages of a project, and these estimates should be updated and improved as more
information becomes available over time. It is also important to provide supporting details for
the estimates, including ground rules and assumptions.
4.5.2 Cost Estimating Tools and Techniques
To develop an accurate and quality cost estimate takes a lot of time and effort and a good
quality WBS needs to be used as basis for the cost estimate. The more accurate and detailed
the WBS the better the cost estimate. The following tools and techniques are generally used to
develop cost estimates:
Analogous Estimating
Analogous cost estimating means using the actual cost of previous, similar projects as
the basis for estimating the cost of the current project and is also called top-down
estimating.

Bottom-up estimating
Bottom up estimating involve estimating individual activities from the lowest level to the
highest level. Once individual activities are estimated at different levels of the WBS,
they are then rolled and summed up to arrive at a total cost.
This estimating technique is more accurate but can also take time to conclude, and is
expensive to carry out. The project manager must determine the accuracy level
required for the cost estimate and then choose the most cost effective technique to
deliver the cost estimate.
Parametric Modeling
Parametric estimating is a technique that uses a statistical relationship between historical

data and other variables (e.g. square meters in construction, lines of code in software
development, required labour hours) to calculate a cost estimate for a schedule activity
resource. The cost and accuracy of parametric models vary. They are most reliable when
the historical data used to develop the model is correct, the parameters used in the model
are readily quantifiable and the model is scalable i.e. can be applied to very large as well
as very small projects.
4.5.3 Cost Budgeting
Cost budgeting involves allocating cost estimates to activities over a period of time or project
duration. The activities are based on the WBS for the project and the main goal of the cost
budgeting process is to produce a cost baseline. The cost baseline is defined as a time phased
budget that is used as a basis against which to measure, monitor, and control overall cost
performance on the project.


1. Construct a AOA network diagram for the following project:
Activity Description Predecessor Duration
A Locate facilities - 8 weeks
B Order furniture A 6 weeks
C Interview - 4 weeks
D remodel A 11 weeks
E Furniture setup B 3 weeks
F Hire and train C 9 weeks
G Move in E,D,F 1 week
2. Draw a Gantt Chart using the following information

Activity Description Duration
Get recipe 1min
Organise ingredients 3 min
Preheat oven to 180oC 15 min
Sift flour 1 min
Beat eggs 1 min
Add eggs 1 min
Add milk and mix well 1 min
Add sugar and mix well 1 min
Mix well 1 min
Pour in baking tray 1 min
Place in oven for baking 25 min
Make icing 5 min
Remove cake and let it cool 10 min
Ice cake 10 min

3. Arrange the following activities into the WBS to show how the work items decompose
into activities.
Shop for shoes

Create guest list
Tailoring and fitting
Shop for dress
Find caterer
Cater the wedding
Wait for RSVPs
Mail the invitations
Finalize the menu
Print the invitations
Choose the bouquet
Solution to Self Assessment Activity

1.
6 weeks
B 4
3 weeks
8 weeks 2 E
D
11 weeks
1 A 5 G 6
1 week
C
4 weeks
9 weeks
F
3

69
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61
Get recipe
Organise
ingredients
2. Gantt Chart solution
Preheat oven to
180oC
Sift flour
Beat eggs
Add eggs and mix
well
Add milk and mix
well
Add sugar and mix
well
Mix well
Pour in baking tray
Place in oven for
baking
Make icing
Remove cake and
let it cool
MANCOSA BBA Year 3

Ice cake
3.

SECTION FIVE

PROJECT PLANNING 2
LEARNING OBJECTIVES
Discuss the project quality management.
Analyse project human resources requirements.
Set up project communications.
Manage project risks
Discuss the project procurement.
READING
Clements, J.P and Gido, C (2014). Effective Project Management. 6rth edition South-Western
Cengage Learning

5.1 Project Quality Management
According to the PMBOK (2004), project quality management processes include all the
activities of the performing organisation that determine quality policies, objectives, and
responsibilities so that the project will satisfy the needs for which it was established. This
means that quality can mean different things to different people if the quality requirements in a
project are not determined upfront. The most relevant description of quality is fit for purpose.
Project quality must therefore be weighed against the project cost and time constraints. For
example if the level of quality is increased, the result could be a higher budget and longer
project duration.
Project Quality management comprises of three processes:

Quality planning establishing the planning for meeting project quality requirements.
Quality assurance ensuring the project is meeting the requirements established in the
project quality management plan. This will be discussed in Chapter 6 Project
Execution.
Quality control making sure the deliverables are meeting their quality requirements.
This will be discussed in Chapter 7 - Project Monitoring and Control.
5.1.1 Quality Planning and the Quality Management Plan
Quality planning includes identifying which quality standards are relevant to the project and
determining how to satisfy them. It also involves designing quality into the product of the project
as well as the processes involved in managing the project. Like other plans, the size and
complexity of quality management plans varies to meet project needs. A metric is a standard of
measurement. They allow organisations to measure their performance in certain areas and to
compare them over time or with other organisations.
The outputs of quality planning are the quality management plan, quality metrics, quality
checklists, process improvement plan, and quality baseline. The quality management plan
describes how the project management team will implement the organisations quality policy.

5.1.2 Attributes of a Project Quality Plan

A project quality plan has the following attributes:
It describes all the quality definitions and standards relevant to the project.
It highlights the standards that must be followed (regulatory requirements).
It describes the conditions that the services and materials must possess in order to
satisfy the needs and expectations of the project stakeholders.
It describes the situations or conditions that make an output fall below quality
standards, this information is used to gain a common understanding among the
project team to help them identify what is above and what is below a quality
standard.
The quality plan also includes the procedure to ensure that the quality standards
are being followed by all project staff. The plan also includes the steps required to
monitor and control quality and the approval process to make changes to the
quality standards and the quality plan.
5.1.3 Quality Metrics
A metric is an operational definition that describes in very specific terms, what something is and
how the quality control process measures it. Quality metrics are used in the QA (Quality Audit)
and QC (Quality Control) processes.
5.1.4 Quality Checklist
A checklist is a structured tool, usually for a specific component, used to verify that a set of
required steps had been performed. Checklists may be simple or complex. Different projects
have different checklists, for example a change management process can have a checklist to
ensure that all the necessary steps have been followed before a change is actually effected.
5.1.5 Quality Planning Tools and Techniques
There are numerous quality planning tools and techniques. A few are outlined below:

Benefit / cost analysis

Quality planning must consider cost benefit tradeoffs. The primary benefit of meeting
quality requirements is less rework, the primary cost is the expense associated with project
quality management activities.
Benchmarking
In benchmarking, a comparison is done between the actual and planned activities to those
of other projects to generate ideas for improvement. It also provides a standard by which to
measure performance.
Flowcharting
Flowcharts are diagrams that show how various elements of a system relate. One such
example of a flow chart is the Cause and Effect Diagram. This will be discussed in detailed
in Chapter 11: Performing Quality Control.
Design of experiments (DOE)

This is an analytical technique that helps identify which variables have the most influence
on the overall outcome. An example would be in the automotive industry where automotive
designers use this technique to determine which combination of tyres and suspension will
produce the most desirable ride at a reasonable cost.
Additional quality planning tools

Other tools used to plan more effective project quality management activities include:
brainstorming, affinity diagrams, force field analysis, matrix diagrams and prioritization
matrices.
5.2 Project Human Resource Management
Project human resource management includes the processes that organise and manage the
project. It involves the use of soft skills - interpersonal, leadership, motivational, negotiation and
conflict management. It is unlike our technical skills which can be easily measured, but the
ultimate measure of success is an efficient, effective and cohesive project team.

Project Human Resource Management can be broken down into four processes:
Developing the Human Resource Plan this is part of project planning phase
Acquiring the Project Team - part of Project Execution Phase
Developing the Project Team part of Project Execution Phase
Managing the Project Team part of Project Execution Phase
Human resources planning is concerned with identifying and documenting project roles,
responsibilities, and reporting relationships, as well as creating the staffing management plan.
Key outputs produced as part of project human resource management planning include a
project organisational chart, responsibility assignment matrix, resource histogram, and a
staffing management plan.
5.2.1 Project Organisational Charts
The project organisational chart is similar to a companys organisational chart. It is a

hierarchical graphical representation of how authority and responsibility are distributed within
the project. The size and complexity of the project determines the simplicity or complexity of the
organisational chart. A sample organisational chart is illustrated in Figure 12 below:

XYZ
Project
Project
Sponsor
Project
Manager
Quality Training Leader

Leader leader developer
Quality
analyst Trainer Programmer
Technician
Figure 12: Project Organisational Charts
5.2.2 Resource Histograms
A resource histogram is a column chart that shows the number of resources required for or
assigned to a particular project over time. In planning project staffing needs, senior managers
often create a resource histogram in which columns represent the number of people needed in
each skill category. By stacking the columns, you can see the total number of people needed
each month. After resources are assigned to a project, you can view a resource histogram for
each person to see how his/her time has been allocated.

A diagram of a resource histogram is shown in Figure 13 below:
Figure 13: Resource Histogram

Source: http://www.anvari.net/BUS-517%20Proj%20Mang/chap09.ppt#295,1,Chapter 9:
Project Human Resource Management
5.2.3
5.2.4 Staffing Management Plans
The staffing management plan describes when and how human resource requirements will be
met. It describes procedures to be followed when hiring and reassigning team members. It
describes the types of people needed to work on the project, the numbers needed over a
specific time, and how these resources will be acquired, trained, rewarded and reassigned after
the project.

5.3 Project Communications Management
It is normally said that project managers spend about 90% percent of their time in a project
communicating. This indicates that project communications management is one of the critical
areas and the project manager should take the time to plan thoroughly. Yet most of the
challenges faced in projects are as a result of communication breakdown, information not
reaching the intended destination, information being filtered and the message getting lost on
the way.
Project Communication has the following processes:

Identifying stakeholders part of Project Initiation
Communication planning discussed in this chapter
Distributing information part of Project Execution
Manage Stakeholders Expectations part of Project Execution
Reporting Performance part of Monitoring and Control.
Project Communication is important due to the following reasons:

Dual purpose:
causes some action or agreement to take place, and
makes a record that might be needed later.
Inefficiencies in communication, and especially the lack of communication, can severely
affect a projects schedule and chances for success
Is a critical success factor for managing the expectations of the customer and the
stakeholders
Provides the critical link among people, ideas and information that is necessary for
success.
Communication planning is focused on determining the information and communications needs

of the stakeholders: Who needs what information, when will they need it, and how will it be
given to them
Project communication management plan is a framework and should be a living, evolving

document that can be revised when appropriate.

5.3.1 Communications Management Plan
The communications management plan is a guiding document, which provides communication

channels, what to communicate, with whom, and how is it going to be communicated among
other things. The communications management plan provides the following:
Stakeholder communications requirements.

Information to be communicated, including format, content, and level of detail.
Person responsible for communicating the information.
Person or group who will receive the information.
Methods or technologies used to convey the information, such as memoranda, e-mail,
and/or press releases.
Frequency of the communication, such as daily, weekly, monthly, etc.
Escalation process-identifying time frames and the management chain (names) for
escalation of issues that cannot be resolved at a lower staff level.
Method for updating and refining the communications management plan as the project
progresses and develops.
Glossary of common terminology.
5.3.2 Project Web Sites
Project web sites provide a centralized way of delivering project documents and other
communications. Some project teams also create blogs. Blogs are easy to use journals on the
web that allow users to write entries, create links and upload pictures, while allowing readers to
post comments to particular journal entries. Project teams can develop project web sites using
web-authoring tools, such as Microsoft FrontPage as an example
THINK POINT
What would happen if the project team was not kept informed about the project development?

5.4 Project Risk Management
Project risk management is one of the areas normally ignored by many project managers and
yet it is one of the most important areas to analyse. It is reported that at the early stages of a
project, risks are high because of the high uncertainty and low confidence that the project has.
As the project progresses and the projects product is delivered, the level of uncertainty is
reduced and the confidence among stakeholders is improved, thus reducing the risk. By the
time the project is completed and handed over the project risk is almost none.
To reduce the project risk the project team needs to understand the risks that the project is
exposed to so that they can be analysed and a contingency plan developed to increase the
probability of success.
Project Risk Management involves the following processes:

Risk management planning
Identifying risks
Performing Qualitative risk analysis
Performing Quantitative risk analysis
Planning risk responses
The above will be discussed in this chapter as it falls under project planning
Monitoring and controlling risk part of project monitoring and controlling.
5.4.1 Risk Management Plan
The risk management plan describes how risk management will be structured and performed
on the project. The risk management plan includes the following:
Methodology. Defines the approaches, tools, and data sources that may be used to
perform risk management on the project.
Roles and responsibilities. Define the lead, support, and risk management team.
Budgeting. Assigns resources and estimates costs needed for risk management for
inclusion in the project cost baseline.

Timing. Defines when and how often the risk management process will be performed
throughout the project life cycle.
Risk categories. Provides a structure that ensures a comprehensive process of
systematically identifying risk to a consistent level of detail and contributes to the
effectiveness and quality of risk identification.
Definition of risk probability.
The risk management plans include contingency plans, reserves / allowances, and fallback
plans. Contingency plans refers to actions determined as part of the risk assessment should
the identified risks occur. Contingency allowances are funds held by the project sponsor
specifically set aside for unforeseen risks should they arise.
Fallback plans are developed for risks that have a high impact on meeting project objectives,
and are put into effect if attempts to reduce the risk are not effective.
5.4.2 Risk Factors
A risk factor is a situation that may give rise to one or more project risk (Portny, 2007:151). An
example of a risk factor would be a project undertaken by a company where there has been no
prior experience in it or where no similar project like the one its presently undertaking has been
done before. Due to the fact that the company has no prior experience in this type of project,
activities or resources may be overlooked that could be required to complete the project.
Having no prior experience does not guarantee that the company may not have problems but it
increases the probability of a problem occurring.
5.4.3 Identifying Risks
Sound risk assessment and risk management planning throughout project implementation can
have a big payoff. The earlier a risk is identified and dealt with, the less likely it is to negatively
affect project outcomes. Risks are both more probable and more easily addressed early in a
project. By contrast, risks can be more difficult to deal with and more likely to have significant
negative impact if they occur later in a project.

Risk identification determines what might happen that could affect the objectives of the
project, and how those things might happen.
The following example cited from Portny (2007:155) explains the relationship between risk
factor and risk identification.
Suppose you plan a new technology in your project. The risk factor will be use of the new
technology. Risks arising from this risk factor could be broken down to product, schedule and
resource risks and are further explained below:
Product Risk: the new technology may not produce the desired results.
Schedule Risk: tasks using the new technology may take longer than anticipated.
Resource Risk: Existing facilities and equipment may not be adequate to support the
use of the new technology.
5.4.4 Risk Identification Process
The risk identification process must be comprehensive, as risks that have not been identified
cannot be assessed, and their emergence at a later time may threaten the success of the
project and cause unpleasant surprises. The process should be structured using the key
elements to examine risks systematically, in each area of the project to be addressed.
A number of techniques can be used for risk identification, but brainstorming is a preferred
method because of its flexibility and capability. It allows one to collect a wide range of risks.
Information used in the risk identification process may include historical data, theoretical
analysis, empirical data and analysis, informed opinions of the project team and other
experts, and the concerns of stakeholders.
It is important to be specific when describing a risk. The more specifically you describe a risk,
the better you can assess its potential effect.
The output is a comprehensive list of possible risks to the successful outcome of the project,
usually in the form of a risk register, with management responsibilities (risk owners) allocated to
them.
The risk identification process is an iterative process as new risks may arise or become known
during the progression of the project through its lifecycle.

The Wheel of Misfortune below shows the besides project risks, there are a whole range of
other risks to consider.
THE WHEEL OF MISFORTUNE
Product Liability Fire
Floods
Competition
Business Property
Theft
New Technology Risks Risks
Poor Info
Personal Financial Bankruptcy
Risks Risks
Employee
Dishonesty Bad Debts
Key team
members leaving Cashflows
Figure 14: The Wheel of Misfortune ,Source: Burke, 2008:121
5.4.5 Risk Events and Probability/Impact Matrices
Risk events refer to specific, uncertain events that may occur to the detriment or enhancement
of the project.
There are two broad categories of risk events namely negative and positive risk events.
Negative risk events include the performance failure of a product produced as part of a project,
delays in completing work as scheduled, increases in estimated costs, supply shortages,
litigation against the company, and strikes.

Positive risk events include completing work sooner than planned or at an unexpectedly
reduced cost, collaborating with suppliers to produce better products, and obtaining good
publicity from the project.
Work done by outside suppliers or sellers should be well documented in contracts, which are
mutually binding agreements that obligate the seller to provide the specified products or
services at the right time, at the right cost and correct quantity, and obligate the buyer to pay for
them.
Project managers should include clauses in contracts to help manage project risks by using:
Incentive or penalty clauses.
Certain types of contracts, such as fixed-price contracts, to reduce their risk of incurring
higher costs than expected.
Competition for supplying goods and services to help reduce negative risks and
enhance positive risks on projects.
Once the risks of a project have been identified, the risks would need to be analyzed. There are
two methods that will be discussed: Qualitative and Quantitative Risk Analysis
5.4.6 Qualitative Risk Analysis
Qualitative Risk Analysis includes the methods for prioritizing the identified risks for further
action. It also assesses the priority of the identified risk using the probability of occurring, and
the severity of the risk should it occur. It also looks at other factors like the impact the identified
risk will have on the schedule, cost, scope and quality (PMBOK, 2004:249).
5.4.7 Qualitative Risk Analysis
This analysis is performed after the qualitative risk analysis. In quantitative risk analysis, the
effect o the overall project objectives of identified risk is numerically analysed. It is performed
on risks that have been prioritized in the qualitative risk analysis process as potentially and
substantially impacting the projects competing demands (PMBOK, 2004:254).

Having identified, quantified and prioritised the risk, a risk response plan would need to be
developed.
5.4.8 Risk Response Planning
In risk response planning, options and actions to enhance opportunities and to reduce threats
to project objectives are developed. It also includes the identification and assignment of one or
more persons to take responsibility for each agreed to and funded risk response.
There are a range of responses which should be developed in advance during the planning
phase:
Eliminate risk
Mitigate the risk
Deflect risk
Accept risk
These are not mutually exclusive and the response may contain a combination of them all.
Eliminate the risk

This should be the initial consideration when dealing with the risk. Look into ways of
avoiding the risk completely by removing the cause or taking an alternate action.
Mitigate the risk

The word mitigate means to minimise or reduce. To reduce the risks probability one could
develop prototypes, simulate or conduct model testing.
Deflect the risk

This is where the risk is transferred in part or whole to another party. This can be achieved
by:
Contracting: Here the risk is moved away from the client and onto the contractor or
supplier.
Retention: The client retains a percentage of the contractors income against the
contractor failing to complete the contractual obligation.

Performance bonds: Contractors often offer their clients a performance bond

through a bank. The bond could be held against lack of performance or poor work
quality.
Insurance: A third party accepts the insurable risk in exchange for the payment of a
premium.
Accept the risk

The consequence of the risk occurring is accepted but a contingency plan is developed to
protect the organization from the risk event happening. It is also termed self-insurance.
A contingency plan defines actions you take ahead of time. An example would be if your
backed up files in the office gets damaged, you would keep a separate set of files offsite
5.4.9 Risk Register
The risk register is the output of the risk identification process and it includes a list of identified
risks, list of potential responses, root causes of risks, and updated risk categories. A typical risk
register is seen in Schwalbe (2009:184).
THINK POINT
South Africa is undertaking massive public infrastructure projects such as the construction and
upgrading of roads and bridges in time for the FIFA 2010 soccer world cup and beyond. Identify
potential risks posed by these projects and rate them according their probability and impact on
a sliding scale between low to high
5.5 Project Procurement Management
Project procurement management includes the processes to purchase or acquire the products,
services, or results needed from outside the project team to perform the work. The project team
needs to determine the projects needs regarding acquiring of goods so need to develop a
procurement strategy that will satisfy those projects needs. Key outputs include make or buy

analysis, procurement management plans, requests for proposals or quotes, contract

statements of work, and supplier evaluation matrices.
The processes in procurement management include:

Procurement planning
Conducting procurement
Administrating procurement
Closing procurement
The first three processes are part of project planning and the last process is part of project
closure phase.
5.5.1 Procurement Management Plan
A procurement management plan is a document that describes how the procurement

processes will be managed, from developing documentation for making outside purchases or
acquisitions, to contract closure.
The procurement management plan should include:
Guidelines on types of contracts to be used in different situations.

Standard procurement documents or templates to be used, if applicable.
Guidelines for creating contract Work Breakdown Structures, Statements of Work, and
other procurements documents.
Roles and responsibilities of the project team and related departments, such as the
purchasing or legal department.
5.5.2 Requests for Proposal or Quote
A request for proposal or quote, it is a document that requests potential bidders to tender for a
proposal or quote to the proposing organisation based on the specification or statement of work
or product that the project organisation intends to purchase.

5.5.3 Types of Contracts
Different types of contracts are used for different types of projects and purchases. The type of
contract used and the specific contract terms and conditions set the degree of risk being
assumed by both the buyer and seller. The three main categories of contracts are as follows:
Fixed price or lump sum contracts
These contracts involve a fixed total price for a well-defined product or service. The
assumption is that once the price has been fixed, it cannot be changed except on
customer goodwill.
Cost-reimbursable contracts
Cost-reimbursable contracts involve payments to the seller for direct and indirect actual
costs.
Time and material contracts
Time and material contracts are a hybrid type of contractual arrangement that contains
aspects of both cost-reimbursable and fixed-price type arrangements. These types of
contracts resemble cost-reimbursable type arrangements in that they are open ended.
5.5.4 Contract Statement of Work
The contract Statement of Work defines, for those items being purchased or acquired, just the
portion of the project scope that is included within the related contract. The Statement of Work
for the contract is developed from the project scope statement and the Work Breakdown
Structure. The contract Statement of Work must be written clearly, complete, and concise. The
sample contract Statement of Work is illustrated in the figure below.

5.5.5 Supplier Evaluation Matrix
After doing a thorough evaluation of potential suppliers, many organisations summarize

evaluations using a supplier evaluation matrix (a type of weighted scoring model). Suppliers are
often evaluated on criteria related to cost, quality, technology, past performance, and
management. See Figure 5-22 from Schwalbe (2009) of a sample supplier evaluation matrix.
THINK POINT
Identify a large project that you are familiar with. Describe some of the tasks performed in
planning the quality, human resources, communications, and procurement aspects of the
project

1. Outline a few risk that may have been considered for the Moses Mabida Stadium
Construction
2. Draw the organogram of your company.
3. Explain the 3 processes of Project Quality Management in relation to the Project Life
cycle.
4. What are the different types of contracts that one can use in projects?

Solution to Self-Assessment Activities

1. The following risk could have been considered in the stadium construction:
Strikes
Delays in construction material
Lack of skilled staff
Weather
2. The solution will vary depending on your organization type. An example of
an organogram is seen below:
Company
name
MD
General
Manager
Finance HR Technical
Manager Manager Manager
Cost
controller Training Chemist
manager
3. Refer to Section 5.1

4. Refer to Section 5.5.3

SECTION SIX
PROJECT EXECUTION

PROJECT EXECUTION
LEARNING OBJECTIVES
List several outputs of project execution under the different knowledge areas.
Discuss the tasks performed in directing and managing project execution as part of
project integration management.
Explain the importance of recommending corrective action and updating project plans
as part of quality assurance process.
Clements, J.P and Gido, C (2012). Effective Project Management. 6rth edition South-Western
Cengage Learning
Schwalbe, K (2009) Introduction to Project Management Cengage Learning

Refer to Chapter 2

6.1 Introduction
The executing process group consists of the processes used to complete the work defined in
the project management plan to accomplish the projects requirements. The project team
should determine which of the processes are required for the teams specific project. This
process group involves coordinating people and resources as well as integrating and
performing the activities of the project in accordance with the project management plan.
6.2 Project Execution Outputs
Key outputs of the executing process relating to the project integration management include:
project deliverables, requested changes, implemented change requests, implemented
corrective actions, implemented preventive actions, and implemented defect repair.
Executing outputs relating to project quality management include: requested changes,

recommended corrective actions, organisational process assets update, and updated project
management plans.
Executing outputs relating to project human resources management knowledge area include:
project staff assignments, resource availability, updated staffing management plan and, team
performance assessment.
6.3 Project Execution Tasks
Project execution tasks are the series of actions that are taken by the project stakeholders in
carrying out the project plans. Most project sponsors would argue that the most important
output of any project is its deliverables. Deliverables are products or services produced or
provided as part of a project. As illustrated above, project execution tasks are also carried out
under each of the different project management knowledge areas.
6.3.1 Executing Tasks for Project Integration Management
To effectively direct and manage project stakeholders, project managers can follow several
important practices which include:

Coordinated planning and execution
The main objective of project planning is to ensure the successful execution of the project. If
proper planning was done from the outset, the project will be better to execute. However, to
execute projects thoroughly, the project manager must be consistent in his/her monitoring and
control throughout the project. This assists in identifying gaps such as schedule slippage or
cost over-runs. When the execution process is monitored closely these gaps are easily
identified and corrective action can be implemented.
Development and use of soft skills
Soft skills are essential for a project manager to have simply because he / she deals with
people all the time and spends a large percentage (about 90%) of their time communicating
with people. The project manager, therefore, cannot afford to work in isolation. He/she has to
manage the team and inspire them to deliver on the project.
Soft skills include: strong leadership, effective team building, strong communication, ability to
motivate, negotiations, and conflict management just to mention a few. The project manager is
the focal point of the project. Below and around him/her they have to manage the project team.
Above them they have to manage the project sponsor, executives and steering committee
members. They also have to manage the external environment such as the government,
customer, suppliers, contractors and sub-contractors. Because they communicate at different
levels they have to possess the soft skills to persuade, motivate, charm, and convince the
stakeholders all the time.
Provide a supportive organisational culture
Project execution is made easier with a supportive organisational structure. Organisational

structures must allow for easy flow of communication, and have a clear line of authority to
ensure prompt decision making. The flatter the organisational structure the more flexible and
productive the organisation is and the quicker the decisions are made. It is important for project
managers to create a supportive climate within their sphere of responsibility for effective project
execution.

Break the rules when needed
Occasionally it may be necessary to bend or even break the organisations rules or policies for
the good of the project. For example, where a particular software is the preferred choice of the
company, it makes sense for the project manager to break the rules and get cheaper but more
effective software.
Capitalise on product, business, and application knowledge area
The project manager and his/her team need to have in depth knowledge of the various project
knowledge areas. It is normal in a complex project to bring in people with specialist knowledge
in the various areas to enhance the chances of a successful project execution. In general, the
project manager must use his/her expertise to guide the project team.
Use project execution tools and techniques
The various project execution tools and techniques should be used for the good of the project.
Naturally project teams will meet a lot of problems and challenges. Some challenges can be
avoided by doing a good job of initiating, planning, or monitoring and controlling the project, but
other challenges cannot be avoided. Some common problems encountered during project
execution are described in this chapter, but project managers must be creative and flexible in
dealing with problems that occur on their projects. For example one of the challenges a project
can face is if the project is not viable anymore (technology improvement substituting the project
need) that is, the need for the project is no more.
6.3.2 Executing Tasks for Project Quality Management
Quality assurance includes all the activities related to satisfying the relevant quality standards
for the project. Another goal of quality assurance is continual quality improvement. Key outputs
of quality assurance include recommended corrective actions and project plan updates.
This section discusses three important quality improvement techniques namely: benchmarking,
quality audits, and cause-and-effect diagrams.

Benchmarking compares specific project practices or product characteristics to those of other

projects or products within or outside an organisation itself (for example, training costs per
employee) with a view to improving quality.
A quality audit is an analysis of specific quality management activities that helps identify
lessons learned, which could improve performance on current or future projects. Either internal
auditors or third parties with experience in specific areas can perform quality audits. Quality
audits may be scheduled at specific points in time or they may be carried out randomly.
Cause and effect diagrams, which is also known as Fishbone Diagrams or Ishikawa diagrams
can assist in ensuring and improving quality by finding the root causes of quality problems.
Figure 15 adapted from Schwalbe (2009) illustrates a sample cause and effect diagram.
INTERACTIVITY CONTENT
Too simple
Not enough examples
Too little interaction
No online support
Low course rating
Too simple
Colours too wild
Assessment results very slow
Fonts too small
SPEED GRAPHICS/FONT
Figure 15: Cause and Effect Diagram for Low Course Rating, Adapted from Schwalbe
(2009:217)
6.3.3 Executing Tasks for Project Human Resource Management
In the human resources management knowledge area the two main tasks the project manager
performs are the acquiring of a project team and developing the project team.

The key outputs include project staffing assignments, resource availability, staffing
management plan updates, and team performance assessment. Project managers must
understand motivation theories to effectively execute projects. Psychologists, managers, co-
workers, teachers, parents, and most people in general still struggle to understand what
motivates people, or why they do what they do. Intrinsic motivation causes people to participate
in an activity for their own enjoyment. Extrinsic motivation causes people to do something for a
reward or to avoid a penalty.
Maslows hierarchy of needs is presented as Figure 16 is a simple way of understanding

peoples needs and where they are in their lives in relation to the hierarchy.
Figure 16: Maslow Hierarchy of Needs

Source: http://tutor2u.net/business/people/motivation_theory_maslow.asp
Maslow's theory consisted of two parts:

(1) The classification of human needs, and
(2) Consideration of how the classes are related to each other
Up to date information on current project members can be kept on a simple team roster. The
team roster can include names, roles, and contact information of project team members.
Supplier details (those involved in the project) can also be added to the team roster.

A sample team roster is shown in Figure 17 below:
TEAM ROSTER
October 1, 2010
Name Role on Project Position Email Phone Location
Mike Project Champion HR Manager Mike.sandy@ppp.com

Sandy
Lucy Smith Project Sponsor Training Manager Lucy.smith@ppp.com
Rene Pillay Team Member Senior programmer Rene.pillay@ppp.com
Kim Team Member designer Kim.naidoo@ppp.com

Naidoo
Figure 17: Team Roster
6.3.4 Executing Tasks for Project Communications Management
Good communications management is crucial to project execution. Information distribution is

the main communications management task performed during project execution. The main
output of this task is updating business processes. Some project managers say 90 percent of
their job is communicating, therefore, it is important to address concepts related to improving
project communications.
It is not enough for project team members to submit formal status reports to project managers
and other stakeholders and assume that everyone who needs to know that information will read
the reports. In fact, many people may prefer to have an informal, two way conversation about
project information. Project managers must be good at nurturing relationships through good
communications.
6.3.5 Executing tasks for Project Procurement Management
The main executing tasks performed as part of project procurement include requesting seller
responses and then selecting them. Key outputs include procurement document packages,
contracts, and management plans. It is important to address important concepts related to
improving project communications. It must be emphasized that people make or break projects.

In general, people like to interact with each other to get a true feeling for how a project is
progressing. The project manager must facilitate this interaction.
THINK POINT
Discuss the impact of acquiring a project team with the right skills for successful project
execution.
6.4 Project Library

A Project library is a system for storing, organizing and controlling all documentation produced
or used by the project. It is administered to agreed procedures and standards. It can be an
electronic/digital filing system.
The library must also contain Project staff and / or consultant information records in accordance
with instructions.
A project coordinator / administrator is responsible for maintaining and administering the project
library, collecting and processing information pertaining to requests for project change and
administering the project library.

1. Tabulate the effect of the knowledge areas on the Executing phase.
2. Discuss the three important quality techniques used in the Execution phase of a
project.


1.
Knowledge Area Executing
Integration Management Direct and manage
execution
Quality Performa QA
Management
HR Management Acquire & develop team
Communications Distribute info
Management
Procurement Procurement document
Management packages &contracts

SECTION SEVEN
PROJECT MONITORING AND
CONTROLLING

PROJECT MONITORING AND CONTROLLING

LEARNING OBJECTIVES
List the project monitoring and control outputs common to all knowledge areas.
Use control as part of project integration management and explain how to use earned
value management.
Explain the importance of scope verification, scope control, and acceptance
deliverables.
Construct the schedule control process and schedule performance measurement tools,
such as tracking Gantt charts.
Analyse the quality control and monitoring techniques and process.
Identify the tasks performed as part of project communications management.
Evaluate the risk monitoring and control processes.
Gido and Clements (2015). Successful Project Management. 6rth edition South-Western
Cengage Learning
Schwalbe, K (2009) Introduction to Project Management. Cengage Learning

7.1 Introduction
The monitoring and control focuses on those processes performed to observe project execution
so that potential problems can be identified in a timely manner and corrective action can be
taken, if and when necessary. The project team should determine which of the processes are
required for the teams specific project. The key benefit of this process group is that project
performance is observed and measured regularly to identify variances from the project
management plan.
7.2 Project Monitoring and Controlling Outputs
Outputs common to all knowledge areas include requested changes, recommended corrective
actions, and updates to applicable plant and processes.
The monitoring and controlling tasks for each knowledge area are tabulated below:
Knowledge Area Monitoring and Controlling Tasks

Project Integration Management Monitoring and controlling project work,
integrated change control
Project Scope Management Verify scope, control scope
Project Time Management Control schedule
Project Quality Management Perform quality control
Project Cost Management Control cost
Project HR Management Manage Team
Project Communication Management Report performance, manage stakeholders
Project Risk Management Monitor and control risk
Project Procurement Management Contract change control systems, buyer
performance reviews, claims administrations,
record management
Table 1: Monitoring and Controlling Tasks

7.3 Monitoring and Control Tasks for Project Integration Management
Project monitoring and control assures project delivery progress. This process is normally
achieved by measuring performance of the actual progress of work done compared to the
project plan. Where there are gaps or variations, corrective action is taken to ensure that the
plan is on schedule. The main tasks of monitoring and control of a project is performing
integrated change control.
7.3.1 Monitoring and Controlling Project Work
Monitoring and controlling project work involves collecting, measuring, and disseminating
performance information as well as assessing measurements and analyzing trends to
determine what process improvements can be made. On the other hand, performing integrated
change control involves identifying, evaluating, and managing changes throughout the projects
life cycle. Every project will experience changes at one point or another. It is therefore
important to develop a process of monitoring, controlling and documenting project changes.
Two methods are particularly invaluable in this regard, forecasting with the Earned Value
Management and Earned Value Charts.
Earned Value Management (EVM)
Earned Value Management is a project performance measurement technique that integrates

scope, time and cost data. Given a baseline, project managers and their teams can determine
how well the project is meeting scope, time and cost objectives by entering actual information
and then comparing it to the baseline. The baseline information includes:
Scope data - WBS tasks

Time data - start and finish estimates for each task
Cost date cost estimates for each task
Earned value management can be used at either a detailed or summary level.

It is important to be familiar with a number of earned value terms including:
Planned Value (PV) is that portion of the approved total cost estimate planned to be
spent on an activity during a given period.
Actual Cost (AC) is the total direct and indirect costs incurred in accomplishing work on
an activity during a given period.
Earned Value (EV) is an estimate of the value of the physical work actually completed.
It is based on the original planned costs for the activity and the rate at which the team
is completing work on the activity to date.
Rate of performance (RP) is the ratio of actual work completed to the percentage of
work planned to have been completed at any given time.
Earned Value Charts
Earned value information can be plotted onto a graph and are important for tracking project
performance and forecasts. This information is required by project stakeholders to enable them
to make certain decisions.
7.3.2 Integrated Change Control
Integrated change control is the process of identifying, evaluating and managing changes
throughout the project life cycle.
Integrated change control serves three main purposes:
To influence factors that causes change.
To determine if a change has occurred.
To manage changes as they occur.
7.4 Monitoring and Controlling Tasks for Project Scope Management
The monitoring and controlling tasks performed as part of project scope management are
scope verification and scope control as discussed below.

7.4.1 Scope Verification
Scope verification involves formal acceptance of the completed project scope by the project
sponsor or designated stakeholders. Acceptance is often achieved through customer
inspection who then sign-off on key deliverables. The project team must develop clear
documentation of the projects end product and procedures, which the stakeholders can then
evaluate for the degree of project completion and express their satisfaction or dissatisfaction
with the results.
7.4.2 Deliverables
Deliverables are the ultimate project results that benefit the customer. These are the results
that the project was originally set for. Projects usually include many deliverables. A committee
consisting of project sponsor, steering committee, and other stakeholders are normally involved
in verifying acceptance of deliverables.
7.4.3 Scope Control
It is difficult to control the scope of a project unless it is clearly defined and documented. It is
equally important to develop a process for soliciting and monitoring changes to project scope.
In this regard, project stakeholders are particularly encouraged to suggest beneficial changes.
However stakeholders should be discouraged from suggesting unnecessary changes.
7.5 Monitoring and Controlling Tasks for Project Time Management
The main monitoring and control task performed under project time management is schedule
control. The project schedule is one of the most important measures for a projects success
and is normally constrained by budget and quality parameters. During project execution in
particular, the project schedule becomes a source of conflict because time extensions often
equate to additional budget requirements.

The key output of the schedule control is performance measurements, which are provided by:
Indicators, whether the project is on schedule or not.

Milestone completion.
Performance review meetings and tracking through Gantt charts.
7.6 Monitoring and Controlling Tasks for Project Cost Management
The main objective of controlling costs is to ensure that the project budgeted amount is not
exceeded. The project managers goal is to deliver a good quality project at the budgeted
amount, or at a lesser amount than budgeted.
The main monitoring and control task performed as part of project cost management is cost
control. Cost control includes monitoring cost performance, ensuring that only appropriate
project changes are included in a revised cost baseline, and informing project stakeholders of
the cost of authorized changes. Outputs include project management plan updates,
documentation on corrective action, revised estimates for project completion, requested
changes, and updates to organisational process assets, such as lessons-learned documents.
7.7 Monitoring and Controlling Tasks for Project Quality Management
To achieve quality objectives the project must deliver on what it was initiated for. The projects
product must be fit for purpose and be used for its intended purpose. The key outputs in this
area include quality control measurements, validated defect repair, and validated deliverables.
The main outcomes of this process are acceptance decisions, rework, and process
adjustments.
7.7.1 Adherence to the Principles of Total Quality Management (TQM)
The principles of TQM require an intense focus on the customer and as a result a partnership
with customers and suppliers is formed. There is concern for continuous improvement as
everyone in the organisation should be viewed as a customer. There must be a preoccupation
with quality improvement in everything the organisation does. In addition, accurate
measurement, statistical control and cycle times for new products and services, is improved.

Empowerment of employees in taking more responsibility in what they do and becoming

accountable for their own actions is part of this process.
THINK POINT
Discuss the impact of rework due to poor quality.
7.8 Monitoring and Controlling Tasks for Project Human Resource Management
The main tasks performed under human resource management as part of the monitoring and
control of a project, is managing the project team. The major task for the project manager is to
manage his/her team, that is, he/she must ensure that their team delivers at all times. They
must use their soft skills to inspire and motivate the team to perform optimally.
The following tools and techniques are used to manage teams:

Observation and conversation. Team observation and talking (formal or informal) to
team members is important.
Project performance appraisals. Measure team performance and implement
development plans where needed.
Conflict management. The project manager must have strategies to manage conflict.
Issue Logs. These are used to log issues and actions to resolve them.
7.9 Monitoring and Controlling Tasks for Project Communication Management
The main communications management tasks include performance reporting and managing
stakeholders expectations. Key outputs include performance reports, forecasts, and resolved
issues and some of these are discussed below.

7.9.1 Performance Reporting

Performance reporting keeps stakeholders informed about how resources are being used to
achieve project objectives. Refer to Figure 18 for a template for Project Progress Report.
Harvard ManageMentor PROJECT MANAGEMENT TOOLS
Project Progress Report

Use this form to help assess progress, present this information to others, and think through next steps.
Project: Prepared by:
For the period from: to:
Current Status
Key milestones for this period:
Achieved (list) Coming up next (list)
Key issues or problems:

Resolved (list) Need to be resolved (list)
Key decisions:
Made (list) Need to be made: (list) By whom When
Budget status:
Implications
Changes in objectives, timeline/delivery dates, project scope, resource allocation (including people and financial)
Next steps
List the specific action steps that will be done to help move this project forward successfully. Put a name and date next to each
step if possible.
Step Person Responsible Date
Comments:
1999 by the President and Fellows of Harvard College and its licensors. All rights reserved.
Figure 18: Progress Report

Source: http://www.elearning.hbsp.org/businesstools/downloads/pm01_p.rtf

7.9.2 Status report
The status report describes where the project stands at a specific point in time. This gives a
snapshot to stakeholders of the exact position of a project.
7.9.3 Progress reports
Progress reports describe what the project team has accomplished during a certain period. Key
project stakeholders require this information regularly in order to track project progress.
7.9.4 Forecasts
Forecasts predict future project status and progress based on past information and trends. A
rough idea of the kind of progress that the project can achieve in the future is important if
facilitating the adoption of any corrective measures.
7.10 Monitoring and Controlling Tasks for Project Risk Management
Monitoring and controlling risks involves executing risk management processes to respond to
potential risks.
Carrying out individual risk management plans involves monitoring risks based on defined
milestones and making decisions regarding risks and their response strategies. In the absence
of contingency plans, project teams sometimes use workarounds in the event of risk.
Workarounds are unplanned responses to risk events. The output of monitoring and controlling
risks are requested changes, recommended corrective and preventive actions and updates to
the risk register, project management plan, or organisation process assets. Such lessons learnt
provide information that might help future projects.
7.11 Monitoring and Controlling Tasks for Project Procurement Management

Contract administration ensures that the sellers performance meets contractual requirements.
The contractual relationship is a legal relationship and disagreements may result in litigation.
When contracts are written, it is important that lawyers and other contracting professionals are
involved. A key output of contract administration is contract documentation.

7.11.1 Tools and Techniques for Contract Administration
The tools and techniques for contract administration include: formal contract change control
systems, buyer conducted performance reviews, inspections and audits, performance
reporting, payment systems, claims administration, records management and information
technology to support contract administration.
THINK POINT
Discuss the concept of Earned Value Management and its importance in managing the
performance of projects

1. What are the objectives of integrated change control?
2. How would you manage a project team?
3. Differentiate between scope verification and scope control and justify their importance
to project success.


SECTION EIGHT
PROJECT CLOSURE

PROJECT CLOSURE
LEARNING OBJECTIVES
Summarise project closing outputs.
List project closing tasks and outputs.
Discuss the process of closing a project performed as part of project integration

management.
Explain the process of contract closure performed as part of project procurement

management.
Identify several best practices used in project management.
Cengage Learning
Schwalbe, K (2009) Introduction to Project Management Cengage Learning

Refer to Chapter 2

8.1 Introduction
The closing process group is the most neglected project phase of all the phases in a project.
This phase includes processes used to formally terminate all the activities of the project or
phase. The project success or failure is evaluated and the project is handed over to the client.
The project experiences or lessons learnt are documented. Closing projects involves
stakeholder and customer acceptance of the final product or service, and bringing the project to
an orderly end.
8.2 Summary of Project Closing Tasks
A number of outputs confirm that a project was closed in a proper manner. Documents are
stored and archived for future use maybe as reference.
The knowledge areas that are affected in the closing phase are Project Integration
Management and Project Procurement Management.
8.3 Project Closing Tasks for Project Integration Management
The final task in project integration is to bring the project to an end. It is important in closing
projects that all activities are finalized and the completed project is transferred to the
appropriate people. In situations where a project was not completed but cancelled, steps must
still be taken to bring the project to closure. The main outputs of closing projects are as follows:
8.3.1 Contract closure procedure
Project teams must follow all procedures to ensure that projects are closed off administratively.
8.3.2 Contract closure procedure
Many projects involve contracts, which are legally binding agreements on all the signatories.
Contract closure procedures describe the methods for ensuring that the contract has been
completed including both delivery of goods and services and the subsequent payment for them.

8.3.3 Final products, services or results
Project sponsors are more interested in making sure that final product, services or results are
delivered on schedule, within budget and with acceptable quality. A final project report and
presentation are common features used during project closure.
8.3.4 Updates to organisational process assets
Updates to company policies and procedures are carried out based on the experiences of the
project. The lessons learnt report is a collection of positive and negative lessons learnt by all
stakeholders during the project and a template is shown in Figure 19 below:
Project Enter the Project Name Date Enter the Date (mm/dd/yy)
Name Lessons Learned are recorded
Project Lifecycle Information

Project Project Management Project Funding Approval Acquisition
Lifecycle System Development Initiation Planning
and Phases Requirements Analysis Project Closeout Contracting
(select one Design
Lifecycle and System Termination Product Acceptance Development
Phase only)
Test Implementation
Knowledge Lesson Learned What Worked Lesson Learned What Didnt Work
Area That Worked Well That Didnt Well
Recommendation Work Recommendation
Scope 1. Describe the 1. Provide a 1. Describe the 1. Provide a
lesson learned recommendation lesson learned recommendation
that worked so for continued use that didnt work for improvement
that a novice for each lesson so that a novice for each lesson
would understand. learned that would learned that
Add/Delete worked well. understand. didnt work well.
numbers as Add/Delete Add/Delete Include details
needed for each numbers as numbers as such as: 1.
knowledge area. needed for each needed for each Role/Position of
knowledge area. knowledge area. who needs to
2. make the
2. 2. change.
3.
3. 3. 2.
3.
Time 1. 1. 1. 1.
Cost 1. 1. 1. 1.

Quality 1. 1. 1. 1.
Communication 1. 1. 1. 1.
Risk 1. 1. 1. 1.
Management
Human 1. 1. 1. 1.
Resources
Procurement 1. 1. 1. 1.
Figure 19: Lessons Learnt Report Template
8.4 Closing Tasks for Project Procurement Management
Contract closure involves completion and settlement of contracts including the resolution of any
outstanding items. The following tools and techniques are used to assist in contract closure:
Procurement audits that identify lessons learnt in the entire procurement process.
A records management system which provides the ability to easily organize, find, and
archive procurement related documents.
Outputs include updates to organisational process assets and closed contracts.


1. Discuss the reasons why the project has to be formally closed.

1. It is important in closing projects that all activities are finalized and the completed
project is transferred to the appropriate people. In situations where a project was not
completed but cancelled, steps must still be taken to bring the project to closure.

BIBLIOGRAPHY

Burke, R. (2009). Project Management Techniques. (College Edition). Burke Publishing

International.
Clements, J.P. and Gido, C. (2014). Effective Project Management. 6rth edition. Boston:
Cengage Learning
Portny, S.E. 2007. Project Management for Dummies. Indiana: Wiley Publishing, Inc..
Project Management Institute. 2004. A Guide to the Project Management Body of Knowledge.
An American National Standard ANSI/PMI9-001-2004
Schwalbe, K (2009) Introduction to Project Management. Boston: Cengage Learning.

TYPICAL EXAM QUESTIONS

TYPICAL EXAM QUESTIONS

1. Draw a network diagram ( AOA), showing the paths and critical path for the following
set of activities:
Activity Preceding Activity Duration, days
Start 0
A Start 2
B A 3
C A 6
D A 2
E B 5
F C 7
G D 3
H E,F, G 1
Finish H 0
2. Discuss this tools and techniques used in any four knowledge areas
3. Discuss the term project stakeholders and give examples of the most important
stakeholders usually in a project

SOLUTION TO TYPICAL EXAM QUESTIONS
Paths:
Start-A-B-E-H = 2+ 3+5+1=11
Start-A-C-F-H =2+6+7+1=16
Start-A-D-G-H=2+2+3+1=8
Critical path is Start A-C-F-H with duration of 16

2. Any 4 from the table below will be accepted:
Knowledge Areas Tools and Techniques

Scope Management Scope statements, work breakdown structures, statement of work,
scope management plans, scope verification techniques, scope
change control
Time Management Gantt charts, project network diagrams, critical path analysis,
crashing, fast tracking, schedule performance measurements
Cost Management Net present value, return on investment, payback analysis, earned
value management, project portfolio management, cost estimates,
cost management plans, cost baselines.
Quality Management Quality metrics, checklists quality control charts, pareto diagrams,
fishbone or cause and effect diagrams, maturity models, statistical
analysis
Human Resource Management Motivation techniques, empathetic listening, responsibility
assignment matrices, project organisational charts, resource
histograms, team building exercises
Communications Management Communications management plans, conflict management,
communications media selection, status reports, virtual
communications, templates, project web sites
Risk Management Risk management plans, risk registers, probability/impact matrices,
risk ranking, decision trees
Procurement Management Make or buy analyses, contracts, requests for proposals or quotes,
source selections, supplier evaluation matrices
Integration Management Project selection methods, project management methodology,
stakeholder analysis, project charters, project management plans,
project management software, change control boards, project
review meetings, and lessons learned reports.

3. Project stakeholders include organizations and individuals who are interested or

affected by the project being executed. Stakeholders may have an influence over the
projects objectives or outcomes. The success of the project is dependent on the
stakeholders as they may decide to embrace and support it or they may also decide to
stop the project. For example if a property development company wants to build a golf
course in a tribal land. For such a project to succeed the property company as a client
must identify and recognize the local community as a major stakeholder for the project
otherwise the local community can actually stop the project.
It is the responsibility of the project management team to identify stakeholders, determine

their roles, requirements and expectations, so that they are able to analyse and manage
them properly in the interest of the project.
Stakeholders cannot be classified under one umbrella as they have varying levels of
authority and responsibilities, which is why the project management team needs to
conduct an analysis of its stakeholders so that they understand each stakeholders needs
and interest.
There are positive stakeholders who have a positive influence on the project. These are
the stakeholders who tend to benefit from the project or see some benefit of the project.
In the golf course example, these would be people hoping to open businesses as a result
of the traffic that will be caused by the building of the golf course, or people hoping to get
employment from the golf course.
On the other hand negative stakeholders have a negative influence on the project
because they feel threatened by it. These may be people who have vested interest in the
area such as indigenous people who have been living in the area for a long time with
their ancestors graves in the area, for example.
The project management team needs to focus more energy on the negative stakeholders
to ensure buy in and success of the project. The following is a list of typical key
stakeholders in any industry or sector:
Project Sponsor The person that provides the financial resources for the project.

Project Manager The single point responsibility of a project.
PMO The project management office provides support to the project.
Customer or user This is the person or entity that will use the projects product.
Project management team the members of the project team who are directly
involved in executing the project management functions.
Influencers People or groups who are directly or indirectly interested or affected by

the project. They can also influence the project positively or negatively.
Investors A person or entity making the investment in a project.
Contractor A contractor is normally the person or organization that is entrusted with

supplying the services and/or goods to achieve project deliverables.
Government The government is in most cases a stakeholder in projects whether

they are public or private sector projects because it has an interest on the project, e.g.
collecting taxes.

BBA Year 3 Business Administration 3C July 2016

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BACHELOR OF BUSINESS ADMINISTRATION

PROJECT MANAGEMENT CONCEPTS ....................................................................................4

PROJECT LIFE CYCLE PROCESS .........................................................................................22

INITIATING A PROJECT ..........................................................................................................28

PROJECT PLANNING PART 1 .................................................................................................44

PROJECT PLANNING PART 2 .................................................................................................71

PROJECT MONITORING AND CONTROLLING ....................................................................102

PROJECT CLOSURE .............................................................................................................113

TYPICAL EXAM QUESTIONS ................................................................................................121

MANCOSA BBA Year 3 i

Aims of the Module

Outcomes of the Module

1 MANCOSA BBA Year 3

How to use this Study Guide

MANCOSA BBA Year 3 2

SELF ASSESSMENT ACTIVITY

Schwalbe, K (2009). Introduction to Project Management. Cengage Learning.

3 MANCOSA BBA Year 3

MANCOSA BBA Year 3 4

PROJECT MANAGEMENT CONCEPTS

Understand the growing importance of project management.

This section is to be read in conjunction with the following textbooks:

5 MANCOSA BBA Year 3

Project management is seen by many professionals as a step up towards a project

1.2 What is a Project?

A project is a temporary endeavour undertaken to create a unique product, service or

MANCOSA BBA Year 3 6

A legal requirement e.g. the government authorizes a new project to legislate

use of unleaded fuel to substitute leaded fuel.

An organisational need e.g. an organisation authorizes a project management

A customer request e.g. a body corporate of a townhouse complex authorizes a

A technological advance e.g. the department of transport authorizes the eNatis

The environmental consideration e.g. the mining company authorizes a project to

Y2K projects. Organisations globally authorized Y2K projects to ensure their

7 MANCOSA BBA Year 3

Coega Industrial Development Zone. The South African government authorized

1.3 Attributes of Projects

MANCOSA BBA Year 3 8

1.4 Project Management

Project Management is the application of knowledge, skills, tools and techniques to

Project management is achieved by applying and integrating project management

1.5 Project Stakeholders

9 MANCOSA BBA Year 3

It is the responsibility of the project management team to identify stakeholders, and to

Project Manager The single point responsibility of a project.

PMO The project management office provides support to the project.

MANCOSA BBA Year 3 10

Influencers People or groups who are directly or indirectly interested or affected by

Investors A person or entity making the investment in a project.

Contractor A contractor is normally the person or organisation that is entrusted with

Government The government is in most cases a stakeholder in projects whether

1.6 Programmes and Project Portfolio Management

1.6.1 Programmes and Programme Management

A programme is a group of related projects clustered together with the programme

An example of a programme is the South African governments infrastructural group of

11 MANCOSA BBA Year 3

1.6.2 Portfolios and Portfolio Management

1.7 The Community of Project Management

Project Management has grown significantly as a profession. There are a number of

MANCOSA BBA Year 3 12

the PMIs project management body of knowledge (PMBOK) is an international

1.8 PMBOK and the ten knowledge areas

Processes overlap and interact throughout a project or phase. Processes are

The ten knowledge areas are: