PROJECT MANAGEMENT : PROJECT MANAGEMENT
INTRODUCTION : INTRODUCTION The word ‘project’ came from the Latin word projectum from the Latin verb proicese (to throw something forwards) which in turn comes from ‘pro’ which denote something that proceeds the action of the next part of the word.
DEFINITIONS : DEFINITIONS According to Harrison, “ Project is a non routine, non repetitive, one-off undertaking, with well defined time, financial and technical performance goal;”
According to Project Management Institute (PMI), “Project can be defined as a temporary endeavor undertaken to accomplish a unique objective at goal.”
EXAMPLES OF PROJECT : EXAMPLES OF PROJECT Construction of a house.
Writing a book.
Building a dam.
CHARACTERISTICS OF PROJECT : CHARACTERISTICS OF PROJECT Objectivity or temporariness
Uniqueness (Non-routine activity)
Complexity (Demands team work)
Life cycle
Risk and uncertainty
Change (In response to environment)
CHARACTERISTICS OF PROJECT(contd.) : CHARACTERISTICS OF PROJECT(contd.) Involves resources
Optimality
Multidisciplinary
conflicts
Forecasting
Definite time limit
TAXONOMY OF PROJECTS : TAXONOMY OF PROJECTS Based on the type of activity
Based on the location of the project
Based on the completion time
Based on ownership
Based on size
Based on need
TYPES OF PROJECTS : TYPES OF PROJECTS Construction projects
Research projects
Reengineering projects
Procurement projects
Business implementation projects
Miscellaneous types
SPECIFIC USES : SPECIFIC USES Schools and universities
Engineering project
RESPONSIBILITIES OF A PROJECT MANAGER : RESPONSIBILITIES OF A PROJECT MANAGER To plan thoroughly all aspects of the project
To control the organization of manpower needed by the project.
To control the basic technical definition of the project.
To lead the people and organizations assigned to the project at any given point in time.
RESPONSIBILITIES OF A PROJECT MANAGER : RESPONSIBILITIES OF A PROJECT MANAGER To monitor the performance, costs and efficiency of all elements of the project.
To complete the project on schedule and within costs.
To plan thoroughly all aspects of the project, soliciting the active involvement of all the areas involved.
To control the organization of man power.
RESPONSIBILITIES OF A PROJECT MANAGER : RESPONSIBILITIES OF A PROJECT MANAGER To control the basic technical definition of the project
To lead the people and organisation assigned to the project at any point in time.
To monitor the performance, costs and efficiency of all elements of the project and the project as a whole.
To complete the project on schedule and within costs .
WHY DO PROJECTS GO WRONG? : WHY DO PROJECTS GO WRONG? Project goals are not clearly defined
Short time scale
Resource availability
Quality factors
Human factors
CONSTRAINS ON THE COMPLETION OF PROJECTS : CONSTRAINS ON THE COMPLETION OF PROJECTS Time
Resource availability
Quality factors
PROJECT FAMILY TREE : PROJECT FAMILY TREE Plan Programme Project Work Package Task Activity
CATEGORIES OF PROJECT : CATEGORIES OF PROJECT Project International National Industrial Non-Industrial Low
Technology Conventional
Technology High
Technology Non Conventional
/R&D Mini Medium Major Mega Modification Expansion Grass root Disaster Crash Normal
PROJECT LIFE CYCLE PHASES : PROJECT LIFE CYCLE PHASES Conception phase
Definition phase
Planning and organising phase
Implementation phase
Project clean up phase
TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT : TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT Project selection techniques
Cost benefit analysis
Risk and sensitivity analysis
Project execution planning techniques
Work breakdown structure(WBS)
Project execution plan (PEP)
Project responsibility matrix
Project management manual
TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT : TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT Project scheduling and coordinating techniques
Bar charts
Life cycle curves
Line of balance (LOB)
Networking techniques (PERT/CRM)
Project Monitoring and progressing techniques
Progress measurement techniques(PROMPT)
Performance monitoring technique (PERMIT)
Updating, reviewing and reporting technique (URT)
TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT : TOOLS AND TECHNIQUES FOR PROJECT MANAGEMENT Project cost and productivity control techniques
Productivity budgeting technique
Value engineering (VE)
COST/WBS
Project Communication and clean up techniques
Control room
Computerized information system
INTRODUCTION TO PROJECT MANAGEMENT : INTRODUCTION TO PROJECT MANAGEMENT Meaning : Project management is a system of procedures, practices, technologies and know how that enables the planning, organising, staffing, directing and controlling of project activities to successfully manage a project.
DEFINITION : DEFINITION It is defined as “The application of knowledge, skills, tools and techniques to project activities in order to meet project requirement.”
ELEMENTS OF A SUCCESSFUL PROJECT : ELEMENTS OF A SUCCESSFUL PROJECT Has been finished on time.
Is within its cost budget.
Performs to technical/performance standards which satisfies the end user.
3 Ws OF PROJECT MANAGEMENT : 3 Ws OF PROJECT MANAGEMENT What : Scientific application of modern techniques and tools.
Whom : in planning, financing, implementing, monitoring, controlling and coordinating unique activities of project
Why : to produce desirable outputs in accordance with predetermined objectives within constrains of time and cost.
Slide 25: Project Management Project Management MANAGEMENT
Knowledge, skills, tools and techniques PROJECT ACTIVITIES
Conception, design, Implementation, Commissioning SUCCESSFUL PROJECT
Within planned time, resource, scope and quality
THE SCOPE TRIANGLE : THE SCOPE TRIANGLE Cost Resources Time Project scope and
quality
PROJECT PARAMETERS : PROJECT PARAMETERS Defining project scope
Defining quality
Managing time
Managing cost
Managing resources
IMPORTANCE OF PROJECT MANAGEMENT : IMPORTANCE OF PROJECT MANAGEMENT Increasing size and complexity of projects
Increasing importance of financial controls
Urgency of early completion
Growing amount of statutory regulations
Increased sophistication of technology
Inability of managers and architects to manage the things
BENEFITS OF PROJECT MANAGEMENT : BENEFITS OF PROJECT MANAGEMENT Clear description of work to be performed
Responsibilities and assessment of tasks
Time limit for task completion
Measurement of accomplishment against plans is possible
Problems are exposed in advance allowing corrective action
Objective that cannot be met are identified early
PROJECT IDENTIFICATION AND FORMULATION : PROJECT IDENTIFICATION AND FORMULATION
HOW TO START A NEW VENTURE : HOW TO START A NEW VENTURE Idea generation
Primary screening or pre-feasibility study
Project feasibility or detailed feasibility study
Support study
Detailed project report (DPR)
Design or planning
Implementation or execution
Termination of project
Slide 32: Idea generation or project identification Preliminary screening or pre feasibility study Project feasibility or feasibility study Detailed project reporter formal approval from sponsors Planning, organizing & scheduling of project activities Direction & controlling of activities Termination of project (commissioning) Support
Study Market & demand
Analysis Technical
Analysis Financial
Analysis Social cost benefit
Analysis Environmental
& risk analysis
IDEA GENERATION OR IDENTIFICATION OF INVESTMENT OPPORTUNITIES : IDEA GENERATION OR IDENTIFICATION OF INVESTMENT OPPORTUNITIES Idea generation is the process of grouping logical thoughts based on some factors.
IMPORTANCE OF IDEA GENERATION : IMPORTANCE OF IDEA GENERATION Basis for other steps in completing steps.
Important for continuous growth of organization.
Survival in the competitive market.
Contribution towards development of society.
SOURCES OF IDEA GENERATION : SOURCES OF IDEA GENERATION Performance of existing industry
Examining the inputs and outputs of various industries
Review of imports and exports
Availability of cheap materials & labor locally
Price trend, to find demand – supply gap
Government guidelines
Analysis of economic and social trends
Study of new technological developments
others
PRELIMINARY SCREENING OR PRE-FEASIBILITY STUDY : PRELIMINARY SCREENING OR PRE-FEASIBILITY STUDY Preliminary screening is done with a view to avoid unnecessary cost and efforts in detailed study, if idea is not looking worthwhile in first instance
DEFINITION : Preliminary screening can be defined as a series of steps to know whether or not a complete detailed feasibility study should be made.
OBJECTIVES OF PRELIMINARY SCREENING : OBJECTIVES OF PRELIMINARY SCREENING To determine whether project (idea) is promising business opportunity or not.
Whether it justified a detailed analysis or not
To find out any critical aspect on which success or failure depends
To formulate a plan for detailed feasibility study
ASPECTS OR AREAS OF PRELIMINARY SCREENING : ASPECTS OR AREAS OF PRELIMINARY SCREENING Acceptable risk level
Consistency with government priorities
Availability of inputs
Adequacy of market
Reasonableness of the costs
Compatibility with promoters
SUPPORT STUDY : SUPPORT STUDY Support study can be defined as – An in-depth investigation into any one or a couple of critical aspects (areas) of a project, to help the feasibility study.
Critical aspect here means those areas whose success or failure decides the success of failure of business or project.
OBJECTIVES OF PROJECT FEASIBILITY STUDY : OBJECTIVES OF PROJECT FEASIBILITY STUDY It guarantees the success of Project
It works as basic terms of reference for Project
It describes the nature and complexity of Project
It gives an idea about investment in Project
It also provides us the possible future difficulties
It gives an idea about economic and social benefits
Difference between Pre-Feasibility Study or Project or Detailed Feasibility Study : Difference between Pre-Feasibility Study or Project or Detailed Feasibility Study
Components of Project of Detailed Feasibility study : Components of Project of Detailed Feasibility study Market and Demand analysis
Technical analysis
Financial analysis
Social Cost-Benefit analysis
Environmental and risk analysis
Detailed Project Report (DPR) : Detailed Project Report (DPR) Meaning:
“Doing project feasibility is not the end of Project formulation stage. It also includes documentation of it, which is known as Detailed Project Report.”
Slide 44: Definition:
“A formal written document containing the process of Project formulation and briefing the Project scope”
Slide 45: Objectives:
It work as formal communication to Project Promoters for their approval.
It also fulfills the need of Project Report to be provided to the financial institutions/banks
It can also be submitted as Project Reports to Govt. Departments for necessary approval.
Format of DPR : Format of DPR General information about the Project
Background and experience of the Project Promoters
Details and working of already owned businesses.
Details of the proposed Projects
Schedule of implementation
Project costs
Means of financing the Project
Marketing and selling arrangements
Profitability and cash-flow estimates
Mode of payment of term-loans
Government Approvals.
Slide 47: PROJECT MARKET
&
DEMAND
Market Demand Analysis : Market Demand Analysis
Market Survey : Market Survey “Market Survey is a technique that is aimed at gathering all possible information (primary data) by conducting interviews.”
Steps under Market Survey : Steps under Market Survey Defining the Target Market
Selecting the Sample
Developing the Questionnaire
Training the Surveyors
Recording the Information
Interpreting the Information
Market Descriptions : Market Descriptions Competition in Market
Study of Market Segments
Price
Methods of Distribution
Sales Promotion
Consumers Interest
Slide 52: Demand Forecasting “Demand Forecasting is the art of predicting demand for a product or a service at some future date on the basis of certain present and past behaviour patterns of some related events.”
Characteristics of a Good Demand Forecasting : Characteristics of a Good Demand Forecasting Accuracy
Simplicity
Economy
Timeliness
Availability
Methods of Demand Forecasting : Methods of Demand Forecasting Survey of buyer’s intentions
Collective opinion method
Expert opinion method
Controlled experiments
Study of general economic environment
Statistical Methods : Statistical Methods Trend Projection Method
Graphical Method
Regression Analysis
Slide 56: Market Planning This steps under Market and Demand Analysis is not related to actual analysis, but related to Market plans of new firm (if idea under consideration is selected). Under this step, four P’s of Marketing viz Product, Price, Place and Promotion should be well designed to achieve the expected level of Market Penetration.
Slide 57: Project Technical Analysis
Objective of Technical Analysis : Objective of Technical Analysis Primary Objective First and foremost important objective of technical analysis is to see whether the project idea is feasible or not from technical point of view or not Secondary Objective
Activities in Technical Analysis : Activities in Technical Analysis Technology selection
Material and utilities input requirements
Flexibility in product-mix
Plant capacity
Location and size of the project
Machinery and equipment
Technology Selection : Technology Selection Plant Capacity
Material and utilities input requirements
Investment Outlay and production costs
Use by other units
Flexibility in Product mix
Latest Developments
Appropriateness of technology.
Materials and Utilities Input Requirements : Materials and Utilities Input Requirements Raw-materials
Processed Industrial materials and components
Auxiliary materials and factory supplies
Utilities
Product Mix Flexibility : Product Mix Flexibility Another area to be analysed under the technical analysis is flexibility of technology and plan regarding product mix.
Plant Capacity : Plant Capacity Technological requirements
Input constraints
Market conditions
Investment cost & resources of firms
Location and Site selection : Location and Site selection Nearness to raw-materials and market
Availability of infrastructure
Labour situations
Government policies
Other factors
Machinery and Equipments : Machinery and Equipments Technical analysis of a project idea should include the study of required machinery and equipment to run the project. The machinery and technology required depends on the plant capacity and type of technology selected.
Charts and Layouts : Charts and Layouts Material Flow Diagram
Production Line Diagram
Transport Layout
Utility Consumption Layout
Communication Layout
Organisation Layout
Plant Layout
Work Schedule : Work Schedule To anticipate problems like to arise during the installation phase and suggest possible means for coping with them
To establish the phasing of investments taking into account the availability of finances
To develop a plan operations covering the initial period (the running - in period).
Cost of Project : Cost of Project Land and site development
Building and civil works
Plant and machinery
Technical Know-how and Engineering fees
Expenses on foreign technicians and training of Indian technicians abroad
Preliminary and capital issue expenses.
Pre-operative expenses
Margin money for working capital
Initial cash losses
Means of Financing : Means of Financing Share Capital
Term Loan
Debenture Capital
Deferred Credit
Incentive Sources
Miscellaneous Sources
Slide 70: Project Financing
Slide 71: Definition:
“A process of raising the funds (money) for an economically separable project, where providers of the fund look primarily cash flows and revenue of that project as a source of interest (dividend) payment and capital repayment.”
Source of Finance : Source of Finance Equity shares
Preference shares
Debentures
Bonds
Term Loans from financial institutions
Un-secured Loans
Lease financing
Deferred Credit
Capital Investment subsidy
Bridge finance (Bridge Loan)
Internal accruals (in case of Expansion Projects).
Main Activity : Main Activity Financial Evaluation of Project Other Activities
Financial Evaluation of a Project : Financial Evaluation of a Project Financial Evaluation is a Planning Process used to determine whether a firm’s low term investment in project is financially feasible or not. On the basis of expected inflows and outflows in future.
Slide 75: Financial Cost
(from Financial Analysis) Revenue Cash Inflows (from Market and Demand Analysis) Various Appraisal Techniques
ARR
PBP
NPV
IRR
PI etc.
Slide 76: Project Appraisal
Slide 77: Meaning:
“It is a detailed study of several aspects of given project before recommending it.”
Various aspects of Project Appraisal : Various aspects of Project Appraisal Technical appraisal
Commercial appraisal
Economic appraisal
Financial appraisal
Management appraisal.
Slide 79: Risk Analysis
Slide 80: Definition:
“A process of identifying and quantifying the risks involved in a project and developing measures to avoid and manage such a risk”
Slide 81: Types of Risks Completion risks
Technical risks
Economic risks
Social risks
Political risks
Production risks
Marketing risks
Financial risks
Activities involved in Risk Analysis : Activities involved in Risk Analysis Risk assessment
Risk management
Slide 83: Implementation Monitoring & Control of Project Project Scheduling
Project Team-management
Project Monitoring and implementation