Introduction of Project:

 A project is a temporary endeavor undertaken to create a unique product, service, or result.

 Characteristics of projects include:

o Temporary: Projects have a defined beginning and end.

o Unique: Projects are one-of-a-kind endeavors, different from routine operations or repetitive

tasks.

o Progressive elaboration: Project details become clearer as the project progresses and more

information is gathered.

o Cross-functional: Projects often involve people from different departments or disciplines.

 Types of projects:

o Construction projects: Building infrastructure like bridges, roads, or buildings.

o IT projects: Developing software, implementing systems, or upgrading technology.

o Marketing projects: Launching campaigns, conducting market research, or developing

branding strategies.

o Research projects: Investigating new technologies, conducting scientific studies, or

exploring innovative ideas.

Project Life Cycle:

 The project life cycle represents the phases a project passes through from initiation to closure.

 Common phases include initiation, planning, execution, monitoring and controlling, and closure.

 Each phase has specific deliverables and objectives that contribute to the overall success of the

project.

Concepts of Deliverables:

 Deliverables are tangible or intangible outputs produced as a result of the project.

 Tangible deliverables: Physical products or materials produced by the project, such as a software

application or a construction structure.

  Intangible deliverables: Non-physical outcomes of the project, such as improved processes, increased

customer satisfaction, or enhanced brand reputation.

The Project Management Process:

 The project management process involves initiating, planning, executing, monitoring and

controlling, and closing the project.

 Initiating: Defining the project scope, objectives, and stakeholders.

 Planning: Developing a detailed project plan, including schedules, budgets, and resource allocation.

 Executing: Implementing the project plan and carrying out the work defined in the scope.

 Monitoring and Controlling: Tracking project progress, managing changes, and ensuring that the

project stays on track.

 Closing: Formalizing project completion, obtaining acceptance from stakeholders, and transitioning

the project deliverables to the client or end users.

Roles of Project Team & Project Leader:

 Project Team: Comprised of individuals with specific skills and expertise required to complete the

project tasks.

o Roles may include project manager, subject matter experts, team members, and stakeholders.

 Project Leader: Responsible for guiding the project team, making strategic decisions, managing

resources, and ensuring the project's success.

o The project leader provides direction, motivation, and support to the team members, fosters

collaboration, and resolves conflicts.

Fundamental Components of Project Cost:

 Project cost includes all expenses incurred to complete the project objectives within the defined

scope, schedule, and quality requirements.

 Components of project cost may include:

o Direct costs: Expenses directly attributable to the project, such as labor, materials, and

equipment.
 o Indirect costs: Overhead expenses not directly tied to a specific project but necessary for its

execution, such as administrative costs or utilities.

o Contingency reserves: Funds set aside to address unforeseen risks or changes during the

project execution.

o Management reserves: Additional funds allocated for project management activities, such as

monitoring and controlling, scope changes, or quality assurance.

1. Types of Costs:

o Direct Costs: Costs directly attributable to the production of a specific good or service.

These costs include materials, labor, and other expenses directly related to the production

process.

o Indirect Costs: Costs that are not directly traceable to a specific product or service but are

incurred in the general operation of a business. Examples include utilities, rent, and

administrative salaries.

o Recurring Costs: Costs that occur regularly and are expected to continue over time, such as

monthly rent or salaries.

o Non-Recurring Costs: One-time costs that are not expected to reoccur in the future, such as

equipment purchases or marketing campaigns.

o Fixed Costs: Costs that remain constant regardless of the level of production or sales.

Examples include rent and insurance.

o Variable Costs: Costs that fluctuate in direct proportion to changes in production or sales

levels. Examples include raw materials and hourly wages.

2. Project Financing and Budgeting:

 o Sources of Finance: Various avenues through which projects can be financed, including:

 Equity Financing: Raising capital by selling shares of ownership in the company.

 Debt Financing: Acquiring funds by borrowing from lenders, which must be repaid

with interest.

 Government Grants and Subsidies: Financial assistance provided by government

entities to support specific projects or industries.

 Venture Capital: Investment provided by venture capital firms in exchange for

equity stakes in startups or high-growth companies.

o Top-down Budgeting: An approach where senior management sets the overall budget for

the organization or project, and then allocates funds to individual departments or activities

based on predetermined targets or guidelines.

o Bottom-up Budgeting: A process where budgets are developed by lower-level managers or

project teams based on their detailed knowledge of the activities and resource requirements.

These budgets are then aggregated to create the overall budget for the organization or

project.

o Activity Based Costing (ABC): A method of allocating costs to specific activities or

processes based on their use of resources. ABC provides a more accurate understanding of

the costs associated with different activities, enabling better decision-making and cost

control.

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