UNIT-3

Contents

Project Identification and Formulation:

Meaning and definition of Project –
concepts
Project Life cycle
Project Identification
Project Selection
 Source of Finance for a Project
Project appraisal –
Technical, Financial,
Market appraisal
Preparation of detailed project report.
 Project Management
Project management is the discipline of
organizing and managing resources in such
a way that these resources deliver all the
work required to complete a project within
defined scope, time, and cost constraints.

A project is a temporary and one time

endeavor undertaken to create a unique
product or service.
This property of being a temporary and
one time undertaking contrasts with
processes, or operations, which are
permanent or semi-permanent ongoing
functional work to create the same product
or service over-and-over again.
The management of these two systems
is often very different and requires varying
technical skills and philosophy, hence
requiring the development of project
management first challenge of project
management is ensuring that a project is
delivered within the defined constraints.
The second, more ambitious, challenge is
the optimized allocation and integration of
the inputs needed to meet those predefined
objectives.

The project, therefore, is a carefully

selected set of activities chosen to use
resources to meet the predefined objectives.
•As a discipline, Project Management
developed from several different fields of
application, including construction,
mechanical engineering, military projects,
etc.

• In the United States, the forefather of

project management is Henry Gantt, called
the father of planning and control techniques,
who is famously known for his use of the
“bar” chart as a project management tool,
for being an associate of Frederick Winslow
Taylor’s theories of scientific management,
and for his study of the work and
•His work is the forerunner to many
modern project management tools,
including the work breakdown structure
and resource allocation.

• The 1950’s mark the beginning of the

modern project management era. Again,
in the United States, prior to the 1950s,
projects were managed on an ad hoc basis
using mostly Gantt Charts, and informal
techniques and tools.
•At that time, two mathematical project
scheduling
models were developed:

1. The “Program Evaluation and Review

Technique” or PERT, developed as part of
the United States Navy’s Polaris missile
submarine program; and

2. The “Critical Path Method” (CPM)

developed in a joint venture by both
DuPont Corporation and Remington Rand
Corporation for managing plant maintenance
projects.
“Project management is the application “Project management is the
of knowledge, skills, tools and discipline of defining and achieving
techniques to a broad range of
activities in order to meet the
targets while optimizing the use of
requirements of the particular project. A resources (time, money, people,
project is a temporary endeavor space, etc). Thus, it could be
undertaken to achieve a particular aim. classified into several models:
Project management knowledge and time, cost, scope, and intangibles.”
practices are best described in terms of
their component processes. These
processes can be placed into five
Project
Process Groups: Initiating, Planning,
Executing, Controlling and Closing.”
Management
Definitions
“Project management is concerned
with the overall planning and “The leadership role which plans,
coordination of a project from budgets, coordinates, monitors
inception to completion aimed at and controls the operational
meeting the client’s requirements contributions of property
and ensuring completion on time, professionals, and others, in a
within cost and to required quality project involving the development
standards. Project management is of land in accordance with a
typically carried out either by a client’s objectives in terms of
private consultant or an employee quality, cost and time
of the project client.”
•The successful project management is all about
structure, control, sufficient attention to detail and
continuously driving action.

•The role of the project manager is to understand

enough project management to apply its structure
and ensure that project is successfully completed
within the time and cost required.

•The things you must do as a project manager are:

1. Ensure there is a clear understanding why a
project is being done, and what it will produce.
2.Plan the project – to understand how long it
will take and how much it will cost.

3. Manage the project – to ensure that as the

project progresses, it achieves the objectives
you have defined within the time and cost
specified.

4. Complete the project properly – to make

sure everything produced by the project is of
the quality expected and works as required.
Project
Project is defined as temporary but
interrelated tasks undertaken to give a
unique product or service or result.

Projects are different from other ongoing

operations in an organization, because
unlike operations, projects have a definite
beginning and an end - they have a
limited duration.
 Project

•Realization of the objective requires

systematic planning and careful
implementation.

•To this effect, application of knowledge, skill,

tools and techniques in the project
environment, refers to project management.
• Project management in recent years
has proliferated, reaching new
heights of sophistication.

• It has emerged as a distinct area of

management practices to meet the
challenges of new economic
environment, globalization process,
rapid technological advancement,
and quality concerns of the
stakeholders.
Characteristics of Project

Tempora
ry

Definite
Beginnin
Multiple
g and
Talents
Completi
on

Definite
Defined Objectiv
Time and e
Resource Scope
s and
Unique
 Characteristics: -
Projects are temporary in nature.
• 1. Temporary: -
Every project has a beginning and end. The
word ‘temporary’ here may refer to an hour, a
day or a year.

• Operational work is an ongoing effort which is

executed to sustain the business. But projects
are not ongoing efforts. A project is considered
to end when the project’s objectives have
been achieved or the project is completed or
discontinued. Only projects are temporary in
characteristic and not the project’s outcomes.
• It will not generally be applied to the
product, service or result created by the
project. Projects also may often have
intended and unintended social,
economic and environmental impacts
that long last.

• Eg. Building Eiffel Tower was a project.

The structure was built between 1887
and 1889. Project Eiffel Tower ended on
1889. But still the outcome of the
project exists as a monument.
2. Definite Beginning and
Completion: - Project is said to be
completed when the project’s
objectives have been achieved.
When it is clear that the project
objectives will not or cannot be met
the need for the project no longer
exists and the project is terminated.
Thus, projects are not ongoing
efforts. Thus, every project has a
definite beginning and end.
3. Definite Objective/Scope and Unique:
- All the projects have their own defined
scopes/objectives for which they are
carried out. Every Project is undertaken to
create a unique product, service, or result.
Eg. Hundreds of house buildings may have
been built by a builder, but each individual
building is unique in itself like they have
different owner, different design, different
structure, different location, different sub-
contractors, and so on. Thus, each house
building is to be considered as a Project
and each Project produces unique
outcome.
• 4. Defined Time and Resources: -
As the projects have definite
beginning and end, they are to be
carried out within the time and
resources constraints. Each project
will have defined time and resources
for its execution.
5. Multiple Talents: - As projects
involve many interrelated tasks done
by many specialists, the involvement
of people from several departments
is very much essential. Thus, the use
of multiple talents from various
departments (sometimes from
different organizations and across
multiple geographies) becomes the
key for successful project
management.
• For example, take the construction of
house building; the expertise of very
many professionals and skills of
various people from various fields like
architect, engineers, carpenters,
painters, plumber, electrician, interior
decorator, etc, are being coordinated
to complete the house project.