Project Intro

PROJECT PROJECT

MANAGEMENTMANAGEMENT

PROJECTPROJECT

Project is a temporary endeavor to create Project is a temporary endeavor to create a unique product.a unique product.

A Project is a unique set of coordinated A Project is a unique set of coordinated and inter-related activities, undertaken to and inter-related activities, undertaken to meet a defined objective with a defined meet a defined objective with a defined start date, a defined end date and a start date, a defined end date and a defined cost. defined cost.

WHAT IS SPECIAL ABOUT A WHAT IS SPECIAL ABOUT A PROJECT?PROJECT?

The 5’C’s are theThe 5’C’s are the characteristics of a characteristics of a Project: Project: 1. A defined 1. A defined objeobjeCCtive tive 2. A defined2. A defined CCostost 33. s. sCChedulehedule -A defined start date and -A defined start date and a defined end date a defined end date 4. Within given 4. Within given resourresourCCes es and and 5. All with good 5. All with good CCustomer relationustomer relation

THE FIRST ‘C’ IS ‘DEFINEDTHE FIRST ‘C’ IS ‘DEFINED OBJECTIVE’OBJECTIVE’

Objective, also called Objective, also called ‘scope‘scope’, ‘’, ‘quality’, quality’, ‘result‘result,, needs to be fixed on Day One needs to be fixed on Day One

. The ‘Project Management’ says: First . The ‘Project Management’ says: First define what you want to achieve in the define what you want to achieve in the end and then do. Make the ‘definition’ as end and then do. Make the ‘definition’ as complete as you can. The more complete complete as you can. The more complete the definition, the stronger the chances of the definition, the stronger the chances of success.success.

Example of a road constructionExample of a road construction

If you start ‘doing’, before If you start ‘doing’, before knowing ‘what’, knowing ‘what’, You will go back to the You will go back to the first step you skipped: first step you skipped: What is to be done in the What is to be done in the end? end?

A DEFINEDA DEFINED CCOSTOST

‘‘Defining Objective First’ has Defining Objective First’ has another reason: Estimating the another reason: Estimating the project cost.project cost.

It requires funds.It requires funds.

33. SCHEDULE. SCHEDULE -A defined start -A defined start date and a defined end datedate and a defined end date

Planning: The ‘sChedule’ of a ProjectPlanning: The ‘sChedule’ of a Project

A Project has a defined completion period. A Project has a defined completion period. First define what you want to achieve in the First define what you want to achieve in the end and then do. Make the ‘definition’ as end and then do. Make the ‘definition’ as complete as you can. The more complete complete as you can. The more complete the definition, the stronger the chances of the definition, the stronger the chances of success.success.

Two Main Network Techniques of PlanningTwo Main Network Techniques of Planning

1] Gantt Chart (Bar Chart) 1] Gantt Chart (Bar Chart)

2] AoA (Activity-on-Arrow) Diagram (Also 2] AoA (Activity-on-Arrow) Diagram (Also called ‘PERT’called ‘PERT’

Nobody plans to fail. Nobody plans to fail. People fail to planPeople fail to planPlan your work and then Plan your work and then work your planwork your plan

Within given Within given resourresourCCes es and and

Every project has a budget.Every project has a budget.

Its vital resources are Its vital resources are tool, people and tool, people and system.system.

Project is an organized programs of Project is an organized programs of predetermined group of activities predetermined group of activities that are non routine in nature and that are non routine in nature and that must be completed using the that must be completed using the available resources within the given available resources within the given time period.time period.

5. WITH GOOD CUSTOMER 5. WITH GOOD CUSTOMER RELATIONRELATION

Projects are not ready made articles, Projects are not ready made articles, rather they are made ready.rather they are made ready.

Primary concern is customer Primary concern is customer requirement.requirement.

Satisfy the customer.Satisfy the customer.

SOME OTHERSOME OTHER

-It has a definite life cycle i.e conception, -It has a definite life cycle i.e conception, definition, planning ,execution, definition, planning ,execution, commission.commission.

- are unique- are unique-requires team work-requires team work-generally complex-generally complex-require constant change-require constant change-optimal utilization of resources-optimal utilization of resources-Need subcontracting-Need subcontracting -unity in diversity-unity in diversity

DIFFERENCEDIFFERENCE

ProgrammeProgramme ProjectProject TaskTask ActivityActivity

PROJECT MANAGERPROJECT MANAGERHAD TO BE PROACTIVE RATHER REACTIVEHAD TO BE PROACTIVE RATHER REACTIVE

Provide team Provide team support.support.

Resolve conflict Resolve conflict issues quicklyissues quickly

Monitor team Monitor team progressprogress

Set standard for Set standard for team team

Set realistic goalSet realistic goal

Marshals Marshals resourcesresources

Link with Link with customercustomer

Coordinate Coordinate teamteam

performanceperformance

WHATWHAT

IS IS

MANAGEMENT MANAGEMENT??

PROJECT MANAGEMENTPROJECT MANAGEMENT

TOOLSPEOPLE

SYSTEM

PM

DEFINITIONDEFINITION Project management is facilitation of Project management is facilitation of

planning, scheduling and controlling of all planning, scheduling and controlling of all activities that must be done to meet the activities that must be done to meet the objectives.objectives.

It is an organised venture for managing It is an organised venture for managing project. it involves scientific application of project. it involves scientific application of modern tool as and techniques in planning modern tool as and techniques in planning ,financing, implementing, monitoring, ,financing, implementing, monitoring, controlling and coordinating unique controlling and coordinating unique activities or task to produce desirable activities or task to produce desirable output with in constraints of time and cost.output with in constraints of time and cost.

SOME MORE DEFINITIONSSOME MORE DEFINITIONS

Association of project managersAssociation of project managers““Planning, organising, monitoring and Planning, organising, monitoring and

controlling of all aspects of a project and controlling of all aspects of a project and the motivation of all involved to achieve the motivation of all involved to achieve project objective safely and with in well project objective safely and with in well defined time, cost and performance defined time, cost and performance parameters.”parameters.”

Harold KerznerHarold Kerzner““Planning, directing and controlling of Planning, directing and controlling of

company resources for a relatively short-company resources for a relatively short-term project which has been established for term project which has been established for completion of specific goals”completion of specific goals”

The FOUR constraintsThe FOUR constraints

You can assign value to only three.You can assign value to only three.

S scope

PPerformance

C cost

T time

PROJECT LIFE CYCLEPROJECT LIFE CYCLE

D

P E C

CAPITAL BUDGETINGCAPITAL BUDGETING A capital budgeting decision is one that A capital budgeting decision is one that

involves the allocation of funds to projects involves the allocation of funds to projects that will have a life of atleast one year and that will have a life of atleast one year and usually much longer. usually much longer.

Examples would include the development Examples would include the development of a major new product, a plant site of a major new product, a plant site location, or an equipment replacement location, or an equipment replacement decision.decision.

Capital budgeting decision must be Capital budgeting decision must be approached with great care because of the approached with great care because of the following reasons:following reasons:

1.1. Long time period:Long time period: consequences of capital consequences of capital expenditure extends into the future and will expenditure extends into the future and will have to be endured for a longer period have to be endured for a longer period whether the decision is good or bad. whether the decision is good or bad.

2.2. Substantial expenditure:Substantial expenditure: it involves large it involves large sums of money and necessitates a careful sums of money and necessitates a careful planning and evaluation.planning and evaluation.

3.3. Irreversibility:Irreversibility: the decisions are quite often the decisions are quite often irreversible, because there is little or no irreversible, because there is little or no second hand market for may types of second hand market for may types of capital goods. capital goods.

4 4 Over and under capacity:Over and under capacity: an erroneous an erroneous forecast of asset requirements can forecast of asset requirements can result in serious consequences. First the result in serious consequences. First the equipment must be modern and secondly it equipment must be modern and secondly it has to be of adequate capacityhas to be of adequate capacity

DIFFICULTIESDIFFICULTIES

There are three basic reasons why capital expenditure decisions pose difficulties for the decision maker. Uncertainty: the future business success is today’s investment decision. The future in the real world is never known with certainty.

Difficult to measure in quantitative terms: Even if benefits are certain, some might be difficult to measure in quantitative terms.

Time Element: the problem of phasing properly the availability of capital assets in order to have them come “on stream” at the correct time.

TYPES OF CAPITAL INVESTMENTTYPES OF CAPITAL INVESTMENT According to tangibility According to tangibility a)Physical a)Physical

b) Monetary c)Intangibleb) Monetary c)Intangible By project size By project size By degree of dependence By degree of dependence

a) mutually exclusive projects (can a) mutually exclusive projects (can execute project A or B, but not both)execute project A or B, but not both)b) complementary projects: taking b) complementary projects: taking project A increases the cash flow of project A increases the cash flow of project B.project B.c) substitute projects: taking project A c) substitute projects: taking project A decreases the cash flow of project B. decreases the cash flow of project B.

PHASES OF CAPITAL BUDGETINGPHASES OF CAPITAL BUDGETINGPLANNING

IMPLEMENTATION

FINANCING

ANALYSIS

SELECTION

REVIEW