Table of Contents:-
- What is a Project?
- Meaning of a Project
- Definition of Project
- Characteristics of Project
- Scope of Project
- Scope Creep of a project
- Classification of Project
- Objectives of Project
What is a Project?
A project involves accomplishing a particular task with clear objectives, requiring the allocation of time and resources for execution. Projects provide an excellent opportunity for efficient planning, comprehensive assessment, and independent evaluation as individual work units.
Meaning of a Project
Project initiation is the vital first step in accomplishing a specific mission, concluding upon task completion. It starts with a clear mission and involves managing activities using various resources, both human and non-human, all directed toward mission achievement. What makes a project unique is that it’s a one-time occurrence, not a daily, weekly, or monthly routine, involving the conversion of organizational resources into goods or services.
Considering a project as a cycle means that each phase not only builds on the previous one but also contributes to the next, creating a self-sustaining cycle that consistently generates new projects from previous ones.
A project essentially represents an investment activity where the project manager allocates capital resources to develop a productive asset, with the expectation of reaping benefits over time. It’s essentially an expenditure made with the anticipation of returns and is treated as a unified entity for planning, financing, and execution. It embodies a distinct endeavour with a clear start and end, aimed at achieving specific objectives. A project should be quantifiable in terms of costs and returns, with well-defined priorities for regional development and specific clientele groups in mind.
Definition of Project
A project is a temporary and distinct undertaking with a set start and end date, and its duration may vary. It aims to meet a particular need within an organization, whether that involves creating a product or service or enhancing a business process. This sets it apart from an organization’s regular and ongoing operations in producing goods or services.
According to the Project Management Institute’s (PMI) Publication, A Guide to the Project Management Body of Knowledge (PMBOK), a project is defined as “a temporary endeavour undertaken to create a unique product or service”
As per F.L. Harrison, “A project can be defined as a non-repetitive, one-off undertaking, normally with discrete time, financial and technical performance goals”.
According to the British Standard, “A unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within a defined schedule, cost and performance parameters”.
Hence, a project comprises a sequence of interrelated activities that are carefully planned and executed in a specific order to deliver a distinctive product and/or service, all while adhering closely to predefined timeframes, budget, and client demands.
- nature of marketing
- difference between questionnaire and schedule
- features of marginal costing
- placement in hrm
- limitations of marginal costing
- nature of leadership
- difference between advertising and personal selling
Characteristics of Project
Some characteristics of projects are as follows:
- Unique Activities
- Attainment of Specific Goals
- Sequence of Activities
- Specified Time
- Interrelated Activities
- Transience Creates Urgency
1) Unique Activities
Each task involves a series of unique activities, signifying that the organization is tackling this type of activity for the first time. These activities within the task remain non-repetitive in similar cases, ensuring that each activity maintains its distinctive characteristics. In cases of repeated activities, the variables that shape them change with each repetition.
2) Attainment of Specific Goals
Organizations initiate projects to accomplish specific tasks or achieve particular objectives. The nature of these tasks varies from one project to another. Examples of projects within an organization include building a new facility, digitizing the accounting department, or conducting market analysis for a new product planned for launch.
3) Sequence of Activities
In a project, a series of activities must be systematically executed in a specific order to produce the final result. The sequence of these activities depends on the technical requirements and the interdependence between them.
4) Specified Time
Each task is assigned a clear start and end date, with this timeframe being determined either by the project team or by the customer. The project’s duration can vary widely, ranging from mere hours to several years. The project reaches its conclusion when the product aligns with the client’s specifications, or when it becomes evident that meeting these final product requirements is no longer feasible.
5) Interrelated Activities
Projects comprise a series of interconnected technical activities where the result of one phase triggers the initiation of the next.
6) Transience Creates Urgency
For a project to be successful and yield a return on investment, it’s important to meet development goals within a set timeframe. In some cases, these time constraints are quite stringent, with a narrow market window for the project’s output. If the project doesn’t align with this market window, it loses its value. Therefore, committing to excessively tight timelines is generally avoided due to the low likelihood of success.
Scope of Project
Project scope is a vital part of project planning, involving the identification and documentation of specific project objectives, deliverables, costs, tasks, and deadlines. This process establishes a clear understanding of the project’s boundaries and parameters, promoting clarity and alignment among stakeholders for successful program execution.
The project scope encompasses all the activities required to design, construct, deliver, and test a new process, enhancement, or function, as outlined in the project’s scope and task details within the work breakdown structure. In simpler terms, the scope represents what your plan covers, as defined by the program manager. The scope statement is the document that outlines the project’s deliverables, constraints, assumptions, objectives, boundaries, and other pertinent information. It can also be referred to as the terms of references or the statement of work.
Effective scope management
The scope statement defines the task’s boundaries, limits, and parameters while also outlining the roles and responsibilities of both the manager and each team member. It establishes clear procedures for approving and verifying completed work. This comprehensive project document not only clarifies project boundaries but also ensures that all team members fully understand what is included and excluded within the scope of the design. In extensive projects, adapting as the project progresses is common. Therefore, a well-defined initial project scope empowers the project team to effectively manage changes. When documenting a project’s scope, stakeholders should aim for precision to avoid scope creep— a situation where one or more aspects of a task require additional time, work, or effort due to miscommunication or poor planning.
To efficiently manage scope, it’s important to ensure clear communication among all team members, ensuring that everyone understands the project scope and agrees on the specific approach to achieve the project’s goals. As a part of scope management, the team leader should actively seek approvals and sign-offs from various stakeholders throughout the project’s progress, ensuring that the completed tasks align with everyone’s requirements as initially proposed.
Scope Creep of a project
Program managers are well aware of three inevitable certainties: taxes, death, and scope creep.
Scope creep occurs in a project when its requirements consistently expand during the development of deliverables. It signifies the expansion of the project’s scope, and the larger and more complex the project, the higher the likelihood of significant scope creep.
Let’s consider some key facts about scope creep:
1) The project’s boundary is often undefined at the project’s beginning
2) Sometimes, the boundary may not become clear until the manager has made significant progress in the project.
3) The manager might employ progressive or rolling-wave planning to articulate the scope more clearly.
4) Sometimes, the scope may only become fully clear after completing and testing the deliverables.
5) Even after stakeholders accept the deliverables, the interpretation of the scope boundary can remain open to debate.
Scope changes must have a solid business foundation. Consider this example: pursuing the development of an exceptionally high-quality product might appear appealing initially, but it’s essential to ensure there’s a market with customers willing to pay the higher price. Otherwise, the outcome could be a product that lacks demand or falls beyond the reach of potential buyers.
Classification of Project
We can categorize the project into these defined groups:
- National and International Projects
- Industrial and Non-Industrial Projects
- Projects Based on Level of Technology
- Projects Based on Size
- Projects Based on Ownership
- Infrastructure Projects
- Need-Based Projects
1) National and International Projects
Just as Indian companies collaborate with foreign counterparts to establish plants in India, Indian entrepreneurs also export their expertise by setting up plants in foreign host countries. Meanwhile, large industrial corporations or government entities in other nations undertake projects referred to as international projects.
Participating in international projects requires entrepreneurs to invest considerably more effort in understanding the local conditions and carefully evaluating project prospects. The risks associated with such projects are notably higher and distinct.
2) Industrial and Non-Industrial Projects
National projects fall into two broad categories: industrial and non-industrial projects. Industrial projects are undertaken by business organizations with the primary goal of generating wealth through profitable ventures. Non-industrial projects, on the other hand, encompass a wide range of initiatives such as healthcare, education, irrigation, agricultural development, soil conservation, and more.
For non-industrial projects, quantifying the benefits can be challenging since their primary focus is on providing social services. These projects receive funding from both Central and State governments, with budget allocations and development plans integrated into the Five-Year Plans.
3) Projects Based on Level of Technology
Industrial projects can be categorized based on technology into three groups: high-technology, conventional technology, and low-technology projects. High-technology projects typically involve substantial investments.
High-technology projects include endeavours such as space exploration projects, nuclear power initiatives, and advanced electronic ventures. In contrast, conventional technology projects utilize established or well-known technologies within industries such as sugar, steel, cement, chemicals, and others.
Conventional technology projects primarily produce products for use in various industries or as final consumer goods. While the investment in these projects is substantial, it’s not exceedingly large.
4) Projects Based on Size
Projects can be categorized based on their investment and plant capacity into three groups: large, medium, and small projects. Small-scale projects have a capital outlay of less than 25 crores, large-scale projects involve investments exceeding 100 crores, and medium-sized projects fall within the range between these two limits.
Large and medium-sized projects receive financial support from All India Financial Institutions such as IFCI, IDBI, and ICICI, as well as from commercial banks. On the other hand, small-scale projects obtain financial assistance through State Financial Corporations. Additionally, State Industrial Development Corporations assist small-scale projects in procuring essential raw materials, equipment, and related supplies.
5) Projects Based on Ownership
Projects can be categorized into three ownership-based categories:
- Public sector projects,
- Private sector projects and
- Joint sector projects.
i) Public Sector Projects
Government-owned projects, whether initiated by the Central or State government or both, fall under the category of public sector projects. These projects may be directly managed by administrative ministries/departments or government-owned entities such as Public Sector Enterprises/Public Sector Undertakings (PSE or PSU). Examples of public sector projects include airlines, railways, state transport corporations, nationalized banks like SBI, insurance companies like LIC, and steel plants such as Rourkela, Bhilai, and Durgapur.
ii) Private Sector Projects
Private-sector projects are characterized by full ownership in the hands of promoters and investors. These projects are owned by individuals, partnership firms, or companies (private or public but not PSU). While public-sector projects prioritize objectives other than profit, profitability is a fundamental consideration for private-sector projects. Entrepreneurs typically seek projects that offer satisfactory returns on their investments.
iii) Joint Sector Projects
Joint-sector projects involve co-ownership by both the State and private entrepreneurs. Typically, private sector expertise handles project management, while the government partner assists in liaising with government authorities, including securing substantial funding. The primary motive behind investing in joint sector projects is the state’s intention to leverage the managerial skills and marketing capabilities of private entrepreneurs. From the entrepreneur’s perspective, the joint sector is appealing because they are not solely responsible for funding their investment.
6) Infrastructure Projects
Infrastructure projects involve efforts aimed at developing vital infrastructure facilities within the country. These projects drive significant investment into critical sectors such as power, transportation, telecommunications, and ports. Unlike traditional projects for producing goods and services, infrastructure projects demand substantial resources and often entail extended implementation schedules.
7) Need-Based Projects
Every project initiated by an organization must serve a distinct purpose or address a specific need. Recognizing these specific requirements is crucial for effective project management. A new industrial project, executed by a well-established organization, can be grouped into the following categories:
i) Balancing Project
A project aimed at enhancing or fortifying the capacity of a specific segment within the entire production plant, to align the production capabilities of all production centres within the plant, is referred to as a balancing project. Balancing projects involves fine-tuning the capacities of different production units within the plant to ultimately optimize the planned output of the final product.
ii) Modernization Project
In today’s rapidly evolving landscape of technology and production processes, modernization becomes an imperative for organizations. It allows them to harness new technologies, processes, input materials, and production methods. Staying competitive and ensuring cost-effective production necessitates the abandonment of outdated technology.
Modernization projects focus on enhancing plants and processes through the introduction of new machinery, techniques, and procedures, without altering the organization’s core activities or product line. These projects aim to boost productivity and streamline operations, ultimately leading to increased profitability for the organization.
iii) Expansion Project
An expansion project, undertaken by an organization, is aimed at significantly increasing the production volume of its existing products or services. For instance, a large organization that currently manufactures 100,000 television sets annually might embark on an expansion project to boost its capacity to 150,000 sets per annum by establishing a new plant. Such a project is referred to as the organization’s ‘expansion project.’ The primary driver behind undertaking expansion projects is the firm’s desire to meet projected increases in product demand or to expand its market share in that product category.
iv) Replacement Project
A replacement project is initiated to address issues caused by the ageing and wear-and-tear of specific plant components. These issues, if left unattended, result in escalating maintenance expenses and decreased plant output. In a replacement project, the problematic part of the plant, including outdated machinery, is replaced with new equipment. This replacement not only reduces maintenance costs but also enhances the organization’s production output.
v) Diversification Project
When an organization ventures into activities that are entirely different from its current operations, it’s engaging in a diversification project. In such cases, a company explores new and potentially profitable investment opportunities in entirely different sectors or industries, marking the pursuit of a diversification project.
vi) Rehabilitation/Reconstruction Project
A rehabilitation project entails actions aimed at restoring and revitalizing the financial health of a company encountering difficulties.
vii) Plant Relocation Project
When an organization deems it necessary to relocate its current plant from its current site to a more suitable location, it initiates a project known as a plant relocation project. Likewise, when a company acquires an existing plant, either domestically or internationally, and relocates and reinstalls it at its premises, the undertaking for this re-erection or reinstallation is classified as a plant relocation project.
Objectives of Project
The goal of project execution is to progress toward achieving the project objectives. These objectives typically encompass three primary goals, namely:
1) Performance: This involves meeting the designated standards for functionality, reliability, and safety.
2) Cost: Managing expenses within allocated budgets for seamless operations.
3) Time: Punctual project execution, demonstrated at the time of launch.
While the last two objectives are often tied to resource constraints, this might oversimplify the true purpose of project objectives. A project can encompass multiple objectives that need to be well-defined for both the program manager and the owner. Establishing priorities among these objectives is essential to distinguish primary and secondary goals.
Some of the common objectives, listed without any specific order, include:
1) Quality of product,
2) Fastest completion time,
3) Avoiding unproven equipment,
4) High level of automation,
5) Safety during construction,
6) Lowest capital investment,
7) Designing for particular project life,
8) Lowest operational costs,
9) Safety for maintenance,
10) Reliability of information,
11) Minimizing start-up time,
12) Security of information,
13) Enhanced public image,
14) Use of local sub-contractors,
15) Safety during operation,
16) Use of local suppliers.