Chapter 1

Introduction to
Software Project
Management
 1.1. What is a Project?
• A project is a temporary endeavor to create a unique product,
service, or result.
• Key attributes of project:
– Temporary: every project has a definite beginning and a definite end.
– Unique purpose: Every project should have a well-defined objective.
Projects result in a unique product, service, or result.
– Progressive elaboration: Projects are often defined broadly when
they begin. As time passes, the specific details of the project become
clearer.
– Requires resources: Resources include people, hardware, software,
and other assets.
– Involves uncertainty: Because every project is unique, it is
sometimes difficult to define its objectives clearly, estimate how long
it will take, or determine how much it will cost.
 1.1. What is a Project? …
• Organizations perform work and work generally involves either
operations or projects.
• Operation is work done in organizations to sustain the business.
• Projects are different from operations in that they end when their
objectives have been reached or it is terminated.
• Operations are ongoing and repetitive while projects are
temporary and unique.
• Projects:
– Temporary and unique.
– End when objectives are met.
• Operations:
– Ongoing and repetitive.
– Sustain the business.
• Examples of projects are:
• A large healthcare provider updates its information systems and procedures
to improve service.
• A team of students creates a smartphone application and sell it online.
• A company develops a driverless car.
• A college upgrades its technology infrastructure to provide wireless
Internet access across the whole campus as well as online access to all
academic and student service information.
• A company implements a new system to increase sales force productivity
and customer relationship management that will work on various devices.
• A television network implements a system to allow viewers to vote for
contestants and provide other feedback on programs via social media sites.
• A government develops a system to track child immunizations.
• A large group of volunteers from organizations throughout the world
develops standards for environmentally friendly or green IT.
• A global bank acquires other financial institutions and needs to consolidate
systems and procedures.
• A multinational firm decides to consolidate its information systems into an
integrated enterprise resource management approach.
• Every project is constrained by scope, time, and cost.
• Scope: What work will be done? What deliverables are expected?
• It refers to the work required to deliver a project's objectives, including
features, deliverables, and tasks.
• The project scope includes all the deliverables, features, tasks, and
activities required to complete the project successfully.
• It includes:
• Project Objectives: The high-level goals the project aims to achieve.
• Example: Develop e-commerce website to increase online sales by 20%.
• Deliverables: Tangible or intangible outputs the project will produce.
• Example: A fully functional website, user training materials, and a
maintenance plan.
• Tasks and Activities: The specific work required to produce deliverables.
• Example: Design the website layout, develop the payment gateway, and
test the site for usability.
• Boundaries (Inclusions and Exclusions): Clearly defines what is included
in the project and what is not.
• Time: How long will the project take? What is the schedule?
• Time refers to the schedule or timeline required to complete the project,
including deadlines for deliverables and milestones.
• It includes:
• Project Schedule: A detailed timeline that outlines when tasks,
activities, and milestones will be completed.
• Example: A Gantt chart that shows the start and end dates for each task.
• Deadlines: Specific dates by which deliverables or milestones must be
completed.
• Example: The prototype must be ready by March 15th.
• Dependencies: Tasks that rely on the completion of other tasks before
they can begin.
• Example: Testing cannot start until development is complete.
• Milestones: Key points in the project timeline that mark significant
achievements or phases.
• Example: Completion of the design phase by February 1.
 1. 1. What is a Project? ...
• Cost: What is the budget? How will costs be tracked?
• This includes total project budget, costs incurred, contingency
funds, etc.
• For example, a project might have a budget of 500,000.
Balancing Act:
• Project managers must make trade-offs between these
constraints.
• For example:
– Increasing scope may require more time and cost.
– Reducing time may require cutting scope or increasing costs.
– Reducing costs may require cutting scope or extending the
timeline.
 1. 1. What is a Project? ...
• Visual Representation:
– A triangle with Scope, Time, and Cost at each corner.
– Quality and customer satisfaction in the center, showing
their importance.
• Meeting all three constraints (scope, time, cost) is crucial, but
quality and customer satisfaction are equally important.
• For example, a project might meet its scope, time, and cost
goals, but if the quality is poor or the customer is unhappy, the
project is still considered a failure.

Figure constraints of a project

 1.2. Problems with Software Projects
• Software projects are complex and often face challenges that
can lead to delays, cost overruns, poor quality, or project failure.
• Software project management is a complex endeavor, and many
factors can contribute to project failures.
• Here are some common problems:
• A. Scope Creep: This occurs when the project's scope expands
beyond its original objectives.
• New features are continuously added without adjusting budget
or schedule.
• Delays due to constant requirement changes.
• It can result from unclear requirements, lack of stakeholder
discipline, or inadequate change control processes.
• B. Poor Project Planning and Estimation: If the project
objectives are not clearly defined, the team will struggle to
deliver a successful product.
• Lack of clarity leads to misaligned expectations between
stakeholders and developers.
– Unrealistic timelines and budgets.
– Lack of clear scope definition.
– Poor resource allocation.
• C. Communication Breakdown: Effective communication is
critical in software projects.
• Poor communication between team members, stakeholders, and
project managers can lead to misunderstandings, delays, and
conflicts.
• Poor communication can lead to misunderstandings, lack of
coordination, and ultimately project delays or failure.
• Causes:
– Lack of regular updates or transparency.
– Using incompatible tools for collaboration.
– Cultural or language barriers in distributed teams.
 1.2. Problems with Software Projects…
• D. Inadequate Risk Management: Failure to identify, analyze,
and mitigate risks can lead to unexpected issues that derail the
project.
• Insufficient contingency planning can exacerbate the impact of
unforeseen events.
• Unexpected risks cause project delays and budget overruns.
• Project managers must proactively manage risks throughout the
project lifecycle.
• E. Technical Debt: This refers to the implied cost of additional
rework caused by choosing an easy solution now instead of
using a better approach that would take longer.
• Accumulating technical debt can slow down development and
increase maintenance costs over time.
• It leads to increased maintenance costs, reduced productivity,
and higher risk of defects.
 1.2. Problems with Software Projects…
• F. Resource Allocation and Management:
• Misallocation or insufficient allocation of resources, including
personnel, technology, and budget can impede project progress.
• This includes not having the right mix of skills or enough staff
to complete the project tasks.
• This leads to:
– Poor workload balancing.
– Lack of skilled personnel.
– Demotivated team due to unclear roles or unrealistic expectations.
• In terms of skills gap:
– Lack of skilled personnel can impede progress and compromise
the quality of the product.
– Difficulty in attracting and retaining qualified developers is a
common challenge.
 1.2. Problems with Software Projects…
• G. Poor Requirement Gathering: Incomplete or ambiguous
requirements can lead to misunderstandings and a product that
does not meet the needs of its users.
• It occurs when the process of identifying, documenting, and
validating the needs and expectations of stakeholders is
incomplete, unclear, or inaccurate.
• This is often due to inadequate communication between
stakeholders and the development team.
• Issues:
– Incomplete, unclear, or conflicting requirements from
stakeholders.
• Causes:
– Stakeholders not fully engaged or aligned
– Assumptions made without validation
– Lack of user-centric design thinking
 1.2. Problems with Software Projects…
• To mitigate the above problems, project managers should
employ best practices such as:
– thorough planning
– stakeholder analysis
– risk management
– clear communication
– regular progress reviews
• Additionally, adopting a flexible project management
methodology that can adapt to changes and challenges as they
arise is crucial for the success of software projects.
 1.3. What is Project Management?
• Project management is the application of knowledge, skills,
tools and techniques to project activities to meet project
requirements.
• Project managers must strive to meet specific scope, time, cost,
and quality goals of projects.
• They must also facilitate the entire process to meet the needs
and expectations of the stakeholders.
• Key elements:
– Stakeholders: People involved in or affected by the project.
– Knowledge Areas: 10 key areas like scope, time, cost, and
risk management.
– Tools and Techniques: Gantt charts, risk registers, and more.
– Project Success: Meeting goals and satisfying stakeholders.
• Project management framework is a structured approach or set
of guidelines, processes, tools, and techniques used to plan,
execute, monitor, control, and close projects effectively.
• It provides a standardized way to manage projects, ensuring
consistency, efficiency, and alignment with organizational goals.
• It helps teams deliver projects on time, within budget, and to the
required quality.

Figure Project management framework

A. Project Stakeholders
• Stakeholders are individuals or groups who are involved in or
affected by the project.
• Examples:
– Project Sponsor: Provides funding and direction. For
example, the CEO of a company sponsoring a new IT
system.
– Project Team: Executes the work. For example, software
developers, testers, and project managers.
– Customers/Users: Benefit from the project’s outcome. For
example, employees using a new HR system.
– Suppliers: Provide materials or services. For example, a
vendor supplying hardware for a network upgrade.
– Opponents: May resist the project due to conflicts of interest.
For example, employees who fear job loss due to
automation.
• Stakeholders have different needs and expectations, and
managing them is critical for project success.
 1.3. What is Project Management? ...
B. Project Management Knowledge Areas
• Project management knowledge areas describe the key
competencies that project managers must develop.
• Ten knowledge areas:
– Scope Management: Defining and controlling what is included in
the project.
– Schedule Management: Planning and controlling the project
timeline or schedule.
– Cost Management: Estimating and managing the project budget.
– Quality Management: Ensuring the project meets the required
standards.
– Resource Management: Managing people and physical resources.
– Communications Management: Ensuring effective information
flow.
 1.3. What is Project Management? ...
– Risk Management: Identifying and mitigating risks.
– Procurement Management: Acquiring goods and services.
– Stakeholder Management: Engaging and managing
stakeholders.
– Integration Management: Coordinating all aspects of the
project.
• Project managers must have knowledge and skills in all of these
areas.
C. Project Management Tools and Techniques
• It is important for people to develop and use tools, especially for
managing important projects.
• Project management tools and techniques assist project managers
and their teams to carry out work in all ten knowledge areas.
• Some popular time management tools and techniques include:
– Gantt Charts: Visualize project schedules and task dependencies.
For example, Microsoft Project or Smartsheet.
– Critical Path Analysis: Identify the longest path of tasks to
determine project duration.
– Risk Registers: Document and track potential risks. For example, a
spreadsheet listing risks, their impact, and mitigation strategies.
– Stakeholder Analysis: Identify and prioritize stakeholders based on
their influence and interest.
– Work Breakdown Structure (WBS): Break down the project into
smaller, manageable tasks.
• The Project Management Institute identifies Super Tools as those
with high adoption rates and strong positive impact on project
outcomes.
Knowledge Area/Category Tools and Techniques Super Tools
Project selection methods Project management software
Project management methodologies Change requests
Stakeholder analyses Lessons-learned reports
Work requests
Integration management Project charters
Project management plans
Change control boards
Project review meetings

Statements of work Scope statements

Scope management plans Work breakdown structures
Scope management Scope verification techniques Requirements analyses
Scope change controls
Project network diagrams Gantt charts
Critical path analysis
Time management Crashing
Fast tracking
Schedule performance measurements

Project budgets
Net present value
Return on investment
Payback analysis
Earned value management
Cost management Project portfolio management
Cost estimates
Cost management plans
Cost baselines
 Quality metrics
Checklists
Quality control charts
Pareto diagrams
Quality management Fishbone diagrams
Maturity models
Statistical methods
Test plans
Motivation techniques
Empathic listening
Human resource Responsibility assignment matrices
management Project organizational charts
Resource histograms
Team building exercises
Communications management plans Kick-off meetings
Conflict management Progress reports
Communications media selection
Communications
Status reports
management
Virtual communications
Project websites

Risk management plans

Risk registers
Risk management
Probability/impact matrices
Risk rankings
Make-or-buy analyses
Contracts
Procurement management Requests for proposals or quotes
Source selections
 1.3. What is Project Management? ...
• The Project Management Institute (PMI) identifies Super Tools as
those with high adoption rates and strong positive impact on
project outcomes.
• Super Tools are highly effective project management tools,
techniques, or methodologies that significantly improve project
success rates.
• These tools help in planning, execution, communication,
collaboration, and risk management.
• Super Tools enhance efficiency, reduce risks, and improve project
success rates.
• Choosing the right tools depends on project size, complexity, and
team needs.
D. Project Success
• Criteria for Success:
– Meeting Scope, Time, and Cost Goals: The project delivers what
was promised, on time and within budget.
– Stakeholder Satisfaction: Even if the project meets its goals, it can
fail if stakeholders are unhappy.
– Achieving the Main Objective: The project should deliver value,
such as increased revenue, cost savings, or improved efficiency.
• Why do some IT projects succeed and others fail? The list below
summarizes the results of the 2015 CHAOS study.
• Factors that contribute most to the success of IT projects are:
– Executive sponsorship 15
– Emotional maturity 15
– User involvement 15
– Optimization 15
– Skilled resources 10
– Agile process 7
– Modest execution 6
– Project management expertise 5
– Clear business objectives 4
 2. Stages of Project
• The stages of a project provide a structured framework for
managing a project from start to finish.
• Projects are typically broken down into stages or phases that
provide a structured framework for managing and delivering the
project successfully.
• These stages ensure that the project is well-planned, executed,
monitored, and closed, ultimately leading to successful delivery.
• A project has five major phases:
– initiation, planning, execution, monitoring and control, and closure.
• Taken together, these phases represent the path a project takes
from the beginning to its end.
• The purpose is to ensure that the project is well-planned, executed,
and controlled to achieve its objectives.
 2. Stages of Project…
• The five phases of project
I. Initiation
• The initiation stage marks the beginning of the project.
• It involves defining the project at a high level and obtaining
approval to proceed.
• It involves defining the purpose and scope of the project, the
justification for undertaking the project and the solution to be
implemented.
• Key activities include:
• Identifying the project need: Understanding the problem or
opportunity the project aims to address.
• Feasibility study: Assessing whether the project is viable in
terms of technical, financial, and operational aspects.
• Stakeholder identification: Identifying key stakeholders and
their interests.
• Project Charter: Creating a document that formally authorizes
the project and outlines its objectives, scope, and key
stakeholders.
 2. Stages of Project…
• The outcome of initiation phase is clear project purpose and a
decision to move forward.
• In initiation, a problem analysis is conducted describing:
– the problem to be addressed by the project,
– the alternative solutions and
– the potential costs and benefits associated with each.
• This is followed by feasibility study.
• Feasibility is conducted to ascertain the likelihood of alternative
solutions for delivering the stated benefits in the problem analysis.
• Next, develop the Terms of Reference (ToR).
• This describes what the project intends to achieve and the
boundaries within which it must achieve it.
• This includes the project vision, objectives, scope, deliverables,
project organization and an Implementation Plan.
 2.1. Feasibility Study
• A
​ feasibility study is a critical assessment conducted during the
initial planning phase of a software project.
• Its main goals is to determine project’s viability and potential
for success.
• This comprehensive analysis evaluates various factors to ensure
that the proposed project aligns with organizational goals and is
achievable within the given constraints.
• Feasibility study evaluates whether a proposed project is viable
from technical, economic, legal, operational, and scheduling
perspectives.
• It helps stakeholders make informed decisions about whether to
proceed with the project, modify it, or abandon it altogether.
 2.1. Feasibility Study…
• The primary objective of a feasibility study is to evaluate the
practicality of a proposed project plan.
• This assessment helps decision-makers determine whether the
project is likely to succeed before committing significant
resources. ​
• It aims to answer the question: "Should we proceed with this
project?"
• A feasibility study answers the following questions:
– Is the project technically achievable?
– Is the project economically justified?
– Are there legal or regulatory constraints?
– Can the project be completed within the desired timeframe?
– Does the organization have the operational capacity to
support the project?
 2.1. Feasibility Study…
Types of Feasibility
• 1. Technical Feasibility
• TF assesses whether the proposed software can be developed
with the available technology, tools, and expertise.
• It assesses whether the organization has the technical resources
and expertise to execute the project successfully.
• This includes evaluating the availability of technology, technical
skills, and compatibility with existing systems.
• Key Considerations:
– Are the required hardware and software resources available?
– Does the development team have the necessary skills?
– Are there any technical risks or limitations?
 2.1. Feasibility Study…
• 2. Legal Feasibility
• LF examines whether the project complies with legal and
regulatory requirements.
• This includes assessing potential legal obstacles and ensuring
adherence to relevant laws and regulations.
• Key considerations:
– Are there any intellectual property or licensing issues?
– Does the project comply with data protection laws (e.g.,
GDPR)?
– Are there any contractual obligations or liabilities?
 2.1. Feasibility Study…
• 3. Operational Feasibility
• It assesses whether the organization can effectively integrate the
software into its operations.
• It evaluates how well the proposed solution fits within the
organization's existing operational processes and whether it can
be integrated smoothly.
• This also considers the project's impact on current operations
and its acceptance by stakeholders.
• Key considerations:
– Will the software meet the needs of end-users?
– Are there any organizational or cultural barriers to adoption?
– Does the organization have the infrastructure to support the
software?
 2.1. Feasibility Study…
• 4. Scheduling Feasibility
• It determines whether the project can be completed within the
desired timeframe.
• This involves assessing the reasonableness of the project
timeline and the availability of resources to meet deadlines.
• Key considerations:
– Are the project timelines realistic?
– Are there any dependencies or bottlenecks that could cause
delays?
– Can the team meet the deadlines without compromising
quality?
• 5. Economic Feasibility
• EF evaluates whether the project is financially viable and
provides a good return on investment (ROI).
• It analyzes the cost-benefit aspect of the project to determine if
it is financially viable.
• This involves estimating the total costs and comparing them
with the expected benefits or returns.
• Key Considerations:
– What are the estimated costs (development, maintenance,
training)?
– What are the expected benefits (revenue, cost savings,
efficiency gains)?
– Is the project financially sustainable in the long term?
• It involves:
– Cost-benefit analysis (CBA).
– Return on investment (ROI) calculations.
– Budgeting and forecasting.
 2.1.1. The Cost-benefit Analysis
• Cost-Benefit Analysis (CBA) is a fundamental technique in
software project management used to evaluate the financial
viability of a project.
• It compares the expected costs of developing and maintaining a
software system with the anticipated benefits it will deliver.
• The primary goal of CBA is to determine whether the benefits of
a software project outweigh its costs.
• This analysis helps stakeholders make informed decisions about
whether to proceed with a project, modify, or abandon it.
• CBA provides a quantitative basis for decision-making by:
– Identifying and quantifying all relevant costs and benefits.
– Comparing the total costs with the total benefits.
– Assessing the project's financial feasibility and potential return on
investment.
 Benefits Costs
Tangible Benefits Development costs (OTO)
• Readily quantified as cash values • Development and purchasing costs
• Examples – Cost of development team
– Consultant fees
– increased sales
– software used (buy or build)?
– cost/error reductions – hardware (what to buy, buy/lease)?
– increased throughput/efficiency – facilities (site, communications,
– increased margin on sales power,...)
– more effective use of staff time • Installation and conversion costs
Intangible benefits – installing the system,
– training personnel,
• Difficult to quantify – file conversion,....
• But maybe more important!
Operational costs (on-going)
• business analysts help estimate cash
• System Maintenance
values
– hardware (repairs, lease, supplies,...),
• Examples – software (licenses and contracts),
– increased flexibility of operation – facilities
– higher quality products/services • Personnel
– better customer relations – For operation (data entry, backups,…)
– improved staff morale – For support (user support, hardware and
– software maintenance, supplies,…)
– On-going training costs
• The types of costs involved in project management can be
categorized as:
– Direct cost
– Indirect cost
– Fixed cost
– Variable cost
– Sunk cost
1. Direct cost
• Direct costs are directly linked to doing the work of the project.
• You can identify the direct relationship between these costs and the
project by selecting a cost object.
• They are directly attributable to the project and can be easily traced
to specific activities or deliverables.
• Examples:
– Salaries of project team members.
– Costs of software licenses or hardware.
– Costs of materials or tools required for development.
– Training costs specific to the project.
 2.1.1. The Cost-benefit Analysis…
2. Indirect Cost
• Indirect costs are not directly tied to the project but are
necessary for its execution.
• Indirect costs in project management are the costs that
contribute to an overall production output but aren't easily
traceable to a specific cost object.
• These are often shared across multiple projects or activities.
• Examples:
– Overhead costs (e.g., utilities, office space).
– Administrative support (e.g., HR, finance).
– Shared resources (e.g., servers, cloud infrastructure).
 2.1.1. The Cost-benefit Analysis…
3. Fixed Cost
• Costs that remain constant regardless of the project's scale or
duration.
• It is predictable and not fluctuate with the level of activity or usage.
• These fees are not linked to how long your project goes on for.
• These costs are incurred even if no output is produced.
• Examples:
– Rent or lease payments for office space.
– Annual software license fees.
– Lease payments for equipment.
– Salaries of permanent staff.
– Insurance premiums.
 2.1.1. The Cost-benefit Analysis…
4. Variable Cost
• Costs that fluctuate based on the project's scope, duration, or
scale.
• These are the opposite of fixed costs - charges that change with
the length of your project.
• It's more expensive to pay staff salaries over a 12 month project
than a 6 month one.
• Machine hire over 8 weeks is more than for 3 weeks.
• Examples:
– Hourly wages for contractors.
– Costs of additional resources (e.g., cloud services based on usage).
– Travel expenses for project-related activities.
5. Recurring Costs
• Costs that occur repeatedly over the project's lifecycle or beyond.
• Costs that occur repeatedly over time, typically at regular
intervals (e.g., monthly, annually).
• These are ongoing expenses necessary to sustain a project or
operation.
• Examples:
– Salaries and wages for ongoing staff.
– Monthly subscription fees for software tools.
– Maintenance and support costs.
6. Non-Recurring Costs
• One-time costs incurred during the project's lifecycle.
• These are typically incurred during the initial phases of a project
or for specific, non-repetitive activities.
• Examples:
– Initial setup costs (e.g., infrastructure, software installation).
– Costs of project planning and design.
– Costs of purchasing equipment.
Benefit Estimation
• Estimate benefits of new system based on:
– Estimation of cost savings and money generation when deployed
– Value of information obtained for objective driven project
– Value of intangibles
• Benefits types are: direct benefits, indirect benefits, intangible benefits
1. Direct Benefits
• Measurable, tangible outcomes that directly result from the project.
• They are often quantifiable and directly tied to the project's objectives.
• They are directly accountable to new system
– Cost savings (e.g., less staff, less paper, quicker turnaround)
– Money generation (e.g., new revenue stream, new markets)
– Improved system performance (e.g., faster response times).
– Higher customer satisfaction scores due to enhanced features.
• Measurable after system is operational.
• Have to be estimated for cost/benefit analysis
2. Indirect Benefits
• These are secondary outcomes that are not directly tied to the
primary goal of the project but still contribute to its overall value.
• These benefits are often secondary or downstream effects and may
be quantifiable, though they are not the main focus of the project.
• They often support long-term goals or broader organizational
objectives.
• The secondary benefits of new system examples are:
– Increased market share due to a competitive advantage gained from
the project.
– Increased Customer Satisfaction.
– improve employee satisfaction, leading to reduced turnover.
– Higher Productivity: A project that automates repetitive tasks free up
employees' time, allowing them to focus on higher-value activities.
• Somewhat quantifiable after the system is operational.
• Have to be estimated for cost/benefit analysis.
3. Intangible Benefits
• These are non-physical, qualitative benefits that are difficult to
measure in monetary terms but still provide value to the organization.
• They often relate to improvements in organizational culture, brand
perception, or employee capabilities.
• Related to non-financial improvements (e.g., reputation, satisfaction).
• Positive side effects of new system.
– Improved customer loyalty due to a better user experience.
– Enhanced organizational agility and adaptability.
– Increased innovation potential from new technologies or processes.
– Better alignment with industry standards or compliance requirements.
• It could be be due to external or internal systems:
– External system (e.g., increase branding, entry to new markets)
– Internal system (increased interest in job for users, enabler for other
systems)
• Often very specific to a project; not measurable even after a system is
operational.
• Part of strategic decision rather than cost/benefit analysis.
Example: costs for small Client-Server project
 2.1.1. The Cost-benefit Analysis…
• CBA involves comparing the total expected costs of a project
with its total expected benefits to determine whether the project
is worthwhile.
• There are some methods for comparing projects based on their
cash flow forecasts:
– Net Profit
– Payback Period
– Return on Investment (ROI)
– Net Present Value (NPV)
– Internal Rate of Return (IRR)
• After assigning monetary values to all costs and benefits, we use
the above methods to compare different projects.
1. Net Profit
• The net profit of a project is the difference between the total
costs and the total income over the life of the project.
• It is a key metric to determine whether a project is financially
and strategically worthwhile.
• The formula for net profit is:
Net profit = Total revenue – Total costs
• Total revenue is the income generated from the project (e.g.,
sales, services, or deliverables).
• On the next slide, project 2 shows the greatest net profit
• But this is at the expense of a large investment.
• Indeed, if we had 1M to invest, we might undertake all of the
other three projects and obtain an even greater net profit.
• Project 1 & 3 each have a net profit of 50K, and according to
this selection criterion, would be equally preferable.
• The bulk of the income occurs late in the life of Project 1,
whereas Project 3 returns a steady income throughout its life.
 2.1.1. The Cost-benefit Analysis…
• Cash flow forecasts for four projects
 2.1.1. The Cost-benefit Analysis…
• In net profit:
• Year 0: costs before the system is put into operation.
• Cash Flow: timings of expenditure & income.
• Net Profit: difference between the total costs and the total
income over the life of the project.
Year Cash Flow
0 -100,000
1 10,000
2 10,000
3 10,000
4 20,000
5 100,000
Net Profit 50,000
• Why is Net Benefit Important?
‒ Helps in decision-making for project approval
‒ Assists in comparing multiple project options
‒ Ensures resources are invested in most beneficial initiatives
• Calculate the net profit for the following four projects:
 2.1.1. The Cost-benefit Analysis…
2. Payback Period
• The payback period is the time taken to break even or pay back
the initial investment.
• The payback period measures the time required for a project to
recover its initial investment from its cash inflows.
PP = cumulative cash inflows ≥ cumulative cash outflows
• The project with the shortest payback period will be chosen on
because it will minimize the time that a project is “in debt”.
• Payback period is the amount of time it will take to recoup the
total dollars invested in a project,
• Payback occurs when the net cumulative benefits equal the net
cumulative costs or when the net cumulative benefits minus
costs equal zero.
 2.1.1. The Cost-benefit Analysis…
• Creating a chart helps illustrate more precisely when the payback
period occurs.
• PP is the time it takes to start generating a surplus of income
over outgoings.
• Advantages:
‒ Simple to calculate and understand.
‒ Emphasizes liquidity and risk by focusing on early cash flows.
• Limitations:
‒ Ignores cash flows beyond the payback period.
‒ Does not consider the time value of money.
• What would it be below? It is 5 years.
 2.1.1. The Cost-benefit Analysis…
• In short: Payback period = Time taken to break even
 2.1.1. The Cost-benefit Analysis…
• Calculate the payback period
 2.1.1. The Cost-benefit Analysis…
3. Return on Investment (ROI)
• Return on Investment is a financial metric used to evaluate the
profitability of an investment.
• It measures the percentage return relative to the investment cost.
• ROI is a ratio that measures the profitability of an investment by
comparing the gain to its cost.
• This helps businesses and project managers assess whether a
project is worth pursuing.
• ROI is typically expressed as a percentage because it is easier to
understand than a ratio.
• The formula for ROI calculation is:
 2.1.1. The Cost-benefit Analysis…
• Calculate ROI for the following project

Year Cash Flow • Net profit = 50,000

0 -100,000
• Total investment = 100,000
1 10,000

2 10,000

3 10,000 • A 50% ROI means that the investment

generated a 50% return relative to the initial
4 20,000 cost.
5 100,000

Net Profit 50,000

 2.1.1. The Cost-benefit Analysis…
• ROI of four projects
 2.1.1. The Cost-benefit Analysis…
• ROI provides a simple, easy-to-calculate measure of return on
capital.
• But, it suffers from two severe disadvantages:
– Like the net profit, it takes no account of the timing of the cash
flows.
– It has no relationship to the interest rates offered or charged by
banks, so it is very misleading.
• Limitations of ROI
– Ignores Time Value of Money: It does not account for inflation or
discounting future cash flows.
– Short-Term Focus: ROI might favor short-term gains over long-term
benefits.
– Does Not Consider Risks: Two projects may have the same ROI, but
different risk levels.
• Project 1 has the highest ROI and a longer payback period. It is
suitable for investors looking for steady returns over time.
• Project 2 has the lowest ROI and a long payback period, making it less
attractive despite the higher net profit in absolute terms.
• Project 3 offers a reasonable ROI and a shorter payback period,
making it a potentially better option for quicker returns.
• Project 4 has the second highest ROI and a relatively short payback
period, making it the most attractive option for maximizing
profitability.
 2.1.1. The Cost-benefit Analysis…
4. Net Present Value (NPV)
• NPV is a metric used in capital budgeting to evaluate the
profitability of an investment or project.
• NPV considers the time value of money.
• It calculates the present value of future cash inflows and
outflows, helping to evaluate whether a project is financially
viable.
• It represents the difference between the present value of cash
inflows and the present value of cash outflows over a period of
time, discounted at a specific rate.
• Present value is the value which a future amount is worth at
present.
• It takes into account the profitability of a project and the timing
of the cash flows.
 2.1.1. The Cost-benefit Analysis…
• Key concepts of NPV:
• Time Value of Money: NPV accounts for the fact that a dollar
today is worth more than a dollar in the future due to its
potential earning capacity.
• This is because money can be invested to earn returns over time.
• Discount Rate: The rate used to discount future cash flows to
their present value.
• It reflects the risk and opportunity cost of the investment.
• The decision rule is:
– If NPV > 0: The project is profitable and should be accepted.
– If NPV < 0: The project is not profitable and should be rejected.
– If NPV = 0: The project breaks even, and the decision depends on
other factors (e.g., strategic importance).
• The formula for computing the present value of money at time t
in the future is:

• Where:
– Ct​ = Cash inflow or outflow in year 𝑡
– 𝑟 = Discount rate (cost of capital)
– t = Year number
– 𝐶0​ = Initial investment
• The net present value is:

• The discount factor is a multiplier used to convert future cash

flows into present value terms.
• The discount factor for a given year t is calculated as:
 2.1.1. The Cost-benefit Analysis…
• Initial Investment (C0​): 100,000
• Cash Flows: 30,000 per year for 5 years
• Discount Rate (r): 10%
Discount
Present
Year Cash Flow Factor
Value
(1/(1+r)t
1 30,000 0.909 27,270
2 30,000 0.826 24,780
3 30,000 0.751 22,530
4 30,000 0.683 20,490
5 30,000 0.621 18,630
Total PV of Cash Flows 113,700
NPV 13,723.60
•
• Example: two projects with 200,000 and 150,000 investments.
• Discount Rate: 8%

Project A Project B Discount

Year PV (A) PV (B)
Cash Flow Cash Flow Factor

0 200,000 150,000 200,000 150,000

1 60,000 50,000 0.926 55,560 46,300

2 60,000 50,000 0.857 51,420 42,850

3 60,000 50,000 0.794 47,640 39,700

4 60,000 50,000 0.735 44,100 36,750

5 60,000 50,000 0.681 40,860 34,050

Total PV 239,580 199,650

• NPV (A): 239,580−200,000 = 39,580239,580−200,000 = 39,580
• NPV (B): 199,650−150,000 = 49,650199,650−150,000 = 49,650
• Interpretation: Project B has a higher NPV and is more profitable.
 The Cost-benefit Analysis…
• Example: Calculate NPV for a project which lasts for 5 years
and the discounting rate is 4%.
Year Benefits Costs B-C Discounting factor PV

0 5000 -5000 5000

1 0 3000 -3000 1/1.041 = 0.962 -2886

2 1200 0 1200 1/1.042 = 0.925 1110

3 1200 0 1200 1/1.043 = 0.889 1066.8

4 1200 500 700 1/1.044 = 0.855 598.5

5 1200 0 1200 1/1.045 = 0.822 986.4

Total PV 875.7
5. Internal Rate of Return
• IRR is used to evaluate investment profitability.
• It represents the discount rate at which the NPV of cash flows equals 0.
• It represents the discount rate at which the NPV of all cash flows (both
inflows and outflows) from a project equals zero.
• It is the rate at which a project's inflows exactly balance its outflows.
• IRR calculations rely on the same formula as NPV.
• IRR is the annual return that makes the NPV equal to zero.
• The IRR is the interest rate that sets the project’s NPV to zero.
• Key Concepts of IRR:
i. Break-Even Rate: IRR is the rate at which the project breaks even (NPV = 0).
ii. Decision Rule:
• If IRR > Required Rate of Return (or Cost of Capital): Accept the project.
• If IRR < Required Rate of Return: Reject the project.
iii. Comparison with NPV: IRR is closely related to NPV. While NPV provides a
dollar value of profitability, IRR provides a percentage return.
• The IRR is the discount rate (r) that satisfies the following equation:

• Where:
‒ Ct​= Cash flow at time t
‒ r = Internal Rate of Return (IRR)
‒ C0​= Initial investment
‒ t = Time period
• Example:
• Initial Investment (C0​): 100,000
• Cash Flows:
‒ Year 1: 30,000
‒ Year 2: 40,000
‒ Year 3: 50,000
• We need to solve for r in the following equation:

• This equation cannot be solved algebraically, so we use IRR trial

≈ 8.91%
and
error or financial tools like Excel or a financial calculator.
 2.1.1. The Cost-benefit Analysis…
• The IRR is the interest rate that sets the project’s NPV at zero.
PW Benefits = PW Costs at i = IRR.
• Example: A project requires a $240,000 investment and will
return $99,900 at the end of each of the next three years. What is
the IRR?
• The NPV formula is

• Applying the values:

• The IRR for the project is 12.0%.

• An IRR of 12% means the project is expected to generate an
annual return of 12% to break even.
 2.1.1. The Cost-benefit Analysis…
• IRR calculations rely on the same formula as NPV does.
• Unlike the NPV, the IRR is given in percentage terms which is
% discount rate per year such that the project NPV is 0.
• We call this a "yield" measure of return.
• This can be very convenient when comparing different types of
projects.
• In many cases, the project with the largest yield will be the most
desirable.
• IRR is generally impossible to calculate without a computer
except in simple cases.
• If you use Excel, there is a built-in IRR function that will
calculate the IRR
 2.2. Project Planning
• Planning lays out the project’s roadmap.
• In this phase, we determine the steps to actually achieve the
project goals.
• In answers the “how” question of completing a project.
• In planning, we establish budgets, timelines, milestones, source
materials, and necessary documents.
• This step also involves predicting risk, implementing change
processes, and outlining communication protocols.
• Planning phase involves defining the project's objectives, scope,
schedule, resources, risks, and deliverables, and creating a
roadmap to guide the project team.
 2.2. Project Planning…
• The main purpose of project plans is to guide project execution.
• To guide execution, plans must be realistic and useful.
• People who are knowledgeable about the work need to plan the
work.
• The planning phase can include the following steps:
– Deciding on milestones that lead up to goal completion
– Developing a schedule for tasks and milestones, including time
estimates and buffers
– Establishing change processes
– Determining how and how often to communicate with team
members and stakeholders
– Creating and signing documents such as non-disclosure
agreements (NDAs) or requests for proposal (RFPs)
– Assessing and managing risk by creating a risk register
– Holding a kick-off meeting to start the project
• Activities performed in planning phase are:
• 1. Define Project Objectives: Establish clear, measurable goals that the
project aims to achieve.
• Align objectives with stakeholder expectations and business needs.
• 2. Scope Definition: Clearly outline the project's boundaries, deliverables,
and features.
• Create a Work Breakdown Structure (WBS) to break the project into
manageable tasks and subtasks.
• Document assumptions, constraints, and exclusions to avoid scope creep.
• 3. Schedule Planning: Develop a detailed project timeline using tools like
Gantt charts.
• Identify task dependencies and critical paths to ensure efficient sequencing
of activities.
• Estimate task durations and set milestones to track progress.
• 4. Resource Planning: Identify the personnel, tools, equipment, and budget
required for the project.
• Assign roles and responsibilities to team members.
• Plan for resource allocation and availability to avoid bottlenecks.
• 5. Cost Estimation and Budgeting: Estimate the costs associated with resources,
tools, and other project expenses.
• It is the process of predicting the financial cost of the project, based on the
resources required and other factors.
• Include contingency funds to address unforeseen expenses.
• 6. Risk Management Planning: Identify potential risks that could impact it.
• Assess the likelihood and impact of each risk.
• Develop mitigation strategies and contingency plans to address risks.
• 7. Quality Planning: Define quality standards and criteria for deliverables.
• Plan testing, reviews, and inspections to ensure the software meets
requirements.
• Establish processes for continuous quality improvement.
• 8. Communication Planning: Develop a communication plan to ensure effective
information sharing among stakeholders.
• Define communication channels, frequency, and formats for updates & reports.
• Identify key stakeholders and their communication needs.
• 9. Procurement Planning: Identify external resources or services required for
the project.
• Plan for vendor selection, contract negotiation, and procurement processes.
 2.2. Project Planning…
• 10. Documentation Planning: Define the types of documentation
required (e.g., project charter, requirements documents, technical
specifications, user manuals).
• Assign responsibilities for creating and maintaining documentation.
• Tools and techniques used in planning are:
– Work Breakdown Structure (WBS): Breaks the project into smaller,
manageable components.
– Gantt Charts: Visualizes the project schedule and task dependencies.
– Critical Path Method (CPM): Identifies the sequence of tasks that
determine the project duration.
– Risk Registers: Documents identified risks and mitigation strategies.
– Cost Estimation Tools: Helps in calculating project costs and
creating budgets.
– Project Management Software: Tools like Microsoft Project, Jira, or
Asana assist in planning and tracking.
 2.2. Project Planning…
• There are several methods of setting up the project’s goals but
S.M.A.R.T. is one of the most popular.
• The S.M.A.R.T. criteria ensure that the goals set for the project are
critically analyzed.
• It is an established method that reduces risk and allows project
managers to make clearly defined and achievable goals.
• Specific: Goals should be clear and specific, avoiding ambiguity.
• Example: Instead of saying, "Improve the website," a specific goal would be,
"Redesign the company website to improve user experience by reducing page
load time and adding a mobile-responsive design."
• Measurable: Goals should include criteria to track progress and
measure success.
• Example: "Increase website traffic by 20% within the next three months by
implementing SEO and a social media campaign."
• Attainable: Goals should be realistic and achievable, considering
available resources, constraints, and time.
• Example: "Hire two additional software developers within the next quarter to
support the development of the new mobile app"
• Realistic: Goals should be relevant and aligned with the project’s
overall objectives and the organization’s mission. They should also be
within the team’s capacity to achieve.
• Example: "Implement a new customer relationship management (CRM)
system within six months to improve sales tracking and customer
engagement"
• Timely: Goals should have a clear deadline or timeframe to create a
sense of urgency and focus.
• Example: "Complete the first prototype of the new product by the end of Q2 to
 2.3. Project Execution
• This is where the planned activities are carried out to develop
and deliver the software product.
• It involves translating the project plan into actionable tasks,
coordinating resources, and ensuring that the project progresses
according to the defined scope, schedule, and quality standards.
• It involves actual development, testing, and integration of the
software.
• Resource usage is the highest in this stage as it is where the
product or solution is developed.
• Stakeholder expectations and engagement are closely managed
during this stage to prevent project problems.
• Risk contingency and remediation plans are also implemented
when applicable.
 2.3. Project Execution…
• As the project manager, you assign tasks, clarify roles, answer
questions, oversee work, facilitate communication, attend
briefings and meetings, support the project team, and keep them
on track.
• Activities:
– Project deliverables are produced/implemented
– Resources are procured
– Management of stakeholder expectations
– Management of the quality of deliverables
– Implement risk remediation plan if applicable
• The Execution Phase concludes with the project deliverable(s)
achieved and accepted by the users and the sponsor.
• Activities of execution phase are:
• 1. Task Allocation and Team Coordination: Assign tasks to team members
based on their roles and expertise.
• Ensure clear communication and collaboration among team members.
• Use project management tools (e.g., Jira, Trello, Asana) to track progress and
manage workloads.
• 2. Development and Coding: Write code according to the design
specifications and coding standards.
• Follow best practices such as version control (e.g., Git), code reviews, and
pair programming.
• Implement features, modules, and components as outlined in the project plan.
• 3. Integration of Components: Combine individual modules or components
into a cohesive system.
• Ensure compatibility and seamless interaction between different parts of the
software.
• 4. Testing and Quality Assurance: Conduct various types of testing,
including unit testing, integration testing, system testing, and UAT.
• Identify and fix bugs or defects.
• Ensure the software meets the defined quality standards and functional
requirements.
• 5. Resource Management: Allocate and manage resources (e.g., personnel,
hardware, software) effectively.
• Ensure that team members have the tools and support they need to complete
their tasks.
• 6. Configuration Management: Manage changes to the software through a
structured process.
• Use tools like Git, SVN, or Mercurial to track changes and maintain different
versions of the software.
• 7. Documentation: Create and maintain technical documentation, including
code comments, API documentation, and user manuals.
• Ensure documentation is up-to-date and accessible to stakeholders.
• Risk Management: Monitor and address risks identified during the planning
phase.
• Implement mitigation strategies to minimize the impact of risks on the
project.
• 8. Communication and Reporting: Provide regular updates to stakeholders
on project progress.
• Conduct status meetings, generate progress reports, and address any issues or
concerns.
 2.4. Monitor and Control
• This phase is responsible for monitoring the project's
performance, gathering key data to determine whether it is
performing in line with the project plan.
• If not, we will control the issues that need to be addressed.
• Steps in the monitoring & controlling phase can include:
– Setting quality assurance protocols
– Using project monitoring tools
– Gathering relevant project data
– Identifying any issues (or risks) that arise
– Digesting that data into project reports
– Resolving issues by implementing change control
• Although monitoring and controlling is labeled as the fourth
phase, it typically takes place concurrently with the execution
phase.
 2.4. Monitor and Control
• Project monitoring and control phase is a phase that runs
concurrently with the project execution phase.
• It ensures that the project is progressing according to the plan,
meeting its objectives, and adhering to the defined scope,
schedule, budget, and quality standards.
• It is an ongoing process that tracks the project's progress against
the planned project management plan and takes corrective or
preventive actions to ensure the project stays on track.
• This phase involves continuous tracking, reviewing, and
regulating the progress and performance of the project to
identify and address any deviations or issues promptly.
• You will track project progress and make adjustments to ensure
the project stays on track.
• It is essential for maintaining alignment with project objectives,
managing risks, and ensuring stakeholder satisfaction.
• Activities of this phase are:
• 1. Progress Tracking: Monitor the completion of tasks and milestones
against the project schedule.
• Use tools like Gantt charts, burn-down charts, or dashboards to visualize
progress.
• Compare actual progress with the baseline plan to identify variances.
• 2. Performance Measurement: Measure key performance indicators (KPIs)
such as schedule variance, cost variance, and quality metrics.
• Use earned value management (EVM) techniques to assess project
performance in terms of scope, time, and cost.
• 3. Risk Management: Continuously identify, assess, and mitigate risks.
• Update the risk register and implement contingency plans as needed.
• 4. Change Management: Evaluate and manage changes to the project scope,
schedule, or budget.
• Use a formal change control process to assess the impact of changes and
obtain approvals before implementation.
• 5. Quality Control: Monitor the quality of deliverables through inspections,
testing, and reviews.
• Ensure that the software meets the defined quality standards and
requirements.
• 6. Issue Management: Identify and resolve issues that arise during the
project.
• Maintain an issue log to track the status and resolution of issues.
• Resource Management:
• Monitor the utilization of resources (e.g., personnel, equipment, budget).
• Reallocate resources as needed to address bottlenecks or imbalances.
• 7. Communication and Reporting: Provide regular status updates to
stakeholders through meetings, reports, and dashboards.
• Ensure transparency and keep stakeholders informed about project
progress, risks, and issues.
• 8. Scope Management: Verify that the project deliverables align with
the defined scope.
• Prevent scope creep by managing change requests and ensuring that only
approved changes are implemented.
• 9. Schedule and Cost Control: Adjust the project schedule and budget
as needed to address variances.
• Implement corrective actions to bring the project back on track.
 2.4. Monitor and Control…
• Tools and Techniques for Monitoring and Control
– Project Management Software: Tools like Microsoft Project, Jira,
Trello, and Asana help track tasks, milestones, and progress.
– Earned Value Management (EVM): A technique that integrates
scope, schedule, and cost to measure project performance.
– Dashboards and Reports: Visual tools that provide real-time
insights into project status and performance.
– Risk Registers: A document that tracks identified risks, their
impact, and mitigation strategies.
– Change Control Systems: Formal processes for evaluating and
approving changes to the project.
• Common outputs/deliverables:
– Project change requests
– Project status reports
 2.5. Closing
• During this stage, the Project Manager will confirm all
requirements have been met and obtain formal acceptance from
the Sponsor.
• If any deliverables need to be handed off to operational teams, it
will be done during this stage.
• Stakeholders will be notified of project completion, and the
project team will be officially released.
• Contracts related to the project should be closed at this stage.
• Any project documents will be stored and archived including
lessons learned.
• Recording lessons learned provides a method for continuous
improvement on subsequent projects.
• This includes items that went right or wrong, from a technical,
project management, management, or any other aspect of the
project.
1. Delivering the Final Product: The completed software product is
handed over to the client or end users.
• It includes deployment, final testing, and confirmation of project
completion.
• User documentation and training may be provided if needed.
2. Conducting Final Testing & Validation: Ensuring the final
software meets functional and non-functional requirements.
• Performance, security, and user acceptance testing are reviewed.
3. Client Acceptance & Sign-Off: The client formally approves the
software after confirming that all deliverables meet their
expectations.
• A sign-off document is obtained to confirm project completion.
4. Releasing Project Resources: Team members are reassigned to
new projects or tasks.
• Hardware, software licenses, and third-party services used in the
project are decommissioned if no longer needed.
• 5. Closing Contracts & Financial Settlement: Finalizing contracts
with vendors, suppliers, or third-party service providers.
• Ensuring all financial transactions, invoices, and payments are settled.
• 6. Conducting Project Review & Lessons Learned: A post-mortem
analysis is conducted to assess what went well and what could be
improved.
• Gathering feedback from team members, stakeholders, and users.
• Documenting lessons learned for future projects.
• 7. Archiving Project Documents & Codebase: Storing important
project documents such as design documents, source code, test
reports, and user manuals for future reference.
• Ensuring proper version control and documentation for future
maintenance.
• 8. Celebrating Success & Recognizing Contributions: Acknowledging
the efforts of the team and rewarding achievements.
• A formal closing meeting or celebration helps maintain team morale.
 2.5. Closing…
• Activities
– Formal acceptance of deliverables
– Hand off any deliverables to operational staff
– Close any project related contracts
– Formally release the project team
– Notify stakeholders of project completion
• Common outputs/deliverables
– Archived project documentation storage
– Lessons learned repository
– Project closure report
 2.6. Project and Product Life Cycles
• Project life cycle and product life cycle refer to two distinct
concepts in project management and product development.
• The Project Life Cycle is a series of phases that a project goes
through from initiation to closure.
• The product life cycle is a series of phases that represents the
evolution of a product, from introduction through growth,
maturity, and to retirement.
• Understanding the product life cycle helps businesses make
informed decisions about marketing strategies, product
development, and resource allocation at each stage.
 2.6. Project and Product Life Cycles…
• The project life cycle defines the stages a project goes through
from initiation to closure.
• Stages of the Project Life Cycle
• 1. Initiation – Defining objectives, feasibility, and stakeholder
identification.
• 2. Planning – Developing schedules, resources, budgets, and
risk assessments.
• 3. Execution – Carrying out project activities and managing
teams.
• 4. Monitoring & Controlling – Tracking progress, managing
changes, and ensuring quality.
• 5. Closure – Finalizing deliverables, reviewing outcomes, and
closing the project.
• Example: Developing a new mobile app from concept to launch.
 2.6. Project and Product Life Cycles…
• Product life cycle describes the stages a product goes through
from its conception to its withdrawal from the market.
• It is a management concept used to understand and manage the
lifespan of a product.
• The product life cycle is ongoing and evolves as the product
matures.
 2.6. Project and Product Life Cycles…
• Stages of the Product Life Cycle are:
• 1. Introduction:
• The product is launched into the market.
• Focus is on creating awareness and attracting early adopters.
• Sales are low, and costs are high due to marketing and development.
• High marketing and promotional costs to build awareness.
• 2. Growth:
• The product gains market acceptance, and sales increase rapidly.
• Competitors may enter the market, and the focus shifts to building
brand loyalty.
• Profits start to rise as economies of scale are achieved.
• Companies may invest in product improvements and expand
distribution channels.
• 3. Maturity:
• Sales growth slows down as the market becomes saturated.
• Competition intensifies, leading to price wars or differentiation
strategies.
• Companies may focus on cost reduction and efficiency.
• Product enhancements or new features may be introduced to extend
the product's life.
• There are few first-time buyers as most buyers are repeat buyers.
• 4. Decline:
• Sales and profits decrease due to market saturation, changing
customer preferences, or new technologies.
• Buyers move on to other products and sales drop.
• The product becomes obsolete or less relevant.
• The product may be discontinued or replaced.
• Alternatives include discontinuing the product, sell it, or reinvent it.
 1.3. The Stakeholder of a Project
• Stakeholders are
– those who have a positive or negative influence on the
project, or
– who are or might be positively or negatively affected by the
project, or its activities, decisions, and outcomes.
• Stakeholders can be anyone including groups, teams,
businesses, corporations, communities, government agencies,
international bodies, and NGOs.
• They may affect the whole project, or only one or some of the
decisions or activities, or the outcomes of the project.
• Stakeholders may be involved actively or passively in the
project, or its activities and decisions.
• Stakeholders are a varied group, with varied interests.
 1.3. The Stakeholder of a Project…
• Often there is more than one major stakeholder in the project.
• An increase in the number of stakeholders adds stress to the
project and influences the project’s complexity level.
• Stakeholders can be inside the organization or outside of it.
– Internal stakeholders: These stakeholders are coming from
within the house.
– Internal stakeholders are people or groups within the
business, such as team members, managers, executives, and
so on.
– External stakeholders: External stakeholders are people or
groups outside the business.
– This includes customers, users, suppliers, and investors.
 1.3. The Stakeholder of a Project…
• Internal stakeholders which are inside the organization are:
– Project sponsor - Project manager
– Project team members - PMO (Project Management Office)
– Program manager - Project/Portfolio steering
committee
– Board of trustees
– Company owners/founders
– Top management (e.g., C-level executives)
– Project managers of other projects in the organization
– Functional departments/units in the organization
– End users in functional departments, regional offices, and
international offices of the organization
– Regional offices/branches of the organization
– International offices/branches of the organization
 1.3. The Stakeholder of a Project…
• External stakeholders which are outside the organization are:
– Customers
– End users outside the organization
– Suppliers
– Contractors and subcontractors
– Shareholders
– Regulatory bodies
– Government agencies (e.g., federal, state, local, county)
– Current and potential competitors
• For a successful project, key stakeholders’ requirements, project
objectives, and happiness should be an ongoing concern
throughout the project.
• Stakeholder analysis is a way of determining who among stakeholders
can have:
– the most influence on the project
– who is likely to be most affected by the project, and
– how you should work with stakeholders with different levels of
interest and influence.
• It involves identifying, assessing, and prioritizing stakeholders to
understand their interests, influence, and potential impact on a project.
• Most methods of stakeholder analysis or mapping divide stakeholders
into one of four groups.
• Effective stakeholder management involves identifying stakeholders,
understanding their needs and expectations, and engaging them
throughout the project lifecycle.
• This helps to:
‒ Align project goals with stakeholder interests.
‒ Mitigate risks and resolve conflicts.
‒ Ensure stakeholder buy-in and support.
‒ Improve project outcomes and satisfaction.
• Tools like stakeholder analysis, stakeholder mapping, and
communication plans are often used to manage stakeholder relationships
 • After the initial assessment has been completed, stakeholder
prioritization can occur.
• A power/interest grid would be a very helpful tool for
prioritization.
• It helps project managers categorize stakeholders and create
effective communication strategies for each stakeholder category.
• Most methods of stakeholder analysis or mapping divide
stakeholders into one of four groups.

Fig Stakeholder Matrix: Power/Interest Grid and the strategies to deal with the stakeholders
 1.3. The Stakeholder of a Project…
• Properties of each quadrant with the potential stakeholder are:
• 1. High power – High interest: These stakeholders are decision-
makers and have the biggest impact on the project’s success and
hence we must closely manage their expectations.
• 2. High power – Low Interest: These stakeholders need to be kept
satisfied even though they aren’t interested because they yield
power.
• 3. Low power – High interest: We should keep these stakeholders
adequately informed and talk to them to ensure that no major
issues are arising.
• 4. Low power – Low interest: We should monitor these
stakeholders, but do not bore them with excessive communication.
• gg

Fig Stakeholder Power/Interest Grid for Mobile Commerce Project

• The role of the Project Manager in stakeholder management is
critical to the success of any project.
• Stakeholder management involves identifying, analyzing,
engaging, and maintaining relationships with individuals or
groups who have an interest or influence in the project.
• The project manager plays a crucial role in stakeholder
management by identifying, engaging, and managing
relationships with stakeholders to ensure their needs and
expectations are met, ultimately contributing to project success.
• Project managers have to deliver project quality alongside
meeting stakeholders' expectations.
• Stakeholder management is one of the most crucial dimensions
of project management and this has four essential elements:
– Analyzing stakeholder profiles
– Developing collaborations with stakeholders
– Setting and managing stakeholder expectations
– Fostering partnerships with stakeholders
 1.3. The Stakeholder of a Project…
• Stakeholder profiling: A PM needs to consider how the project
management deliverables could impact stakeholders. This
requires conducting stakeholder analysis.
• Collaboration: A PM is expected to speak the language of
stakeholders. The PM must actively engage with stakeholders
throughout the project's lifecycle, ensuring their input and
concerns are heard and addressed.
• Setting and managing expectations: A PM needs a strategy to
manage the expectations of its stakeholders. The PM is expected
to know and handle reasonable and unreasonable expectations
from stakeholders.
• Partnership: Fostering a strong partnership with stakeholders is
pivotal for achieving project success. Through this, the PM can
gain the trust and support of stakeholders.
 1.4. Project Management Framework
• A Project Management Framework is a structured set of
guidelines, processes, and principles that provide a roadmap for
managing projects from initiation to closure.
• The framework helps organizations map out the progression of
the individual project steps, from beginning to completion.
• The framework includes all aspects of the project, from required
resources and tools to specific processes and tasks.
• It helps project managers and teams plan, execute, monitor,
control, and close projects effectively.
• It provides a standardized approach to managing projects,
ensuring consistency, efficiency, and alignment with
organizational goals.
• The framework serves as a foundation for managing projects.
• It defines the processes, tools, roles, responsibilities, and
workflows necessary to manage a project effectively.
• Benefit: it provides a standardized approach to managing projects.
• Project managers can use the same process and methodology for
every project, improving efficiency and consistency across the
organization.
• The major benefits of a Project Management Framework are:
• Consistency – the PMF imparts consistency to the project planning
and execution.
• Clarity - A PMF clearly lays out all project tasks and the tools
needed to complete them. This means there is no confusion when
teams get to the execution stage.
• Collaboration – it involves all the stakeholders in a project right
from the beginning until the project termination stage.
• Communication - By meeting regularly with teams as outlined in
the framework, project managers can effectively communicate with
colleagues and boost information flow.
• Optimization: it can help managers assess how much time and
money is spent on each project. This enables to allocate and
optimize resources for future projects.
 1.4. Project Management Framework…
• Project management frameworks typically are organized these
main components:
– the project lifecycle, processes & methodologies, the project
control cycle, tools and templates, and roles & responsibilities.
• I. Project Life Cycle:
• The project life cycle outlines how to set up your overall project
management framework.
• You start mapping out project management framework by
referencing project lifecycle.
• It provides a timeline with goals and milestones for five
different stages.
• There are typically five phases that make up the project
lifecycle:
– initiation, planning, execution, control and closing.
• II. Processes & Methodologies:
• Processes are structured workflows within each phase.
• Methodologies define the overall approach to managing the
project.
• Common processes are:
– Integration Management: Project charter, change control.
– Scope Management: WBS, requirements gathering.
– Time Management: Scheduling (Critical Path Method).
– Cost Management: Budgeting, Earned Value Analysis.
– Quality Management: QA/QC processes.
– Risk Management: Identification, mitigation strategies.
– Stakeholder Management: Engaging relevant parties
• Popular methodologies are:
– Waterfall: linear, phase-gated
– Agile: iterative, flexible
– Hybrid: Mix of predictive & adaptive
• III. Project Control Cycle:
• This provides functions for monitoring and management.
• The project control cycle involves the active monitoring and
management of the project.
• Key functions of this component include:
– managing and mitigating risks,
– tracking progress across teams and team members, and
– communicating project status with external stakeholders.
• Furthermore, communications channels across different teams
and projects are opened.
• Ensure the project stays within budget.
• Ensure timely completion.
• Proactively identify and mitigate threats.
• Manage scope creep and unauthorized changes.
• Ensure deliverables meet standards.
• Communicate progress to stakeholders.
• Optimize use of people, equipment, and materials.
 1.4. Project Management Framework…
• IV. Tools and Templates:
• Tools and templates offer ready-made structure to organizations
looking to implement project management frameworks.
• There are many tools and templates available, many of which
have reached widespread use.
• These tools help the project manager to establish the project plan,
track progress, and manage risks.
• The common tools include:
– Gantt charts, PERT charts, project management software, issue logs.
• Project management framework templates include:
– project charter, project plan, risk management plan, quality
management plan, change management plan.
• The availability of tools and templates helps to standardize the
project management process.
• V. Roles & Responsibilities
• It defines who is accountable for what.
• In Waterfall methodology, some of the roles & responsibilities are:
– Project Manager: Oversees the entire project from initiation to
closure, ensuring adherence to scope, timeline, and budget
– Business Analyst: Bridges the gap between business needs and
technical solutions. Gathers and documents requirements (functional
& non-functional).
– Solution Architect/Technical Lead: Designs the technical solution and
ensures alignment with requirements. Defines system architecture
(e.g., databases, APIs).
– Development Team: Builds the product according to specifications.
– Quality Assurance (QA) Team: Ensures the product meets quality
standards. Develops test plans (test cases, scripts). Executes system
testing, integration testing.
– Operations/DevOps Team: Deploys and maintains the solution post-
development. Manages environnements (dev, test, production).
Monitors system performance post-launch.
– End Users: Validate that the solution meets their needs.
• Popular Project Management Frameworks are:
• 1. Waterfall: A linear, sequential approach where each phase must be
completed before the next begins.
• Waterfall project management is a traditional framework that follows a
linear, sequential approach to managing projects.
• It is a step-by-step process where each project phase is completed before
moving on to the next.
• Each phase of the project is clearly defined, with its own deliverables and
milestones, making it easier to track progress.
• 2. PMBOK Guide: A globally recognized standard by the Project
Management Institute (PMI). Broadly applicable across various industries
and project types.
• Focuses on best practices and processes.
• 3. PRINCE2 (Projects IN Controlled Environments): A process-driven
methodology widely used in government and private sectors.
• Emphasizes detailed planning and control.
• One of the benefits of using PRINCE2 framework is that it is highly
customizable and adaptable to different project types and sizes.
• Used mainly in the UK and other parts of Europe.
• 4. Agile: Iterative and flexible approach, ideal for software
development and dynamic projects.
• It is an iterative and incremental approach that emphasizes flexibility,
collaboration, rapid feedback, customer satisfaction.
• It allows teams to be more responsive to changes in the project.
• Agile teams can adapt and adjust their approach as needed based on
customer feedback, changing requirements, or other unforeseen issues.
• Includes frameworks like Scrum, Kanban, and Extreme Programming.
• 5. Lean: Focuses on maximizing value by eliminating waste and
improving efficiency.
• Lean project management emphasizes continuous improvement
(Kaizen), respect for people, and the elimination of waste in all forms.
• Process improvement techniques are often incorporated into this
framework.
• This framework aims to continuously improve efficiency by
eliminating waste and optimizing processes.
• 6. Hybrid: Combines elements of traditional (Waterfall) and Agile
frameworks.
 1.4. Project Management Framework…
• The choice of framework depends on factors such as:
– Project type and complexity.
– Organizational culture and goals.
– Stakeholder requirements.
– Team expertise and preferences.
• Use the following questions to guide your decision:
– Is the project scope fixed or flexible?
– Are stakeholders highly involved or hands-off?
– Does the team have experience with the framework?
– Are there strict budget or timeline constraints?
– Is the project high-risk or highly uncertain?
– Does the organization prefer structure or flexibility?
 1.5. IS Tools for Project Management
• IS tools are software applications and platforms designed to
support the planning, execution, monitoring, and control of
projects.
• They help project managers and teams plan, execute, monitor,
and control projects effectively.
• These tools help project managers and teams manage tasks,
resources, timelines, budgets, risks, and communication more
efficiently.
• IS tools automate many aspects of project management,
enabling better collaboration, transparency, and decision-
making.
• These tools streamline project management processes, improve
collaboration, and enhance productivity.
• 1. Project Planning and Scheduling Tools
• These tools help in creating project plans, defining tasks, setting
deadlines, and allocating resources.
• Microsoft Project: A comprehensive tool for project planning,
scheduling, and resource management.
• Features Gantt charts, task dependencies, and workload
management.
• Smartsheet: A spreadsheet-like tool for project planning, task
tracking, and collaboration.
• Supports Gantt charts, calendars, and automated workflows.
• Trello: A visual tool using boards, lists, and cards to organize
tasks and workflows.
• Ideal for Agile and Kanban methodologies.
• Asana: A task and project management tool for creating tasks,
assigning responsibilities, and tracking progress.
• Supports timelines, calendars, and integrations with other tools.
• 2. Collaboration and Communication Tools
• These tools facilitate team communication, file sharing, and
real-time collaboration.
• Slack: A messaging platform for team communication, with
channels, direct messaging, and file sharing.
• Integrates with other project management tools like Trello and
Asana.
• Microsoft Teams: Combines chat, video meetings, and file
collaboration in one platform.
• Integrated with Microsoft 365 tools like SharePoint and
OneDrive.
• Zoom: A video conferencing tool for virtual meetings, webinars,
and team collaboration.
• Google Workspace (formerly G Suite): Includes tools like
Google Docs, Sheets, and Drive for real-time collaboration and
document sharing.
• 3. Task and Workflow Management Tools
• These tools focus on task assignment, tracking, and workflow
automation.
• Jira: A popular tool for Agile project management, particularly
for software development teams.
• Supports Scrum and Kanban boards, sprint planning, and issue
tracking.
• Monday.com: A flexible work operating system for task
management, project tracking, and workflow automation.
• Customizable dashboards and integrations with other tools.
• ClickUp: An all-in-one project management tool for tasks, docs,
goals, and time tracking.
• Highly customizable and suitable for various project
management methodologies.
• Wrike: A tool for task management, project tracking, and team
collaboration.
• Features Gantt charts, workload management, and real-time
reporting.
• 4. Budgeting & Cost Management Tools
• These tools help manage project budgets, expenses, and
financial tracking.
• QuickBooks – Financial management and expense tracking.
• SAP ERP – Enterprise-level financial and resource planning.
• Oracle NetSuite – Cloud-based financial and project tracking.
• 5. Risk & Issue Management Tools
• These tools help identify, track, and mitigate project risks and
issues.
• RiskWatch – Risk assessment and mitigation planning.
• ActiveCollab – Helps manage project risks, budgets, and
deadlines.
• JIRA – Tracks issues, bugs, and risks in software development
projects.