Concept of Project

Management

Importance of Project

Management All organizations, be they small or

large, at one time or other, are

involved in implementing new

undertakings.

These undertakings may be diverse,

such as, the development of a new

product or service; the establishment

of a new production line in a

manufacturing enterprise; a public

relations promotion campaign; or a

major building programme.

All these require project management

as an essential component.

Importance of Project

Management Whilst the 1980's were about quality and the

1990's were all about globalization, the 2000's are about service speed .

To keep ahead of their competitors, organizations are continually faced with the development of complex products, services and processes with very short time-to-market windows combined with the need for cross-functional expertise.

In this scenario, project management becomes a very important and powerful tool in the hands of organizations that understand its use and have the competencies to apply it.

Typologies of projects

Elements of Project

A ‘project’ is a one-time work that has

a definite end.

Elements of project management are:

Formulation (identification + appraisal)

Implementation

Monitoring and

Evaluation

Project Formulation

Formulation consists of:

Identification of projects

◦ Defining objectives

◦ Generation of ideas

◦ Initial screening

Appraisal

◦ Technical

◦ Financial

◦ Marketing

◦ Socio-economic

Technical Appraisal

Technical Feasibility

Technology availability

• Indigenous

• Imported

- Structure

- Cost

- Restrictions (governmental)

Technology compatibility

Raw materials and competent people

Geography and climate

Financial Appraisal

Checking financial feasibility

◦ Capital costs

◦ Operating costs (materials, labour, power,

transport, etc.)

◦ Revenues

◦ Capital budgeting

Detailed assessment of costs is

required.

Social Cost Benefit Analysis

Larger interests of the society considered while selecting projects.

Social Cost Benefit Analysis involves thorough assessment of :

• Benefits and Costs to society

• Environment Impact Assessment (EIA)

Includes quantifiable as well as qualitative aspects.

A very important analysis for both public sector and private sector projects.

Project Implementation

Once a project is selected, its

implementation is planned in detail.

Detailed planning helps in monitoring

the project, while in progress, and

controlling it.

Network analysis (PERT/CPM) is of

immense help in implementation

planning, monitoring and control.

Project Evaluation

This is post-project critical evaluation:• Have conceived objectives been

achieved?

• What have been the problems?

• What can be done for similar projects in the future?

- Defining objectives set

- Implementation

- Monitoring and control

Project evaluation is about ‘learning’.

Project Life Cycle

PROJECT MANAGEMENT

It is the process of planning and

directing a project from its inception to

its completion in a given time and at a

given cost to generate a given result.

The Importance of Project

Management

Factors leading to the increased use of

project management:

◦ Compression of the product life cycle

◦ Knowledge explosion

◦ Corporate downsizing

◦ Increased customer focus

◦ Small projects represent big

problems

The Technical

and Socio cultural

Dimensions

of the Project

Management Process

WHY PROJECT MANAGEMENT?

Short product life cycles

Flatter organizations

Time-based competition

More frequent change/need for flexibility

Imposed deadlines/short/late starts

Limited/shared resources

Multiple responsibilities

Involve different people/depts./priorities

Regular conflict about work/approaches/budgets

PHASES OF PROJECT

MANAGEMENT

Divided in a six broad phases.

IDENTIFICATION

SELECTION

FORMULATION

APPRAISAL

IMPLEMENTATION

REVIEW

PHASE OF PROJECT

MANAGEMENT 1. IDENTIFICATION- finding out of a

project after a careful scanning of the environment of investment opportunity & its likely return.

2. SELECTION- rational choice of a project in the light of objective & inherent constraints.

3. FORMULATION- translation of idea into a concrete project with scrutiny of its important preliminary aspects.

PHASES OF PROJECT

MANAGEMENT

4. APPRAISAL- searching scrutiny, analysis &evaluation

of market, technical, financial, & economic variable.

Assessing the profitability, return on investment&

breakdown points.

5. IMPLEMENTATION- expeditious completion with in

the allocated resources.

6. REVIEW- judicious operation of a project with

objective like, maximization of net present value

maximization of return and increase in the rate of return

at low risk.