Project Management

Chapter 3: Project Planning and

Implementation

Maru Shete (PhD and Assoc. Prof.)

 Outline

3.1 The concept of project planning

3.2 Logical Framework Analysis (LFA) and its
processes
3.3 Tools of project planning
 What is project planning?
• Planning is one of the management functions
which involves determination of missions, goals
and strategies to achieve these predetermined
objectives. It gives the basis for implementation,
monitoring and evaluation of activities.
• Planning, in general, can best be described as the
function of selecting the enterprise’s objectives
and establishing the policies, procedures, and
resources necessary for achieving them.
• Planning is concerned with the future.
 Cont...
• Before commencement of any project, the first thing that
we need to do is project planning. Any reasonable project
manager certainly understands importance of planning a
project well.
• Carefully planned project takes into account necessary
aspects of a project (e.g. tasks, milestone, schedule, risks,
communication, quality, etc.) and provide a plan which
project team can refer to during execution.
• Planning in a project environment may be described as
establishing a predetermined course of action within a
forecasted environment.
• Project planning includes the prediction of the tasks
necessary to achieve a goal, the estimation of required
resources to accomplish the tasks, and the scheduling of
people and tasks to meet the deadline.
 Characteristics of a project plan
1. It is a time-sequenced Action Item Register
2. Has both a near-term and a long-term focus
3. Meant to be a working document
4. Schedules have a combination of hard deadlines
and soft deadlines(with slack)
5. Schedules change frequently but should always
reflect
i. Your best current estimate of what tasks(get specific)
need to be done and which are most
important(prioritize)
ii. Who will do the tasks (responsibility)
iii. How long they will take to complete (duration)
iv. What is needed to get the job done (resources)
 Cont...
• Typical problems with developing objectives
include:
1. Project objectives/goals are not agreeable to all
parties.
2. Project objectives are too rigid to accommodate
changing priorities.
3. Insufficient time exists to define objectives well.
4. Objectives are not adequately quantified.
5. Objectives are not documented well enough.
6. Efforts of client and project personnel are not
coordinated.
7. Personnel turnover is high.
 Cont...
• Once the objectives are clearly defined, four questions
must be considered:
1. What are the major elements of the work required to
satisfy the objectives, and how are these elements
interrelated?
2. Which functional divisions will assume responsibility
for accomplishment of these objectives and the
major-element work requirements?
3. Are the required corporate and organizational
resources available?
4. What are the information flow requirements for the
project?
 Cont...
• Effective total program planning cannot be
accomplished unless all of the necessary
information becomes available at project
initiation. These information requirements are:
1. The statement of work (SOW)
2. The project specifications
3. The milestone schedule
4. The work breakdown structure (WBS)
 Why plans are made?
• One of the objectives of project planning is to
completely define all work required (possibly through
the development of a documented project plan) so that it
will be readily identifiable to each project participant.
• This is a necessity in a project environment because:
1. If the task is well understood prior to being performed,
much of the work can be pre-planned.
2. If the task is not understood, then during the actual task
execution more knowledge is gained that, in turn, leads
to changes in resource allocations, schedules, and
priorities.
3. The more uncertain the task, the greater the amount of
information that must be processed in order to ensure
effective performance
 Basic Reasons of Planning
1. To eliminate or reduce uncertainty
2. To improve efficiency of the operation
3. To obtain a better understanding of the objectives
4. To provide a basis for monitoring and controlling
work
5. To clearly communicate the schedule (to the
project team and outside reviewers)
6. To track progress relative to the plan
7. To assist in effective resource allocation
8. To schedule/estimate costs
 Consequences of poor planning
1. Project initiation without defined
requirements
2. Wild enthusiasm
3. Disillusionment /Lack of expectation
4. Chaos
5. Search for the guilty
6. Punishment of the innocent
7. Promotion of the nonparticipants
 Logical process in planning
• The logic of planning requires answers to several questions in order for the
alternatives and constraints to be fully understood. A list of questions would
include:
• Prepare environmental analysis
 Where are we?
 How and why did we get here?
• Set objectives
 Is this where we want to be?
 Where would we like to be? In a year? In five years?
• List alternative strategies
 Where will we go if we continue as before?
 Is that where we want to go?
 How could we get to where we want to go?
• List threats and opportunities
 What might prevent us from getting there?
 What might help us to get there?
• Prepare forecasts
 Where are we capable of going?
 What do we need to take us where we want to go?
 Cont...
• Select strategy portfolio
 What is the best course for us to take?
 What are the potential benefits?
 What are the risks?
• Prepare action programs
 What do we need to do?
 When do we need to do it?
 How will we do it?
 Who will do it?
• Monitor and control
 Are we on course? If not, why?
 What do we need to do to be on course?
 Can we do it?
 Basic Planning elements
• Planning is determining what needs to be done, by
whom, and when, in order to fulfil one’s assigned
responsibility.
• The basic planning elements include the following:
1. Identify the key project tasks(What)
2. Identify the objective for each task (Why)
3. Estimate the Personnel, Resources, and Time
Required to meet each task objective (How)
4. Establish priority of tasks by arranging them in
time sequenced order (When) + Estimate
Costs(Project Budget)
 Cont...
There are nine major or specific components of the planning phase:
1. Objective: a goal, target, or quota to be achieved by a certain time
2. Strategy: the strategy to be followed and major actions to be taken
in order to achieve or exceed objectives
3. Schedule: a plan showing when individual or group activities or
accomplishments will be started and/or completed
4. Budget: planned expenditures required to achieve or exceed
objectives
5. Forecast: a projection of what will happen by a certain time
6. Organization: design of the number and kinds of positions, along
with corresponding duties and responsibilities, required to achieve
or exceed objectives
7. Policy: a general guide for decision-making and individual actions
8. Procedure: a detailed method for carrying out a policy
9. Standard: a level of individual or group performance defined as
adequate or acceptable
Part Two: The Logical Framework
Approach (LFA) as a Planning Tool
 Result Based Management (RBM) and the Logical
Framework Approach (LFA)
RBM is a management strategy that helps:
o To manage the whole project cycle by focusing on outcomes
o To prepare a plan with SMART objectives
o To monitor/track progress by continuously collecting and
analyzing data
o To assess/analyze results, disseminate results and learn from
results
o To manage and acting upon results
The LFA is an RBM tool used for systematic planning,
implementing, monitoring, and evaluating projects/
programmes.
 The Logical Framework Approach
Some features of the LFA include:
1. Stakeholder involvement
2. Needs-based approach
3. Logical intervention approach
4. Framework for assessing relevance, feasibility and
sustainability
5. Results-oriented – not activity driven
6. Logically sets objectives and their causal relationships
7. Shows whether objectives have been achieved: Indicators
(for M&E)
8. Describes external factors that influence the project’s
success: assumptions and risks
 Why LFA?

– Using LFA ensures that the project/program

meets:
1. Relevance
2. Feasibility
3. Sustainability
4. Cost efficiency
 Steps of the LFA Analysis- the planning process
1. Analysis of the project´s Context
2. Analysis of Stakeholders
3. Problem Analysis/Situation Analysis
4. Objectives Analysis
5. Plan of Activities
6. Plan of Resources/Inputs
7. Indicators and Source of Verification
8. Risk Analysis and Risk Management
9. Analysis of Assumptions
 Step 1: Context Analysis
• Projects are part of a larger context - prior to start, collect
relevant background information on the sector and on the
relevant organizations to work with.
• Which environment will the project be situated in,
the country, the region and the sector?
• Analysis of Context made through a study and/or through
making a “SWOT” analysis: Strengths, Weaknesses,
Opportunity and Threats
• SWOT analysis is a tool for auditing /identifying e.g. an
environment, agency, company etc:
• SWOT is a separate method, which may be used for the analysis
of the project’s Context
 Step 2: Stakeholder Analysis
• Stakeholders are those who are influenced by and exert an
influence on the project’s entity. Who will be influenced,
positively or negatively, by the project.
• Normally they are with different knowledge, different
background, different sex, different region , etc
• Stakeholder analysis - mapping of different
individuals/institutions and their respective roles, degree of
influence on the project, gender, age, ethnicity, etc
• Which stakeholders should be involved in planning and /
or implementing the project?
• As a rule of thumb it is important to include a broad group
of people/institutions with different knowledge on the sector
 Cont...
Five main groups of stakeholders to involve:
1. Beneficiaries/Target group
2. Implementers
3. Financing agents
4. Decision makers
5. Experts
 A stakeholder may belong to several groups.
 All stakeholders have important information to
give to the future project group/ implementers.
 They provide a relevant picture of the situation
in order to find relevant, feasible and sustainable
solutions.
Stakeholder Analysis Templates
Stakeholder Analysis Templates
Stakeholder Analysis Templates
 Step 3: Problem Analysis
Problem analysis enables to get an understanding of
the root cause of the problem
Finding “the roots of the evil” is the most important
task. So, it is imperative to ask:

1. What is the focal problem to be solved?

2. Who owns the problem?
3. What are the causes and effects to the focal problem

 The causes of the problem shall be “tackled”

through activities within the framework of the
project so that the problem will be solved in a
sustainable way
 Cont...
Problem analysis is helping us finding “the roots of the
evil”

Three parts in a problem analysis;

1. The main problem to be solved, one focus
2. The causes to the focal problem
3. The effects of the focal problem

 Discuss who owns the problem?

 A problem analysis should always be made by the
local stakeholders who are the owners of the
problem.
 Problem Tree

Effekr Effects

Focal Problem

Causes
 Example of a Problem Tree
Bus company gets a Disabled High cost for
Effekr
bad reputation people hospital care

People die and Buses

are delayed
get injured

High number of
bus accidents

Careless Buses in Roads in

busdrivers poor condition poor condition
Stress Alcohol Poor
abuse maintenance Old buses
Poor maintenace
Bad traffic Tight
situation No maintenance
schedule Weak Corruption
routines
knowledge
Too few drivers on manintenace
and buses
Weak management capacity
at the bus company
 Step 4: Objective Analysis

Formulating objectives: Moving from problem

tree to objective tree
 Why a Problem Tree?

Problem Tree Objective Tree

Effects Overall objectives

Project Objective
Focal problem

Causes
Expected results

Activities
Objective Tree
Ends

Means
 Objectives Vs Activities
There is a difference between objectives and activities.
Objectives should describe;
1. Which is the changed situation to acheive
2. What to acheive when the project is completed.
3. What the activities are aiming at
While, an activity is a means to acheive the objective
Example
Objective: Enhanced competence on trade facilitation among
trading partners
Activity: Arrange a seminar on trade facilitation
 Objectives Cont...
1. Overall Objectives/ Development Objectives
 Several different projects often aiming at the same overall
objectives. Sometimes also called goals
 Often Governmental level E.g. Social welfare, economic growth
 Time frame: Long term.
2. Project Objective/ Project Purpose
 The main objective that the intervention/project should be able to
achieve.
 Solution to the focal problem.
 The very reason for implementing a project.
 Time frame: Medium term (the length of the project). Purpose
should be “SMART’’
3. Expected results/ immediate objectives
 The results describe the services to be produced by the project.
 What services do the beneficiary get access to?
 Short term objectives. Directly after the project activities.
 Time frame: After the activities have been implemented. Results
should be “SMART”.
 LFA Overall Objectives
 Long-term social and/or economic benefits, to
which the project will contribute
 Not achieved by the project on its own, several
projects contribute
 States the positive state for the beneficiaries
and for the society
 Examples:
 Improved social welfare
 Economic growth in region X
 Food supply stabilised
 LFA Project Purpose
 The main reason for having a project ! WHY a project
 Connection to the “focal” problem
 Sets out the benefits, which the beneficiaries derive from the
project
 Implementing agencies should enable for the beneficiaries to
achieve the benefits by delivering the required services/results
 Examples:
 Improved labour productivity for crop X achieved
 Health hazards (for certain diseases) of the population in area
X reduced to a certain standard
 River water quality improved etc...
 LFA Results
 Connected to the causes of the focal problem
 Sets out the services which the beneficiaries will
receive from the implementing agency through the
project
 Examples:
 Farmers able to apply more efficient maize
production techniques,
 Adequate mother and child care provided to the
people in region X,
 Improved transport between A and B
 Make it logic when planning: Example
Overall objectives:
The project will contribute to increased trade and
increased GDP in country X

Project objective:
Increased efficiency in the customs service in country X

Expected results:
1. Enhanced competence on custom related trade
facilitation mesures among customs service staff
2. Strengthened management capacity in the
Customs service
3. Improved customs clearence routines

Expected Outputs:
1. 500 staff members trained on trade facilitation

Activitie
1. Develop new manuals for customs clearance
2. Implemete a pilot training for 20 staff
 Writing objective statements
Objective hierachy
Overall objectives
(long term)
---------------------------------
Project objective
(mid-term):
---------------------------------
Expected Results:
(Short term objectives)
------------------------------
Activities:
Example of how to write objectives
 To contribute to increased GDP in country X
-------------------------
 Improved service from the state sector to exporting
companies in country X
----------------------------------------
 1.Enhanced knowledge among officials on Trade
facilitation and Rules of Origin
2. Improved trade standards
established and effectively enforced in the country.
-------------------------------------
Activities for expected result 1:
1:1 Conduct a baseline survey of the vocational training and a need
assessment (knowledge gaps)
1:2 Analyse the findings of the study
1:3 Make a curriculum for trainings based on the findings
1:3 Prepare tender documents for new training programs
1.4 Select trainers /providers of the vocational trainings
1:5 Implement pilot trainings
1.6 Follow-up /monitor of the trainings , analyze results and
if needed change the trainings
1:7 Run a full scale training program for health care staff
1:8 Evaluate the program after 3 years, and analyze, if needd repeat part
of the training program
Terminologies for objectives used by different donors
DFID EU RBM World Bank
(Department of
(Results-
International Development) Based
Objectives (Great Britain) Management)

Long-term Goals Overall Impact Impacts/

objectives Objectives Development
Objectives

Medium-term Project Project Outcome Project

objective Purpose Objective Outcome

Short-term Immediate Expected Outputs Intermediate

Objectives objectives Results Outcomes
Step 5. Activities/ Plan of Operation/
Plan of Activities
 Activities are means to achieve the objectives,
not the objectives. Activities tackle the causes to
the focal problem (see problem analysis, step 3)

 Activities should be clearly specified and

expressed as an action. They explain how to
achieve the expected results of the project (the
short term objectives).

 Activities should be connected to the expected

results , the short-term objectives
(Expected result 1: activities 1:1,1:2, 1:3… etc.)
 Cont...
 Activities should always be connected to the expected results/short-
term objectives e.g.
Result 1: Improved knowledge among decision-makers at ministerial
level on efficient trade facilitation measures
Activity:
1:1 Make a need assessment among staff in Ministries and relevant
authorities
1:2 Develop a training program, a curricula, and training material for
trainings
1:3 Print training material
1:4 Train 15 teachers/trainers (ToT )
1:5 Implement the training program for 25 persons, a pilot training
1:6 Follow-up of the training program, review evaluations, if needed make
changes in the training curricula
1:7 Complete the training program
1:8 Evaluation and dissemination of the results of the trainings
1:9 Integrate the program in to existing services
 Specified plans of activities make it easier to implement, to monitor
and much easier to make a realistic planning of resources
(budget, manning schedule and time schedule etc.).
 Step 6 : Planning of Resources

 Resource planning should include:

1. Staff
2. Budget
3. Equipment
4. Time
 Step 6. Inputs/Resource planning

 Experts and personnel (human resource management, project group,

reference group, which knowledge & capacity is needed?)

 Financing (loans, grants, funds, cost sharing, who is financing what?

Future long term financing?)

 Equipment, equipment should be adapted to local conditions

(Are spare parts and maintenance available?)

 Premises (office, training facilities, is there a contract for the premises?)

 Time (make a realistic time schedule, e.g. GANTT-schedule)

 Example GANTT schedule
Time Schedule / Gantt Chart
 Advantage and Limitations of Gantt Schedule
• Advantages:
– Gantt charts are quite commonly used.
– They provide an easy graphical representation of when activities
(might) take place.
• Limitations:
– Do not clearly indicate details regarding the progress of
activities.
– Do not give a clear indication of interrelation ship between the
separate activities
– As project became larger and more complex, the Gantt chart
was found to be lacking as a planning and control tool because it
could not indicate the logical relationships between activities.
• These deficiencies can be eliminated to a large extent by showing
the interdependence of various activities by means of connecting
arrows called network technique.
 Network Diagramming
• For a project plan to be effective it must equally address the
parameters of activity time and network logic.
• This logical relationship is required to model the effect
schedule variance will have downstream in the project.
• Both Program Evaluation and Review Technique
(PERT) and the Critical Path Method (CPM) uses a similar
network format where the activities are presented in boxes and
the sequence of the activities from left to right show the logic
of the project.
• In CPM activities are shown as a network of precedence
relationships using activity-on-node network construction
• CPM is used in Production management for the jobs of
repetitive in nature where the activity time estimates can be
predicted with considerable certainty due to the existence of
past experience. Hence,
– Single estimate of activity time
– Deterministic activity times
 Network Analysis: CPM and PERT
• Critical Path Method (CPM):
– Developed in the 1950s by DuPont for chemical plants
– The emphasis was on the trade-off between the cost of the
project and its overall completion time (e.g. for certain
activities it may be possible to decrease their completion
times by spending more money - how does this affect the
overall completion time of the project?)
• Program Evaluation and Review Technique (PERT)
– In 1958, the special projects office of the US navy developed
PERT for the planning and control of the Polaris missile
program
– The emphasis of PERT was on completing the program in the
shortest possible time.
– In addition, PERT had the ability to cope with uncertain
activity completion times (e.g. for a particular activity the
most likely completion time is 4 weeks but it could be
anywhere between 3 weeks and 8 weeks).
 Network Diagramming Cont…
• The main difference between PERT and CPM was how
they addressed activity time durations.
• The accuracy of an activity’s time estimate usually
depends on the information available from previous
projects.
• If an activity has been performed before, its duration
should be accurately predicted.
• 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 durations.
• CPM uses a deterministic approach, which suits a
project whose time durations can be accurately predicted.
E.g. a construction project.
• PERT, on the other hand, uses a probabilistic approach,
which suits a project whose time durations may vary
over a range of possibilities. E.g. a research project.
 CPM and PERT: Comparison
• PERT and CPM are similar in their basic
approach, they do differ in the way activity times
are estimated.
• For each PERT activity three times (optimistic,
pessimistic and most likely times) are combined
to determine the expected activity completion
time and its variance.
• Thus, PERT is a probabilistic technique: it
allows us to find the probability of the entire
project being completed by any given date.
• CPM, on the other hand, is called a deterministic
approach. It uses two time estimate, the normal
time and the crash time, for each activity
 Comparison Cont…
• In PERT activities are shown as a network of
precedence relationships using activity-on-arrow
network construction
• PERT is used in Project management: for non-
repetitive jobs (research and development work), where
the time and cost estimates tend to be quite
uncertain.
• Hence, PERT uses probabilistic time estimates. Thus,
will have multiple time estimates, and probabilistic
activity times
• Use of nodes and arrows in CRM and PERT:
1. Arrows (): An arrow leads from tail to head directionally. It indicates
ACTIVITY, a time consuming effort that is required to perform a part of the
work.
2. Nodes (): A node is represented by a circle. It indicate EVENT, a point in
time where one or more activities start and/or finish.
 Network Diagramming Cont…
• Activity on Node: A completion of an activity is
represented by a node
• Activity on Arrow: An arrow represents a task,
while a node is the completion of a task
• Arrows represent order of events (See example
below)
 Network Diagramming Cont…
• Each event has two important times associated
with it:
- Earliest time (Te): is a calendar time when a event can
occur when all the predecessor events completed at the
earliest possible times
- Latest time (TL): is the latest time the event can occur
without delaying the subsequent events and completion of
project.
• Slack Time: Difference between the latest time and the
earliest time of an event
• Positive slack: Slack is the amount of time an event
can be delayed without delaying the project completion
• Critical Path: the sequence of activities and events
where there is no “slack” (Zero slack), longest path
through a network, and minimum project completion
time
 CPM and PERT: Questions to be Answered
• By using PERT and CPM analysis you will be able to answer:
1. When will the entire project be completed?
2. What are the critical activities or tasks in the project, that is, the
ones that will delay the entire project if they are late?
3. Which are the noncritical activities, that is, the ones that can run
late without delaying the whole project’s completion time?
4. What is the probability that the project will be completed by a
specific date?
5. At any particular date, is the project on schedule, behind schedule,
or a head of the schedule?
6. On any given date, is the money spent equal to, less than, or
greater than the budgeted amount?
7. Are there enough resources available to finish the project on time?
8. If the project is to be finished in a shorter amount of time, what is
the best way to accomplish this at the least cost? (crash analysis)
 Critical Activities
• Finding the critical path is a major part of
controlling a project.
• The activities on the critical path represent tasks
that will delay the entire project if they are
delayed.
• Manager gain flexibility by identifying non-
critical activities and re-planning, rescheduling,
and reallocating resources such as personnel and
finances.
• A critical path for the network is a path
consisting of activities with zero slack. And it is
always the longest path in the project network.
 Example
• Illustration of network analysis of a minor redesign of a
product and its associated packaging.
• The key question is: How long will it take to complete
this project ?
 Example Cont…
• For clarity, this list is kept to a minimum by
specifying only immediate relationships, i.e,
relationships involving activities that "occur near to
each other in time“.
 Example Cont…
• Before starting any of the above activity, the questions one
would ask be
1. "What activities must be finished before this activity
can start"
2. Could we complete this project in 30 weeks?
3. Could we complete this project in 2 weeks?
• One answer could be, if we first do activity 1, then activity
2, then activity 3, ...., then activity 10, then activity 11 and
the project would then take the sum of the activity
completion times, 30 weeks.
• “What is the minimum possible time in which we can
complete this project ?’’
 Example Cont…
• We shall see below how the network analysis
diagram/picture we construct helps us to answer this
question.
CRITICAL PATH TAKES 24 WEEKS FOR THE COMPLETION OF THE PROJECT
 Program Evaluation and Review Technique (PERT)
 The PERT technique was developed to apply a statistical
treatment to the possible range of activity time durations.
 A three time probabilistic model is developed, using
pessimistic, optimistic and most likely time durations.
 The three time estimates are then imposed on a normal
distribution to calculate the activity’s expected time.
 For PERT, three time estimates are required for every activity:
to= the most optimistic duration that could be foreseen
tm= the most likely duration
tp= the most pessimistic duration
 From these quantities a probable duration is calculated for
each activity on a statistical basis, assuming that the errors
will fall within a normal distribution curve when all the
project activities are taken as the sample.
 The expected time (te) is:
 PERT: Estimation of the activity duration
• Example: An activity was performed 40 times in the
past, requiring a time between 10 to 70 hours. The
figure below shows the frequency distribution.
 Estimation of the activity duration

• The probability distribution of the activity is

approximated by a probability frequency
distribution.
 Estimation of the activity duration
• In project scheduling, we usually use a beta
distribution to represent the time needed for
each activity.
 Estimation of the activity duration
 Three key values we use in the time estimate for each
activity:
to = optimistic time, which means that there is little
chance that the activity can be completed before this
time;
tm = most likely time, which will be required if the
execution is normal;
tp = pessimistic time, which means that there is little
chance that the activity will take longer.
 Estimation of Mean and SD

 The expected or mean time is given by:

D= (to +4 tm + tp)/6

• The variance is:

V = (tp - to) 2/36
• The standard deviation is (tp - to)/6

• For our example (Figure 7-3), we have to =10, tp =70, tm =35.

Therefore D=36.6, and V2 =100.
 Estimation of Mean and SD

Beta-distribution

to (a) tm (m) tp (b)

a  4m  b
Expected task time: t
6
ba
2
ba
Standard deviation:    (
2
)
6 6
 Step 7 : Indicators & Sources of verifications

 Indicators measure achievements and help to monitor results

 Are the objectives achieved? Any positive results?
 The process of setting up indicators shows whether
the objectives are vague and unrealistic.
 Indicators should be set for all expected results and for the
project purpose (short-term objectives and medium-term
objective).
 Indicators should state the quantity and the quality of
results/outcomes to be measured
 Example for Indicators & Sources of verifications
Indicators for a management training
1. Number of persons participating in the training
(SoV: List of participation) (quantity)
Examples of indicators, quantity and/or quality,
2. Number of occasions when knowledge among the trained
personnel has been used
(Source of verification (SoV): Number, interviews) (quality)
3. Number of persons passing the test after the training
(SoV: The test results from the training)
4. Examples of changes made in the organization after the training
(SoV: Organizational study )
5. Staff recognition/comments 6 months after the management
training ( SoV: Interviewing staff on management at the authority)

Indicator for service: e.g. Number of satisfied customers (SoV:

statistics, interviews %) (measures quality).
 Measuring achievements
 A baseline study, input data is needed, in order to be able to
measure the final results, to be able to compare.
(E.g. how many custom clearances per year when we start our
project)

 Each indicator should be connected to a Source of Verification

(SoV), answering the questions how the information on the
indicator should be collected, when/how it will be collected
(e.g. SoVs interviews, exams, at the statistical office,
questionnaires etc.)
 Step 8 : Risk Analysis and Risk Management
 Continuous risk analysis & risk management
important to reach sustainability
 Analysis of factors which may influence the
implementation of the project and hence the
achievement of the objectives.
 Internal and External risks
 Make a risk management plan – mitigation of risks,
new activities.
 Killing factors? Important threats, threatening the
whole implementation e.g. the political situation,
corruption etc.
 Risk value
Risks Probability Consequence Risk value Risk management
1-5 1-5 /mitigation

1.Brain- 5 4 20 a. Train more staff

drain b. Develop manuals for
training
c. Develop an internal long
term training module
d. Avoid dependence on one
person, share
responsabilities
2.Delayed 2 1 2 None
deliveries
 Step 9: Analysis of Assumptions
 Assumptions describe situations and conditions which are
necessary for project success, problems needed to be solved, but
which are largely beyond the control of the project group to solve
due to the resources of the project group, their mandate and
knowledge etc)
 An assumption is a problem the project group realistically can
assume that other projects/ authorities/actors will handle
 The project in the perspective of society/ institutional situation in a
country (laws, political commitments, financing)
 Assumptions describe situations and conditions, which are
necessary for project success, but which are largely beyond the
control of the project management
 Assumptions on each level of objective (results, project purpose
and overall objectives)
 Examples: Delivery in time of equipment, at least five of the
trained personnel stays within the company for 5 more years,
prevailed stable political situation
 Why different steps in LFA in the
planning procedure?
1. Relevance (Step 1 – 4): The Context, the Stakeholder-, the
Problem- and the Objectives analysis. Logical links between
problems and solutions? Ensure that the problems of the target group
are solved by the project.

2. Feasible (Step 5 – 7): Plan of Activities, Resources/inputs

and Indicators. Are the activities and resources sufficient to achieve
the objectives? (Resources: Personnel, time, funding, equipment)

3. Sustainable (Step 8 – 9) : Risk analysis, Risk

Management and Analysis of the Assumptions. If the project is
sustainable, will the effects of the project remain without external
assistance?
 The nine steps of an LFA
analysis - why?
1. Analysis of project´s Context
2. Analysis of Stakeholders
3. Problem Analysis/Situation Analysis RELEVANCE
4. Objectives Analysis

6. Plan of Resources/Inputs
5. Plan of Activities FEASIBILITY
7. Indicators/measurements

8. Risk Analysis and Risk Management

9. Analysis of Assumptions SUSTAINABILITY
The Logical Framework Matrix
Objectives & Means of
Indicators Assumptions
activities verification

Goal
(Impact)

Purpose/
(Outcome)

Outputs

Means Cost
Activities

What needs to
be fulfilled Pre-conditions
before activities
can start
 Summary of the logical framework
Intervention Logic
1. Goal: The higher level objective towards which
the project is expected to contribute (mention
target groups)
2. Purpose: The effect which is expected to be
achieved as the result of the project.
3. Outputs: The results that the project management
should be able to guarantee (mention target
groups)
4. Activities: The activities that have to be
undertaken by the project in order to produce
outputs.
 Evaluation Criteria
1. Relevance: The appropriateness of the project objectives to the
problems it addresses and to the physical and policy
environment.
2. Efficiency: Results achieved at reasonable cost i.e how well
inputs/means have been converted into results in terms of
quality, quantity and time?
3. Effectiveness: An assessment of the contribution made by the
results to achievement of the project purpose and how
assumptions have affected project achievements.
4. Impact: The effect of the project on its wider environment. Its
contribution to the objectives for the sector (overall objectives)
5. Sustainability: Likelihood of the benefits produced by the
project to continue to flow after end of project with particular
reference to ownership, environment, policy support,
institutional capacity and financial support.
Project Management (MBA 592)

Project Implementation

Maru Shete (PhD and Assoc. Prof.)

How will approved projects be implemented?

Implementation of approved projects require

choosing among different Organizational
Structures.
There are three different project management
structures to choose from:
1. Functional organization
2. Projectized or dedicated teams
3. Matrix structure

84
 Cont..
 In any organizational structure there is
Organizational Workflow with different level of
authority, responsibility and accountability.
 Authority: the power granted to individuals so that
they can make the final decision
 Responsibility: The obligation incurred by
individuals in their roles in the formal organization to
effectively perform assignments
 Accountability: being answerable for the
satisfactory completion of a specific assignment
Accountability = Authority + Responsibility
85
 Functional Organization
 When top management decides to implement the projects
with the existing functional hierarchy, it is functional
organizations
 Thus, the implementation and coordination of the projects
are managed by functional management.
 The project will be part of the working agenda of top
management.
 The overall project will be managed following (within)
the normal hierarchy.
 One functional area plays a dominate role or has a
dominant interest in the success of the project

86
 Functional Organization (Example)

General
Manager

Adminis-
Director Level Engineering Production Sales Marketing Admin.
tration

Division Level

Department Level

Section Level Functional Responsibility

87
 Cont…
Advantages of Functional Organization
1. No change: Projects are managed within the functional
structure of the organization to administer and
complete project. No radical change in the operations
of the parent company. Thus, status quo is maintained.
2. Flexibility: Specialists in different functional units can
temporarily work on the project then return to their
normal work.
3. Indepth Expertise: The functional unit is assigned
primary responsibility and in-depth experts within the
unit can concentrate on the most crucial aspects of the
project.
4. Easy Post-Project Transition: Normal career paths
within a functional division remain intact. The
functional unit worked on it and they maintained it
after being implemented.

88
 Cont...
Disadvantages of Functional Organization
1. Lack of Focus: Each functional unit has it own routine operational
work to do. Project responsibilities can easily be pushed aside in
order to meet normal obligations. Creates delay!
2. Poor Integration: Poor integration across functional teams as
functional specialists tend to be concerned only with their project
responsibilities, not what is best for the total health of the project.
3. Slow: Decisions have to be circulated through normal management
channels. As project operations are not their core function, they
respond to project concerns slowly. Thus, takes longer to complete
projects!
4. Lack of Ownership: Weak motivation of the resources assigned to
the project as it is not directly linked to their professional
development or advancement. This lack of ownership discourages a
strong commitment to project-related activities.

89
Organizing Projects as Dedicated Teams

 Dedicated Teams is also known as a projectized

organization.
 These teams operate as separate units as part of the parent
organization or separately from the parent organization
depending on the nature of the project.
 Thus, the project team could be located physically
separated from the parent organization.
 The project manager does all the recruiting of project
resources and has full authority to assign priorities and
direct the work of team members assigned to the project.
 The sole purpose of this dedicated team is to drive
completion of the project with no interest in daily
operations.
 There can be multiple dedicated teams within the
organization each dedicated to a major project. 90
 Dedicated Project Team (Example)

09/11/2019 Prepared by Temesgen Belayneh (PhD) 91

 Cont...
Advantages of Dedicated Project Team

1. Simple: All specialists are dedicated to the project allowing the

functional units to operate without project work interruption.
2. Fast: Project get done more quickly when project team members
are fully focused to the project and are not distracted by other
obligations. Response time is much faster because decisions are
made within the dedicated team instead of being dependent on
the response across the hierarchy.
3. Cohesive: Motivation and cohesiveness is present as all share a
common goal and personal responsibility towards the success of
the project.
4. Cross-Functional Integration: Experts or specialists from
different work areas work together and are committed to
optimizing the project, not just their respective area of expertise.

92
 Cont...
Disadvantages of Dedicated Project Team
1. Expensive: Newly created management positions, resources and
project teams working on a full-time basis. If more than one project
is going on at a time, duplication of efforts across all projects occurs
and a loss of economies of scale.
2. Internal Strife: Sometimes dedicated teams take on a social
phenomenon called Projectitis in which members of the dedicated
team exhibit inappropriately intense loyalty to the project.
3. Limited Technological Expertise: Because these teams are self-
contained, the level of expertise is limited by the skill level and
expertise among the recruits. Because of the “we versus them”
syndrome, specialists often will not consult with other experts in
the functional units.
4. Difficult Post-Project Transition: When the project is completed
and the team members are released from the project, going back to
their former functional position may not be available. It may be
difficult for those released resources to catch up with new
developments that occurred during their prolonged absence.
93
 Organizing Projects within a Matrix Model

 The Matrix model is a hybrid organizational form in

which a project horizontally crosses over several
functional units.
 Matrix structure is designed to utilize resources working
on multiple projects as well as being capable of
performing normal functional duties.
 Two chains of command: Project managers and
functional managers.
 Matrix structure achieves smoother integration by
recognizing the legitimate authority of the project
manager. The functional manager ensures the project
tasks will be implemented and completed as per the
project schedule.
94
 Matrix Organization Cont…
 Participants must spend full time on the project.
This ensures a degree of loyalty.
 Horizontal as well as vertical channels exist for
making commitments.
 Both horizontally and vertically oriented
managers negotiate for resources.
 The horizontal line operates as a separate entity
except for administrative purposes.
 All managers will have input in the planning
process.
 The structure requires to have quick and
effective methods for conflict resolution.
 It also requires good communication channels
and free access between managers.
95/48
 Different Matrix Forms
1. Weak matrix: very similar to a functional approach
with the exception that there is a formal designated
project manager responsible for coordinating project
activities.
 The project manager acts as a staff assistant who develops
the schedules and checklists, collects information on work
status, and facilitates project completion.
 Project managers have indirect authority
 Functional managers have full and direct authority over
resources
 Advantage: likely to improve technical quality as well as a
better system for managing conflicts across projects
because the functional manager is in control of unit
resources.
 Disadvantage: Functional control over the project is often
the cause of poor project integration.
96
 Weak Matrix (Example)

DIVISION MGR.
LEGEND
FORMAL FLOW
PROJECT MGR.
INFORMAL FLOW

DEPT. MANAGER DEPT. MANAGER

97
The Matrix Management Structure (Example)

General
Manager

Engineering Operations Finance Others

Functional Responsibility

Project Mgr. Project Responsibility

X

Project Mgr.
Y

Project Mgr.
Z
98
Modified Matrix Structure (With a Director of Project Management)

General Manager

Director: Director: Director: Director:

Project Mgmt. Engineering Manufacturing Finance/Admin.

Project Mgr. X

Project Mgr. Y

Project Mgr. Z

99
 Matrix Cont…
2. Balanced matrix: classic structure in which the project manager is
responsible for defining what needs to be accomplished and functional
managers are concerned with how it will be accomplished.
 The project manager establishes the overall plan, integrates
completed tasks, sets schedules, and monitors progress
 Functional manager is responsible for assigning personnel and
executing their project work per the standards and schedules set by
the project manager.
 Both the project and functional managers work closely together and
jointly approve technical and operational decisions.
 Power is shared equally between the project and functional manager
 Balanced matrix can achieve better balance between technical and
project requirements. However, it is a delicate system to manage due
to sharing authority and resources with a functional manager.
100
 Matrix Cont...
3. Strong matrix: project manager controls most aspects
of the project including assignment of functional
personnel.
 Project manager controls when and what resources do and
has final say on major project decisions
 Functional manager has title over the unit and is often
utilized as a “subcontractor” for the project, in this case
having more control over specialized work.
 Advantage: Strong matrix is likely to enhance project
integration, diminish internal power struggles, and ultimately
improve control of project activities and costs.
 Disadvantage: quality may suffer because functional areas
have less control over the quality of contributions to the
project.
101
 Matrix Cont...
General Advantages
1. Efficient: Resources are shared across multiple projects within functional
divisions. This reduces duplication of effort as seen in a projectized structure.
2. Strong Project Focus: A stronger focus on projects due to having a designated
project manager. This helps sustain a holistic approach to problem solving which
is often lacking in the functional unit.
3. Easier Post-Project Transition: Since the project organization is overlaid across
functional divisions, specialists maintain ties with their functional group and are
not displaced when a project ends.
4. Flexible: Matrix structure provides for flexible utilization of resources and expert
skill sets within the organization. Depending on the culture and the Matrix
structure, functional units may provide individuals who are entirely managed by
the project manager while engaged on a project. In other cases, the contributions
to the project are managed and monitored by the functional manager.

102
 Matrix Cont...
General Disadvantages
 Potential weaknesses in a matrix structure is due in great part that it
creates multiple bosses over functional resources. This is a radical
departure from the traditional hierarchical authority system.
 Managers who are not indoctrinated to a project style organization
may find it difficult to relinquish or even share their authority over
their staff with a project manager.
 Analysis shows that a matrix structure can take 3 to 5 years to reach
full maturity. The disadvantages and problems that follow represent
growing pains along the journey of project maturity
 Project management maturity refers to the progressive development of
an enterprise-wide project management approach, methodology,
strategy, and decision-making process. The appropriate level
of maturity will vary for each organization based on its specific goals,
strategies, resource capabilities, scope, and needs.

103
 Matrix disadvantage cont...
1. Dysfunctional conflict: Tension between functional managers and
project managers is viewed as a necessary mechanism for achieving a
balance between complex technical issues and unique project
requirements. This tension can be the result of conflicting agendas
(project and operational) and accountabilities (to project and to
operational demands).
2. Infighting: When equipment and resources are being shared between
project and functional activities, it can lead to conflict and competition
for scarce resources. Infighting can occur between project managers who
are vying for the same resources when concerned about what is best for
their project.
3. Stressful: Matrix structures violate the management principle of unit of
command. Project participants take orders from their functional
managers in addition to one or more project managers. Working in a
matrix environment can be stressful to people resources.
4. Slow: The presence of a project manager to coordinate project tasks
should accelerate completion of projects. In practice, however, decision
making can get bogged down as agreements have to be obtained across
multiple functional groups. This is especially true in balanced matrix.

104
What is the Right Project Mgmt. Structure?
The following Organizational and Project Considerations
are important:
1. Project Considerations
1. How important is project management for the success of
the organization?
 If over 75% of work being done involves projects, then
the organization should consider a fully projectized
structure.
 If the organization performs both standard products and
projects, then a matrix structure would be appropriate.
 If the organization has very few projects, then a less
formal arrangement is probably all that is needed (i.e.
functional structure).
 Finally, dedicated (or projectized) teams could be formed
only when needed or could be outsourced.
105
 Cont...
There are seven project-related factors that
influence the choice of a project management
structure. This includes:
1. Size of the project
2. Strategic importance of the project
3. Novelty and need for innovation
4. Need for integration
5. Environmental complexity
6. Budget and time constraints
7. Stability of resource requirements
106
 Cont...
 The higher the importance of these seven
factors the more autonomy and authority the
project manager and the project team needs in
order to be successful.
 Today a growing number of companies are
using the “mix and match” structure approach
for managing their projects.

107
 Cont...
2. How available are resources?
 Matrix structures share resources across multiple
projects and functional work while at the same
time creating legitimate project leadership.
 For organizations which have limited resources
and cannot afford to tie up critical personnel on
projects, a matrix structure is appropriate.
 Alternatively, the organization could create a
dedicated team or outsource the project when
internal resources are not readily available.

108
 Organizational Culture and Choice of
Project Management Structure
 Organizational Culture: refers to a system of shared norms, beliefs,
values, and assumptions which binds people together and becomes a
shared meaning.
 Culture reflects the personality of the organization and defines its
aspects, which differentiate its setting from other organizations, even
in the same industry.
 Culture provides a sense of identity for its members. The more
clearly an organization’s perceptions and values are stated, the more
strongly people can identify with their organization and feel part of it.
 Culture helps legitimize the management system and helps clarify
authority and why authority should be respected.
 Culture clarifies and reinforces standards of behavior by defining
what is permissible and inappropriate behavior.
 Culture helps create social order within the organization. Customs,
norms, and ideals provide stability and predictability in behavior,
essential for an effective organization.
109
 Cont...
 According to research, there are 10 primary characteristics that, when
aggregated, capture the culture of the organization. There are:
1. Member identity: employees identify with the organization as a
whole rather with their type of job or their field of professional
expertise.
2. Team emphasis: the degree in which work activities are organized
around groups rather than individuals.
3. Management focus: the degree in which management decisions take
into account the effect of outcomes on people in the organization.
4. Unit integration: the degree to which organizational units are
encouraged to operate in both coordinated or interdependent manners.
5. Control: the degree in which rules, policies, and direct supervision
are used to oversee and control employee behaviour.
110
 Culture Cont...
6. Risk tolerance: the degree in which employees are encouraged to
be aggressive, innovative, and risk seeking.
7. Reward criteria: the degree to which rewards (promotion &
salary bumps) are allocated according to performance rather than
seniority, favoritism, or other non-performing factors.
8. Conflict tolerance: the degree in which employees are
encouraged to air conflict and criticisms openly
9. Means versus end orientation: the degree in which management
focuses on outcome rather than on techniques or processes used to
achieve those results.
10. Open-system focus: the degree to which the organization
monitors and responds to changes in the external environment
 These 10 dimensions provide a composite picture of the
organization’s culture. It becomes the basis for shared feelings
across the organization, how things are done, and the way
members are supposed to behave.
111
 Implications of Organizational Culture for
Organizing Projects
 Project managers have to interact with the culture of the
parent organization and work well in the subcultures of
various departments.
 Project managers have to interact with the client or
customer organizations.
 Project managers have to interact with other organizations
connected to the project
 Project managers have to be able to read and speak the
culture they are working in when developing strategies,
plans, and responses that will be understood and accepted.
 Strong correlation between project management structure
and the organizational culture with project success.

112
 Cont...
 Given the metaphor that culture is a river and a project is
a boat
 Cultures that are conducive to project management is like
paddling downstream.
 Some organizations have such a strong project culture
and are project friendly. In these cases, projects succeed
due to the norm of project commitment, healthy conflict,
and committed to the strategies of the organization.
 Toxic cultures is like paddling upstream, which requires
more time, effort, and constant attention to the end goal.
These are cultures that discourage teamwork, have a low
tolerance for conflict, and where “getting ahead” is less
about performance and more on relationships with upper
management. 113
 Cont...
The degree of interdependence between the
parent organization and the project team
determines how well the culture will support
project management.
Again, based on the culture and commitment
to project management, the structure will be
conducive to either Functional, Projectized, or
Matrix (weak, balanced, strong).

114
End of Chapter Three!!!