THE CONCEPT OF PROJECT MANAGEMENT
E2 Chapter 9
PROJECT CONSTRAINTS
PROJECT LIFE CYCLE
STAGES OF PROJECT LIFE CYCLE
development of
identification of
proposed implementation completion
need
solution
Phase 1 – Identification of a need
The first phase of the project life cycle involves identification of a need, opportunity or
problem. Initially, a feasibility study will be conducted to check the size of potential benefits
and evaluate in broad outline potential alternative solutions and their lifetime costs. At the
end of this phase, the company will decide whether to proceed with the project. If it does,
then a project team is formed and a project initiation document (PID) is raised.
This will include a vision and a business case for the project. The business case is an
important guide to decision-making throughout the project, and the vision encourages
motivation and congruent goals in the project team.
Phase 2 – Development of a proposed solution
The second stage of the project life cycle is the development of a proposed solution. All
proposals for the solution will be submitted and evaluated and the most appropriate
solution to satisfy the need will be selected.
Phase 3 – Implementation
The third stage of the project life cycle is the implementation of the proposed solution. This
phase is the actual performance of the project and will involve doing the detailed planning,
and then implementing that plan to accomplish the project objective.
The overall solution is subdivided into separate deliverables to be achieved at fixed points
(milestones) throughout this stage of the project. Achievement of these deliverables may
be linked to stage payments. The project’s objectives of functionality, quality, cost and time
are monitored regularly against each deliverable to ensure they are being met. Timely
appropriate action can then be taken if any slippage has occurred.
Phase 4 – Completion
The fourth stage of the project life cycle is the completion or closure of the project. When a
project closes, important tasks need to be carried out, such as confirmation that all
deliverables have been provided and accepted, and all payments have been made and
received. Project performance is evaluated and appraised in order to learn from the project
for future reference. Obtaining customer feedback is important in improving the quality of
future project provision. The original business case is also revisited to check whether any
subsequent actions are needed to ensure achievement of the anticipated benefits.
PROJECT MANAGEMENT PROCESSES
1. Initiating
Feasibility
The development of any new project requires careful consideration and planning. It will
consume large volumes of resources, both financial and non-financial, and is likely to have a
major effect on the way in which the organisation will operate.
Feasibility studies may be carried out on a number of potential strategies and the aim of
the study is to decide on which proposal to choose.
Technological - can it be
done?
Social - does it fit with
current operations?
Types of feasibility
Ecological - how does it
effect the environment?
Economic - is it worth
it?
Technical feasibility – can it be done?
There are a number of key aspects regarding technology which must be considered, for
example:
a) Is the technology available?
b) Is the technology tried and tested?
c) What performance do we require of the technology?
d) Is the technology suitable to satisfy the objective of the project effectively?
Social (operational) feasibility – does it fit with current operations?
It is becoming increasingly necessary to assess operational/social factors affecting
feasibility. These may include awareness of the social issues within a group or office (e.g.
introducing a computerised system), or larger social awareness regarding the effect of
projects or products on workers, employment or the environment. It is also important to
ensure that the projects fits with business goals.
Social considerations include:
a) Number of people required (during the project and after implementation).
b) Skills required – identify recruitment, training, redundancy.
Some of these issues can be directly costed (such as training costs). Others have less
tangible effects that must be documented in the feasibility report.
Ecological (environmental) feasibility – how does it affect the environment?
Ecological considerations may be driven by the understanding that customers would prefer
to purchase alternative products or services as they are more ecologically sound and less
harmful to the environment.
Ecological considerations include:
a) Effects on local community and what that might do to company image.
b) What pollution could be caused by the project.
Economic (financial) feasibility – is it worth it?
The project (proposed system) must provide a benefit to the organisation. Economic
feasibility will be assessed through a cost-benefit analysis. Cost-benefit analysis helps to
identify and evaluate the costs of the proposal over its anticipated life. The other side to
cost-benefit is the identification and evaluation of the benefits of the project over its life.
cost benefit
analysis
Benefit Costs
Capital
Tangible
costs
Revenue
Intangible
costs
Financial
costs
Costs:
Capital Costs – costs incurred in the acquisition of assets plus any additional costs of
installation and maintenance.
Revenue Costs – any costs other than for the purchase of assets. These costs are incurred
on a regular basis and include repairs and consumables.
Finance Costs – finance costs are usually incurred as interest charges. Sources of finance
include banks, shareholders, retained profit from the business and grants or subsidies from
the government.
PROJECT INITIATION DOCUMENT
Contents of
PID
Cost and
Purpose Scope Chain of
Deliverables times Objectives Stakeholders
statement statement command
estimates
2. Planning
Examples of
plans
Time Quality Resources contingency cost deliverables communications
During the planning stage, a number of separate detailed plans will be drawn
up. For example, separate plans for:
a) Time: The time plan lists all the activities and how long each is planned to take. This
includes the finish dates of each stage of the project life cycle, and the estimated
completion date of the whole project.
b) Quality: The quality plan includes identification of the project's customers, the key
outcomes each expects and the acceptance criteria that have been agreed with
them. This may include safety and security planning. It will also include an audit plan
for the project management process.
c) Resources: The resource plan checks peaks and troughs of workload to ensure the
human resources plan is feasible. It also lists all purchases required for the project.
d) Contingency: Contingency planning was mentioned earlier and includes deciding on
what additional activities, costs and time need to be added to the plan to ensure a
reliable budget and completion date. A risk register will identify contingency plans for
each of the key risks and allocates responsibility for monitoring each.
e) Cost: The cost plan uses a rate per hour for each activity in the time plan, plus cost of
purchases from the resource plan, plus contingency costs to create a budget for the
project. This will be phased over the project to provide a detailed cash flow forecast.
f) Communication: The communication plan identifies the key people in the project,
their likely concerns, messages needed, planned method of communication and who
will be responsible.
g) Deliverables: The deliverables plan will detail exactly what has been agreed as the
deliverables of the project. This must be agreed by the users and sponsors at the
outset of the project
The project manager and planning:
Planning for all three project constraints need to be done and a detailed project plan
needs to be prepared. This has no predefined format but it should include all the
important areas of the project.
Project time:
The schedule is the timetable for activities involved in achieving the project objective. The
project will have a finite date for completion, either set by the customer or negotiated and
agreed upon with the customer.
For example, planning a wedding will require organisation of all activities to occur at a
specific time and on a specific date.
Project cost:
The cost is the amount the customer agrees to pay for the final project or product. The
project cost is based on the budget, which includes a cost estimate of the resources that
will be used in the project. This will include salaries of the people working on the project,
project materials, equipment purchase or hire, subcontractors’ or consultants’ costs and
facilities costs.
Quality (customer satisfaction):
The objective of any project is to complete the project within the budget and by the agreed
date to the customers’ satisfaction and quality requirements. It is important to ensure that
prior to the project planning the project team has a clear understanding of the customer
specifications and requirements, that the customer is kept informed of project progress
throughout the project life, and that the plan includes progressive testing to ensure that
quality requirements are fully met. Quality in computer systems can be measured in the
number and type of errors (‘bugs’) it still contains, response times, fitness for purpose (i.e.
matches the business process it is intended to support) and so on.
Another important constraint is scope/functionality:
The scope of the project is all of the work that must be carried out to satisfy the project’s
objective. The customer will expect the work to be carried out to completion and that there
is nothing expected which is missing.
For example, when building a house, the project scope will include clearing the land,
building the house and landscaping, all within the agreed quality standards expected by the
customer. Leaving windows or walls unfinished, a hole in the roof, or a garden full of
rubble, will be unlikely to satisfy the customer! In computer systems, the scope is often
defined by all the functions that the system is expected to fulfil.
Project scope tends to be positively correlated with both cost and time, in that
increasing the number of tasks to be performed within the project will normally
lead to an increase in both the cost of the project and its overall duration.
Managing variations to scope is one of the most complex aspects of project management.
The manager must ensure that every time the customer asks for a change or addition to the
scope of the project, the customer is informed of (and ‘signs off’) the cost and time
consequences of that change. Such changes should also be fully recorded and documented
to avoid arguments about what changes were required and authorised.
3. Executing and controlling
Change needs to be controlled. If they are not controlled, the project may face the
following problems:
Change management process
Method for prioritising changes Authorisation for agreement of change recording of communication of
requested changes budget changes changes
must be
nice to have
done
Change process:
At the outset of the project a change management process must be agreed. It should
include the following:
a) Method for prioritising changes requested. Changes requested will range from:
• Must be done. Without these changes the project cannot succeed, to – Nice to
have. These are changes requests suggesting enhancements to the current
project plan. Not all changes of this nature are able to be incorporated into the
final project.
b) Authorisation for changes. It must be agreed who has the authority to agree to
changes. This may be set as a sliding scale whereby the project manager is able to
authorise small, low cost changes, but larger changes must be authorised at the
highest level, for example the project committee or the project sponsor.
c) Agreement of a change budget. It is likely that changes will result in additional cost
to the project. A change budget may be set up for this purpose to avoid the project
sponsor having to authorise every dollar of additional spend.
d) Recording of changes. A set procedure should be agreed for how all changes are to
be recorded and who will manage this procedure.
e) Communication of changes. The change management process must specify how
changes to the project will be communicated to all interested parties.
Configuration management
PROJECT CONTROL SYSTEM
Performance management
Project reports
Exception reports Progress report
Exception reports:
This is when everything is in accordance with the plan. Only exceptions are reported.
Progress reports:
Both formal and regular, these note what has happened in the report period and the
project status to date. It normally includes:
a) Status against plan in terms of cost, timetable, and scope.
b) Status and progress of resolving issues identified to date.
c) New issues.
Project meetings
Team meetings project progress review meeting other meetings
project problem meetings with
solving meetings external parties
4. Closing
After the project completion audit, it is important to aim at continuous improvement in
future projects. Organisations need to learn from their past projects and apply their
learning to future projects.
