Project Life Cycle

Project Management Life Cycle Meaning and Phases

Table of Contents:-

Meaning of Project Management Life Cycle

The project management life cycle is a collection of generally sequential project phases. The determination of the number of project phases is based on the control requirements of the project organization. The project life cycle represents the linear progression of a project, from defining the project, through developing a plan, implementing the plan and closing the project.

A project management life cycle usually specifies.

1) The technical work that must be carried out in various phases of the project.

2) The list of people and their roles in each phase of the project life cycle.

The attention that a particular project receives is again not uniformly distributed throughout its lifespan but varies from phase to phase. During a specific phase of the project life cycle, attention must be given based on the requirements of that phase. Therefore, it is required to know the various phases in the life of a project.

Phases of Project Management Life Cycle

Generally, all projects have to go through the following five phases:

1) Need Identification

This phase is also known as conception phase. This is the phase during which the project idea takes root. The idea may first emerge when one is earnestly seeking solutions to specific problems. The problems may be non-utilization of available funds, plant capacity, expertise or simply unfulfilled aspirations. When one is seized with the problems, he looks in and around to find out ways of overcoming them.

The development of the project management life cycle begins with identification, determining whether there is a need for a development project in a particular sector, area, community, etc. The identification process typically includes two main aspects: situation analysis and problem analysis. Let’s discuss these two important aspects in detail

i) Situation Analysis

Understanding the situation is the starting point for designing any development project or program. Situation analysis broadly involves the analysis of needs and assets, problem analysis, and examination of relevant interventions.

According to Towen (2001), situation analysis is an activity that can firmly link planning to the realities in the field and, thereby, to the implementation of the project. The situation analysis may include an analysis of the physical, economic, social, cultural, and political environment within which the population lives. Some of the development indicators used during the situation analysis of a project include the composition of the population, housing, sanitation, health, employment, drinking water, education, landholding, industry, services, etc.

ContextType of Information
Socio-Demographic1. Population composition and distribution
2. Family Formation and Household
3. Health Services and Education
4. Housing conditions
5. Drinking water and Sanitation
6. Access to communication and energy
Socio Cultural & Political1. Political structure
2. Political participation
3. Relevant laws, statutes and policies
4. Predominant social structure
5. Gender role in the household
6. Decision making pattern
7. Condition of marginalized
Economic Activity1. Political structure
2. Political participation
3. Relevant laws, statutes and policies
4. Predominant social structure
5. Gender role in the household
6. Decision making pattern
7. Condition of marginalized
Table: Information for Situation Analysis

ii) Problem Analysis

The second step in need identification is problem analysis. To understand a situation that may be influenced by a project, it is essential to know the problem conditions that constitute development constraints, as well as their causes. It is of prime importance in developmental project planning, as it strongly influences the design of all possible developmental interventions. Problem identification is a deductive process, involving a state of affairs or facts or figures that cause difficulties and suffering. Problem analysis not only investigates “What is wrong?” but also seeks to understand “Why” and “How” it is wrong, in order to assign priority to the problem.

It seeks to answer several questions:

  1. What is the problem?
  2. Why is this a problem?
    a) What are the possible causes of the problem?
    b) How serious is the problem?
  3. Who is affected by the problem?
    a) How many are they?
    b) Where are they located?
    c) What are their characteristics?

2) Definition Phase

It may so happen that an idea will suddenly come to his mind as he surveys the environment. It is also possible that ideas will be put to him by his well-wishers or those working on the problems for him. Regardless of the situation, the ideas need to be documented and structured before they can be considered and compared with other competitive ideas.

3) Definition Phase

The definition phase of the project will develop the idea generated during the need identification phase and produce a document describing the project in sufficient detail covering all aspects necessary for the customer and/or financial institutions to make up their minds on the project idea.

The areas to be examined during this phase, for example, in the case of a cement plant, may include the following:

i) Raw Materials

Qualitative and quantitative evaluation of limestone reserves.

ii) Plant Size/Capacity

Enumeration of plant capacity for the entire plant and for the main departments.

iii) Location and Site

Description of location supported by a map.

iv) Technology/Process Selection

Selection of optimum technology, reasons for selection and description of the selected technology.

v) Project Layout

Selection of the optimum layout, reasons for the selection, and preparation of appropriate drawings.

vi) Plant and Machinery

Selection of optimum equipment, reasons for selection, description of selected equipment and machinery, stating number, type, specifications, capacity, source and cost.

vii) Electrical and Instrumentation Works

Listing the broad features of the major electrical and instrumentation items, suggesting a broad scheme for power distribution and power grid map.

viii) Civil Engineering Works

Selection of optimum civil works, reasons for selection, description of selected civil work and cost estimates.

ix) Utilities-Fuel, Power, and Water

Selection and description of utilities stating qualitative properties, quantities, source, availability and unit costs.

x) Manpower and Organizational Pattern

Selection of labour and staff considering organizational structure/layout, skill requirement and level of training, availability and cost estimates.

xi) Financial Analysis

Total investment costs, sources of finance, total production costs and evaluation of financial viability.

xii) Implementation Schedule

This phase, therefore, clears some of the ambiguities and uncertainties associated with the formation made during the conceptual phase. This phase also clearly outlines the risks involved in proceeding with the project. A project either be accepted or dropped at this stage.

Once the project needs are identified and the decision is made by project management to proceed with the project, the next step is to launch or initiate the project. There are a number of activities associated with this stage. The project sponsor creates a project charter that delineates the authorization of work on the project, defines the authority, responsibility, and accountability of the project team, and establishes the scope boundaries of the project. The success of the project team genuinely depends on starting with complete and accurate information, management support, and the authorization necessary to manage the project.

3) Planning and Organizing Phase

This phase can effectively start only after the definition phase but in practice, it starts much earlier, almost immediately after the conception phase. This phase overlaps so much with the definition and implementation phases that no formal recognition is given to this by most organizations. Some organizations, however, prepare documents such as project execution plans to mark this phase.

By and large, organizations, during this phase, deal with the following, and in most cases take necessary action for the realization of the same:

i) Project infrastructure and enabling services,

ii) System design and basic engineering package,

iii) Organization and manpower,

iv) Schedule and budget,

v) Licensing and governmental clearances,

vi) Finance,

vii) Systems and procedure,

viii) Identification of project manager,

x) Design basis, general conditions for purchase and contracts,

x) Site preparation and investigations,

xi) Construction resources and materials, and

xii) Work packaging.

Thus, this phase involves preparing for the project to launch smoothly.

The planning phase is one of the important stages in the project management life cycle. Project planning defines the activities to be performed, the output to be produced, and how these activities will be accomplished and managed. It outlines each major task, estimates the time, resources, and cost required, and provides a framework for management review and control. In essence, planning involves identifying and documenting scope, tasks, schedules, costs, risks, quality, and staffing needs.

The project manager, along with the project team, prepares the project plan and seeks approval from the management. The project plan is a comprehensive document that enables the project team to initiate and complete the work necessary to achieve the project’s goals and objectives. It addresses how the project team will manage the various elements of the project.

4) Implementation Phase

This is a period of intense activity for the project. It is during this period that something begins to take shape in the field, and people can see the project for the first time. Preparation of specifications for equipment and machinery, ordering of equipment, lining-up construction contractors issue of construction drawings, etc., takes place during this phase. As far as the volume of work is concerned, 80-85% of project work is done in this phase only. This phase itself is more or less the whole project, every attempt is made to fast track, i.e., overlap the various sub-phases such as engineering, procurement, construction and commissioning to the maximum extent. This is besides starting the implementation stage itself in parallel with the earlier phases of the project lifecycle. Few projects can afford the luxury of completing one implementation sub-phase fully before moving on to the next.

After the project plan is prepared, it is ready for execution or implementation. The project team acquires all necessary resources required to carry out the project and is prepared to perform project activities. The project manager, along with the project team, invests their energy and efforts in participating, observing, and analyzing the project activities to ensure the production of the desired output and the achievement of the project’s goals and objectives. In other words, execution involves carrying out the work necessary to produce the project’s product. Furthermore, executing refers to implementing the project plan. In essence, executing involves coordinating and managing project resources while carrying out the project plan, performing the planned project activities, and ensuring their efficient completion.

5) Monitoring/Controlling

The function of the project manager at this stage is to monitor and compare actual performance with the planned performance and take corrective measures to achieve the desired outcome when there are significant differences. By regularly monitoring and measuring progress, identifying variances from the plan, and taking corrective action if required, project control ensures that project activities are met.

6) Commissioning, Shut-down or Clean-Up Phase

This is a transition phase in which the hardware bulk with the active involvement of various agencies is physically handed over for production to a different agency that was not so involved before. For project personnel, this phase is essentially a clean-up task. Drawings, files, documents, and operation and maintenance manuals are catalogued and handed over to the customer. The customer has to be satisfied with guarantee-test runs. Any change required at the last minute for fulfilment of contractual obligations in respect of performance has, therefore, to be completed during this phase to the satisfaction of the customer. Project accounts are closed, materials reconciliation is carried out, outstanding payments are made, and dues are collected during this phase.

The most important issue during this phase is the planning of the staff and workers involved in the execution of the project.

Closing out is the final but crucial phase of project cycle management. Once the result is produced to the customer’s satisfaction, the project is considered complete. However, this should not be the end. A final lessons-learned review should be conducted before considering the project complete. Failing to conduct the lessons-learned review means that future projects are likely to suffer. Although project closeout is a standard process, it is an essential one. According to Haugey, project closure means the formal acceptance of the deliverables and the disbanding of all the elements that were required to run the project.

Project Life Cycle

One of the most basic concepts in project management is the project life cycle. This concept is widely employed in the field of marketing management, where the product life cycle is analyzed in terms of the overall revenue generated over time. Upon the introduction of a new product, the features are assessed, and revenues initially grow slowly, marking the “establishment” phase. Subsequently, there is a swift increase in revenues during the “growth” phase. However, in the “maturity” phase, revenues reach a plateau, and this is succeeded by a decline in revenues, known as the “decline” phase.

Project Life Cycle

Adapted from William R. King and David I. (Eds), the life cycle in the Handbook of Project Management is followed by a decline in revenues during the “decline” phase. Management experts have similarly examined the life cycle of a project in terms of the intensity of activity associated with a particular project. Accordingly, a project is divided into four distinct phases:

  1. Feasibility
  2. Design
  3. Production
  4. Termination

The image provides a general idea of the nature of activities and their intensity throughout the entire life cycle of a project. Project Management can also be examined from the perspective of various functional specializations in management. Considering this viewpoint, each project encompasses the following dimensions: Technical, Commercial, Financial, Socio-economic, Environmental, and Managerial. Throughout each phase of the project, the Project Manager, responsible for the project, must attend to all these dimensions to successfully manage the project.

(i) Feasibility

This phase of a project is a vital component that commences with the identification of an unfulfilled need in the economy or the market. This need serves as the foundation for a concept or idea, inspiring an entrepreneur or enterprise to design and establish a project to address it. For instance, consider power projects, two-wheeler projects, fertilizer projects, oil refinery projects, or any other project; at the outset, there is a shortage in areas such as power, two-wheelers, automobiles, fertilizer, and so on.

Building upon this initial need and a body of information, knowledge, and understanding about the possibilities for fulfilling it, several ideas are conceived. Among these ideas, some are deemed more probable than others. Take, for example, power projects. To sustain the progressive development of our country, there was a recognized need to increase the availability of electric energy to meet the rising demands of industry, government, and the population at large.

Strategic Decision-Making and Feasibility Assessment in Energy Project Development

Considering this basic need, various possibilities for generating electric energy were contemplated, including thermal, hydro, geothermal, and solar, among others. From these ideas, it was determined that the thermal route of producing electric energy held the most promise for our country. Concurrently, the magnitude of the basic need was perceived to be so significant that it required attention and coordination at the national level, leading to the establishment of the National Thermal Power Corporation.

These ideas undergo preliminary screening to ensure their feasibility at a prima facie level. At this stage, the focus is broadly on aspects such as the likely demand-supply gap, the technical feasibility of addressing this gap, and the willingness to take the financial risk associated with the project. Following this initial screening, the project ideas undergo a detailed investigation of all six dimensions that impact a project. A decision is then made either to discard the idea or proceed with the concept.

Decision-Making and Feasibility in Project Management Life Cycle

At this juncture, an investment decision must be made because significant expenses would be incurred to transform the idea into a detailed executable plan and ultimately execute the plan.

Note at this point that the decision regarding the feasibility of a project is made at a specific time and applies only to the conditions prevailing at that time. Therefore, even if a project idea is deemed unfeasible and discarded, it is typically archived for potential reconsideration at a later date.

For example, some mining projects for coal might be considered unviable due to the coal layers being too deep within the earth, making it economically impractical to extract. However, this viability assessment considers the current prices of other energy sources, particularly that of oil. If, for some reason, oil prices increase significantly (as seen during the two oil shocks), some of the coal mining projects previously deemed non-viable may later become feasible.

Similarly, human-powered flying machines were once considered technically unfeasible due to the unavailability of lightweight yet strong materials. With the advent of new materials technology, this barrier has been overcome.

If a project idea is determined to be generally feasible from all considerations, it is then granted a “go-ahead” signal. This signal signifies a commitment on the part of the authority issuing the signal to provide the necessary resources for successfully carrying the project through to its logical completion.

Phase I of the project can be summarized as follows:

  1. Identification of the need
  2. Establishment of the primary feasibility of the project idea
  3. Identification of alternatives
  4. Evaluation (appraisal) of the alternatives
  5. Investment decision.

(ii) Design

Once the investment decision is made, the design or planning stage of the project commences. In the design phase, the original project idea is expanded as much as possible to create a comprehensive blueprint for the next stage. This involves freezing the technical parameters, completing the basic design of the project, finalizing specifications for major plant and equipment, estimating project costs in greater detail, planning a schedule for the project, and taking all necessary steps to secure the required funds and other resources for the successful execution of the project.

There is a significant increase in activities, and a considerable number of people become involved, along with substantial amounts of money being spent. In the design phase, attention must be paid to all six dimensions, and fairly detailed plans of action need to be specified. Although the feasibility and design stages share similarities in content, they differ in depth and detail. By the conclusion of the design phase, a blueprint for the project’s execution is ready. The output of the design phase is typically referred to as the Detailed Project Report (DPR). Normally, an entrepreneur or organization, along with financial institutions participating in project financing, would review the DPR and approve it, possibly with changes. During this second phase of the project life cycle, the intensity of activities continuously increases.

(iii) Production

After the design phase concludes, a project transitions into the execution or production phase, where the focus is on translating the ideas detailed in the DPR into physical reality. Typically, this involves taking steps to procure the materials, machinery, and equipment needed for the project, as well as constructing facilities like buildings, equipment foundations, and infrastructure at the project site to accommodate these items. These activities are broadly categorized as civil and structural work. Once the plant and equipment are manufactured and delivered, and the civil and structural work is completed to receive them, they are erected and tested.

The intensity of activities continues to build up and reaches its peak somewhere during the execution phase. However, as the execution nears completion, the intensity of activities begins to decline. This phase is the most crucial part of a project, requiring the largest input of all resources. The demands on the Project Manager are at their peak due to the sudden escalation in activity levels. There is a substantial need for almost continuous monitoring and control of all activities, making decisions, taking prompt corrective actions, and addressing numerous conflicts that inevitably arise when various agencies collaborate on the project.

(iv) Termination

Finally, the construction of the project reaches its conclusion, and the last phase of project termination begins. During this phase, the newly constructed facilities are tested one by one and then in an integrated fashion, with efforts made to resolve any teething problems that may arise. In this phase, a group of individuals is identified to ultimately take over the operation of the facilities created during the project execution phase. These operations, maintenance, and services personnel are brought in for trial runs and commissioning. In other words, these activities are jointly conducted by the project and operational personnel.

This process ultimately leads to the handover of the newly created facilities to the operating personnel and the winding up of the project team or its transfer to a new project. This may also involve training the operating personnel, transferring leftover materials, releasing specialized resources reserved for use in the project, and reassigning the project team to a new project.

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