UNIT-II

Creativity in Entrepreneurship
Creativity refers to the essential source of inventiveness and can lead to the formation of
new firms and to make improvements in existing products of the company to become more
efficient and competitive in the marketplace. A blend of creativity and technology in the
activities of entrepreneurship to commercialize the idea related to products and services is
helpful to strengthen the entrepreneurship.
Importance Of Creativity in Entrepreneurship
Creation of innovative ideas: The entire procedure of entrepreneurship rotated around the
creation and exploration of some innovative ideas. When an entrepreneur gets innovative
that is efficient and in favour of the business, then they can stay ahead o the curve and beat
the competition in a very proper manner. It is a kind of learning skill that is possessed by
some individuals to explore some inventive ideas and thoughts that can create a huge
difference and help the business to stay always in the hit list.
1. Novel ways to develop and improve the products: Creativity is all the way
associated with making changes in the products or services in such a way that
it creates something different. Chances of improvement in any product are
high but it just needs some sort of creative thinking to know what is missing
in the products. This thing can only be assessed by a creative entrepreneur.
2. Thinking out of the world: The intention and imagination of producing
something different with unique ideas are called Creativity. Imagination is
always must cross the boundaries between the normal and unique and come
up with something that can help you think outside of the box. The creative
entrepreneur always thinks out of the world and replaces the traditional
solutions with inventive ones. Creativity meant to be created something new,
interesting, and versatile to get some potential.
3. Searching the same patters but the areas are different: Somehow, due to
monotonous routine and surroundings, we always go with the same
procedures all the time. A connection between the dissimilar and unrelated
subjects allows creativity to happen and make some successful ideas for
entrepreneurship. The creation of new niches comes by merging the different
ideas and fields which may give something innovative and interesting
intersection. There is no fear of bringing the various disciplines together, but
some may have however interesting ideas comes by mixing the different
fields.
4. Growth of new niches with creativity and entrepreneurship: It is vital to
explore the new aspects of conventional business in the entrepreneurship. It
can be done in various ways such as by changing the manufacturing
techniques, mode of delivery or make some changes in the service or
product. All these changes create a big difference in business strategies and
give birth to a new niche.
5. Startup success is not enough: Sometimes, the entrepreneurs get some
initial ideas that establish a creative image of the entrepreneur in the eyes of
the people, and they think that it is not required to be creative again in the
future. But this is not at all enough to succeed in the avenue of business as
creativity keeps a business to remain ahead of the curve.

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Things keep changing all the time and when you discover a new idea instead of the old one,
then you need to find something inventive all the time to stabilize uniqueness in your
business. Moving forward with some ideas and thoughts is an integral part of every business
and paved the way to success.
7. A table full of untraditional ideas: Conventional thinking leads to the same
procedure for a long time if everyone is doing a particular work in the same
way. But if you want to succeed, then you have to challenge the conventional
techniques and bring something new in the marketplace. The breed of
creativity is Disruption.
To exemplify, Apple Inc, change the vision of people how they look forward to the mobile
phone and what the company discovered. No one never thought about mobile phones can
be something different and changed the entire mental image of a device.
The whole concept is changed by Apple and when someone heard of “phone”, and then a
shadow like a screen emerged. That is called the creativity that fills the table and shows the
creativity of an entrepreneur by nature.
8. Stand out from the crowd: A startup with huge success is something
remarkable that can set an example that you are completely unique from
others. Need to get up from the crowd.
For instance, when people think about the reasons behind the crash of an application on a
mobile device, the entrepreneur should find out the perfect way out to deal with the
problem. It was quite tedious and irritating for people to deal with all these issues and the
solution seems utterly amazing. Afterwards, people use the solutions and give feedback too.
If it is perfectly fine with the device, then it creates a status quo of the entrepreneur and
gives a breath of relief.
9. Pushing your potential and never stay settle down: If the business is running
smoothly and the entrepreneur is comfortable with the whole process, then
it is quite dangerous as well as monotonous too. Although the business is
doing fine it does not mean that you can’t do better.
However, it shifts the benefit in the hand of the competitor, and they can something
innovate to put your business down and seems conventional. Never settle as it is not your
job place but the business. The business always needs some creativity in the procedure,
your products, your knowledge, and ideas.
10. Become a solution: Creativity is not just a flash of motivation but sometimes,
the great designers, artists and writers fail in front of the creativity.
Continuous working on the problem is the only solution to make it right.

Generation and screening of Project Ideas (Project Identification)

Generation of Ideas: Identifying suitable project ideas is the most important step in the
whole process of project preparation. The search for promising project ideas is the first step
towards establishing a successful venture. The key to success lies in getting into the right
business in the right time. The objective is to identify investment opportunities which are
feasible and promising.
Generation of an idea of producing a new product, new business, requires imagination
sensitivity to environmental changes and the realistic assessment of what the firm can do? A
project is not a product or commodity to be purchased. It has a promise as well as a risk.

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An idea regarding a required intervention in a specific area to address identified problem is
formed and developed. This idea is usually hatched through discussions by specialists and
local leaders in a community need based on issues and turned into a proposal.
Generally, project ideas are generated depending on:

• Consumer needs
• Market demand
• Resource availability
• Technology
• Natural calamity
• SWOT analysis
• Political considerations etc.,

The project idea selection is selection of project idea from available alternatives is to be best
suited to the entrepreneurs’ capacity, competence, and willingness. The project Selection
includes.

• Profitability
• Feasibility
• Resource-ability
• Acceptability

The basic criterion for selection of a project could be existence of a favorable cost-benefit
relationship.
People would like to select a project which requires a minimum investment, low degree of
competence, completed in the shortest time, and which has the highest return potential.
A project idea should be SMART:
S – Specific objective
M – Measurable
A – Achievable
R – Realistic
T – Time bounded
Project identification: A search for promising project ideas could contribute towards
achieving specified development objectives. Project identification should be an integral part
of the Macro-planning exercise of the state with sectored information and strategies as the
main source of the ideas.
Generally, ideas are formed from several sources based merely on some vested interests of
the individuals involved. However irrespective of their origin, project ideas should be in
general aim at overcoming constraints on the national development effort.

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 Good project ideas are the key to success. Therefore, a wide variety of sources should be
tapped to analyse them. To have a wide range of options, the sources of project ideas can
be categorized into two they are:

A. Micro level sources

B. Macro level sources

A] Micro level.
At micro level project ideas can be generated from various sources. Some of these are
discussed below.
1. Analysis of the performance of existing industries; A study of existing industries in terms
of their profitability utilization can indicate promoting investment opportunities which are
profitable and relatively risk free. An examination of capacity utilization of various industries
provides information about the potential for further investments. Such study is more useful
if it is done region wise. Particularly for products which have high demand for consumption
and wide scope for production.
2. Examination of the input-outputs of various industries: The analysis of inputs required
for various industries may throw some project ideas. Opportunities exist when {1] Materials,
purchased parts, or supplies are presently procured from distance sources with considerable
time lag and transportation cost and [2] Several firms produce internally some components
parts which can be supplied at lower cost by a single producer who can enjoy economics of
scale
3. Review of imports and exports; Analysis of import statistics for a period of five to seven
years is helpful in understanding the trend of imports of various goods and the potential for
import substitution. Indigenous manufacture of goods currently imported is advantageous
for several reasons. [1] It improves the balance of payments situation. It generates
employment, and [3] it provides market for the supporting industries and services. Likewise,
an examination of export statistics is useful in learning about the export possibilities of
various products.
4. Investigation of local materials and resources; A search for project ideas may begin an
investigation into local resources and skills. Various ways of adding value to locally available
materials may be examined. Similarly, the skills of local artisans may suggest products that
might be profitably produced and marketed. Such assessment may consider issues such as
the human and material resources, Infrastructure facilities and market for various products.
5. Analysis of economic and social changes: A study of economic and social trends is helpful
in projecting demands for various goods and services. Changing economic conditions and
consumer preferences provide new businesses opportunities. For example, a greater
awareness of the value of time is dawning on public. Hence the demand for time saving
products like prepared food items, ovens and powered vehicles has been increasing. The
other change that can be seen during analysis is the increasing desire for the leisure and
recreational activities. This has caused a growth in the market for recreational products and
services.

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6. Study of new technological developments: New products are the new process and
technologies for existing products developed by the research laboratories may be examined
for profitable communication.
7. Exploring the possibility of reviving sick units: Industrials sickness is spread in many
countries. There are innumerable bossiness units which have been characterized as sick.
These units closed have reached the prospect of closure. A significant proportion of sick
units however can be nursed back to health by sound management, fusion of further capital
and provision of complementary inputs. Hence there is a good scope investment in this
area.
8. Identification of unfulfilled psychological needs:
For well-established multi brand product groups like bathing soaps, detergents, cosmetics
and toothpaste, the questions to be asked is not whether there is an opportunity to
manufacture them for satisfying an actual physical need, but whether there are certain
psychological needs of the consumers which are presently unfulfilled.
9. Attending trade fairs:
National and international trade fairs provide an excellent opportunity to know about new
product and developments.
10. Stimulating creativity for generation’s new product lines:
New product ideas may be generated by thinking along the following lines: Modifications,
rearrangements, reversal, magnifications, reductions, substitutions, adoptions, and
combinations.
B. At Macro level:
At macro level project ideas can be obtained from various sources as mentioned below:
1. Project ideas from government policies and plan:
From time-to-time governments produce guidelines such as the national development plans
and session papers which spell out the directions the government should take to achieve
certain targets in various sectors of the economy and guidelines to various organizations
and individuals. The information contained in these documents is useful in generating ideas
for new projects for Ex: If the government intends to start number of new schools in a given
area, then a number of projects which are related to the establishment of such schools
would be considered.
2. Project ideas from technical specifications:
For many industrial projects, ideas will usually tend to come from technical specifications,
which by virtue of their experience and for research findings will give use full information
which may lead to the manufacturing of new products or improving the existing products.
3. Project ideas from local leaders:
For community and social projects, local leaders usually have important ideas, which they
together with their local people, have identified as being important in improving the welfare

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of the people. In the case of social projects depending in which one is to identify, there may
be number of other projects which are linked to the identified projects.
Ex: A project of constructing a dam for the generation of hydroelectric power will be giving
suggestions for the start of irrigation projects, a fishing project, and other related projects.
4. Project ideas from Entrepreneurs:
For commercial and industrial projects, Entrepreneurship is an important source of ideas.
Entrepreneurships include the characteristics of preparation of managerial competence and
motivation to achieve results. Although entrepreneurship skills have been passed on from
one generation to another along Family and social-economic circles, it has been recognized
that programs for entrepreneurship development will help individuals to come up with
useful ideas which can be translated into viable projects.
Monitoring the environment
Basically, a promising investment idea enables a firm to exploit opportunities in the
environment by drawing on its competitive strengths. Hence the firm must systematically
monitor the environment and asses its competitive abilities. For purposes of monitoring the
business environment may be divided into six broad sectors. They are as follows:
Economic Sector

• State of the economy

• Overall rate of growth
• Growth rate of primary, secondary, and territory sectors
• Cyclical fluctuations
• Linkage with the world economy
• Trade surplus/deficits balance of payment situation

Government Sector

• Industrial policy
• Government programs and projects
• Tax framework
• Subsidies, incentives, and concessions
• Import and export policies.
• Financing norms
• Lending conditions of financial institutions and commercial banks

Technological Sector

• Emergence of new technologies

• Access to technical know-how, foreign as well as local
• Receptiveness on the part of industry

Socio-demographic Sector

• Population trends

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 • Age shifts in population.
• Income distribution
• Educational profile Employment of women
• Attitudes toward consumption and investment

Competition Sector

• Number of firms in the industry

• Degree of homogeneity and differentiation among products
• Entry barriers
• Comparison with substitutes in terms of quality, price, appeal, and functional
performance
• Marketing policies and practices

Supplier Sector

• Availability and cost of raw materials

• Availability and cost of energy

Screening potentially promising project ideas

Once a list of project ideas has been put forward, the first step is select one or more of them
as potentially promising. This calls for quick preliminary screening by experienced
professionals who could also modify some of the proposals. At this stage, the screening
criteria are vague and rough, that becomes specific and refined as project planning
advances, during the preliminary screening to eliminate ideas, which are not promising, and
one is required to look into the following aspects.
1. Compatibility with the promoter:
The idea must be compatible with the interest, personality, and resources of the
entrepreneur. It means [1] it should fit to the personality of the entrepreneur; [2] it should
be accessible to him and [3] it should offer him the prospect growth and high return on the
invested capital.
2. Consistency with government priorities:
The project idea must be feasible given the national goals and governments regularity
framework. The questions to be raised in this context are:
Is the project consistent with national goals and priorities?
Are there any environmental effects contrary to government regulation?
Can the foreign exchange requirements of the project be easily accommodated?
Will there be any difficulty in obtaining the license for the project?
3. Availability of inputs:
The resources and inputs required for the project must be reasonably assured. To assess
this, the following questions need to be answered.

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Are capital requirements of the project within manageable limits?
Can the technical know- how required for the project be obtained?
Are the new materials required for the project available domestically at a
reasonable cost? If the materials have to imported, will there be problems?
Is the power supply for the project reasonably obtainable from external sources and
Captive power sources?
4. Adequacy of the market:
The size of the present market must offer the prospect of adequate sales volume. Further
there should be a potential for growth and reasonable return on investment. To judge the
adequacy of the market the following factors have to be examined.

• Total present domestic market

• Competitors and their market shares

• Exports markets
• Sales and distribution system
• Projected increase in consumption
• Barriers to the entry of new units
• Economic, Social and demographic trends favourable to increased consumption.
• Patent protection

5. Reasonableness of cost:
The cost structure of the proposed project must enable it to realize an acceptable profit
with a price. The following should be examined in this regard:

• Cost of material inputs

• Labor costs
• Factory overheads
• General administration expenses
• Selling and distribution cost
• Service cost
• Economies of scale

6. Acceptability of risk level:

The desirability of a project critically dependent on the risk characterizing in the assessment
of risk the following factors should be considered:

• Business cycles
• Technological changes
• Competition from substitute
• Competition from imports
• Government control over price and distribution

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Therefore, during the preliminary selection, the analyst should eliminate project proposals
that.

• Technically unsound and risky

• Have no market for the output.
• Have inadequate supply of inputs.
• Are very costly in relation to benefits and
• Assume over ambitious sales and profitability.

PROJECT PLANNING

After the project has been defined and the project team has been appointed, you are ready
to enter the second phase in the project management life cycle: the detailed project
planning phase.

Project planning is at the heart of the project life cycle and tells everyone involved where
you’re going and how you’re going to get there. The planning phase is when the project
plans are documented, the project deliverables and requirements are defined, and the
project schedule is created. It involves creating a set of plans to help guide your team
through the implementation and closure phases of the project. The plans created during this
phase will help you manage time, cost, quality, changes, risk, and related issues. They will
also help you control staff and external suppliers to ensure that you deliver the project on
time, within budget, and within schedule.

The project planning phase is often the most challenging phase for a project manager, as
you need to make an educated guess about the staff, resources, and equipment needed to
complete your project. You may also need to plan your communications and procurement
activities, as well as contract any third-party suppliers.

The purpose of the project planning phase is to:

• Establish business requirements.

• Establish cost, schedule, list of deliverables, and delivery dates.
• Establish resources plans.
• Obtain management approval and proceed to the next phase.

The basic processes of project planning are:

• Scope planning – specifying the in-scope requirements for the project to facilitate
creating the work breakdown structure.
• Preparation of the work breakdown structure – spelling out the breakdown of the
project into tasks and sub-tasks

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 • Project schedule development – listing the entire schedule of the activities and
detailing their sequence of implementation.
• Resource planning – indicating who will do what work, at which time, and if any
special skills are needed to accomplish the project tasks.
• Budget planning – specifying the budgeted cost to be incurred at the completion of
the project.
• Procurement planning – focusing on vendors outside your company and
subcontracting.
• Risk management – planning for possible risks and considering optional contingency
plans and mitigation strategies.
• Quality planning – assessing quality criteria to be used for the project.
• Communication planning – designing the communication strategy with all project
stakeholders.

The planning phase refines the project’s objectives, which were gathered during the
initiation phase. It includes planning the steps necessary to meet those objectives by further
identifying the specific activities and resources required to complete the project. Now that
these objectives have been recognized, they must be clearly articulated, detailing an in-
depth scrutiny of each recognized objective. With such scrutiny, our understanding of the
objective may change. Often the very act of trying to describe something precisely gives us a
better understanding of what we are looking at. This articulation serves as the basis for the
development of requirements. What this means is that after an objective has been clearly
articulated, we can describe it in concrete (measurable) terms and identify what we have to
do to achieve it. Obviously, if we do a poor job of articulating the objective, our
requirements will be misdirected, and the resulting project will not represent the true need.

Users will often begin describing their objectives in qualitative language. The project
manager must work with the user to provide quantifiable definitions to those qualitative
terms. These quantifiable criteria include schedule, cost, and quality measures. In the case
of project objectives, these elements are used as measurements to determine project
satisfaction and successful completion. Subjective evaluations are replaced by actual
numeric attributes.

PROJECT EVALUATION

Project Evaluation is a step-by-step process of collecting, recording, and organizing

information about project results, including short-term outputs (immediate results
of activities, or project deliverables), and immediate and longer-term project
outcomes (changes in behaviour, practice or policy resulting from the project).
Common rationales for conducting an evaluation are:
• Response to demands for accountability.
• Demonstration of effective, efficient, and equitable use of financial and other
resources.
• Recognition of actual changes and progress made.

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 • Identification of success factors, need for improvement or where expected
outcomes are unrealistic.
• Validation for project staff and partners that desired outcomes are being achieved.
The project planning stage is the best time to identify desired outcomes and how
they will be measured. This will guide future planning, as well as ensure that the data
required to measure success is available when the time comes to evaluate the
project. Project evaluation assumes a comprehensive point of view looking at the
project as a package. Success or failure is determined by the achievements of the
whole project measured against its objectives. The evaluation process results in the
refinement of policy and implementation. However, it is not yet institutionalized in
most government planning agencies. Effective project evaluation requires that
evaluation standards, criteria and indicators are established during the early stages
of the project planning process.
The identification and collection of baseline data should entail a preliminary
evaluation framework with the following specifications:
1. Identification of evaluation criteria: these are key result areas (e.g., cost and
budget limits, productivity output targets, time schedule) specified in measurable
terms.
2. Selection of evaluation techniques: apart from the cost benefit analysis, the use
of control groups for comparative analysis, baseline measures, sampling and various
data gathering methods such as field surveys, FGD, questionnaires and interviews
may be chosen.
3. Time Schedule: in the case where the project results are not evident immediately
after project completion, project evaluation should be scheduled.
4. budget for evaluation: the acquisition and efficient utilization of needed
resources for evaluation must be planned for.
5. Organization and staff requirements: the size of the evaluation team, its
qualifications, the reporting relationships and access to project information and staff
should be outlined.
6. Participation of beneficiaries: the evaluation process should be designed in such a
7. Way that it allows the intended beneficiaries to assume a vital role in it. Cost
benefit analysis, as main evaluation technique, attempts to determine what success
the country will have towards achieving national objectives by pursuing a particular
strategy against opportunities lost because it has committed its measure if the
computations made for societal/ macroeconomic costs and benefits done in the
feasibility and appraisal process reflect what actually occurred. This could require a
recompilation or remodification of societal / macroeconomic costs and benefits in
the light of changing government priorities.

Why is Project Evaluation important?

Evaluating project results is helpful in providing answers to key questions like:

• What progress has been made?
• Were the desired outcomes achieved? Why?

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 • Are there ways that project activities can be refined to achieve better outcomes?
• Do the project results justify the project inputs?

PROJECT MONITORING

Project monitoring is defined as a process which is performed to track the progress of

project execution so that potential problems can be identified well in time for the taking of
the corrective actions for the purpose of controlling the execution of the project. It is a
continuing function during project implementation which provides management of an
ongoing development intervention with indications of the extent of progress and
achievement of objectives and progress in the use of allocated funds. It provides
information and ensures the use of such information by management to assess project
effects – both intentional and unintentional – and their impact. It aims at determining
whether or not the intended project goals and objectives are being on the track.

Project monitoring can also be defined as the ongoing process by which management gets
regular feedback on the progress being made towards achieving the goals and objectives of
the project. It focuses on reviewing of progress against achieving of goals. In other words,
monitoring is not only concerned with the taking of the actions but is also concerned with
making the progress towards achievement of the results. In the more limited approach,
monitoring can focus on tracking project with regards to the use of the resources. In the
broader approach, monitoring also involves tracking strategies and actions being taken by
management, and figuring out what new strategies and actions need to be taken to ensure
progress towards the project objectives.

Project monitoring activities

Project monitoring activities involve.

(i) the monitoring of actual project progress as compared to the planned project
progress and the collection of key progress metrics such as risks, issues,
changes, and dependencies, and
(ii) the reporting of project status, costs and outputs and other relevant
information, at a summary level, to the management. The format and
timing of project monitoring and reporting varies in each organization

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 and depends upon such items as the size, duration, risk and complexity of
the project.

Project monitoring is carried out (i) measuring progress of project activities against
established schedules and indicators of success, (ii) identifying factors affecting the progress
of project activities, (iii) measuring the response of the decision taken on the project
activities and its effect on the progress of project implementation, and (iv) to minimize the
risks of project failure.

Timing and method of project monitoring are significant aspects of the project
management.

Important steps in project monitoring

• Study of the project, its schedule, and costs.

• Selection of the parameters to be monitored.

• Selection of the frequency of reporting and its format.

• Collection of data for the parameters being monitored.

• Analysis of the data by using appropriate monitoring technique.

• Presentation of the analysed data and reporting it to the management.

• Review of the presented data by the management for decision making.

Integrity and accuracy of the data and its proper analysis is very important in the project
monitoring since it helps in taking of proper decisions for the project.

Project monitoring process

Process of the project monitoring is required to fulfil certain criteria. It is to be relevant

towards meeting the needs of the project. It is to be efficient so that it facilitates the
progress of the project. It is to be effective so that it helps the management to take the right
decisions regarding the project. It has to impact the project in the positive manner by being
responsive to the mid-way changes in the project. And above all it is to be sustainable and is
to meet the project requirements during the life cycle of the project.

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Each project is unique and differs from other project. It is therefore necessary the process of
the project monitoring is suitably designed and is suitably aligned to the requirements
necessary for the project implementation. However, the process of the project monitoring is
to be simple, quick in providing the information for corrective action, cost-effective, flexible,
accurate, comprehensive, relevant, and accessible. Project monitoring process is expected
to lead to learning. It is to be transparent and consists of sharing of the information up and
down.

One of the greatest weaknesses of project monitoring is the lack of effective and timely
communication of information to the users. The employees monitoring the project
frequently invest too much time and resources in gathering data which they frequently fail
to interpret and present in a form that which conveys the meaning of the progress made.
The project monitoring is effective only if the collected data is properly analysed and
presented timely in a concise manner to the management for decision making.

The importance of communication in process of project monitoring is equally critical.

Communication in project monitoring process acts as a lubricant facilitating and speeding up
the project movement for the achievement the stated goals and objectives of the project.

There are various processes and tools which are normally used to assist the project
monitoring. The process of project monitoring generally involves obtaining, analysing, and
reporting of monitoring data. Specific processes and tools used for monitoring can vary from
project to project and also to meet the requirements of the monitoring, but there are some
overall best practices, which are summarized below.

• Monitoring of the project is to be well-focused to meet the needs of the project, the
specific audiences and uses. It is to be sufficient and limited to what is necessary.

• Monitoring is to be systematic, based upon predetermined indicators and

assumptions.

• Monitoring is also to look for unanticipated changes occurring in the project and its
context, including any changes in project assumptions/risks. This information is
useful for adjusting project implementation plans.

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 • Monitoring needs to be timely, so that it informs timely the progress made towards
project implementation.

• As far as possible, monitoring is to participatory with the involvement of key players.

This helps in the understanding and ownership of the analysed data of the project
monitoring.

• Monitoring information is not only meant for the project management but need to
be shared with all the key players of the project.

Project Controls

Project controls are processes for gathering and analysing project data to keep costs and
schedules on track. The functions of project controls include initiating, planning, monitoring,
and controlling, communicating, and closing out project costs and schedule. Ultimately,
project controls are iterative processes for measuring project status, forecasting likely
outcomes based on those measurements and then improving project performance if those
projected outcomes are unacceptable.

Activities under the project controls may include:

• Aligning projects with portfolio/organization goals and objectives

• Developing a work-breakdown structure (WBS)
• Collaborating on initial project schedules
• Developing a risk management plan
• Project budgeting and forecasting
• Monitoring project costs
• Feedback and reporting
• Optimizing project strategies to enable better outcomes in the future.

While a project may deal with many parameters, such as quality, scope, etc., the discipline
of project controls focuses on the cost and schedule factors, continuously monitoring for
any risk to them.

Hierarchically, project controls nest under project management. A project controller could
be reporting to a project manager on a specific project or an entire portfolio of projects.
Project controls are integral to successful project management, as it alerts project
stakeholders to potential trouble areas and allows them to course correct, if needed.

Processes That Define Project Controls

The strengths of project controls lie in their data-focused approach and attention to detail.
A project manager does not simply want to know that there is a cost overrun, but rather
wants to know the root causes, the precise numbers, and how it can be fixed. This is where

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a fully integrated project controls solution can help with efficiency in getting answers
quickly, and visibility into performance that can reduce project costs.

Let’s dive into the processes that define project controls.

Project Planning

Planning is one of the important steps in which controllers and project managers work
together. Whether it’s creating project plans, schedules, work-breakdown structures or cost
estimates, planning gives everyone a baseline to work with throughout the project.

Budgeting

Integrating the budgeting process into project activities is essential to calculate costs
accurately and to understand when and why variances occur. By time-phasing budgets and
refining the numbers, a transparent model is available for senior managers and team
members alike to serve as both a benchmark throughout the project and understand vitally
important cash flows.

Risk Management

Project controls provide a meticulous approach to managing risk. By pre-emptively

identifying risks, monitoring risk continuously, and developing contingency plans to address
and mitigate issues, it becomes possible to reduce impact on budget and schedule. It also
helps prevent some risks from happening in the future.

Change Management

When a project deviates from its original estimates, it’s often not due to a single factor, but
due to the cumulative effect of several factors that tend to go unnoticed. This is why change
management is critical. By tracking changes and understanding their impact, while following
a clear process for evaluation, approval, and accountability, projects can remain on their
charted trajectory.

Forecasting

By increasing the accuracy of estimates-at-complete, project controllers and managers can

gain a lot more insight into the current drivers of cost and schedule overruns. Good progress
measurement is a critical input to the forecasting process. It serves as the comparison
against actual and committed costs that enable project controllers to extrapolate a forecast
using a combination of standard forecasting methods and formulas. Regular, timely updates
aid the project controller by enabling faster response and corrective action to when a
project begins to get off track.

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Performance Management

Defining and using key performance indicators (KPIs) to monitor project health and forecast
trends is crucial to take corrective actions. Organizations that use performance information
to manage projects, like the calculations used in Earned Value Management, achieve a 68%
success rate, compared to a 7% success rate for projects that don’t leverage this data.

Project Administration

This process involves establishing processes and systems that can help team members
communicate and collaborate with each other. The goal is to track status updates, capture
meeting minutes and lessons learned, and manage workflows seamlessly so teams can focus
on actual execution rather than routine tasks.

Benefits of Project Controls

In megaprojects, the various moving parts can make it difficult to stay aligned with the initial
plans. However, close monitoring, analysis, and regulation can keep this in check. Projects of
all sizes, not just large projects, experience significant benefits when controls are properly
executed.

The following are some of the key benefits of project controls:

• Reduced project costs through ability to make timely decisions using KPIs.
• Increased project predictability for cost and completion date
• Increased visibility into the financial health of the project at all stages
• Ability to mitigate project scope creep.
• Meaningful benchmarking data for future projects via well-structured projects
• Increased margins when working in a fixed price environment.
• Improved reputation for properly managing and controlling projects.
• Competitive advantage over organizations with less mature project management
capabilities
• Increased job satisfaction for project team members

Small Industries Development Bank of India (SIDBI)

The SIDBI was established as a wholly owned subsidiary of Industrial

Development Bank of India (IDBI) under a special Act of the
Parliament 1988 and started its operations on April 2, 1990. It took
over the responsibility of administering Small Industries
Development Fund and National Equity Fund which were earlier
administered by IDBI. It is the Principal Financial Institution for the
Promotion, Financing and Development of the Micro, Small and
Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions
engaged in similar activities. It is managed by a team of 10 Board of Directors. The
authorised capital of the Bank is Rs. 1000 crore and the Paid-up capital is Rs. 531.92 crore as
on 31.03.2019.

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SIDBI Subsidiaries

• SIDBI VENTURE CAPITAL LIMITED (SVCL)

• MICRO UNITS’ DEVELOPMENT & REFINANCE AGENCY LTD (MUDRA)

Modes of Finance

SIDBI provides direct, indirect and micro finance facilities.

• Direct Finance: In the form of Term Loan Assistance, Working Capital Assistance,
Support against Receivables, Foreign Currency Loan, Scheme of Energy Saving for
MSME sector, equity support etc.
• Indirect Finance: The Indirect assistance in the form of Refinance is provided to
Primary Lending Institutions (PLIs), comprising banks, State Level Financial
Institutions, etc. having a wide network of branches all over the country. The main
objective of Refinance Scheme is to increase the resource position of PLIs which
would ultimately facilitate the flow of credit to MSME sector.
• Micro Finance: SIDBI provides micro finance i.e., credit to small entrepreneurs and
businessmen for establish their business.

Functions of SIDBI

1. SIDBI refinances loans extended by the primary lending institutions to small scale
industrial units, and also provides resources support to them.
2. SIDBI discounts and rediscounts bills arising from sale of machinery to or
manufactured by industrial units in the small-scale sector.
3. To expand the channels for marketing the products of Small-Scale Industries (SSI)
sector in domestic and international markets.
4. It provides services like leasing, factoring etc. to industrial concerns in the small-scale
sector.
5. To promote employment-oriented industries especially in semi-urban areas to create
more employment opportunities and thereby checking migration of people to urban
areas.
6. To initiate steps for technological up-gradation and modernisation of existing units.
7. SIDBI facilitates timely flow of credit for both term loans and working capital to SSI in
collaboration with commercial banks.
8. SIDBI Co-Promotes state level venture funds in association with respective state
government.
9. It grants direct assistance and refinance loans extended by primary lending
institutions for financing exports of products manufactured by small scale units.

Role of SIDBI

• Indirect lending – It is done through Banks, SFBs, NBFCs, MFIs, and New Age
FinTech’s and is based on a multiplier effect/a wider reach in financing the MSME
sector.

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 • Direct lending – It aims to close existing credit gaps in the MSME sector through
demonstrative and innovative lending products that can be scaled up by the credit
delivery ecosystem.
• Fund of Funds – It promotes entrepreneurship by providing funding to emerging
start-ups through the Fund of Funds channel.
• Promotion and Development - encouraging entrepreneurship and assisting aspiring
entrepreneurs in the holistic development of the MSME sector through credit-plus
initiatives.
• Acts as a facilitator through roles such as Nodal Agency for the Government's
MSME-oriented Schemes.

SIDBI – Benefits

• Custom made - SIDBI policies loans based on the needs of your business. If your
requirement does not fall into the ordinary and usual category, the Small Industries
Development Bank of India can help you get the funding you need.
• Dedicated Size - Credit and loans are tailored to the size of the company. As a result,
MSMEs may be able to obtain various types of loans that are tailored to their specific
business needs.
• Attractive Interest Rates - It has agreements with several banks and financial
institutions around the world and may be able to offer low interest rates. The SIDBI
has collaborations with the World Bank and the Japan International Cooperation
Agency.
• Assistance - It provides more than just a loan; it also provides assistance and much-
needed advice. Its relationship managers assist entrepreneurs in making sound
decisions and provide assistance throughout the loan process.
• Security Fee – Without providing security, businesspeople could receive up to Rs.100
lakhs.
• Capital Growth - Entrepreneurs could acquire adequate capital for meeting their
growth requirements without tempering their ownership of a company.
• Equity and Venture Funding - It has a wholly owned subsidiary, SIDBI Venture
Capital Limited, that provides growth capital as equity through venture capital funds
that focus on MSMEs.
• Subsidies - SIDBI offers a variety of schemes with low interest rates and flexible
terms. SIDBI has in-depth knowledge and a broader understanding of available
schemes and loans, which can assist enterprises in making the best decision for their
businesses.
• Transparency - Its processes and rate structure are open to the public. There are no
additional fees.

Conclusion

SIDBI is mandated to serve as the Principal Financial Institution for executing the triple
agenda of promotion, financing, and development of the MSME sector and coordination of
the functions of the various institutions engaged in similar activities.

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