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Project Management – the Importance of the Planning Process

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An individual assignment under the topic: „Project Management – the Importance of the Planning Process“ Teacher: Maria do Sacramento Basilio Student: 2012 Beja Content Content2 Introduction4 Project Management5 The Life Cycles of Projects7 PLANNING PROCESS8 Project Plan Elements11 Project Control13 Project Termination14 Conclusion16 Literature17 Introduction Each organization‘s activity in its own way contributes to organization‘s goals. It is not always easy to assess the impact of the work or the decision to achieve these objectives in the context of a complex organization of activities.

Common to assume that what unites all the organizations processes to the general population and focus their efforts on a defined term direction, is a strategy. Project work is one of the extraordinary management forms. Each project is progressing to a certain stage, which is called the project life cycle. Despite the widely different names can be said that all projects are characterized by four main phases: initiation, planning, realization, finishing. An object of the Project: the planning process.

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The aim: to analize the essential part of Project life cycle – planning process.

My essay will consists of two parts. In the first part I am going to introduce the Project Management and Project Life Cycle, in the second part of the project I will analyse the planning process and will make a conclussion about it‘s importance. Project Management In order to understand project management, one must begin with definition of a project. A project can be considered to be any series of activities and tasks that: * Have a specific objective to be completed within certain specifications * Have defined start and end dates * Have funding limits Consume resources (money, people, equipment) Project management, on the other hand, involves project planning ant project monitoring and includes such items as: Project planning: * Definition of work requirements * Definition of quantity and quality work * Definition of resources needed Project monitoring: * Tracking progress * Comparing actual outcome to predicted outcome * Analyzing impact * Making adjustments Successful project management can then be defined as having achieved the project objectives: * Within time * Within cost * At the desired performance/technology level While utilizing the assigned resources effectively and efficiently * Accepted by the customer The potential benefits from project management are: * Identification of functional responsibilities to ensure that all activities are accounted for, regardless of personal turnover * Minimizing the need for continuous reporting * Identification of time limits for scheduling * Identification of methodology for trade-off analysis * Measurement of accomplishment against plans * Early identification of problems so that corrective action may follow * Improved estimating capability for future planning Knowing when objectives cannot be met or will be exceeded Unfortunately, the benefits cannot be achieved without overcoming obstacles such as: * Project complexity * Customer’s special requirements * Organizational restructuring * Project risks * Changes in technology * Forward planning and picking Project management can mean different things to different people. Quite often, misunderstand the concept because they have ongoing projects within their company and feel that they are using project management to control these activities.

In such a case, the following might be considered an appropriate definition: Project management is the art of creating the illusion that any outcome is the result of a series of predetermined, deliberate acts when, in fact, it was dumb luck. Although this might be the way that some companies are running their projects, this is not project management. Project management is designed to make better use of existing resources by getting work to flow horizontally as well as vertically within the company.

This approach does not really destroy the vertical, bureaucratic flow of work but simply requires that line organizations talk to another horizontally so work will be accomplished more smoothly throughout the organization. The vertical flow of work is still the responsibility of the line managers. The horizontal flow of work is the responsibility of the project managers, and their primary effort is to communicate and coordinate activities horizontally between the line organizations.

The following would be an overview definition of project management: Project management is the planning, organizing, directing, and controlling of company resources for a relatively short-term objective that has been established to complete specific goals and objectives. Furthermore, project management utilizes the systems approach to management by having functional personnel (the vertical hierarchy) assigned to a specific project (the horizontal hierarchy). The above definition requires further comment. Classical management is usually considered to have five functions or principles: * Planning Organizing * Staffing * Controlling * Directing In the above definition, the staffing function has been omitted. This was intentional because the project manager does not staff the project. Staffing is line responsibility. The project manager has the rigt to request specific resources, but the final decision of what resources will be committed rests with the line managers. Talking about the meaning by a “relatively” short-term project, not all industries have the same definition for a short-term project.

In engineering, the project might be for six months or two years; in construction, three to five years; in nuclear components, ten years; and in insurance, two weeks. Long-term projects, which consume resources full-time, are usually set up as a separate division (if large enough) or simply as a line organization. The Life Cycles of Projects All organisms have a life cycle. They born, grow, wane, and die. This is true for all living things, for stars and planets, for the products we buy and sell, for our organizations, and for our projects as well.

A project’s life cycle measures projects completion as a function of either time (schedule) or resources (budget). This is life cycle must be understood because the PM’s managerial focus subtly shifts at different stages of the cycle. During the early stages, the PM must make sure that the project plan really reflects the wishes of the client as well as the abilities of the project team and is designed to be consistent with the goals and objectives of the parent firm. As the project goes into the implementation stage of its life cycle, the PM’s attention turns to the job of keeping the project on budget nd schedule – or, when chance interferes with progress, to negotiating the appropriate trade-offs to correct or minimize the damage. At the end of the project, the PM turns into a “fuss-budget” to assure that the specifications of the project are truly met, handling all the details of closing out the books on the project, making sure there are no loose ends, and that every “i” is dotted and “t” crossed. Many projects are like building a house. A house-building project starts slowly with a lot of discussion and planning. Then construction begins and progress rapid.

When the house is built, but not finished inside, progress appears to slow down and it seemingly takes forever to paint everything, to finish all the trim, and to assemble and install the built-in appliances. Progress is slow-fast-slow, as shown in figure: It used to be thought that S-shaped curve of figure represented the life cycle for all projects. While this is true of many projects, there are important exceptions. This is about the project that approaches completion by a very different route that the tradidtional S-curve, as shown in this figure:

To make a conclusion of the topic about product life cycle, there are two different paths (life cycles) along which projects progress from start to completion. One is S-shaped and the other is J-shaped. It is an important distinction because identifying the different life cycles helps the PM to focus attention on appropriate matters to ensure successful project completion. PLANNING PROCESS The most important responsibilities of a project manager are planning, integrating and executing plans. Almost all projects, because of their relatively short duration and often prioritized control of resources, require formal, detailed planning.

The integration of a planning activities is necessary because each functional unit may develop its own planning documentation with little regard for other functional units. Planning, in general, can be best described as the function of selecting the enterprise objectives and establishing the policies, procedures, and programs necessary for achieving them. Planning in a project environment may be described as establishing a predetermined course of action within forecasted environment. The project’s requirements set the major milestones, and the line managers hope that they can meet them.

If the line manager connot commint because the milestones are perceived as unrealistic, the project manager may have to develop alternatives, one of which may be to move the milestones. Upper-level management must become involved in the selection of alternatives during the planning stage. Planning is, of course, decision making, since it involves choosing among alternatives. Planning is a required management function to facilitate the comprehension of complex problems involving interacting factors. The project manager is the key to successful project planning.

It is desirable that the project manager be involved from project conception through execution. Project planning must be systematic, flexible enough to handle unique activities, disciplined through reviews and controls, and capable of accepting multifunctional inputs. Successful project managers realize that project planning is an iterative process and must be performed throughout the life of the project. One of the objectives of project planning is to completely define all work required (possibly through the development of a documented project plan) so that will be readily identifiable to each project participant.

This is necessity in a project environment because: * If the task is well understood prior to being performed, much of the work can be preplanned. * If the tas is not understood, the during the actual task execution more knowledge is gained that, in turn, leads to changes in resource allocations, schedules, and priorities. * The more uncertain the task, the greater the amount of information that must be processed in order to ensure effective performance. Without proper planning, programs and projects can start off “behind the eight ball” because of poorly defined requirements during the initial planning phase.

Below is a list of the typical consequences of poor planning: * Project initiation * Wild enthusiasm * Disillusionment * Chaos * Search for the guilty * Punishment of the innocent * Promotion of the nonparticipants * Definition of the requirements Obviously, the definition of the requirements should have been the first step. There are four basic reasons for project planning: * To eliminate or reduce uncertainty * To improve efficiency of the operation * To obtain a better understanding of the objectives * To provide a basis for monitoring and controlling work Planning is decision making based upon futurity.

It is a continuous process of making entrepreneurial decisions with an eye to the future, and methodically organizing the effort needed to carry out these decisions. Furthermore, systematic planning allows an organization of set goals. The alternative to systematic planning is decision making based on history. This generally results in reactive management leading to crisis management, conflics management, and fire fighting. Effective total program planning cannot be accomplished unless all of the necessary information becomes available ant project initation. These information requirements are: * The statement of work (SOW) The project specifications * The milestone schedule * The work breakdown structure (WBS) The statement of work (SOW) is a narrative description of the work to be accomplished. It includes the objectives of the project, a brief description of the work, the funding constraint if one exists, and the specifications and schedule. The schedule is a “gross” schedule and includes such things as the: * Start date * End date * Major milestones * Written reports The last major item is the work breakdown structure. The WBS is the breaking down of the statement of work into smaller elements so that better isibility and control will be obtained. Project Plan Elements The project master plan should contain nine elements: a project overview, a statement of objectives, a description of the technical and managerial approaches to the work, all contractual agreements, schedules of activities, a list of resource requirements or a project budget, personnel requirements, project evaluation methods, and preparations to meet potential problems. These are the elements that constitute the project plan and the basis for a more detailed planning of the budgets, schedules, work plan and general management of the project.

Once this basic plan is fully developed and approved, it is disseminated to all interested parties. I would like to describe each element. * Overview. This is a short summary of the objectives and scope of the project. It is directed to top management and contains a statement of the goals of the project, a brief explanation of their relationship to the firm’s objectives, a description of the managerial structure that will be used for the project, and a list of the major milestones in the project schedule. * Objectives. This contains a more detailed statement of the general goals noted in the overview section.

The statement should include profit and competitive aims as well as technical goals. * General approach. This section describes both the managerial and the technical approaches to the work. The technical discussion describes the relationship of the project to available technologies. For example, it might note that this project is an extension of work done by the company for an earlier project. The subsection on the managerial approach takes note of any deviation from routine procedure – for instance, the use of subcontractors for some parts of the work. * Contractual aspects.

This critical section of the plan includes a complete list and description of all reporting requirements, customer-supplied resources, liaison arrangements, advisory committees, project review and cancellation procedures, proprierty requirements, any specific management agreements, as well as the technical deliverables and their specifications, delivery schedules, and a specific procedure for changing any of the above. Completeness is a necessity in this section. If in doubt about whether an item should be included or not, the wise planner will include it. * Schedules.

This section outlines the various schedules and lists all milestone events. The estimated time for each task should be obtained from those who will do the work. The project master schedule is constructed from these inputs. The responsible person or department head should sign off on the final, agreed-on schedule. * Resources. There are two primary aspects to this section. The first is the budget. Both capital and expense requirements are detailed by task, which makes that a project budget. One-time costs are separated from recurring project costs. Second, cost monitoring and control procedures should be described.

In addition to the usual routine elements, the monitoring and control procedures must be designed to cover special resource requirements for the project, such as special machines, test equipment, laboratory usage or construction, logistics, field facilities, and special materials. * Personnel. This section list the expected personnel requirements of the project. Special skills, types of training needed, possible recruiting problems, legal or policy restrictions on work force composition, and any other special requirements, such as security clearances, should be noted here.

It is helpful to time-phase personnel needs to the project schedule. This makes clear when the various types of contributors are needed and in what numbers. These projections are an important element of the budget, so the personnel, schedule, and resources sections can be cross-checked with one another to ensure consistency. * Evaluation Methods. Every project should be evaluated against standards and by methods established at the project’s inception. This section contains a brief description of the procedure to be followed in monitoring, collecting, storing, and evaluating the history of the project. Potential Problems. Sometimes it is difficult to convince planners to make a serious attempt to anticipate potential difficulties. One or more such possible disasters such as subcontractor default, technical failure, strikes, bad weather, sudden required breakthroughs, critical sequences of tasks, tight deadlines, resource limitations, complex coordination requirements, insufficient authority in some areas, and new, complex, or unfamiliar tasks are certain to occur. The only uncertainties are which ones will occur and when.

In fact, the timing of these disasters is not random. There are times, conditions, and events in the life of every project when progress depeneds on subcontractors, or the weather, or coordination, or resource availability, and plans to deal with unfavorable contingencies should be developed early in the project’s life cycle. Some PMs disdain this section of the plan on the grounds that crises cannot be predicted. Further, they claim to be very effective firefighters. It is quite possible that when one finds such a PM, one has discovered an arsonist.

No amount of current planning can solve the current crisis, but preplanning may avert some. Project Control The two fundamental objectives of control are: 1. The regulation of results through the alteration of activities. 2. The stewardship of organizational assets. Most discussions of the control function are focused on regulation. Physical Asset Control Physical asset control requires control of the use of physical assets. It is concerned with assets maintenance, whether preventive or corrective.

At issue also is the timing of maintenance or replacement as well as the quality of maintenance. Physical inventory, whether equipment or material, must also be controlled. It must be received, inspected, and possibly stored prior to use. Records of all incoming shipments must be carefully validated so that payment to suppliers must also be applied to suppliers from inside the organization. Even such details as the project library, project coffee maker, project room furniture, and all the other minor bits and pieces must be counted, maintained, and conserved.

Human Resource Control Stewardship of human resources requires controlling and maintaining the growth and development of people. Projects provide particulary fertile ground for cultivating people. Because projects are unique, differing one from another in many ways, it is possible for people working on projects to gain a wide range of experience in a reasonably short time. Measurement of physical resource conservation is accomplished through the familiar audit procedures. The measurement of human resource conservation is familiar audit procedures.

The measurement of human resource conservation is far more difficult. Such devices as employee appraisals, personnel performance indices, and screening methods for appointment, promotion, and retention are not particularly satisfactory devices for ensuring that the conservation function is being properly handled. The accounting profession has worked for some years on the development of human resource accounting, and while the effort has produces some interesting ideas, human resource accounting is not well accepted by the accounting profession.

Financial Resource Control Though accountants have not succeeded in developing acceptable methods for human resource accounting, their work on techniques for the conservation of financial resources has most certainly resulted in excellent tools for financial control. This is the best developed for the basic areas needing control. It is difficult to separate the control mechanisms aimed at conservation of financial resources from those resources from those focused on regulating resource use. Most financial controls do both.

Capital investment controls work to conserve the organization’s assets by insisting that certain conditions be met before capital can be expended, and those same conditions usually regulate the use of capital to achieve the organization goal of a high return on investments. The techniques of financial control, both conservation and regulation, are well known. They include current assets controls, and project budgets as well as capital investment controls. These controls are exercised through a series of analyses and audits conducted by the accounting function for the most part.

Project Termination As it must to all things, project termination comes to every project. At times, project death is quick and clean, but more often it is a long process. The process of termination is never easy, always complicated, and, as much as we might wish to avoid it, almost always inevitable. The problem is how to accomplish one of the several levels of what is meant by project termination with a minimum of trouble and administrative dislocation. A project can be terminated in one of four ways: * by extinction * addition * integration * starvation y Extinction: * The project has successfully completed scope and the client has accepted it. * It has been superseded by the external developments like technological advancement, market crisis etc * It has failed to achieve it’s goal. * It has no longer support from the Senior Management. It is also sometimes referred to as “termination by murder“. The important point to notice is that all project activity ceases in this kind of termination. by Addition: * The project is a major success. It becomes the formal part of the parent organization. The transition or  transfer of the resources such as the project personnel, materials and equipment to the newly created unit within the parent  organization. by Integration: * The project is successfully completed. The  project product is integrated to the operations of the client. This is the most common mode and most complex operation. The resources are  released  and  disturbuted in the parent organization. by Starvation: * The project is terminated by budget decrement. * It is also known as  withdrawal of “life support”. The reason of this termination is generally to shadow the failure of non-accomplishment of the goals.

This can save face of the senior management and avoid embarrassment. The Project Final Report incorporates the process knowledge gained from the Project. In addition to preservation of Project records, the Final Report embodies the experience from which we learn. It should include: Project performance comments, administrative performance comments, organizational structure comments, personnel suggestions, possibly a confidential section. Conclusion Project planning is probably the most time-consuming project management activity.

Project planning continues from the initial idea through to the system delivery. Plans must be regulary updated using the new available information. There are many techniques for developing a project plan. They are fundamentally similar. All of them use a systematic analysis to identify and list the things that must be undertaken in order to achieve the project‘s abjectives, to test and validate the plan and to deliver it to user. Planning is an essential function in the success of any project. Planning does not refer simply to pulling out a calendar and recording things to do on random dates.

Planning is all about actively plotting a course to meeting goals. Goals are really the start of any discussion about planning in a successful project. Literature 1. Harold Kerzner „Project Management. A Systems Approach to Planning, Scheduling, and Controlling“ sixth edition 2. Samuel J. Mantel Jr. Jack R. Meredith, Scott M. Shafer, Margaret M. Sutton „Project Management in Practise“ second edition 3. Jack R. Meredith, Samuel J. Mantel „Project Management. A Managerial approach“ third edition 4. V. Buda, A. Chmieliauskas „Projektu valdymas“ 2006

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