Unit-1

General Introduction
Introduction:

Normally, when we think of projects, we think of large

initiatives such as developing a new product or
service, developing a new information system,
constructing a building, or preparing a major sports
event. But projects can be of any size and duration.
Projects may be personal like wedding plan,
planning of house extension etc. Or, projects may be
industrial like providing a gas supply to an industrial
estate, designing a new car etc., or they can be
business like developing a computer system,
introducing a new product etc.
What is a Project?

Unique process consisting of a set of

coordinated and controlled activities with
start and finish dates, undertaken to
achieve an objective conforming to
specific requirements, including
constraints of time, cost, quality and
resources”
A Project is a planned set of activities
A Project has a scope
A Project has time, cost, quality and
resource constraints
Project concept:
Project is a scientifically evolved work plan devised
to achieve a specific objective within a specific
period of time. It can be considered as proposal
involving capital investment for the purpose of
developing facilities to provide goods and services.
A project is a blue print for action-oriented activities
of an organization. A project reflected the plan for
action in its totality. Like a movie film it is projection-
oriented process. The project has beginning middle
and an end.
For example: Cement project, Power project, Refinery
projects , Health project, Educational projects , Social
project, Construction projects etc.
DEEINITION OF PROJECT
A Project is a one-shot, time limited, goal directed, major
undertaking, requiring the commitment of varied skills and
resources. It has also been described as a combination of
human and non human resources pooled together in a
temporary organization to achieve a specific purpose. The
purpose and the set of activities which can achieve that
distinguish one project form another.
-Project Management Institute, U.S.A
‘’We mean by a project any scheme, or part of
scheme, for investing resources which can reasonably be
analyzed and evaluated as an independent unit. The definition
is thus arbitrary. Almost any project could be broken down
into parts for separate consideration; each of these parts
would then by definition a project”.
FEATURES OF A PROJECT:
•A project can be identified by its features.
•A project is a fixed set of objectives. Once the objectives
have been achieved, the project ceases to exist.
•It has a specific life span.
•Project has for a teamwork,
•Project has a life cycle reflected by growth, maturity and
decline similar.
•Change is an inherent feature in any project’s life.
•Project is based on successive principle and hence it is
difficult to learn fully the end results at any stage.
•A project works for a specific set of goals with the complex
set of diversified activities.
•High level of sub-contraction of work can be done in a
project.
•Every project has risk and uncertainty associated with it.
TYPES AND CLASSIFICATION OF PROJECTS
1. Quantifiable and Non-quantifiable Projects
Quantifiable projects are those in which a plausible (or perfect)
quantitative assessment of benefits can be made. Examples of
quantifiable projects include industrial development, power generation,
and mineral development projects. Non-quantifiable projects are those
where such an assessment is not possible, like health, education, and
defense projects.

2. Sectoral Classification of Projects

Based on the usefulness of projects in resource allocation at macro
level, they may be classified into the following sectors:
Agricultural and allied sector projects
Irrigation and Power sector projects
Industry and Mining sector projects
Transport and Communication sector projects
Social Service Sector projects
Miscellaneous projects
•Techno-Economic Projects
Based on their techno-economic aspect, projects can be classified into
three groups.
1.Factor Intensity- oriented classification: Here, Projects may be
classified as
(i) Capital intensive projects:-where large-scale investment is made in
Plant and Machinery
(ii) Labor intensive projects:- where large-scale investment is made in
Human Resources.
2. Causation-oriented classification: Here, projects are classified as
(iii) Demand-based :- where projects are formulated to meet the demand
of any goods or services when it is unavailable and more demanded
by the consumers.
(iv) Raw material based:- where the project is formulated to make
available of inputs, skills or raw materials for starting a project.
3. Magnitude-oriented classification: Here, Projects are classified on
the basis of size of investment forms as Mega-scale, Large-Scale,
Medium–scale or Small- scale projects.
4. Financial Institutions Classification:
Financial Institutions classify projects
according to the age and experience and the
purpose for which the project is being taken up
as follows:
oNew Projects
oExpansion Projects
oModernization Projects
oDiversification Projects
4. Services Projects
These are further classified as:
(i) Welfare or Non commercial projects
(ii) Service Projects
(iii) Research and Development projects
(iv) Educational Projects
6. Ownership and control based classification: Under
this approach, projects are classified into:
a)Corporate Projects: Projects in which a group
of shareholders have sole interest in the control
of management of the projects are called
corporate projects.
b)Partnership Projects: Projects in which a
group of partners have sole interest in the control
of management of the project are called
Partnership projects.
c)Sole Proprietor Projects: Projects in which a
sole proprietor or single owner of business have
control over management of project is called
sole proprietor projects.
7. Technology Based Classification: Based upon the
level of technology applied, the projects are classified
as:
a)High-Technology Projects: Projects which use
most sophisticated technology to meet its
objectives such production of new goods etc.,
are called Hi-Tech projects or High Technology
projects.
b)Conventional Technology Projects: Projects
which use outdated technology for its project
completion process are called conventional
technology projects.
8. Risk Based Classification: Under this
classification, projects are classified into:
•High-Risk Projects: Projects which involves
high risk to expand new technology with
available financial resources to earn high returns
are called High Risk or Venture Capital projects.
•Medium Risk Projects: Projects which involve
only medium risk to earn normal profits are
called medium risk projects.
•Low Risk Projects: Projects which involve low
risk to earn minimum profits and which explore
conventional technology for project completion
purposes are called small risk projects.
9. Country origin based classification: On
the basis of this, projects are classified into:
•Domestic projects: Projects carried in
home country to carry on with national
interest are called domestic of national
projects.
•Foreign Projects: Projects carried in
one or more other countries in global
interest are called Foreign or
International projects.
10. Productivity based classification: Under this
approach, projects may be classified as:
(i)Directly productive projects- In directly
productive projects, the benefits and costs of the
project are accrued to a single large organization.
This organization will be able to calculate the
surplus.
(i)Indirectly productive projects- Indirectly
productive projects are those where the benefits
derived from a new project do not accrue to the
organization responsible for carrying out the
costs. Hence, the resulting surplus is not
concentrated in the hands of a single
organization. In the case of indirectly productive
projects, the calculation of benefits is difficult.
Example: Infrastructural projects such as roads,
schools, health centers, where the benefits accrue
to the users. Such large projects are usually
carried out by government because of the high
investment requirement and their longer
gestation period.
11. Social Welfare Projects and Infrastructure
development projects
•Social Welfare Projects: These projects are
non-industrial capital projects/schemes and are
undertaken for increased public welfare. For
example, creation of educational facilities,
building up of medical centers, creation of
universities, community centers, sports
facilities, libraries, improving water supply,
etc.
•Infrastructure development projects: These
projects involve development of infrastructure in
sectors such as power, Telecommunications,
Railways, Roads, and Ports etc.
IMPORTANCE OF PROJECT
MANAGEMENT:
Project management is crucial for
ensuring projects are completed
successfully, on time, within budget,
and to the expected quality. It
provides a framework for planning,
organizing, and executing projects,
ultimately leading to better
outcomes for teams, organizations,
and stakeholders.
1. Ensures Project Success:
 Project management helps define project
scope, objectives, and deliverables, creating
a shared understanding among team
members and stakeholders.
 It provides a structured approach to
managing the project, including planning,
execution, monitoring, and control.
 Effective project management minimizes
risks, improves quality, and reduces costs,
ultimately increasing the likelihood of
project success.
2. Enhances Efficiency and
Productivity:
 Project management helps
streamline workflows, improve
communication, and optimize
resource utilization, leading to
increased efficiency and
productivity.
 It provides tools and techniques for
tracking progress, managing tasks,
and identifying potential delays,
ensuring projects stay on track.
3. Improves Collaboration and Communication:
 Project management fosters better collaboration
and communication among team members,
stakeholders, and clients.
 It provides a framework for managing
expectations, resolving conflicts, and ensuring
everyone is aligned on project goals.
4. Saves Time and Money:
 By identifying and mitigating risks, project
management can prevent costly delays and
rework, saving time and money.
 It helps optimize resource allocation, ensuring
projects are completed efficiently and within
budget.
5. Provides a Foundation for Learning and
Improvement:
 Project management encourages learning and
improvement by providing a structured approach to
project execution and post-project analysis.
 This allows organizations to identify areas for
improvement and implement best practices for
future projects.
6. Facilitates Better Decision-Making:
 Project management provides a framework for
making data-driven decisions, including resource
allocation, risk management, and project
prioritization.
 It helps organizations track project progress,
PROJECT LIFE CYCLE
MEANING:
•Project life cycle is a series of phases
of a project from initiation to
completion.
Definition of Project Life Cycle:
“A group of activities that have to be
performed in a logical sequence to
meet present objectives outlined by
the client.”
STAGES OF PROJECT CYCLE:
(1) Identification: Stage where one project-idea out of
several alternatives is chosen and defined.
(2) Preparation: Defined idea is carefully developed to the
appraisal stage.
(3) Appraisal: Every aspect of the project idea is subjected
to systematic and comprehensive evaluation, and a project
plan is prepared.
(4) Presentation: Detailed plan is submitted for approval
and financing to the appropriate entities.
(5) Implementation: With necessary approvals and
financing in place, the project plan is implemented.
(6) Monitoring: At every stage the progress of the project is
assessed against the plan.
7) Evaluation: upon completion the project is reassessed in
terms of its efficiency and performance.
Statement of Work :
A Statement of Work (SOW) in project
management is a detailed document that
outlines the specific tasks, deliverables, and
milestones for a project. It's a crucial part of
project planning, ensuring all parties involved
have a shared understanding of the project's
scope, responsibilities, and expectations. The
SOW serves as a contract between the project
owner and the service provider, defining what
needs to be done, who is responsible, and how
it will be accomplished.
Key Components of a Statement of
Work:
Project Overview: A brief introduction
to the project, its goals, and its purpose.
Scope of Work: A detailed description
of the tasks and activities required to
complete the project, including specific
deliverables.
Deliverables: A list of all tangible items
that the project must produce, such as
reports, documents, software, or
physical products.
Milestones: Key checkpoints or stages
in the project timeline that are used to
track progress and ensure the project is
on schedule.
Schedule: A timeline outlining the start
and end dates for each task and
deliverable.
Responsibilities: A clear definition of
who is responsible for each task or
deliverable, including project manager,
team members, and vendors.
Assumptions and Constraints: Any factors
that may influence the project, such as
assumptions about resources, budget, or
timeline constraints.
Acceptance Criteria: The criteria that must
be met for each deliverable to be
considered complete and acceptable.
Payment Terms: Details on how and when
payment will be made.
Change Management: Procedures for
handling changes to the project scope,
schedule, or budget.
Benefits of Using a Statement of Work:
 Clear Communication:
Ensures all parties involved have a shared
understanding of the project's scope and
expectations.
 Reduced Risks:
Helps to prevent misunderstandings and disputes by
clearly defining the project's parameters.
 Improved Project Management:
Provides a framework for planning, organizing, and
controlling the project.
 Easier Contract Negotiation:
Serves as a basis for negotiations and can be
incorporated into a formal contract.
 Work Breakdown Structure (WBS)
• The Work Breakdown Structure is the foundation
for effective project planning, costing and
management.
• It is the most important aspect in setting-up a
Project
 It is the foundation on which
everything else builds
Work Breakdown Structure - Definition

“A Work Breakdown Structure (WBS) is a

hierarchical (from general to specific)
tree structure of deliverables and tasks
that need to be performed to complete a
project.”