Chapter one: Introduction to Project

1.1. Definition of a project

The dictionary meaning of project:
The word project comes from the Latin word projectum meaning “to throw something forwards”
The word PROJECT thus actually originally meant “something that comes before anything else
happens”.
The general definition is:
 According to PMI a project can be defined as a temporary endeavour undertaken to create a
unique /non routine product or service.
 UNIDO (1986) defined “a project as a proposal for investment to create, expand and/or develop
certain facilities in order to increase the production of goods and/ or services in a community
during a certain period of time”.
 Therefore, a project is accomplished by performing a set of activities.
 Aim of the project is to attain its objectives and then terminates.
For example, the construction of a house consists of many activities like:
 digging of foundation pits,  construction of roof,
 construction of foundation,  fixing of doors and windows,
 construction of walls,  Fixing of sanitary fitting, wiring etc.
 Thus, we can define a project as an organized programme of pre-determined group of activities
that are non-routine in nature and that must be completed using the available resources within the
given time limit.
Basically, project is planned to achieve a particular aim. Some of the reasons to start a project can be:
 A customer request or market demand
 An organizational need
 A technological advance
 A legal requirement
Classification of projects
The project can be grouped/classified according to their common characteristics
Categories of projects are many and depend on the following factors:
a. Objectives – (Economic/profit, non-profit/social services relief).
b. Sources of funds – (Private/Equity capital, Public/community, governmental, NGO).
c. Ownership – (Individuals and community)
d. Size – (Small scale, large scale).
e. Geographical coverage – (Local, National, International).
f. Time- / short range and long range /
Details of the classification
1. Economic projects
• These are projects that aim at generating income.
E.g. Cash crop framing (coffee, cotton, tea etc.), business concerns like: shop keeping, an industry, a
commercial farm or farming for profit.
2. Social Projects
• These are projects that aim at providing social services and do not earn a direct income.
E.g. projects on education, health, water and sanitation, road construction and maintenance etc.
3. Private Projects
• These are projects that belong to and are managed by individuals or groups of individuals. They
aim at making a profit e.g. an individual’s retail shops; a farm belonging to a private.
4. Public/Community Projects
• These are projects that are community owned and benefit society (community) as a whole without
exclusion.
• E.g. roads, public grazing land, forest, where everyone may be free to harvest herbs, firewood,
fruits, public utilities like water, electricity, etc.
5. Government Projects
• These are projects initiated, planned and implemented by Government e.g. Poverty Alleviation
Project (PAP)
6. Non-Governmental Projects
• These are projects, initiated, set up and implemented by Non-Governmental Organisations
(NGOs) both indigenous (Local) and foreign (or international).
7. Local or National Projects
• Local projects are those projects which are initiated or funded by a given country or local
authority – District, city municipality.
• National projects on the other hand are projects common to a Country/Nation as a whole.
• E.g. Polio vaccination, national road construction network.
8. International Projects
• These are projects that involve or are implemented by two or more countries. They may be
referred as:
• Bilateral - Involving 2 countries:
E.g. Ethio-Japan Road construction
Finland’s development cooperation with Ethiopia such as: education for all children, clean
water and toilet for all, rural development etc.
• Multi-lateral- involving more than 2 countries
E.g. COMESA (Common Market for East and Southern Africa) Projects
IGAD (inter governmental authority on development)
9. Small Scale (Micro) Projects
• Also referred to as Micro-enterprises, these are projects which are small in size, use limited
resources, employ few people, and have small capacity. E.g. a poultry unit, retail shop, a road side
seller.
10. Large scale (Macro) Project
Also referred to as Macro Projects, they are projects which are:
 Large in size and scope,  Employ many people of diverse skills,
 Require heavy initial investment,  Have high capacity of production.
E.g. Hydroelectric power plant (HEP), sugar processing factory.
11. Short Range Projects:
They are completed within one year, and are focused towards achieving the tactical objectives. They are
less rigorous (accurate); require less risk. They are not cross functional (denoting to a system whereby
people from different areas of an organization work together as a team.)
These projects require limited Project Management tools, and have low level of sophistication. It is easy
to obtain approval, funding and organizational support for short range projects.
12. Long Range Projects:
These projects involve higher risk and a proper feasibility analysis is essential before starting such
projects. They are most often cross functional. Their major impact is over long period of time, on internal
as well as external organization. Large numbers of resources are required to undertake long range
projects and they require break through initiatives from the members.
1.2. Main Features /characteristic of a Project
Objectives: A project has a set of objectives or a mission. Once the objectives are achieved
the project is treated as completed.
Life cycle: A project has a life cycle (it has beginning & an end).
Uniqueness: Every project is unique and no two projects are similar. Unique does not mean
that there is nothing else that is similar
Team Work: Project is a team work and it normally consists of diverse areas. There will be
personnel specialized in their respective areas and co-ordination among the diverse areas calls
for team work.
Complexity: A project is a complex set of activities relating to diverse areas.
Risk and uncertainty: Risk and uncertainty go hand in hand with project.
Customer specific nature: A project is always customer specific. It is the customer who
decides upon the product to be produced or services to be offered and hence it is the
responsibility of any organization to go for projects/services that are suited to customer needs.
Use of resources: A project consumes resources. The resources required for completing a
project are material, money and time.
1.3. National Development Planning and Project Analysis
National planning is the mechanism by which governments set up their proprieties, objectives and
demonstrates their intension. Project analysis and national development planning are closely related;
The best economic appraisal of projects cannot be made without referring to such plans and policies of
the country. A sound plan requires a great deal of knowledge about existing and potential projects.
National plans spell out (explain) a range of economic and social objectives and strategies meant to
enhance growth and development
What is growth? What is development?
 Investment and development expenditures foreseen (predicted) in the plans can be clarified
and realized through projects
 Development plans and projects are closely interlinked
Effective planning requires wide range of information:
 About existing and potential, investments, and
 Their likely effects on growth and national objectives
 Project analysis provides the necessary information for national planning
  Projects selected for implementation become vehicles for using resources to create new
income/wealth
Financial and administrative resources available to governments are always limited
 Scarce resources need to be allocated among many sectors and competing demands as
efficiently as possible
 Project analysis enables optimal allocation of resources.
 Helps to prioritize activities - higher priority projects with greater payoff undertaken first
 During 1960s--70s period the project became the means through which governments of
developing countries translated their development plans and policies into programs of
action
 Projects were (and still are) seen to act as crucial coordinating mechanism for
implementation of policy and the integration of resources and institutions
Policy, institutional, and physical environments influence the progress of development activities
Developing countries–characterized by poor policy environment
Have to undertake extensive & consistent policy reforms to attain good and stable macro -economic
environment
Structural Adjustment Programs (SAP) –is mentionable as an extensive reform initiative
SAP–required governments to open the path for the private sector
Rationale for SAP:
 Governments do not have sufficient capacities or the comparative advantages to do everything
 Governments should help the private sector to undertake most activities
 Governments should create an enabling environment for the private sector to flourish or making
appropriate policy reforms
 Government should provide public goods
Fundamental roles of government
 Establish a firm foundation of law
 Maintaining a non distortion policy environment including macro-economic stability
 Investing in basic social service & infrastructures
 Protecting the vulnerable in the society
1.4. Role of project manager (PM)

The project manager (PM) is the leader of a team performing a project. To ensure a successful project,
the project manager and his team must:
 Identify the stakeholders,
 Determine their needs, and
 Manage and influence those needs
A key to stakeholder satisfaction is the diligent and accurate analysis of the stakeholders themselves as
well as their stated needs and unstated expectations. A project manager should not just be handed a
statement of work from upper management and then try to complete it; rather the PM should be deeply
involved with the development of that statement of work. The roles of a PM are many, some of which
include the following:
• Identifying the requirements and risks
• Making plans and organizing the effort
 • Qualifying and possibly selecting project team, vendors, and other participants
• Communication among team, management, stakeholders
• Assessing the probability of occurrence of problems
• Developing solutions to problems (both in advance and on the spot)
• Ensuring that progress occurs according to the plan
• Deliverable management
Key stakeholders on every project include:
• Project manager-the individual responsible for managing the project
• Customer – the individual or organization that will use the project’s product.
• Performing organization – the enterprise whose employees are most directly involved in doing
of the project work
• Project team members- the group that is performing the work of the project.
• Sponsor – the individual or group within or external to the performing organization that provide
resources in cash or in kind to the project.

Figure.1.1. Relevant stakeholders

1.5. Project Environment

All projects are planned and implemented in a social, economic, environmental,
political and international context.
• Cultural and Social Environment is that how a project affects the people and how
they affect the project. This requires understanding of economic,
demographic, ethical, ethnic, religious and cultural sensitivity issues.
• International and Political Environment refers to the knowledge of international,
national, regional or local laws and customs, time zone differences,
teleconferencing facilities, level of use of technology, national holidays, travel
means and logistic requirements.
• Physical Environment is the knowledge about local ecology and physical
geography that could affect the project, or be affected by the project.