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Project Management Unit 1

Sikkim Manipal University Page No. 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 themajor 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 economyfrom 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 inthe 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 theactivities 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 tocomplete 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, requiredresources, 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 projects 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 thetotal 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 Questions3. 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 nine

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 nine knowledge areas are:

integration

scope

time

cost

quality

risk

human resources

communications, and

procurement.

All the knowledge areas are interlinked and each must be effectively

considered during project planning. Figure 1.1 lists the nine knowledge

areas.

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Fig. 1.1: Project Management Knowledge Areas

Let us now discuss about each of these nine project management

knowledge areas one by one.

Project integration managementensures that various elements of a

project are properly integrated and coordinated for smooth flow of

information and resources.

Project scope management includesdeveloping 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 managementstresses on timely completion of project.

Project cost managementensures that the completion of project within the

permitted budget.

Project quality managementfocuses on the processes required to make

certain that the project will suit the needs for which it was undertaken.

Project human resource managementensures that the most appropriate

manpower with necessary skills is deployed for an effective execution of the

desired project.

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Project communications management consist of the processes

necessary for timely and suitable generation, collection, dissemination,storage, and final disposition of project information.

Project risk managementis 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.


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 projects goals or

objectives is known as the project life cycle. Most projects experiencesimilar stages on the path from origin to completion. Figure 1.2 depicts the

stages of a projects life cycle.

Time Duration

Start Up (Slow)

Quick Momentum

Finish (Slow)

100

%P

rojectCompletion

Fig. 1.2: Project Life Cycle

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Let us now discuss about each of these stages.

Start-up phase:The project is started and a manager is chosen, the projectteam 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 weconsider 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.

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.

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7. A __________________ of activities that are used to achieve theprojects 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.


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

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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.

ProjectPlanning

ProjectDevelopment

ProjectInitiation

ProjectImplementation

ProjectClosure

Phases ofProject life

cycle

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, andpreliminary budget proposal. The information in project initiation assists

in performing an end of Phase study for getting a GO No GO decision.

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

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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 Questions11. Project management is a rationally planned and organised effort to

achieve a specific goal. (True/False)

12. Project closure involves releasing the final product to the customer,

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

network layouts. (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.

Projectprocesses

Processgroups

Processinteractions

Customisation

ProjectManagement

Processes

Fig. 1.4: Project Management Processes

1.8.1 Project processes

Project processes are a series of activities undertaken to accomplish thetarget. Project process is classified into two main categories. These

categories are:

Project management process

Product-oriented process

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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.

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 42 processes that are mapped to one

of nine 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 knowledgeareas matrix.

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36.PerformQuantitative

Risk Analysis37. Plan Risk

Responses

ProjectProcurementManagement

39.

PlanProcurements

40.

ConductProcurements

41.

AdministerProcurements

42.

CloseProcurements

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,

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

layouts. At last a post implementation review is to be carried out to identifythe 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 themarketing 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.

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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.

1.9 Impact of Delays in Project Completions

The most important problem faced in the implementation phase of a projectis 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.

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Therefore, it is necessary to build a system, which can correct deviations

from the initial expectations and ensure that the schedule of the project isnot 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.

The operational plan should include the following aspects:

The breakdown of the projects 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.


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 proventechniques 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

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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

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 theproject 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

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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.

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

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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 keyobjective 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

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.


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.

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1.13 Glossary

Project management: The art of organising, coordinating, and managingthe 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.

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


1. True

2. True

3. Projects

4. Project management5. True

6. True

7. Rational order

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8. Quick Momentum

9. Project Manager10. Overlaps

11. True

12. True

13. Project processes, process groups, customisation

14. Project management, product oriented

15. Tools and techniques

16. True

17. True

18. True19. 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 projects

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.

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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.

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 itsdesign, the wear and tear of mechanical parts was also reduced. The

success of Enercons 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 regulatoryauthorities 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. EILs 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

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at the different regions. The location of the BDM in a particular state

depended on the location of the regulatory authority in that state. Forexample, 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

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 villagers 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 30thSeptember and EIL would have to compensate any financial loss

suffered by the client due to delays. Delay might affect the customer

confidence in EILs 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 Projectafter 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

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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. Rathores is facing a Project Management problem.

2. Is Project Management just a variant on general management?

Hint:The answer is both yesand 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.

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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