Unit-3

Project Planning and Control

# Concept of Planning:
Planning involves selecting missions and objectives and the actions to
achieve them; it requires decision making that is, choosing a future course of
action from among alternatives. It is the selecting and relating to facts and the
making and using of assumptions regarding the future in the visualization and
formulation of proposed activities believe necessary to achieve desired results.
According to Cleland & King. “Planning is the process of thinking through
and making explicit the strategic actions and relationships necessary to accomplish
an overall objective or purpose.”
According to Koontz & O’Donnell, “Planning is an intellectual process, the
conscious determination of a course of action, the basing of decisions on purpose,
acts and considered estimates.”
Thus, planning is the determination of a course of action to achieve a desired
result. Planning concentrates on setting and achieving objectives of an
organization. It is deciding in advance what to do, how to do it, when to do it and
who is to do it. It brings the gap from where we are to where we want to go. It is an
intellectual process characterized as the process of thinking before doing.

# Total Planning Process:

The planning process may have several activities. These activities include
several phases and are interlinked to each other. The planning process can be as:
i. Analyzing Opportunities: Analysis of opportunities is based on the scanning
of external and internal environment. Internal environment forces bring
strengths and weaknesses where as external environmental forces bring
opportunities and treats.
ii. Define the Vision, Mission, Goals and Objectives: The mission should be
clear and communicated to all the people concerned in it. Like mission vision
should be developed according to the entire goal of the organization. An
objective is the goals, which an organization tries to achieve. Objectives are
also described as the end point of planning. Clear-cut objectives lead to the
success of any plan.
iii. Forecast Planning Premises: What are the strengths and weaknesses of the
organizational and threats and opportunities in this regard. By this the
organizations have to decide upon the premise of the plan.
iv. Determination of an Alternative Course of Action: After forecasting the
planning premises, the next stage is to develop the alternative course of action
which aims to achieve the targeted objectives and goals. The alternative
course of action must be workable and relevant to the situation.
v. Evaluating Alternative Course of Action: Evaluation of the available
alternatives is a crucial job. The pros and cons of each alternative as well as
the expected return, social benefit, expenses, and so on are to be evaluated.
vi. Selecting the Best Course or Developing Strategies: Among the available
alternatives, the next process is to select the best alternative. This lead to
alternative, which the organization is carrying in the future.
vii. Establishment of the Sequence of Activities: Development of sequential
activities is to be required and the job is related to what is to be done by whom
and so on. The sequence of activities helps the organization while
implementing the plan.
viii. Formulation of Strategies of Long-range Plan: The next process is to
develop the long run plan. The workable strategies are to be developed at each
level and relate to the long run plan.
ix. Formulation of Functional or Tactical Plan: tactics are specific actions
used to achieve strategic goals and implement to the strategic plans. In
planning process it is formulated on the base of strategic plan.
x. Formulation of action Plan: Preparing the action program to achieve the
objectives in the light of environmental forces is a crucial job. Action
programming typically includes deciding who is going to do what and by
when and in what order for the organization to reach its strategic goals.
xi. Preparation of Budget: Budget is estimated income and expenditure based
on the action plan. Putting differently, action plans are converted into
financial planning. The budget serves as standards for control.
xii. Reviewing and Re-cycling the planning process: This is the final step in
the planning process. After the completion of cycle of planning process it is
necessary to review and redo the things related to formulating the plans
frequently.

# Concept of Project Planning:

Project planning is the process of setting goals and choosing the action to
achieve specific goals and objectives of the project. It is the integral part of project
management and chosen course of action with clearly defined objectives. Project
planning involves detailed design, estimates, scheduling, budgeting and allocation
of human and non-human resources. It involves the task of feasibility analysis,
appraisal and design.
According to Harold Kerzner, “Project planning is defined as the functions
of selecting the enterprise objectives and establishing the policies, procedures and
programs necessary for achieving them.”
In conclusion, project planning is a decision based on the future. It is a
continuous process of taking original decision with a view to achieve certain goals
in the future using standard norms and methodologies. It is the description of the
technical contents of the project. It defines project objectives, determines and
evaluates alternative course of action, selects action plans to achieve project
objectives.

# Need of Project Planning:

Project planning is necessary for many reasons. There are two basic reasons
for project planning. Firstly, involuntary reasons can be internally mandatory
functions for the organization in order to address organizational lag in response
time, environmental fluctuations, uncertainty and discontinuity. Secondly, the
voluntary reasons for planning are attempting to secure efficient and effective
operations. Major reasons among others are to eliminate or reduce risk and
uncertainties, allocate the resources properly, establish performance standards,
facilitate project implementation, improve efficiency in project operation, obtain a
controlling work and achieve projects goals within the constraint of cost, quality
and time. Poor project planning brings negative consequences on an overall life
cycle of the project.

# Project Planning Process:

Project planning is intellectual, systematic and logical way of doing project
work. Project planning must be systematic, flexible to handle unique activities,
disciplined through review and controls, and capable of accepting multifunctional
inputs. The project planning consists of the following steps:
i. Understand Project Scope and Objectives: Objectives are “results to be
achieved” or “end results” of the project. Project objectives should be clearly
understood and defined by the board of directors, senior management and the
professionals. Project scope sets the stage for developing a comprehensive
project and the development of work breakdown structure. Project scope
establishes the criteria that will be used to evaluate whether the major phases
of the project have been completed.
ii. Identify Key Project Stages: The project can be divided into major stages
from its inception, planning, implementation and termination. A clear
understanding of these steps helps people to plan in a logical and sequential
way. Normally, the key stages of project life cycle are conception, planning
and design, implementation and termination.
iii. Development of Project Plan: Development of the project plan is the critical
step in the project planning process. The management processes that are
undertaken during this phase include the planning of all elements of the
project so that project is ready for implementation. In this regard following
plan must be developed.
A. Project plan
a. Development of Activities Schedule
i. Application of work breakdown structure.
ii. Identification of activities.
 iii. Determination of activities sequence and dependencies.
iv. Estimation of Activities/Tasks duration.
v. Scheduling activities.
b. Development of Resource Plan
i. Identification of what types of resources (labor, equipment, material)
and in what quantities are required in order performing project
activities and tasks.
ii. Development of resources schedule by estimating when and for how
long each resource is going to be utilized.
iii. Assignment of resources to specific project activities and tasks.
c. Development of Cost Plan:
i. Identification and estimation of costs that are expected to be
incurred in the project.
ii. Development of cost schedule by estimating when each of the costs
will be incurred.
iii. Estimation of cost per activity/task
B. Development of Other Plans:
a. Development of Quality Plan.
b. Development Issues management plan.
c. Development of change management plan.
d. Development of risk plan
e. Development of acceptance plan.
f. Development of communication plan.
g. Developing performance indicators.
iv. Allocate Responsibilities of Each Activity: Once the activities, time and
resources are identified and estimated, then each activity of the project needs
to be owned by an individual or department of the project. Based on
organization structure designed, allocate of authority and responsibility
carefully by recording the responsibilities allocated.
v. Finalize Project Plan: This is the last stage of project planning process. In
this stage, the project schedule is optimized for the sequenced activities of all
the stages of project life cycle. The project plan is finalized by incorporating
major elements of the project plan. It is a formal document of the project to be
implemented.

# Types of Project Costs:

1. Direct Cost: The costs are linked to doing the work of the project directly.
For example expenditure on plant, machinery, land &building, buying
software licenses.
2. Indirect Costs: This costs are not linked to the project directly but the cost
of doing business overall. For example- coffee/tea from vending machines,
office rental space.
3. Fixed Costs: Fixed costs are everything i.e. a one-off charge. It is cost
associated with the project even if no output is produced. For example-
production plant, machinery, licenses to start a business.
4. Variable Costs: Variable costs are the cost that changes with the length of
the project and the quantity of output produced. For example-wages, interest
on capital, depreciation, etc.
5. Sunk Costs: These are the costs that have already been incurred. It is a loss
which should not play any role in determining the future of the project. For
example- money spent on equipment/machines that is outdated.