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Q.1 Explain the following a. Project Vs. Program Vs. Portfolio b. Project work and Traditional functional work


Answer:
a. Project Vs. Program Vs. Portfolio :
Project Management is the application of Tools and Techniques to meet Project Objectives. Project Management requires balancing key project constraints such as Scope, Schedule, Cost, Quality, Risk, Resources. Constraints are interdependent and changing one constraint impacts other constraints.
The term project has multiple definitions. Some of the definitions are as follows:

  • The British standard BS60792 defines a project as „a unique set of coordinated activities with definite starting and finishing points, undertaken by an individual, or organisation to meet specific objectives within defined schedule, cost and performance parameters.
  • A general definition is given by Mr. J.M Juran3, a quality guru, who defines project as a „problem scheduled for solution.
  • PMBoK4 defines project as "a temporary endeavour undertaken to produce a unique product, service or result." A general definition for project is a "problem scheduled for solution".
  • It is a temporary endeavour, with a defined beginning and end date, defined responsibilities, defined budget, and undertaken to meet unique goals and objectives, usually to bring about beneficial change or added value.

The following are some examples of project initiatives:
  • Setting up a production facility
  • Constructing National highways
  • Constructing a dam
  • Developing a software application
  • Implementing a Management Information System
  • Building a new arc furnace
  • Relocating a production facility

Program management is the process of managing related projects of an organisation, in order to improve the organisation's performance.
Program group together many related projects to better manage interdependent Projects.
Program management deals with multiple projects that collectively produce an agreed business outcome – i.e., they have inter-dependencies (e.g., impact the same group of stakeholders, each contribute to achieving a business outcome, and depend upon each other to do so).  It is the management of these inter- dependencies against the delivery of the agreed outcomes that distinguishes program from project management. In the aerospace/defense industry, for example, programs have a different connotation more related to funding.
If projects can be thought of as the bottom of a hierarchy, programs sit above them in the middle of the hierarchy and address a related set of projects, then things get to be most interesting at the top of the hierarchy – the portfolio management level.

Portfolio management is a process of managing the assets to hold in a portfolio which includes choosing and monitoring of appropriate investments and allocating the funds accordingly.
Portfolio consist many projects and programs to better manage and align organization’s objectives. Projects in Portfolio might not be related or interdependent.




Project
Program
Portfolio
Definitions

A temporary endeavor undertaken to create a unique product, service, or result.


PMBOK 2004 pg. 5
A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.

PMBOK 2004 pg. 16
A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives.
PMBOK 2004 pg. 16
Process Standards
by PMI
PMBOK®

The Standard for Program Management

The Standard for Portfolio Management

Process Certifications
PMP®
Prince2
PgMP®
OPM3®

Tools
by Microsoft
Microsoft Project

Microsoft Project Server*

Microsoft Portfolio Server

Tool Certifications
(overview)
070-632 Microsoft Project 2007, Managing Projects

70-633 Microsoft Project Server 2007, Managing Projects

70-634 Microsoft Project Server 2007, Managing Projects and Programs
TBD - Certification exam for Microsoft Portfolio Server


b. Project work and Traditional functional work :
Project work and traditional functional work differ in significant ways, and it is important to understand these differences.
Functional work is routine ongoing work. Each day machine operators, car salesmen, secretaries, accountants, financial analysts, quality inspectors perform functional work that is routine, notwithstanding some variations from day to day. The functional worker gets training from a manager assigned to the specific function, and the manager supervises and manages the worker according to standards of productivity and quality set for the particular function.
Functional work is typically structured as a hierarchical organization with traditional formal lines of authority as shown in figure below.
In contrast to functional work, project work is a temporary endeavor undertaken to create a unique, non routine product or service. A project manager manages a specific project with people and other resources assigned to him only for project management support on the specific project, and not on an ongoing basis. The project manager is responsible for the approved objectives of a project – such as budget, schedule and specifications. Project teams are typically not organized in the same hierarchical structure as that of functional groups. They are organized in one of the various ways which will be described in unit 6 under „Organization structure.
A comparison of project and functional work is as under (fig. below)
The traditional functional approach is not adequate in a project environment and does not promote work meeting the time, budget and quality targets fixed. The project approach promotes the innovation, experimentation and entrepreneurship, which is needed in business today.

Thus it is to be noted that a project has the following characteristics:-
1. A project has an owner
The project is initiated by the owner – an individual, public/private sector company, a joint sector company.

2. Fixed set of objectives those are unique
Every project has a set of activities that are unique, leading to an objective or a set of objectives, which are unique. It means that it will be the only time that the same set of activities is carried out for the same objective or objectives of the project. Even for another similar project, there will be something different in many activities, or even if an activity is repeated, the variables influencing it change every time. For example, for coal fired power plants of 500 MW to be constructed, each plant will need to be designed and constructed for different site conditions, coal specifications, plant layouts, design parameters, waste disposal plans, infrastructure facilities available for carrying out the project, customers requirements and other variables.
Once the project is implemented, the project is closed. However, it must be recognized that while project closure implies that the project is turned over to operations at this juncture, cognizance of the Operations & Maintenance / Integrated logistics support phase of operation needs to be taken during project management. To elaborate, planning inputs from this phase needs to be absorbed into the project. Also in many projects, management will have some responsibility extended into the early period of startup and operations.

3. Goal Oriented
Projects are taken up by organizations to attain a specific goal e.g. near total automation of a manually operated manufacturing plant, relocating a plant to a new location, computerizing the accounts department, studying the demand for a new product that a company plans to launch in the market. In other words, a project has a desired outcome at the end.

4. Specified time of completion (life span)
Every project has a specified start date and completion date. This time span is referred to as time of completion, which should be in line with the project owner's requirement.

5. Specified budget
A project needs to be implemented within its budgeted cost which is determined prior to start of project implementation. The budget is prepared for a pre-specified scope of work, performance requirements and time of completion. A continuous monitoring of project costs incurred during the implementation of the project is essential in order to track cost variances. While cost variances occur commonly in projects (usually cost overruns), and additional funds as required can be mobilized by careful cost monitoring, it is also not uncommon to see projects that are unduly delayed or even abandoned on account of excessive cost overruns.

6. Performance parameters

There are two kinds of performance requirements that could collectively be called specifications. One is the functional requirement which tells what the deliverable that is being delivered is supposed to do. The other is the technical requirement which describes the features and the quality requirements of the deliverables.

7. Logical sequence of activities

In order to achieve the project completion in the specified time period, there is a logical sequence of activities that need to be worked out by detailed planning, depending on the technical requirements and the interdependency of each of the activities.

8. Coordination between different areas of work expertise

A commercial building complex would require continuous coordination between architectural design, structural design, interior design, electrical facilities design, air conditioning system design, landscaping, construction works, liaison with statutory approval authorities, project funding agencies, electricity supply/water supply departments, sewerage department of government etc.
9. Resources

A project consumes significant amount of resources-time, money and manpower.
10. Project team is temporary
As a project has definite start date and definite end date, the project team is essentially temporary. Even within a company engaged only in project contract execution, some or many of the personnel in the project team will differ from project to project. For the project owner's company, the agencies deployed by the owner company for carrying out various functions of the project will vary from project to project.

11. Large projects involve a substantial degree of subcontracting
Since project work comprises works in different areas of expertise, it is necessary to engage specialized subcontractors for different work-packages. For a coal fired power plant, the major work packages would comprise boiler, turbine, generator, coal handling system, cooling water system, ash disposal system, exhaust chimneys, switchyards and various construction works for civil, structural, piping, cabling, instrumentation etc.

12. Risk
Risk is defined as the possibility of an outcome being different from the expected outcome. Every activity of a project is subject to some risk e.g. damage to machinery, stoppage of financial flows, accidents to personnel. Hence risk analysis and management is one of the processes of project management.

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