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Chapter one
Introduction
to project
 Outline of the chapter
2

1. Definition of a Project
2. Characteristics of a Project
3. Classification of a Project
4. National Development Planning
and Project Analysis
5. Role of Project Manager
6. Project Management Environment
7. Project Organization Structure
1. Definition of Project
3

What is project?
No definition of project will suit every situation.
In other words there are a number of ways to
define a project.
Project is in general a building block of an
investment plan.
“A Project is a temporary Endeavour
undertaken to
create a unique product or service” (PMBOK®
Guide, 2000).
A project can be described as a combination of
human and material resources pulled together
in an organization to achieve a specific
objective.
Definition of Project (Cont…)
4

 A project is a complex set of activities where

resources are used in expectation of returns and
that lend itself to planning, financing, and
implementation as a separate unit (Gittinger,
1982).
 If development can be thought of as a progression
and improvement in the quality of life of the
people, projects are temporal and spatial entities
each with a
financial and economic value and a social impact
that make up the continuum (Little and Mirlees,
1974)..
 Definition of Project (Cont…)
5

 According to the British Standard 6079 of

1996 (as cited by ICMR, 2007), a project
is defined as a unique set of coordinated
activities, with definite starting and
finishing points, undertaken by an
individual or organization to meet specific
objectives within defined schedule, cost,
and performance parameters.
Definition of Project (Cont…)
6

According to USA Project Management Institute,

“Project is a one shoot, time limited, goal
directed, major undertaking, requiring the
commitment of varied skills and resources”
“Project is an effort that starts from scratch with a
definite mission, generate activities involving a
variety of human and non-human resources all
directed to words fulfilment of the mission and
stops once the mission is fulfilled.”
Definition of Project (Cont…)
7

A project is a set of proposals for the

investment of resources
 Into a clearly identified set of actions
 That are expected to produce future
benefits of a fairly specific kind,
The whole series of actions being the
subject of individual planning and
examination before being adapted and
implemented within a single overall
financial and managerial framework.
Definition of Project (Cont…)
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From the above all definitions we can learn that

 A project is an economic/development activity
 It requires a commitment of scarce resources
 It brings some benefit from its accomplishment
 The benefit should exceed its cost
Implementation of a project needs resources or
inputs.
Every project converts the given inputs into outputs
through the process of implementation
The out puts in the short run lead to outcomes while
in the long run it will result in impact
 Definition of Project (Cont…)
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Examples of projects
 Cement project
 Power project
 Refinery project
 Road project,
 Bridge project, Etc.
3. Characteristics of Project
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A project is a big-work.
It is basically a work of one whole thing.
 This means that while there may be
contribution from many people, it can be
regarded as one whole thing.
A comparison can be made with a book
There may be many chapters in the book
sometimes written by different authors
(which can be considered as sub-project),
the book is a single entity and is supposed
to serve a single purpose.
 Characteristics of Project
(cont…)
11
The various work that constitute the whole
are inter-related and together they tell the
whole story.
In the same way all works that are
interrelated can be grouped together and
termed as a project
Thus, with project there is a concept of
Wholeness despite diversity of work.
The wholeness concept does exist in a
factory or any organization in any other
work.
But, in case of a project the whole has
to be completed in one-shot (once for
all)
 Characteristics of Project
(cont…)
12

The special feature of project that

differentiate it from any other ongoing
activities, are
Objective: A project has a fixed set of
objectives.
 Once the objectives are achieved the project ceases to
exist
 Life span: A project can not continue
endlessly.
 It has to come an end at one time.
Single entity: A project is a single entity and
is normally entrusted to one responsibility
centre, while participants in the projects are
many.
Characteristics of Project
(cont…)
13

Team work: Any project calls for team work-.

The team members may be from different
 Discipline,
 Organization,
 and even country
Life cycle: A project has a life cycle reflected
by growth, maturity and decay.
Uniqueness: No two projects are exactly
similar even if the plants are exactly identical
or are duplicated.
 The location,
 The infrastructure,
 The agencies and
 Characteristics of Project
(cont…)
14

 the people make each project unique.

 Change: A project sees many changes through
out its life while some of these changes may
not have any major impact, there can be
changes which will change the entire course of
the project.
Unity in diversity: A project is complex set of
verities. Varieties in terms of
 Technology
 Equipments and material
 People and machinery
 Work culture and ethics, But they remain
interrelated
Characteristics of Project
(cont…)
15

High level of sub contracting : A high

percentage of a work in a project is done
through contractors. The more complex is a
project, the more will be the extent of
contracting
Risk and Uncertainty: Every project has a
risk associated with it.
The degree of risk and uncertainty will
depend on how a project has passed through
its various life cycle.
4. Classification of Project
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 Revenue Vs capital project
Project can come in many size and form.
They may be very simple or complex.
Major project types are two. These are,
Revenue project: Are those which can be
carried out within the normal organizational
structure and normally will be completed
within the a single accounting period.
Capital Project: Are those which can not be
carried out within the normal organizational
structure and are normally stretched over a
number of accounting periods.
In practice many projects fall between these
two broad categories
Classification of Project (cont …)
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Capital project always require considerable

capital investment.
The main feature of capital projects are,
 They usually occupy considerable time
 They usually employ huge capital
investment
As a result they do not fit readily into
conventional organizational structure but cut
across functional and time boundaries and
thus, require an organizational structure
particular to themselves.
When we say project we are mainly referring
to the capital projects.
Classification of Project (cont …)
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 In general projects be it revenue or

capital can be classified from different
perspectives.
a) On the basis of time horizon project can
be
Long term projects : Power plant project
Medium term projects:
projects Construction of
a factory
Short term project: Exhibition, trade fair
Classification of Project (cont …)
19

b) On the basis of the type of output:

Project producing tangible Products : Oil
mill
Project providing services: Telecom project,
Education etc.
c) On the basis of the scope of the project:
International project : Euro tunnel project
National Project: Eth Hydro power project
Regional Project:
Project Elementary school project
d) Based on the economic sector:
Agricultural project:
project Irrigation project
Industry project : Cement Project
Service sector project : Bank projects
Classification of Project (cont
…)
20

e) On the basis of technology:

Capital intensive project : Brewery project
Labour intensive project : Textile industry
project
f) Based on location :
Rural Projects
Urban project
g) On the basis of the nature of the project
Independent project : Hospital,
Hydroelectric power
Complementary project : Airport project,
Run Way and airport services are different
projects which are complementary to each
other.
5. National planning and project
analysis
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National planning is the mechanism by which

governments set up their priorities, objectives
and demonstrates their intentions.
Development planning can also be regarded
as an attempt to raise the rationality of
decision-making- carefully specifying
objectives and systematically sifting
alternative policy instruments so as to find
the optimal means of achieving the objectives
(Cusworth and Tom, 1993; DEPSA, 1981,
1990; Gittenger, 1972, 1885, 1998).
 National planning and project
analysis (Cont…)
22

In general, the essence of development planning

is that it is futuristic, i.e. it is forward looking and
it involves systematic thought and preparation.
A sound plan required a great deal of knowledge
about existing and potential projects.
projects
Since projects commit scarce resources, project
selection is meaningful only when it is placed
with in a broader development framework- the
medium or long-term development plans and
policy statements issued by the government
(Cuury and Weiss, 1993; Gittenger, 1998; Little
and Mirrlees, 1974).
 National planning and project analysis
(Cont…)
23
The best economic appraisal of projects cannot be
made without referring to such plans and policies.
The more elaborate the plans and policies of the
government, the easier becomes the work of the
project planner.
Identifying national development objectives,
elaborate sector programs, selecting priority areas
for investment, designing effective price policies
and mobilizing resources are of great help in
identifying development projects.
A realistic plan shall be prepared by assessing the
development potentials in the various sections of
the economy.
 National planning and project analysis
(Cont…)
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Any kind of plan shows the general direction of
action leading toward the achievement of set
objectives.
It is not enough for the purpose of implementation.
This means the plan has to be elaborated or cut
into ‘packages of action’.
action
The package of action can be divided into two
broad categories.
These are:
i. Program- which is the first step in plan elaboration
and
ii. Project-
Project the second step in plan elaboration.
 Program
25
Policies are implemented through programs
usually overall lengthy time scale of five to
ten years.
Programs have broadly expressed
development objectives.
Program in general is a groups of related
projects that are managed in a coordinated
ways to achieve certain objective.
A program is thus,
 larger in scope,
 activity oriented
 not necessarily time bound and
 its objectives are broader
 Project
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Project on the other hand achieves

goals, which lead to the
accomplishment of specific objectives
with in program.
Projects in general need to be SMART
(Specific, measurable, area bounded,
real and time bounded)
 Example
27

The national goal: Poverty Eradication

Strategy: Increase productivity ( in all
sectors)
Development program: Increase
agricultural productivity
This may result in a number of
projects like,
 Construction of dams ( irrigation
infrastructure)
 Upgrading the skill of agricultural
practices
 Construction of training centers
 Example(cont…)
28

Health program may have a number of

projects like,
 Construction of hospitals
 Training of health officers
 Expansion of health centres
 Role of Project Manager
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The project manager is the individual
responsible for delivering the project.
The individual leads and manages the
project team, with authority and
responsibility from the project board, to run
the project on a day-to-day basis.
To fulfil his/her specific responsibilities, a
project manager need special skills and
attributes.
 Specific Responsibilities of a project
manager
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The project manager:

 Manages the project taking into account
integration across all areas.
 Engages with stakeholders.

 Develops Project Plan.

 Directs project resources.

 Monitors and manages the project

schedule, project budget and project risk.
 Deals with operational issues.
 Specific Responsibilities of a project
manager…
31

 Organizes steering committee meetings,

including ensuring that minute will be taken.
 Reports to the steering committee, raising

strategic issues.
 Prepares Project Status Reports and Project

Change Requests for the steering committee.

 Ensures project meets requirements and

objectives.
 Manages project team members.
 Specific Responsibilities of a project
manager…
32

 Negotiates and resolves issues as they arise

across areas of the project and where they
impact on other activities, systems and
projects.
 Looks after the interests of the project team.

 Organizes and chairs project reference group

meetings, as appropriate.
 Communicates project status to project
sponsor, all team members, and other
relevant stakeholders and involved parties.
 Maintains project documentation.
Skills and attributes needed to be a project
manager
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The project manager should be able to:

 Establish a good working relationship with
the Senior Responsible Owner
 Direct, manage and motivate the project

team
 Develop and maintain an agreed project

plan and detailed stage plans

 Understand and apply business case and

risk management processes

Skills and attributes needed to be a project
manager…
34

 Tailor expert knowledge to meet specific

circumstances
 Plan and manage deployment of physical

and financial resources to meet project

milestones
 Build and sustain effective communications

with other roles involved in the project

 Apply quality management principles and

processes
[Link] management
environment
35

According to project management

institute(PMI) “Project Management is the
application of knowledge,
knowledge skills,
skills tools and
techniques to project activities to meet
project requirements.”
The project environment directly influences the
project and how it should be managed.
For project managers to be effective, they must
have a thorough understanding of the project
environment that may well be changing and so
continually shifting the goal posts.
Project management
environment (cont...)
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The project environment consists of the

numerous stakeholders and players that have an
input or are affected by the project.
All must be managed as any one person could
derail the project.
Project managers should Consider the following:
 Stakeholders (all interested parties),

 Client/Sponsor's requirements,

 Company's organization structure,

 Market requirements,
Project management
environment (cont...)
37

 Competitors,

 New technology,
 Rules and regulations,

 Economic cycle, etc.

 Project Management Structure
38

Project management is the process of planning,

organizing, executing, and controlling a project.
There are many different types of project
management structures that you can choose
from depending on the structure of the project
you are running or the specific needs of your
business.
There are two types of project organizational
structures:
1. Waterfall Modeling/Methodology, and
2. Agile Modeling/Methodology
 Project Management Structure
(Cont…)
39
Whether a firm is undertaking a few occasional
projects or is fully project-oriented and carrying on
scores of projects, any time a project is initiated,
the following three organizational issues
immediately arise.
A decision must be made about how
 To tie the project to the parent firm (inter-

organization),
 To organize the project itself (intra-organization),

and
 To organize activities common to other projects

(across-organization).
 Project Management Structure
(Cont…)
40
Project management structure is an
organizational format which facilitate effective
communication, co-ordination and control of a
project.
Traditional/classical organizational format may
not be suitable to the projects due to:
 Project is a non-routine, non repetitive
 Work often plagued with uncertainties.
 It involves co-ordination of efforts of
persons.
 The relationships in the project setting are
dynamic, temporary and flexible.
Project Management
structure(cont…)
41

Thus, there is a need for entrusting an

individual or group with the responsibility for
integrating the activities and functions or
various departments and outside organization
involved in the project work.
Depending on the authority that is given to
the person responsible for the project, the
projects organization may take one of the
following forms:
A. Functional organizational structure
B. Project-Based Organizational Structure
C. Matrix organizational Structure
 42

End of
Chapter
One