Unit-1

Introduction to Projects

Introduction:

Normally, when we think of projects, we think of large initiatives such as developing a new
product or service, developing a new information system, constructing a building, or preparing a
major sports event. But, projects can be of any size and duration. Projects may be personal like
wedding plan, planning of house extension etc. Or, projects may be industrial like providing a
gas supply to an industrial estate, designing a new car etc., or they can be business like
developing a computer system, introducing a new product etc.

A project is a set of interrelated activities that has a definite starting and ending point and results
in the accomplishment of a unique, often major outcome. Projects exist at all levels of every
organization and must be managed proactively, regardless of their size. Therefore, the first
chapter of this module is designed to provide you a reliable foundation on the conceptual
framework of projects and Development.

1.1 Project concept and Definition:

Project is a scientifically evolved work plan devised to achieve a specific objective within a
specific period of time. It can be considered as proposal involving capital investment for the purpose of
developing facilities to provide goods and services.

A project is a blueprint for action oriented activities of an organization. A project reflected the plan for
action in its totality. Like a movie film it is projection oriented process. The project has beginning middle
and an end.

For example; cement project, Power project, refinery projects

Health project, Educational projects

Social project, construction projects etc.

DEEINITION OF PROJECT

A Project is a one-shot, time limited, goal directed, major undertaking, requiring the commitment
of varied skills and resources. It has also been described a s a combination of human and non-humanprint
resources pooled together in a temporary organization to achieve a specific purpose. The purpose and the
set of activities which can achieve that distinguish one project from another.

Project Management Institute, U.S,A

‘’We mean by a project any scheme, or part of scheme, for investing resources which can
reasonably be analyzed and evaluated as an independent unit. The definition is thus arbitrary. Almost any

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project could be broken down into parts for separate consideration; each of these parts would then by
definition a project”.

- I.M.D. Little and J.A. Mirrless.

“A specific activity with a specific starting point and a specific ending point intended to
accomplish a specific objective. It is something you draw a boundary around at least a conceptual
boundary and say this is the Project”.

-J. Price Gettinger.

“Compilation of data which will enable an appraisal to be made of the economic advantages and
disadvantages attendant upon the allocation of country’s resources to the production of specific goods and
services.”

1.2. Classification of projects

Projects are classified based on several criteria, including: ownership, source of finance, and
forces behind the projects.
1. Based on ownership:
a. Private sector- mostly projects undertaken by business enterprises.
b. Public sector- projects undertaken by national and local government bodies.
c. NGOs- development projects are most often undertaken by non-government and non-
for profit organizations.
2. Based on the Sources of Finance:
a. Government treasury- projects may be entirely financed by government budget as
per its priority. For instance, construction of regional airport.
b. Government treasury and external sources- most projects are financed by the joint
partnership of the government and donor groups. For example, a road project may be
financed 50% by the government and 50% by a foreign donor.
c. External sources of Finance- projects may be financed totally by parties other than
the government but established for the wellbeing of the citizens and the ownership may be
for the government or the public.
3. Based on the forces Behind:
a. Demand driven/need driven- based on identified unsatisfied demand project can be
created or on unsatisfied basic needs like food, water and shelter.
b. Donor driven- the force behind the financing organization. Donors will have their
own say and influence the types of projects to be established.
c. Political Driven- Projects may be established in response to some political situation
such as for example because of national elections, projects by religious organizations.
4. Based on their nature:
a. Civil engineering, construction, petrochemical, mining, quarrying, projects far away
from the contractor’s home office, and involve special risk as well as problems of
organizational communication.
b. Manufacturing projects- conducted in a factory or other home based environment
and enable exercising on the spot management.

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 c. Research projects- established for pure research consuming large sum of money and
lasting over years resulting in dramatic profitable discovery or proving waste of
money.
d. Management projects- projects that require the employment of an external project
manager or managing contractor for issues such as relocating headquarters,
developing and introducing a new computer system, preparing for a trade exhibition,
producing a feasibility or other study report, restructuring the organization etc.

1.3. CHARACTERISTICS/FEATURES OF A PROJECT -United Nations.

 A project can be identified by its features. The special features of a project that would
differentiate one from any other ongoing activity are given below:
 A project is a fixed set of objectives. Once the objectives have been achieved, the project ceases
to exist.
 It has a specific life span.
 Project has for a teamwork,
 Project has a life cycle reflected by growth, maturity and decline similar.
 Change is an inherent feature in any project out its life.
 Project is based on successive principle and hence it is difficult to learn fully the end results at
any stage.
 A project works for a specific set of goals with the complex set of diversified activities.
 High level of sub-contraction of work can be done in a project.
 Every project has risk and uncertainty associated with it.
 Project needs feasibility in any appraisal studies. So that the sponsors sweet dream becomes
realizable.
1.4. National Development Planning and Project Analysis
Projects play an important role in a socio-economic development of a nation. Projects creates
channel for public and private investments, re-channel unused or underemployed resources into
productive uses, and offer expanded opportunities for entrepreneurship. They have an
increasingly important role in the public administration of developing countries as well.

Projects have also been the primary instruments for grants, credits, loans, and technical aid to
developing countries by international assistance agencies. In a broader context, projects have
become vehicles for socio-economic change in many developing countries as parts of larger
social programs and sector plans, and are creating the capacity for improving serious of problems
that obstruct growth and delay progress.

In general, the important benefits that can be derived from a given good project are usually

categorized into two: micro and macro-level benefits

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The Micro level benefits PROJECTS include:

 increase in wealth of suppliers of resources including owners or shareholders;

 provision of the framework of the future activities of enterprises;

 shaping of the future pattern of services of the firm and industry as a whole;

 generating of surplus for the company’s long-term growth and result in increased
welfare of employees;

 Initiating of the process of development like production, employment, income

generation and so on.

At the Macro level benefits PROJECTS include:

 Become the catalytic (causing agents) of economic development as they create new
opportunities for new entrepreneurs.

 Accelerate the process of socio-economic development.

 Initiate development of basic social infrastructure.

 Bring the necessary changes in society in course of time.

1.5. Role of Project Management

For every project to succeed, an efficient project management is necessary. Project management
includes defining and planning the necessary work, scheduling the activities to complete the
work, monitoring and controlling project activities and finally conducting activities to end the
project. It is important to remember that projects are carried out by people,and the human aspects
of project management are very critical for the project success. A project manager and a project
team are involved in the project. At this place, let us look into the role of project manager and the
project team in management of projects.

The project manager is the person assigned by the organization to achieve the project objectives.
The role of the project manager is one of great responsibility. It is the project manager's job to
direct, supervise and control the project throughout its lifetime. However, project managers
should not carryout project work as managing the project is enough.

Required skills of a Project Manager

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Project managers bear ultimate responsibility for making things happen. Traditionally, they have
carried out this role as mere implementers. To do their jobs, they needed to have basic
administrative and technical competencies. Today, they play a far broader role. In addition to the
traditional skills, they need to have business skills, customer relations skills, and political skills.
Thus, a project manager must have a range of skills that include:

 Managing the project team

 Playing a leadership role
 Effective Communication
 Influencing
 Negotiation
 Conflict Management
 Planning
 Contract management
 Estimating
 Problem solving
 Creative thinking
 Time Management

Responsibilities of a Project Manager

The main responsibility of a project manager is to plan thoroughly all aspects of the project,
soliciting the active involvement of all functional areas involved, in order to obtain and maintain a
realistic plan that satisfies their commitment for performance. Further, he has to lead the people
and organizations assigned to the project at any given point of time. A strong positive leadership
must be exercised by a project manager in order to keep the many disparate elements moving in
the same direction in a co-operative. Further, the other main responsibilities of a project manager
include the following:

 The project manager must define the project, reduce it to a set of manageable tasks,
obtain appropriate resources and build a team to perform the work.
 The project manager must set the final goal for the project and motivate his/her team to
complete the project on time.
 The project manager must inform all stakeholders of progress on a regular basis.

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  The project manager must assess and monitor risks to the project and mitigate them.
 No project ever goes exactly as planned. Therefore, the project manager must learn how to
adapt to and manage changes.
 To monitor performance, costs and efficiency of all elements of the project and the project
as a whole, the project manager has to exercise his personal judgment and leadership in
determining the causes of problems and facilitating solutions.

1.6. Project Management Environment:

Today's project manager also needs to be familiar to the cultural, organizational and social
environments surrounding the project. Understanding this environment includes identifying the
project stakeholders and their ability to affect its successful outcome. This leads to the possibility
of influencing this environment in a positive way, for the better reception of the change which
the project is designed to introduce. The project environment may be thought of in terms of the
project time environment, the internal project culture, the original corporate culture, and the
external social surroundings.

The Internal Project Culture: project is often a reflection of the leadership style and
organizational structure which is adopted for the project.

The Corporate Culture: The work places are typically bounded by classic organizational
hierarchies, established policies, procedures and lines of authority, by centralized control and by
repetitive, assembly-line-like jobs.

Project External Environment

It includes the established and latest state-of-the-art technology in which the project is based, its
customers and competitors, its geographical, climatic, social, economic and political settings, in
fact, virtually everything that can impact its success. These factors can affect the planning,
organizing, staffing and directing which constitute the project manager's main responsibilities.

1.7. Project organization Structure:

A project organization is a structure that facilitates the coordination and implementation of

project activities. The structure defines the relationships among members of the project
management and the relationships with the external environment. The structure defines the
authority by means of a graphical illustration called an organization chart. A properly designed
project organization chart is essential to project success. An organization chart shows where each
person is placed in the project structure.The project organization chart establishes the formal
relationships among project manager, the project team members, the development organization,

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the project, beneficiaries and other project stakeholders. The main purpose is to create an
environment that fosters interactions among the team members for reducing disruptions, overlaps
and conflict.

The project manager must create a project structure that will meet the various project needs at
different phases of the project. The structure cannot be designed too rigid or too lose, since the
project organization's purpose is to facilitate the interaction of people to achieve the project
ultimate goals within the specified constraints of scope, schedule, budget and quality. The
objective in designing a project structure is to provide a formal environment that the project
manager can use to influence team members to do their best in completing their assignment and
duties. The structure needs to be designed to help, develop collaboration among individual team
members; all in a cost effective way with a minimum of duplication of effort and overlaps.

1.8. Management By Project ( M B P ):

In response to a rapidly changing business and social environment and to achieve performance
goals, major organizations, worldwide have adopted an approach of managing their
organizations by projects. Within such organizations, the focus of roles is on successful
management and completion of projects rather than on static positions in a corporate hierarchy.
This leads to a more flexible structure capable of responding quickly to changes in market
demands and the business environment. It also focuses the attention of the whole organization on
cooperative working to achieve results.

MBP means giving the best available people the best available resources, applying teamwork,
leadership and project management principles, and producing the best outcome for the client.
MBP breaks down artificial barriers between functions and business units and gives everyone the
chance to focus on results.

Key characteristics of the approach are:

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• Work organized into projects

• Delivered by project teams

• Focus on results

• Flexibility to deal with change

• Delivery of products by cross functional, cross disciplinary project teams

In adopting a Management by Projects (MBP) approach, the Department recognizes that it is

essential that the people within the organization understand the approach, understand their roles
and have the skills to work effectively within this environment.