MBA-Finance Project FinancingandManagementUnit –I 1
UNIT –IPROJECT - INTRODUCTIONObjectivesoftheLesson:
Aftergoingthroughthisunit, you maybeableto
Ø
DefineaProject
Ø
Explain indetailtheclassificationofProjects,Sub-projects
Structureof theLesson:
1.0 Introduction1.1 Features of a Project1.2 Operation and Project – Similarities1.3 Operations and Projects – Comparison1.4 Key Considerations in a Project1.5ClassificationofProjects,Sub-Projects1.5.1 Types of Projects1.5.2 Sub-projects
1.0Introduction
Organizations perform work continuously. These works include operations orprojects though some works may overlap with each other. For the organizations,projects are important elements of change. They are considered to be the leadingedge of change in organizations. A project consists of a combination of organizationalresources pulled together to create something that did not previously exist and that willprovide a performance capability in the design and execution of organizationalstrategies. Projects are conceptualized, designed, engineered and produced (orconstructed); something is created that did not previously exist. Anorganizational strategy has been executed to facilitate the support of ongoingorganizational life. Projects therefore support the ongoing activities of a goingconcern. For example,
MBA-Finance Project FinancingandManagementUnit –I 2• An R&D project bridges the gap from an existing technology to a futuretechnology.• A new factory adds to the manufacturing capability.• A new building contributes to the infrastructure of the city.• A new highway improves transportation systems.• A canal provides a waterway over land.• A pipeline moves oil, gas, or water.• A new house improves the living standards of a family.
Hence we can definea project astemporary endeavor to create a unique product or service. -
P
roject
M
anagement
Bo
dy of
K
nowledge (
PMOK)
Somemoredefinitionsare–Newman et al.
defined a project and described its value as simply a cluster of activities that is relatively separate and clear-cut. Building a plant, designing anew package are examples.It is "any undertaking that has definite, final objectives representing specifiedvalues to be used in the satisfaction of some need or desire.”
(Ralph CurrierDavis)1.1Featuresof aProject
- A clear termination point (temporary).- Might be part of a broader program.- A distinct mission (unique).- The main virtue of a project involves in identification of a nice, neat workpackage within a bewildering array of objectives, alternatives, and activities.- Mostly used as a means of implementing strategy.- Progressively elaborated i.e. scope and details of the projects evolve as oneundertakes the project even though distinguishing features of the project arestated initially.
MBA-Finance Project FinancingandManagementUnit –I 3
1.2OperationandProject - Similarities
- Planned, executed and controlled- Performed by people- Limited resources
1.3OperationsandProjects- Comparison
- Operations are repetitive (not unique)- Operations are ongoing (not temporary)
1.4KeyConsiderationsinaProject
a) How much will it
cost?
b) What is the
time
required?c) What
technical performance
capability will it provide?d) To what extent will the project results
fit into the design
andexecution of organizational strategies?
1.5ClassificationofProjects,Sub-Projects
A detailed study of different types of projects with reference to sequence of stages or processes used in each case would provide us an idea to use projectmanagement in a most effective manner. The success of a project-basedorganization lies in managing a portfolio of projects. In this regard the study of criteria for selection of projects is needed.
1.5.1Typesof Projects
One of the methods to classify projects is:1. Open project or ‘Walking in the fog’2. Semi-open project or 'Making movies'3. Closed project or 'Painting by numbers'4. Semi-closed project or 'Going on a quest'
1. OpenProject or "walkinginthefog"
Strict control over costs and on time-scale is important. Projects may not
achieve anything as in semi-closed project. Neither is it known what to do nor
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