Chapter 1

1. Chapter 1 Projects in Contemporary Organizations

2. The Definition of a “Project” • A ‘Project’ is a temporary endeavour, having a defined beginning and end (usually constrained by date, but can be by funding or deliverables). • E.g.- • Construction of a Hospital. • Creating a new Website. • Production of a Movie etc.

3. Project vs. Ongoing operations • Project is not everyday work. • Everyday work is ongoing. Production processes are an example of ongoing operations. • E.g. In a cola company, producing cola is an example of ongoing operations. • The company knows how many cola to produce, how many go in a package, and so on. Everyday hundreds of thousands of bottles make their way into bags, onto store shelves, and eventually into our mouths. But the production of these colas is not a project.

4. Now let’s say that the management team has decided to introduce a new line of cola. • You have been tasked with producing the new cola flavor and bottling. • You assemble a research team to come up with a new formula. The marketing team gathers data which shows that new cola has real potential with the consumers. According to plan, the cola is produced & distributed to the stores. • Is this a project or ongoing operation?

6. Major Characteristics of a Project • Temporary • Life cycle with a finite due date • Interdependencies • Uniqueness • Resources • Importance • Performance

7. Project Attributes • A project: • Has a unique purpose. • Is temporary. • Is developed using progressive elaboration. • Requires resources, often from various areas. • Should have a primary customer or sponsor. • The project sponsor usually provides the direction and funding for the project. • Involves uncertainty.

8. Introduction • Main forces in driving the acceptance of project and other forms of management: • The exponential growth of human knowledge • The growing demand for a broad range of complex goods and services • Increased worldwide competition • All of these contribute to the need for organizations to do more and to do it faster • Project management is one way to do more faster

9. Projects Tend to be Large • Projects tend to be large • The Channel Tunnel, or Chunnel • Denver International Airport • Panama Canal expansion project • Three Gorges Dam, China • Projects are getting larger over time • Flying: balloons  planes  jets  rockets  reusable rockets

10. Historical Evidence of Monumental Projects • Great wall of China • Pyramids of Egypt • Suez Canal • Taj Mahal • Konark Temple

11. Project Management Institute (PMI) • The Project Management Institute is the major project management organization • Founded in 1969 • Grew from 7,500 members in 1990 to over 3,41,900 in 2014 • The Project Management Journal and PM Network are the leading project management journals

12. Common Examples of Different types of Projects • Construction Projects (dams/railway lines/buildings /roads/airports etc. • Consultancy Projects (Providing service, technological and managerial knowhow) • IT Projects (Productions/services/applications) • Maintenance or Repair Projects

13. Projects vary in size and complexity • Require less than 100 hours or may take several years. • Involves changes to existing systems, policies, legislation and/or procedures. • Involves a single person or many people. • Involve management of external resources.

14. Not All Projects are Same • Projects do vary widely with respect to their- • Applicability or Usability (Single user, custom built) • (Multi user, Wider user group or generic user) • Technical Complexity • (Radar/satellite comm.-very high) • (ERP implementation – high) • (New product development-medium) • (Building construction – low)

15. Resources Used (Capital/ Labour) • A small maintenance project may take one month with only 10 people • An O/S development project may take about three years involving somewhere around 500 people

16. Classification of Projects • Civil Engg., construction, petrochemical, mining Projects • Manufacturing Projects • Management Projects • Research Projects

17. 1. Civil Engg., construction, petrochemical, and mining Projects • Fulfilment phase must be conducted on the site. • Special risks • Require massive capital investment • Deserve rigorous management of progress, finance and quality.

18. 2. Manufacturing projects • Aim to produce a piece of equipment or machinery, ship, aircraft, land vehicle or some item of specially designed hardware. • Most difficult is the case of a complex product(such as an aircraft) that is developed and manufactured by consortium of companies.

19. 3. Management Projects • Management expertise in matters like relocating the head quarters, develop & introduce a new product, launch a marketing campaign, restucture the organization. • Most not-for-profit organizations-including national and local govt. depts., professional associations, charities, & disaster relief agencies conduct projects ,that fall in this category.

20. 4. Research projects • Carry the highest risk as they aim to extend the boundaries of current knowledge. • The objectives are difficult or impossible to define. • They may consume large amount of money and last for many years, but yield no practical result.

21. Primary Project Objectives • Specification, performance and quality • Budget • Time to completion

22. The Triple Constraint • Scope goals: What work will be done? • Time goals: How long should it take to complete? • Cost goals: What should it cost? • It is the project manager’s duty to balance these three often-competing goals.

23. 1. Specification, performance and quality • The end result is the fitness for the purpose for which it was intended. • E.g. A copper refinery, designed to process 200000 tonnes of cathode copper p.a. must be able to do so, and it must produce that copper at the specified level of purity. • Plant must function reliably, efficiently, and safely. There will be trouble if the plant causes environmental pollution.

24. 2. Budget • Failure to complete project within the authorized expenditures, will reduce profits & ROI. • Even in absence of a Profit motive, proper attention to budgets is vital.(e.g. pure scientific research programmes, charities, projects carried out using public fund). • A project may be abandoned due to lack of funds.

25. 3. Time to completion • Actual progress has to match or exceed planned progress. • Late completion will not enhance the reputation of contractor/project manager. • Late projects can have knock-on effect and disrupt other projects either in progress or waiting to follow.

26. Project Success or Failure • A • A project success is usually measured in terms of whether it is completed within specified time and under stipulated budget • If it exceeds uncontrollably it is termed as a failure. • However there is more to a project’s success than just its completion within time and budget • Meeting customer specifications • Degree of customer satisfactions • Level of success in the market place • Result in greater revenue and profits

27. Significant projects • Definable, measurable project outcomes that relate to corporate goals. • Well defined project team. • Criteria to measure project performance.

28. Project vs. Programme • Project is a non repetitive set of activities leading to singular product or service and gets over in a limited / finite time frame • Programme is a repetitive array of activities carried out on a longer/ indefinite time frame to accomplish many no of similar / dissimilar projects