project -meaning and definition

7/28/2019 Project -Meaning and Definition

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Project Management-Meaning anddefinition


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A project is a duty or task which has a fixed deadline to create aunique product or service.

According to a British Standard, a project is a unique set ofcoordinated activities, with definite starting and finishing points,

undertaken by an individual or organization to meet specific

objectives within the defined schedule, cost and performance

parameters.

A project must have:- Every project possesses a group of activities, which are unique in

nature to the organization handling the activities

Every project aims at achieving a specific objective or performing a

particular task. Generally, the objective and tasks vary fro project to

project. The activities of a project have to be performed in a sequence to

deliver the product to the customers. For example, it is necessary to

plan the activities before they are implemented.


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Aproject has a specific starting and completion date. The

deadlines of project are either decided by the individualwho handles the project or by the project client.

The various activities of a project are interrelated,

because one activity is the input for another activity. Forexample, in the project of a building or a shopping mall,

the activity of creating the plan for constructing the all

works as an input or the activity of constructing the mall


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Types of Projects

Basis Category I Category II Category III Category IV

Time period 18 months or

more

Bet 9-18 months Bet 3-9 months 3 months or less

Risk level The level is high The level of risk

is medium

Level of risk is

low

Very low

Level of

complexity

Is high Is medium low Very low

Probability of

problems

100% certain 50% likely 10% low No risk


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Types of projects

Construction projects:- these types of projects are undertaken to construct

residential buildings, industrial and highways. It requires human effort and

various mechanical components for the construction.

Research projects:-these type of projects are undertaken to acquire

knowledge about a specific subject or an object. The acquired knowledge canbe presented in the form of models. Patterns and patents. For example,

projects undertaken to develop the model of Indian economy and the

varieties of rice.

Re engineering projects:- this type of project is undertaken to review and

carry out the desired changes in an existing system or a process. For

example, the re engineering projects undertaken to renumber the telephonesystem in UK


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Procurement Projects:-this type of project is undertaken to contractually

establish relationship with the selected supplier for a defined product or

service. For example, projects undertaken for outsourcing a complete

business function ( such as IT) and for imposing the new rules and measures

on a regulated industry.

Business Implementation Projects:-This type of project is undertaken to

produce an operationally effective process. The value generated by the

project is embedded in the process. For example, the business

implementation projects undertaken to install e commerce.


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Steps in the Identification of projects

Setting the objectives and goals of the project.

Recommending various methods to achieve the objectives of the

project

Identifying the target groups benefitted by the project

Setting the priority of the project in the context of the urgency of the

work

Considering the adequacy of the executing agency and the active

participation of the people involved in the project

Estimating the approximate project cost, based on the conceptualdesign and suggesting the various cost alternatives.

Making preliminary assessment of the feasibility of the project and its

impact on the organization, its specific departments or sections.


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Importance of Projects

Planning and organizing the work: Projects involve planning and organizing

the entire work. Planning refers to deciding in advance the

equipments,finances,raw materials and processes required for completion of

the project. Organizing refers to specifying the work in a systematic manner.

Efficient use of resources:- projects also result in the efficient use of

resources like time, money, people ,material and energy. It is only possible ifplanning and organizing projects is done effectively.

Helps in assessing and minimizing risk:-project formulation involves

environmental, technical and financial appraisal. This helps to avoid various

risks such as shortage of finance, change in consumer preferences etc.

Proper assignment of task:-projects involve planning of work, which states in

advance the tasks necessary for completion of the project. It also results in

the proper and efficient execution of tasks.

Reduces chances of failure:- project also reduces chances of failure because

the project manager helps to maintain mutual interaction among the various

interacting parties.


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Factors Influencing a project The main objective of a project or service to a client within a particular

span of time and budget. The success of a project relies on variousfactors such as quality of the product and availability of resources, The

following are the factors that affect a project.

Scope:-It explains all the activities that you need to perform in a

project. The scope of the project consists of target results and the

financial and human resources required to complete the project. Quality:-it is necessary for a project to satisfy the quality requirements

at levels related to the product quality and the process quality.

Time:-It is one of the most important constraints, in which a projct has

to be completed. The client decides the time limit of the project and it

is essential to complete the project within the allotted time.


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Lifecycle of a living organism


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Phases of a system1. The conception/formation phase

Involves the preliminary evaluation of an idea. This includes recognition andacceptance of a problem or a need analyzing the requirement and finding

ways to fulfill the need or solve the problems . Steps involved in this are

Determine the existing need or problem, or potential deficiencies of the

existing system

Examine alternate ways of meeting the need or of solving the problem.

Identify the approximate resources(human and others) required for the

system

Establish the basic concept of the system

Prepare initial estimates of time, cost and performance of the conceived

system

Determine the initial feasibility and practicability(technical , economic andenvironmental) and

Establish a first-cut system organization.


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The definition/build up phase

2 the system is now investigated in greater detail. Basically ,it would be a

refinement of the elements described in the conception phase. All the sub-systems of the main system are defined and examined. This requires a firm

identification of the resources required and the establishment of time, cost

and performance parameters. It also includes the initial preparation of all thedocuments necessary to support the system such as policies,procedures,bid

documents, job descriptions ,budget and funding papers. The specific stepsin the definition phase of a system are

Determination of time, cost and performance requirement of the system

Identification of the estimates of human and non human resources required

Determination of the necessary sub systems , including the detailed plans

required to support the main system

To define the inter-system and intra-system interfaces: and

Identification and preparation of the documents required to support the

system such as policies, procedures, bid documents, job descriptions .


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3 Acquisition/production phase

This is so called because at the end of the phase the user acquires the system.

This phase also referred to as the production phase as the system is produced.

The efforts are now focused on standardization,testing,and evaluation of an

alternative detailed design and the production based on the acceptableproduct design.

The production phase of a system and of a project are similar to each other.

Production involves either production of a single item or mass production.

Project management oversees and controls resources, motivates workrs and

reports about the progress to the user of the system.

The specific tasks and activities during the acquisition/production phase

include:-


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Update the detailed plans and specification and the definition of phase

Identify detailed resource requirements and managerial procedures-

inventory, scheduling,accounting,book keeping etc

Begin the production, construction and installation of the actual system.

Verify the system specifications with the performance

Prepare the policy and procedural documents and

Develop plans to hand-over the system to the user , and to provide

supporting services, such as training during the operational phase


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4 The Operation Phase Here the user takes over the system who integrates its product/service into

the existing organizational system.

The user takes over, operates the system and evaluates its performanceaccording to its ability to meet the need or solve the problem for which it was

designed.

The operation phase also includes the provision for feedback to the system

planner/designer, so that the system be improved. The specific activities and

steps in the operation phase of a system are as follows.

Use of the system by the client/customer

Integrate the products/services into the existing organizational system.

Evaluate the system performance vis-a vis the specifications (made in the

definition of phase) with respect to technical, economical, social and

environmental parameters..

Provide feedback to the system designer/planner about the efficiency and

effectiveness of the system.

Provide training support and maintenance services.


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5. The divestment/termination phase

This is the last phase of the system and many times it may overlap with the

preceding operations phase. The senior management of the organization will

now be looking at the means of divestment and reallocation of resources.

This figure corresponds to the phase out and termination of a project.Similarly, compared to the technology/product life cycle divestment

corresponds to the deterioration and death phases of the technology or the

product.

As one product out of several in an organization enters the deterioration and

death phase of its lifecycle, other new products or projects must be conceivedand developed


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Strategic Management

and Project Selection

Maturity of Project Management

Criteria for PS Models

Nature of PS Models

Types of PS Models

Uncertainty Analysis and Risk Management

Information Base for PS Models

Project Portfolio Process (PPP)

Project Proposal


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Overview of PS Process

Project Management Office (PMO): Aligningcorporate needs and project goals

Project Selection: Chose candidate project using

Evaluation Criteria Dealing with Uncertainty: Risk Analysis

Strategically selecting best Projects: ProjectPortfolio Process (PPP)

Locking up the deal: Writing a Project Proposal


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Project Management Maturity

Levels

Ad-hoc (essentially disorganized)

Abbreviated (some processes exist) Organized (standardized processes)

Managed (measured processes)

Adaptive (continuous improvement)


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PS Models

Idealized view of reality

Representing the STRUCTURE of the

problem, not the detail

Deterministic or stochastic


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Criteria for Project Selection

models

Realism (technical-, resource-, market-risk)

Capability (adequately sophisticated)

Flexibility (valid results over large domain) Ease of Use (no expert needed to run model)

Cost (much less than project benefit)

Easy Computerization (use standard software)


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Nature of PS Models:Methodology

Startwith detailed list of firms goals

Createlist of project evaluation factors (PEFs)

Weigh every element in PEF list Compute an overall score for project based on

weighted PEFs

Select project that has the closest alignment withfirms goals


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Project Evaluation Factors

(PEFs)

Production Factors

Marketing Factors Financial Factors

Personnel Factors

Administrative and Misc. Factors


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Types of PS Models:

Nonnumeric

Sacred Cow

Operating Necessity

Competitive Necessity

Product Line Extension

Comparative Benefit

Model


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Numeric PS Models:

Profit / Profitability

Payback Period (PB)

Average Rate of Return

Discounted Cash Flow (NPV) Internal Rate of Return

Profitability Index

Other Profitability Models


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Choosing the PS Model

Dependent on wishes and philosophy ofmanagement

80% of Fortune 500 firms choosenonnumeric PS models

Firms with outside funding often chosescoring PS models

Firms without outside funding often choseprofit / profitability PS models


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Management of Risk:

Terminology

Risk: Decision based on completeinformation about the probability of each

possible outcome. Uncertainty: Decision based on

incomplete or insufficient data.

Game: Decision based under conditionsof conflict.


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Areas of Uncertainty

Project timing & expected cash flow.

Direct outcome of project, i.e. what exactlywill the project accomplish

Side effects and unforeseen consequencesof project


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Risk Analysis

Crystal Ball2000 Software

1) Start with estimated risk profile for all

key parameters of project

2) Use Crystal Ball, an EXCEL plug in,

to represent decision by statistical model

3) Repeat many times to get a statistical

distribution of all possible outcomes


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Window-of-Opportunity

Analysis

Estimate IN ADVANCE economicimpact of innovation before R&D isundertaken

Set up a baseline of current process as thesum of all current sub processes

Compute cost / performance of newinnovation as a multiple of each subprocess in the baseline system


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Problems Affecting Data Used

in PS Models

Accounting: arbitrary assignment of overheadcosts, linear cost and revenue forecasts

Measurements: (subjective vs. objective),(quantitative vs. qualitative), (reliable vs.unreliable), (valid vs. invalid)

Technology shock: New technology has to

overcome initial resistance threshold.


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Project Portfolio Process (PPP)

Step 1: Establish a Project Council

Step 2: Identify Project Categories & Criteria

Step 3: Collect Project Data Step 4: Assess Resource Availability

Step 5: Reduce Project and Criteria Set

Step 6: Prioritize Projects within Categories Step 7: Prioritize the projects within categories

Step 8: Implement the Process


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Project Proposal:Content

Cover letter

Executive summary

Description and past experience of project team

Nature of technical problem to be solved

How to approach solution of technical problem

Plan for implementation of project

Plan for logistic support and administration


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Project Proposal:Cover letter & Executive summary

Compose a cover letter as key marketing

instrument

Explain fundamental nature and generalbenefits of project

Minimally technical language


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Project Proposal:Past Experience of Project Team

List all key project personnel with titlesand qualifications

Include full resume of each principal

Provide all pertinent references


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Project Proposal:Technical Approach

General description of problem to beaddressed or project to be undertaken

Major subsystems of problem or project

Methodology of solving the problem

Special client requirements Test and inspection procedures


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Project Proposal:Implementation Plan

Estimates of time, cost and materials for eachsubsystem and the whole project

Establish major milestones to break project intophases

List equipment, overhead and administrative

cost

Develop contingency plans (incl. slack time)


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Project Proposal:Plan for Administration and Logistic Support

Control over subcontractors

Nature and Timing of all reports (progress,budget, audits)

Change management

Termination Procedures

touch of classcapabilities (artistsrenderings, meeting facilities, video conferencing,computer graphics)

project -meaning and definition

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