Principles of Project Management
Business Justification
• Definition: Business justification is the reasoning behind undertaking
a project, ensuring that the project aligns with the strategic goals of
the organization and delivers value.
• It is crucial for assessing whether the project should proceed, based
on its potential to deliver benefits that outweigh the costs and risks.
Key Concepts in Business
Justification
Cost-Benefit Analysis
• Projects should generate more value than their costs. Analyze
potential benefits and compare them with expected expenses. It
often includes:
• Direct Costs: Expenses directly tied to the project (e.g., labor,
materials).
• Indirect Costs: Overhead or secondary costs associated with the
project (e.g., impact on other departments).
• Benefits: Financial gains, efficiency improvements, customer
satisfaction, etc.
Key Concepts in Business
Justification
Strategic Alignment
• Ensures the project supports the organization's long-term goals,
mission, and vision.
Stakeholder Support
• Gather support from stakeholders, including management, customers,
and team members, for project feasibility.
Risk Assessment
• Identifying and evaluating potential risks that could affect the project's
success. This includes understanding the likelihood of risks occurring
and their potential impact on the project’s outcomes.
Management of Exceptions and
Change
Exceptions and changes are inevitable in projects. Proactive
management ensures they are addressed effectively without disrupting
project goals.
Key Components:
1. Change Management Process
Establish a formal process for managing changes, including approval
workflows, impact assessments, and documentation
i.e Assess the impact of the proposed change on the project’s
objectives, timeline, and costs.
2. Communication and Transparency
• Keeping all stakeholders informed about exceptions, changes, and
their impact on the project i.e Provide consistent updates on project
status and any deviations from the plan. Engage stakeholders in the
decision-making process for significant changes.
Key Components
3. Exception Handling
Exceptions are significant deviations from the project plan that cannot
be managed within the established parameters (e.g., major delays,
budget overruns).
Example: A key supplier fails to deliver critical materials on time,
jeopardizing the project schedule. The project manager escalates the
issue and negotiates with alternative suppliers to mitigate the delay
Setting Objectives and
Constraints
Clearly defined objectives and constraints provide the framework
within which the project will be executed. They guide decision-making
and help ensure that the project stays on track to deliver the desired
outcomes.
Key Components
1. Objectives: Specific, measurable, achievable, relevant, and time-
bound goals that define project success.
2.Constraints: Limitations such as budget, time, resources, and
regulations that shape project scope and execution.
3. Prioritization: Involves ranking objectives and constraints in order of
importance. This helps in decision-making, especially when trade-offs
are necessary.
4.Project Scope: Specific deliverables or features that are included in
the project.
Schedule and Time Management
Involves the process required to ensure timely completion of a project, which
is by no means simple.
:There are six main processes involved in Project Time Management
Activity Definition: involves identifying activities that the project team
members and stakeholders must perform to produce the project deliverables.
• An activity/task is an element of work normally found on the Work
Breakdown Structure (WBS) that has an expected duration, a cost,
and resource requirements.
• The main outputs of this process are an activity list, activity
attributes, milestone list and requested changes.
cont
Activity Sequencing: involves identifying and documenting the
relationships between project activities.
• The main outputs of this process include a project schedule,
network diagram, requested changes, updates to the activity list
and attributes.
• Activity Resource Estimation: involves estimating how many
resources (people, equipment, and materials) a project team should
use to perform project activities.
• The main outputs of this process are activity resource
requirements, a resource breakdown structure, requested
changes, and updates to activity attributes and resource calendars.
cont
Activity Duration Estimation: involves estimating the number of
work periods that are needed to complete individual activities.
• Outputs include activity duration estimates and updates to
activity attributes.
Schedule Development: involves analysing activity sequences,
activity resource estimates, and activity duration estimates to the
project schedule.
• Outputs include a project schedule, schedule model data, a
schedule baseline, requested changes and updates to resources
requirements, activity attributes, the project calendar, and the
project management plan.
contd
• Schedule Control: involves controlling and managing changes to
the project schedule.
• Outputs include performance measurements, requested
changes, recommended corrective actions, and updates to the
schedule model data, the schedule baseline, organisational
process assets, the activity list and attributes, and the project
management plan.
Cost Management
Cost management involves planning, estimating, budgeting, financing,
funding, managing, and controlling costs to complete the project within
the approved budget.
There are three project cost management processes
Cost Estimation: Accurately estimate project costs based on resources,
materials, labor, and contingencies.
• The main outputs of the cost estimating process are activity cost
estimates, and supporting detail, requested changes, and updates to
the cost management plan
contd
Cost Budgeting :Develop a detailed budget that outlines all expected
costs, including direct, indirect, fixed, and variable costs.
• The main outputs are a cost baseline, project funding requirements,
requested changes and updates to the cost management plan
Cost Control: involves controlling changes to the project budget.
• The main outputs of this process are performance measurements,
forecasted completion information, requested changes ,
recommended corrective actions, and updates to the project
management plan (which includes the cost management plan), cost
estimate, cost baseline and organisational process assets.
The End
