Project Management-Meaning and definition

A project is a duty or task which has a fixed deadline to create a unique product or service. According to a British Standard, a project is a unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within the defined schedule, cost and performance parameters. A project must have: Every project possesses a group of activities, which are unique in nature to the organization handling the activities Every project aims at achieving a specific objective or performing a particular task. Generally, the objective and tasks vary fro project to project. The activities of a project have to be performed in a sequence to deliver the product to the customers. For example, it is necessary to plan the activities before they are implemented.

 A project has a specific starting and completion date. The deadlines of project are either decided by the individual who handles the project or by the project client. The various activities of a project are interrelated, because one activity is the input for another activity. For example, in the project of a building or a shopping mall, the activity of creating the plan for constructing the all works as an input or the activity of constructing the mall

Types of Projects
Basis
Time period

Category I
18 months or more

Category II
Bet 9-18 months

Category III
Bet 3-9 months

Category IV
3 months or less

Risk level

The level is high

The level of risk is medium

Level of risk is low

Very low

Level of complexity Probability of problems

Is high

Is medium

low

Very low

100% certain

50% likely

10% low

No risk

Types of projects
Construction projects:- these types of projects are undertaken to construct residential buildings, industrial and highways. It requires human effort and various mechanical components for the construction. Research projects:-these type of projects are undertaken to acquire knowledge about a specific subject or an object. The acquired knowledge can be presented in the form of models. Patterns and patents. For example, projects undertaken to develop the model of Indian economy and the varieties of rice. Re engineering projects:- this type of project is undertaken to review and carry out the desired changes in an existing system or a process. For example, the re engineering projects undertaken to renumber the telephone system in UK

Procurement Projects:-this type of project is undertaken to contractually establish relationship with the selected supplier for a defined product or service. For example, projects undertaken for outsourcing a complete business function ( such as IT) and for imposing the new rules and measures on a regulated industry.

Business Implementation Projects:-This type of project is undertaken to produce an operationally effective process. The value generated by the project is embedded in the process. For example, the business implementation projects undertaken to install e commerce.

Steps in the Identification of projects

Setting the objectives and goals of the project. Recommending various methods to achieve the objectives of the project Identifying the target groups benefitted by the project Setting the priority of the project in the context of the urgency of the work Considering the adequacy of the executing agency and the active participation of the people involved in the project Estimating the approximate project cost, based on the conceptual design and suggesting the various cost alternatives. Making preliminary assessment of the feasibility of the project and its impact on the organization, its specific departments or sections.

Importance of Projects
Planning and organizing the work: Projects involve planning and organizing the entire work. Planning refers to deciding in advance the equipments,finances,raw materials and processes required for completion of the project. Organizing refers to specifying the work in a systematic manner. Efficient use of resources:- projects also result in the efficient use of resources like time, money, people ,material and energy. It is only possible if planning and organizing projects is done effectively. Helps in assessing and minimizing risk:-project formulation involves environmental, technical and financial appraisal. This helps to avoid various risks such as shortage of finance, change in consumer preferences etc. Proper assignment of task:-projects involve planning of work, which states in advance the tasks necessary for completion of the project. It also results in the proper and efficient execution of tasks. Reduces chances of failure:- project also reduces chances of failure because the project manager helps to maintain mutual interaction among the various interacting parties.

Factors Influencing a project

The main objective of a project or service to a client within a particular span of time and budget. The success of a project relies on various factors such as quality of the product and availability of resources, The following are the factors that affect a project. Scope:-It explains all the activities that you need to perform in a project. The scope of the project consists of target results and the financial and human resources required to complete the project. Quality:-it is necessary for a project to satisfy the quality requirements at levels related to the product quality and the process quality. Time:-It is one of the most important constraints, in which a projct has to be completed. The client decides the time limit of the project and it is essential to complete the project within the allotted time.

Lifecycle of a living organism

Phases of a system
1. The conception/formation phase
Involves the preliminary evaluation of an idea. This includes recognition and acceptance of a problem or a need analyzing the requirement and finding ways to fulfill the need or solve the problems . Steps involved in this are Determine the existing need or problem, or potential deficiencies of the existing system Examine alternate ways of meeting the need or of solving the problem. Identify the approximate resources(human and others) required for the system Establish the basic concept of the system Prepare initial estimates of time, cost and performance of the conceived system Determine the initial feasibility and practicability(technical , economic and environmental) and Establish a first-cut system organization.

The definition/build up phase

2
the system is now investigated in greater detail. Basically ,it would be a refinement of the elements described in the conception phase. All the subsystems of the main system are defined and examined. This requires a firm identification of the resources required and the establishment of time, cost and performance parameters. It also includes the initial preparation of all the documents necessary to support the system such as policies,procedures,bid documents, job descriptions ,budget and funding papers. The specific steps in the definition phase of a system are Determination of time, cost and performance requirement of the system Identification of the estimates of human and non human resources required Determination of the necessary sub systems , including the detailed plans required to support the main system To define the inter-system and intra-system interfaces: and Identification and preparation of the documents required to support the system such as policies, procedures, bid documents, job descriptions .

3 Acquisition/production phase
This is so called because at the end of the phase the user acquires the system. This phase also referred to as the production phase as the system is produced. The efforts are now focused on standardization,testing,and evaluation of an alternative detailed design and the production based on the acceptable product design. The production phase of a system and of a project are similar to each other. Production involves either production of a single item or mass production. Project management oversees and controls resources, motivates workrs and reports about the progress to the user of the system. The specific tasks and activities during the acquisition/production phase include:-

Update the detailed plans and specification and the definition of phase Identify detailed resource requirements and managerial proceduresinventory, scheduling,accounting,book keeping etc
Begin the production, construction and installation of the actual system. Verify the system specifications with the performance Prepare the policy and procedural documents and Develop plans to hand-over the system to the user , and to provide supporting services, such as training during the operational phase

4 The Operation Phase

Here the user takes over the system who integrates its product/service into the existing organizational system. The user takes over, operates the system and evaluates its performance according to its ability to meet the need or solve the problem for which it was designed. The operation phase also includes the provision for feedback to the system planner/designer, so that the system be improved. The specific activities and steps in the operation phase of a system are as follows. Use of the system by the client/customer Integrate the products/services into the existing organizational system. Evaluate the system performance vis-a vis the specifications (made in the definition of phase) with respect to technical, economical, social and environmental parameters.. Provide feedback to the system designer/planner about the efficiency and effectiveness of the system. Provide training support and maintenance services.

5. The divestment/termination phase

This is the last phase of the system and many times it may overlap with the preceding operations phase. The senior management of the organization will now be looking at the means of divestment and reallocation of resources. This figure corresponds to the phase out and termination of a project. Similarly, compared to the technology/product life cycle divestment corresponds to the deterioration and death phases of the technology or the product. As one product out of several in an organization enters the deterioration and death phase of its lifecycle, other new products or projects must be conceived and developed

Strategic Management and Project Selection

Maturity of Project Management Criteria for PS Models Nature of PS Models Types of PS Models Uncertainty Analysis and Risk Management Information Base for PS Models Project Portfolio Process (PPP) Project Proposal

Overview of PS Process
Project Management Office (PMO): Aligning corporate needs and project goals Project Selection: Chose candidate project using Evaluation Criteria Dealing with Uncertainty: Risk Analysis Strategically selecting best Projects: Project Portfolio Process (PPP) Locking up the deal: Writing a Project Proposal

Project Management Maturity Levels

Ad-hoc (essentially disorganized) Abbreviated (some processes exist) Organized (standardized processes) Managed (measured processes) Adaptive (continuous improvement)

PS Models
Idealized view of reality Representing the STRUCTURE of the problem, not the detail Deterministic or stochastic

Criteria for Project Selection models

Realism (technical-, resource-, market-risk) Capability (adequately sophisticated) Flexibility (valid results over large domain) Ease of Use (no expert needed to run model) Cost (much less than project benefit) Easy Computerization (use standard software)

Nature of PS Models:
Methodology
Start with detailed list of firms goals Create list of project evaluation factors (PEFs) Weigh every element in PEF list Compute an overall score for project based on

weighted PEFs Select project that has the closest alignment with firms goals

Project Evaluation Factors (PEFs)

Production Factors Marketing Factors Financial Factors Personnel Factors Administrative and Misc. Factors

Types of PS Models:
Nonnumeric
Sacred Cow Operating Necessity Competitive Necessity Product Line Extension Comparative Benefit Model

Numeric PS Models: Profit / Profitability

Payback Period (PB) Average Rate of Return Discounted Cash Flow (NPV) Internal Rate of Return Profitability Index Other Profitability Models

Choosing the PS Model

Dependent on wishes and philosophy of management 80% of Fortune 500 firms choose nonnumeric PS models Firms with outside funding often chose scoring PS models Firms without outside funding often chose profit / profitability PS models

Management of Risk: Terminology

Risk: Decision based on complete
information about the probability of each possible outcome.

Uncertainty: Decision based on

incomplete or insufficient data.

Game: Decision based under conditions

of conflict.

Areas of Uncertainty
Project timing & expected cash flow.
Direct outcome of project, i.e. what exactly will the project accomplish Side effects and unforeseen consequences of project

Risk Analysis Crystal Ball2000 Software

1) Start with estimated risk profile for all key parameters of project 2) Use Crystal Ball, an EXCEL plug in, to represent decision by statistical model 3) Repeat many times to get a statistical distribution of all possible outcomes

Window-of-Opportunity Analysis
Estimate IN ADVANCE economic
impact of innovation before R&D is undertaken Set up a baseline of current process as the sum of all current sub processes Compute cost / performance of new innovation as a multiple of each sub process in the baseline system

Problems Affecting Data Used in PS Models

Accounting: arbitrary assignment of overhead
costs, linear cost and revenue forecasts

Measurements: (subjective vs. objective),

(quantitative vs. qualitative), (reliable vs. unreliable), (valid vs. invalid)

Technology shock: New technology has to

overcome initial resistance threshold.

Project Portfolio Process (PPP)

Step 1: Establish a Project Council Step 2: Identify Project Categories & Criteria Step 3: Collect Project Data Step 4: Assess Resource Availability Step 5: Reduce Project and Criteria Set Step 6: Prioritize Projects within Categories Step 7: Prioritize the projects within categories Step 8: Implement the Process

Project Proposal:
Content
Cover letter Executive summary Description and past experience of project team Nature of technical problem to be solved How to approach solution of technical problem Plan for implementation of project Plan for logistic support and administration

Project Proposal:
Cover letter & Executive summary Compose a cover letter as key marketing
instrument

Explain fundamental nature and general

benefits of project

Minimally technical language

Project Proposal:
Past Experience of Project Team

List all key project personnel with titles

and qualifications

Include full resume of each principal Provide all pertinent references

Project Proposal:
Technical Approach
General description of problem to be
addressed or project to be undertaken

Major subsystems of problem or project Methodology of solving the problem Special client requirements Test and inspection procedures

Project Proposal:
Implementation Plan
Estimates of time, cost and materials for each
subsystem and the whole project

Establish major milestones to break project into

phases

List equipment, overhead and administrative

cost

Develop contingency plans (incl. slack time)

Project Proposal:
Plan for Administration and Logistic Support Control over subcontractors Nature and Timing of all reports (progress,
budget, audits) Change management

Termination Procedures touch of class capabilities (artists

renderings, meeting facilities, video conferencing, computer graphics)