Project Management Unit 1

Unit 1 Basics of Project Management

Structure:
1.1 Introduction
Objectives
1.2 Definition
1.3 Need for Project Management
1.4 Project Management Knowledge Areas and Processes
1.5 The Project Life Cycle
1.6 The Project Manager (PM)
1.7 Phases of Project Management Life Cycle
1.8 Project Management Processes
Project processes
Process groups
Process groups and knowledge area matrix
Process interactions
Customisation
1.9 Impact of Delays in Project Completions
1.10 Essentials of Project Management Philosophy
1.11 Project Management Principles
1.12 Summary
1.13 Glossary
1.14 Terminal Questions
1.15 Answers
1.16 Case Study

1.1 Introduction
The economy of India has a healthy growth for the last few years. Indian
economy recorded the utmost growth rate in mid-2000. In the existing
situation, Indian economy has a long way way to go in terms of development
to achieve its growth objectives. The credit of boosting economic health
despite global downturn in the last decade goes to various projects
undertaken by the government both directly and indirectly. Some of the
major projects that saw the light of the day were golden quadrilateral project
connecting the major cities through superb highways to smoothen the
distribution channel, construction of roads, bridges, dams, and large real
estate projects to meet the growing demands of urban and rural population.

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Other than this, projects of importance such as oil and gas projects and
energy projects. boosted the agricultural output and saved the economy
from succumbing to the global recession crisis. On the top of it, the Indian IT
sector also contributed greatly by supporting and supplementing heavy
industry and infrastructure projects to absorb the employment potential of
the country.
Project management is a valuable means to administer and develop any
kind of infrastructure which is required to meet the growing requirements of
Indian economy across various sectors like Power, Roads, Ports, IT and so
on. In current scenario, it a method vital to the success of both public and
private sector projects in India.
The popularity of term ‘Project Management’ among businesses began in
the early 1960s. Businesses understood that there were advantages to be
achieved from organising work into distinct, definable units and from co-
ordinating various kinds of skills among departments and professions.
Basically, a task with a known end point is called project. For example,
construction of a new home is a project, the end point being when the home
is constructed and ready to live-in. Likewise, developing a new computer
software, launching a new product is a project. These projects include huge
technology development as well as huge financial resources. So, they need
to be administered by managers in an effective way to increase returns.
A cautiously planned and organised effort to complete a successful project
is called project management. In the absence of structured approach, it is
difficult to complete the projects effectively. Furthermore, project
management is aimed at reaching the end point predictably, within the
specified time limits and pre-decided cost.
Though the term project management is now universally familiar, still many
people do not understand what exactly project management involves. In
proper terms, it includes developing a project plan, identifying the tasks and
how the goals will be achieved, quantifying the resources needed, and
determining the budgets and timelines for completion. It involves the
activities that meet the specific objectives and can be used to introduce or
improve new or existing products and services
In this book, a practical approach has been taken to explain the
development, evaluation, initiation, implementation and administration of

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projects. This will help you to understand and examine the concepts of
project management and guide you to handle any type of projects.
In this unit, we would first attempt to explain the term project management
and its importance. To make the learning easier, we will take the help of
globally recognised best practices. Various sections and sub-sections of this
unit cover key aspects, concepts, and scope of project management and the
role of a project manager. This will help you to understand the qualities and
skills that are required in a project manager.

Objectives:
After studying this unit, you should be able to:
 recall the need for project management
 identify the project management knowledge areas and processes
 discuss the role of the project manager (PM)
 describe the phases of project management life cycle
 identify the impact of delays in project completions
 describe the essentials of project management philosophy
 use the project management principles

1.2 Definition
We will start with the definition of some terminologies and concepts that are
necessary to understand the concept of project management.
Project: A project is a set of activities which are networked in a particular
order aimed at achieving the defined goals of the work to be undertaken.
Only when the goal is achieved, all the activities of the project are
completed.
Management: Management is the technique of understanding the problems
and needs and controlling the use of resources, such as money, time,
manpower, and materials.
Project management: Project management is the art of organising,
coordinating, and controlling the various tasks and resources in order to
complete a project successfully.
Project cycle: A collection of generally sequential project phases whose
description and order of occurrence are determined by the control needs of
the organisation or organisations involved in the project.

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Process: A process is a part of the project which consists of simple and

routine instructions to achieve a desired result of any activity of the project.
Resource: Resource refers to the manpower, machinery, money, and
materials required in the project.
Project budget: The amount and distribution of money allocated to a
project.
Project cost: Project cost is the budgeted expenditure of the project.
Project management principles: The tools, processes, skills, and
behaviours that are used to guide the project performance.
Project manager (PM): The individual responsible for managing a project.
Project objectives: Project scope expressed in terms of outputs, required
resources, and timing.
Project scope: Project scope refers to the various parameters that affect
the project in its planning, formulation, and execution.
Examples of projects
The projects most frequently undertaken are the following:
 Integrating all the functions of an organisation using Enterprise
Resource Planning (ERP) software.
 Setting up an intranet or an extranet
 Configuring a Customer Relationship Management (CRM) system
 Setting up a Knowledge Management (KM) process
 Developing a technology
 Launching a new product
 Setting up a new location for the factory

Self Assessment Questions

1. Project cycle is a collection of generally sequential project phases
whose description and order of occurrence are determined by the
control needs of the organisation or organisations involved in the
project. (True/False)
2. Project management is the job of organising, coordinating, and
controlling the various tasks and resources in order to successfully
complete a project. (True/False)

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1.3 Need for Project Management

The primary reason for commencing a project is to fulfil some specific goals.
Project Management assists in realising those goals. To maximize returns in
the current cut throat competitive environment, it is vital to manage the
projects effectively. The present corporate environment requires proper and
effective project management to achieve growth in business.
Project management is vital for the success of a project. Without proper
project management, there are chances that the teams may pursue the
wrong goals, activities may prolong, actual expenditure may exceed budget,
and resources may be under allocated or over allocated. Project
management helps an organisation to execute a project successfully by:
 Preventing failures in projects. A project needs large funds and society
is affected directly or indirectly by a loss in any project.
 Helping an organisation to define an project scope control the project
creep.
 Helping the managers to understand the project and its purpose, as lack
of understanding of the project among managers leads to failure.
 Assessing and mitigating the risks from change of technology used
during the course of project implementation.
 Helping to identify and communicate the problem areas.
Project management provides a shared vision to the project team to guide
their day-to-day work much more actively. The team members are expected
to focus exclusively on this shared vision. Their sharp focus leads them to
greater productivity.
The project manager is responsible for optimising the productivity of his
team. In simple terms, it is his/her responsibility to do everything possible to
minimise the obstacles. The project manager has to match and combine all
activities required to attain project’s goals.
Specifically, the project form of organisation permits the manager to be
reactive to:
 The client and the environment,
 Identification of problems at near the beginning stage and correct them,
 Taking well-timed decisions concerning to tradeoffs among differing
project goals, and

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 Guarantees that managers of separate tasks of the project do not

optimize the performance of their individual tasks at the expense of the
total project.
Practical experiences of several organizations prove that project
management helps them to experience better control and better customer
relations, and increase their project's return on investment. A significant
proportion of users also reported shorter development times, lower costs,
higher quality and reliability, and higher profit margins. Other reported
benefits include a sharper orientation toward results, better
interdepartmental coordination, and higher worker morale.

Self Assessment Questions

3. To maximize returns in the current cut throat competitive environment,
it is vital to manage the ___________________ effectively.
4. _______________ helps an organisation to prevent failures in projects.

1.4 Project Management Knowledge Areas and Processes

The Project Management Body of Knowledge (PMBOK) describes ten
knowledge areas of the project management discipline. The in-depth
understanding, application and attaining proficiency in any one of these
knowledge areas will be extremely helpful to you.
The ten knowledge areas are:
 integration
 scope
 time
 cost
 quality
 risk
 human resources
 communications, and
 procurement
 stakeholders.
All the knowledge areas are interlinked and each must be effectively
considered during project planning. Figure 1.1 lists the ten knowledge areas.

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Integration
Management

Stakeholder Time
Management Management

Risk Quality
Management Management

Project
Management

Communication Scope
Management Management

Cost HR
Management Management

Procurement
Management

Fig. 1.1: Project Management Knowledge Areas

Let us now discuss about each of these Ten project management

knowledge areas one by one.
Project integration management ensures that various elements of a
project are properly integrated and coordinated for smooth flow of
information and resources.
Project scope management includes developing the scope statement that
defines the boundaries of the project and guarantees that a project contains
all the necessary elements and specifies scope change control procedures
to complete the project effectively.
Project time management stresses on timely completion of project.

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Project cost management ensures that the completion of project within the
permitted budget.
Project quality management focuses on the processes required to make
certain that the project will suit the needs for which it was undertaken.
Project human resource management ensures that the most appropriate
manpower with necessary skills is deployed for an effective execution of the
desired project.
Project communications management consist of the processes
necessary for timely and suitable generation, collection, dissemination,
storage, and final disposition of project information.
Project risk management is the orderly process of identifying, analysing,
and reacting to project risks. It consists of increasing the chances and
outcomes of positive events and minimising the chances and outcomes of
unfavourable events to project objectives.
Project procurement management assists the project managers to
acquire the right goods and services to meet the demands of the project as
described in the scope of project.
Project stakeholder management contains processes to identify
stakeholders, plan stakeholder management, manage conflicting interests
and foster engagement.
Self Assessment Questions
5. Project Human Resource Management ensures that the most
appropriate manpower with necessary skills is deployed for an effective
execution of the desired project. (True/False)
6. Project Integration Management ensures that various elements of a
project are properly integrated and coordinated for smooth flow of
information and resources. (True/False)

1.5 The Project Life Cycle

A rational order of activities that are applied to attain the project’s goals or
objectives is known as the project life cycle. Most projects experience
similar stages on the path from origin to completion. Figure 1.2 depicts the
stages of a project’s life cycle.

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Finish (Slow)

% Project Completion
Quick Momentum

Start Up (Slow)

100 Time Duration

Fig. 1.2: Project Life Cycle

Let us now discuss about each of these stages.

Start-up phase: The project is started and a manager is chosen, the project
team and primary resources are assembled, and the work program is
organised.
Quick momentum: Progressively, the work gains momentum. This
continues until the end is near.
Finish (Slow): Completing the final tasks take some extra amount of time,
partly since there are often a number of parts that must come together and
partly because team members “drag their feet” for different reasons and
avoid the final steps.
The pattern of slow progress towards the project goal is common. If we
consider the construction of a house or building, this phenomenon can be
observed. For the most part, it is a consequence of the changing levels of
resources utilised throughout the successive stages of the life cycle. Least
effort is necessary at the beginning, when the project is conceptualised and
subjected to project selection processes. If this obstacle is passed, activity
increases as planning is completed and the real work of the project gets in
progress. This rises to a peak and afterwards begins to taper off as the
project nears fulfillment, at last ceasing when assessment is complete and
the project is finished. However, the rise and fall of effort usually occurs,
there is no definite pattern that is suitable to all projects, nor any reason for
the slowdown at the concluding stage of the project to look like the build-up
at its beginning.

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The ubiquitous goals of meeting performance, time, and cost are the major
considerations throughout the project's life cycle. It was generally thought
that performance took precedence early in the project's life cycle. This is the
time when planners focus on finding the specific methods required for
meeting the project's performance goals
Early in the life cycle, performance took priority over schedule and cost.
During the periods of high activity cost was thought to be of prime
importance, and then schedule became paramount during the final stages,
when the client demanded delivery.

Self Assessment Questions

7. A __________________ of activities that are used to achieve the
project’s goals or objectives is known as the project life cycle.
8. In the _____________ phase of the project life cycle the work gains
momentum.

1.6 The Project Manager (PM)

A project manager is a qualified person in the field of project management.
She/He is the person who manages the four basic elements of a project:
resources, time, money, and most importantly, scope. All these elements
are interrelated and each must be managed effectively. Other
responsibilities of the project manager include:
 Budgeting and cost control
 Scheduling tasks
 Allocating resources
 Tracking project expenditures
 Ensuring technical quality
 Managing relations with the customer and company
The life cycle of a project manager overlaps with the development life cycle
because duties of a project manager start before the development and
continue even after the delivery of the product.

Activity
Find out the roles of consultant in project management.

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Self Assessment Questions

9. The _____________ manages the four basic elements of a project:
resources, time, money, and scope.
10. Life cycle of a project manager ___________ with the development life
cycle.

1.7 Phases of Project Management Life Cycle

Project management is a rationally planned and organised effort to attain a
specific goal. It comprises of organising, coordinating and managing
different tasks and resources for successful completion of project. A project
lasts for a definite period of time and then finishes. Projects are usually
made up of different diverse elements or mini-tasks that are completed
separately and finally combined together to make the completed project.
Figure 1.3 depicts the phases of project life cycle which is followed by the
project management.

Project Project
Initiation Planning

Phases of
Project life
Project cycle Project
Closure Development

Project
Implementation

Fig. 1.3: Phases of Project Life Cycle

Let us now discuss each phase in detail.

1. Project initiation: Project initiation is the first step in the project
development cycle, and in simple terms: starting up the project. A
project is initiated by defining its reason, business goals, and scope. The
cause for initiation and the suggested solution to be implemented must
be defined. A project team is put together to define early milestones, and
preliminary budget proposal. The information in project initiation assists
in performing an end of phase study for getting a “GO No GO” decision.

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2. Project planning: Once the project is defined and project team is

assembled, the next phase is the in-depth Project Planning phase. This
includes developing the “PMP” (Project Management Plan), for guiding
the team throughout the project development stage. In this phase the
required skills of development team, non-labour resources, risks plan,
detailed action items and milestones are explained.
3. Project development: On the basis of inputs received in the shape of
project feasibility study, preliminary project evaluation, project proposal
and customer interviews, the following outputs are produced:
 System design specification
 Programme functional specification
 Programme design specification
 Project plan
4. Project implementation: In this phase, the requirements are built and
programmed. The product is presented for client acceptance and full
implementation after the quality assurance analysis. If the client has
accepted the final product, the project is finished and closed down.
5. Project closure: It includes giving the final output to the customer,
handing the project documentation, manuals, source code, and network
layouts. At last a Post Implementation Review is to be carried out to
identify the extent of project success and document review outcomes.
Self Assessment Questions
11. Project management is a irrationally planned and ill-organised effort to
achieve a specific goal. (True/False)
12. Project closure involves developing the “PMP” (Project Management
Plan), for guiding the team throughout the project development stage
(True/False)

1.8 Project Management Processes

Project management consists of the following interacting processes
organised in groups. Figure 1.4 depicts the project management processes.

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Project
Management
Processes

Project Process Process

processes groups Customisation
interactions

Fig. 1.4: Project Management Processes

1.8.1 Project processes

Project processes are a series of activities undertaken to accomplish the
target. Project process is classified into two main categories. These
categories are:
 Project management process
 Product-oriented process
Project management process: Project management process is defined by
the organisation. It describes and organises the work of the project.
Product-oriented process: Product-oriented process is defined by the life
cycle. It specifies and creates products and related works.

1.8.2 Process groups

Project processes are categorised under five process groups. Figure 1.5
depicts the connection between process groups in a phase.

Initiating Planning

Executing Controlling Closing

Fig. 1.5: Connection between Process Groups

Let us now look at the process given in figure 1.5 one by one.
 Initiating processes start the project and ascertain commitment.
 Planning processes are meant for devising and maintaining a workable
scheme to accomplish the business need.
 Executing processes are used for coordinating people to carry out the
plan.

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 Controlling processes monitor and measure the progress to take

remedial action.
 Closing processes are meant for formalising acceptance and bringing
project to an orderly end.

1.8.3 Process groups and knowledge area matrix

Project management is composed of 47 processes that are mapped to one
of ten project management knowledge areas. Each of these processes also
falls into one of the five process groups. This gives us a matrix structure
wherein every process can be related to one knowledge area and one
process group. Table 1.1 depicts the process groups and knowledge areas
matrix.
Table 1.1: Process Groups and Knowledge Areas Matrix

1.8.4 Process interactions

The individual processes overlap and interact throughout a project or its
various phases such as initiating processes, planning processes, executing
processes and controlling. It includes giving the final output to the customer,

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handing the project documentation, manuals, source code, and network

layouts. At last a post implementation review is to be carried out to identify
the extent of project success and note down review outcomes.
The common features of process interactions are:
 Inputs: It refers to the client documents converted to action plans to be
acted upon.
 Tools and techniques: It refers to the mechanisms applied on to the
inputs to create the desired outputs.
 Outputs: It refers to the documents that are the results of the process.
1.8.5 Customisation
Sometimes, project management processes need to be customised based
on the requirement of the product. Some examples of customisation are
given below:
 Large projects may need details: A detailed project management plan
might be necessary to indicate every detail in the initial stages.
 Smaller projects may need relatively less details: A detailed plan
may not be required in the initial stages.
 Process details might change for other reasons: Resource
identification might be required for scope definition.
Example: In a project of a FMCG industry product development the
marketing feasibility study is of longer duration, while in case of construction
of a dam project the market feasibility study does not involve a relevant
scope.

Self Assessment Questions

13. Project management consists of interacting processes namely
___________, ____________, process interactions, and ___________
which are organised in groups.
14. Project process is classified into _____________ and _____________
process.
15. ____________ and ___________ refer to the mechanism applied on
the inputs to create the desired outputs.

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1.9 Impact of Delays in Project Completions

The most important problem faced in the implementation phase of a project
is delay in execution. This is also referred to as slippage of projects, which
results in escalation of costs and also the loss of revenue. The result is that
the initial assumption in the feasibility report is thrown completely out of
gear. The delays may be caused by internal as well as external factors.
The internal factors, which cause delays, are:
 Inadequate planning based on wrong and inadequate information
 Inadequate financing
 Choice of wrong technology
 Lack of coordination among execution departments
 Absence of delegation of power
 Lack of reasonable norms of accountability
 Wrong selection of vendor
 Non-involvement of people
The external factors, which may cause delays, are:
 Input problems
 Transportation problems
 Frequent change in administration at the senior level, affecting the
continuity of policy
 Lack of public cooperation
Despite taking all the care, there are bound to be factors beyond the control
of a manager, which are likely to cause delays in project implementation.
Therefore, it is necessary to build a system, which can correct deviations
from the initial expectations and ensure that the schedule of the project is
not disturbed. To perform such tasks, there needs to be a scientific system
of flow of management information to the executives at the various levels in
the organisation. The system of monitoring and control is more effective
when, along with the time-frame, there is linkage between the physical work
to be performed in each activity and the financial expenditure to be incurred.

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The operational plan should include the following aspects:

 The breakdown of the project’s final objectives into various subsystems
and these subsystems into activities and sub-activities.
 The time schedule for starting and completion of each activity and sub
activity and their sequencing.
 Linking of physical work involved in each activity with financial
expenditure.
 The timetable indicating the requirements of financial resources during
the pre-implementation phase.
 Monitoring and control system.
Self Assessment Questions
16. The most important problem faced in the implementation phase of a
project is delay in execution. (True/False)
17. The system of monitoring and control is more effective when, along
with the time-frame, there is linkage between the physical work to be
performed in each activity and the financial expenditure to be incurred.
(True/False)

1.10 Essentials of Project Management Philosophy

Effective project management is the most important factor in achieving the
desired results of any project. Project management requires team
knowledge of the project cycle and the skilled implementation of proven
techniques and tools to manage the project through the cycle. Project
management provides the project managers and team members with the
principles they require to effectively meet the needs of the customer. It is
designed as a practical, hands-on learning experience to give participants
some skills and techniques that they can immediately implement in their
work environment. A project has the following characteristics:
 A programme of non-routine work bringing about a beneficial change
 Guided by at least one well-engaged sponsor who has both adequate
authorities and resources to charter the project effort
 A programme that has a definite start and an end date
 A multi-disciplinary team brought together for the project
 Scope of work is well defined
 Constrained by cost, time, and quality
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During the course of a project, a team negotiates for scope, cost, and
schedule objectives; changes to scope; cost or schedules; contract terms
and conditions; and resources.
Now, the question arises as to how does project management “add value” to
a project. The projects may be completed with one or more of the following:
 Stretched deadlines
 Over-stressed team
 Wasted resources
 Unmet customer functional requirements
 Overshot budget
As you all know that a good project management methodology provides a
framework for the processes. It provides guidelines for the execution of the
project that increases the chances of the project being successful, and
therefore provides value to the project.
The following are some of the steps of a good project management:
 Define the project scope
 Reduce it to a set of manageable tasks
 Obtain appropriate and necessary resources
 Build a team to perform the project work
 Plan the work and allocate the resources to the tasks
 Monitor and control the work
 Report progress to the senior management and/or the project sponsor
stakeholders
 Close down the project when completed
 Review it to ensure that the lessons are learnt and widely understood

Self Assessment Questions

18. Project management provides the project managers and team
members with the principles they require to effectively meet the needs
of the customer. (True/False)
19. Scope, cost, and schedule are some of the parameters used for project
negotiation. (True/False)

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1.11 Project Management Principles

Every project takes place in its own specific context. It brings together a
group of people as a project team and gives responsibilities and roles to
people. While every project is unique in its own way, there are certain basic
principles which define project management in clearer terms. All these
factors need to be identified and considered in order to complete a project
successfully. Figure 1.6 depicts the basic principles of project management.

Objectives

Constraints

Lifecycle

Fig. 1.6: Basic Principles of Project Management

Let us now discuss each of these principles in detail.

Objectives
The main point of any project is to achieve specified goals and objectives.
Once these objectives have been fulfilled, the project is said to be complete.
It is, therefore, essential that the goals and objectives should be clearly
defined, measurable, and achievable. In the absence of a focused
approach, chances of project failure will increase.
Once the objectives of a project have been established, they should be
clearly communicated and agreed with all the working on the project.

Constraints
A constraint is any factor which can limit or have an impact on a project.
Some typical constraints are funding, the scope of the project, available
resources, and time. In order to clearly define the boundaries, it is important
to understand what the constraints of any project are.

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Projects which do not consider their constraints are often regarded as

failures and tend to incur a significant cost to their business.
Activity
Give an example of a project in each of the following sectors specially
taking into account the public enterprises.
1. Manufacturing
2. Banking
3. Marketing

Lifecycle
Projects have a definite start and finish point within which their objectives
need to be fulfilled. This is known as the project life cycle.
Apart from the above principles, there are five dimensions that must be
managed on a project. They are scope, quality, cost, schedule, and staff.
These dimensions are not independent. For example, if you add staff, the
schedule may be shortened (although not necessarily), and the cost may
increase. A more common trade-off is to shorten the schedule or increase
scope, and sacrifice quality. The trade-offs among these five dimensions are
not simple or linear. For each project, we need to decide which dimensions
are critical and how to balance the others so we can achieve the key project
objectives. Figure 1.7 depicts the five dimensions of a project.

Fig. 1.7: The Five Dimensions of a Project

Source: http://www.processimpact.com/articles/principle.html

Each of these five dimensions can take one of three roles on any given
project: a driver, a constraint, or a degree of freedom. A driver is a key
objective of the project. A constraint is the limiting factor beyond the control
of a project team. Any project measurement that is neither a driver nor a
constraint becomes a degree of freedom. A constraint gives the project
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team virtually no flexibility. A driver has low flexibility and a degree of

freedom that provides wider latitude to balance that dimension against the
other four.

Self Assessment Questions

20. Five dimensions that must be managed on a project are ___________,
______________, cost, _____________, and staff.
21. ______________ of a project should be clearly defined, measurable,
and achievable.

1.12 Summary
Let us recapitulate the important concepts discussed in this unit:
 Organisations launch projects for different reasons, such as to meet a
business or legal requirement, or to take on an opportunity offered by
the market.
 The project management is the application of knowledge and skills to
project activities in order to meet the project objectives. It involves
performing a set of processes that constitute nine knowledge areas of
project management.
 Each process is part of a knowledge area and has a membership in one
of the five process groups: initiating, planning, executing,
monitoring/controlling, and closing. The process groups represent the
different stages of a project lifecycle.
 After going through this unit, you must have realised the importance of
project management in business applications and the scope of project
planning. Also, you are now familiar with the various phases involved in
project management.

1.13 Glossary
Project management: The art of organising, coordinating, and managing
the various tasks and resources in order to successfully complete a project.
Project cycle: A collection of generally sequential project phases whose
name and number are determined by the control needs of the organisation/s
involved in the project.

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Project budget: The amount and distribution of money allocated to a

project.
Project integration management: A knowledge area of project
management that includes the processes required to ensure that the various
elements of the project are properly coordinated.
Project procurement management: A knowledge area that includes the
processes required to acquire goods and services to attain the project
objective from outside the performing organisation.

1.14 Terminal Questions

1. Define project management, resource, process, and project cycle.
2. Why is project management important?
3. Explain the life cycle of a project.
4. Describe the various phases of project management life cycle.
5. What are the steps in good project management?
6. Explain the five dimensions that must be managed on a project.

1.15 Answers

Self Assessment Questions

1. True
2. True
3. Projects
4. Project management
5. True
6. True
7. Rational order
8. Quick Momentum
9. Project Manager
10. Overlaps
11. False
12. False
13. Project processes, process groups, customisation
14. Project management, product oriented
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15. Tools and techniques

16. True
17. True
18. True
19. True
20. Scope, quality, schedule
21. Objectives

Terminal Questions
1. The job of organising, coordinating, and managing the various tasks and
resources in order to successfully complete a project. Refer to
section 1.2.
2. The basic purpose for initiating a project is to accomplish specific goals.
Refer to section 1.3.
3. A logical sequence of activities that are used to achieve the project’s
goals or objectives is known as the project life cycle. Refer to
section 1.5.
4. It includes organising, coordinating, and managing the various tasks and
resources in order to successfully complete a project. Refer to
section 1.7.
5. It provides guidelines for the execution of the project that increases the
chances of the project being successful, and therefore provides value to
the project. Refer to section 1.10.
6. There are five dimensions namely; scope, quality, cost, schedule, and
staff. Refer to section 1.11.

1.16 Case Study

Enercon India Limited
Enercon India Limited (EIL) was founded in 1995 as a collaboration between
the Mehra family and Enercon GmbH of Germany. Enercon GmbH holds 56
per cent in EIL while the Mehra Family holds the rest. Enercon India is ISO
9001:2000 certified for manufacturing, installation and services. It is
supported with the latest design and development from its Principals,
Enercon GmbH.

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In 1991, Enercon GmbH introduced gearless Wind Generators (WEC). A

gearless WEC could deliver optimal power under any wind speed and did
not draw reactive power from the grid during low wind periods. Due to its
design, the wear and tear of mechanical parts was also reduced. The
success of Enercon’s gearless design helped EIL introduce this product
range in India. Enercon claimed that its gearless machines with
Synchronous Generators, Variable Slow speed, Continuous Pitch
Regulation were the most efficient machines available in the market when
compared to the Induction Generator, Constant speed, Stall Regulated,
High speed Gear Box type machines with Lattice Towers.
EIL offered a complete gamut of services, “from concept to operation”. This
included a number of services like exploration of potential high wind
location, micrositing the WECs within a location, interfacing with regulatory
authorities for permissions required, agreements with State Electricity
Boards for evacuation of power, preparing approach roads, construction of
the WEC, erection and commissioning of the WEC, installing transformers
and internal grid for evacuation of power to the electrical substation, and
operation and maintenance of the WECs. In addition, EIL offered a
guarantee of 95 per cent uptime, subject to grid availability from the
Electricity Board. EIL’s strategy was to offer its clients a low risk opportunity
to invest in wind power.
EIL had its corporate office in Mumbai and manufacturing facilities (two
plants) were located in the union territory of Daman. These manufactured
various components of 230 KW and 600 KW WECs. It had staff strength of
nearly 1000 people. This included 500 at the two plants, 200 in operations
and maintenance of WECs, 125 in installation, 50 in project offices and 70 in
the corporate office. Business Development Managers (BDMs) were located
at the different regions. The location of the BDM in a particular state
depended on the location of the regulatory authority in that state. For
example, for the state of Gujarat, the BDM was located at Vadodara.
The Vadodara office was running a project at Nawapur. Jayant Shah, the
Site Engineer, reported a snag with the 220-tonne crane. The crane stopped
functioning due to a Printed Circuit Board (PCB) blowout. Repairing such
faults usually meant replacement of the PCB. Jayant reported that he had
already informed the firm that supplied the crane. A similar PCB blowout
had happened two weeks earlier and it had taken two days to replace the
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PCB. There were only six or seven cranes of 220 tonne capacity available
for hire in the entire country and smaller cranes would not do the job.
Enercon had already hired four, which were working at its different sites.
Hence, there seemed to be little possibility of hiring or replacing the crane
and a replacement crane would result in a huge increase in the project cost.
The Nawapur project was already running late due to a villager’s agitation
against the project and heavy rainfall during the ongoing monsoon season
arefurther impeded progress. Any further delay would significantly affect the
probability of finishing the project within the due date of end-September. The
financial deal stipulated that the WECs would be erected and commissioned
before 30th September and EIL would have to compensate any financial loss
suffered by the client due to delays. Delay might affect the customer
confidence in EIL’s ability to handle wind energy projects “from concept to
commissioning and beyond”. More importantly, a delay carried the risk that
the project might not reach completion if the agitated villagers started a
bigger movement. The villagers believed that the construction of wind
turbine generators near their agricultural land would affect the growth of
their crops.
The project office at Daman was of the opinion that nothing much could be
done except expediting the repair of the crane by the vendor. The option of
moving another project team to Nawapur would result in stopping the work
on some other project. Such a decision could be taken by the VP Project
after considering the workloads of the other project teams, but seemed
improbable. Prithwiraj Rathore, the Team Leader of the Nawapur project,
knew that the remoteness of the Nawapur project site would imply that any
supply of spare parts would take time. He was now on his way to the project
site wondering what he should do.
1. What type of problem is Mr. Rathore facing?
Hint: Mr. Rathore’s is facing a Project Management problem.
2. Is Project Management just a variant on general management?
Hint: The answer is both ‘yes’ and ‘no’. There are a lot of similarities, but
there are enough differences to warrant treating project management as
a discipline separate from general management.
Source: Profs. S. Mukerjee and G. Rughuram, ‘Enercon India: Project Planning’,
IIM (A), 2004.

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References:
 Clements and Gido. Effective Project Management, Publication:
Thomson.
 Gray, C. F. and Larson, E. W. Project Management, Publication: Tata
McGraw Hill.
 Lock, D. Project Management, Ninth Edition, Publication: Gower.
 Nagarajan, K. Project Management, Third Edition, Publication: New Age
International.
 Chandra, P. Projects-Planning: Selection, Financing, Implementation,
and Review, Sixth Edition, Publication: Tata McGraw Hill.
 Rao, P.C.K. Project Management and Control, Publication: Sultan
Chand & Sons.
 Desai, V. Project Management, Second Revised Edition, Publication:
Himalaya Publishing House.

E-References:
 www.projectsmart.co.uk. Retrieved on 7/01/2012
 www.projectmanagement.com. Retrieved on 8/01/2012
 www.pmearth.com. Retrieved on 9/01/2012

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