Project

• It's a temporary attempt undertaken to create a unique

product, service, or result.
• It has a defined start and end date, a specific set of
resources, and a clear set of goals.
• A project is defined as an undertaking of a non-routine, non-
repetitive nature having prescribed objectives in terms of
scope, time, quality and cost.
• Project is a unique process, consist of a set of coordinated
and controlled activities with start and finish dates,
undertaken to achieve an objective/goal confirming to
specific requirements.
• Ex: Imagine building a bridge, developing a new software
application, or launching a marketing campaign.

Dr. G. Ramanjaiah, Assoc. Prof.

 Project 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.
Dr. G. Ramanjaiah, Assoc. Prof.
 IT Project Management
• IT project management involves overseeing the planning,
execution, and monitoring of projects within the
information technology sector.
• This field requires both technical expertise and managerial
skills to ensure that IT projects are completed efficiently,
on time, and within budget.
• Project management is the process of the application of
knowledge, skills, tools, and techniques to project
activities to meet project requirements.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project management is the art and science of
applying knowledge, skills, tools, and techniques to
project activities in order to meet project
requirements.
• It's like conducting an orchestra - you need to
coordinate different team members, resources, and
activities to achieve the desired outcome.
– Effective Communication: Ensuring clear and transparent
communication among all stakeholders is vital for project
success.
– Risk Management: Identifying potential risks that could
impact project costs and schedule, and developing
strategies to mitigate them.
– Stakeholder Engagement: Proactively engaging stakeholders
throughout the project life cycle helps manage expectations
and secure their support.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project Management Involved the following
Activities:
– Planning & Analyzing Objectives of the
Project
– Measuring & controlling risk
– Estimating the organizational Resources
required
– Assigning tasks to the employees.
– Directing & Motivating Employees
– Forecasting Trends in the Project
– Completing the Project on time
– Keeping up the quality of the Project
Dr. G. Ramanjaiah, Assoc. Prof.
• Project Management Provides the
following benefits:
– Saving cost
– Improving working conditions
– Improving Financial Management
– Resolving Problems
– Determining Risk
– Improving the Product Quality

Dr. G. Ramanjaiah, Assoc. Prof.

• Effective IT project management requires a
combination of technical skills (understanding
IT systems, methodologies, tools) and soft
skills (communication, leadership, negotiation).
• Various project management methodologies
such as Agile, Waterfall, and hybrid approaches
are used depending on the project's
requirements and organizational preferences.
• Additionally, project management software
tools like Jira, Trello, or Microsoft Project are
commonly used to facilitate planning, tracking,
and collaboration.

Dr. G. Ramanjaiah, Assoc. Prof.

Phases of Project Management Life
Cycle

Dr. G. Ramanjaiah, Assoc. Prof.

Dr. G. Ramanjaiah, Assoc. Prof.
• Initiation:
• This involves defining the project, objectives, scope, and
feasibility. It's crucial to identify stakeholders and establish
clear expectations from the beginning.

• Planning:
• This phase involves creating a detailed project plan,
outlining tasks, timelines, resources, quality management
and budget requirements. Risk management and
contingency planning are also essential components.

• Execution:
• Here, the project plan is put into action. Tasks are
assigned, managing resources , teams are mobilized, and
resources are allocated according to the plan.
Communication among team members and stakeholders is
critical to ensure smooth progress.

Dr. G. Ramanjaiah, Assoc. Prof.

• Monitoring and Control:
• Throughout the project lifecycle, progress is
tracked, and performance is measured against
the project plan. Any deviations are identified,
and corrective actions are taken to keep the
project on track.

• Closure:
• Once the project objectives are met, or the
project is terminated, a formal closure process is
undertaken. This involves documenting lessons
learned, finalizing deliverables, releasing
resources and transitioning the project's
outcomes to the stakeholders or the operational
team.
Dr. G. Ramanjaiah, Assoc. Prof.
 Software Project Management Activities
• Software Project Management consists of many
activities, that includes planning of the project, deciding
the scope of product, estimation of cost in different
terms, scheduling of tasks, etc.
• The list of activities are:
– Project planning and Tracking
– Project Resource Management
– Scope Management
– Estimation Management
– Project Risk Management
– Scheduling Management
– Project Communication Management
– Configuration Management
Dr. G. Ramanjaiah, Assoc. Prof.
• Project Planning:
• It is a set of multiple processes or a task that
performed before the construction of the product
starts.

• Scope Management:
• It describes the scope of the project. Scope
management is important because it clearly defines
what would do and what would not.
• Scope Management create the project to contain
restricted and quantitative tasks, which may merely
be documented and successively avoids price and
time overrun.

Dr. G. Ramanjaiah, Assoc. Prof.

• Estimation management:
• This is not only about cost estimation because whenever we
start to develop software, but we also figure out their size(line of
code), efforts, time as well as cost.
• If we talk about the size, then Line of code depends upon user
or software requirement.
• If we talk about effort, we should know about the size of the
software, because based on the size we can quickly estimate
how big team required to produce the software.
• If we talk about time, when size and efforts are estimated, the
time required to develop the software can easily determine
• if we talk about cost, it includes all the elements such as:
– Size of software
– Quality
– Hardware
– Communication
– Training
– Additional Software and tools
– Skilled manpower Dr. G. Ramanjaiah, Assoc. Prof.
• Scheduling Management:
• Scheduling Management in software refers to all the
activities to complete in the specified order and within
time slotted to each activity.
• Project managers define multiple tasks and arrange
them keeping various factors in mind.
• For scheduling, it is compulsory -
• Find out multiple tasks and compare them.
• Divide time into units.
• Assign the respective number of work-units for
every job.
• Calculate the total time from start to finish.
• Break down the project into modules.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project Resource Management:
• In software Development, all the elements are
referred to as resources for the project.
• It can be a human resource, productive tools, and
libraries.
• Resource management includes:
– Create a project team and assign responsibilities
to every team member
– Developing a resource plan is derived from the
project plan.
– Adjustment of resources.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project Risk Management:
• Risk management consists of all the
activities like identification, analyzing and
preparing the plan for predictable and
unpredictable risk in the project.
• Several points show the risks in the project:
– The Experienced team leaves the project, and the
new team joins it.
– Changes in requirement.
– Change in technologies and the environment.
– Market competition.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project Communication Management:
– Communication is an essential factor in the
success of the project. It is a bridge between
client, organization, team members and as well
as other stakeholders of the project such as
hardware suppliers.
– From the planning to closure, communication
plays a vital role.
– In all the phases, communication must be clear
and understood. Miscommunication can create
a big blunder in the project.

Dr. G. Ramanjaiah, Assoc. Prof.

• Project Configuration Management:
– Configuration management is about to control the
changes in software like requirements, design,
and development of the product.
– The Primary goal is to increase productivity with
fewer errors.

Dr. G. Ramanjaiah, Assoc. Prof.

Dr. G. Ramanjaiah, Assoc. Prof.
• A feasibility study is carried out by the system
analysts, which refers to a process of evaluating
alternative systems through cost/benefit analysis so
that the most feasible and desirable system can be
selected for development.
• The Feasibility Study of a system is evaluated under
following dimensions:
– Technical: Is the technology needed available?
– Financial: Is the solution viable financially?
– Economic: Return on Investment?
– Schedule / Time: Can the system be delivered on time?
– Resources: Are human resources reluctant for the solution?
– Operational: How will the solution work?
– Behavioral: Is the solution going to bring any adverse effect on
quality of work life?
– Legal: Is the solution valid in legal terms?.

Dr. G. Ramanjaiah, Assoc. Prof.

 Feasibility Study

• A Feasibility study is a preliminary survey of a

proposed project or undertaking to determine its
merits and viability.
• A feasibility study is carried out by the system
analysts.
• A feasibility study aims to provide an independent
assessment that examines all aspects of a
proposed project, including technical, economic,
financial, legal, and environmental considerations.
• This information then helps decision-makers
determine whether or not to proceed with the
project.

Dr. G. Ramanjaiah, Assoc. Prof.

Dr. G. Ramanjaiah, Assoc. Prof.
• The project feasibility studies focus on
– Economic and Market Analysis
– Technical Analysis
– Market Analysis
– Financial Analysis
– Economic Benefits
– Project Risk and Uncertainty
– Management Aspects

Dr. G. Ramanjaiah, Assoc. Prof.

• Technical Feasibility
– The analyst ascertains whether the proposed system is
feasible with existing or expected computer hardware
and software technology.
– This assessment focuses on the technical resources
available to the organization.
– It helps organizations determine whether the technical
resources meet capacity and whether the technical
team is capable of converting the ideas into working
systems.
– Technical feasibility also involves the evaluation of the
hardware, software, and other technical requirements
of the proposed system.

Dr. G. Ramanjaiah, Assoc. Prof.

• The technical issues usually raised during the
feasibility stage of investigation include the
following:
– Does the necessary technology exist to do what is
suggested?
– Does the proposed equipment have the technical
capacity to hold the data required to use the new
system?
– Will the proposed system provide adequate responses
to inquires, regardless of the number or location of
users?
– Can the proposed application be implemented with
existing technology?
– Can the system be expanded if developed?
– Are there technical guarantees of accuracy, reliability,
ease of access, and data security?
Dr. G. Ramanjaiah, Assoc. Prof.
• Some of the technical issues to be considered are
given in the following Table:

Dr. G. Ramanjaiah, Assoc. Prof.

• Financial Feasibility
– The solution proposed may be excessively costly for the
user organization.
– For example, monitoring the stock through VSAT network
connecting multiple locations may be acceptable for an
organization with high turnover. But this may not be a
viable solution for smaller ones.

Dr. G. Ramanjaiah, Assoc. Prof.

• Economic Feasibility:
– Economic feasibility refers to the assessment of whether a project
or investment is financially viable and can generate a positive
return.
– It involves analyzing the economic aspects of the project, such as
the net present value (NPV), internal rate of return (IRR), payback
period (PP), and return on investment (ROI) .
– This assessment typically involves a cost/ benefits analysis of the
project, helping organizations determine the viability, cost, and
benefits associated with a project before financial resources are
allocated.
– After possible solution options are identified, an analyst should
make a primary estimate of each solution's costs and benefits.

Dr. G. Ramanjaiah, Assoc. Prof.

• Schedule or Time Feasibility
– Schedule feasibility involves the design teams estimating
how long it will take a new or revised system to become
operational and communicating this information to the
steering committee.
– For example, if a design team projects that it will take 16
months for a particular system design to become fully
functional, the steering committee may reject the proposal
in favor of a simpler alternative that the company can
implement in a shorter time frame.

Dr. G. Ramanjaiah, Assoc. Prof.

• Resources Feasibility
• This focuses on human resources.
• Implementing sophisticated software solutions
becomes difficult in non-metro locations because of
the reluctance of skilled personnel to move to such
locations.

Dr. G. Ramanjaiah, Assoc. Prof.

• Operational Feasibility
– It is concerned with ascertaining the views of
workers, employees, customers and suppliers
about the use of computer facility.
– The support or lack of support that the firm's
employees are likely to give to the system is a
critical aspect of feasibility.

Dr. G. Ramanjaiah, Assoc. Prof.

• Behavioral Feasibility:
• It refers to the systems, which is to be designed to
process data and produce the desired outputs.
However, if the data input for the system is not
readily available or collectable, then the system may
not be successful.

• Legal Feasibility
• It reviews the legal aspects surrounding the
proposed endeavor, from compliance with regulatory
frameworks to possible liabilities.

Dr. G. Ramanjaiah, Assoc. Prof.

• Key benefits of conducting a feasibility
study:
– Improves project teams’ focus
– Identifies new opportunities
– Provides valuable information for a “go/no-go”
decision
– Narrows the business alternatives
– Identifies a valid reason to undertake the project
– Enhances the success rate by evaluating multiple
parameters
– Aids decision-making on the project
– Identifies reasons not to proceed

Dr. G. Ramanjaiah, Assoc. Prof.

 Identification
• The first step in the project cycle is to identify an issue that a project
could address.
• The Identification phase of the IT Project Management Framework
involves evaluating and deciding if a proposed project should be
undertaken, based on the studying of factors like costs, benefits,
risks, and etc.
• The Identification phase is initiated by the project sponsor, who
generates the need of an IT project and is responsible for the project
proposal.
• Project identification is the process of analyzing and assessing
project ideas and selecting one to initiate on behalf of your
organization.
• The project identification process is often split into multiple, smaller
stages for easier and more efficient completion.
• Project identification takes on different forms and varies depending
on the industry, the organization, and the project manager in charge.
• Project identification is the process of brainstorming, analyzing, and
selecting a project to initiate as a preliminary step before the first
phase of the project life cycle begins. Dr. G. Ramanjaiah, Assoc. Prof.
• Project identification is an important step in
project formulation.
• These are conceived with the objective of
meeting the market demand, exploiting natural
resources or creating wealth.
• The project ideas for developmental projects
come mainly from the national planning process,
where as industrial projects usually stem from
identification of commercial prospects and profit
potential.
• As projects are a means to achieving certain
objectives, there may be several alternative
projects that will meat these objectives.
• It is important to indicate all the other
alternatives considered with justification in
favour of the specific project proposed for
consideration.
Dr. G. Ramanjaiah, Assoc. Prof.
• The primary purpose of project identification is to
create new, worthwhile projects for your
organization.
• The initial project ideas can come from many
different sources, including the following:
– Yourself
– Your supervisors or teammates
– Customers and end-users
– Community members
– Other companies and organizations
• Regardless of where the idea initiates, the fact
remains that the project identification phase is a
crucial step to ensuring project viability.

Dr. G. Ramanjaiah, Assoc. Prof.

• Understand problems and identify root causes
• Project identification helps you understand
problems. This includes internal issues such as your
company’s ability (or inability) to hire and retain top
talent, as well as external problems that pose a
threat to your organization, such as the popularity of
one of your competitors.

• Ensure projects align with organizational values

• It’s also important to make sure that your new
projects align with your company’s mission
statement, organizational values, and public image.
Projects that could have a detrimental effect on any
of these elements should be highly scrutinized to
ensure they’re appropriate for your team and
organization. Dr. G. Ramanjaiah, Assoc. Prof.
• Allocate and coordinate resources
• Project identification plays a key role in determining, allocating,
and coordinating your project resources. IT helps to coordinate
activities between departments. If your project teammates are
waiting for your IT team to perform upgrades or maintenance
on certain systems, for example, you can utilize this stage to
schedule those upgrades and plan for your project to start as
soon as the maintenance has been completed.

• Determine organizational goals for the future

• Although project identification is often used to identify
immediate goals for the project at hand, it can be used to help
determine your organizational goals for the future too.

Dr. G. Ramanjaiah, Assoc. Prof.

• Benefits of Project Identification
• Project identification provides short- and
long-term benefits to yourself, your team,
and your organization.
– Helps identify critical success factors
– Provides basis for determining Key Performance
Indicators (KPIs)
– Reduces project risks
– Minimizes resources needed
– Keeps employees engaged

Dr. G. Ramanjaiah, Assoc. Prof.

• Stages of Project Identification
• It’s best to split the project identification process into
multiple, smaller stages. Not only does this make it
easier for your team to complete the project
according to plan, but it also makes it easier for
you—and key project stakeholders—to track their
progress along the way.
• Brainstorming
• Initiation
• Feasibility analysis
• Project scheduling
• Risk analysis
• Close-out
• Project approval

Dr. G. Ramanjaiah, Assoc. Prof.

Dr. G. Ramanjaiah, Assoc. Prof.
 Feasibility Study

• A Feasibility study is a preliminary survey of a

proposed project or undertaking to determine its
merits and viability.
• A feasibility study is carried out by the system
analysts.
• A feasibility study aims to provide an independent
assessment that examines all aspects of a
proposed project, including technical, economic,
financial, legal, and environmental considerations.
• This information helps decision-makers to
determine whether or not to proceed with the
project.

Dr. G. Ramanjaiah, Assoc. Prof.

• Technical Feasibility
– The analyst ascertains whether the proposed system is
feasible with existing or expected computer hardware and
software technology.
– This assessment focuses on the technical resources
available to the organization.
– It helps organizations determine whether the technical
resources meet capacity and whether the technical team is
capable of converting the ideas into working systems.
– Technical feasibility also involves the evaluation of the
hardware, software, and other technical requirements of the
proposed system.

Dr. G. Ramanjaiah, Assoc. Prof.

• The technical issues usually raised during the
feasibility stage of investigation include the
following:
– Does the necessary technology exist to do what is
suggested?
– Does the proposed equipment have the technical
capacity to hold the data required to use the new
system?
– Will the proposed system provide adequate responses
to inquires, regardless of the number or location of
users?
– Can the proposed application be implemented with
existing technology?
– Can the system be expanded if developed?
– Are there technical guarantees of accuracy, reliability,
ease of access, and data security?
Dr. G. Ramanjaiah, Assoc. Prof.
• Some of the technical issues to be considered are
given in the following Table:

Dr. G. Ramanjaiah, Assoc. Prof.

• Financial Feasibility
– The solution proposed may be excessively costly for
the user organization.
– For example, monitoring the stock through VSAT
network connecting multiple locations may be
acceptable for an organization with high turnover. But
this may not be a viable solution for smaller ones.

Dr. G. Ramanjaiah, Assoc. Prof.

• Economic Feasibility:
– Economic feasibility refers to the assessment of whether a
project is financially viable and can generate a positive
return.
– It involves analyzing the economic aspects of the project,
such as the net present value (NPV), internal rate of return
(IRR), payback period (PP), and return on investment (ROI) .
– This assessment typically involves a cost/ benefits analysis
of the project, helping organizations determine the viability,
cost, and benefits associated with a project.
– After possible solution options are identified, an analyst
should make a primary estimate of each solution's costs
and benefits.

Dr. G. Ramanjaiah, Assoc. Prof.

• Schedule or Time Feasibility
– Schedule feasibility involves the design teams estimating
how long it will take a new or revised system to become
operational and communicating this information to the
steering committee.
– For example, if a design team projects that it will take 16
months for a particular system design to become fully
functional, the steering committee may reject the proposal
in favor of a simpler alternative that the company can
implement in a shorter time frame.

Dr. G. Ramanjaiah, Assoc. Prof.

• Resources Feasibility
– This focuses on human resources.
– Implementing sophisticated software solutions
becomes difficult in non-metro locations because
of the reluctance of skilled personnel to move to
such locations.

Dr. G. Ramanjaiah, Assoc. Prof.

• Operational Feasibility
– It is concerned with ascertaining the views of
workers, employees, customers and suppliers
about the use of computer facility.
– The support or lack of support that the firm's
employees are likely to give to the system is a
critical aspect of feasibility.

Dr. G. Ramanjaiah, Assoc. Prof.

• Behavioral Feasibility:
• It refers to the systems, which is to be designed to
process data and produce the desired outputs.
However, if the data input for the system is not
readily available or collectable, then the system may
not be successful.

• Legal Feasibility
• It reviews the legal aspects surrounding the
proposed endeavor, from compliance with regulatory
frameworks to possible liabilities.

Dr. G. Ramanjaiah, Assoc. Prof.

• A Feasibility study is a process of evaluating
alternative systems through cost/benefit analysis so
that the most feasible and desirable system can be
selected for development.
• The Feasibility Study of a system is evaluated under
following dimensions:
– Technical: Is the technology needed available?
– Financial: Is the solution viable financially?
– Economic: Return on Investment?
– Schedule / Time: Can the system be delivered on time?
– Resources: Are human resources unwilling for the solution?
– Operational: How will the solution work?
– Behavioral: Is the solution going to bring any adverse effect on
quality of work life?
– Legal: Is the solution valid in legal terms?.

Dr. G. Ramanjaiah, Assoc. Prof.

 Market Analysis
• Market analysis is a detailed assessment of your business's
target market and the competitive scenery within a specific
industry.
• This analysis allows you project the success you can expect
when you introduce your brand and its products to consumers
within the market.
• Market analysis includes quantitative data such as the actual
size of the market you want to serve, prices consumers are
willing to pay, revenue projections, and qualitative data such as
consumers' values, desires, and buying motives.

Dr. G. Ramanjaiah, Assoc. Prof.

 Demand analysis
• Demand analysis in IT project management refers to the process of
identifying, understanding, and documenting the needs and
requirements of stakeholders, users, or customers for an IT project
or system.
• It plays a crucial role in ensuring that the project delivers value and
meets the expectations of its intended users.
• Demand analysis ensures that IT projects are focused on
delivering solutions that address real business problems or
opportunities.
• By understanding and documenting requirements accurately,
project managers can plan and execute projects effectively,
leading to successful outcomes and stakeholder satisfaction.

Dr. G. Ramanjaiah, Assoc. Prof.

• Key aspects and steps involved in demand
analysis:

• Identifying Stakeholders:
• The first step is to identify all stakeholders who
have an interest in or will be affected by the IT
project. This includes end-users, managers,
executives, IT staff, and any other relevant parties.

• Gathering Requirements:
• Requirements gathering involves collecting
information about what stakeholders expect from
the IT project. This can be achieved through
various techniques such as interviews, workshops,
surveys, and observations.
Dr. G. Ramanjaiah, Assoc. Prof.
• Analyzing Requirements:
• Once requirements are gathered, they need to be analyzed to
ensure they are clear, complete, and consistent.
Requirements analysis involves prioritizing requirements,
resolving conflicts or ambiguities, and identifying
dependencies between different requirements.

• Documenting Requirements:
• Requirements are typically documented in a requirements
specification document. This document serves as a blueprint
for the IT project, detailing what needs to be developed,
implemented, or delivered.

• Validating Requirements:
• Validation ensures that the documented requirements
accurately reflect the needs and expectations of
stakeholders. This involves reviewing requirements with
stakeholders to confirm their understanding and agreement.
Dr. G. Ramanjaiah, Assoc. Prof.
• Managing Changes:
• Throughout the project lifecycle, there may be
changes to requirements due to evolving business
needs, technological advancements, or new insights.
Effective demand analysis includes processes for
managing and accommodating changes while
minimizing their impact on project scope and
timeline.

• Communication and Collaboration:

• Effective communication and collaboration with
stakeholders are essential throughout demand
analysis. It ensures that all relevant perspectives are
considered, expectations are managed, and there is
alignment between project goals and stakeholder
needs. Dr. G. Ramanjaiah, Assoc. Prof.
 Market and Demand Analysis
• Market and demand analysis are carried out by the
project manager in the process of evaluating a project
idea.
• Market and demand analysis in IT project management
involves assessing the current and future trends, needs,
and opportunities within the IT project management
industry.
• Market and demand Analysis is conducted to know about
the aggregate demand for the product or service and the
market share that the proposed project will enjoy.
• By conducting a thorough market and demand analysis,
IT project managers can make informed decisions about
market entry, product development, pricing strategies,
and resource allocation to effectively meet the needs of
their target market and capitalize on emerging
opportunities. Dr. G. Ramanjaiah, Assoc. Prof.
• The typical approach for Market and Demand
Analysis is:
– Industry Overview
– Market Size and Growth
– Customer Segmentation
– Competitive Analysis
– Technology Trends
– Regulatory Environment
– Customer Needs and Preferences
– Barriers to Entry
– Demand Forecasting
– SWOT Analysis

Dr. G. Ramanjaiah, Assoc. Prof.

• There are Six Steps or Activities in the market
and demand analysis:
– Situational analysis and specification of
objectives
– Collection of secondary information
– Conduct of Market Survey
– Characterization of Market
– Demand forecasting
– Market Planning

Dr. G. Ramanjaiah, Assoc. Prof.

Key Steps in Market and Demand Analysis and their Inter-relationships

Dr. G. Ramanjaiah, Assoc. Prof.

• Situational analysis and specification of objectives
• A situational analysis must be done to know about –
– The preferences and purchasing power of customer
– Action and strategies of the competitors
– Practices of middle man

• Specification of objectives helps the organization to move

towards a particular direction.
• The objectives to be focused on are:
– Potential buyer
– Total demand
– Break up of demand
– Type of distribution channel
– Prices and warranties

Dr. G. Ramanjaiah, Assoc. Prof.

• Collection of secondary information:
• Secondary data refers to data that is collected by someone other than
the primary user. Secondary data is gathered in some other context
and is already available in market. It is not conducted by researcher
himself.
• A researcher may use the following sources :-
– Census survey
– National sample survey reports
– 5 years plans
– India year book
– Economic survey reports
– Political survey reports
– Annual survey of industries
– Annual bulletin of export and import
– Stock exchange directory
– Monthly bulletins of RBI
– Publications of advertising agencies
– Industry potential surveys
• Once collected, this information is evaluated to judge its reliability,
accuracy and relevance to the project. Dr. G. Ramanjaiah, Assoc. Prof.
• Conduct of Market Survey:
• Secondary data does not provide comprehensive
information.
• It has to be supplemented with collection of primary data.
• Primary information is gathered through market surveys
specially for a particular project.
• Market surveys may be census survey or sample survey.
• In a census survey the whole population is considered while
in a sample survey a sample of population is observed to
gather relevant information.
• They are conducted to gather information regarding –
– Total demand
– Growth of demand
– Income
– Buying motive
– Purchase plans
– Unsatisfied needs and attitude of people
– Characteristics of buyer Dr. G. Ramanjaiah, Assoc. Prof.
• Characterization of Market
• The market for the product or service is described
in terms of the following factors based on the
information collected through market surveys and
secondary sources.
• These factors are :-
– Effective demand in the past/present and future
– Breakdown of demand
– Methods of distribution and sales promotion
– Types of consumer
– Listing of supply and competition
– Government policies
– Price

Dr. G. Ramanjaiah, Assoc. Prof.

• Demand forecasting
• It refers to estimation of future demand for a product or service. Forecasting
methods may be broadly divided into three categories i.e. Qualitative
methods, Time series projection methods and causal methods .
– Qualitative Methods :
• Jury of executive opinion method: It involves soliciting/asking the
opinions of a group of Managers on expected future sales and
combining them into a sales estimate.
• Delphi Method : It is used for eliciting the opinions of a group of
experts with the help of mail survey.
– Time series Projection Method :It involves analysis of historical time
series.
• Trend Projection Method
• Exponential smoothing method
• Moving Average Method
– Casual Method: It uses the phenomenon of change in one parameter
due to the change in another parameter to develop a cause effect
relationship which can be converted into quantitative method.
• Bass diffusion Method
• Leading indicator method
• Econometric method –
Dr. G. Ramanjaiah, Assoc. Prof.
• Market Planning
• In order to penetrate the market and achieve pre-determined
objectives an appropriate marketing plan must be developed
covering all aspects related to product, price, place and
promotion.
• It involves the following steps:-

Dr. G. Ramanjaiah, Assoc. Prof.

• Market Research Techniques:
• To understand market demand, various research
methods can be employed:
– Surveys: Questionnaires distributed to a target audience can
gather valuable data on customer needs, preferences, and
willingness to pay.
– Interviews: In-depth discussions with potential customers or
industry experts can provide insights into market trends and
buying behaviour.
– Competitor Analysis: Studying existing solutions and
competitor offerings helps understand what's already
available in the market, identify gaps, and develop a
competitive advantage. For example, analysing competitor
products can help identify areas for improvement in your
own offering.

Dr. G. Ramanjaiah, Assoc. Prof.

• Market Segmentation:
• Dividing the target market into smaller groups with
similar characteristics allows for more focused
marketing strategies.
• Segmentation can be based on demographics,
behaviours, or needs.
• For instance, a company selling fitness trackers
might segment their market by age group or
activity level.

Dr. G. Ramanjaiah, Assoc. Prof.

 Project Cost Estimate
• Project cost estimation is critical for any type of project
and is the process of forecasting the financial and other
resources needed to complete a project within a defined
scope.
• A project estimate is the process of accurately
forecasting the time, cost and resources required for a
project. This is done by looking at historical data, getting
information from the client and itemizing each resource
and its duration of use in the project.
• Before starting a project, the project manager and
sponsor need data to determine if the cost of a project is
a good use of resources, considering business
objectives.
• Project cost estimation is simplified with the help of
project management software like Project Manager.
Dr. G. Ramanjaiah, Assoc. Prof.
• An IT project cost estimation is similar to a general project
cost estimation, but each IT project falls under one of two
primary areas: hardware and software.
– Hardware projects involve physical structures and
permanent solutions, which include upgrading the
existing infrastructure (either facilities or operating
system or cloud storage, or changing any large-scale
structures).
– Software projects focus on a specific product that is
modified over time, such as developing and launching a
new app or creating a website.
• Project cost estimation is the process that takes direct
costs, indirect costs and other types of project costs into
account and calculates a budget that meets the financial
commitment necessary for a successful project. To do this,
project managers and project estimators use a cost
breakdown structure to determine all the costs in a project.
Dr. G. Ramanjaiah, Assoc. Prof.
• Characteristics of a Cost Estimation
• Every IT cost estimation project is different, but each
requires four characteristics to create a quality,
substantive document.
– Comprehensive: The cost estimation must completely
define the project, including the schedule and technical
needs.
– Well-Documented: A cost estimate relies on detailed
documentation. The estimate should describe how you
acquired the information and allocate the funds to
execute the project.
– Accurate: Be sure you create an unbiased cost
estimation with highest accuracy.
– Credible: Include any limitations to the estimate, due to
uncertainty, bias, or assumptions concerning the data.

Dr. G. Ramanjaiah, Assoc. Prof.

• Elements of Cost Estimation in Project Management:

• There are various key types of costs addressed by

the cost estimation process:
– Direct costs
– Indirect costs
– Labor
– Materials and equipment
– Facilities
– Vendors
– Risk

Dr. G. Ramanjaiah, Assoc. Prof.

• Types of Project Costs
• There are five main types of costs that make up your total project
cost.
– Direct costs: Direct costs are those that occur in a project and are
attached to specific activities. These are generally costs that are
easier to accurately estimate. They include raw materials, labor,
supplies, etc.
– Indirect costs: Indirect costs in a project are those that are in
support of the project, such as administrative fees. These can
include everything from rent to salaries of the administrative staff
to utilities, etc.
– Fixed costs: Fixed costs are costs that don’t change throughout
the life cycle of a project. Some examples of fixed costs include
setup costs, insurance premiums, property taxes, etc.
– Variable costs: Variable costs are costs that change due to the
amount of work that’s done in the project and are variable in
nature. These costs can include hourly labor wages, materials,
fuel costs and so on.
– Sunk costs: In project cost estimating, when an investment has
already been incurred and can’t be recovered it’s called a sunk
Dr. G. Ramanjaiah, Assoc. Prof.
cost. Some examples of sunk costs include marketing, research
• Project Cost Estimation Techniques
• All of these factors impact project cost estimation, making it
difficult to come up with precise estimates but there are cost
estimating techniques that can help with developing a more
accurate cost estimation.

– Analogous Estimating
– Seek the help of experts who have experience in similar
projects, or use your own historical data. If you have access to
relevant historical data, try analogous estimating, which can
show precedents that help define what your future costs will be
in the early stages of the project.

– Parametric Estimating
– Parametric estimating is a statistical and accuracy based
technique for calculating the time, cost, and resources needed
for project success.

Dr. G. Ramanjaiah, Assoc. Prof.

– Bottom-Up Estimating
– Bottom-up estimating uses estimates of individual tasks and
then adds those up to determine the overall cost of the
project. This cost-estimating method is even more detailed
than parametric estimating and is used in complex projects
with many variables such as software development
or construction projects.

– Three-Point Estimate
– Another approach is the three-point estimate, which comes
up with three scenarios: most likely, optimistic and
pessimistic ranges. These are then put into an equation to
develop an estimation.

– Reserve Analysis
– Reserve analysis determines how much contingency reserve
must be allocated. This cost estimation method tries to
wrangle uncertainty.
Dr. G. Ramanjaiah, Assoc. Prof.
– Cost of Quality
– Cost of quality uses money spent during the project to
avoid failures and money applied after the project to
address failures. This can help fine-tune your overall project
cost estimation. Plus, comparing bids from vendors can
also help figure out costs.

– Dynamic Project Costing Tools

– Whenever you’re estimating costs, it helps to use online
software to collect all of your project information. Use
online software to define your project teams, tasks and
goals. Even manage your vendors and track costs as the
project unfolds.

Dr. G. Ramanjaiah, Assoc. Prof.

• Estimating project costs accurately is crucial in IT project
management to ensure budgets are realistic and
sufficient resources are allocated.
• Here’s a structured approach to project cost estimation:
– Work Breakdown Structure (WBS)
– Resource Identification
– Cost Estimation Techniques
– Contingency Planning
– Cost Baseline
– Monitoring and Control
– Documentation and Reporting
– Review and Update
• By following these steps, IT project managers can
develop robust cost estimates that support effective
budget management and decision-making throughout the
project lifecycle.

Dr. G. Ramanjaiah, Assoc. Prof.

• 1. Work Breakdown Structure (WBS)
– Develop a comprehensive Work Breakdown
Structure that details all project tasks and
deliverables.
– This structured breakdown helps in identifying all
components of the project that will incur costs.

Dr. G. Ramanjaiah, Assoc. Prof.

• 2. Resource Identification
• Identify all resources required for the project:
– Labor: Determine the number of hours each team member
will spend on each task. Consider roles like developers,
testers, project managers, etc., and their hourly rates.
– Equipment and Tools: Include costs for any specialized
software, hardware, or licenses needed for development,
testing, and deployment.
– Materials: If applicable, include costs for materials such
as servers, networking equipment, or any physical
components needed.

Dr. G. Ramanjaiah, Assoc. Prof.

• 3. Cost Estimation Techniques
• Use various techniques to estimate costs:
– Analogous Estimating: Use past similar projects as a benchmark.
– Parametric Estimating: Apply statistical relationships (e.g., cost per
function point, cost per user) to estimate costs based on project
metrics.
– Bottom-Up Estimating: Estimate costs for individual activities or
work packages and then roll them up to get the total project cost.
– Vendor Estimates: If outsourcing certain tasks or using third-party
services, obtain quotes or estimates from vendors.

Dr. G. Ramanjaiah, Assoc. Prof.

• 4. Contingency Planning
• Factor in contingencies for unforeseen events or
changes in project scope. A common practice is to
add a contingency reserve (e.g., 10% of total
estimated costs) to account for risks that may
impact cost.

Dr. G. Ramanjaiah, Assoc. Prof.

• 5. Cost Baseline
• Once estimates are finalized, establish a cost
baseline — a time-phased budget against which
project performance can be monitored and
controlled.
• This baseline includes:
– Total Estimated Cost: Sum of all estimated costs
across tasks and resources.
– Cost Distribution: How costs will be distributed
over the project timeline (monthly, quarterly, etc.).

Dr. G. Ramanjaiah, Assoc. Prof.

• 6. Monitoring and Control
– Throughout the project lifecycle, monitor actual costs
against the baseline to identify any variations (cost
overruns or savings) and take corrective actions as
needed:
– Earned Value Management (EVM): Measure project
performance against the cost baseline using metrics like
Planned Value (PV), Earned Value (EV), and Actual Cost
(AC).
– Change Management: Manage changes in scope or
requirements that could impact project costs.

Dr. G. Ramanjaiah, Assoc. Prof.

• 7. Documentation and Reporting
• Document all cost estimates, assumptions, and
methodologies used for transparency and future
reference. Regularly report cost status and forecasts
to stakeholders to maintain project financial
accountability.

Dr. G. Ramanjaiah, Assoc. Prof.

• 8. Review and Update
• Regularly review and update cost estimates as the
project progresses and new information becomes
available. Adjustments may be necessary based on
changes in scope, resource availability, or market
conditions.

Dr. G. Ramanjaiah, Assoc. Prof.

 Financial Appraisal
• Financial appraisal in IT project management is the process of
providing an objective and comprehensive review of an
organization's financial performance.
• It involves assessing the viability, profitability, and financial
health of a project, investment, or business decision.
• Financial appraisal helps you:
– Make informed investment decisions: By analyzing
financial projections and ratios, you can assess the
project's potential profitability and risk.
– Communicate project viability to stakeholders: Financial
data provides a clear picture of the project's financial
health, convincing stakeholders of its potential success.
• There are many different types of financial appraisal, and each
has its own specific purpose. The three main types of financial
appraisal are historical, current, and projected.
Dr. G. Ramanjaiah, Assoc. Prof.
• Several important factors are considered during financial
appraisals to evaluate the potential returns and risks associated
with the investment.

– Investment Costs: This includes the initial capital investment

required to start or implement the project or investment. It
covers expenses such as equipment purchase, construction
costs, software development costs, and any other expenditure
directly related to initiating the project.

– Operating Costs: These are the ongoing expenses incurred

during the operation of the project or investment. Operating
costs may include salaries and wages, raw materials or
inventory costs, utilities, maintenance costs, marketing
expenses, and other day-to-day expenses necessary to sustain
operations.

Dr. G. Ramanjaiah, Assoc. Prof.

– Revenue or Cash Flows: Forecasting future revenues or cash
inflows is crucial for assessing the financial viability of an
investment. This involves estimating sales revenues,
subscription fees, rental income, or any other income streams
generated by the project or investment over its expected
lifespan.

– Profitability Measures: Various financial metrics are used to

evaluate profitability, such as:
• Return on Investment (ROI): Measures the return
generated relative to the initial investment.
• Net Present Value (NPV): Calculates the present value of
all expected future cash flows, considering the time value
of money and discount rate.
• Internal Rate of Return (IRR): Represents the discount rate
that makes the net present value of all cash flows from a
particular investment equal to zero. It indicates the
project's expected rate of return.

Dr. G. Ramanjaiah, Assoc. Prof.

– Risk Assessment: Evaluating risks associated with the
project or investment is essential. Risks may include market
risks (changes in demand or competition), operational risks
(production or delivery issues), financial risks (interest rate
fluctuations or liquidity risks), and external risks (regulatory
changes or geopolitical risks). Understanding these risks
helps in assessing potential impacts on financial
performance.

– Payback Period: This measures the time required for the

project or investment to generate sufficient cash flows to
cover its initial costs. A shorter payback period is generally
preferred as it indicates quicker recovery of investment.

Dr. G. Ramanjaiah, Assoc. Prof.

 – Sensitivity Analysis: Conducting sensitivity analysis involves
assessing how changes in key assumptions or variables (such as
sales volume, costs, or interest rates) impact financial outcomes
like NPV or IRR. This helps in understanding the project's
sensitivity to different scenarios.

– Financial Ratios: Utilizing financial ratios (e.g., liquidity ratios,

profitability ratios, debt ratios) to assess the financial health and
performance of the project or investment. These ratios provide
insights into liquidity, profitability, leverage, and efficiency.

– Strategic Fit: Assessing how the project or investment aligns with

the organization's overall strategic goals and objectives. A project
or investment should not only be financially viable but also
contribute strategically to the organization's long-term success
and growth.

• By considering these factors comprehensively, financial appraisals

provide decision-makers with insights into the economic feasibility,
risks, and potential returns of investing in a project or making a
business decision.
Dr. G. Ramanjaiah, Assoc. Prof.
• HOW FINANCIAL APPRAISALS CONTRIBUTE TO PROJECT
DEVELOPMENT:
– Investment Decision Making:
– Financial appraisals help stakeholders, investors, and project
sponsors make informed decisions about whether to proceed with a
project. By analyzing projected costs, revenues, and potential risks,
decision-makers can assess the financial attractiveness and
expected profitability of the project.
– Resource Allocation:
– Effective financial appraisals assist in allocating resources such as
capital, labor, and materials optimally. By estimating the financial
requirements of the project, including initial investments and
ongoing operational costs, project managers can ensure that
sufficient resources are allocated to support project activities.
– Risk Management:
– Financial appraisals include risk assessment, which helps identify
and quantify potential financial risks associated with the project. By
evaluating risks such as market fluctuations, regulatory changes, or
cost overruns, project teams can develop mitigation strategies and
contingency plans to minimize negative impacts on project
finances.
Dr. G. Ramanjaiah, Assoc. Prof.
– Budgeting and Cost Control:
– Financial appraisals provide a basis for developing realistic
budgets and cost estimates for the project. By forecasting
cash flows, budgeting for expenses, and monitoring
financial performance against projections, project managers
can control costs effectively and ensure that expenditures
align with approved budgets.

– Performance Evaluation:
– During project execution and upon completion, financial
appraisals serve as a benchmark for evaluating project
performance. By comparing actual financial outcomes with
initial projections (e.g., actual vs. budgeted costs, actual vs.
forecasted revenues), stakeholders can assess the project’s
success in meeting financial goals and objectives.

Dr. G. Ramanjaiah, Assoc. Prof.

– Stakeholder Communication:
– Financial appraisals facilitate transparent communication
with stakeholders by providing clear financial projections,
assumptions, and rationale behind investment decisions.
This helps build trust, manage expectations, and gain
support for the project throughout its lifecycle.

– Long-Term Sustainability:
– Assessing the financial implications of a project ensures its
long-term sustainability and viability. Financial appraisals
consider factors such as return on investment (ROI),
payback period, net present value (NPV), and internal rate
of return (IRR), which are critical indicators of the project’s
economic benefits and potential for generating positive
cash flows over time.

Dr. G. Ramanjaiah, Assoc. Prof.