Prodevsys

Hemen Parekh
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Email: hcp@recruitguru.com
PRODEVSYS
A CONCEPT NOTE
by
Hemen Parekh
3P Consultants Pvt. Ltd. Mumbai
20th July 2004

Hemen Parekh
Email: hcp@recruitguru.com 2
BACKGROUND
• G O I has opened up the economy under its liberalization-program. This process is irreversible and will gain
momentum in the coming years.
• A key structural feature of this new policy, is PRIVATIZATION, in all sectors of the Economy. This will be
particularly so in the areas of Infrastructure Development
Road / Transport / Rail / Air / Telecom / Power / Ports / Airports / Cross-country pipe lines / Bridges /
Tunnels / Dams / Jetty etc.
• Property Development
Townships / Mass Housing / Commercial Complexes / Sports Stadium / Convention Centres / Holiday Resorts
etc.
• Industrial Structures
Process Plants / Manufacturing Plants / Industrial Estates etc.
• Development of these sectors is vital to rapid growth of economy. Central/State Govts. have no funds to spare
for these projects. Hence private-sector participation on a big-scale is inevitable. Even foreign parties will be
encouraged to enter these areas by forming joint-ventures with Indian Partners.

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• Any Industrial Group wanting to grow rapidly must exploit this opportunity. This must be done quickly before the
field gets crowded with competition.
Timely action is the essence.
• A major part of Infrastructure/Property Development Projects consists of
 System Design / Engineering / Technology
 Construction (leaving out equipment-supply)
• It takes many years to build-up expertise / human assets /Plant & Machinery assets to become a major Property
Development Company. This is, therefore the single – biggest hurdle for anyone wanting to be a key player in
this sector.
• It is, therefore, in the light of the foregoing observations that I have developed a concept called PRODEVSYS.

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CONCEPT
PRODEVSYS is a concept under which a company interested to make rapid strides in Project Development shall
develop an EXPERT SYSTEM. This system shall, broadly cover following modules :-
• TECHNOLOGY
• FINANCE
• MARKETING
• PROJECT INDENTIFICATION / EXECUTION
• LEGAL MATTERS
• LAND ACQUISITION
• CENTRAL GOVT. / STATE GOVT. LIASON

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• Each of the above-mentioned departments ( of the company ) will comprise of a few EXPERTS (and a few
supporting staff). The idea is to have a (manpower-wise) lean organisation heavily dependent on
Computerised, networked EXPERT – SYSTEMS and a very efficient Telecom communication system.
• The Central idea behind an EXPERT – SYSTEM based organisation is that the organisation itself shall not
 Engage in actual construction
 Develop system-design or construction-method on its own ( i.e. Technology Development ) although it
will have a huge Computerised library of such systems / methods
 Engage in architectural design or structural designs
• The organisation, shall enter into “project-wise” technical collaborations or joint –ventures with Overseas ( or
even Indian ) Companies to execute the Projects. These companies will be selected on the basis of their
perceived “expertise” in that particular field of construction. These tie ups will be aimed at “tapping” from
abroad ( or from within the country ) the most appropriate “Technologies” needed for the execution of a given
project.
• The main MODUS OPERANDI of this organization will be OUT – SOURCING / SUB – CONTRACTING.

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THE THEME
• The THEME will be
Do not duplicate within the organisation, the skills and the expertise and the experience which other
organisations have already built-up over years. Let us hire these skills / expertise / experience in the
execution of our projects.
The only skills that we shall develop in house are the skills to,
Identify the best vendor / supplier of such skills
Frame the “scope of work” and “terms of Reference”
Enable such outside expert-organisations to submit their Detailed offers
Study /analyse / interpret the offers
Negotiate the contracts / commercial Terms
Monitor the performance of the contractors and motivate them to excel

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• And such “ Out – Sourcing” shall not be confined to only the actual “construction” but shall encompass,
• “ Financing ” contracts
• “ Marketing ” contracts
• “ System Design ” contracts
• “ Detailed Engineering ” contracts
• “ Procurement ” contracts
• “ Architectural / Structural / Monitoring ” contracts ( i.e. Project Management )
• “ Operating ” contracts ( to manage the property after Commissioning )
• The EXPERT Organisation will , by itself, not undertake / manage any activities.
• By definition, it will only manage the “ Managers ” of various activities.

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It will actually Orchestrate / Coordinate / Synthesize / Blend / Amalgamate the efforts of a large number of
SPECIALIST COMPANIES , each of which is “expert” at some specific aspect of the Project.
So the CORE – COMPETENCE of our company will be to “manage” a number of such expert companies – and
through them, their respective professional technologies – be these expertise at ,
 Raising finances
 Marketing the concept of the project
 Designing
 Constructing etc. etc.
It is only such an approach that can catapult a company in The BIG – LEAGUE within a short – span of time and
with Minimum of resources.

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RESOURCES
• Manpower
 I have earlier said that there will be only 6/8 departments
 And may be 60/80 persons altogether (half of whom will be experts in some or other field ).
• Space
 To begin with an office – space of 10,000 sq - ft should suffice to kick-off the operations.
• Equipment
These will be largely office- automation equipment such as
 Computer Systems / Telecom Systems / Modems
 Audio / Video equipment / Photocopying equipment etc.
Finance
 Here again the idea would be to deploy a bare minimum of “own” funds. Fund shall be raised from “Investors” as
“Down Payment” and as “progress payment” , as each project advances.

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FUNDS
• The funds shall be raised by giving-out “franchises “, for operating of
• Convention Centres
• Theatres / Cable TV Services
• Amusement Parks
• Exhibition Halls
• Restaurants / Hotels
• Transport Systems ( for township )
• Educational Institutes
• Telecom Services
• Banking Premises
• Shopping Centers

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• It is envisaged that the Investors and the Franchises shall be two separate sets of people.
• For certain projects, it should be possible to raise funds from ,
 Widely held, public – limited companies
 NRIs
 Overseas Mutual Funds
 Public at large

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ORGANISATION
• The PRODEVSYS Company shall primarily focus on the “Development” aspect.
• As far as “Execution” aspect is concerned, the emphasis shall be on the “Management of Execution” rather
than the execution itself.
• Over a period of time, PRODEVSYS must come to be recognised as a BRAND which is synonymous with
property-development projects. It will undertake such projects, not only on its own but also on behalf of
others, who do not have the necessary expertise to get into this business.
• For such individuals or Corporate, PRODEVSYS will provide a TOTAL TURNKEY solution.
• In fact, a time shall come when PRODEVSYS can been seen as
A Solution in Search of a Problem !

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• Over the last 3 years we have seen that hundreds of companies have gone to public and raised hundreds of
thousands of crore of rupees from the market. Almost anybody has been able to raise funds in the market. So
apparently there is no dearth of funds.
• But whereas any number of companies have been able to raise funds, very few have been able to put-up their
projects in time, largely due to lack of expertise in “Project planning & Project management”
• This is where the USP of PRODEVSYS comes in, viz :
• PROJECT PLANNING / PROJECT MANAGEMENT
• But it is not merely another Project – Consultancy or a Project Design Organisation , undertaking such
assignments on behalf of “Clients” and earning a meagre fee and employing hundreds of engineers.

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COMPARATIVE SCENARIOS
Project Consultancy Vs Project Development
The following tabulation will clearly bring-out the differences.
PARAMETER A TYPICAL
ENGINEERING
CONSULTANCY CO. WORKING
FOR OTHERS
PRODEVSYS
(DEVELOPING-
IITS OWN PROPERTY)
1 Conceptualising X 
2 Project Identification X 
3 All Permissions X 
4 Land Acquisition X 
5 Funding X 
6 Technology / Engineering  To be sub –
contracted
7 Construction Sometimes own -
mostly given out

8 Marketing Tender based Aggressive, Concept-based
Brand Selling
9 Planning / Mobilising  X
10 Procurement Rarely-mostly
done by client
To be sub -
contracted

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PARAMETER A TYPICAL
ENGINEERING
CONSULTANCY CO.
WORKING FOR OTHERS
PRODEVSYS
(DEVELOPING-
IITS OWN PROPERTY)
11 Project Execution Own team To be sub –
contracted
12 Implementation / Commi –
ssioning
By itself To be sub –
contracted
13 Operating X To be sub –
contracted
14 Franchising Not Applicable 
15 Equity base Small Small
16 Asset base Small Small
17 Manpower Large Small
18 Equipment Nil Nil
19 Working Capital Nil Large
20 Profit Margin Low High

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