INTRODUCTION TO PROJECT

MANAGEMENT
 NATURE OF PROJECTS
• Projects are cutting edge of development.
• Almost all single problems confronting the
implementation of development programmes
can be traced to poor project preparation.
• Project preparation is however not the only
aspect of development or planning is
challenged.
 NATURE OF PROJECTS
• Identifying national development objectives,
selecting priority areas for investment,
designing effective price policies, and
mobilizing resources are all critical of projects.
• Development activities require careful project
preparation in advance of expenditures.
• This ensures efficient, economic use of capital
funds, and increases the chances of
implementation on schedule.
 NATURE OF PROJECTS
 Unless projects are carefully prepared in
substantial detail, inefficient or even wasteful
expenditure is almost sure to result.
 WHAT IS A PROJECT?
• A project is an investment activity in which
financial resources are expended to create
capital assets that produce benefits over an
extended period of time.
• It is an activity for which money will be spent
in expectation of returns and which logically
seems to lend itself to planning, financing, and
implementing as a unit.
 WHAT IS A PROJECT?
• It is a specific activity, with a specific starting
point and specific ending point, intended to
accomplish specific objectives.
• A project is likely to comprise several or all of
these five elements:
1. Capital investment in civil works, equipment, human
development, etc..
2. Provision of services for design and engineering,
supervision of construction, and improvement of
operations and maintenance.
 WHAT IS A PROJECT?
• A project is likely to comprise several or all of these
five elements:
3. Strengthening of local institutions concerned with
implementing and operating the project, including the
training of local managers and staff.
4. Improvement in policies – such as those on pricing,
subsidies, and cost recovery – that affect project
performance and the relationship of the project both to
the sector in which it falls and to broader national
development objectives.
5. A plan for implementing the above activities to achieve
the project’s objectives within a given time.
 WHAT IS A PROJECT?
• A Project may be defined as:
– A complex, nonroutine, one-time effort
limited by time, budget, resources, and
performance specifications designed to
meet customer needs.
– A project can also de described as a
temporary endeavor undertaken to create a
unique product, service, or result.
 MAJOR CHARACTERISTICS OF A PROJECT

Term Means that a Project

temporary Has a beginning and end
endeavor Involves effort, work
to create Has an intention to produce something
(project "deliverables"
unique One of a kind, rather than a collection of
identical items
product Tangible objects, but could include things like
computer software, film or stage works
service Might include the establishment of a day-care
center, for instance, but not its daily
operations.
 MAJOR CHARACTERISTICS OF A PROJECT

– Has an established objective.

– Has a defined life span with a beginning and an
end.
– Typically requires across-the-organizational
participation.
– Involves doing something never been done before.
– Has specific time, cost, and performance
requirements.
 ARE PROJECTS DIFFERENT FROM THE
OTHER WORK?
• Projects are different from the normal
operation of the organization in that they:
– Projects have specific objectives to deliver new
benefits to, the taxpayer, companies, the general
public, government, the sponsoring organisation,
stakeholders and/or deliver y partners.
– Projects may introduce significant changes to the
way the business operates.
– Projects create new outputs/deliverables that will
enable benefits to be realised.
ARE PROJECTS DIFFERENT FROM THE OTHER WORK?

• Projects are different from the normal operation of

the organization in that they:
– Projects have a specific, temporary management
organisation and governance arrangements set up for
the duration of the project.
– Projects are susceptible to risks not usually encountered
in the day to day operation at work of the organization.
– Projects involve a range of stakeholders from different
parts of the organisation and beyond.
– Projects may use methods and approaches that are new
or unfamiliar.
COMPARISON OF ROUTINE WORK WITH PROJECTS

ROUTINE, REPETITIVE WORK PROJECTS

Taking class notes Writing a term paper
Daily entering sales receipts into the Setting up a sales kiosk for a
accounting ledger professional accounting meeting
Responding to a supply-chain request Developing a supply-chain information
system
Practicing skills on the piano Writing a new piano piece
Routine manufacture of an Apple iPod Designing an iPod that is approximately
2 X 4 inches, interfaces with PC, and
stores 10,000 songs
Attaching tags on a manufactured
product Wire-tag projects for GE and
Wal-Mart
 WHAT IS PROJECT MANAGEMENT?
• Project management is the application of
knowledge, skills, tools, and techniques to
project activities to meet the project
requirements.
 PROGRAMMES VERSUS PROJECTS
• Programme is defined as:
– A series of coordinated, related, multiple projects that
continue over an extended time and are intended to
achieve a goal.
– A higher-level group of projects targeted at a common
goal.
– Example:
• Project: completion of a required course in project
management.
• Programme: completion of all courses required for a
business major.
 PROJECT CYCLE
• It is convenient to think of project work as taking
place in several distinct stages. These stages are
commonly referred to as the “Project Cycle”.
• Different terms can be used to describe the
various stages such as:
– Starting/ Identification/ Conception Stage.
– Initiating/ Preparation/ Planning Stage.
– Appraisal & Evaluation Stage.
– Running/ Implementation/ Execution Stage.
– Closing/ Termination Stage.
 IDENTIFICATION STAGE
• Identifying project idea that appears to represent a
high priority use of the country’s or firm’s resources
to achieve an important development objective.
• Project idea should meet an initial test of feasibility
i.e.:
– There should be some assurance that technical and
institutional solution(s) will be achieved.
– That costs commensurate with the expected benefit(s).
– That it will be suitable to policies adopted.
 IDENTIFICATION STAGE
• At this level, the Owner, Sponsor or whoever
identified the potential project is expected to
undertake the following:
– Define and justify the need for the project.
– Specify, quantify and agree desired outcomes and
benefits.
– Appoint a Project Manager and, if appropriate, set up a
Project Board.
– Ensure that the reasons for the project and its terms of
reference are defined in a Project Brief.
– Ensure that it is aligned with strategic/business plan.
 FROM IDENTIFICATION TO PREPARATION
STAGE
• After Identification processes have been
completed, there is the need for authorization
to proceed to the Preparation stage.
• At this stage, Owner or Sponsor must decide
whether it is sensible and viable to proceed
into the preparation stage of the project.
 PREPARATION STAGE
• After passing the identification test, a firm
decision must be made as to whether or not
to proceed with it.
• This requires a progressive refinement of the
design of the project in all its dimensions i.e.:
technical, economic, financial, social,
institutional, and so on.
 PREPARATION STAGE
• At this level, the project management team should:
– Plan how to deliver the required outcomes and benefits.
– Decide how to manage relationships with key stakeholders.
– Decide how to project manage the delivery process.
– Determine the resource requirements and ensure that they
can be made available when required.
– Develop the Business Case to enable the Owner/
Sponsor/Project Board to decide whether the project is
cost and risk justified.
– Document the understanding of the project and how it will
be managed in a Project Initiation Document (PID).
 APPRAISAL STAGE
• Appraisal is to assess the overall soundness of
the project and its readiness for implementation.
• For internally generated funds, the extent of
formal appraisal varies widely in accordance with
government or organizational business practices.
• Explicit appraisal is however necessary or at least
a desirable part of the decision making process
before funds are committed especially when
funding is sought from external sources.
BEFORE IMPLEMENTATION BEGINS
• There is the need to approve the Project
Initiation Document before proceeding to
project implementation.
• The Owner, Sponsor or Project Board must
assess PID (in particular the Business case) to
decide whether the project is worthwhile,
viable, affordable and appropriate at this time.
 IMPLEMENTATION STAGE
• The Implementation cover the actual
development or construction of the project,
up to the point which it become fully
operational.
• It includes monitoring of all aspects of the
work or activity as it proceeds and supervision
by oversight agencies within the country or by
external lenders.
 IMPLEMENTATION STAGE
• At this level, the Project Management Team is expected to undertake the
following:
– Mobilize the staff and other resources needed to build the
products and deliverables that will enable the required outcome.
– Plan, monitor and control the work and resources of the project.
– Manage risks and issues as they occur.
– Maintain communication with those impacted by the project and
its outcome.
– Report progress and issues to the Owner/Sponsor/Project
Board/Stakeholders.
– Decide ongoing viability in the light of experience and any
changes in requirements.
– Ensure deliverables are fit for purpose and will enable benefits to
be realised.
 EVALUATION STAGE
• The ex-post evaluation of a completed project
seeks to determine whether the objectives
have been achieved and also to determine
how to draw lessons from experience with the
project that can be applied to similar projects
in the future.
 PROJECT CLOSURE STAGE
• At this stage, the project management team
should undertake the following:
– Evaluate the outcome of the project against the
PID.
– Ensure that any lessons learnt are shared with
those who might benefit from them.
– Release resources used by the project.
– Review any benefits achieved by the end of the
project.
 PROJECT CLOSURE STAGE
• The Owner, Sponsor or Project Board should
close the project and ensures that:
– Plans exist for a post-project review to measure
the degree of benefits that have been achieved in
practice.
– The need for any improvements or modifications
are determined.
– The project is handed over to person who will
deliver the outcomes.
 CONCLUSION ON PROJECT CYCLE
• The distinction among the various stages of
the project cycle, especially the earlier ones of
identification and preparation, are often
blurred in practice, and their relative
importance can vary greatly, depending on the
character and history of each project.
• The process is an iterative one; the same
issues may be addressed, with varying degrees
of detail and refinement, as the project
advances through the cycle.
 DETERMINANTS OF PROJECT SUCCESS.
• To guarantee a successful project, the
following must be considered:
– Deliver the outcomes and benefits required by the
organisation, its delivery partners and other
stakeholder organisations.
– Create and implement deliverables that meet
agreed requirements.
– Meet time targets.
– Stay within financial budgets.
 DETERMINANTS OF PROJECT SUCCESS.
• To guarantee a successful project, the
following must be considered:
– Involve all the right people at the right time.
– Make the best use of resources in the organisation
and elsewhere.
– Take account of all changes in the way the
organisation operates.
– Manage any risks that could jeopardize success.
– Take into account the needs of staff and other
stakeholders who will be impacted by the changes
brought about by the project.
 THE IMPORTANCE OF PROJECT
MANAGEMENT
• Factors Leading to the Increased Use of Project
Management:
– Compression of the product life cycle
– Global competition
– Knowledge explosion
– Corporate downsizing
– Increased customer focus
– Small projects that represent big problems
 USING THE PROJECT APPROACH
• The project approach has proved a potent
instrument for rationalizing and improving the
investment process.
• Principal advantages lies in providing a logical
framework and sequence within which data
can be compiled and analyzed, investment
priories established, project alternatives
considered, and sector policy issues addressed.
 USING THE PROJECT APPROACH
• It imposes a discipline on planners and decision
makers, and ensures that relevant problems and
are taken into account and subjected to systematic
analysis before decisions are reached and
implemented.
• The project approach also has its limitations. It
depends on quantitative inputs of data and can be
no more reliable than those data
• It also depends on estimates and forecasts, which
are subject to human error.
 USING THE PROJECT APPROACH
• Value judgments must be made, but the project
approach should at least force them to be made
explicitly.
• Risks can be assessed but not avoided, and
projects must be designed and implemented
against a constantly shifting background of
political, social, and economic changes.
• The effectiveness of the project approach depends
on the skills and judgment of those who use it.