Midterm guide

Lecture 1Introduction to project management

Why we care: delivering value

For-profit and non-profit organizations both exist to deliver value to customers or stakeholders, who in return keep them alive. Porter's value chain shows how a firm creates that value:

• Support activities: firm infrastructure, human resource management, technology, procurement.
• Primary activities: inbound logistics → operations → outbound logistics → marketing & sales → service.
• What is left after all costs is the margin. Projects are one of the main ways an organization creates new value.

Permanent work vs temporary work

What is a project?

A project is a “temporary endeavor” to create value through unique products, services and processes. Projects have a team, a budget, a schedule and a set of expectations the team must meet. Tasks are carried out as work over a period of time and lead to a unique result.

Project development and project management

The course covers both. They use different methods and answer different questions.

Examples of big projects

• Türkiye: Istanbul New Airport, Kanal Istanbul, the domestic electric car (TOGG), e-Devlet, Eurasia Tunnel, Antalya Expo Centre.
• BMC Power 1500 hp power pack: 400 engineers, 600 global suppliers, 3,000 parts designed from scratch; first phase 2019–2023. It survived strategic expectations, military embargoes, pandemic lockdowns and technical difficulties, which the professor uses as an example of good project management.

Project management as a profession

Project management is centuries old (pyramids, Great Wall, Taj Mahal). After the mid-20th century it became a formal discipline with guides and tools: Gantt chart, CPM, PERT, WBS, risk management, Waterfall, Agile.

★ = marked with a red dot by the professor. Two schools came out of this history: PMI (USA: PMI → PMBOK → ANSI → ISO 21500, certificate PMP) and PRINCE (UK: PROMPTII → PRINCE → PRINCE2, certificate PRINCE2 Practitioner).

Phases in the two approaches

• PMI: Initiating → Planning → Executing → Monitoring & Controlling → Closing.
• PRINCE2: Starting up a project → Directing a project → Initiating a project → Controlling a stage → Managing product delivery → Managing stage boundaries → Closing a project.

Key elements of a project

• Unique product (a component), service (a call centre) or result (research findings).
• Temporary endeavor: a defined beginning and end; short (new product architecture) or long (an airport).
• Drives change: moves the organization from a current state to a future state through project activities.
• Creates value: tangible and intangible benefits such as money, market share and brand recognition.

Why projects are initiated (initiation context)

1. Meet regulatory, legal or social requirements
2. Satisfy stakeholder requests or needs
3. Create, improve or fix products, processes or services
4. Implement or change business or technological strategies

Good vs poor project management

Portfolio, program, project

• Portfolio: a group of programs and projects put together to meet the strategic objectives of the business.
• Program: a group of related projects.
• Project: a temporary endeavor to create a unique result.

OPM (Organizational Project Management) is the framework that integrates portfolio, program and project management with organizational enablers to achieve strategic objectives: strategy → portfolio (value decisions) → programs and projects (deliver results) → operations (business value realized), with feedback back to strategy.

Project components

• Project life cycle: the series of phases from start to completion (starting, organizing & preparing, carrying out the work, ending).
• Phase: related activities that end in a deliverable (idea, design, prototype).
• Phase gate: a review at the end of a phase where a decision is made to continue, change or stop.
• Process groups: logical groupings of inputs, tools and outputs (initiating, planning, executing, monitoring & controlling, closing).
• PM processes: systematic activities that turn inputs into outputs (collect requirements, identify stakeholders, schedule activities).
• Knowledge areas: the 10 PMBOK areas (Lecture 3).

Organization types

Projects can sit in a functional organization (team reports to functional managers), a project-oriented / projectized one (team reports to project managers) or a matrix (team members report to both).

The project manager

Spheres of influence: the project (lead the team to objectives), the organization (work well with other PMs), the industry (follow trends), professional discipline (keep learning, transfer knowledge) and across disciplines (explain the value of PM to other professionals).

PMI Talent Triangle: technical project management · leadership · strategic and business management.

Both are needed. In the course framework, the actual engineering and technology work (ask → imagine → design → improve) happens inside the Executing phase; project management is the frame around it.

Lecture 2Project types, methodologies, project charter

Two points from the framework drive this lecture: the high-level decision and approval before Initiation (business case, charter) and the engineering and technology development work inside Execution (development methodologies).

Project types

TÜBİTAK runs many project types: method, technology, model, facility, software, product, process, system and platform development; proposal preparation; feasibility and characterization studies; data analysis; training; consultancy; certification; pre-production; field service; standard development. The lecture focuses on technology development and product development.

Project portfolio monitoring map

Projects are placed on two axes: value presented (pre-analysis → technology development → product → process → system/facility → production → facility monitoring/inspection → field service → training/consultancy) and resources used (know-how → personnel → equipment → reliability/brand name → independent authority → location → legal requirements).

• Good (green): value comes from know-how and people, e.g. technology development.
• Bad (red): value comes only from legal authority, location or independent-authority status, e.g. inspection work.
• The improvement direction is toward knowledge-intensive, high value-added projects.

Development methodologies

Each field (construction, facility, technology, software, process and service, product) has its own methodology. Every stage ends with a milestone where the team stops, reviews and evaluates performance before continuing (a phase gate).

Technology vs product

Technology is the use, application or knowledge of physical or chemical principles or methods to perform a certain function. A product is an object that uses a technology to ideally meet market needs or wants (high quality, low cost…).

A function is written as verb + noun: measure flow, heat the room, sense speed.

Example function “heat the room”: if you use an existing technology, you are doing product development; if you build a new working principle from physical equations, you are doing technology development.

Technology development: the concept steps

1. C1 Functional structure: break the primary useful function into sub-functions (sense speed, determine flow, display flow).
2. C2 Concept development: generate alternative solution concepts for each sub-function (float, hot wire, paddle wheel) and select.
3. C3 Functional model: connect all functions with flows of energy, material and signal (inputs: kinetic energy, liquid; outputs: data on display, electrical energy, liquid).
4. C4 Proof of concept: write the physics behind each function (½mv², Bernoulli, ½Iω², Faraday ε = −dΦ/dt). Conservation of energy and mass must be proven: mass in = mass out, energy in = energy out.

Project pre-work: getting approval

Professor's note: “You need approval first, then you can continue. What is the benefit for me, for the company and for the customer? What is the net profit?”

Telling the business case

Dimensions: customers, problem, solution, competitors, value proposition (why would the customer buy it, what are its advantages), business model, future work.

NABC

A business case lists objectives, required investment and financial and qualitative success criteria. It is used to make the go / no-go decision.

Stakeholders and the charter

Benefits management plan: regularly identify project stakeholders and analyse and document their interests, involvement, interdependencies, influence and potential impact on project success. Internal: employees, managers, owners. External: suppliers, society, government, creditors, shareholders, customers. Professor: “Anyone who affects our business can be a stakeholder” (BMC example: Land Forces, ministries, suppliers, local governments, political parties).

The project charter formally authorizes the existence of a project and gives the project manager the authority to apply organizational resources. Sections: project name, PM and sponsor, start/end dates, business need, scope, deliverables, risks and issues, assumptions and dependencies, financials (budget), milestones, project team, approval/review committee.

Lecture 3Integration, scope and schedule

This lecture is about Planning.

Process groups × knowledge areas

Integration management

Integration covers the processes to identify, define, combine, unify and coordinate the processes of all other areas: resource allocation, balancing competing demands, examining alternatives, tailoring processes to objectives, managing interdependencies.

The project management plan describes how the project will be executed, monitored, controlled and closed. It integrates all subsidiary plans and the baselines, and states the approvals, conflict resolution and control against the scope, schedule and cost baselines. Professor's note: it is an expanded, more detailed version of the charter.

• Plan components (18): scope, requirements, schedule, cost, quality, resource, communications, risk, procurement, stakeholder engagement, change and configuration management plans; scope, schedule, cost and performance measurement baselines; life cycle description; development approach.
• Project documents (33): records produced during the work, e.g. activity list, assumption log, issue log, lessons learned, milestone list, requirements traceability matrix, risk register, stakeholder register, quality reports.

Scope management

Professor: “What will you develop? What will be achieved?” Product scope = the features and functions of the product. Project scope = the work performed to deliver it; the boundaries of the project, the expectations given in the contract.

1. Plan scope management: document how scope will be defined, validated and controlled.
2. Collect requirements: determine, document and manage stakeholder needs.
3. Define scope: a detailed description of the project and product.
4. Create WBS: subdivide deliverables and work into smaller, manageable components.
5. Validate scope: formal acceptance of completed deliverables.
6. Control scope: monitor scope status and manage changes to the scope baseline.

Collecting requirements

• Tools: brainstorming, interviews, focus groups, questionnaires, benchmarking, document analysis, voting, multicriteria decision analysis, affinity diagrams, mind maps, nominal group technique, observation, facilitation, context diagrams, prototypes.
• Outputs: requirements documentation and the requirements traceability matrix (RTM), which tracks each requirement through design, development, test and deployment so none is forgotten.
• Requirement levels: business (sponsor's view, scope, business goals) → user (user's goals, inputs and outputs) → system (functional and non-functional).
• Sources: customer domain (marketing literature, agreements), company domain (policies, business rules, plans, processes, problem reports, field data), government domain (laws, regulations, standards).

Business strategy decides the requirements

• Choose the segment level (BMW Z4 → BMW → luxury car → car → land vehicle → transportation); the competitors change with the level.
• User types: lead user, satisfied, dissatisfied, former customer, never bought. Buyer types: system integrator, distributor, retailer, customer.
• For low-cost ideas, talk to people who know your product. For differentiation ideas, talk to people who are not your customers.
• Interviews capture needs in the customer's own words (two interviewers, or one with a recorder). Contextual inquiry observes needs in behaviour; location, people, culture and values matter.

Defining scope

The scope statement lists deliverables, acceptance criteria and exclusions. Requirement categories: performance, functionality, ergonomics, aesthetics (the five senses), cost, service and maintenance (accessibility, time and cost to service), health and safety, standards, sustainability. Writing the exclusions prevents disputes and scope creep.

Work Breakdown Structure

Create WBS = subdivide project deliverables and work into smaller, more manageable components. Inputs: scope management plan, scope statement, requirements documentation. Tools: expert judgment, decomposition. Output: the scope baseline. Requirement IDs (1.0 → 1.1, 1.2…) become branches; the lowest level is the work package.

Professor: “Check your WBS against customer expectations and requirements. Develop it from the customer requirements.”

Schedule management

The schedule is the detailed plan of how and when the project will deliver the scope; it is the basis for communication, managing expectations and reporting.

1. Plan schedule management
2. Define activities
3. Sequence activities
4. Estimate activity durations
5. Develop schedule
6. Control schedule

Sequencing: the precedence diagramming method (PDM)

Every activity except the first and last must have at least one predecessor and one successor. Example: build the wall (predecessor) → paint the wall → install curtains (successor). Professor's note: we need to minimize the duration.

Lead = how much a successor can be advanced (written minus: FS − 2 weeks, landscaping before the punch list ends). Lag = how much a successor is delayed (written plus: SS + 15 days, editing after writing starts). The schedule network diagram shows activities, relationships, leads and lags.

Estimating durations: three-point estimate

Most likely tM (realistic expectations), optimistic tO (best case), pessimistic tP (worst case). Numbers come from expert judgment.

tE = (tO + tM + tP) / 3   e.g. (4 + 6 + 14) / 3 = 8 days

Developing the schedule: critical path method

CPM estimates the minimum project duration and the scheduling flexibility (float) on each path. A forward pass gives early dates, a backward pass gives late dates.

• Forward: ES = largest EF of predecessors; EF = ES + duration.
• Backward: LF = smallest LS of successors; LS = LF − duration.
• Float = LS − ES = LF − EF. The critical path is the chain with zero float, the longest path; any delay on it delays the project.

Professor's notes: “We consider the critical path.” For an activity with float (E has 2 days) you can use a slower machine or fewer people to reduce cost or improve quality.

Resource leveling vs smoothing

Schedule compression

Schedule levels: milestone schedule (zero-duration points) → summary schedule (work packages) → detailed schedule (activities and relationships), usually shown as a Gantt chart whose colours match the WBS.

Lecture 4Cost, quality and resources

Board summary of the project flow: business case (NABC) → charter → customer requirements → WBS → schedule → network diagram → critical path. For each work package decide: 1 time, 2 number of people, 3 budget, 4 skills of people, 5 risk, 6 quality parameters (CTQ, critical to quality). Requirements come from customer, company, government and the real end user, in categories of performance, quality and cost.

Cost management

1. Plan cost management: how costs will be estimated, budgeted, managed, monitored and controlled.
2. Estimate costs: approximate the monetary resources needed; repeated periodically.
3. Determine budget: aggregate activity or work-package estimates into an authorized cost baseline.
4. Control costs: monitor status, update costs, manage changes to the baseline.

Overhead varies by industry (manufacturing 15–25%, retail 20–30%, construction 10–20%, healthcare 25–40%, hospitality 30–50%, professional services 20–35%, IT 15–25%). At MIT, each federal research dollar is about 70¢ direct and 30¢ indirect; the professor's note: ~30% for the budget that runs all activities.

Estimating techniques

• Expert judgment: knowledge from similar projects and the industry.
• Analogous: values from a similar previous project; quick but rough.
• Parametric: statistical relationship between historical data and variables (cost per m² × m²).
• Bottom-up: estimate each work package or activity in detail and add up; most accurate.
• Three-point: cE = (cO + cM + cP) / 3.

Estimates are refined as the project progresses: early accuracy −25% to +75%, later −5% to +10%.

Activity costs: each activity gets direct items (salary, labour, material, license, vendor, travel, rent, utilities) plus percentage indirect items (admin 10%, insurance 5%, marketing 5%, management 20% = 40%). Activity 1.1: 5 + 2 + 2 + 1 = 10 → 10 × 1.4 = 14 (×$1000).

Costs over time and funding

Spreading activity costs over the weeks and adding them up gives the cumulative cost curve, the S-curve, which is the cost baseline (lecture example total $361,200). Money is not received continuously: it comes in steps.

Reserves

Examples: 60% × $10,000 = $6,000; five risks, two at $10,000 and three at $11,000 → $53,000.

Tom's PMP example: membership $139 + course $199 + exam $405 + other $300 = $1,043 project cost; + $500 contingency = $1,543 cost baseline; + $100 management reserve = $1,643 project budget.

Inside the margin: EBITDA − depreciation & amortization = EBIT − interest = EBT − taxes = EAT (net profit).

Quality management

1. Plan quality: identify quality requirements and standards and how compliance will be shown.
2. Manage quality: turn the plan into executable quality activities.
3. Control quality: monitor and record results to ensure outputs are complete, correct and meet expectations.

• Company: build a culture aware of and committed to quality (Japan).
• Planning/design: build quality into the design (off-line control: Taguchi robust design).
• Production: examine and correct the process, not only defects (online control: SPC).
• Outbound: detect defects before shipping (online control: acceptance sampling).
• Field: warranty, recalls, lost reputation, rework.

SIPOC and KPIs

Flowcharts show where quality defects can occur and where to put quality checks. Each SIPOC block gets metrics: supplier quality and delivery; input quality and timeliness; process cycle time, efficiency, yield; output defect rate; customer satisfaction and on-time delivery.

Board chain: requirement “sound ≤ 65 dB” (from the end user) → WBS: Mechatronic Design → work package MD3 Motion Design → SIPOC (input: electric motor; output: sound level) → tests (vibration, sound) → control plan: control parameter, sample size, sampling frequency, control limits.

A KPI is a measurable indicator tied to a target. It must be SMART: specific, measurable, achievable, relevant, time-bound. Table columns: quality criterion · KPI · metric · frequency · target · how · data source (e.g. noise · sound level · dB · every 50 units · ≤ 65 dB · sound test · test lab). Cooking example: ingredients → freshness, shopping → cost, cooking → time, tasting → taste.

Resource management

Resources include time, money and equipment, but here the focus is human resources.

1. Plan resource management
2. Estimate activity resources (team and physical: materials, equipment, supplies)
3. Acquire resources
4. Develop team
5. Manage team
6. Control resources

• Resource breakdown structure (RBS): personnel (roles, levels), materials (grades), equipment. Consider skills, location, availability and market conditions.
• Head count: capacity (number of people) follows from the time limit and the capability (skills) needed. 400 person-hours in 80 hours → 5 people.
• Sustainable head count: keep the core staff level; cover peaks by outsourcing and temporary hires on site or remote.
• Sourcing 25 people: current staff, new qualified hires, new hires to train, transfers from other projects, short-term staff from service companies, subcontracted tasks.
• For every task: responsible people, resource, location, plus cost, quality and HR details.

Lecture 5Communication and risks

Communications management

Plan communications management develops an approach and plan for communication based on the information needs of stakeholders and the needs of the project. Then: manage communications (Executing), monitor communications (M&C).

• Technology: conversations, meetings, documents, databases, social media, websites, chosen by urgency, availability, reliability, ease of use, environment, sensitivity, confidentiality.
• Models: basic sender/receiver (encode → transmit → decode; concerned with delivery) and interactive (ensures understanding through acknowledgement and feedback).
• Methods: interactive (real-time, multidirectional), push (sent to specific recipients, no feedback, e.g. a letter), pull (recipients access it themselves, e.g. websites).

Dimensions: written, spoken, gestures, media · internal / external · formal (reports, formal meetings, briefings) / informal (emails, social media, ad hoc talks) · official (annual reports to regulators) / unofficial (relationship building).

Successful communication = an appropriate strategy plus appropriate messages in the right formats. The plan defines collection, creation, dissemination, storage, retrieval, tracking and disposition; iterations improve efficiency.

5Cs of written communication: correct grammar and spelling · concise · clear (aimed at the reader's needs) · coherent logical flow · controlling the flow of words and ideas (graphics, summaries).

Skills: active listening; cultural and personal awareness; managing stakeholder expectations; persuading, motivating, coaching, negotiating, resolving conflict.

Communication requirement analysis: 1 identify stakeholders → 2 their information needs (team: detail; sponsor: summaries) → 3 channels (team: Gantt; sponsor: status reports) → 4 frequency (team: daily; sponsor: monthly) → 5 document the plan. Example plan: team, status updates, fortnightly, face to face; vendors, performance review, monthly, video; executives, high-level report, weekly, email.

Risk management

Risk management includes planning, identification, analysis, response planning, response implementation and monitoring. The objectives are to increase the probability and/or impact of positive risks and decrease those of negative risks.

Professor's notes on the slide: risks come from the chain market needs → contract → customer requirements → WBS → work packages (time, quality, budget, people, skills) → risks in time, people, budget, quality → risk list (R1, R2…), analysed with root cause analysis and failure mode analysis. External sources (technology, social/cultural, legal, environmental, economic) can stop the project and drive the go/no-go decision (implicit). Internal sources may jeopardize results: time, money, quality (explicit).

Two levels of risk

Identifying individual risks (6 steps)

1. Statement template: “Because of <cause>, <event> could occur during <time window>, which could lead to <impact> with an <effect on a project objective>.”
2. Basic identification: SWOT, analogy.
3. Detailed identification: interviews, assumptions analysis, document reviews, Delphi technique, brainstorming.
4. External cross-check: knowledge from outsiders; checklists, categories.
5. Internal cross-check: each risk corresponds to an element in the WBS.
6. Final statement: one statement per risk; flowchart and fishbone diagram to clarify causes and effects.

Identifying overall risk

A higher view is needed: PESTLE (political, economic, social, technological, legal, environmental), PESTLIED (+ international, demographic), STEEPLE (+ ethics), InSPECT, SPECTRUM, TECOP (technical, environmental, commercial, operational, political), VUCA (volatility, uncertainty, complexity, ambiguity).

Risk breakdown structure

Level 0 all sources → 1 technical (scope, requirements, estimates, technology, interfaces) · 2 management (PM, program/portfolio, operations, organization, resourcing, communication) · 3 commercial (contract terms, procurement, suppliers, subcontracts, client stability, partnerships) · 4 external (legislation, exchange rates, site, weather, competition, regulatory). Example: Risk 1.2 may not hire skilled personnel; 2.5 license fee underestimated; 3.4 contract not closed in time; 4.1 supplier delays delivery.

Assessing risks

Two dimensions: uncertainty (probability, frequency, likelihood: low/medium/high) and significance (effect, impact, consequence on time, cost, performance). Scale example: very high = >70%, >6 months, >$5M; very low = 1–10%, 1 week, <$100K.

Three-dimensional: Risk Priority Number RPN = impact × probability × detectability (each 0–10, total 0–1000). Categories: extremely high 512–1000, high 216–511, medium 64–215, low 8–63, extremely low 0–7. Example: R4.3 = 8 × 9 × 8 = 576, priority 1; R2.4 = 280; R1.1 = 48; R5.1 = 24.

Quantitative: Monte Carlo simulation

Gives better certainty on the probability of outcomes in cost, schedule and performance. Inputs are probability distributions (x1, x2, x3); the model f(x) samples them thousands of times; outputs are a histogram and an S-curve.

Budget example: the $2.2M target has a 23% chance; expected value $2.35M; 85% chance of $2.45M or less. On the reserve diagram: base cost → project contingency → management reserve; beyond that is risk to the project budget, then risk to the business.

Risk responses