U1: OVERVIEW OF PROJECT

MANAGEMENT
 INTRODUCTION TO PROJECT MANAGEMENT
• Project management is a set of skills and techniques used to plan, organize, and
execute projects effectively and efficiently. For successful project management, one
must have a clear understanding of the project goals, scope, timelines, and budget.

• Project management requires developing a project plan, which outlines the tasks to
be completed, the resources needed, and the timelines for each task. This plan will
also need to identify risks and potential issues that may arise during the project and
include contingency plans to mitigate them.

• During the project, one needs to manage the team, track progress, and
communicate regularly with stakeholders to ensure that the project is on track and
meeting expectations. The project plan must also accommodate changes and
unforeseen events.
Let’s understand this with the help of an example:
• Suppose you are planning a birthday party for a friend. This simple task can
also be broken down in terms of a project. The key steps you might take to
manage this project are as follows:
• Define the project:
• In this case, the project is to plan and execute a birthday party for your friend.
• Develop a project plan:
• This plan should outline all the tasks you need to complete, such as selecting a
venue, creating a guest list, ordering food and drinks, and decorating the
space. You will also need to set timelines for each task and assign
responsibilities to team members who might join you on the plan.
• Monitor progress:
• As you work through the project plan, you should regularly monitor progress
and adjust the plan as needed. For example, if you realize that the venue
backed out you need to adjust the timeline for finding a new venue to
complete the task.
• Manage the team:
• If you have other people helping you with the party planning, you will need
to manage the team to ensure that everyone is on the same page and
working toward the same goals.
• Communicate with stakeholders:
• You should communicate regularly with your friend to ensure that the party
is meeting their expectations. You may also need to communicate with
vendors or other stakeholders (such as other guests) to ensure that
everything is running smoothly.
• Evaluate the results:

• After the party is over, you should evaluate how it went and identify areas
for improvement. For example, you may realize that you could have ordered
more food or that the venue was too crowded or that it must have been
better if you had shared google map location with the guests.

• By using these project management techniques, you can successfully plan

and execute a birthday party that meets your friend's expectations and runs
smoothly. The same basic principles can be applied to larger-scale projects
in a business setting, such as launching a new product or opening a new
office location.
 IMPORTANCE OF PROJECT MANAGEMENT
• Develops essential skills:
• Project management helps develop essential skills such as planning,
organization, communication, leadership, problem-solving, and decision-
making. These skills are crucial for students to excel in their future careers
and become effective leaders in the workplace.

• Promotes efficiency and effectiveness:

• Project management ensures that projects are completed efficiently and
effectively. By following a structured process, project managers can identify
potential problems early on and develop strategies to overcome them. This
approach helps reduce waste, minimize risk, and increase productivity.
• Enhances teamwork:
• Project management emphasizes the importance of teamwork and collaboration.
By working together towards a common goal, team members can leverage their
strengths, share knowledge and expertise, and develop new skills. This
collaborative approach helps foster a positive work culture and strengthens
relationships within the team.
• Improves decision-making:
• Project management provides students with a structured approach to decision-
making. By considering different options and evaluating the potential outcomes,
project managers can make informed decisions that align with the project goals
and objectives.
• Increases employability:
• Project management is a highly sought-after skill in today's job market. Employers
are looking for candidates with strong project management skills who can lead
projects, manage teams, and deliver results. By gaining experience in project
management, management students can enhance their employability and increase
their chances of securing a job in their chosen field.
 CONCEPTS AND ATTRIBUTES OF A PROJECT
• A project is a temporary endeavor that is designed to achieve specific goals
and objectives within a defined timeline, budget, and scope. It involves a
unique set of activities that are planned and executed to achieve a desired
outcome. Some key concepts and attributes of a project are as follows:
• Goals and Objectives:
• Projects are designed to achieve specific goals and objectives. These goals and
objectives provide a clear direction for the project team and serve as a
benchmark for measuring success. The goals and objectives must be clearly
defined, measurable, and achievable within the given constraints.
• Scope:
• The scope of a project defines the boundaries of the project and identifies
what is included and excluded from the project. A well-defined scope helps
ensure that the project team stays focused on delivering the desired outcome.
• Timeline:
• Projects have a defined timeline or schedule. The timeline outlines the key
milestones, deadlines, and deliverables that must be achieved within a
specific timeframe. It helps the project team to stay on track and deliver the
project on time.

• Budget:
• Projects have a budget or cost associated with them. The budget outlines the
resources required to complete the project, including labor, materials,
equipment, and other expenses. It helps to ensure that the project is
completed within the allocated resources.

• Risk:
• Projects are associated with risk. Risk can be defined as any event or
circumstance that can impact the project outcome. Identifying and managing
risk is essential to ensure that the project is completed successfully.
• Stakeholders:
• Projects involve multiple stakeholders, including the project team, sponsors,
customers, and other interested parties. It is important to identify the
stakeholders and their requirements and manage their expectations
throughout the project.
• Quality:
• Projects must adhere to certain quality standards. The quality of the project is
defined by the requirements and expectations of the stakeholders. Quality
Overview of Project Management 5
• assurance and control processes must be put in place to ensure that the
project meets the required standards.
• Change:
• Projects are subject to change. Changes can occur due to various factors such
as changes in requirements, scope, or external factors. It is important to
manage changes effectively to ensure that the project stays on track.
 PROJECT LIFECYCLE
• The project life cycle is a series of phases that a project goes through from its
initiation to its completion. The life cycle is divided into various phases, each
with its own set of deliverables, activities, and milestones. Understanding the
project life cycle is essential for effective project management.
• The different phases of product life cycle are as follows:

• Initiation:
• The initiation phase marks the start of the project. This is the phase where the
project is defined, its goals and objectives are established, and its feasibility is
assessed. During this phase, the project team is identified, stakeholders are
identified, and the project charter is developed.

• Planning:
• The planning phase is where the project plan is developed. This includes
identifying the scope of the project, creating a work breakdown structure,
identifying resources, developing a schedule, and defining the budget. The
project team also identifies and analyzes potential risks during this phase and
comes up with risk management strategies.
• Execution:
• The execution phase is where the project work is performed. This includes
implementing the project plan, managing resources, and monitoring and controlling
the project work. The project team also communicates progress to stakeholders and
makes necessary adjustments to keep the project on track.

• Monitoring and Control:

• The monitoring and control phase is where the project team monitors the project's
progress against the plan, identifies variances, and takes corrective action. This
includes tracking progress, managing change requests, and managing risk.

• Closure:
• The closure phase marks the end of the project. During this phase, the project team
completes all the remaining tasks, obtains final approval from stakeholders, and
closes the project. The team also conducts a final review to identify the lessons
learned from the project.
 STAKEHOLDERS
• Stakeholders are individuals or groups who have an interest or stake in the
outcome of a project. They can affect or be affected by the project's activities,
decisions, and results. Effective stakeholder management is essential for project
success.
• There are multiple stakeholders involved in each project. Some of the common
stakeholders involved in project management are as follows:
• Project Sponsor:
• The project sponsor is the person or group who initiates the project and provides
the resources and support required for the project's success. They are usually
senior executives or managers within the organization.
• Project Manager:
• The project manager is responsible for managing the project and ensuring that it
meets its objectives. They are accountable for the project's success or failure.
• Project Team:
• The project team is responsible for executing the project's activities and
delivering the project's outputs. They may include individuals from different
departments or functions within the organization or external consultants.
• Customers:
• Customers are the people or organizations who will use or benefit from the
project's outputs. They may be internal or external to the organization.
• Suppliers:
• Suppliers are the people or organizations who provide the resources, materials,
or services required for the project's success. They may include vendors,
contractors, or service providers.
• Regulators:
• Regulators are the government or regulatory bodies that have an interest in the
project's outcomes. They may set standards or guidelines that the project must
adhere to.
 STAKEHOLDER MANAGEMENT
• Effective stakeholder management involves identifying the stakeholders,
understanding their interests, expectations, and requirements, and engaging
them throughout the project's lifecycle. It is essential for managing project
risks, managing change, and ensuring successful completion of the project.

• Some of the ways to manage stakeholders are as follows:

• Identify Stakeholders:
• Identify all stakeholders who are involved or affected by the project. These may
include project sponsors, team members, customers, suppliers, regulators, and
the community. It's essential to have a clear understanding of their interests,
expectations, and requirements.
• Prioritize Stakeholders:
• Prioritize stakeholders based on their level of influence, interest, and power. This
can help you determine the level of engagement and communication required for
each stakeholder.
• Communicate Effectively:
• Develop a communication plan to keep stakeholders informed of project progress,
changes, risks, and issues. The communication plan should outline the stakeholders'
communication needs, frequency, mode of communication, and the information to
be shared. Project Management 8
• Manage Expectations:
• Ensure that stakeholder expectations are aligned with project goals, deliverables,
and timelines. Manage expectations by setting realistic goals, providing regular
updates, and addressing concerns promptly.
• Engage Stakeholders:
• Engage stakeholders by involving them in the project's planning, decision-making,
and review processes. This can help build support and commitment to the project.
• Resolve Conflicts:
• Identify and resolve conflicts among stakeholders promptly. Addressing
conflicts in a timely and effective manner can help minimize their impact on
the project's success.

• Monitor and Evaluate:

• Monitor stakeholder engagement and satisfaction throughout the project
lifecycle. Evaluate the effectiveness of stakeholder management strategies
and adjust them as needed.

• Thus, by identifying, prioritizing, communicating, managing expectations,

engaging stakeholders, resolving conflicts, and monitoring and evaluating
stakeholder engagement, project managers can achieve project goals and
outcomes while building strong relationships with stakeholders.
 PROJECT ORGANIZATION
• Project organization refers to the specific structure, roles, and
responsibilities assigned to individuals and teams involved in a project.
• Let's understand this with the help of an example. Suppose a large
manufacturing company wants to launch a new product line. To do so, they
will need to create a project team with the necessary skills and resources to
manage the project from start to finish. The project organization structure
may look something like this:
• Project Sponsor:
• This person is typically a senior executive who champions the project and
provides the necessary resources and support to the project team. They
ensure that the project aligns with the company's strategic goals and
objectives.
• Project Manager:
• This person is responsible for leading the project team, developing and
executing the project plan, managing risks and issues, and ensuring the project
is delivered on time, within budget, and to the required quality standards.
• Project Team:
• This group of individuals are responsible for executing the project plan and
delivering the project's outputs. They may include subject matter experts,
designers, engineers, marketers, and other specialists.
• Steering Committee:
• This group of senior executives provides oversight and guidance to the project
manager and project team. They review project progress, provide direction,
and make key decisions.
• Stakeholders:
• These are individuals or groups who are affected by the project's outcomes.
They may include customers, suppliers, regulators, and employees.
• In this example, the project organization is designed to ensure that the project
is aligned with the company's strategic goals, and the right people with the
necessary skills and resources are involved.
• The project sponsor provides the necessary resources and support to the
project team, while the project manager leads and manages the team.
• The steering committee provides oversight and guidance, while stakeholders
are kept informed and engaged throughout the project lifecycle.
 Types of Project Organization
• There are three main types of project organization structures:

• Functional Organization:
• In this type of project organization, the project team members are drawn
from different functional areas of the organization, such as engineering,
marketing, and finance. Each team member reports to their respective
functional manager, and the project manager has limited authority. The
functional manager is responsible for the team member's performance, and
the project manager is responsible for coordinating and integrating the
team's work. This structure is often used in organizations with a stable and
routine project environment.
• Projectized Organization:
• In this type of project organization, the project team members are organized into a
separate project team for each project. Each team member reports directly to the
project manager, who has complete authority and control over the project. The
project manager is responsible for managing the project budget, schedule, and
resources. This structure is often used in organizations where project work is the
primary business function.

• Matrix Organization:
• In this type of project organization, the project team members are drawn from
different functional areas of the organization, and each team member has two
reporting lines – to their functional manager and to the project manager. The project
manager has moderate authority, and the functional manager has partial authority.
This structure combines the strengths of functional and projectized organizations,
allowing organizations to balance resources and expertise while maintaining
flexibility. This structure is often used in organizations where projects are critical to
the business but not the primary business function.
 WBS
• Work Breakdown Structure (WBS) is a hierarchical decomposition of project
tasks, deliverables, and work elements that organizes and defines the total
scope of the project. It is a critical tool in project management, used to
break down the project into smaller, more manageable components, and to
establish a framework for organizing and tracking project tasks.

• The WBS typically starts with the main project deliverable, and then breaks
it down into smaller, more manageable components or work packages.
These work packages can then be further broken down into smaller, more
specific tasks, which can be assigned to individual team members for
execution. The WBS should be developed in collaboration with the project
team and stakeholders to ensure that all key project elements are included
and that everyone is clear on their responsibilities.
• Benefits of using a WBS in project management include:
• Improved project planning:
• The WBS allows project managers to better plan, estimate, and allocate resources
by breaking the project into smaller, more manageable components.
• Better communication:
• The WBS provides a clear and structured way of communicating project tasks and
responsibilities to team members, stakeholders, and other project participants.
• Enhanced project tracking and monitoring:
• The WBS provides a framework for tracking progress, monitoring budgets, and
identifying potential project risks and issues.
• Increased stakeholder engagement:
• The WBS allows project stakeholders to see the project's overall structure and
understand how their contributions fit into the project as a whole.
• Overall, the WBS is an essential tool for project managers to ensure that the project
is well-planned, well-executed, and achieves its objectives on time and within
budget.
• Let us understand this with the help of an example of a breakdown of a
marketing campaign.

• The work breakdown for a certain marketing campaign can be as follows:

• Campaign Planning
• Objective Setting
• Target Audience Identification
• Campaign Strategy Development

• Creative Development
• Concept Development
• Creative Execution
• Asset Creation (graphics, videos, copy)
• Campaign Execution
• Media Planning and Buying
• Creative Deployment
• Campaign Tracking and Optimization

• Reporting and Analysis

• Metrics Tracking
• ROI Calculation
• Post-Campaign Analysis

• This structure can vary depending on the type and the complexity of the
project. However, the key is to break down the project into smaller,
manageable components that can be executed and tracked effectively
 SCOPE AND PRIORITIES
• Scope and priorities are two critical elements in project management that help
ensure the success of a project.
• Scope:
• The scope of a project defines the boundaries of what will be delivered and what
won't be delivered. It is a statement of the project's objectives, deliverables, and
the work required to achieve those objectives. The scope outlines what is included
in the project, and also what is not included.
• Defining the scope of a project is critical to ensure that all stakeholders have a clear
understanding of what the project will deliver. This clarity is essential in managing
expectations and avoiding scope creep, where additional work is added to the
project without proper evaluation of its impact on budget, timeline, and resources.
A well-defined scope helps in developing realistic project plans, identifying potential
risks and constraints, and allocating resources effectively.
• Priorities:

• Priorities are the relative importance of project objectives, tasks, and

deliverables. Prioritization is the process of ranking project tasks based on
their level of importance or urgency. Priorities are determined based on the
project's goals and objectives, stakeholder needs, and available resources.

• Setting priorities helps project managers to focus on the most critical and
high-impact tasks, which improves project outcomes. Prioritization helps in
effective resource allocation, time management, and risk management. It
also helps in avoiding delays and bottlenecks, as tasks are completed in order
of importance.
• Setting scope and priorities helps in effective allocation of resources,
developing realistic project plans, improved communication with the
stakeholders and manages risk associated with the project.
 PROJECT IDENTIFICATION
• Project identification is the first step in the project management process. It involves
identifying potential projects that align with an organization's goals and objectives,
evaluating them, and selecting the best project(s) to pursue. The goal of project
identification is to determine whether a project is worth pursuing and whether it has
the potential to provide a return on investment.
• The steps involved in project identification are as follows:
• Idea generation:
• The first step in project identification is to generate ideas for potential projects. Ideas
can come from various sources, including customers, employees, management, and
stakeholders. Brainstorming sessions and market research can also help in generating
ideas.
• Screening:
• After generating project ideas, the next step is to screen them. The screening process
involves evaluating the ideas against a set of criteria, such as feasibility, market
potential, and alignment with organizational goals. The purpose of screening is to
eliminate ideas that are not feasible or do not align with organizational goals.
• Feasibility study:
• Once the ideas have been screened, the next step is to conduct a feasibility
study on the remaining ideas. The feasibility study helps in determining whether
the project is technically feasible, financially viable, and meets other criteria
such as legal and regulatory compliance.
• Project selection:
• Based on the results of the feasibility study, the next step is to select the best
project(s) to pursue. The selection process involves evaluating the potential
projects against the organization's goals, objectives, and available resources
• Project charter:
• After selecting a project, the next step is to develop a project charter. A project
charter outlines the project's objectives, scope, timelines, budgets, resources,
and stakeholders. The project charter helps in providing a clear direction and
framework for the project.
MARKET FEASIBILITY WITH MOVING AVERAGE AND
EXPONENTIAL SMOOTHING METHODS
• Market feasibility is a critical aspect of project identification and evaluation.
Two commonly used methods to analyze market feasibility are Moving
Average and Exponential Smoothing.

• Moving Average Method:

• Moving Average is a statistical method used to identify trends in data. In
market feasibility analysis, the moving average method involves calculating
the average of a set of data points over a specific period. For example, if we
want to analyze market trends over the last 12 months, we would take the
sum of the sales for the past 12 months and divide it by 12 to get the
moving average.
• The moving average method helps in identifying trends in the market, including
changes in demand or supply. By analyzing the moving average, we can
determine whether the market is growing, declining or stagnant. We can also
identify seasonal trends in the market.

• Let us understand this with the help of an example:

• Let's say a company wants to analyze the market demand for a product over the
past 6 months. The sales data for the past 6 months are as follows:
• Month 1: 100 units
• Month 2: 120 units
• Month 3: 110 units
• Month 4: 130 units
• Month 5: 140 units
• Month 6: 150 units
• To calculate the moving average, we would add up the sales data for the past
6 months and divide by 6:

• Moving Average = (100+120+140+130+110+150)/6 = 125.

• The moving average for the past 6 months is 125 units.

• This indicates that the market demand is relatively stable, and there is no
significant increase or decrease in demand.
Exponential Smoothing Method:
• Exponential Smoothing is another statistical method used to analyze market
feasibility. This method involves forecasting future sales based on past sales
data. The method works by assigning different weights to different data points,
with more weight assigned to recent data points.
• The exponential smoothing method helps in identifying changes in the market
and forecasting future sales. By analyzing the exponential smoothing curve,
we can determine whether the market is growing, declining, or stagnant. We
can also forecast future sales based on the trend identified in the data.
• Let's say a company wants to forecast future sales for a product using
exponential smoothing. The sales data for the past 6 months are as follows:
• Month 1: 100 units
• Month 2: 120 units
• Month 3: 110 units
• Month 4: 130 units
• Month 5: 140 units
• Month 6: 150 units
• To forecast future sales using exponential smoothing, we would assign different
weights to each data point, with more weight assigned to recent data points.
For example, we could use a smoothing factor of 0.3, which means that 30% of
the weight is assigned to the most recent data point, and 70% of the weight is
assigned to the previous forecast.
• Using this smoothing factor, we can forecast future sales as follows:
• Forecast for Month 7 = (0.3 x 150) + (0.7 x 140) = 143 units
• Forecast for Month 8 = (0.3 x 143) + (0.7 x 150) = 147 units
• Forecast for Month 9 = (0.3 x 147) + (0.7 x 143) = 144 units
• The exponential smoothing method helps in identifying changes in the market
and forecasting future sales. In this example, we can see that the forecasted
sales are relatively stable, indicating that the market demand is steady
GOVERNMENT POLICY TO LOCATION

The Indian government has formulated several policies to promote project

management and to guide the location of projects in the country. Some of the key
policies are as follows:

National Project Management Policy (NPMP):

The NPMP aims to provide a framework for effective project management across
various sectors. The policy sets out guidelines for project management, including
project planning, implementation, monitoring, and evaluation.
• Industrial Location Policy:
• The Industrial Location Policy aims to promote balanced regional development
by encouraging industries to set up in backward regions. The policy offers
incentives such as tax holidays, capital subsidies, and interest subsidies to
industries that set up in these regions.

• Special Economic Zones (SEZs):

• The government has set up SEZs to promote exports and attract foreign
investment. SEZs offer various incentives such as tax holidays, duty-free
imports, and relaxed labour laws to companies that set up operations in these
zones.
• National Industrial Corridor Development Programme (NICDP):
• The NICDP aims to promote industrial development by creating industrial
corridors across the country. These corridors will have world-class
infrastructure and offer various incentives to attract industries.

• Make in India:
• The Make in India initiative aims to promote manufacturing in India and
increase the share of manufacturing in the GDP. The initiative offers various
incentives to companies that invest in manufacturing in India.

• Environmental Regulations:
• The government has various environmental regulations that companies must
comply with when setting up a project. These regulations aim to protect the
environment and ensure sustainable development.
• These policies aim to promote industrial development while ensuring
sustainable development and balanced regional growth.
• LEGAL ASPECTS IN PROJECT MANAGEMENT
• In India, project managers need to be aware of the legal aspects that apply to their
projects. Some of the legal aspects of project management in India are as follows:
• Contracts and agreements:
• Project managers need to ensure that they have proper contracts and agreements in
place with stakeholders such as clients, vendors, and contractors. These contracts
should comply with the Indian Contract Act, 1872, and should clearly define the
scope of work, timelines, and responsibilities of each party, as well as provisions for
dispute resolution and breach of contract.
• Intellectual property:
• Project managers need to be aware of the various laws related to intellectual
property in India, including the Patents Act, 1970, the Trademarks Act, 1999, and the
Copyright Act, 1957. They need to ensure that any intellectual property created
during the project is properly protected and that they have the necessary licenses
and permissions to use any intellectual property owned by others.
• Labour laws:
• Project managers need to comply with the various labour laws in India, including the
Minimum Wages Act, 1948, the Employees Provident Fund and Miscellaneous
Provisions Act, 1952, and the Payment of Bonus Act, 1965. They need to ensure that
their employees are provided with appropriate wages, benefits, and working
conditions.
• Environmental regulations:
• Project managers need to comply with environmental regulations in India to ensure
that their projects do not have a negative impact on the environment. This may involve
obtaining environmental clearances from the Ministry of Environment, Forest and
Climate Change, conducting environmental impact assessments, and implementing
measures to mitigate any environmental impact.
• Taxation laws:
• Project managers need to be aware of the various taxation laws in India, including the
Income Tax Act, 1961, the Goods and Services Tax (GST) Act, 2017, and the Customs Act,
1962.
• Data privacy laws:
• Project managers need to comply with data privacy laws in India, including the
Information Technology Act, 2000, and the Personal Data Protection Bill, 2019. They
need to ensure that they obtain consent from
 PROJECT PLANNING MOD2
• INTRODUCTION TO NETWORK DIAGRAMS
• Network diagrams provide a way to visually depict the interrelationships and
dependencies between various activities that constitute a project. In order to
ensure effective oversight and control, it is crucial to break down a project into
smaller tasks. The fundamental idea is that completing each task in a timely
manner should result in the timely completion of the project as a whole.
• Activity:
• In project management, an activity refers to a self-contained unit of work that
requires a specific amount of time and resources to complete. It is the smallest
element of productive effort that can be planned, scheduled, and monitored.
Typically, activities are depicted as arrows in a network diagram and are labeled
with activity codes and estimated durations.
• There are four types of activities in a network:
• 1. Predecessor activity: An activity that must be completed before another
activity can begin.
• 2. Successor activity: An activity that cannot begin until one or more other
activities have been completed but immediately follows them.
• 3. Concurrent activity: An activity that can be carried out at the same time as
one or more other activities. It may be a predecessor or successor to an
event.
• 4. Dummy activity: A dummy activity does not require any resources and is
used solely to represent technological dependencies in the network. It is used
in the network in the following cases:

• a) To differentiate between activities with the same start and end points.
• b) To maintain proper precedence relationships between activities that are
not linked by events.
• Event:
• In project management, an event marks the beginning or end of an
activity and occurs at a specific point in time. Unlike activities, events are
not self-contained work elements.
• Fig 2.1
• Events are represented by small circles. There are three types of events:
• Merge Event:
• This type of event occurs when two or more activities start from the
same event.
• Burst Event:
• This event occurs when more than one activity ends at the same event.
Merge & Burst Event:
This type of event acts as both a merge and burst event. It receives multiple activities and also sends out
multiple activities
When creating a network diagram, it is important to adhere to certain conventions.
The diagram comprises of a sequence of circles that represent events and arrows
that represent activities. The length and direction of the arrows do not inherently
signify anything. Events are usually numbered sequentially as 1, 2, 3, and so on,
while activities are identified using codes like A, B, C, etc.

To maintain consistency, the number of the head event for any activity should
always be greater than that of the corresponding tail event. The arrows are
generally directed from left to right to indicate the passage of time in a broad
sense. It is advisable to minimize the crossing of arrows to ensure clarity and
prevent confusion.

Furthermore, it is recommended to depict the beginning and end of the project

with single events. Additionally, the use of dummy activities should be minimized
whenever possible.
AOA & AON DIAGRAMS
AOA and AON are both project management
techniques used to represent and analyze the tasks
involved in a project.

AOA stands for "Activity on Arrow," which is a method

of representing project tasks as arrows (or lines) on a
network diagram. Each arrow represents an activity or
task, and the length of the arrow represents the
duration of the task. AOA also uses nodes or circles to
represent the starting and ending points of each
activity.
• AON stands for "Activity on Node," which is another method of
representing project tasks as nodes (or boxes) on a network diagram.
Each node represents an activity or task, and the arrows connecting
the nodes represent the dependencies between tasks. AON also uses
arrows to represent the flow of tasks and the duration of each task.

Both AOA and AON are commonly used in project management to

help plan, schedule, and manage projects. They can help identify
critical paths, manage resources, and track progress. The choice
between AOA and AON often depends on the specific needs of the
project and the preferences of the project manager.
• In the AOA diagram, circles represent events, and arrows represent activities.
• In the AON diagram, circles represent activities, and arrows represent the
dependencies between them. Both AOA and AON diagrams are useful tools for
project management, and one of them can be used based on the specific need of
the project.

• Rules for constructing AOA network

• When constructing an AOA network, the following rules must be followed:
• ● Activities are represented by arrows and events by circles in the network
diagram. The length of an arrow is not significant.
• ● Each activity must be represented by a single arrow that starts and ends in an
event circle. The tail of an arrow indicates the start, and the head indicates the
completion of the work.
• ● The direction of an arrow represents the direction of workflow. The usual
convention is to depict the workflow from left to right.
• All networks are constructed based on the principle of dependency.
• ● An event cannot occur until all incoming activities into it have been
completed.
• ● An activity cannot start until all preceding activities have been completed.
• ● No set of activities can form a circular loop.
• To reflect the flow of a logically constructed network, each event is assigned a
number, indicated by a sequence of numbers inside the circle. D.R. Fulkerson's
rule is used to determine the numbering sequence.
• To apply this rule, start by identifying the initial event that has all outgoing arrows
and no incoming arrows. Then, delete all arrows emerging from the numbered
events and continue this process until a terminal event is reached. The steps
involved are:
• ● Ensure event numbers are unique.
• ● Number events sequentially from left to right.
• ● The initial event is numbered as 1.
• ● Delete all arrows emerging from numbered events, creating new start events.
• ● Number all new start events 2, 3, and so on, and repeat the process until a
terminal event without any successor activity is reached. Number the terminal
node accordingly.
Comparison between AOA and AON Networks
• ESTIMATING TIME & COST USING AOA & AON METHODS
• To estimate the time and cost of a project using Activity-On-Node (AON) and Activity-On-
Arrow (AOA) techniques, you can follow the steps below:
• Define the project scope:
• Clearly define the scope of the project, including its objectives, deliverables, and the timeline
for completion.
• Identify the activities:
• Identify all the activities required to complete the project. List them in order and break them
down into smaller, manageable tasks.
• Determine the dependencies:
• Determine the dependencies between activities. Identify which activities need to be
completed before others can begin.
• Create a network diagram:
• Create a network diagram using either AON or AOA. AON uses nodes to represent activities,
and arrows to represent dependencies, whereas AOA uses arrows to represent activities, and
nodes to represent dependencies.
• Estimate activity durations:
• Estimate the time required to complete each activity. This can be done by consulting experts,
historical data, or other sources of information.
• Determine critical path:
• Identify the critical path, which is the path of activities that will take the
longest time to complete.
• Calculate project duration:
• Calculate the total duration of the project by summing the durations of all
activities on the critical path.
• Estimate costs:
• Estimate the costs of each activity, including labor, materials, and other
resources. Add up all the costs to get the total project cost.
• Monitor and control:
• Monitor the project regularly to ensure that it stays on track. If there are any
delays or issues, take corrective action to get the project back on schedule.
• Example of estimating time and cost of a project using Activity-On-Arrow
(AOA) method:
• Let's say you are managing a project to develop a new software application. The
project can be broken down into the following activities:
• Activity A: Requirements gathering
• Activity B: Design
• Activity C: Development
• Activity D: Testing
• Activity E: Deployment
• The dependencies between activities are as follows:
• A→B
• B→C
• C→D
• D→E
• The estimated duration of each activity is:
• Activity A: 2 weeks
• Activity B: 4 weeks
• Activity C: 6 weeks
• Activity D: 3 weeks
• Activity E: 1 week
• In this case, each activity is represented by an arrow, with the duration next
to it.
• To calculate the critical path and project duration, we need to find the longest
path through the network diagram. In this case, the critical path is A → B → C
→ D → E, with a total duration of 16 weeks.
• To estimate the project cost, we need to estimate the cost of each activity.
Let's assume that the cost of each activity is:
• Activity A: 10,000
• Activity B: 20,000
• Activity C: 30,000
• Activity D: 15,000
• Activity E: 5,000
• The total project cost would be the sum of the costs of each activity on the
critical path, which is:
• Total cost = 10,000 + 20,000 + 30,000 + 15,000 + 5,000 = 80,000
• So, based on this analysis, it can be estimated that the project will take 16
weeks to complete and cost 80,000 using AOA method.
• Example of estimating time and cost of a project using Activity-On-Node (AON)
method:
• Let's say you are a project manager tasked with organizing a software development
project. The project involves creating a new mobile app for a
• client and the client has provided you with a detailed project scope and requirements
document.
• To estimate the time and cost of the project using the AON (Activity on Node)
method, you would follow these steps:
• Break down the project scope and requirements document into smaller tasks or
activities. For example:
• Research and choose a programming language and framework
• Develop wireframes and prototypes
• Develop the user interface
• Develop the backend and front-end functionality
• Test and debug the mobile app
• Deploy the app
• Let us suppose the time and cost for each scope of work is as follows:
• 1. Research and choose a programming language and framework (Time: 2
Weeks, Cost: 10,000)
• 2. Develop wireframes and prototypes
• (Time: 4 Weeks, Cost: 20,000)
• 3. Develop the user interface (Time: 6 Weeks, Cost: 30,000)
• 4. Develop the backend and front-end functionality (Time:18 Weeks, Cost:
90,000)
• 5. Test and debug the mobile app (Time: 2 Weeks, Cost: 10,000)
• 6. Deploy the app (Time: 1 Week, Cost: 5,000)
• This path takes a total of 33 weeks and costs Rs 165,000.
ESTIMATING PROJECT BUDGET
• The process of estimating the budget of a project involves identifying all the costs
that will be incurred during the project's lifecycle, and then calculating the total
amount of funds required to complete the project.
• A general method for estimating the budget of a project is as follows:
• Identify all project costs:
• Make a list of all costs associated with the project, including direct and indirect
costs. Direct costs are those directly related to the project, such as labor, materials,
and equipment. Indirect costs are those that are not directly related to the project
but are still necessary for its completion, such as rent, utilities, and administrative
expenses.
• Determine the cost drivers:
• Cost drivers are factors that influence the cost of the project. For example, the
number of team members, the project duration, and the complexity of the project
are all cost drivers. Identify the key cost drivers that will impact the project and
estimate their costs.
• Estimate labor costs:
• Estimate the labor costs associated with the project by determining the
number of hours required for each team member, their hourly rate, and the
duration of the project. Multiply the number of hours by the hourly rate to
calculate the total labor cost for each team member, and then add up the total
labor costs for all team members.
• Estimate material costs:
• Estimate the cost of materials required for the project, such as software
licenses, hardware, and other supplies. This can be done by obtaining quotes
from suppliers or by using historical data.
• Estimate equipment costs:
• Estimate the cost of any equipment required for the project, such as
computers or machinery. This can be done by obtaining quotes from suppliers
or by using historical data.
• Estimate indirect costs:
• Estimate the cost of any indirect costs, such as rent, utilities, and administrative
expenses. This can be done by using historical data or by obtaining quotes from
vendors.
• Calculate the total project cost:
• Add up all the costs identified in the previous steps to calculate the total project
cost.
• Add a contingency reserve:
• A contingency reserve is an amount of money set aside to cover unforeseen
events or risks that may arise during the project. Add a contingency reserve to
the total project cost to ensure that there is enough funding to cover
unexpected costs.
• Review and refine the budget:
• Review the budget to ensure that it is accurate and comprehensive. Refine the
budget as necessary based on any changes to the project scope, schedule, or
other factors.
 FLOAT ANALYSIS
• Float analysis, also known as float or slack analysis, is a project management technique
that helps in identifying the flexibility or slack in a project schedule. It helps to
determine the amount of time that a particular activity can be delayed without delaying
the entire project completion date.
• In project management, float analysis is done by calculating two types of floats - total
float and free float.
• Total Float:
• Total float represents the duration an activity can be postponed without impacting the
scheduled completion date of the project. It is the amount of time that an activity can
slip or float without affecting the project's deadline. The total float is calculated by
determining the difference between the early start date and the late start date of an
activity.
• Free Float:
• Free float refers to the duration that an activity can be postponed without delaying the
start date of its subsequent activity. In other words, it is the amount of time that an
activity can float or slip without affecting the start date of the following activity in the
project schedule. The calculation of free float involves subtracting the early start date of
an activity from the early start date of its subsequent activity, and then subtracting the
duration of the predecessor activity.
• Float analysis can help project managers to prioritize critical activities and identify
those that can be delayed or fast-tracked to optimize the project schedule. It can
also help in resource allocation and identifying potential risks and delays in the
project schedule.
• Steps involved in float analysis:
• Identify the project network:
• The first step in float analysis is to identify the project network. This involves
creating a visual representation of the project tasks and their interdependencies
using a network diagram, such as a Gantt chart or a PERT chart.
• Example: Let's say you are managing a construction project to build a new office
building. The project network would include tasks such as design, excavation,
foundation, framing, electrical, plumbing, HVAC, and finishing.
• Calculate the duration and dependencies:
• The second step is to calculate the duration of each task and their
dependencies. This involves determining the time required to complete each
task and the order in which they need to be completed.
• Example: For the construction project, the duration of each task could be
estimated as follows: design (4 weeks), excavation (2 weeks), foundation (4
weeks), framing (8 weeks), electrical (6 weeks), plumbing (4 weeks), HVAC (6
weeks), and finishing (6 weeks). The dependencies would be such that
excavation cannot start until design is complete, foundation cannot start until
excavation is complete, and so on.
• Calculate the early start and early finish:
• The third step is to calculate the early start and early finish dates for each task.
This involves determining the earliest date each task can start and the earliest
date it can be completed based on its dependencies and duration.
• Example: Using the construction project, the early start and early finish dates
for each task could be calculated as follows:
• Design: early start = 1, early finish = 4
• Excavation: early start = 5, early finish = 6
• Foundation: early start = 7, early finish = 10
• Framing: early start = 11, early finish = 18
• Electrical: early start = 19, early finish = 24
• Plumbing: early start = 19, early finish = 22
• HVAC: early start = 25, early finish = 30
• Finishing: early start = 19, early finish = 24
• Calculate the late start and late finish:
• The fourth step is to calculate the late start and late finish dates for each task. This
involves determining the latest date each task can start and the latest date it can be
completed without delaying the project completion date.
• Example:
• Using the construction project, the late start and late finish dates for each task
could be calculated as follows:
• Design: late start = 1, late finish = 4
• Excavation: late start = 5, late finish = 6
• Foundation: late start = 7, late finish = 10
• Framing: late start = 11, late finish = 18
• Electrical: late start = 19, late finish = 24
• Plumbing: late start = 23, late finish = 26
• HVAC: late start = 25, late finish = 30
• Finishing: late start = 25, late finish = 30
• Calculate the float:
• The final step is to calculate the float for each task. This involves determining
the amount of time each task can be delayed without delaying the project
completion date (total float) or the start date of its successor task (free float).
• Example:
• Using the construction project, the float for each task could be calculated as
follows:
• Design: total float = 0, free float = 0
• Excavation: total float = 0, free float = 0
• Foundation: total float = 0, free float = 0
• Framing: total float = 2, free float = 2
• To calculate float time (also known as slack time or slack), there are two types of
floats that can be calculated: total float and free float. The formulas for calculating
each type of float are as follows:
• Total Float: Total float is the amount of time that an activity can be delayed without
delaying the entire project completion date. It can be calculated using the following
formula:
• Total Float = Late Finish Date - Early Finish Date - Duration
• Free Float: Free float is the amount of time that an activity can be delayed without
delaying the start date of its successor activity. It can be calculated using the
following formula:
• Free Float = Early Finish Date of Successor Activity - Early Finish Date of Current
Activity - Duration of Current Activity
• In order to compute the float time for a project, it is necessary to compute the float
time for each activity within the project network. This would necessitate determining
the early start, early finish, late start, late finish, and duration for each activity, and
then applying the aforementioned formulas to determine both the total float and
free float.
CRASHING
• Crashing is a concept in project management that involves shortening the project schedule by
compressing the project activities. The goal of crashing is to reduce the project duration while still
meeting the project requirements.

• The concept of crashing is based on the understanding that the longer a project takes to
complete, the more it will cost. By shortening the project duration, a project manager can reduce
costs, meet project deadlines, and stay competitive.
• Crashing is important in project management because it allows project managers to accelerate the
completion of a project when there is a need to meet tight deadlines or when the project is
behind schedule. By adding more resources to critical path tasks, project managers can reduce the
overall project duration and ensure that the project is completed on time.
• There are several benefits to crashing a project. For example, it can help to increase customer
satisfaction by delivering the project on or ahead of schedule. It can also help to reduce the
overall cost of the project by shortening the duration and minimizing the need for additional
resources.
• Crashing can also help to improve team morale and motivation by demonstrating a commitment
to completing the project on time and under budget. Additionally, it can help to identify critical
path tasks and areas where additional resources can be added to maximize project efficiency.
Techniques for crashing:
• There are two main techniques for crashing a project:
• Fast Tracking:
• This technique involves overlapping activities that would normally be performed
sequentially. For example, instead of waiting for the design phase to be completed
before starting development, both activities can be done simultaneously. Fast tracking
can help to reduce project duration but can also increase risk and rework if not
managed carefully.
• Resource Leveling:
• This technique involves adding additional resources to a project to complete it more
quickly. For example, adding more programmers to a development team to speed up
the coding process. Resource leveling can help to reduce project duration but can also
increase costs.
• When deciding which technique to use for crashing a project, project managers must
consider the tradeoffs between time, cost, and risk.
• Crashing a project can have a number of benefits, including:
• Meeting tight project deadlines
• Reducing project costs
• Improving project quality
• Gaining a competitive advantage