PROJECT MANAGEMENT/UNIT WISE SYLLABUS UNIT 1: Concepts of Project Management: Project Management concept, Categories of Projects, Project Life

Cycle, Tools and techniques of Project Management, Roles and Responsibilities of Project Manager UNIT 3: Contracting: Accountability in Project Execution, Contracts, 3 Rs of Contracting, Tendering and Selection of Contracts, Team Building UNIT 5: Project Evaluation,Reporting: Project Evaluation, Pproject Review Meetings, Project Reporting, Closing the Contract, Project Extensions UNIT 2: Establishing the Project: UNIT 2: Establishing the Project: Feasibility Report, Financial aspects of Project Preparation, Technical aspects, Finalization of Project Implementation Schedule, Evaluation of Project Profitability

UNIT 4: Project Implementation: Project Execution Plan, Project Procedure Manual, Project Control System, Project Scheduling and Monitoring, Monitoring Contracts

Introduction :
A project needs to be fully defined in order to provide terms of reference of it and the project manager should be thourough with the same. A project is said to be fully ESTABLISHED, only on fulfilling the following conditions : Part 1: 1.Technical configuration is defined 2.Performance requirements for various SYSTEMS,SUB-SYSTEMS & KEY EQUIPMENTS are specified 3.Cost estimate for the project is FROZEN 4.Techno-Economic viability is EXAMINED,APPRAISED&APPROVED 5.An over all implementation schedule is DRAWN. Generally, these 5 points constitute FR, which are arrived at in PROJECT DEFINITION PHASE. Part 2 : 6.Financial arrangements made to implement the project 7.A project Manager has been appointed 8.Pre- project Activities completed & A ZERO DATE IS FIXED Further, the project Manager has to update & revalidate the FR before start of the project , as he is ultimately responsible for project execution as per Techno-Economic Stipulations.

NOTE : If the ZERO DATE is shifted ,for any reason, the project cost estimate needs to be updated. -FEASIBILITY REPORT : An FR is meant to present an in-depth techno-commercial analysis for use by FINANCE INSTITUTIONS(FI) and others to take INVESTMENT decision. As per guidelines of the Planning Commission, FR should include: 1.Raw Materials(RM) Survey 2.Demand Survey 3.Technical Study of Product pattern,Process selection,Plant Size and RM Requirements 4.Location Study 5.Project capital cost estimates & Sources of Finance 6.Profitability & Cash Flow analysis & 7.Cost-Benefit Analysis 1.Raw Materials(RM) Survey: (a)Availability in-situ,transport arrangement from there,quality,Quantity(Gross &Net availability after meeting existing commitments for the current project(Through Desk study) (b) Availability in the form of a product or by-product from other industries (Through Desk study ) ( c) Availability through Imports(Through Desk study or from Foreign trade missions ) Note : If the ZERO DATE is shifted ,for any reason, re confirmation of the data needs to be updated.

2.Demand Survey (a)Demand: Present & Future consumption (b) Supply: Existing capacity, Capacity utilization,Capacity additions etc ,already in the industry ( c) Distibution:Channels of distribution,transport modes,Packing & distribution costs & govt. policies Sources : ( 1) Plan Documents of planning commission,Guide lines to industries(Dept of industry,Ministry of Industry,MoI,Economic surveys(MoF),Annual survey of Industries(Central SO, Hindu survey),Import & Export Statistics(MoC),Monthly bulletins of RBI,Survey reports of various institutions(IDBI,NCAER ,ToIs Economic divn etc (2) Market Research organizations(For small and detailed surveys) (3) Long range sales fore casts Note : If the ZERO DATE is shifted ,for any reason, re confirmation of the data needs to be updated.

3.Technical Study of Product pattern, Process selection, Plant Size and RM Requirements 1.Product Pattern :The total spectrum of products,co-products to be produced from the project on completion 2.Process selection: If the organization has already developed the processing scheme, it is called as Know-how. If not, it can be obtained through technology transfer license agreement and entrusted to a PROJECT ENGINEERING COMPANY.The Project Engg co. will the convert the Knowhow obtained into technological package and market it, which consists of Basic design data along with process description and specifications,Process flow diagrams,Equipment List,Process data sheet for all equipment,Process Piping & Instrumentation diagrams(P&I),Instrument data sheet,Utility summary,Indicative plot plan,Utilitys P&I,Pipe line List including of Process&Utility7 OPERATING INSTRUCTIONS. Where necessary resources do not exist for translating process technology into an operating plant, the owner may enter into a turn key contract with owner of technology, or the main supplier of machinery as well. ONLY WHEN TECHNICAL PACKAGE IS READY, A PROJECT CAN BE CONSIDERD TO HAVE BEEN ESTABLISHED. During FS Period, investigating different know-how sources is made,for evaluating alternatives, for which the required factors are: Indigenous Vs Foreign Know-how,Type of process and state of its development,RM requirements,Utilities requirements,Domestic and foreign components requirements,Flexibility in product patternand needs of India,Operating and installed capital costs,Economic analysis,Organisational ability of Process licensor,Success of Process in country of origin and else where. 4.Location Study The various factors to be cosiderd are; Land characteristics,approach to site,Source of RM,transportation requirements fr RM &FG,water sources,power sources,skilled man power sources,social amenities, govts tax laws,effluent and drainage facilities,availability of engg and maintenance facilities ana acceptance of project by local bodies ,environmentalists etc Different Costing methods are used to compare different locations. 5.Project capital cost estimates & Sources of Finance These deal with financing arrangements. For the zero date of the project tobecome effective,it is essential that funds required for the project are arranged .The fund requirement is to meet (1) The capital expenditure for purchasing Plant and Machinery (2) Initial working capital and (3) Pre-operating expenses Though the entire fund is not required on the zero date , nevertheless,suitable arrangement will have to be made IN ADVANCE so that funds do not pose a constraint for meeting the project targets , once the project starts. First these are to be assessed. Then the financial structure(debt:Equity Ratio) is worked out and then FIs are approached.

-CAPITAL COSTS: All the costs incurred , before it becomes ready for commercial production.Expenditure on assets such as land,plant&Machinery,town ship etc and also soft ware costs such as design engineering,Licensors fees,management and supervision and even pre-operative expenses. Planning commissions guidelines for estimating capital cost of a project(Fund Plan) Fund Plan means item wise cost and schedule & can be shown in a Tabular form.. S.No Item Item description Tot Plan of al J F cost (Rs) Expenditure M A

I II

Fixed assets Software costs

Land,P&M etc Engg&PMgt Technology fee Engg fee Mgt&Suprvn Pre-operative Expenses Contingencies Margin WC WC Operating costs

III IV

WC Operating costs COMMON NOMENCLATURE IN TABULAR FORM S.No Item Item description I WC The funds required for maintain various inventories(including operating supplies) and to meet misc cash requirements TO MAINTAIN A LEVEL OF PRODUCTION.These inventories are to be maintained throughout the PRODUCTION LIFE,as if there is no consumption. BORROWED A part of WC , till the plant goes into production,can be borrowed WC from the Bank against hypothecation of RMs and operating supplies Inventory. MARGIN The rest of the Initial WC financed from long-term sources , which WC finance capital items (20-30% of the initial WC) OPERATING Once the project goes into commercial production, the costs incurred COSTS on recurring basis for production, maintenance and marketing ,such as for for RMS, labour, utilities, repair and maintenance, selling expenses and any other expenses are Operating expenses. It will also include interest taken on loans for financing the project. PRE Only part of OPERATING COSTS is likely to be financed from OPERATIVE long-term sources.It is called PRE OPERATIVE EXPENSES,which EXPENSES includes expenses like staff recruitment and training expenses, interest burden and commitment charges,establishment expenses incurred before the commencement of commercial production.

II

-SOURCES OF FINANCING : Financial structure (Balanced debt, equity ratio) is needed to be established. For cement industry, the figure is 4 : 1 Sourcing: Terms for finance Short-term financing

Intermediate-term financing

Long-term financing

Source Trade credit Loan from commercial banks Commercial paper (Hundi) Accounts receivable finance Term loans Hire purchase Lease financing Fixed deposits from public Central govt. subsidy Common stock Debt Preferred Stock

Expenditure to be financed WC

CAPITAL COST

CAPITAL COST

FINANCIAL INSTITUTIONS: Lend debt or term loans to projects. National Financial Institutions: Egs: IDBI, IFCI (Industrial Finance Corporation of India) ,ICICI(Industrial Credit and Investment Corporation of India),IRCI(Industrial Reconstruction Corporation of India), SFCs, UTI, LIC, EXIM Bank Foreign Financial Institutions: Egs:World Bank, IFC(International Finance Corporation),IDA(International Development Association),UNDP,UNIDO(UN Industrial Development Organisation ),IMF,ADB,NRIs -PREPARATION OF COST ESTIMATES: A project cost estimate is required for(a)assessing fund requirement and (b) ascertaining its economic viability. It should be reasonably accurate. Under & over estimation is to be avoided ,which other wise leads to project delay and consequent DELAY COST ESCALATION and over capitalization & under utilization of SCARCE CAPITAL RESOURCE. But high accuracy is not easy due to non exact information, which is possible only when the progress becomes substantial. Hence, repeated cost estimates are made at different project life cycle stages. TYPES OF COST ESTIMATES ARE 1. Order of Magnitude Estimate: ( +/_ 60 % Accuracy):Estimate is made when the project is identified. Types: 1.Investment per annual tonne capacity: Installed cost of Project 2(New) ,R2 = (R1 x C2) / C1, where R1 is installed cost of Project 1 (reference completed Project),C1 is Reference projects installed capacity and C2 is new projects Installed capacity. 2.Turn-over ratio and capital ratio : The ratio between annual sales and investment expressed in rupees is known as turn-over ratio .The reverse of this ,i.e. the ratio between plant investment and annual sales, both again expressed in rupees is known as capital ratio.If

the capital ratio relating to a particular process and plant size is C, then for the proposed plant,knowing the sales volume and price,the installed cost can be estimated as shown below. R2 = C x V1 X P1,where V1= projected annual sales volume and P1 is the price per unit of sales volume. 3.Six-tenth factor: This is a modification of the investment per annual tone capacity method. In this method, plant investment is assumed to vary as 0.6 power of the plant size. Thus , estimated cost R2 for the new plant can be computed as : R2 = R1 x (C2 / C1) to the power of 0.6, Where R1 and C1 represent cost and capacity of a previously completed plant(Reference plant) and C2 is the capacity of the proposed plant. 4.Inflation Index: Installed cost(now) = Installed cost (past) x (Cost index(new) / cost index ( past). 5.Location index :Knowing a plant cost in else where country and using relative productivity levels, cost estimate may be made. Ratio methods give crude rough estimates, which initially serve the purpose as an indicator. 2.Study Estimate: ( +/_ 30 % Accuracy) Preliminary flow sheets, equipment list, construction materials etc from process licensor are costed and overall project cost is estimated by multiplying with LONG FACTOR, to account for civil ,electrical, piping, instrumentation, insulation and installation etc. However for funds estimation, it is better to use separate methods to estimate these for improved objectivity. 3Preliminary Estimate : ( +/_ 20 % Accuracy) There is urgent need to improve accuracy of cost estimates, hence these are made SUCCESSIVELY ,whenever ADDITIONAL information is available, which will ensure FURTHE ACCURACY .The Preliminary estimate is prepared when the technology package is FROZEN and A FIRM IMPLEMENTATION SCHEDULE is available. This point of time is considered as effective start date or ZERO DATE for the project.

4.Definitive Estimate: ( +/_ 10 % Accuracy): This estimate is prepared after the zero date, WHEN THE DETAILED ENGINEERING OF A PROJECT IS IN AN ADVANCED STAGE .At this stage, the following additional inf which will add further accuracy to the estimate are likely to be available. (a)Equipment purchase specifications/vendor quotations/awarded cost (b) Schedule of items for work tenders/contractors quotes/awarded cost (c) Reasonably accurate material take-offs for steel, piping and electrical equipment based on general arrangement drawings (d) House(Plant) general arrangement drawings

5.Detailed Estimate: ( +/_ 05 % Accuracy) This estimate may be made on completion of engineering, ordering of eqpt & machinery and award of major field contracts. At this stage corporate office work for a project is mostly

COMPLETE. The additional inf available at this stage which WILL ADD FURTHER ACCURACY TO THE ESTIMATE is: (a)ORDERED VALUE of Plant Eqpt & Machinery (b)AWARDED COST OF ALL major contracts (c )FINAL MATERIALS TAKE-OFFS (d)NINETY % CONSTRUCTION DRAWINGS The estimate at this stage may have an accuracy(of still) +/- 5 %.As a matter of fact, 100% accurate estimate can be obtained only when the project goes into full commercial production. The concern at this stage is to establish A COST TARGET FOR THE PROJECT.

Types of cost estimates &Details are shown in the figure below.

-FINALISATION OF PROJECT IMPLEMENTATION SCHEDULE: Considerations similar to COST ESTIMATES EQUALLY HOLD GOOD for making Project Time Schedule. At the Zero Date of the project, A TIME TARGET for completion of the project is to be set. This again has to be REALISTIC, as nothing is achievable by daydreaming alone.

There is a qualitative difference between cost estimating and TIME TARGET SETTING PROCESS. The need for accuracy in cost estimating is of great importance, time is not so much dependent on on the quantum work as cost. Time is a commodity that can be BOUGHTT WITH INCREASED COST. Time crashing of project is feasible. BASIS OF TIME ESTIMATE: While cost estimate is obtained through MORPHOLOGICAL BREAKDOWN OF THE PROJECT,TIME ESTIMATE is made by making A WORK BREAKDOWN of the project, estimating the time schedules for each WORK, putting them in proper sequence, i.e. in SERIES or PARRALLEL ,as per TECHNICAL or ANY OTHER LOGICAL MANNER and finally matching their build-up ON A TIME SCALE WITH THE AVAILABLE RESOURCES. The total stretch on the time scale corresponding with RESOURCES sets the TARGET. Thus, it is not a summing up process but is rather a MANIPULATING PROCESS. Therefore, time is not merely what it takes to do work, it will also be governed by how much time we want the work to take. The estimated time for completion of the project is dependent on WORK CONTENT,RESOURCES and constraints. The Fig 2.3 illustrates the same.

-VARIOUS APPROACHES FOR ESTIMATING TIME DURATION: 1.TIME STUDY APPROACH: T= Q / (p x n), where Q is total quantity of work, p is productivity factor(output per man-day) and n is crew size

2.PREVIOUS PROJECT DATA: Data from recently completed projects without consideration of Q, p & n. Data from from foreign projects can be used ,if not indigenously available. 3.GUESTIMATING APPROACH; Using Knowledge of experienced people, it is done. T(e) = ( t(o) + 4 x t(m) + T(p) ) / 6, where o denotes optimistic time estimate ,m-most likely & p-pessimistic. 4.RANGE ESTIMATES: Basis: guestimates /or from past data. No two time data from past figures will be same, hence a range like 6 8 months is made use of..However, from vendors, single estimate is asked for. 5.TIME TAKEN Vs TIME REQUIRED: Only when the estimator has also the responsibility for implementation, he would like to provide for all sorts of possible contingencies to take care of delays which may occur because of unavoidable modification in assumptions regarding SCOPE OF WORK, INEFFICIENCY,UNCERTAINITIES etc. The reverse happens if the estimator has no responsibility for Implementation. 6.ESTIMATES FROM VENDORS & CONTRACTORS: Vendors and contractors are asked to indicate time estimates as well (along with cost quotation).These estimates in a competitive situation may provide a realistic estimate. The time estimates are fine tuned through negotiations , to arrive at a range. 7.ALLOCATED & COMMITTED TIME: Except for a few activities, which take a Fixed duration(Like concrete curing),for majority of activities, the duration could be changed/manipulated, with in a limit, to meet the requirements of the project..So ,for fixing the project duration ,it is necessary to allocate the time the project could spare and ensure that this allocation is within the limit of compressibility of the activity, which ,however is to be reasonable. What matters is the commitment from implementing agencies.

SCHEDULING FOR FEASIBILITY STUDY: In the beginning, only project authorities are bound for this. But,subsequently ,the financing agencies are to be convinced with the reasonableness of the time estimate who would be intensively questioning. An indicative schedule may be available from the process licensor, based on their previous projects .This needs to be updated to reflect present environment..The engineering consultant can help in this. A typical time schedule for a feasibility study is shown in the following figure(2.4) S.No Activity 2 1 License 4 6 ... 8 10 12 14 16 18 20 22 24 26 28 30

2 3 4 5 6 7 8 9 10 11 12 13 14

Land ... Fincl Argmnt Licensor ... Appntmnt Design& Engineering Detailed Engg Order placement Equipment Delivery Site survey Site Prepratn Civil,structu ral Work Equpmnt Erection Testing & Checking Plant commning

...

...

...

...

... ...

The picture should not be portrayed as too tight in schedule(to show higher profitability) -OVERALL IMPLEMENTATION SCHEDULE: When the project manager (or any other agency required to deliver the project) is asked to accept the schedule, A SECOND LOOK is given to the SCHEDULE. This is done first, to confirm the feasibility schedule in the light of any enhanced data availability and also to break it down to sufficient details so that commitment from participating agencies or major milestones can be achieved.

The schedule is made in squared net work form coupled with simplicity of bar-chart to make a convincing case for getting the schedule ACCEPTED BY THE IMPLEMENTING AGENCIES. Thus, the overall schedule made is to be made acceptable to the project manager, as it is reviewed BEFORE THE ZERO DATE, AND IT GETS FROZEN ONLY AFTER THE IMPLEMENTING AGENCIES ARE BROUGHT INTO THE PICTURE AND JOINTLY EXAMINE THE SCHEDULE CRITICALLY. This is also democratic!

An overall schedule tries to adhere to the overall project completion time target set by the feasibility schedule. Also ,it sets TARGETS TO EACH PROCESS SYSTEM,UTILITY SYSTEM AND OFF-SITE FACILITIES. With each system or facility, the schedule also sets targets for IMPORTANT MILESTONES. The schedule is developed by taking into consideration THE PROCESS COMMISSIONINING SEQUENCE and the inter-relationship between various systems comprising PROCESS UNITS,UTILITIES and OFF-SITE FACILITIES. This will also require overall study of the work load, resource availability and execution method. In view of the need to study multiple factors and methods, considerable time is required in developing this schedule. Also, this schedule has to serve as mother document for subsequent detailed schedules utmost attention is given to make the targets AS REALISTIC AS POSSIBLE. This is done by providing time allowances at key milestones.

At the Zero date of the project , the accuracy could be in the range of +/- 20%, in view of paucity of inf.An inbuilt allowance of 20% may be kept in the time schedule and be allocated in proportion to the progress project. ALLOWANCES SHOULD NOT ,HOWEVER , BE PARTED WITH WITH THE EXECUTION AGENCIES, who will only be allowed the time committed by them. The reserve time should therefore be there to take care of uncertainties.

COMMITTED ACTIVITY TARGETS & RESERVED ACTIVITY TARGETS:

The above approach gives rise to these two schedules . Whereas the Committed targets would be used for progressing of the executing agencies , The Reserved Activity targets are the ones WHICH MUST BE ACHIEVED. The former would always try to have one upmanship over the latter ; hence ,the project management should always MAINTAIN SUFFICIENT DISTANCE BETWEEN THESE TWO , TILL THE END. Accordingly, it is prudent, not to divulge the latter schedule indiscriminately.

The following figure 2.5 explains these two schedules.

FLEXI TARGETS : When a schedule is developed something is known, something half known and the rest is unknown. This needs to be borne in mind. Time targets, as like cost estimates, need to be revised at different stages of project management to serve the purpose for which they are meant. It might be required to undergo one such revision on the ZERO DATE to make the start of the project ON A REALISTIC NOTE.

-6.PROFITABILITY & CASH FLOW ANALYSIS & EVALUATION OF THE PROJECT PROFITABILITY It can be observed that ,at the ZERO DATE both the cost estimate and the overall schedule WOULD HAVE CHANGED from what they were in the FEASIBILITY REPORT. This would change the PROFITABILITY of the project. There would be more changes as the project progresses, but inspite of these, THE PROJECT SHOULD STILL REMAIN ECONOMICALLY VIABLE. It is , therefore , not enough to forecast SUCCESSIVELY ,as things come to be known, what the project would cost and how much more time it would take to complete the project ; it would also be necessary to check the economic viability of the project everytime the time and cost estimates change. In any case, there can not be any question of proceeding with the project , IF THE PROJECT IS NOT ECONOMICALLY VIABLE AT ZERO TIME. The economic viability of the project can be assessed by the following methods:

1 .PAY BACK PERIOD ( PBP ) PBP = Original Investment (Rs) / Annual Income ( Rs ) = Number of Years Item Capital Investment (Rs Lakhs) Project Operating Life ( Years ) Annual Income (Rs Lakhs) Pay Back Period ( Years ) Project A 150 10 15 10 Project B 150 15 15 10 Project C 150 20 15 10

2.RETURN ON INVESTMENT ( ROI ) ROI = Average annual earning after tax / Average book investment after depreciation, Eg: Capital Investment = Rs 150 lakhs , Project operating life = 10 years ,Salvage value at the end of 10 years = 0, If expected profit after tax = Rs 15 Lakhs for first Five years and Rs 7.5 Lakhs for balance Five years ,then ROI = ( (15 X 5 +7.5 X 5 ) / 10)) / ( (150 + 0 ) / 2 )) X 100 = 15 % (ROI > Bank interest.) This method is better than PBP Method, as it emphasizes Profitability and not liquidity of Investment and also considers the whole project life and the total Income accruable to a project during this period.

3.NET PRESENT VALUE ( NPV ) This method also considers the time value of money. Hence , all future amounts are to be DISCOUNTED by the applicable INTEREST RATE to determine THE PRESENT VALUE.

NPV = (Sigma, t=0 to t=n) of St x ( 1 / (1 + r ) to the power of t ) NPV = (Sigma, t=1 to t=n) of St x ( 1 / (1 + r ) to the power of t ) - I, Where, St = net cash flow for the year t, t = operating year, n = operating life of the project , I = Original capital Investment , r = Interest rate. A project must have a positive value to be acceptable. The higher the NPV, better is the project. This method is, therefore, more suitable for ranking projects rather than assessing their profitability.

4.INTERNAL RATE OF RETURN ( IRR ) This is also a discounting method, but in this case instead of assuming a fixed discount rate, the discount rate is varied till the net present value becomes zero. The discount rate at which the NPV becomes zero is known as IRR . IRR then reflects the true yield of a project and should enable comparision of a project with others or judge the project for its suitability on a single case basis. IRR is calculated through an iterative process by assuming different discount rates for each iteration.IRR method, projects with higher than prevailing return will be preferred. Projects with highest IRR will be considered as the best. & 5. BENEFIT COST RATIO ( BCR ) This method is a modified form of the NPV method. The benefit cost ratio is computed as the ratio of aggregate present value of all future cash flows to initial capital investment. BCR = ( ( Sigma t=1 to t=n of (St / (1 + r) to the power t)) / I , Where, St = net cash flow for the year t, t = operating year, n = operating life of the project , I = Original capital Investment , r = Interest rate. In this method, higher the benefit cost ratio the better is the project. Projects to be accepted must have benefit cost ratio higher than 1. SOCIAL PROFITABILITY: Beyond financial yields, like Forex savings, backward area development, defence requirements, self-reliance which are important society.

APPOINTING A PROJECT MANAGER: Once formulated and cleared,the Project needs Project manager. 1. He has proper appreciation of PM concepts and the benefits. 2. He understands the difficulties that may be encountered during PM execution. 3. An ongoing corporate may not show priority to project .If one of the functional manager is given additional charge, he may not bestow enough time or may not possess the capacity to manage successfully the project , on account of lack of requisite accountability. The CEO and top management had to step in , thereby forced to spend their VALUABLE RESOURCE, VIZ. TIME. Thus existing functional managers will not serve the purpose in view of their limited specialization. 4. If there is no PMgr, the project has no target for time, cost and performance. 5. The expertise for project management and operational management is DIFFERENT ,as the latter mostly deal with STABLE SITUATION, whereas the PM has to deal with EVERNEW,UNCERTAIN AND RISKY SITUATIONS.

6. Operational management runs through LINE AUTHORITY and deals with well defined team , whereas PM has to deal with MULTIPLE AGENCIES, which calls for EXPERTISE IN ART OF MANAGEMENT AS WELL AS KNOWLEDGE MANAGEMENT ,IN THEIR TRUE SENSE AT THEIR BEST. 7. PMgt is a specialized discipline in its own right. It needs to be learnt, and learning takes time. But projects always racing against time, so it is NOT POSSIBLE TO ALLOW LUXURY OF SOMEONE IN THE ORGANISATION TO LEARN AND AT THE SAME TIME ACHIEVE THE TIME TARGETS OF THE PROJECT. Even a day,s delay is always expensive for the project. The project may no longer REMAIN VIABLE if delays are allowed to occur ,DUE TO THE LEARNING FACTOR. Thus part time Project Manager will not serve the purpose 8. Project being multi-disciplinary in nature, will require several cross functionaries to participate in it.Generally, no single functionary, except CEO, own the project. Hence, the role of PM is important. 9. FINDING A PROJECT MANAGER : Compared to the earlier times, it is possible to find suitable personnel as PM. Even educational institutes are offering PM as a course subject. 10. AS HAS BEEN SEEN, THERE CAN BE MANY WAYS OF APPOINTING A PROJECT MANAGER.THE MAIN POINT IS TO HAVE A PROJECT MANAGER ,RIGHT FROM THE START OF THE PROJECT AND MAINLY FROM THE STAGE OF EFFECTIVE START-UP OF PROJECT; HOW HE IS APPOINTED IS A SECONDARY ISSUE.AN ORGANIZATION WILL HAVE TO CERTAINLY WEIGH THE PROS AND CONS FOR TAKING THIS IMPORTANT DECISION ON THIS ISSUE.

ROLE OF PROJECT MANAGEMENT SERVICES ORGANISATION In view of continuous industrialization in both operations & services, many Consultancy organizations have come into existence , who offer a multitude of services. The scope of such organizations can be summarized as follows. 1.Project management system design 2.Project Time, Cost and Quality monitoring Services 3. Project Management 4. Project Productivity Services 5. Project Performance Audit 6.Development of Project Management Software 7.Project Scheduling Services 8.Project Cost Estimation, Updating of Feasibility Report and Preparation of Tender Documents 9.Project M.I.S 10.Short-term Project Staff Services on Loan

FIXING THE ZERO DATE: The last important step in establishing a project is THE FIXATION OF THE ZERO DATE. 1. The Zero date of the project signals the effective start of the project. 2. The clock starts ticking from this date. 3. The project completion period will be counted from this point of time, therefore, anything that may affect performance of the project will have to be defined / established / started by this time. This applies not only to time, cost and technical parameters of the project ,but also to infrastructural facilities, formation of new company / division, government clearances and many other things needed for putting up a project. 4. ALL THESE ACTIVITIES WHICH MUST BE COMPLETED BEFORE THE ZERO DATE ARE KNOWN AS PRE-PROJECT ACTIVITIES.

- PRE-PROJECT ACTIVITIES: Pre-project activities are the ones that not only define the scope of the main project activities but also enable fixation of all performance targets and hence the zero date. Achievement of the zero date, therefore, can be advanced by imaginative planning of the pre-project activities. Some of the pre-project activities are sequential in nature, but there are others which are independent , for which Advance Actions should be taken. ADVANCE ACTIONS : Such of the activities, which have long lead-time, particularly work on infrastructural facilities should be started in the form of advance actions which reduces the overall project completion period. INFRASTRUCTURAL FACILITIES: 1. Approach Road 2. Power 3. Water 4. Railway siding 5. Port and Jetty etc. SUMMARY: well begun is half-done nowhere is the saying more true than in the case of a project.The journey begins well with the establishment of the project scope and setting of time , cost and performance goals. END OF UNIT-II