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ORGANIZATION STRATEGY AND PROJECT SELECTION

ORGANIZATION STRATEGY & PROJECT SELECTIONTEXTBOOK T1 CHAPTER 2TOPICSNEED FOR STRATEGYROLE OF PROJECT MANAGERSTRATEGIC MANAGEMENT PROCESSPROJECT PORTFOLIO MANAGEMENTPROJECT SELECTION MODELMANAGING PORTFOLIO SYSTEM

NEED FOR STRATEGYIDENTIFY A PROJECTS PRIORITY AND LINK WITH ORGANIZATIONAL STRATEGYEFFECTIVE UTILIZATION OF RESOURCES: PEOPLE, MONEY, EQUIPMENT AND CORE COMPETENCIESCLEAR ORGANIZATION PROCESS, BEST USE OF SCARE RESOURCES AND IMPROVED COMMUNICATION ACROSS PROJECTS USING A PROCESS THAT IS OPEN AND TRANSPARENTROLE OF PROJECT MANAGER UNDERSTAND ORGANIZATIONS MISSION AND STRATEGY OTHERWISE PROJECT MANAGER WILL TEND TOFOCUSING ON PROBLEMS OR SOLUTIONS THAT HAVE LOW PRIORITY STRATEGICALLYFOCUSSING ON THE IMMEDIATE CUSTOMER RATHER THAN THE WHOLE MARKET PLACE AND VALUE CHAINOVEREMPHASIZING TECHNOLOGY

SOLVE EVERY CUSTOMER ISSUE WITH PRODUCT/ SERVICEENGAGING IN PERFECTION FOR JOBS WHICH ARE NOT IN PRIORITYDEMONSTRATE SENIOR MANAGEMENT HOW THE PROJECT CONTRIBUTES FIRMS MISSIONEXPLAIN TEAM MEMBERS AND OTHER STAKE HOLDERS : OBJECTIVES AND PRIORITIES

STRATEGIC MANAGEMENT PROCESSREVIEW AND DEFINE THE ORGANIZATION MISSIONSET LONG TERM GOALS AND OBJECTIVESANALYZE AND FORMULATE STRATEGIES TO REACH OBJECTIVESIMPLEMENTATION OF STRATEGIES THROUGH PROJECTSMISSION STATEMENTSMISSION STATEMENTS IDENTIFY THE SCOPE OF THE ORGANIZATION IN TERMS OF ITS PRODUCT AND SERVICEEVERY ONE IN THE ORGANIZATION SHOULD BE AWARE OF MISSIONIT INCLUDES ORGN. PHILOSOPHY, KEY TECHNOLOGIES, PUBLIC IMAGE AND CONTRIBUTION TO SOCIETY

EXAMPLESPROVIDE HOSPITAL DESIGN SERVICESPROVIDE VOICE/DATA DESIGN SERVICESPROVIDE INFORMATION TECHNOLOGY SERVICESINCREASE SHARE HOLDER VALUEPROVIDE HIGH VALUE PRODUCTS TO OUR CUSTOMERS

LONG RANGE GOALS AND OBJECTIVESOBJECTIVES TRANSLATE MISSION INTO SPECIFIC, CONCRETE, MEASURABLE TERMSOBJECTIVES COVER MARKETS, PRODUCTS, INNOVATION, PRODUCTIVITY, QUALITY, FINANCE, PROFITABILITY, EMPLOYEES AND CONSUMERSSMART GOALS (SPECIFIC, MEASURABLE, ASSIGNABLE, REALISTIC AND TIME BOUND)SPECIFIC : BE SPECIFIC IN TARGETING AN OBJECTIVEMEASURABLE: ESTABLISH A MEASURABLE INDICATORS OF PROGRESSASSIGNABLE: MAKE THE OBJECTIVE ASSIGNABLE TO ONE PERSON FOR COMPLETIONREALISTIC: STATE WHAT CAN REALISTICALLY BE DONE WITH AVAILABLE RESOURCESTIME RELATED: STATE WHEN THE OBJECTIVE CAN BE ACHIEVEDANALYZE AND FORMULATE STRATEGIES TO REACH OBJECTIVESDETERMINING AND EVALUATING ALTERNATIVES THAT SUPPORT OBJECTIVESSELECT THE BEST ALTERNATIVEASSESSMENT OF INTERNAL AND EXTERNAL ENVIRONMENTSSWOT ANALYSIS OBJECTIVES OR TASKS ASSIGNED TO DIVISIONS, DEPARTMENTS OR INDIVIDUALSIMPLEMENT STRATEGIES THROUGH PROJECTSIMPLEMENTATION REQUIRES ACTION AND COMPLETING TASKSALLOCATION OF RESOURCES: FUNDS, PEOPLE, TECHNOLOGICAL SKILLS, MANAGEMENT TALENTS AND EQUIPMENTREQUIRES FORMAL AND INFORMAL ORGANIZATION THAT COMPLEMENTS AND SUPPORTS STRATEGIES AND PROJECTSPLANNING AND CONTROLMOTIVATING PROJECT CONTRIBUTORSPRIORITIZING PROJECTSNEED FOR PROJECT PORTFOLIO MANAGEMENT SYSTEMIMPLEMENTATION GAPCONFLICTS FREQUENTLY OCCUR AMONGST FUNCTIONAL MANAGERS AND CAUSE LACK OF TRUSTFREQUENT MEETINGS ARE CALLED TO ESTABLISH OR RE-NEGOTIATE PRIORITIESPEOPLE FREQUENTLY SHIFT FROM ONE PROJECT TO ANOTHER PEOPLE ARE WORKING ON MULTIPLE PROJECTS AND FEEL INEFFICIENTRESOURCES ARE NOT ADEQUATE

ORGANIZATION POLITICSPOLITICS EXIST IN EVERY ORGANIZATIONINFLUENCES FUNDING AND HIGH PRIORITYPROJECT SELECTION MAY NOT BE ON FACTS AND SOUND REASONING BUT ON PERSUASIVENESS AND POWER OF PEOPLE ADVOCATING PROJECTSTOP MANAGEMENT SHOULD DEVELOP A SYSTEM FOR IDENTIFYING AND SELECTING PROJECTS THAT REDUCE THE IMPACT OF INTERNAL POLITICS AND FOSTERS THE SELECTION OF THE BEST PROJECTS.

SACRED COW: PROJECTS THAT POWERFUL, HIGH RANKING OFFICAL ADVOCATESNEW BABY: OBSESSION WITH PROJECTSPONSORED PROJECT : SELECTION AND IMPLEMENTATION OF PRODUCT INNOVATIVE PROJECTSRESOURCE CONFLICTS AND MULTI-TASKINGPROBLEM OF SHARE AND SCHEDULING RESOURCES ACROSS PROJECTSMULTITASKING INVOLVES STARTING AND STOPPING WORK ON ONE TASK TO GO AND WORK ON ANOTHER PROJECT AND THEN RETURN TO WORK ON ORIGINAL TASKINEFFICIENT PEOPLECAPACITY OVERLOADINGBENEFITSBUILDS DISCIPLINE INTO PROJECT SELECTION PROCESSLINKS PROJECT SELECTION TO STRATEGIC METRICSPRIORITIZE PROJECT PROPOSALSALLOCATE RESOURCES TO PROJECTS THAT ALIGN WITH STRATEGIC DIRECTIONBALANCES RISK ACROSS ALL PROJECTSIMPROVES COMMUNICATION AND SUPPORTS AGREEMENT ON PROJECT GOALSJUSTIFIES KILLING PROJECTS THAT DO NOT SUPPORT ORGANIZATION STRATEGY

PORTFOLIO MANAGEMENT SYSTEMENSURE PROJECTS ALIGNED WITH STRATEGIC GOALS AND PRIORITIZED APPROPRIATELY

DESIGN OF PMS

CLASSIFICATION OF THE PROJECTSOURCES OF PROPOSALSEVALUATING PROPOSALSMANAGING THE PORTFOLIO OF PROJECTSCLASSIFICATION OF THE PROJECTCOMPLIANCE AND EMERGENCY: MUST DO PROJECTS TO MEET REGULATORY CONDITIONS REQUIRED TO OPERATE IN A REGIONOPERATIONAL : TO SUPPORT CURRENT OPERATIONS e.g. REDUCE DOWNTIME, IMPROVE EFFICIENCY, ENHANCE QUALITY ETC.STRATEGIC: DIRECTLY SUPPORTS LONG RUN MISSION e.g. NEW PRODUCT, RESEARCH & DEVELOPMENT PROJECTS ETC.MANAGING PORTFOLIO SYSTEMSENIOR MANAGEMENT INPUTGUIDANCE IN ESTABLISHING SELECTION CRITERIABALANCE AVAILABLE RESOURCES WITH DIFFERENT TYPES OF PROJECTSPRIORITY TEAM RESPONSIBILITIESRESPONSIBLE FOR PUBLISHING THE PRIORITY OF EVERY PROJECTPERIODIC PRIORITY REVIEW KEEPING ORGANIZATION FOCUSBALANCING THE PORTFOLIO FOR RISKS AND TYPES OF PROJECTSRISK LEVEL, HIGH COST, KEY RESOURCES, NON-REVENUE PRODUCING, LONG DURATION

BREAD AND BUTTER PROJECTS: IMPROVEMENTS TO CURRENT PRODUCTS AND SERVICESSOFTWARE UPGRADATIONCOST REDUCTION TECHNIQUES

PEARLS: REVOLUTIONARY COMMERCIAL ADVANCES USING PROVEN TECHNICAL ADVANCESSUBSURFACE IMAGING TO LOCATE GAS AND OILOYESTER: TECHNOLOGICAL BREAKTHROUGHS WITH HIGH COMMERCIAL PAYOFFSNEW KINDS OF METAL ALLOYSWHITE ELEPHANTS: PROJECTS THAT AT ONE TIME SHOWED PROMISE BUT ARE NO LONGER VISIBLEPRODUCTS FOR A SATURATED MARKETHIGH SUCCESSBREAD AND BUTTERPEARLLOW SUCCESSWHITE ELEPHANTOYESTERLOW COMMERCIAL PAY-OFFHIGH COMMERCIAL PAY-OFFINFRASTRUCTURE PROJECT PHASESPRE-FEASIBILITY PHASEEVALUATION PHASETECHNOLOGY SELECTION AND ENGINEERING PHASECONTRACTING AND PROCUREMENT PHASECONSTRUCTION PHASESTART UP PHASES

GENERAL CAUSES OF OVERRUNPRE-FEASIBILITY STUDY PHASEDELAY IN LAND ACQUISITION, FOREST CLEARANCE AND ENVIRONMENTAL CLEARANCEDELAY IN CLEARANCES FROM FINANCIAL /REGULATORY BODIES OF THE GOVERNMENTLACK OF INFRASTRUCTURAL FACILITIESFAILURE IN PLANNING FOR IMPORTANT RESOURCES, FACILITIES, INPUTS NEEDED FOR TIMELY CONSTRUCTION AND PUTTING INTO OPERATIONSELECTION OF INCOMPETENT CONSULTANT

EVALUATION PHASEINADEQUATE PROJECT STUDYUNDERSTATEMENT OF SCOPE AND UNDERSTANDING OF COST AND RESOURCESCALLING FOR SUBSEQUENT CHANGES IN THE SCOPE OF THE PROJECTNON-FREEZING OF SPECIFICATIONSREVISION OF BUDGETSPOLITICAL INFLUENCES IN SITE SELECTIONCONSULTANTS AND PROJECT AUTHORITIES INADEQUECIES, LEADING TO WRONG ECONOMIC STUDIES MISLEADING FUND FLOW STATEMENTS AND PROJECTIONS CAUSING FINANCIAL IMPEDIMENTSTECHNOLOGY SELECTION AND ENGINEERING PHASEPOOR OR OUTDATED TECHNOLOGY ACQUISITIONTECHNOLOGICAL TIE-UPS MORE ON CONSIDERATION OF CREDIT OFFERED BY THE SUPPLIER RATHER THAN OF TECHNICAL NECESSITIESSTARTING OF DETAIL ENGINEERING AND PREPARATION OF PROCUREMENT LISTS BEFORE FINALIZING PROCESS FLOW SHEETS AND LINE DIAGRAMSDELAY IN COMPLETING DETAIL ENGINEERING LACK OF DESIGN DATA DELAY IN THE FREEZING OF DESIGN AND SPECIFICATIONSABSENCE OF AN ENGINEERING SCHEDULE LEADING TO DELAY IN THE RELEASE OF DRAWINGS FOR PROCUREMENTINEFFICIENT PROCEDURES FOR SCRUTINY, APPROVAL AND TRANSMITTANCE OF DRAWINGS AND SPECIFICATIONSCONTRACTING AND PROCUREMENT PHASEDelays, slipshod preparations of bid documentsPoor selection of vendors/manufacturers / fabricators/suppliers and contractors and preferential treatment to public sector enterprises, on the basis of Government s guidelinesDelayed placement of ordersThe practice of accepting of lowest quotations of the vendor quality and/or contractors competencyDelay in the issuance of import licence, permits and various clearancesDelay in the opening of letters of credit and issuance of various guarantees to foreign suppliersTime consuming procedures concerning the procurement of imported raw materials and hi-tech components by Indian manufacturers of equipmentInadequate expediting actionsLack of Integrated action plans closely involving suppliers and contractorsDelay in the supply of critical equipmentLack of proper quality control arrangements stage and final, and consequent defects in equipmentChanges and modifications without cost-benefit analysisPoor logistic planningCONSTRUCTION PHASEVery early starting of construction activities, before ensuring the availability of working drawings, storage and pre-assembly space, sequential supply of equipment and materials and adequate infrastructureDelay and/or inadequacy in contractors mobilisationPoor planning by contractorsLack of close coordination and owners serious involvement

Failure to assure contractors of law and order in the project areaContractors low productivity and consequent financial problemsInefficiency of contractors, in both the public and private sectorsHold-up resulting from delays in interconnected activities, because of the absence of integrated managementBelated clearancesIndecisions and delayed decision makingBad quality controlLack of micro-level schedule control with reference to the macro plan of the projectUnder treatment to contractors and suppliersDelay in payments, supply of owners free issues, provision of infrastructural facilities, settlement of extras, changes and claimsDelay in replacement suppliesSTART-UP PHASESDELAY IN INPUTS LIKE SPECIAL TOOLS, MANUALS, SERVICES AND FEEDSTOCKABSENCE OF COMMISSIONING SPECIALISTSFAILURE OF EQUIPMENT OR PARTSDESIGN CHANGESDELAYED ACTIVITIES OF PROCESS OWNERS /SUPPLIERS OF MAIN EQUIPMENT/ COMMISSIONING CONTRACTORSDEFECTS IN ERECTION AND INSTALLATIONSTEETHING TROUBLES RESULTING FROM BAD QUALITY CONTROL DURING ERECTION AND IMPROPER TESTING OF EQUIPMENTIN ALL PHASESWEAK PROJECT TEAMINDECISIONLACK OF MANAGERIAL TALENTSDISCONTINUITY OF EFFICENT TEAM MEMBERSABSENCE OF PERSONAL ACCOUNTABILITY AND COMMITMENTUNDUE JOB SECURITY AND RESULTANT INDISCIPLINELACK OF AWARENESS OF THE TIME VALUE OF MONEYINADEQUATE CONTROLS AND IGNORING OF WARNING SIGNALSPOOR QUALITY AWARENESSUNWARRANTED CBI ENQUIRIES NOT OREINTED TOWARDS PROJECT OBJECTIVES AND CONSEQUENT WORKING ATMOSPHERE OF FEAR WHICH DEPRESSES THE SPIRITS OF WELL-MEANING DECISION MAKERSGENERAL IGNORANCE AND NON-IMPLEMENTATION OF SOUND PROJECT MANAGEMENT PRACTICESPROJECT CLEARANCESTECHNICAL REQUIREMENTSSTATUTORY REGULATED BY GOVERNMENT

ESSENTIALS OF GOVERNMENT POLICIES, PROCEDURES AND REGULATIONS CONCERNING VARIOUS CLEARANCES

ALL REGULATORY REQUIREMENTS CONCERNING CLEARANCES AND LICENSING WOULD KEEP CHANGING FROM TIME TO TIME, ACCORDING TO CENTRAL GOVERNMENTS INDUSTRIAL AND TRADE POLICIESSOIL INVESTIGATION REPORTFOR DESIGNING FOUNDATION AND TALL STRUCTURES : SOIL MECHANICS, ROCK MECHANICS, FOUNDATION ENGINEERING, FIELD INVESTIGATIONS, FIELD TESTINGSDONE BY CENTRAL SOIL MECHANICS RESEARCH INSTITUTE, DELHIROAD RESEARCH INSTITUTE, DELHICENTRAL BUILDING RESEARCH INSTITUTE, ROORKEESOIL RESEARCH STATIONS OF STATE GOVERNMENTSORGANIZED SMALL PRIVATE PROFESSIONAL INSTITUTIONSCLEARANCE UNDER MONOPOLIES AND RESTRICITIVE TRADE PRACTICES ACTAFTER LIBERALISATION, ADVANCE CLEARANCES HAS BEEN DONE AWAY WITH

EMPHASIS ON CONTROLLING AND REGULATING MONOPOLISTIC, RESTRICTIVE AND UNFAIR TRADE PRACTICESINDUSTRIAL LICENSE / LETTER OF INTENTMOST OF THE INDUSTRIES ARE EXEMPTED FROM LICENSEPROJECTS WITHIN 40 KM PERIPHERY OF THE STANDARD URBAN AREA LIMITS OF A CITY HAVING A POPULATION OF MORE THAN 10 LAKH REQUIRES INDUSTRIAL LICENSESETTING UP NEW UNITS OR TAKE OVER OF EXISTING UNITS, MANUFACTURE OF NEW ARTICLE IN AN EXISTING SET UP, CHANGING THE LOCATION OF AN EXISTING INDUSTRIAL UNDERTAKINGS REQUIRE LICENSESPECIAL APPROVAL COMMITTEE FOR NRI PROPOSALSIT EXISTS UNDER CHAIRMANSHIP OF THE SECRETARY, DEPARTMENT OF INDUSTRIAL DEVELOPMENTCLEAR ALL INDUSTRIAL INVESTMENT PROPOSALS EMANATING FROM NON-RESIDENT INDIANSMONITORS : INDUSTRIAL LICENSES, FOREIGN COLLABORATION, IMPORT OF CAPITAL GOODSAPPROVAL OF FOREIGN COLLABORATIONFOREIGN INVESTMENTFOREIGN TECHNOLOGY AGREEMENT

AUTOMATIC APPROVAL FOR IMPORT OF TECHNOLOGY IN HIGH PRIORITY INDUSTRIES, PROVIDED ROYALTY PAYMENT DOES NOT EXCEED 5% OF DOMESTIC SALES AND 8% OF EXPORTS SUBJECT TO TOTAL 8% OF SALES OVER 10 YEARS FROM THE DATE OF AGREEMENT OR 7 YEARS FROM THE COMMENCEMENT OF PRODUCTIONLUMPSUM PAYMENTTECHNICAL KNOW HOW FEESDESIGN, ENGINEERING, CONSULTANCY ETC.USE OF PATENTS, BRAND NAMES, TRADE MARKS RECURRING ANNUAL ROYALTYAS A PERCENTAGE OF THE EX-FACTORY VALUE OF ANNUAL PRODUCTION, AFTER DEDUCTING THE ALL-IN TOTAL LANDED COST OF IMPORTED COMPONENTS AND THE STANDARD BOUGHTOUT COMPONENTS, IF ANY

APPROVAL FOR APPOINTMENT OF FOREIGN CONSULTANTTO RENDER ENGINEERING SERVICESSUPPLY OF PATENTED TECHNOLOGY AND LICENSING FOR ITS USESCRUTINY OF DETAILED ENGINEERING DONE AND SUCCESSFUL TRANSFER OF TECHNOLOGY WITH PERFORMANCE GUANRANTEESERVICES ARE VITAL IN EQUIPMENT SELECTION AND INSPECTIONQUALITY ASSURANCE AND OBSERVANCE OF STANDARDS IN CONSTRUCTIONRECTIFICATION OF ANY EQUIPMENT FAILUREFOREIGN EXCHANGE CLEARANCESFOREIGN EQUITY INVESTMENT UPTO 49% MAY BE ALLOWED IN THE PSU AND REQUIRES GOVERNMENT APPROVALAUTOMATIC APPROVAL FOR DIRECT FOREIGN INVESTMENT UPTO 51% IN HIGH PRIORITY INDUSTRIESIMPORT OF CAPITAL GOODSCOMPRISING PLANT, MACHINERY AND EQUIPMENT

CAPITAL GOODS IMPORT POLICY:

PROHIBITED ITEMS, RESTRICTIVE ITEMS

APPROVAL FOR SETTING UP EXPORT ORIENTED UNITSENVIRONMENTAL / POLLUTION CONTROL CLEARANCESWHILE UNDUE OBSESSION WITH ENVIRONMENT WILL IMPEDE OUR DEVELOPMENT, UNSCRUPULOUS PROJECT PLANS WITHOUT CARING FOR THE ENVIRONMENT WILL GRADUALLY DESTROY MANKIND ITSELFCENTRAL POLLUTION CONTROL BOARD AND BUREAU OF INDIAN STANDARDS HAVE PREPARED NON-STATUTORY EFFLUENT STANDARDS KNOWN AS MINIMUM NATIONAL STANDARDS (MINAS) FOR 11 WATER POLLUTING INDUSTRIESCAUSTIC SODA PLANTMAN-MADE FIBREOIL REFINERYSUPER THERMAL POWER PLANTCOTTON TEXTILESCOMPOSITE WOOLLEN MILLS CEMENTELECTROPLATINGDYES AND DYE INTERMEDIATESCLEARANCE FROM THE INTERNATIONAL AIRPORT AUTHORITYLOCATION OF PROJECT CLOSE TO AIRPORT SHOULD BE SELECTED IN CONSULTATION WITH IAA

RAILWAY CLEARANCE: MARSHALLING YARD, RAIL ROAD TO SITE, SIDING, HANDLING AND SPECIAL TYPES OF WAGONS, WAGON ALLOTMENT

ELECTRICITY CLEARANCE: CLEARANCE FROM STATE ELECTRICITY BOARD OR CENTRAL ELECTRICITY AUTHORITY: CONNECTED LOAD AND MAXIMUM LOAD

EXPLOSIVE CLEARANCE: HANDLING EXPLOSIVE MATERIALSCHIEF CONTROLLER OF EXPLOSIVES, NAGPURINDIAN EXPLOSIVES ACT AND RULES

FOREST CLEARANCE PROJECTS INVOLVING RESERVATION OF RESERVE FOREST OR DIVERSION OR USE OF FOREST LAND NEEDS CLEARANCE FROM STATE GOVT. AND THEN FROM CENTRAL GOVT.STATE - INDUSTRIES DEPARTMENT CLEARANCECLEARANCE OF STATE LEVEL PROJECTS AND SMALL SCALE UNITS ARE HANDLED BY THE STATE DIRECTORATE OF INDUSTRIES

SALES TAX REGISTRATION: THE UNIT SHOULD GET SALES TAX REGISTRATION BEFORE IT STARTS PURCHASE OF EQUIPMENT