The document provides an overview of key concepts in project management. It defines a project as a temporary endeavor undertaken to create a unique product or service. Projects are unique, have a specific deliverable and due date, and involve pulling together organizational resources. Project management involves directing resources throughout the project life cycle to meet objectives for scope, cost, time, quality and satisfaction. It addresses uncertainties that can be managed but not eliminated in projects.

1. Chapter 1
Project Management Concepts

2. WHAT IS A PROJECT?
• “A temporary endeavor undertaken to
create a unique product or service” (PMI –
Project Management Institute, 2000)
• It is any undertaking that has definite, final
objectives representing specified values to
be used in the satisfaction of some need or
desire. (Ralph Currier Davis)

3. Why the emphasis on project
management?
• Many tasks do not fit neatly into business-
as-usual.
• Need to assign responsibility and authority
for achievement of organizational goals.
• It simplifies the control

4. What projects do?
• A project consists of a combination of
organizational resources pulled together to
create something that did not previously
exist & that will provide a performance
capability in the design & execution of
organizational strategies.
• Projects have a distinct life cycle, starting
with an idea & progressing through design,
engineering & manufacturing or
construction, through use by a project
owner.

5. Characteristics of Projects
• Unique
• Specific Deliverable
• Specific Due Date (temporary)
• Might be a part of broader program
• Undertaken at all levels of management or
at cross organizational levels
• Often used as a means of implementing
strategy.
• Complexity

6. Key considerations involved in
projects – Three goals
• What will it cost?
• What time is required?
• What technical performance capability will
it provide?
• How will the project results fit into the
design and execution of organizational
strategies?

7. Figure 1-1: Performance, Cost,
and Time Project Targets

8. Definition of Project Management
• The art of directing and co-ordination of
human and material resources throughout
the life of a project by using modern
management techniques to achieve
predetermined objectives of scope, cost,
time, quality and participant satisfaction.
(PMI)

9. Scope of Project Management
• Time management • Risk management
• Cost management • Procurement
• Quality management management
• Human resource • Integration
management management
• Communication • Scope management
management

10. Skills Required for Effective
Project Management
• Conflict Resolution
• Creativity and Flexibility
• Ability to Adjust to Change
• Good Planning
• Negotiation
– win-win versus win-lose

11. Formalization of liaison devices
in project management
• Individual liaison
• Standing committees
• Product managers
• Managerial liaison
• Task forces
• Project engineer
• Liaison position
• Teams

12. Effects of project management
• Decline in midlevel positions
• Emergence of a new class – project
managers
• It is about managing change in
organizations
• Elusive job security
• Pressure on project managers

13. Project Management vs.
General Management
Project Management General Management
• Specific cost, schedule & • Strategic management of
technical performance enterprise
• Matrix organizational design • Vertical organizational design
• Ad hoc in nature • Ongoing enterprise
• Focal point for financial & • Seeks enterprise efficiency &
enterprise interfaces effectiveness
• Concerned with product, • Concerned with enterprise
service & project mission, objectives, goals,
stakeholders stakeholders
• Supports organizational • Integrates functional &
strategies product activities

14. Activities under Project
Management
• Planning
• Organizing
• Motivation
• Directing
• Control

15. Project Processes
• Project management process groups –
– Initiating processes
– Planning processes
– Executing processes
– Controlling processes
– Closing processes
• Product oriented process
Both the processes are essential and
complimentary for any project.

16. PHASES OF LIFE CYCLE OF A
PROJECT
• Idea – generate an idea
• Research – have a quick look
• Design – have a closure look
• Development – do it
• Marketing – try it
• Production – use it
• Post sales service – post implementation
review

17. Figure 1-2 The Project Life
Cycle

18. Figure 1-3 An Alternate Project
Life Cycle

19. Criteria to be applied for use of
project management
• Size of the undertaking
• Unfamiliarity
• Market change
• Interdependence
• Resource sharing
• Importance of the project
• Organizational reputation

20. Reasons for failure of project
management start-up strategies
• Failure to design & implement a well-
designed & developed strategy for the
introduction of project management
• Project management is viewed as the fad
of the month and is not taken seriously
• Project management is viewed as a
separate entity in the organization and not
as building block in the management of
change in the enterprise.

21. Types of projects
• Closed projects or painting by numbers
• Semi-closed project or going on a quest
• Semi-open project or making movies
• Open project or walking in the fog

22. Representation of types of
projects
Don’t Know
know how how
Know Quest Pairs by
what number
Don’t know Fog Movie
what

23. Applications of project types
Project Type of change it Applications
Type helps create or
manage
Painting by Evolutionary Improving your continuing
numbers business operations
Going on a Revolutionary Proactively exploring outside
quest current operations and way of
working
Making a Evolutionary Leveraging existing capabilities
movie
Lost in a fog Revolutionary Solve problem or explore area
outside your current operations
and way of working

24. Total Project Management Life
Cycle
• Conceptualization
• Formulation
– Technical
– Organizational
– Commercial
– Financial
– Economic
• Evaluation
MEM 612 Project Management

25. Total Project Management Life
Cycle Cont…
• Feasibility studies report
• Investment report
• Environmental clearance
• Administrative council
• Engagement of consultants
• Detailed project report
• Technical specification
• Financial closure
• Contracts finalization MEM 612 Project Management

26. Total Project Management Life
Cycle Cont…
• Execution of contracts/ project
• Monitoring & control
• Completion of construction
• Commissioning of project
• Performance guarantee test
• Handing over to operation
• Closure of contracts
• Completion cost & capitalization
• Post project evaluation and report
MEM 612 Project Management

27. Characteristics of investment in
projects
• High investment cost
• Long implementation schedules
• Long gestation period
• Dynamic domestic and international market
• Government priorities and policies
• Development in the technologies
• Substantial delays in the past
• High cost of capital
MEM 612 Project Management

28. Factors to be considered for new
investments
• Objectives and benefits of investment in
projects to be clearly spell out
• Adoption of technologies keeping in view
the developing technologies & our needs
• Exercising care while adopting new
technologies
• Selection of consultant
• Selection of proven suppliers/ turnkey
contractors MEM 612 Project Management

29. Factors to be considered for new
investments Cont..
• Detailed micro plans and strategy of
implementation
• Faster decision making required
• Technology and know-how transfer
• Project mix after investment in projects
• Continuous up-gradation of technology
• Manpower planning and training
MEM 612 Project Management

30. Diagnosis of delays in projects
• Project ownership between operation & project
authorities in dilemma
• Delayed response for corrective measures
• Lack of involvement in planning stage
• Over dependence on consultants
• Contracting agencies competence
• Increase in quantities of work with reference to
original estimates
• Inadequate planning for structural fabrication
• Delays in indigenous equipment supplies
MEM 612 Project Management

31. Consequences of Delays in
Projects
• Interest loss
• Higher capital cost due to inflation & change in
foreign exchange parity
• Loss of profit as envisaged due to deferment of
benefits
• Risk of outdated technology
• Project remains unprofitable throughout its life
• Production loss
• National loss of resources
• Loss of production incentive (in financial terms) to
workers MEM 612 Project Management

32. Types of investment
• Additions – To sustain present level of production;
To give incremental output/ productivity
• Modification – For ease of operation/ maintenance;
Technological up-gradation
• Replacement – Expansion; Diversification – new
products
• New Technology – New facility; retrofitting with old
facilities
• Quality improvement – Customer satisfaction
• Pollution Control - Statutory
MEM 612 Project Management

33. Types of Expenditure
• Capital Expenditure
• Revenue Expenditure
MEM 612 Project Management

34. Confronting Uncertainty – The
Management of Risk

35. What uncertainties are encountered
in project management?
• Time required to complete a project
• Availability of key resources
• Cost of resources
• Timing of solutions to technological
problems
• Actions taken by competitors

36. Can uncertainty surrounding
projects ever be eliminated?
• No, but it can be managed