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Dr. Sonu Rajak

Assistant Professor,
BIT Mesra, Rachi-835215
WHAT IS A PROJECT?

➢An Undertaking or venture to accomplish

some objective or goal.

➢A project is a temporary endeavour

undertaken to create a unique product,
service or result.

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 VARIETY OF PROJECTS
➢ Project at personal level
▪ Preparing for an examination
▪ Writing a book
▪ A birthday function

➢Project in local neighbourhood

▪ A college function
▪ Running a political campaign
▪ Producing a film
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➢Organizational projects

▪ Developing a new product or service

▪ Developing and marketing a new medicine
▪ Implementing a change in an organization
▪ Constructing a building facility, highway, railways
▪ Launching a new mobile phone
▪ Designing a new transportation system
▪ Manufacturing a new piece of machinery
▪ Increasing production capacity by addition of new manufacturing
processes
▪ Replacing an old manufacturing process by a new one

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➢National projects
▪ Literacy Campaign/poverty removal
▪ Preparation of annual budget
▪ Launching a satellite

➢Global projects
▪ Space Exploration
▪ Environment protection
▪ Global Warming

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 PROJECT CHARACTERISTICS
▪ It has a specific objective
▪ Well defined collection of jobs
▪ Generally non-repetitive, one time effort
▪ It has a specific time constraint
▪ It has a specific cost constraint
▪ It consumes resources
▪ It is unique in nature
▪ Jobs interrelated through precedence
▪ It is often carried out to provide a new facility for a client
▪ It is associated with change and therefore carry considerable risk

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LIFE CYCLE OF A PROJECT
➢Conception phase
▪ Idea generation
▪ Idea to overcome certain problems

➢Definition phase
▪ Convert ideas into documents
▪ Selection of the project

➢Project planning
▪ Scope of work and network development
▪ Basic scheduling
▪ Time cost tradeoffs
▪ Resource consideration in projects

➢Project implementation
➢Project clean-up phase
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PROJECT SELECTION
➢ Project identification

➢Project appraisal

➢Project selection

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PROJECT IDENTIFICATION
▪ Receptive to new ideas
▪ Vision of future growth
▪ Long term objective
▪ SWOT analysis
▪ Preliminary project analysis

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PROJECT APPRAISAL
➢Market Appraisal
➢Technical Appraisal
➢Financial Appraisal
➢Economic Appraisal
➢Ecological appraisal
➢A feasibility report consideration all these issues prior to
project adoption

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MARKET APPRAISAL
▪ Aggregate future demand
▪ Market share
▪ Current and future competition
▪ Location & accessibility of consumers
▪ Technological scenario/obsolescence
▪ Possible pricing options

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TECHNICAL APPRAISAL
▪ Engineering aspect
▪ Locations
▪ Size
▪ Production process

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FINANCIAL APPRAISAL
▪ Cash flows over time
▪ Profitability
▪ Net present value
▪ Internal rate of return
▪ Benefit cost ratio
▪ Payback period
▪ Accounting rate of return
▪ Risk

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ECONOMIC APPRAISAL
▪ Benefits and costs (in shadow prices)
▪ Distribution of income in society
▪ Level of saving and investment in society
▪ Self sufficiency, employment and social order

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ECOLOGICAL APPRAISAL

➢Environmental damage
▪ Air
▪ Water
▪ Land
▪ Noise
▪ Other

➢Restoration measure and cost

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PROJECT SELECTION CRITERIA
▪ Investment
▪ Rate of return
▪ Risk
▪ Profit
▪ Payback
▪ Similarity to existing business
▪ Expected life
▪ Flexibility
▪ Environmental impact
▪ competition 16
PROJECT PLANNING
➢Forming a project team with a leader
➢Defining scope and terms of reference
➢Work breakdown structure
➢Basic scheduling
➢Time cost tradeoffs
➢Resource considerations

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BASIC SCHEDULING
▪ Project representation as a network
▪ Estimation of activity durations
▪ Forward & backward pass
▪ Determination of activity floats
▪ Critical path for selective control and minimum project duration

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TIME COST TRADE-OFF
▪ Normal and crash activity times
▪ Linear/non-linear (discontinuous) discrete time-cost relationships
▪ Project cost-duration efficient frontier
▪ Total project (direct and indirect) cost

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➢Resource aggregation
▪ Project schedule
▪ Resource consumption profile for each resource
▪ Provisioning of resources over time

➢Resource levelling
▪ Shifting the slack jobs in the project schedule to obtain a balanced resource profile
▪ Project duration kept fixed

➢Resource allocation
▪ The minimum duration schedule satisfying the limited availability of resources

▪ May entail delaying some critical jobs to keep the resources profile within the
available limits
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PROJECT IMPLEMENTATION
▪ Organizing team and work
▪ Clear cost/time/performance goals
▪ Project commissioning
▪ Project monitoring with regards to cost, value of work and time
▪ Project control

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PROJECT CLEAN-UP PHASE
▪ Physical handover to user after commissioning
▪ Accounting and report writing
▪ Disbanding of project team
▪ Learning from the experience

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PROBLEMS IN PROJECT EXECUTION
▪ Organizational/behavioural
▪ Financial
▪ Legal
▪ Engineering
▪ Construction/installation
▪ Labour unavailability of resources
▪ Weather conditions

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COMPUTER IN PROJECT MANAGEMENT
▪ Easy sorting and listing of activities
▪ Easy updation and new listing of projects progress over the life cycle
▪ Certain advanced analyses practical only with computer programs
▪ Many commercially available packages

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PROJECT SELECTION
➢ Project identification

➢Project appraisal

➢Project selection

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PROJECT IDENTIFICATION
Objective

Strengths Weaknesses

Threats opportunities
Brainstorming

Alternative project possibility

Criterion

Candidate Projects Proposals

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THE PURPOSE OF A PROJECT
➢ A business purpose
▪ To increase Profit
▪ To increase efficiency
▪ To increase turnover and employment
▪ To minimize threats of losses
▪ To become more competitive

➢ A social purpose
▪ To raise funds for a worth cause
▪ To train people in a new area
▪ To reduce pollution

➢A humanitarian purpose
▪ To provide disaster relief 27
SEARCH NEW IDEAS
➢What are the objective?
➢Brainstorm to generate alternative solution
▪ Emerging market trends
▪ SWOT analysis
▪ Other constraints
➢ Shortlist candidate ideas for detailed scrutiny

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SWOT ANALYSIS
➢Strength
▪ Experience and expertise
▪ Technical skill
▪ Financial position
▪ Capital raising capability
▪ Industrial contacts
▪ Foreign collaborations

➢Weakness
▪ Newer unfamiliar technologies
▪ Inability to raise huge investments
▪ Lack of experience
▪ Lack of trained personnel
▪ Inability to forecast market trends
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➢Opportunities
▪ Emerging technologies
▪ New products with new markets
▪ New processes with better features
▪ Special financing schemes
▪ Government and other incentives

➢ Threats
▪ Competitors
▪ Poor state of the economy
▪ Outdated technology
▪ Unprofessional management skills
▪ New products and services

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BRAINSTORMING
▪ A good means to generate new project ideas
▪ Focus on uninhibited participation by a group
▪ Listing of ideas without suppressing creativity at source
▪ List of ideas subjected to screening and evaluation subsequently

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SCREENING OF IDEAS
Criterion Poor (1) Fair (2) Good (3) V good (4) Excellent (5) Wt.
Cost X 20%
Risk X 30%
Return X 40%
hazard X 10%

Score = 2*0.2 + 3*0.3 + 4*0.4 + 2*0.1 =3.1

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 CASE STUDY
Reduce vehicle pollution
Idea Criteria chosen for screening
1. Restrict registration of new vehicle 1. Effectiveness to achieve objective
2. Cost of the project
2. Enforce strict emission regulation for
vehicles 3. Ease of implementation
4. Time needed
3. Ban diesel run vehicle on road
4. Introduce MRTS for the city
5. Encourage use of car pools
6. Grow more trees/green belts in the city
7. Declaring no traffic zones in the city
8. Ban vehicle with an age of ten or more
years
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SCALE OF EVALUATION
V. Poor (0) Poor (1) Fair (2) Avg. (3) Good (4) Excellent (5)
Low-----------------------Effectiveness---------------------High

High---------------------------Cost-----------------------------Low

Difficult----------------------implementation------------------Easy

Maximum-----------------------Time-----------------------Minimum

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PROJECT CONSTRAINTS
What exactly is the expected outcome?
What can go wrong and
Risk what can be done about it?
Scope

Who and what is required

to do the work?
How much money is available to achieve
this outcome

Resources Six Constraints of Cost

a Project

By when should the output be delivered?

Time
Quality
How close the outcome matches
expectations?
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 THE CLASSIC CONSTRAINT TRIANGLE
➢ These constraints are interrelated, so a strain on one of the
constraints will affect one or more of the other constraints.

➢ These three core constraints—scope, time (in other words, schedule),

and cost—are strained. Each will influence the other two and may result
in poor quality of the product.

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PROJECT ORGANIZATION
➢ Organizational structure is concerned with the allocation of task and establishment
of authority-responsibility relationship between the member of organization.

➢ Objectives:
▪ Understand the various organizational structures for project management
▪ Understand how to choose the most appropriate structure
▪ Understand the role of corporate culture in project management

➢ Organizational structure can be of three types

▪ Functional organization
▪ Product organization
▪ Matrix organization

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FUNCTIONAL ORGANIZATION

General
Manager

Manager Manager Manager Manager Manager

(Finance) (R & D) (Production) (Personnel) (Marketing)

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PRODUCT ORGANIZATION

General
Manager

Manager Manager
Manager Manager
(Pharmaceutical (Health
(Food products) (Cosmetics)
products) products)

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MATRIX ORGANIZATION
General
Manager

Manager Manager Manager Manager Manager

(Finance) (Production) (Personnel) (Marketing) (R & D)

Project manager (A)

Project manager (B)

Project manager (C)

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ADVANTAGES OF A PURE MATRIX FORM OF ORGANIZATION

▪ The project manager is able to have maximum control over the project

▪ High degree of co-ordination

▪ Flexibility - There is sharing of authority and responsibility between project

managers and the functional managers which result in synergy

▪ Resource utilization is optimized

▪ All the personnel are involved, motivated and are prepared to face the challenge

▪ Less work load on top management

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DISADVANTAGES OF A PURE MATRIX FORM OF ORGANIZATION

▪ Unclear authority

▪ Internal conflicts and fight for power

▪ Difficult to reach decisions

▪ There is danger of dual reporting since the personnel are under the dual control of
project and functional managers

▪ It is costly to implement matrix form of organization

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MODIFIED MATRIX ORGANIZATION

General
Manager

Director Manager Manager Manager Manager Manager

(Projects) (Finance) (Production) (Personnel) (Marketing) (R & D)

Project manager (A)

Project manager (B)

Project manager (C)

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PURE PROJECT ORGANIZATION STRUCTURE

Project
Manager

Design Engineering Research Procurement Production

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SELECTION OF PROJECT ORGANIZATION STRUCTURE
➢ Project Considerations:
▪ Size of the project
▪ Strategic importance
▪ Novelty and need for innovation
▪ Need for integration (number of departments involved)
▪ Environmental complexity (external interfaces)
▪ Stability of resource requirements.

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SELECTION OF PROJECT ORGANIZATION STRUCTURE (CONTD.)

➢ For “Project-driven” enterprises, the matrix form of organizational structure is the

best suited

➢ In functional organizational structure, the integration between the functional units is

achieved by formal rules, regulations, plans, budgets etc. this form of organization
is suitable for stable and repetitive environments

➢ Pure project organizational structure and matrix organisational structure work

better for the control of human resources and hence these structure are more sited
for labour intensive projects

➢ Project involving high complexity and requiring huge resources can be better
handled by a pure project organization structure

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SELECTION OF PROJECT ORGANIZATION STRUCTURE (CONTD.)
▪ Other organization that are not “project-driven” also come across situations where
they are to manage projects- Departmental project management structure

General
Manager

Manager Manager
Manager Manager
(Pharmaceutical (Health
(Food products) (Cosmetics)
products) products)

Project Leader Project Leader Project Leader Project Leader

Service level personnel

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BREAKDOWN STRUCTURE
➢ Work breakdown structure (WBS)
1. Project
2. Sub-project
3. Task
4. Sub-task
5. Work-package

➢ Types of work breakdown structures

▪ Product oriented WBS
▪ Functionally oriented WBS

➢ Organization Breakdown structure (OBS): The project organization (i.e., the personnel

involved in project implementation and control) can be broken up in to several groups, sub-
groups, individuals etc.
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