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Project Management

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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.

37 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).

38 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. Cost Benefit Analysis:

Once the approximate total cost of the project is determined, a cost-benefit

analysis should be conducted to determine if the estimated

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.

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


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

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


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.


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.


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


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.


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


Configuration management for all projects under work.

For developing and keeping repository and risk management for projects.


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.

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


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.


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


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