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Project Management

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LESSON 05
PROJECT LIFE CYCLES
Broad Contents
Life cycle phases of a Product
Life cycle phases of a System
System Costs
Cost Benefit Analysis
Characteristics of Project Life Cycle
Project Management Office
Project Management Officer (PMO)
Difference between Project Manager and Project Management Officer
Some Examples of Project Life Cycle
5.1
Life Cycle Phases of a Product:
Every program, project, or product has certain phases of development. A clear understanding of
these phases permits managers and executives to better control total corporate resources in the
achievement of desired goals. The phases of development are known as life-cycle phases.
However, the breakdown and terminology of these phases differ, depending on whether we are
discussing products or projects.
During the past few years, there has been at least partial agreement about the life cycle phases
of a product. They include:
Research and development
Market introduction
Growth
Maturity
Deterioration
Death
Today, there is no agreement among industries, or even companies within the same industry,
about the life cycle phases of a project. This is understandable because of the complex nature
and diversity of projects.
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Figure 5.1: Maturity Path
5.2
Life Cycle Phases of a System:
The theoretical definitions of the life cycle phases of a system can be applied to a project. These
phases include:
Conceptual
Planning
Testing
Implementation
Closure
5.2.1
Conceptual Phase:
The first phase, the conceptual phase, includes the preliminary evaluation of an idea.
Most important in this phase is a preliminary analysis of risk and the resulting impact
on the time, cost, and performance requirements, together with the potential impact on
company resources. The conceptual phase also includes a "first cut" at the feasibility of
the effort.
5.2.2
Planning Phase:
The second phase is the planning phase. It is mainly a refinement of the elements
described under the conceptual phase. The planning phase requires a firm identification
of the resources to be required together with the establishment of realistic time, cost,
and performance parameters. This phase also includes the initial preparation of all
documentation necessary to support the system. For a project based on competitive
bidding, the conceptual phase would include the decision of whether to bid, and the
planning phase would include the development of the total bid package (i.e., time,
schedule, cost, and performance).
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Figure 5.2: System Costs
5.2.2.1 System Costs:
Because of the amount of estimating involved, analyzing system costs during
the conceptual and planning phases is not an easy task. As shown in Figure 5.2,
most project or system costs can be broken down into operating (recurring) and
implementation (nonrecurring) categories. The implementation costs include
one-time expenses such as construction of a new facility, purchasing computer
hardware, or detailed planning. Operating costs, on the other hand, include
recurring expenses such as manpower. The operating costs may be reduced as
shown in Figure 5.2, if personnel perform at a higher position on the learning
curve. The identification of a learning curve position is vitally important during
the planning phase when firm cost positions must be established.
Of course, it is not always possible to know what individuals will be available
or how soon they can perform at a higher learning curve position.
Figure 5.3: Cost Benefit Analysis
5.2.2.2 Cost Benefit Analysis:
Once the approximate total cost of the project is determined, a cost-benefit
analysis should be conducted (see Figure 5.3) to determine if the estimated
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value of the information obtained from the system exceeds the cost of obtaining
the information. This analysis is often included as part of a feasibility study.
There are several situations, such as in competitive bidding, where the
feasibility study is actually the conceptual and definition phases. Because of the
costs that can be incurred during these two phases, top-management approval is
almost always necessary before the initiation of such a feasibility study.
Figure 5.4: A Stream of Projects
5.2.3
Testing Phase:
The third phase-- testing-- is predominantly a testing and final standardization effort
so that operations can begin. Almost all documentation must be completed in this
phase.
5.2.4
Implementation Phase:
The fourth phase is the implementation phase, which integrates the project's product or
services into the existing organization. If the project was developed for establishment of
a marketable product, then this phase could include the product life cycle phases of
market introduction, growth, maturity, and a portion of deterioration.
5.2.5
Closure Phase:
The final phase is closure and includes the reallocation of resources. The question to be
answered is, "Where the resources should be reassigned?" Consider a company that
sells products on the open consumer market. As one product begins, the deterioration
and death phases of its life cycle (i.e., the divestment phase of a system), then new
products or projects must be established. Such a company would, therefore, require a
continuous stream of projects as a necessity for survival, as shown in Figure 5.4. As
projects A and B begin their decline, new efforts (project C) must be developed for
resource reallocation. In the ideal situation these new projects will be established at
such a rate that total revenue will increase and company growth will be clearly visible.
The closure phase evaluates the efforts on the total system and serves as input to the
conceptual phases for new projects and systems. This final phase also has an impact on
other ongoing projects with regard to priority identification.
Thus, so far no attempt has been made to identify the size of a project or system. Large
projects generally require full-time staffs, whereas small projects, although they
undergo the same system life cycle phases, may require only part-time people. This
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implies that an individual can be responsible for multiple projects, possibly with each
project existing in a different life cycle phase.
The following questions must be considered in multi-project management:
1. Are the project objectives the same?
 For the good of the project
 For the good of the company
2. Is there a distinction between large and small projects?
3. How do we handle conflicting priorities?
 Critical versus critical projects
 Critical versus non-critical projects
 Non-critical versus non-critical projects
5.2.6
Explanation of Various Life Cycle Phases:
Later topics discuss methods of resolving conflicts and establishing priorities.
The phases of a project and those of a product are compared in Figure 5.5. Notice that
the life cycle phases of a product generally do not overlap, whereas the phases of a
project can and often do overlap.
Table 5.1 identifies the various life cycle phases that are commonly used. Even in
mature project management industries such as construction, one could survey ten
different construction companies and find ten different definitions for the life cycle
phases.
Table 5.1: Life Cycle Phase Definitions
The life cycle phases for computer programming, as listed in Table above, are also
shown in Figure 5.5 which illustrates how manpower resources can build up and decline
during a project. In Figure 5.5, PMO stands for the present method of operations, and
PMO' will be the "new" present method of operations after conversion. This life cycle
would probably be representative of a twelve-month activity.
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Figure 5.5: Definition of a Project Life Cycle
Most executives prefer short data processing life cycles because computer technology
changes at a very rapid rate. An executive of a major utility commented that his
company was having trouble determining how to terminate a computer programming
project to improve customer service because by the time a package is ready for full
implementation, an updated version appears on the scene. Should the original project be
canceled and a new project begun? The solution appears to lie in establishing short data
processing project life cycle phases, perhaps through segmented implementation. In any
case, we can conclude that top management is responsible for the periodic review of
major projects. This should be accomplished, at a minimum, at the completion of each
life cycle phase.
More and more companies are preparing procedural manuals for project management
and for structuring work using life cycle phases. There are several reasons for this trend.
These are as follows:
Clear description of the work to be accomplished in each phase may be possible.
Pricing and estimating may be easier if well-structured work definitions exist.
There exists key decision points at the end of each life cycle phase so that
incremental funding is possible.
Reader should be aware that not all projects can be simply transposed into lifecycle
phases (e.g., Research and Development). In such a case it might be possible (even in
the same company) for different definitions of life-cycle phases to exist because of
schedule length, complexity, or just the difficulty of managing the phases.
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Figure 5.6: System/Product Life Cycles
5.3
Characteristics of Project Life Cycle:
Project life cycle defines phases that connect beginning and end of the project. After each
phase deliverables are reviewed for the completeness in time, accuracy according to defined
objectives and their final approval (approval for acceptance) before moving to the next
phase.
As shown in the diagrams in the beginning, phases can be overlapped to save time and to
have fast tracking on the life cycle. This technique is used to compress the whole schedule
(if required resources are available or manageable)
There is no way to define Project Life Cycle ideally. Because of this every project
management team can define its own way to work on the project. They can use best
common practices and can learn new ways of dealing projects by their experiences in detail
or in general. Only three phases are always certain to be performed; conceptualization,
intermediate phase(s), and closure.
Generally phases are defined in sequential order by technical information officer.
Cost and staffing level is defined for every single phase.
Project may have sub-project(s) and sub-projects may have their own project life cycle.
In the beginning of the project, level of uncertainty and risk is always high.
The typical project life cycle ­ initiating, implementing and closing ­ has critical decision
points where the project may continue, be changed, or be abandoned.
There are many points within the project life cycle where Community of Professionals
(COPs) may provide support and guidance. For example, initiating the project involves
such activities as identifying the project team members, defining the scope and business
objectives of the project and identifying key stakeholders.
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During project close, reassignment and intelligent preservation of resources, knowledge
projects (i.e. deliverables), and sharing lessons learned are facilitated.
5.4
Project Management Office:
The Project Management Office sets project standards and oversees the organization's portfolio
of projects. This allows the organization to evaluate the use of resources across all projects and
resolve conflicts that affect project timelines. The Project Management Office is also a very
good place to examine how communities are linked across projects. Using the communities as
the linkage point for knowledge transfer is far more efficient for the following several reasons:
In communities, the evaluation of knowledge is generally done by a broader range of
people, ensuring that the ideas are more completely vetted.
Communities generally exist outside the project framework and trust is already established.
They can be used as opposed to setting up more formal structures and methods to get the
required information transferred to the project.
In communities, knowledge is transferred from expert to recipient. This includes tacit
knowledge transfer as well as explicit knowledge transfer. This is a much more efficient
transfer mechanism than is normally used. Generally, documents would be transferred from
project to project with minimal expert knowledge available to add value.
Community transfer shares the knowledge broadly, strengthening the entire organization for
future projects.
As mentioned earlier, Project Management Office and top management are responsible for
the periodic review of major projects. This should be accomplished, at a minimum, at the
completion of each life cycle phase.
5.5
Project Management Officer (PMO):
Project Management Officer (PMO) centralizes and coordinates management of project under
his domain, and oversees management of project and product (system/program) both. Project
Management Officer may not be directly related to the project at spot. He/she focuses on
coordination planning, prioritization of all resources and deliverables of projects and sub
projects. It is the responsibility of Project Management Officer to keep top management and
clients/parents organization connected and informed about all projects running or product life
cycle. He/she is involved in selection, management and re-deployment of shared projects as
much as authorized.
Project Management Officer is generally responsible for:
Providing monitoring platform for Project Manager.
Identifying the Project Management Methodology and best practices for specific project.
Clearing house, i.e. defining and refining project policies, procedures, templates and shared
documents.
Configuration management for all projects under work.
For developing and keeping repository and risk management for projects.
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Developing Project Management Office for operation and maintaining tools for project
management. Normally it includes Enterprise Wide Project Management Software creation
and installation.
Management and coordination and monitoring of communications across the projects,
project timelines and budget, quality standards.
Project Management Officer may be having authority to terminate project anytime when he
gets it not feasible anymore.
5.6
Difference Between Project Manager and Project Management Officer:
1. Both have different objectives - driven by different requirements, aligned with strategic
needs of organization.
2. Project Manager is responsible for delivering specific project objectives within project
constraints, while Project Management Officer is responsible for organizational structure
specific mandates having much vast perspective.
3. Project Manager focuses on project objectives, while Project Management Officer focuses
on major programs, scope and changes required and authenticated. Project Management
Officer considers all potential opportunities to have business goals achieved.
4. Project Manager is constrained with assigned resources for specific project to meet its full
objective. On the other hand, Project Management Officer is supposed to optimize the use
of shared organizational resources across all projects overall.
5. Project Manager manages scope, schedule, cost, and quality of product, while the Project
Management Officer manages overall risk, opportunities, interdependencies and links
among different projects.
6. Project Manager reports on project progress/project specific information to the top
management, while Project Management Officer provides consolidated reporting/enterprise
view of project or all the running projects.
5.7
Some Examples of Project Life Cycle:
There are many variations on the theme of the project phases, influenced by the project's scope
of work. The project phase selected in the examples here are arbitrary and serve only to
illustrate the technique for different types of projects. The main features to look for are the key
issues, key activities, limiting factors, decision and hold points in each phase.
The project life cycle is conveniently represented by a bar chart which clearly indicates the
duration of each phase and its overlap (if any) with the other phases.
5.7.1
House Project:
The construction of a house provides a project many of us have personally experienced.
Consider here the following simple sub-division into four phases.
The level of effort follows the typical life cycle profile by increasing to a maximum
during the building phase before declining during the interior phase.
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Figure 5.7: Project Life Cycle: House Project
5.7.2
Computer installation:
With the improved cost effectiveness of computer facilities most companies will
experience a computer installation project sooner or later.
Note that the training phase overlaps with both system selection and the implementation
phase.
Figure 5.8: Project Life Cycle: Computer Installation
5.7.3
Engineering Project:
An engineering type project is a popular example to illustrate the project phases. Note
here that all phases overlap which could indicate a fast tracking.
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Figure 5.9: Project Life Cycle: Engineering Project
5.7.4
Nuclear Power Station Project:
This project may well span 50 years with the people involved in the initial phases being
retired long before the final phases.
The interesting point here is that the environmental constraints have changed
significantly over the fifty years between the design phase and the decommissioning
phase.
Figure 5.10: Project Life Cycle: Nuclear Power Station Project
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Table of Contents:
  1. INTRODUCTION TO PROJECT MANAGEMENT:Broad Contents, Functions of Management
  2. CONCEPTS, DEFINITIONS AND NATURE OF PROJECTS:Why Projects are initiated?, Project Participants
  3. CONCEPTS OF PROJECT MANAGEMENT:THE PROJECT MANAGEMENT SYSTEM, Managerial Skills
  4. PROJECT MANAGEMENT METHODOLOGIES AND ORGANIZATIONAL STRUCTURES:Systems, Programs, and Projects
  5. PROJECT LIFE CYCLES:Conceptual Phase, Implementation Phase, Engineering Project
  6. THE PROJECT MANAGER:Team Building Skills, Conflict Resolution Skills, Organizing
  7. THE PROJECT MANAGER (CONTD.):Project Champions, Project Authority Breakdown
  8. PROJECT CONCEPTION AND PROJECT FEASIBILITY:Feasibility Analysis
  9. PROJECT FEASIBILITY (CONTD.):Scope of Feasibility Analysis, Project Impacts
  10. PROJECT FEASIBILITY (CONTD.):Operations and Production, Sales and Marketing
  11. PROJECT SELECTION:Modeling, The Operating Necessity, The Competitive Necessity
  12. PROJECT SELECTION (CONTD.):Payback Period, Internal Rate of Return (IRR)
  13. PROJECT PROPOSAL:Preparation for Future Proposal, Proposal Effort
  14. PROJECT PROPOSAL (CONTD.):Background on the Opportunity, Costs, Resources Required
  15. PROJECT PLANNING:Planning of Execution, Operations, Installation and Use
  16. PROJECT PLANNING (CONTD.):Outside Clients, Quality Control Planning
  17. PROJECT PLANNING (CONTD.):Elements of a Project Plan, Potential Problems
  18. PROJECT PLANNING (CONTD.):Sorting Out Project, Project Mission, Categories of Planning
  19. PROJECT PLANNING (CONTD.):Identifying Strategic Project Variables, Competitive Resources
  20. PROJECT PLANNING (CONTD.):Responsibilities of Key Players, Line manager will define
  21. PROJECT PLANNING (CONTD.):The Statement of Work (Sow)
  22. WORK BREAKDOWN STRUCTURE:Characteristics of Work Package
  23. WORK BREAKDOWN STRUCTURE:Why Do Plans Fail?
  24. SCHEDULES AND CHARTS:Master Production Scheduling, Program Plan
  25. TOTAL PROJECT PLANNING:Management Control, Project Fast-Tracking
  26. PROJECT SCOPE MANAGEMENT:Why is Scope Important?, Scope Management Plan
  27. PROJECT SCOPE MANAGEMENT:Project Scope Definition, Scope Change Control
  28. NETWORK SCHEDULING TECHNIQUES:Historical Evolution of Networks, Dummy Activities
  29. NETWORK SCHEDULING TECHNIQUES:Slack Time Calculation, Network Re-planning
  30. NETWORK SCHEDULING TECHNIQUES:Total PERT/CPM Planning, PERT/CPM Problem Areas
  31. PRICING AND ESTIMATION:GLOBAL PRICING STRATEGIES, TYPES OF ESTIMATES
  32. PRICING AND ESTIMATION (CONTD.):LABOR DISTRIBUTIONS, OVERHEAD RATES
  33. PRICING AND ESTIMATION (CONTD.):MATERIALS/SUPPORT COSTS, PRICING OUT THE WORK
  34. QUALITY IN PROJECT MANAGEMENT:Value-Based Perspective, Customer-Driven Quality
  35. QUALITY IN PROJECT MANAGEMENT (CONTD.):Total Quality Management
  36. PRINCIPLES OF TOTAL QUALITY:EMPOWERMENT, COST OF QUALITY
  37. CUSTOMER FOCUSED PROJECT MANAGEMENT:Threshold Attributes
  38. QUALITY IMPROVEMENT TOOLS:Data Tables, Identify the problem, Random method
  39. PROJECT EFFECTIVENESS THROUGH ENHANCED PRODUCTIVITY:Messages of Productivity, Productivity Improvement
  40. COST MANAGEMENT AND CONTROL IN PROJECTS:Project benefits, Understanding Control
  41. COST MANAGEMENT AND CONTROL IN PROJECTS:Variance, Depreciation
  42. PROJECT MANAGEMENT THROUGH LEADERSHIP:The Tasks of Leadership, The Job of a Leader
  43. COMMUNICATION IN THE PROJECT MANAGEMENT:Cost of Correspondence, CHANNEL
  44. PROJECT RISK MANAGEMENT:Components of Risk, Categories of Risk, Risk Planning
  45. PROJECT PROCUREMENT, CONTRACT MANAGEMENT, AND ETHICS IN PROJECT MANAGEMENT:Procurement Cycles