PROJECT MANAGEMENT

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.

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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

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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.”

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Definition: “A formal written document containing the process of Project formulation and briefing the Project scope”

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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.

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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

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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

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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.

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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

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Project Financing

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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.

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Financial Cost (from Financial Analysis) Revenue Cash Inflows (from Market and Demand Analysis) Various Appraisal Techniques ARR PBP NPV IRR PI etc.

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Project Appraisal

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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.

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Risk Analysis

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Definition: “A process of identifying and quantifying the risks involved in a project and developing measures to avoid and manage such a risk”

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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

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Implementation Monitoring & Control of Project Project Scheduling Project Team-management Project Monitoring and implementation