Assignment No.

5
Department: LBS
Course: FPM
Topic: Project Management
2.16 List one advantage and one disadvantage of projecting out a project as a
turnkey project.

Answer:
What is turnkey project?

A turnkey, a turnkey project, or a turnkey operation (also spelled turn-key) is a type of project
that is constructed so that it can be sold to any buyer as a completed product. 'Turnkey' is treated
as merely signifying the design responsibility as the projectors.

Turnkey project is an agreement that projector complete the project and hands it to the client in
fully operational state. Turnkey project is the project that the client projecting with one party
only in the whole project until the project is complete. Normally the developer or projector is
separate with the client, and they will only ‘turn the key’ to the client once the project is
completed and it is fully operational. This type of agreement is suitable for construction project
in the range of single building to large-scale development.

Advantage of Turnkey Project:

 Turnkey projects make sense in a country where the political and economic environment
is such that a longer term investment might expose the firm to unacceptable political and/or
economic risk.

Disadvantages of Turnkey of Project:

 If the firm’s process technology is a source of competitive advantage, then selling this
technology through a turnkey project is also selling competitive advantage to potential and/ or
actual competitors.

2.17. When a large reorganization involves involuntary dismissals, some

companies hire a temporary project manager from outside the company.
Explain why this is preferable to bringing in a project manager from within
the company.

Answers: External firms may provide the staff for a project. Staff agencies very often have
people capable of various specialized tasks on their books, including project managers, designers
and financial experts. Computer experts are also very frequently hired through employment
agencies. Some projects are completely contracted out to external service companies. This is
frequently the case with computer projects. Contracting out those tasks that are not part of the
core business of a company is known as ‘outsourcing’. This involves the independent execution
of certain activities by an external company, with fixed agreements about the required results,
very often for a fixed price and to be ready on a fixed date.
It is preferable to bringing in a project manager from within the company. As he knows what to
do when to do he knows all the team very well and knows better than the project manager who is
coming from another company.