Project Management (3171506)

Experiment:1

Aim: Study and Analysis of different Projects and Management of Projects.

Project Management Project management is a methodical approach to planning and guiding

project processes from start to finish. It is the method of planning the plan. It starts from project
definitions and ends with goal achievement.

PMBOK defines project management as the application of knowledge, skill, tool and techniques
to project activities in order to meet stakeholder’s needs and expectations from a project.

Bridge group defines it as the methods and disciplines used to define goals, plan and monitor tasks
and resources, identify and resolve issues, and control costs and budgets for a specific project.

Objectives of Project management

There are four major objectives of project management

Scope: Scope means what are the expectations from you as a project manager and your team. A
civil contractor always has well-defined scope, like all civil works including excavation,
foundation, concreting, brickwork, plastering of all walls as per the attached drawings.

Performance: A project is always expected to have a well-defined performance level. If a project

is unable to adhere to the desired performance of a customer, it is certainly an unsuccessful project.

Time: A successful project is the one which is completed within the time limits perceived during
the planning. As the cost is dependent on time, time management becomes a crucial activity of
project management.

Cost: It is dependent on all the above objectives. Mathematically it can be written as: Cost = f (P,
T, S).

Therefore, cost is a function of performance, time and scope. If any of the above increases, it is
surely going to increase the cost of the project.

Another approach in defining the objectives is the SMART approach.

Specific: Project should target a specific goal

Measurable: It should be quantifiable

Attainable: It should be attainable with resources available

Realistic: It should be realistic in nature

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Time Limit: There should be fixed time limits

Importance of Project Management

What has led to increased usage of the concept of project management in recent times?

Rapidly changing technologies: Technologies are changing very fast, so all manufacturing as well
as service organizations have to cope up with technological changes, which provide a big scope
for project management.

High entropy of the system: Changes are very fast. So, energy levels are high. To adapt to the fast
changing world, no organization can stick to old things or systems. Any modification or
modernization leads to the need of project.

Squeezed life cycle of products: Product life cycle is squeezed to a great extent with innovations
taking place at a very rapid rate. Projects are needed for the upgradation of products.

Globalization impact: All producers and service providers in the present world are exposed
globally. They need to modify their system of operations to match the global practices, thus
creating opportunity for projects.

Large organizations: They face problems of management of huge workforce and work division,
so they divide their work in projects and create a team to accomplish the objectives in the form of
projects. This has also helped the organization to develop a method for performance appraisal.

Customer focus: Increased customer focus has been a market trend in recent times. A few years
back, cost reduction was a major formula of success for an enterprise. Thus, there was more
emphasis on standardization. In recent years, customer focus has redirected market towards
customization. Though it is not purely customization, it is more of a combination of
standardization and customization. All this has led to the application of project management.

Project Life Cycle

Project life cycle and its phases Project life cycle divides the sequence of operations of project in
to different phases. Regardless of scope or complexity, any project goes through a series of stages
during its life. Project activities must be grouped into phases to facilitate project manager and his
team to plan and organize various inputs effectively. It also helps in identifying deviations and
thus helps in decision making with regard to continuation or termination of the project.

Generally, there are four stages of project life cycle which are

Idea Generation (Concept Phase)

Anyone who is planning to invest starts searching everywhere for new ideas. One can start a new
project by defining its objectives, scope, purpose and deliverables to be produced. He will also
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 Project Management (3171506)

hire his project team, set up the project office and review the project, to gain approval to begin the
next phase.

The basic processes of this initiation phase are

 Project document: This is a statement describing the characteristics of the project

undertaken.
 Project feasibility document: This contains constraints and alternative solutions.
The four steps in the project feasibility study are:

 Problem description
 Approach to be used
 Alternate generations for solving the problem
 Preliminary recommendations
Project concept document: It will answer the following questions

 What is to be done?
 How will it be done?
 Why is it to be done?
Project charter: Project charter formally communicates the initiation of the project. It consists of
project scope, project authority and KSF (Key Success Factors).

During this phase, project team is responsible for the following activities:

• Conducting interviews with customers and stakeholders

• Conducting research for generating more necessary information.

• Preparing project feasibility document, project concept statement and project charter.

Project Planning Phase:

Project planning phase follows the project initiation phase. Countless hours during the succeeding
phases can be saved with proper planning. The purpose of the project planning phase is to:

 Determine project requirements

 Decide project cost and schedules
 Search for sources of all resources
The basic processes of the project planning phase are:

 Defining the scope: Define the scope of the project and its limitations.
 Preparing the work breakdown structure: Divide the whole project into smaller activities

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 Project Management (3171506)

 Role assignment: Assign jobs to individuals or group of individuals as predefined activities

or tasks.
 Project scheduling: Determine optimum schedule of the project and show it on a Gantt
Chart.
 Fund allocation: Allocation of funds for individual activities Other subsidiary processes in
the planning stage are:
 Risk management planning: It includes identification of possible causes and effect of the
risks and trying to reduce the impact of risk.
 Procurement planning: Decisions regarding all products, services or resources needed to
accomplish the project. In the planning stage, various steps are taken which includes:
 Final techno-economic feasibility of the project: This is the last chance for changing the
decision, as after this stage, it proves too closely to shut down the project or change the
project.
 Basic engineering and process design: The process is selected and basic engineering is
done. The documents with respect to equipment specification are prepared.
 Division of work/responsibilities: Different activities are allocated to individuals or groups.
 Identify potential vendors and subcontractors: No project is complete without the help of
outside expert agencies called subcontractors. The potential suppliers of various
equipment, civil construction agencies and similar agencies are identified and negotiated.
 Detailed engineering design: based on the designs of equipment supplier, detailed
engineering is performed. The final layout is prepared and the work schedule prepared.
 Final estimation of the cost of the project: The above steps leads to finalizing quite accurate
cost of the project. This is essential as the next step would involve arrangement of funds.
 Decision of capital structure and means of finance: The final decision with respect to
financing the project is needed during the planning phase. It is a crucial decision generally
taken by core strategic group with the advice of finance managers.
Final schedule of implementation (next phase):

The next phase will be implementation. A proper schedule of implementation is essential to avoid
confusions. The schedule of implementation tells all the members of the team when a particular
activity should start and end. It will provide the milestones of every activity. The techniques used
are PERT, CPM, Gantt chart, crashing resource allocation and resource leveling.

Implementation or Execution Phase:

Project execution is characterized by the actual work on the tasks planned and project control
involves the comparison of the actual performance with the planned performance and taking
appropriate corrective action to get the desired output. During this phase, project team is
responsible for the following activities:

 The team members perform the tasks allocated in the earlier phase under the supervision
of the project manager and report to him.
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 Project Management (3171506)

 Project manager is responsible for performance measurement, which includes finding

variances with respect to cost, schedule and scope.
 Project manager is responsible for providing project status report to all key stakeholders.
He should specifically inform the deviation from the plan to the stakeholders. He should
also determine the root cause for the deviations and suggest the alternate actions to
encounter the deviation caused or expected. This helps stakeholders to decide the
corrective action to be taken.
 All project key stakeholders are responsible for the review of the variances.
All project key stakeholders are responsible for taking necessary action of the variances thus
determined so as to complete the project within time and cost.

The basic process of the project execution can be:

 Execution of the project plan

 Handle the changes
 Project control
The subsidiary processes during project execution can be:

 Quality control
 Performance monitoring
 Project administration
 Risk monitoring and control
 Scope and control
 Schedule and cost control
 Management of outside agencies (subcontractors)
The key activities during this phase of execution include:

 Award contracts to contractors, vendors, subcontractors: Final selection of suppliers of

various supplies of services (generally termed contractors) and physical equipment
(generally termed vendors).
 Procure equipment and services: After continuously monitoring the suppliers, the project
team has to procure the goods and services.
 Erection of equipment: The procured equipment needs to be placed on the designed place
after preparing the required foundation.
 Control and monitor project cost, schedule and scope: As majority of efforts, time and cost
are incurred during this phase, it is critical to monitor the project schedule and cost during
this phase. This is generally done using various tools like Gantt chart and Earned Value
Analysis.
 Motivation of project team: As this phase consumes maximum energy of the team
members, motivating them during this phase is critical to the success of the project.

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Termination Phase (Clean-up Phase):

The last step performed to say good bye to a project is the termination phase. The termination of a
project is inevitable, but how it is terminated and when may have a profound and long lasting
impact on the organization and its employees.

In the end, all projects, both successful and unsuccessful, will have to be terminated. During the
termination phase, the project’s resources are redistributed, financial records are closed, and
project personnel are reassigned. The organization’s sensitivity to the concerns of the project team
can have a lasting impact on their commitment and productivity. Lastly, a final report, which
discusses the project’s successes and shortcomings, is prepared for senior management. This report
can significantly influence how the organization manages projects in the future.

According to Meredith and Mantel (1995), there are three ways to terminate a project: extinction,
inclusion, or integration. Termination by extinction means the project is completed. For example,
the new project has been developed and given to the client, the building has been completed and
accepted by the purchaser, or the software has been installed and is running.

By contrast, termination by inclusion is a very different process. The complete project team and
its equipment are transferred to a new division. As one might expect, this type of change places
significant additional stress on the day-to-day operations of the organization. Project managers and
team members must be sensitive to these stresses until the organization is able to settle into a new
and more stable routine.

The most common, but also the most complex, method of termination is by integration. The
project’s resources, personnel, and functions are absorbed as a part of the original organization.
The major problem associated with this termination process is the ability of the organization to
blend technological differences between the project and the organization. Past experience appears
to play a key role in successfully integrating terminated projects.

Classification of Projects Based On Different Criteria:

Projects can be classified based on duration, quantum of investment and the risk involved

Classification based on duration:

It can be long term, medium term and short term. Long-term projects have a life of more than 10
years, whereas mid-term projects have a life of 5 to 10 years. Short-term projects last only for less
than 5 years.

Classification based on investments:

It is based on how much initial investment is needed to start the project. In India, investment outlay
of above Rs.20 crore is considered high investment, whereas an investment outlay between Rs.5

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crore to Rs.20 crore is considered medium sized industry. And investment below Rs.5 crore is
considered low investment industry. Industry with initial outlay below Rs.50 lac is considered
cottage industry.

Classification based on ownership:

A project can be owned by government, public sector, corporate, cooperative, partnership firm or
proprietorship firm.

Classification based on risk:

This is the most commonly used basis of project classification. Projects are basically classified as
Greenfield project, brown field project, divestment project and modernization or replacement
project. The classifications and sub-classifications on the basis of risk are depicted in.

Greenfield project

Greenfield project is a totally new venture by a fresh entrepreneur. It is also known as grass-root
projects. Such projects are fresh and are exposed to very high risk due to lack of expertise of
entrepreneur and infrastructure.

Brownfield projects

In brown field projects, an existing promoter company or existing project goes for addition of
product/capacity. It is of three types.

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 Project Management (3171506)

Expansion project

In expansion project, there is increase in the capacity of existing plant without any other change.
There is no change or very nominal change in the product, e.g. a biscuit industry increasing its
capacity from 20MT/month to 35MT/month. It can either be achieved through market
intensification or market development.

Vertical integration project

The degree to which a firm owns its upstream suppliers and downstream customers is called
vertical integration. It is of two types.

 Forward integration project: Downstream expansion is called forward integration. The

product of existing industry becomes raw material for the proposed project, i.e., a mango
pulp making industry moves to soft drink manufacturing.
• Backward integration project: Upstream expansion is called backward integration. The raw
material needed for the existing industry is proposed to be manufactured by a new project,
i.e., a Mango pulp making industry establishing its own orchard for raw material or soft
drink company establishing Mango Pulp making unit.

Diversification project

 Financial synergy may be obtained by combining two firms: one with better financial
resources but poor technical capabilities and another firm with strong technical capabilities
but poor financial resources. Firms also try to obtain certainty in businesses by combining
two or more businesses with seasonal or cyclic demand factors such as cotton industries
(October to April) and wheat floor mill (April to September).
This combination can certainly lead to strategic fit in operations and enhance the overall
efficiency of the merged firms.
This can also lead to better and cheaper purchasing through higher bargaining power.
Diversification leads to reduced risk in operations. This can also lead to management
synergy as management expertise and experience is applied in different situations.
Management synergy can be achieved when management experience and expertise is
applied to different situations.
There are two ways of diversifications
• Concentric diversification project: firms adds related products
• Conglomerate diversification: firm diversifies into areas that are unrelated to its
current line of business.

Modernization/Replacement Project
In recent times, technology upgradation has been very rapid. Only those organizations can survive
which cope up with the ongoing technological changes. Firms need to upgrade their technology.
Such projects upgradation of technology may need capital investments and are called
modernization projects. While manufacturing a food product, a company is applying steam drying
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 Project Management (3171506)

method, and recently a new technology of vacuum drying has been introduced. The new process
improves the quality of the product, leading to better customer satisfaction, which is of utmost
importance in the food industry. The company has to change over to the new technology of drying.
This will attract additional capital investment and is an example of partial modernization.
Replacement projects may also be classified into two categories: replacement of the equipment
which is no longer able to work and which deteriorates with time and attracts higher maintenance
costs. In both the above situations, the equipment would be required to be replaced and will cause
additional capital investment.

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 Project Management (3171506)

Assignment

Refer the case study of jalswarajya project and give the answer the following questions.

1.Enlist the objectives of jalswarajya project.

2.Listdown the Prioritization criteria for district to select for jalswarajya project.
3.How jalswarajya project is different from typical infrastructure project?
4.Prepare the list of specialist required for the execution of jalswarajya project.
5.What is the total cost of project? List the component wise project cost.
6.Prepae the life cycle for the jalswarajya project.
7.Identify the various risk involved in jalswarajya project.
8.What are the different techniques used for the dissemination of information about the strategy?
9.State the objectives of project management.
10.Explain the project life cycle in details.
11.Explain the different types of project in detals.

Project Management (3171506)