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a large or major undertaking, especially one involvingconsiderable money, personnel, and equipment. 3. a specific task of investigation, especially in scholarship.
Characteristics of a Project A project has several characteristics. The main characteristics of a project include the followings features: (i) Mission or set of objectives: A project has a mission or a set of objectives to be achieved within a distinct time, cost and technical performance goals. once the mission is achieved, the project is treated as complete. (ii) Ownership: Every project has an owner. Who, in the private sector, can be an individual or a company; In the public sector, a government or government undertaking; and in a joint sector organization, the ownership of project can be represented by a partnership of public and private sector. (iii) Terminal stage : A project can not continue forever. It has to terminate at some time or the other. The set of objective indicate the terminal stage of the project. (iv) Team-work : Every project is planned, managed and controlled by an assigned team- the project team- to achieve the objectives as per specifications. The members of the project team may come from different organizational units, different disciplines and even from different geographical regions. (v) Uniqueness : A Project is unique and no two project are similar, ever, though the inputs, processing and results of two projects are identical. The nature of an organization, available infrastructure, location of the project and the people associated with a project make a project unique. (vi) Risk and uncertainty: Every project has risk and uncertainty associated with it and there can not be a project without any risk and uncertainty. The risk is perceived to be variability of actual returns from the estimated returns and uncertainty about future leads to variations in returns. The degree of risk and uncertainty also vary during the life-cycle of a project. An ill- defined project has a high degree of risk and uncertainty in comparison of a well-defined project.
work culture etc. machines. machinery.(vii) Sub-contracting : A substantial portion of each and every project is performed by sub-contracting. based on Souder. The activities starting from the conception stage. The gender the complexity of a project. The organization of a project changes as it passes through this cycle. comes to the zero on completion and delivery of the project. financial. social. the following criteria. project selection model. equipments. (ix) Life-cycle : Every project has a start and a terminal point-a characteristic of a lifecycle represented by growth. direct comparison of different . ethics. Without a common measurement system. project appraisal Definition Systematic and comprehensive review of the economic. The requirements and constraints within which a project is executed are generally stipulated by the customer or are planned considering the beneficiary customers. materials. Realism: The model should ref lect the reality of the manager’s decision situation. technology. Although theses activities which remain inter-related with each other. maturity and decay. the greater will be the extent of work performed by sub-contractors. people. environmental. including the multiple objectives of both the firm and its managers. the inter-relationship and management of change between these variables is required for successful completion of a project.1 are most important: project Selection 1. mounting up to the peak during maturity or implementation. technical and other such aspects of a project to determine if it will meet its objectives. (viii) Customer-specific: A project is always customer-specific. (xi) Unity in diversity : Every project has the characteristic feature of unity in diversity. Yet these are essentially inter-related during different stages of a project. (x) Management of change : Change is a natural phenomenon with every project throughout its life-cycle. equipments. Some changes in these variables my not have any major impact but some others may change the very nature of a project. people. Therefore. Although these activities differ in terms of materials. A project is a complex set of thousands of different activities which remain inter-related with each other. Projects vary during its life span in terms of technology. work ethics and organizational culture.
The model’s variables should also relate one-to-one with those real-world parameters the managers believe significant to the project. interest rate changes). The model should also include factors that ref lect project risks. tax laws change. and be easy to use and understand. and then select the best overall project or set of projects. including the costs of data management and of running the model. or to be self-adjusting in response to changes in the firm’s environment. and. and to manipulate data in the model through use of a widely available. Lotus 1-2-3®. An optimizing model will make the comparisons that management deems important. Other things being equal. Flexibility: The model should give valid results within the range of conditions that the firm might experience. Cost: Data-gathering and modeling costs should be low relative to the cost of the project and must surely be less than the potential benefits of the project. and time as well as the market risks of customer rejection and other implementation risks. It should have the ability to be easily modified. simulate various situations both internal and external to the project (e. and like programs. new technological advancements alter risk levels. All costs should be considered. It should not require special interpretation. and optimize the decision.. 3. consider major risks and constraints on the projects. Ease of use: The model should be reasonably convenient.g. including the technical risks of performance. Finally. we comment on some special aspects of the information base required for project selection. or unavailable equipment. not take a long time to execute. Project A may strengthen a firm’s market share by extending its facilities. and so forth. 2. data that are difficult to acquire. The same ease and convenience should apply to transferring the information to any standard decision support system.projects is impossible. Quattro Pro®. Then we turn our attention to the selection of a set of projects to help the organization achieve its goals and illustrate this with a technique called the . Capability: The model should be sophisticated enough to deal with multiple time periods. excessive personnel. and Project B might improve its competitive position by strengthening its technical staff. for example. Easy computerization: It must be easy and convenient to gather and store the information in a computer database. personnel. we first examine fundamental types of project selection models and the characteristics that make any model more or less acceptable. it should be easy to simulate the expected outcomes associated with investments in different project portfolios. which is better? The model should take into account the realities of the firm’s limitations on facilities. Finally. including some suggestions of factors to consider when making a decision about which. strikes. 4. standard computer package such as Excel®. if any. 5. above all. of the project selection models to use. In what follows. the organization’s goals change. For example. strengths. 62 The Project Management Discipline Next we consider the limitations. and weaknesses of project selection models. We would add a sixth criterion: 6. cost. capital.
.Project Portfolio Process.
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