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)