PROJECT MANAGEMENT

SEMESTER 4
COURSE M.COM

UNIT 1 (BASIC CONCEPTS)

TOPICS

1. Concept of Project

2. Categories of Project

3. Project Development Cycle/Project Life Cycle

4. Concept Of Project Management

5. Tools & Techniques of Project Management

6. Forms Of Project Management

WHAT IS PROJECT?
A temporary endeavor undertaken to create a unique product or service.
Temporary means that every project has definite end. Unique means the
product of service is different in some distinguish way from all similar
product or services

FEATURE OF PROJECT
 Temporary -Time bounded task.
 Definite Beginning & Completion- Project not ongoing effort. Thus,
every project has a definite beginning & ends.
 Definite Objectives/Scope- Pre-decided or well-defined goals.
 Unique- Product of service is different in some distinguish way from
all similar product or services.
 Defined Time & Resources- Time Constraints & Resources
constraints. Limited time and Resources.
 Multiple Talents- Multiple specialists are working on any specific
project.

CATEGORIES OF PROJECT
 On the Basis of Ownership
 Public Project
These are the projects done by public institutions e.g., Govt.
Projects.
 Private Project
Private projects are undertaken by private enterprises.
 Public Private Partnership
Public-private partnerships involve collaboration between a
government agency and a private-sector company that can be
used to finance, build, and operate projects, such as public
 transportation networks, parks, and convention centers. Financing a
project through a public-private partnership can allow a project to
be completed sooner or make it a possibility in the first place.

 On the Basis of Investment

 Large Scale Project
Large scale projects are those projects which requires a huge
amount of investment e.g., Real Estate Project, Road
Construction etc.
 Medium Scale Project
Medium scale projects are those projects which medium level
of investment.
 Small Scale Project
Small-scale project management is the specific type of project
management of small-scale projects. These projects are
characterized by factors such as short duration; low person
hours; small team; size of the budget and the balance between
the time committed to delivering the project itself and the time
committed to managing the project. They are otherwise
unique, time delineated and require the delivery of a final
output in the same way as large-scale projects.

 On the Basis of Research in Academia

 Major Projects
These projects require 3 to 5 years for completion & minimum
funding of rupees 3 lakhs in case of social sciences & rupees 5
lakh in case of sciences.
 Minor Projects
Projects which will be completed within a year and have maximum
funding of rupees 1 lakh in case of social sciences and rupees 3 lakh
in case of sciences.

 On the Basis of Sector

 Agriculture Projects
Agricultural project means any project proposing agricultural
uses such as commercial farming (e.g., row, field, tree, and
nursery crop cultivation) or animal husbandry (e.g., cows, goats,
and hogs).
 Industrial Projects
Industrial project means the land, buildings, equipment,
facilities, and improvements found by the governing body to
be required or suitable for the promotion of industrial
development and for use by manufacturing or industrial
enterprise, regardless of whether the land, buildings,
equipment, facilities, and improvements are in existence when
or are to be acquired or constructed after the finding is made.
 Service Projects
A service project is an organized effort aimed at benefiting
others or the community at large. It typically involves
volunteers who dedicate their time, skills, and resources to
complete a specific task or project that serves a social or
humanitarian cause. Service projects can take many forms and
can be undertaken by individuals, groups, or organizations.
 On the Basis of Objectives
 Commercial Projects
These projects are undertaken for commercial purpose and
ROI is expected out of these projects.
 Social Projects
These projects are undertaken for social purpose & welfare of
the people.

 On the Basis of Nature

 Conventional Projects
These projects are traditional projects which do not apply any
innovation idea or technology or method.
 Innovative Projects
These projects bring new innovation in the sense of
modification or new technology.
These can be classified into: -
1. Technology
2. Research
3. New Product Development.

 On the Basis of Time

 Long Term Projects
The projects which run for many years till the objectives are
achieved.
 Medium Term Project
These projects run typically for 3 to 5 years.
 Short Term Project
These projects are completed within 1 years.
 Very Short-Term Project
These projects are completed within 1 month or 1 day.
 On the Basis of Function
 Marketing Projects
Marketing project management is used to keep marketing
campaigns on track and stakeholders informed throughout the
project lifecycle. It provides clarity among teams, keeps your
projects within scope, and helps you meet customer needs.
 Financial Projects
These projects are undertaken to raise finance or restructure
capital.
 Human Resource Projects
A human resource project is all aspects of a project
management plan that relate to the individual members of a
project's team. This can include identifying needed team
members, assigning roles and tracking professional
relationships between staff members.
 IT & Technology Projects
These projects are undertaken to manage, acquire &
development of technical equipment or technology itself.
 Production Projects
These projects are undertaken in the areas of production or
operation. These projects improve current operations, they
may not produce radical improvement, but they will reduce
costs, get work done more efficiently, or produce a higher
quality product.
 Strategic Projects
These projects involve creating something new and innovative.
They allow an organization to gain strategic advantage over it’s
competitors.
  On the Basis of Risk
 High Risk Projects
These projects have higher degree of risk when I say risk I am
talking about the future uncertainties.
 Low Risk Projects
These projects have very low degree or negligible level of risk.

 On the Basis of Investment Decision

 Independent Project
A project where the acceptance/ rejection does not directly
eliminate other project form consideration or affect the
likelihood of their selection.
 Mutually Exclusive Project
Acceptance of one project prevents the substitute project from
being accepted. Most of them are either or decisions.
 Contingent Projects
One where the acceptance or rejection depends on the
decision to acceptor reject multiple no. of other projects. Such
project may be complementary or substitute.

PROJECT MANAGEMENT
Project management deals with the planning scheduling controlling &
monitoring the complex
non routine activities that must be completed to reach the predetermined
objectives of the project.

 Need of Project Management

 Exponential expansion of human knowledge.
 Growing demand for broad range of complex sophisticated &
customized goods & services.
  Evaluation of world-wide competitive market for production &
consumption of goods & services.
 Importance of Project Management
 Global Competition
 Knowledge Expansion
 Corporate Downsizing & Restructuring
 Increased customer focus
 Development of Third World Economies.

TOOLS & TECHNIQUES OF PROJECT MANAGEMENT

 Project Selection Techniques
 Cost Benefit Analysis
Systematic process for identifying quantifying & comparing
expected benefits & cost of an action decision or policy.
 Risk Sensitivity Analysis
Aims to eliminate uncertainty about the future by modelling
risk in any given assignment. It is also called “What if” analysis.
 Project Execution & Planning Techniques
 Work Break Down Structure
Break a large project into smaller tasks that can be reasonably
evaluated & assigned to the teams.
 Project Execution Plan
This is a governing document that defines how a project is to
be executed monitored and controlled.
 Project Responsibility Matrix
It is a project tracking tool that maps people against specific
profiles & tasks in a project. Its objective is to understand who
is doing what.
  Project Management Manual
It is a guide at all level of the team recognizing that each
participant has a part in project success. It is success.

 Project Scheduling & Co-ordinating Techniques

 Bar Graph
Also called Gantt Chart as it was designed by Henry Gantt as a
visual aid for planning and controlling his ship building
projects in WW1. It shows task against time.

 Project Life Cycle/ Project Development Cycle

In general, all project goes through four phase life cycle under
the following headings:
Concept/Initiation Phase: The first phase starts the project by
establishing the need or opportunity for the product facility or
service. The feasibility of proceeding with the project is
investigated and on the acceptance of the proposal move to
the next phase.
Design/Planning Phase: The second phase uses the
guidelines set by the feasibility study to design product, outline
the build method and develop detailed schedules and plans
for making or implementation.
Implementation/Execution Phase: The third phase implements the
project as per the baseline plan developed in the previous phase.
Commissioning/Closure: The fourth phase confirms the project has been
implemented or built to the design and terminates the project.
  Line of Balance (LOB)
Allows the balancing of the operations such that each activity
even if it is repetitive in nature is continuously & efficiently
performed in each consecutive unit.
E.g., Multistorey Building.

 Program (Project) Evaluation & Review Techniques (PERT)

& Critical Path Method (CPM)
 Critical Path Method (CPM)
CPM calculates all the activities start dates, finish dates and
floats. Activities with zero float from critical path which
determines the duration of the project- delaying a critical
activity will delay the project. CPM uses a deterministic
approach, which suits a project where time duration can be
accurately predicted, e.g., a construction project.
The critical path method (CPM) also called critical path analysis
(CPA) was developed around 1957 by Remington Rand Univac
as a management tool to improve the planning and control of
their turnaround time (production to sales) - the benefits were
quickly recognized and they soon paid back their development
costs.
CPM was initially setup to address the time cost trade-off
dilemma (crashing) often presented to project managers,
where there is a complex relationship between project time-
to-complete and cost-to-complete. If the duration of the
project is shortened, will the project cost more or less? Some
costs will reduce (plant hire), while others will increase
(overtime). On large complex projects you need a model
like CPM to work out the overall effect of these types of
changes.
 PERT
PERT uses a probabilistic approach, which suits a project where
time duration may vary over a range of possibilities e.g.,
research project.
In the late 1950s the US Navy set up a development team under
Admiral Red Reborn with the Lockheed Aircraft Corporation,
and a management consultant Booz Alien & Hamilton - to
design PERT as an integrated planning and control system to
manage the hundreds of sub-contractors involved in the
design, construction and testing of their Polaris Submarine
missile system.
The PERT technique was developed to apply a statistical
treatment to the possible range of activity time duration. A
three-time probabilistic model was developed, using
pessimistic (p), optimistic (0) and most likely (m) time duration.
The three-time duration were imposed on a normal
distribution to calculate the activity's
expected time.
 Project Monitoring & Management Techniques
 Project Resource Organization Management Planning
Technique (PROMPT)
This technique is used for development & support of IT systems.
It provides prediction of project performance &
impact of various management decisions.
 Performance Monitoring Techniques
It is essential for effective project control that performance is
measured while there is still time to take corrective action. This
includes devising such method from which whether the project
is going as plan or not can be checked.
 Updating, Reviewing & Reporting Techniques
This involves making changes in the project plan, work style to
catch up with the continuously changing environment.

 Project Cost & Productivity Control Techniques

 Project Budgeting Techniques
Estimation of the total cost for a project to be completed.

Analogous Budgeting: Analogous estimating is a technique

that uses information from a similar past project in order to
estimate that cost and duration of a planned project.
This approach is often used when there is limited data available
for project, making it difficult to generate accurate estimates.
By comparing current projects to previous projects, we can
estimate outcomes and plan accordingly.
Parametric Estimation: Parametric estimating is a statistical &
accuracy-based technique for calculating the time, cost, and
resources needed for project success. Combining historical and
statistical data, parametric estimating uses the relationship between
variables to deliver accurate estimation.

Top-Down Estimating: Top-Down estimating is a method of

evaluating a project or budget as a whole and then separating it into
smaller components. With top-down approach, professionals create
an overall plan or budget for a project without defining the
particulars.

Bottom-Up Estimating: Bottom-Up estimating involves the

estimation of work at the lowest possible level of detail. These
estimates are then aggregated in order to arrive at summary totals.
By building detailed cost and time estimates for a work package, the
probability of being able to meet the estimated amounts improves
substantially.

 Value Engineering
Looks for new components & material of the project, function
& development of a systematic & organized approach to
deliver the project at the lowest cost possible.

 Cost Break Down Structure

Represent all the cost categories that need to be purchase
within the task for its completion.
 Project Communication & Clean Up Techniques
 Control Room
Gives a bird eye view of the project by providing all mission
critical information which helps to make decision on the basis
of actually happening of action or task.
 Computerized Information System/MIS
System including the input of data, processing & output of
information to be used either for reporting, controlling &
documentation.

FORMS OF PROJECT ORGANISATION

 Line & Staff Organization

Line & staff organization is a modification of line organization and it

is more complex than line organization.
According to this administrative organization, specialized and
supportive activities are attached to the line of command by
appointing staff supervisors and staff specialist who are attached to
the line authority.
The power of command always remains with the line executives and
staff supervisors guide, advice and counsel the line executives.
Personal secretary to the Managing Director is a staff official it is
more efficient as it reduces the wastage of time and other resource.
 Divisional Organization

Divisional organization structure in which various departments are

created on the basis of products, territory or region, is called a
divisional structure. Each unit has a divisional manager, who is
responsible for performance and has authority over their division.
Each division is further divided into functional units like production,
sales, finance, etc.
Their divisional head is solely responsible for the profit or loss of the
division. It is more effective as it leads to specialization because one
person has to perform same type of task again and again.
 Matrix Organization

A matrix organization is a company structure where teams report to

multiple leaders. The matrix design keeps open communication
between teams and can help companies create more innovative
products and services. Using this structure prevent teams from
needing to realign every time a new project begins.

A matrix organization differs from this classic structure since team

members report to both a project manager and a department lead.