MB0049 – Project Management - Set 2

Course MBA – 2^nd Semester

Subject: Project Management

Assignment MB0049 – Set2

Q.1 Providing adequate resource is key to productivity-Comment.

Concept of PMO is gaining ground in Project Management because enterprises need to optimize resources – especially knowledge and people – across many projects. Economies are achieved and customer satisfaction gained resulting in more profits and repeat contracts. The review of projects – their methodology and the important of interpersonal relations will help in achieving the productivity of the personnel.

Productivity at the junior level can be assumed and controlled only if all other supporting elements of business are well balanced. Higher productivity cannot be expected if they are not motivated. Through one of the mail point is

Adequate availability of resources; otherwise frustration sets in and commitment is lost;

Key elements of a Productivity Improvement Program:

Obtain Upper Management Support. Without top management support, experience shows a PIP likely will fail. The Chief Executive Officer should issue a clear, comprehensive policy statement. The statement should be communicated to everyone in the company. Top management also must be willing to allocate adequate resources to permit success.

2. Create New Organizational Components. A Steering Committee to oversee the PIP and Productivity Managers to implement it are essential. The Committee should be staffed by top departmental executives with the responsibilities of goal setting, guidance, advice, and general control. The Productivity Managers are responsible for the day-to-day activities of measurement and analysis. The responsibilities of all organizational components must be clear and well established.

3. Plan Systematically. Success doesn't just happen. Goals and objectives should be set, problems targeted and rank ordered, reporting and monitoring requirements developed, and feedback channels established.

4. Open Communications. Increasing productivity means changing the way things are done. Desired changes must be communicated. Communication should flow up and down the business organization. Through publications, meetings, and films, employees must be told what is going on and how they will benefit.

5. Involve Employees. This is a very broad element encompassing the quality of work life, worker motivation, training, worker attitudes, job enrichment, quality circles, incentive systems and much more. Studies show a characteristic of successful, growing businesses is that they develop a "corporate culture" where employees strongly identify with and are an important part of company life. This sense of belonging is not easy to engender. Through basic fairness, employee involvement, and equitable incentives, the corporate culture and productivity both can grow.

6. Measure and Analyze. This is the technical key to success for a PIP. Productivity must be defined, formulas and worksheets developed, sources of data identified, benchmark studies performed, and personnel assigned. Measuring productivity can be a highly complex task. The goal, however, is to keep it as simple as possible without distorting and depreciating the data. Measurement is so critical to success, a more detailed analysis is helpful.

Q.2 Compare the following:

a. Traditional Vs. Projectised Organization.

b. Bottom-up Vs. Top-down estimation

A. Traditional Vs. Projectised Organization.

Traditional organizations: These have the formal organisation structure, with departments, functions, sections having an hierarchy of managers and their assistant. All of them function on a continuous basis catering to a series of requirements issued by the planning department. An assembly of various units of their production forms a products and a variety of such products make up the business of the company. No one particular member or a department or a team is responsible for the completion of any particular product. Their creativity and innovation is particular respect of jobs. Most of them do not get exposed to other areas of operations in the organisation. They will become specialists and be insular.

Projectised organizations: These have teams comprising members who are responsible for completing one completely deliverable product. They will have all the resources required to do all jobs or operations to complete it. Most importantly, they have a time schedule within which all the elements of the projects have to be completed. It has been found that a sense of ‘ownership’ of the project motivates them for being creative, cooperate among themselves to achieve high productivity.

Traditional Organisations	Projectised Organisations
They have the formal organisation structure, with departments, functions, sections having a hierarchy of managers and their assistants.	They have teams comprising members who are responsible for completing one entire deliverable product.
All of the managers function on a continuous basis catering to a series of requirements issued by the planning department.	The teams will have all the resources required to finish the jobs.

An assembly of various units of their production forms a products and a variety of such products make up the business of the company.	They have a time schedule within which all the elements of the projects have to be completed.
No particular member or a department or a team is responsible for the completion of any particular product. Their creativity and innovation is in particular respect of their jobs.	There is greater accountability among team members and everyone is responsible for the delivery.
Most of the members do not get exposed to other areas of operations in the organisation. They become specialists and insular.	It is found that a sense of ‘ownership’ of the project motivates team members to be creative, cooperative among them to achieve high productivity.

B. Bottom-up Vs. Top-down estimation

Estimation Approaches There are two types of estimation approaches:

Bottom up approach

The bottom up approach consists of the following

• Project manager first divides the product under development into major modules
• Each module is subdivided into smaller units

• Project manager defines a standard for manufacturing and self-testing as

• Identify modules in the system and classify them as simple, medium or complex.

• As much as possible, use either the provided standard definitions or definitions from past projects

• If a project specific baseline exists, get the average build effort for simple/medium/complex (S/M/C) programs from the baseline.

• If a project specific baseline does not exist, use project type, technology, language and other attributes to look for similar projects in process database. Use data from these projects to define the build effort of S/M/C program.

• If no similar project exist in the process database and no project specific baseline exist refine the estimates based on project specific factors.

Top-Down Approach

The top down approach consists of the following

• Get the estimate of the total size of the product in function points

• Using the productivity data from the project specific capability baseline from the general process capability baseline, or from similar projects, fix the productivity level for the project

• Obtain the overall effort estimate from the productivity and size estimates. Use effort distribution data from the process capability baselines or similar projects to estimate the effort for the various phases. Refine the estimates taking project specific factors into consideration.

Q.3 List out the macro issues in project management and explain each.

Macro issues in project management

Evolving Key Success Factors (KSF) Upfront: In order to provide complete stability to fulfillment of goals, one needs to constantly evaluate from time to time , the consideration of what will constitute the success of completing a project and assessing its success before completion. The KSF should be evolved based on a basic consensus document (BCD). KSF will also provide an input to effective exit strategy (EES). Exit here does not mean exit from the project but from any of the drilled down elemental activities which may prove to be hurdles rather than contributors. Broad level of KSF should be available at the conceptual stage and should be firmed up and detailed out during the planning stage. The easiest way would be for the team to evaluate each step for chances of success on a scale of ten. KSF should be available to the management duly approved by the project manager before execution and control stages. KSF rides above normal consideration of time and cost – at the levels encompassing client

expectation and management perception – time and cost come into play as subservient to these major goals.

Empowerment Title (ET): ET reflects the relative importance of members of the organization at three levels:

• Team members empowered to work within limits of their respective allocated responsibilities – the major change from bureaucratic systems is an expectation from these members to innovate and contribute to time and cost.
• Group leaders are empowered additionally to actindependently towards client expectation and are also vested with some limited financial powers.
• Managers are empowered further to act independently but to maintain a scientific balance among time, cost, expectation and perception, apart from being a virtual advisor to the top management.

Partnering Decision Making (PDM): PDM is a substitute to monitoring and control. A senior with a better decision making process will work closely with the project managers as well as members to plan what best can be done to manage the future better from past experience. The key here is the active participation of members in the decision making process. The ownership is distributed among all irrespective of levels – the term equally should be a\voided here since ownership is not quantifiable. The right feeling of ownership is important. This step is most difficult since junior members have to respond and resist to being pushed through sheer innovation and performance – this is how future leaders would emerge. The PDM process is made scientific through:

1. Earned value management system (EVMS)
2. Budgeted cost of work scheduled (BCWS)
3. Budgeted cost of work performed (BCWP)
4. Actual cost of work performed (ACWP)

Management By Exception (MBE): “No news is good news” . If a member wants help he or she locates a source and proposed to the manager only if such help is not accessible for free. Similarly, a member should believe that a team leaders silence is a sign of approval and should not provoke comments through excessive seeking of opinions. In short leave people alone and let situation perform the demanding act. The bend limit of MBE can be evolved depending on the sensitivity of the nature and size of the project. MBE provides and facilitates better implementation of effectiveness of empowerment titles .MBE is more important since organizations are moving toward multi skilled functioning even at junior most levels.

Q.4 Describe the traits of a professional manager in details?

Traits of the professional manager:

The following traits enable a manager to be effective in his functioning. Endowed with these it will be easy to be effective. The top management will look for these in a person who they want to employ for project management.

• Leadership – These managers lead by exhibiting the characteristics of leadership. They know what they should do, know why they are doing it, know how to do it and have the courage and will to do it.They have the power of taking along with them others.

• People Relationships - Any leader without followers cannot be successful. They have excellent human relationship skills. The manager builds up his team based on the core values of sincerity, objectivity and dedication. He ensures that his subordinates get opportunities for growth based on performance. He makes them a part of the decision making process, thus ensuring cooperation and commitment during implementation. He delegates freely and supports them.

• Integrity - Highest levels of trust, fairness and honesty are expected while dealing with people both within an outside the organisation. This includes the customers, shareholders, dealers, employees, the government and society at large. They ensure that functioning is clean. Their transactions will be transparent. Ethics is something they practice diligently.

• Quality – The quality philosophy should not cover only the product quality, but every process that has gone into making it. Economy of words when instructions are given, acknowledging compliance, arriving on time, remembering the promises and above all a keen eye for details and patience tomake others know what they want are components of quality

• Customer Orientation - It is now recognized that every organized two sets of customers. Internal customers are people in the organisation – employees, directors, team members – any person who needs your services, whose needs of demands you satisfy. External customers – clients and all members of society we come in contact in connection with our business. They need our solutions for their problems. So, the manager’s thinking about any problem is – what can I do for him and all actions will be in that direction.

• Innovation and creativity - Professional managers think beyond the obvious. They exhibit a keenness to go behind a problem and attempt to find the root cause of the problem. They will draw from their experience from diverse fields, seek further information and consider all possible alternatives and come out with some new and unique solution. This happens when they have open minds. A saying goes the human mind is like a parachute, it is useful only when it is open. Such a work culture is very conducive for problem solving – which is the aim of all creativity. Their persistence will reward them. Such actions observed by their team members enthuse them and a spirit of adventure will bring about better solutions faster.

• Performance Management The professional manager not only ensures that his performance is at peak all times, but motivates his entire team to do it. This comes by appreciation and encouragement. If there any shortfalls he arranges for training them so that their performance improves. Thus the team members know that they are expected to perform, that they get help to do so and their effort is recognized. This is the simple path of performance management. The following seven step model will be useful:

• Objectives/Performance standards are set.
• These are communicated to the employees.
• Review/monitor the above.
• Check actual performance Vs. Standards set.
• Identify gaps.
• Jointly decide on corrective action, if needed.
• Reset objectives for next period

Objectives/Performance standards are set.

To mange any criterion, it is necessary to measure the factors that were responsible for ‘what is’. The quality of the input, their quantity and their intended usage. Then measures of the utilizationthe processes used, their suitability, and the difficulties faced in utilization and how they were resolved.

Then the outcomes – are they as they were expected. Performance closer or beyond expectation is the degree of quality. For every employee the level of achievement is set in terms of quantities and extent to which the performance approached the standard. This is the basis for evaluating performance.

These are communicated to the employees

This procedure ensures that they know what is expected of them and help them to adjust their activities in such a way as to meet them. This enables them to seek help, consult their colleagues or bosses, learn– so that they will meet the expectations. It is possible that some objectives cannot be met at all. The communication to his boss, may help in reallocating the job, so that there will be no hiccups at the end of the period

Review/monitor the above

Review helps in resetting the goals when they cannot be achieved for various reasons – shortage of resources, time etc. By monitoring, the shortfalls can be made up with the allocation of extra resources, or even diverting the operation.

Check actual performance Vs. Standards set

This is the evaluation phase. Comparison on every detail is made. Differences are recorded. Particular areas are chosen for improvement.

Identify gaps

Gaps mean the shortfall in performance standards. The immediate supervisor is also involved. The extent to which they affect the functions of the job itself are identified

Jointly decide on corrective action, if needed

There is a possibility that the performance has exceeded the set standards. But if performance is not good the reasons and extent having been identified, the course of action for effecting corrections are decided. Giving extra responsibilities, training, relocation is considered.

Reset objectives for next period

The targets are revised either upward or downward depending on the conclusion of the appraisal process.

• Identification with the organisation A sense of pride and belonging goes with the “ownership” of the job, the project, team members and organisation. This is brought about by the culture and communication system in the organisation. Information sharing brings in trust and promotes belongingness. The tendency seen is that most managers strongly identify with their own departments, units or divisions and they lack a sense of organisation.

In the light of increased competition and ever changing strategies to develop business orientation, which in effect means every manager should be aware of the company’s plans, products and policies. An obvious corollary to this is that the organization’s communication policy too should be conducive to such information sharing. Today, many organizations are using interventions such as team building, survey feedback, and other activities, to ensure that employees build up a strong sense of identity and pride in the organisation they work for.

• Empowering employees: The professional manager should possess the ability to empower his employees down the line. Many managers are not even ready to delegate their authority to subordinates and end up only delegating responsibility. Empowerment is the process by which employees are encouraged to take decisions pertaining to their area of work. Empowerment ensures execution of his duties. This leads employees developing a sense of pride in their jobs. But managers often hesitate to empower their subordinates as they feel insecure and show a sense of uncertainty. The professional manager practices empowerment and encourages employees to grow and develop in their positions.

• Coping with changes: It is often said – ‘The only constant in this world is change’. A professional manager has the ability and capacity to cope with change. He accepts the fact that change is inevitable and is ready to implement change at the workplace. To implement change successfully, it is essential that employees are involved in the implementation of change. Further the positive and negative consequences of change need to be discussed and understood before implementation. Thus a professional manager has the attitude to accept change as a way of life and takes it in his stride

Q.5 List the major participants of project review process. Also highlight roles and responsibilities of each.

The following is a list of key participants and their responsibilities in the Project Management Review Process.

• Chief Information Officer (CIO) – conduct project senior management reviews, monitor project progress, facilitate resolution of related project issues.

• Chief Financial Officer – Approve investments in corporate / major information systems projects.

• Systems Owners – develop or approve project deliverable, present project status, facilitate resolution of project issues.

• Program Managers – develop or approve project deliverables, approve changes to project scope, ensure project reporting, present project status, conduct project management reviews, manage project funding and authorize work activities.

• Project Managers - performs day to day project management, develop project deliverables, prepare project management review and senior management review presentations, present project status, manage resolution of project issues.

• Corporate management Investment process Program staff – Evaluate major information systems which receive CMIP funding and prepare report to the top.

• Program Manager – review and comment on project deliverables and work products, schedule and support the review meetings, provide support to systems owners and project managers, advise the CIO and associate CIO’s.

• Key project stake holders and other invited participants – attend the review meeting, participate in discussion, provide input as appropriate.

Q.6 ABC organization has been in software business since last 20 years. The senior management feels that although they are making profits, but the profit on an average is the same each year. They decide that they would make some additions to the business and decided to go ahead with development of some high technology for better profits. Can you suggest some guidelines, which the management should follow in this venture?

Ans. Every business aims to commence its activities in the foreign market. The foreign market provides with both opportunities and risks. Therefore some prefer to enter in to strategic relationships and one such is the Joint Ventures.

A Joint Venture is an entity formed between two or more parties to undertake economic activity together. The JV parties agree to create, for a finite time, a new entity and new assets by contributing equity. They then share in the revenues, expenses, and assets and the control of the enterprise. Therefore the basic characteristics of joint venture can be summed up as:

1) Based on a Contractual Agreement.

2) Specific limited purpose and duration.

3) Joint Property Interest

4) Common Financial and Intangible goals and objectives.

5) Shared profits, losses, management and control.

Reasons for setting Joint Ventures abroad

The reasons for setting up joint ventures can be contributed to three main factors and they are:

1. Internal Reasons.

2. Competitive Goals.

3. Strategic Goals.

1. The Internal reasons are as follows:

• Building on company’s strength.
• Spreading on costs and risks.
• Improving access to financial resources.
• Economies of scale and advantages of size.
• Access to new technologies and customers.
• Access to innovative managerial practices.

2. The Competitive Goals are as follows:

• Influencing structural evolution of the industry.
• Defensive response to blurring industry boundaries.
• Creation of stronger competitive units.
• Speed to market.
• Improved Agility.

3. The Strategic Goals are as follows:

• Diversification
• Synergies.
• Transfer of technology/skill

Indian Joint Ventures Abroad

India started opening its economy a decade ago to integrate with global economy. The business ventures abroad are not a new phenomenon in the independent India. The initiatives were taken way back in the 1960s with the first ventures of Birlas in Ethopia in the year 1964. However, it has assumed specific significance after the Indian government started economic reforms in the year 1991, making globalization of Indian business an integral part of economic reforms.

Significance of Indian Joint Ventures Abroad

International trade is considered to be imperative for economic development. Economic borders of various countries have been opened on this premise under the aegis of world trade organization. In countries, whose economy has moved from the level of necessity to comforts and luxuries levels, there are increasing pressures for newer, better and superior products with consistent quality, high reliability and attractive finish etc. Further, with the labour becoming increasingly costly, the firms have to go for development of capital intensive technologies. The huge investments in new product and technology development demands higher levels of production to ensure operations of the firms above the breakeven point. The scale of operations required over a period of time reaches a level that is well above the entire domestic demand in most of the developed countries, which generally have small population.

The firms thus face the problem of searching new markets and cheaper sources of raw material, labour and other resources. Their growth and development, thus, depends upon internationalization of the business.

Advantages and Disadvantages

A business while deciding upon whether to go for a joint venture should make a thorough analysis on its business goals.

Advantages

• Financial resources can be shared.
• Allows for Investor diversification.
• Reduces local Friction.
• Reduce Fixed costs per product.
• Direct management of business activities.
• Competitive strengths of two parties can be combined.
• A local JV partner knows the market.
• Economic incentives add value to JVs.

Disadvantages

• JV profits are shared.
• Shared technologies can be used beyond JV.
• Local Management of a JV can be unknown

Broadly there are two schemes under which an Indian Party can set up a JV abroad, namely the Automatic Route and the Normal Route/Approval Route.

Automatic Route

Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for setting up a JV abroad (in case of investment in the financial sector, however, prior approval is required from the concerned regulatory authority both in India and abroad).

The criteria for direct investment under the Automatic Route are as under:

• The total µfinancial commitment of the Indian Party in JVs in any country other than Nepal, Bhutan and Pakistan is up to 100% of its net worth and the investment is in a lawful activity permitted by the host country
• The Indian Party is not on the Reserve Banks exporters caution list / list of defaulters to the banking system published/ circulated by the Credit Information Bureau of India Ltd. (CIBIL)/RBI or under investigation by the Enforcement Directorate or any investigative agency or regulatory authority;
• The Indian Party routes all the transactions relating to the investment in a JV through only one branch of an authorized dealer to be designated by it.

Normal Route

Proposals not covered by the conditions under the automatic route require the prior clearance of the Reserve Bank for which a specific application in form ODI with the documents prescribed therein is required to be made to RBI.

Requests under the normal route are considered by taking into account inter alias the prima facie viability of the proposal, business track record of the promoters, experience and expertise of the promoters, benefits to the country, etc