Project mgmt.

classification

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 Introduction
• Project mgmt is the discipline of planning,
organizing, securing and managing resources
to bring about the successful completion of
specific project goals and objectives.
• A project is a temporary endeavor, having a
defined beginning and end , undertaken to
meet unique goals and objectives usually to
bring about beneficial change or added values

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• The temp nature of projects stands in contrast
to business as usual which are repetitive,
permanent functional work to produce
products.
• The management of these two functions is
often found to be quite different, and as such
requires the development of distinct technical
skills and the adoption of separate mgmt.

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• The primary challenge of project mgmt is to
achieve all of the engg project goals and
objectives while honoring the pre conceived
project constraints.
• Typical constraints are scope, time and budgets
the secondary challenge is to optimize the
allocation and integration of inputs necessary
to meet pre defined objectives.

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 System approach
• A project is a temp, one time endeavor to
solve a problem or to take advantage of an
opportunity. It has a customer, a budget or a
set of scarce resources that must be managed
and some kind of time frame/constraint for
completion.

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 System approach
• The system approach is a framework for
conceptualizing problems as system and for doing
things such as solving problems and designing
systems.
• Concept of system approach:
• The objectives and performance system : it
mandates a practical thinking about the real
objectives of the system and the real ways to
measure it project mgmt uses this kind of thinking.

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• The environment and constraints of the system
: the relevant subsystem, groups and the
persons are affected by the system , must also
be identified.
• The resource of the system : in accomplishing
system goals ,internal system resources such as
capital, labor, material must also be identified.
Most of the system resources are exhaustible.

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• The elements of the system and their function: the
system approach to a project considers the project in
terms of many elements each having performance
measure directly related to performance of overall
project.
• The mgmt of the system :the system approaches plays
explicit attention to the mgmt of the system. Mgmt is
the function which takes into consideration all of the
other aspects of the system such as objectives ,
environment and constraints , resources and elements.

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• System analysis :the goal of system analysis is
to determine where the problems is in an
attempt to fix the system .
• This step involve breaking down the system in
different pieces to analyze the situation,
analyzing project goals, breaking down what
needs to be created and attempting to engage
users so that definite requirements can be
defined.
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 SDLC
• System development life cycle : The SDLC phase serves
as a programmatic guide to project activity and
provide a flexible but consistent way to conduct
projects to a depth matching the scope of the project.
• It is critical for the project manager to establish and
monitor control objectives during each SDLC phase
while executing projects.
• Control objectives help to provide a clear statement
of the desired result and should be used throughout
the entire SDLC process.
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 Classification
• A project is an economic activity with a well-defined objective with certain durations
and gains to entrepreneurs hence project cannot take place at a single level it is
classified majorly at 3 different levels.
• 1. National Level

• These are formulated by a government. The government decides the priority level so as
to develop the economy & according to that major and minor projects are conducted.

• The basic objectives of government projects are as follows

– To boost employment.
– To increase export.
– To raise foreign capital for Eg SEZ.
– To support present investors in business activities for eg Infrastructure projects like airports, roads,
Education projects, Polio eradication projects, etc.

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• 2. Sector Level

• Here the priority sector is determined by the government to develop this

priority sector they undertake various projects like power projects, Creation of
IT parks, Construction of dams for the agriculture sector. In the case of an
organization, the project may be related to quality, modernization,
development of employees, Diversification.

• 3. Project level

• Here individual projects are identified in this project’s actual requirement of

finance, HR, Location techniques, a requirement to run a single project. For eg
Construction of IT park, quality certification for 6 sigma, ISO. A project has
been classified in various ways.

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• Classification of the project are as following

• 1.Quantifiable and Non-quantifiable

• Here projects can be divided into two broader categories namely quantifiable and non-
quantifiable.In a quantifiable project, it is possible to measure the end benefits or
outcomes of the end benefits or outcomes of the project. Whereas in non-quantifiable end
result cannot be calculated properly.

• 2 .Sector Project
• The Planning Committee of India has classified projects for various sectors.

– Agriculture sector.
– Irrigation & Power.
– Transport & Communication.
– Social Services.

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• 3. Techno-Economic Project
• Here project is classified on the basis of technology & Economic Characteristics.

• a) Factor intensity oriented classification

• In this category, projects are either capital intensive or labor-intensive depending
upon their size & investment pattern. For eg: IT project or service rendering
project is labor-intensive depending on their size and investment pattern.

• b) Cause-oriented
• In this category, projects are based on either the availability of raw material or
demand for that project. For eg- Power project required, abundant water, steel
plant required iron ore as raw material.

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• C) Magnitude oriented classification
• Here the size of an investment is considered
depending on the investment. A project can
be classified as a tiny unit investment to 25
lakhs Small-scale unit investment up to 1
crore, medium scale enterprise investment up
to 5 crores or more.

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 Classification
• Based on ownership
– Public projects: undertaken by govt.eg construction
of Roads and Bridges , Adult education programs etc.
– Private projects: undertaken by pvt enterprise eg Any
business related projects such as construction of houses
by real estate builders , software development ,
marriage contract etc.
– Public private partnership: undertaken by both govt.
and pvt enterprises eg Generation of electricity by
Wind-mill , Garbage collection etc.

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 Classification

• Based on investment
– Large scale projects : Projects involve a huge outlay or
investments eg Real estate projects , Road constructions ,
mfg facilities ,Satellite sending projects of ISRO , Unique
identification number project of India, etc.
– Medium scale projects: projects involve medium level
investments and are technology oriented eg computer
industry, electronic industry, etc.
– Small scale projects : involves lesser investments eg
agricultural projects , etc. mfg projects

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• Based on research in Academia
– Major projects: which involve more than 1 year to
3/5 years and minimum funding of Rs 3 lakhs in case
of social sciences and 5 lakhs in case of sciences.
– minor projects : to be completed within 1 year and
have a max funding of 3 lakhs for social sciences and
5 lakhs for sciences.
– Agricultural projects : related to agricultural sector
like irrigation projects, well digging projects ,
manuring projects, soil upgrading projects etc.
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– Industrial projects : related to industrial mfg
sector like cement ,marketing projects , steel
,textile , etc. eg technology transfer projects,
capital issue projects like IPO etc.
– Service projects : related to service sector like
education , tourism , health, public utilities etc eg
adult literary project , medical camp, general
health check up camp etc.

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• Based on Objectives
– Commercial projects : undertaken for commercial
purpose and ROI is expected out these projects. Eg
Toll roads based on BOLT build , own , lease and
transfer concept , BOOT build , own , operate and
transfer model , product launching project etc.
– Social projects : undertaken for social purposes
and welfare of the people . Undertaken by govt or
service oriented NGO eg polio immunization , child
welfare projects adult literacy program etc.
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• Based on nature
– Conventional projects :traditional projects which do not
apply any innovative ideas or technology or method. Eg
conventional irrigation projects, handicraft projects , etc.
– Innovative projects : involve the use of technology ,high
R&D ,development of new products and services. It can be
further classified as :
– Technology
– Research
– New product development

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 Technology : Depending on level of technological uncertainty
at the time of initiation of project , can be classified as
– LOW TECH- rely on existing and well established base
technologies;
– MED TECH- rely on existing base technology but incorporate
new technology or feature;
– HIGH TECH- employ mostly new technology existent and
developed prior to project initiation ;
– SUPER HIGH TECH – based on primarily on new not entirely
existent tech.

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• Research: based on type of research
• Exploratory research –generates novel idea in the domain of
knowledge.
• Constructive research – mainly done by many technological
corporates to find new or alternative solutions to any
particular crisis or problems eg renewable energy research
or development of the capacity of optical fiber .
• Empirical research- observational type in which testing on
real life data or analysis of pattern of some specific events in
order to identify the nature or the class of trend that
specific phenomenon maintains.

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• New product development : undertaken in the life cycle of a
product .
• These products can be classified as:
– advance development project --which aim at inventing new science or
capturing new know-how for the org.
– break through development project– which create the first generation of
an entirely new product and involve significant change in the product
and process technology.
– Platform or next gen development projects –which provides a basis for a
product and process family and thus establish the basic architecture for
follow on derivative projects.
– Derivative development project – which refine and improve selected
performance dimensions.

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• Based on time
– Long term projects: take long duration to complete eg
eradication of polio disease etc
– Medium term projects : takes medium term like 3-5
years eg modernization projects , computerization of
operations etc.
– Short term projects : executed with one year eg pond
cleaning project , health camps, software development
– Very short term projects : can be completed within a
very short time eg product launch

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• Based on functions
– Marketing projects : marketing a product or
service of an org. marketing road shows ,
implementing marketing strategy.
– Financial projects :undertaken to raise finance
or restructure capital . Eg IPO project, share split
etc.

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– Human resource project : induction training
project, campus recruitment project.
– IT & Technology project :dev of human
resources information project , marketing
information project.
– Production project : overhauling project,
preventive maintenance project ,ISO certification
project.
– Strategic project : merger and acquisition
project, core banking solution project in banks etc.
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• Based on risks
– High risk project : nuclear energy project,
thermal energy project, satellite project. High
precautionary measures.
– Low risk project : do not involve risk and
carried out in normal fashion. Road and bridge
construction , house construction.

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• Based on Investment decision
– Independent projects: Acceptance or rejection does not
directly eliminate other project considerations or affect the
likely hood of their selections . introduction of new product
line and replacement of machine which is producing different
product.
– Mutually exclusively projects :projects that cannot be
followed at the same time. They will have either/or decisions .
– Contingent projects : where acceptance or rejection
depends to accept or reject multiple number of other
projects. Eg bio fuel mfg unit and cultivation.

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• Based on output
– Quantifiable projects: benefits/goals which are
amenable for measurement.
– Non quantifiable projects : Quantification of
benefits may not be always possible as the impact
of the project over a longer period. Eg health,
education , environment

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• Based on techno economic characteristics : based
on technology intensity ,size of investments and
scope of the project .
– Factor intensity projects : capital intensity or labor
intensive. Long gestation period ,large scale
investments in plant & machinery.
– Causation oriented projects : availability of
particular raw material in abundance in a particular
place.
– Magnitude oriented projects :size of investments,
gestation period employment generation etc.
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• Based on FI classification
– Profit oriented projects : New projects,
expansion project, development projects,
modernization project, technology projects,
diversification projects.
– Service oriented projects :welfare projects,
service projects, R&D projects educational
projects etc.

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• Project mgmt deals with planning , scheduling,
controlling and monitoring the complex non
routine activities that must be completed to reach
the predetermined objectives of the project.
• The elements of project mgmt control include
programmed objectives, policy restrictions,
resource constraints , government regulations ,
process implementation, review of output ,
feedback and revision of objectives.

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• Thus ,project mgmt involves the coordination of
group activity, wherein the manager plans,
organizes , staffs , directs and controls to achieve an
objectives ,with constraints on time, cost and
performance, of the end product.
• Net work techniques are primarily used for project
planning and controlling.
• Planning is the process of preparing for the
commitment of resources in the most economical
manner.
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• Controlling is the process of making events
confirm to schedules by coordinating the
actions of all parts of the project to achieve
the objectives.
• Project mgmt is the art of managing the
project and it’s deliverables with a view to
produce finished products.

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• Project mgmt includes: identifying
requirements , establishing clear and
achievable objectives, balancing the
competing demands from different
stakeholders and ensuring that a commonality
of purpose is achieved.

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• Reduction in the product life cycle
• Global competition
• Knowledge explosion
• Corporate downsizing
• Increased customer focus
• Managing small projects
• Upsurge of third world and closed economies

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• Integrated project mgmt process focuses all
project efforts towards the strategic plan of the
firm and reinforces mastery of both the project
mgmt tools or techniques and interpersonal
skills necessary to achieve successful project
completion.
• Integration of projects with strategic plan
• Integration within the process of managing
actual projects
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• Project mgmt is about creating structure and managing
the project commitments and delivery of agreed upon
results.
• Project mgmt is both necessary and essential to the
success of the project.
• Integrated project mgmt and the practice of the same
have become indispensible to the project manager.
• The technical side of the project represents the
science of project mgmt and the socio-cultural side
represents the art of managing the project.
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• The main reason for introducing a project
classification is to increase transparency. The
more projects your organization is running in
parallel, the harder it is to manage oversight
and to provide support, for example as a PMO
(project management office).

• Project classification can help in several other

ways:
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• DETERMINING HOW MUCH PROJECT MANAGEMENT WILL BE NEEDED IS
MUCH EASIER
• While smaller projects can be handled in a very lean way without much
organizational overhead, larger projects should definitely follow a formal
process that includes some level of oversight and control (why? to manage
risk).

• Formal elements can include a steering board, the use of quality gates which
projects are only allowed to pass if they meet certain requirements which are
usually documented in a project checklist.

• With the right classification system, you can categorize projects by risk,
complexity or other criteria and define the process and formal requirements
that projects from a specific category have to follow.

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• YOU CAN BETTER PRIORITIZE PROJECTS AND DECIDE ON BUDGET ALLOCATION
• With a classification system that reflects the business value or strategic
importance of projects, you have a basis upon which to decide where to focus
your resources (people and money) on.

• IT’S EASIER TO STAFF YOUR PROJECTS

• If you have an indicator for the project’s complexity, you can use it to assign
project managers with the necessary amount of skills and experience. Less
complex projects can be managed by less experienced project managers while
more complex projects may require real project veterans with tens of thousands
of project hours under their belt.

• These are just some of the reasons that justify the introduction of a project
classification logic. You may have other reasons for categorizing projects.

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• Here are some of the most common
classification criteria used by companies:

– schedule
– budget
– complexity
– business value
– service type
– framework used
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• SCHEDULE
– The project duration is a good indicator for the size and impact. Longer duration
correlates with more resources being needed, higher expenses, more room for
error and consequently greater risk of failure.

• BUDGET
– Probably the most important criterion. Usually used in combination with project
duration (schedule) because a long schedule doesn’t necessarily tell you about
the budget volume (although schedule and budget are correlated). Cost is what
management is most concerned about after the actual project goal. For good
reason because a series of unsuccessful projects can quickly drain the financial
resources of a business.

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• COMPLEXITY
– highly recommend you use some key figure for project complexity. It is
the complexity of a project that determines the level of risk and greater
risk requires more oversight and control.

– The question you probably ask yourself is: How can you measure project
complexity?

– There are many ways to measure complexity. At my previous company we

simply looked at the number of functions involved in the project. Was it
just IT that was involved or were other departments like accounting, sales
or logistics also part of the team? The longer the list of stakeholders, the
higher the presumed complexity of a project.

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• BUSINESS VALUE
– Another useful classification factor is the level a project contributes to your
company’s finances or its competitive position. Some projects don’t
contribute much in terms of business value and can therefore be
deprioritized, for example if you need to trim the project portfolio. Other
projects have a significant positive impact on the cash flow situation and
thus should receive full attention.

• SERVICE TYPE
– Type of service is a useful classification factor if your organization runs
different kinds of projects, for example in different business units. It can also
be helpful to structure the portfolio within a specific department. For IT
projects, service types could be system upgrade, infrastructure, ERP,
migration etc.

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• FRAMEWORK USED
– Agile, waterfall or hybrid: The project management framework (or
methodology) being used determines what steps and guidelines a project must
follow and how it must be staffed.

– Classic projects work in pre-defined phases and with fixed milestones. Agile
projects work in iterative cycles and you need an experienced agile coach or
Scrum master to facilitate the process. By using a classification by
methodology, you can easily see what projects fall into which delivery
framework.

• Don’t make the classification too complicated and define clear

thresholds where everybody understands what category their project
falls into and which sub categories apply for them.

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• There are many ways to classify a project such as:

– By size (cost, duration, team, business value, number

of departments affected, and so on)
– By type (new, maintenance, upgrade, strategic,
tactical, operational)
– By application (software development, new product
development, equipment installation, and so on)
– By complexity and uncertainty

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• Projects are unique and to some extent so is
the best-fit model to manage them. For now it
is sufficient to understand that a one-size-fits-
all approach to project management doesn't
work and has never worked.
• It is far more effective to group projects based
on their similarities and to use a project
management approach designed specifically
for each project type.
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• IT projects are classified as “Small ,” “Medium ,”“ Large,” or as “Super Projects.”:

– Small Projects (1-3 weeks)

– Medium Projects (3-6 weeks)
– Large Projects (6-12 weeks)
– Super Projects (13 weeks or more)
• Projects are classified based on their complexity and resource requirements. For
example, a very complex project requiring all available resources (e.g. the
implementation of a ERP module) will likely require 12+ weeks, where as a much
smaller project may take only 1 week.
• The maximum number of projects that can be scheduled during each quarter
must not exceed 12 weeks. The exception will be “Super Projects” in which case
the project must be fully vetted to understand what resources will be required
(internal vs. external) and for what duration.

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• A project is a scientifically evolved work plan devised to achieve a specific
objective within a specified period of time. It is an individual or collaborative
enterprise that is carefully planned to achieve a particular aim.

• Following are the major types of project –

– (1) Quantifiable and Non-quantifiable projects: Projects for which a plausible

quantitative assessment of benefits can be made art called “quantifiable projects”.
Projects concerned with industrial development, power generation fall in this
category.

– On the contrary, Projects for which a plausible quantitative assessment of benefits

cannot be made are called “Non-quantifiable projects”. Non-quantifiable projects are
those where such assessment is not; possible e.g., Health education, defense etc

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• (2) Sectoral projects: Sectoral projects have their specific sectors, such as
Agriculture and similar sector Irrigation and power sector. Sectoral means relating
to the various economic sectors of a society or to a particular economic sector.

– Industry and Mining sector,

– Transport and Communication sector,
– The social services sector,
– Miscellaneous sector.
• (3) Techno-Economic projects: This type of classification includes factors intensity-
oriented classification, causation• oriented classification, and magnitude-oriented
classification.

– factor intensity-oriented classification: capital intensive or labor intensive.

– causation-oriented classification: demand-based or raw material based projects.
– Magnitude-oriented classification: large-scale, medium-scale or small-scale projects.

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 Project life cycle
• The project life cycle refers to a logical
sequence of activities to accomplish the project
goals or objectives.
• Regardless of scope or complexity , any project
goes through a series of stages during it’s life.
First is an initiation in which the outputs and
critical success factors are defined, followed by
a planning phase, characterized by breaking
down the project into smaller parts
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• A standard project typically has the following
four major phases (each with its own agenda
of tasks and issues): initiation, planning,
implementation, and closure.
• Taken together, these phases represent the
path a project takes from the beginning to its
end and are generally referred to as the
project “life cycle.”

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• An execution phase , in which the project plan
is executed and lastly a closure or exit phase
that makes the completion of the project.
• Project activities must be grouped into phases
so that the core team can efficiently plan and
organise resources for each activity , and also
objectively measure achievements of goals and
justify their decisions to move ahead , correct
or terminate.
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• It is importance to organize projects phases
into industry specific project cycles ,because
each industry sector involves specific
requirements, tasks and procedures when it
comes to projects , but also because different
industry sectors have different needs for life
cycle management methodology.

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• Initiation : The scope of the project is defined
along with the approach to be taken to deliver
the desired outputs. The common tools or
methodologies used in initiation phase are :
– Project charter
– Business plan
– Project framework
– Business case justification
– Milestone reviews
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• During the first of these phases, the initiation phase,
the project objective or need is identified; this can be
a business problem or opportunity. An appropriate
response to the need is documented in a business
case with recommended solution options.
• A feasibility study is conducted to investigate whether
each option addresses the project objective and a
final recommended solution is determined. Issues of
feasibility (“can we do the project?”) and justification
(“should we do the project?”) are addressed.

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• Once the recommended solution is approved, a
project is initiated to deliver the approved solution
and a project manager is appointed.
• The major deliverables and the participating work
groups are identified, and the project team begins to
take shape. Approval is then sought by the project
manager to move onto the detailed planning phase.

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• Planning : This phase includes a detailed identification and
assignments of each task until the end of the project.
• It should include a risk analysis and a definition of a criteria
for the successful completion of each deliverable.
• The governance process is defined, stake holders identified
and reporting frequency and channels agreed.
• The methodologies used are :
– Business plan
– Milestone reviews

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• The next phase, the planning phase, is where the project solution is
further developed in as much detail as possible and the steps
necessary to meet the project’s objective are planned. In this step,
the team identifies all of the work to be done. The project’s tasks
and resource requirements are identified, along with the strategy
for producing them. This is also referred to as “scope management.”
• A project plan is created outlining the activities, tasks,
dependencies, and timeframes. The project manager coordinates
the preparation of a project budget by providing cost estimates for
the labour, equipment, and materials costs. The budget is used to
monitor and control cost expenditures during project
implementation.

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• Once the project team has identified the work,
prepared the schedule, and estimated the
costs, the three fundamental components of
the planning process are complete.
• This is an excellent time to identify and try to
deal with anything that might pose a threat to
the successful completion of the project. This
is called risk management.

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• In risk management, “high-threat” potential problems
are identified along with the action that is to be taken
on each high-threat potential problem, either to
reduce the probability that the problem will occur or
to reduce the impact on the project if it does occur.
• This is also a good time to identify all project
stakeholders and establish a communication plan
describing the information needed and the delivery
method to be used to keep the stakeholders informed

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• Finally, you will want to document a quality
plan, providing quality targets, assurance, and
control measures, along with an acceptance
plan, listing the criteria to be met to gain
customer acceptance.
• At this point, the project would have been
planned in detail and is ready to be executed.

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• Execution and controlling: it is to ensure project
activities are properly executed and controlled.
During the execution phase , the planned solution is
implemented to solve the problems specified in the
project’s requirements .
• In product and system development, a design
resulting in a specific set of product requirement is
created .
• The methodologies used are update of risk
analysis, business plans and milestone reviews.
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• During the third phase, the implementation phase, the
project plan is put into motion and the work of the project
is performed. It is important to maintain control and
communicate as needed during implementation.
• Progress is continuously monitored and appropriate
adjustments are made and recorded as variances from the
original plan.
• In any project, a project manager spends most of the time
in this step. During project implementation, people are
carrying out the tasks, and progress information is being
reported through regular team meetings.

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• The project manager uses this information to maintain control
over the direction of the project by comparing the progress
reports with the project plan to measure the performance of the
project activities and take corrective action as needed.
• The first course of action should always be to bring the project
back on course (i.e., to return it to the original plan). If that cannot
happen, the team should record variations from the original plan
and record and publish modifications to the plan.
• Throughout this step, project sponsors and other key stakeholders
should be kept informed of the project’s status according to the
agreed-on frequency and format of communication. The plan
should be updated and published on a regular basis.

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• Status reports should always emphasize the
anticipated end point in terms of cost,
schedule, and quality of deliverables.
• Each project deliverable produced should be
reviewed for quality and measured against the
acceptance criteria.
• Once all of the deliverables have been
produced and the customer has accepted the
final solution, the project is ready for closure.
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• Closure : the project is brought to it’s proper
completion. The closure phase is characterized
by a written formal project review report
containing:
– A formal acceptance of the final product
– Weighted critical measurements
– a list of lessons learned,
– Releasing project resources
– A formal project closure notification to higher mgmt

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• During the final closure, or completion phase, the
emphasis is on releasing the final deliverables to the
customer, handing over project documentation to the
business, terminating supplier contracts, releasing project
resources, and communicating the closure of the project
to all stakeholders.
• The last remaining step is to conduct lessons-learned
studies to examine what went well and what didn’t.
Through this type of analysis, the wisdom of experience is
transferred back to the project organization, which will
help future project teams.
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 Example
• A U.S. construction company won a contract to design and build the first
copper mine in northern Argentina. There was no existing infrastructure for
either the mining industry or large construction projects in this part of South
America.
• During the initiation phase of the project, the project manager focused on
defining and finding a project leadership team with the knowledge, skills, and
experience to manage a large complex project in a remote area of the globe.
• The project team set up three offices. One was in Chile, where large mining
construction project infrastructure existed. The other two were in Argentina.
• One was in Buenos Aries to establish relationships and Argentinian expertise,
and the second was in Catamarca—the largest town close to the mine site.
With offices in place, the project start-up team began developing procedures
for getting work done, acquiring the appropriate permits, and developing
relationships with Chilean and Argentine partners.

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• During the planning phase, the project team developed an integrated
project schedule that coordinated the activities of the design,
procurement, and construction teams.
• The project controls team also developed a detailed budget that enabled
the project team to track project expenditures against the expected
expenses. The project design team built on the conceptual design and
developed detailed drawings for use by the procurement team.
• The procurement team used the drawings to begin ordering equipment
and materials for the construction team; develop labour projections; refine
the construction schedule; and set up the construction site. Although
planning is a never-ending process on a project, the planning phase
focused on developing sufficient details to allow various parts of the
project team to coordinate their work and allow the project management
team to make priority decisions.

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• The implementation phase represents the work done to
meet the requirements of the scope of work and fulfill the
charter.
• During the implementation phase, the project team
accomplished the work defined in the plan and made
adjustments when the project factors changed.
• Equipment and materials were delivered to the work site,
labour was hired and trained, a construction site was built,
and all the construction activities, from the arrival of the
first dozer to the installation of the final light switch, were
accomplished.
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• The closeout phase included turning over the newly
constructed plant to the operations team of the client.
• A punch list of a few remaining construction items was
developed and those items completed. The office in
Catamarca was closed, the office in Buenos Aries
archived all the project documents, and the Chilean
office was already working on the next project.
• The accounting books were reconciled and closed,
final reports written and distributed, and the project
manager started on a new project.
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 Summary
• A project life cycle is the sequence of phases that a project goes
through from its initiation to its closure. The number and sequence
of the cycle are determined by the management and various other
factors like needs of the organization involved in the project, the
nature of the project, and its area of application.
• The phases have a definite start, end, and control point and are
constrained by time. The project lifecycle can be defined and
modified as per the needs and aspects of the organization. Even
though every project has a definite start and end, the particular
objectives, deliverables, and activities vary widely. The lifecycle
provides the basic foundation of the actions that has to be
performed in the project, irrespective of the specific work involved.

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• Project life cycles can range from predictive or
plan-driven approaches to adaptive or change-
driven approaches.
• In a predictive life cycle, the specifics are defined
at the start of the project, and any alterations to
scope are carefully addressed.
• In an adaptive life cycle, the product is developed
over multiple iterations, and detailed scope is
defined for iteration only as the iteration begins.
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 Project contracting
• Since a major portion of a project is typically
executed through contracts, the proper
managements of contracts is critical to the
successful implementation of the project.
• The following needs to be done:
– The competence and capability of all the
contractors must be ensured.
– Proper discipline must be enforced among
contractors and suppliers
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• Penalties may be imposed for failure to meet
contractual obligations.
• Likewise, incentives may be offered for good
performance.
• Help should be extended to contractors and
suppliers when they have genuine problems.
• Project authorities must retain independence to
off-load contracts (partially or wholly) to other
parties where delays are anticipated.
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• The various types of project contractors are:
• Traditional Contract: All project specifications
are provided to a contractor who purchases and
installs equipment at cost plus a mark-up or
fixed price.
• Extended Technical Guarantee/Service: The
contractor offers extended guarantees on the
performance of selected equipment and / or
service/maintenance agreements.
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• Extended Financing Terms: The contractor
provides the option of an extended lease or
other financing vehicle in which the payment
schedule can be based on the expected savings
• Guaranteed Saving Performance Contract: All
or part of savings is guaranteed by the
contractor, and all or part of the costs of
equipment and/or services is paid down out of
savings as they are achieved.
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