MODULE 1: Introduction to Project Management

Overview:
Realization of these objectives requires systematic planning and careful implementation.
To this effect, application of knowledge, skill, tools and techniques in the project environment,
refers to project management. Project management in recent years has proliferated, reaching
new heights of sophistication. It has emerged as a distinct area of management practices to
meet the challenges of new economic environment, globalization process, rapid technological
advancement, and quality concerns of the stakeholders.

Project Definition:
Project in general refers to a new endeavor with specific objective and varies so widely
that it is very difficult to precisely define it. Some of the commonly quoted definitions are as
follows. Project is a temporary endeavor undertaken to create a unique product or service or
result. (AMERICAN National Standard ANSI/PMI99-001-2004)

Project is a unique process, consist of a set of coordinated and controlled activities with
start and finish dates, undertaken to achieve an objective confirming to specific requirements,
including the constraints of time cost and resource. (ISO10006)

Examples of project include Developing a watershed, Creating irrigation facility,

Developing new variety of a crop, Developing new breed of an animal, Developing agro-
processing centre, Construction of farm building, sting of a concentrated feed plant etc. It may
be noted that each of these projects differ in composition, type, scope, size and time.

Project Characteristics
 Despite above diversities, projects share the following common characteristics.
 Unique in nature.
 Have definite objectives (goals) to achieve.
 Requires set of resources.
 Have a specific time frame for completion with a definite start and finish.
 Involves risk and uncertainty.
 Requires cross-functional teams and interdisciplinary approach.

Project Performance Dimensions

Three major dimensions that define the project performance are scope, time, and resource.
These parameters are interrelated and interactive. The relationship generally represented as an
equilateral triangle. The relationship is shown in figure 1.

Time Cost

Scope

Figure 1. Project performance dimensions

 It is evident that any change in any one of dimensions would affect the other. For example, if
the scope is enlarged, project would require more time for completion and the cost would also go up. If
time is reduced the scope and cost would also be required to be reduced. Similarly any change in cost
would be reflected in scope and time. Successful completion of the project would require
accomplishment of specified goals within scheduled time and budget. In recent years a forth
dimension, stakeholder satisfaction, is added to the project. However, the other school of
management argues that this dimension is an inherent part of the scope of the project that defines the
specifications to which the project is required to be implemented. Thus the performance of a project
is measured by the degree to which these three parameters (scope, time and cost) are achieved.

Mathematically
Performance = f(Scope, Cost, Time)

In management literature, this equilateral triangle is also referred as the “Quality triangle” of the
project.

Project Life Cycle

Every project, from conception to completion, passes through various phases of a life cycle
synonym to life cycle of living beings. There is no universal consensus on the number of phases in a
project cycle. An understanding of the life cycle is important to successful completion of the project as
it facilitates to understand the logical sequence of events in the continuum of progress from start to
finish. Typical project consists of four phases- Conceptualization, Planning, Execution and
Termination. Each phase is marked by one or more deliverables such as Concept note, Feasibility
report, Implementation Plan, HRD plan, Resource allocation plan, Evaluation report etc.

Conceptualization Phase
Conception phase, starting with the seed of an idea, it covers identification of the product /
service, Pre-feasibility, Feasibility studies and Appraisal and Approval. The project idea is
conceptualized with initial considerations of all possible alternatives for achieving the project
objectives. As the idea becomes established a proposal is developed setting out rationale, method,
estimated costs, benefits and other details for appraisal of the stakeholders. After reaching a broad
consensus on the proposal the feasibility dimensions are analyzed in detail.

Planning Phase
In this phase the project structure is planned based on project appraisal and approvals. Detailed
plans for activity, finance, and resources are developed and integrated to the quality parameters. In
the process major tasks need to be performed in this phase are
 Identification of activities and their sequencing
 Time frame for execution
 Estimation and budgeting
 Staffing
A Detailed Project Report (DPR) specifying various aspects of the project is finalized to facilitate
execution in this phase.

Execution Phase
This phase of the project witnesses the concentrated activity where the plans are put into
operation. Each activity is monitored, controlled and coordinated to achieve project objectives.
Important activities in this phase are
1. Communicating with stakeholders
2. Reviewing progress
3. Monitoring cost and time
4. Controlling quality
5. Managing changes
Termination Phase
This phase marks the completion of the project wherein the agreed deliverables are installed
and project is put in to operation with arrangements for follow-up and evaluation.

Life Cycle path

The life cycle of a project from start to completion follows either a “S” shaped path or a “J “
shaped path (Figure 2 and 3). In “S” shape path the progress is slow at the starting and terminal
phase and is fast in the implementation phase. For example, implementation of watershed project. At
the beginning detailed sectoral planning and coordination among various implementing agencies etc.
makes progress slow and similarly towards termination, creating institutional arrangement for transfer
and maintenance of assets to the stakeholders progresses slowly.
Error!
100
Slow finish
Percentage completion

Quick
Momentum

Slow start

Time
Figure 2. Project life path –“S” shape

In “J” type cycle path the progress in beginning is slow and as the time moves on the progress of the
project improves at fast rate. Example, in a developing an energy plantation. In this the land
preparation progresses slowly and as soon as the land and seedling are transplantation is under
taken. This is shown in figure 3.

Error!
100
% Completion

Time Figure 3. Project life cycle path - “J” Shape

Project Classification
There is no standard classification of the projects. However considering project goals, these
can be classified into two broad groups, industrial and developmental. Each of these groups can be
further classified considering nature of work (repetitive, non-repetitive), completion time (long term,
shot term etc), cost (large, small, etc.), level of risk (high, low, no-risk), mode of operation ( build,
build-operate-transfer etc).

Industrial projects also referred as commercial projects, which are undertaken to provide
goods or services for meeting the growing needs of the customers and providing attractive returns to
the investors/stake holders. Following the background, these projects are further grouped into two
categories i.e., demand based and resource / supply based. The demand based projects are designed
to satisfy the customers’ felt as well the latent needs such as complex fertilizers, agro-processing
infrastructure etc. The resource/ supply based projects are those which take advantage of the
available resources like land, water, agricultural produce, raw material, minerals and even human
resource. Projects triggered by successful R&D are also considered as supply based. Examples of
resource based projects include food product units, metallurgical industries, oil refineries etc.
Examples of projects based on human resource (skilled) availability include projects in IT sector,
Clinical Research projects in bio services and others.
Development projects are undertaken to facilitate the promotion and acceleration of overall
economic development. These projects act as catalysts for economic development providing a
cascading effect. Development projects cover sectors like irrigation, agriculture, infrastructure
health and education.

The essential differences between Industrial projects and

Developmental project aresumerised in the following table 1.

Table 1. Difference between Industrial and Developmental Projects

Dimension Industrial Project Developmental Project

Scale of Project Limited Large
Promoters Entrepreneurs or corporates Government, Public
Sectors,
NGOs
Investment --- High
Gestation Period --- High
Profitabilty High, Considered on IRR ( Modest, Considered on
Internal Rate of Return) ERR
(Economic Rate of Return)
Finance Stringent debt equity norms Operates on higher debt-
equity norms

Source of fund National stock markets and International organizations

from domestic financial like World Bank,
institutions IMF,ADB,DFID and others
mostly as loan ,yet times
providing for some grants.

Interest rates and Market rate and the Very low for borrowed funds
repayment period: repayment period is and the repayment period
generally 7 to 10 years extends up to 25 years
and
even beyond.

Project management
Project management is a distinct area of management that helps in handling projects. It has
three key features to distinguish it from other forms of management and they include: a project
manager, the project team and the project management system.