Chapter 1 Introduction to Project Management:

Understanding Project Management: Project is an investment made on a package of interrelated time bound activities. Project Series of activities that have specific goal to be attained within certain specifications. Project converts the given I/p into O/p thrh a process of implementation as shown below.

Input
Men Money Material Method Machinery Information Facilities

transformation

Output

Goods Processing Services Client Satisfactions

Management is an act of managing, controlling, directing and coordinating various activities. So PM is an organized venture of managing the projects. Project Management is a concept which describes the successful mgmt of a pjt. PM is defined as the discipline of planning, organizing, and managing resources to bring about the successful completion of specific pjt goals and objectives. What Is a Project? The fundamental nature of a project is that it is a temporary endeavor undertaken to create a unique product, service, or result.2 Projects are distinguished from operations and from programs.

Temporary Endeavor To be temporary signifies that there is a discrete and definable commencement and conclusion; the management of a project requires tailored activities to support this characteristic, as such, a key indicator of project success is how it performs against its schedulethat is, does is start and end on time. Unique Deliverable The uniqueness of the deliverable, whether it is a product, service, or result, requires a special approach in that there may not be a pre-existing blueprint for the projects execution and there may not be a need to repeat the project once it is completed. Uniqueness does not mean that there are not similarities to other projects, but that the scope for a particular project has deliverables that must be produced within constraints, through risks, with specific resources, at a specific place, and within a certain period; therefore, the process to produce the deliverable as well as the deliverable itself is unique. A Project Versus an Operation The operations of an organization are continuing and repetitive activities that are executed to achieve its mission and sustain the business, but without a definable end to their performance and without a unique outputthat is, it is not produced or provided only once. A Project Versus a Program A project differs from a program in that a program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements or related work outside the scope of discrete projects in the program.4 Furthermore, programs often involve a series of repetitive or cyclical undertakings. In Reclamation, a program is typically a group of projects administered by Reclamation. Reclamation programs do not have to be specifically authorized, and a programs schedule may continue past any individual project. Examples of Reclamation programs are the Safety of Dams Program, the RAX Program, and the Title 16 Program. What Is Project Management? Project management is the process of the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.6 That is, project management is an interrelated group of processes that enables the project team to achieve a successful project. Project Attributes As you can see, projects come in all shapes and sizes. The following attributes help to define a project further: _ A project has a unique purpose. Every project should have a well-defined objective. For example, Anne Roberts, the Director of the Project Management Office in the opening case, might sponsor an information technology collaboration project to develop a list and initial analysis of potential information technology projects that might improve operations for the company. The unique purpose of this project would be to create a collaborative report with ideas from people throughout the company. The results would provide the basis for further discussions and projects. As in this example, projects result in a unique product, service, or result. _ A project is temporary. A project has a definite beginning and a definite end. In the information technology collaboration project, Anne might form a team of people to work immediately on the project, and then expect areport and an executive presentation of the results in one month.

_ A project is developed using progressive elaboration. Projects are often defined broadly when they begin, and as time passes, the specific details of the project become more clear. Therefore, projects should be developed in increments. A project team should develop initial plans and then update them with more detail based on new information. For example, suppose a few people submitted ideas for the information technology collaboration project, but they did not clearly address how the ideas would support the business strategy of improving operations. The project team might decide to prepare a questionnaire for people to fill in as they submit their ideas to improve the quality of the inputs. _ A project requires resources, often from various areas. Resources include people, hardware, software, or other assets. Many projects cross departmental or other boundaries to achieve their unique purposes. For the information technology collaboration project, people from information technology, marketing, sales, distribution, and other areas of the company would need to work together to develop ideas. The company might also hire outside consultants to provide input. Once the project team has selected key projects for implementation, they will probably require additional hardware, software, and network resources. People from other companiesproduct suppliers and consulting companieswill become resources for meeting new project objectives. Resources, however, are limited. They must be used effectively to meet project and other corporate goals. _ A project should have a primary customer or sponsor. Most projects have many interested parties or stakeholders, but someone must take the primary role of sponsorship. The project sponsor usually provides the direction and funding for the project. In this case, Anne Roberts would be the sponsor for the information technology collaboration project. Once further information technology projects are selected, however, the sponsors for those projects would be senior managers in charge of the main parts of the company affected by the projects. For example, if the vice president of sales initiates a project to improve direct product sales using the Internet, he or she might be the project sponsor. If several projects related to Internet technologies were undertaken, the organization might form a program. A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.6 A program manager provides leadership for the project managers directing those projects, and the sponsors might come from several business areas. _ A project involves uncertainty. Because every project is unique, it is sometimes difficult to define the projects objectives clearly, estimate how long it will take to complete, or determine how much it will cost. External factors also cause uncertainty, such as a supplier going out of business or a project team member needing unplanned time off. This uncertainty is one of the main reasons project management is so challenging, especially on projects involving new technologies. What Is Project Success? A standard must be established by which to define and measure project success. Fundamentally, project success is the delivery of the required product, service, or result on time and within budget. To meet these objectives is to deliver a quality project. PMI illustrates project quality through the concept of the triple

constraintproject scope, time and cost.9 Project quality is affected by balancing these three interrelated factors. The relationship among these factors is such that if any one of the three factors change, at least one other factor is likely to be affected.10 Figure 3 illustrates this constrained relationship, sometimes called the iron triangle. Cost and time are intuitive, but the role played by scope warrants further discussion. To understand the significance of scope, one must appreciate the relationship between scope and the project objectives. For the scope to contribute to project quality, it must be managed to meet the demands of the project objective by reliably providing the required functions, nothing more or nothing less. It is not simply a matter of keeping the scope from creeping, or a matter of completing the cheapest and fastest project; it is establishing the appropriate scope and delivering the commensurate product, service, or result. What Is a Project Manager? The key responsibility of the project manager is to successfully accomplish the project objectives by balancing the competing demands for quality, scope, time, and cost. Derivative responsibilities include identifying the project requirements; establishing clear and achievable objectives; and adapting the specifications, plans, and approach to the different concerns and expectations of the various stakeholders. Fundamentally, the project manager must direct the project from its inputs, through its nucleus, to delivery of its outputs. In order to accomplish these multifaceted responsibilities, the roles of the project manager include that of a leader, administrator, entrepreneur, facilitator, arbitrator and mediator, liaison, and coordinator. The project manager must lead teams to operate cross functionally towards a common objective while assuring cohesiveness and continuity as the project progresses through project processes and project phases. The project manager acts as the key catalyst to stimulate effective communication and coordination between design, procurement and construction activities. In order to effectively manage these responsibilities and assume these roles, a project manager must have experience in the following project management knowledge areas: project integration, scope, time, cost, quality, human resources, communications, risk, and procurement management

Chapter 3 PROJECT FEASIBILITY STUDY

Feasibility literally means whether some idea will work or not. It knows before hand whether there exists a sizeable market for the proposed product/service, what would be the investment requirements and where to get the funding from, whether and wherefrom the necessary technical know-how to convert the idea into a tangible product may be available, and so on. In other words, feasibility study involves an examination of the operations, financial, HR and marketing aspects of a business on ex ante (Before the venture comes into existence) basis.

MARKET ANALYSIS A market, whether a place or not, is the arena for interaction among buyers and sellers. From sellers point of view, market analysis is primarily concerned with the aggregate demand of the proposed product/service in future and the market share expected to be captured. Success of the proposed project clearly hinges on the continuing support of the customers. However, it is very difficult to identify the market for ones product/service. After all, the whole universe cannot be your market. You have to carefully segment the market according to some criteria such as geographic scope, demographic and psychological profile of the potential customers etc. It is a study of knowing who all comprise your customers, for this you require information on: - Consumption trends. - Past and present supply position - Production possibilities and constraints - Imports and Exports - Competition - Cost structure - Elasticity of demand - Consumer behaviour, intentions, motivations, attitudes, preferences and requirements - Distribution channels and marketing policies in use - Administrative, technical and legal constraints impinging on the marketing of the product

FINANCIAL ANALYSIS The objective of financial analysis is to ascertain whether the proposed project will be financially viable in the sense of being able to meet the burden of servicing debt and whether the proposed project will satisfy the return expectations of those who provide the capital. While conducting a financial appraisal certain aspects has to be looked into like: - Investment outlay and cost of project - Means of financing - Projected profitability - Break- even point - Cash flows of the project - Investment worthiness judged in terms of various criteria of merit - Projected financial position TECHNICAL ANALYSIS The issues involved in the assessment of technical analysis of the proposed project may be classified into those pertaining to inputs, throughputs and outputs.

Input Analysis: Input analysis is mainly concerned with the identification, quantification and evaluation of project inputs, that is, machinery and materials. You have to ensure that the right kind and quality of inputs would be available at the right time and cost throughout the life of the project. You have to enter into long-term contracts with the potential suppliers; in many cases you have to cultivate your supply sources. When Macdonald entered India, they developed sustainable sources of supply of potatoes, lettuce and other ingredients for their burgers. The activities involved in developing and retaining supply sources are referred to as supply chain management. Throughput Analysis: It refers to the production/operations that you would perform on the inputs to add value. Usually, the inputs received would undergo a process of transformation in several stages of manufacture. Where to locate the facility, what would be the sequence, what would be the layout, what would be the quality control measures, etc. are the issues that you would learn in greater details in subsequent lessons. Output Analysis: this involves product specification in terms of physical features- colour, weight, length, breadth, height; functional features; chemicalmaterial properties; as well as standards to be complied with such as BIS, ISI, and ISO etc.

ECONOMIC ANALYSIS Economics is the study of costs- and- benefits. In regard to the feasibility of the study the entrepreneur is concerned whether the capital cost as well as the cost of the product is justifiable vis--vis the price at which it will sell at the market place. For example, technically, silver can be extracted from silver bromide, (a chemical used for processing the X-ray and photo films); but, the cost of extraction is so high that it would not be economically feasible to do so. Likewise, until recently cost of harnessing solar power was prohibitively high. This cost-benefit analysis goes into financial calculations for profitability analysis that we discussed under financial analysis. At this stage it is also useful to distinguish between the economic and commercial feasibility; whereas economic feasibility leads one to the unit cost of the product, commercial feasibility informs whether enough units would sell. Apart from the cost-benefit analysis as above, which we also refer to as private costbenefit analysis, it is also useful to do what is known as social- cost-benefit- analysis (SCBA). For example, the entrepreneur may be getting subsidized electricity in which case private cost would be less than social cost. Likewise, exporting units earn precious foreign exchange resulting into social benefits being more than private earnings. Many a time, a project that is worthy on SCBA may find greater favour with the support agencies. ECOLOGICAL ANALYSIS In recent years, environmental concerns have assumed a great deal of significance especially for projects, which have significant ecological implications like power plants and irrigation schemes, and for environment polluting industries (like bulk drugs, chemicals and leather processing). The concerns that are usually addressed include the following: What is the likely damage caused by the project to the environment? - What is the cost of restoration measures required to ensure that the damage to the environment is contained within acceptable limits? LEGAL AND ADMINISTRATIVE Think of the plight of the entrepreneur who worked on the idea of a laundry to cater to hotels and hospitals, finds it eminently feasible only to learn subsequently that laundry does not figure as an

industry within the administrative definition of SSI as applicable on that date. Another entrepreneur in Kalyani (West Bengal) developed an Ayurvedic preparation only to find that the office of DIC did not have an expert to validate the project; the product had to be marketed as a confectionary item! What is implied from these examples is that the entrepreneur has to be sure also of the administrative and legal issues involved in the project. These include, choice of the form of business organisation, registration and clearances and approvals from the diverse authorities.