Project Analysis and

Management
(MBA511)

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 Individual Assignment
1.Search one case and analyse it in detail.
2. Write a brief note on Public Policy and
Regulations on Finance

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 CHAPTER ONE
GENERAL
INTRODUCTION

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1.1 Meaning and definition of project

A project is a planned set of interrelated tasks to be

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 The Chartered Management Institute has also defined
a project as …“an activity that has a beginning and an
end which is carried out to achieve a particular
purpose to a set quality within given time constraints
and cost limits”.
Generally, projects are a group of activities that
have to be performed with limited resources to
yield specific objectives, in a specific time, and in
a specific locality.

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 Thus, a project is a temporary endeavour
employed to create a unique product, service or
results. Projects are an investment on which resources
are used to create assets that will produce benefits over
an expanded period of time.
It is a unique process, consisting of a set of
coordinated and controlled activities with start and
finish dates, undertaken to achieve an objective
conforming to specific requirements, including the
constraints of time, cost and resources.

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 Project is a fairly recent phenomenon in history.
Earlier, most tasks in society were handled by
designated permanent organizations – be it the
construction of a bridge or a road, arranging a cultural
or a sports event, developing a new industrial product,
solving a research problem or testing a new drug.
Over the last decades, however, projects have become
increasingly important as a way to organize work.
More than ever before, projects are used to solve big
tasks of public utility. They operate across
organizations, and are terminated when the planned
task is completed.

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 There has been a significant increase in the amount of
such major projects – not least in sectors such as
offshore, infrastructure and information technology.
But projects are also organized within individual
organizations. This means that their value added and
profitability increasingly depend on successful
projects.
Organizations perform work. Work generally involves
either operations or projects, although the two may
overlap.

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 Operations and projects share many characteristics;
for example, they are performed by people, and
planned, executed, and controlled.
They differ primarily in that operations are ongoing
and repetitive while projects are temporary and
unique.
Temporary means that every project has a definite
beginning and a definite end. Temporary does not
signify any type of duration. So a project can be a few
weeks to a few years. Unique means that the product
or service is different in some distinguishing way from
all similar products or services.

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  Projects are undertaken at all levels of the
organization. They may involve a single person or
many thousands. They may require less than 100 hours
to complete or several million hours.
Projects may involve a single unit of one organization
or may cross organizational boundaries as in joint
ventures and partnering.
Projects are often critical components of the
performing organization's business strategy.
Examples of projects include:
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  Developing a new product or service.
Effecting a change in structure, staffing, or style of an
organization.
Designing a new transportation vehicle.
Developing or acquiring a new or modified
information system.
Constructing a building or facility.
Running a campaign for political office.
Implementing a new business procedure or process…

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 The tasks that projects are assigned to solve are
defined in terms of more or less precise and realistic
goals. Being a temporary arrangement, and also
because the undertaking is more or less unique,
uncertainty is often greater than what is common in
permanent organizations.
Because of the uncertainty associated with planning
and implementation, the extent to which the project
will attain its goal is also uncertain.
This is one of the reasons why improved know-how
and tools that can better the planning and
management of projects are of great and increasing
economic significance.

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 It is also one of the reasons why there has been an
increasing tendency to evaluate ongoing and
completed projects.
A comprehensive study of major projects, Morris and
Hough (1991), concludes that the track records of
projects are fundamentally poor, particularly for the
larger and more difficult ones. Overruns are common.
Many projects appear as failures, particularly in the
public view.
It seems therefore that there is a contradiction
between the increasing use of projects and the
fundamental problem of projects often overrunning
their budgets and exceeding their set limits.

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 However, in reality, most projects attain their
objectives in one way or another, even if too many are
made too expensive or are delayed.
There are several reasons for the increasing use of
projects today.
One answer is that many tasks in society are so
enormous and complex that individual
organizations lack the competence or capacity to
carry them out alone. This is particularly the case in
small countries.
Another answer is that the project focuses and
visualizes the task, and therefore has a motivating
effect on all stakeholders.

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 In projects, responsibilities are clarified and the
different parties are made accountable.
Moreover, the project is an expedient/ convenient way
of transferring risk from the financing to the
implementing party.
The project is also a conducive way of organization,
which allows participants to pool resources and co-
operate towards a common goal.
Projects could be short range and long range.

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1.2 Features of a project
There are some unique features that distinguish a
project from other types of corporate activity.
One of the most striking features is that in creating a
project there automatically follows its "death
sentence". That is because projects have a defined start
and end time.
Moreover, the end is forecast/projected/established/
mandated/knowable once the project starts. Simply
put: you are in business to get out of that business as
fast, as soon and as profitably as possible. And when
you've finished you don't have anything else to do!

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 A project always has associated with it certain
resources. Such resources may be any combination of
time, funds, talent, knowledge, services, personnel,
space, facilities, equipment, materials, and so on.
These resources can be of multiple kinds: used-and-
returned; used-and-delivered-with-the-product; used-
and-consumed; generated-by-project-activity; limited
life or time-dependent; etc. The kind will typically vary
with the project's life span stage of the project.
The variety of resources employed in project activities,
and often the duration and criticality, is typically an
order of magnitude above those found in most other
corporate activities.
It is often true that a much wider range of internal
(corporate) resources will also be involved in project
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 The nature of the relationships that exist over the life
of a project's effort is another unique feature. Typically,
all the relationships are temporary, as is the project
itself.
Also all the participants, stakeholders, onlookers,
supporters, detractors, suppliers, customers, and
competitors know that these relationships are
temporary and will cease totally when the project is
finished.
It is this fluid and ever-changing area of relationships
that has lead to the characterization of project
management as "The art and science of managing
interfaces”…
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 Characteristics of projects
Projects have a purpose: Projects have clearly-
defined aims and set out to produce clearly-defined
results. Their purpose is to solve a "problem”, and this
involves analysing needs beforehand.
Projects are realistic: Their aims must be achievable,
and this means taking account both of requirements
and of the financial and human resources available.
Projects are limited in time and space: They have a
beginning and an end and are implemented in (a)
specific place(s) and context.
Projects are complex: Projects call on various
planning and implementation skills and involve
various partners and players.
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 Projects are collective: Projects are the product of
collective endeavours. They involve teamwork and
various partners and cater for the needs of others.
Projects are unique: Projects stem from new ideas.
They provide a specific response to a need (problem)
in a specific context. They are innovative.
Projects are an adventure: Every project is different
and ground-breaking; they always involve some
uncertainty and risk.
Projects can be assessed: Projects are planned and
broken down into measurable aims, which must be
open to evaluation.
Projects are made up of stages: Projects have
distinct, identifiable stage….
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Short Range Projects:
They are completed within one year, and are focused
towards achieving the tactical objectives.
They are less rigorous; require less or no risk. They
are not cross functional.
These projects require limited Project Management
tools, and have low level of sophistication.
It is easy to obtain approval, funding and
organizational support for short range projects..

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Long Range Projects:
These projects involve higher risk and a proper
feasibility analysis is essential before starting such
projects.
They are most often cross functional.
Their major impact is over long period of time, on
internal as well as external organization.
Large numbers of resources are required to undertake
long range projects and they require breakthrough
initiatives from the members….

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1.2 Why Projects are initiated?
Projects don’t just happen to give people something to
do – usually. Projects are launched for a purpose.
Now the purpose may be masked from the project
manager and the project team, projects usually, if not
always, center on two things: cutting costs or
increasing revenue.
Think of any project that you ever know; did the
project cut costs or increase revenue?

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 If you drill a little deeper, and if you think back the
different projects that you know, you’ll find that
projects are typically initiated for one or more of the
following reasons:
Market demand
Advances in technology
Solving a business need
At the request of a customer
New laws and regulations
Social needs in your community
Desire to be more competitive
Responses to competition…

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 Policies, Programmes, and Projects
Policies determine the environment and frameworks
within which change interventions (or
development) take place. National goals and
strategies, which are implemented through various
policy instruments and interventions, have an effect
on society through a series of sequential feedback
linkages.
Policies are frequently implemented through
programmes. A policy is typically described as a
principle or rule to guide decisions and achieve
rational outcome(s). The term is not normally used to
denote what is actually done; this is normally referred
to as either procedure or protocol.
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 Whereas a policy will contain the 'what' and the 'why',
procedures or protocols contain the 'what', the 'how',
the 'where', and the 'when'.
Policies are generally adopted by the Board of or
senior governance body within an organization where
as procedures or protocols would be developed and
adopted by senior executive officers.
 A Policy can be considered as a "Statement of Intent"
or a "Commitment". For that reason at least, we can be
held accountable for our "Policy"

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 Programmes consist of different activities of a
government implemented in a formally coordinated
way through ongoing activities and projects.
The execution of a National Development Plan is
therefore commonly viewed as providing the
frameworks for the effective performance of a
country’s economy...

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1.4 What Projects are Not
Since a project is by definition a unique set of activities
not repeated in operational cycle(s), it follows that we
can also define a project by exclusion.
For example, a monthly closing is not usually
considered a project. But an effort to study the closing
process and its related activities, timings, resource
utilization, etc. in order to improve some aspect or
feature of the closing can indeed be a project.
The statement about non-cyclic nature needs
interpretation. For example in process plant
construction each project will in fact have piping
spools that are cut/fit/welded and then
installed/tested.
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 However, the design, procurement, installation, test,
startup and turnover process for that plant will not be
repeated.
When a similar plant is to be built in almost the same
configuration but at a different location, the
differences introduced by time, changes in markets,
techniques, infrastructure, etc. not to mention the
possibility of a different client, all make each project
unique.

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 Another aspect of project work is that projects are
rarely successful when run by a committee.
Not that there is nothing theoretically wrong with
assigning a project to a committee, it is just that
committee management is not suited to the needs of
successful projects.
A wag once observed that a camel was the product of a
committee running a project to produce a horse….

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 1.5 The three key characteristics of a
project
While no two projects are identical, there are three
key characteristics that all projects possess. These
three characteristics must always be considered when
making a decision within a project and also provide
constraints to the delivery of the objective.
The three key project characteristics are:
Time
Scope
Cost/Budget

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 Time (sometimes known as timeframe or schedule):
This refers to how long the project will take, and
generally involves using past experience to predicate
the likely time that parts of a project will take.
The scheduling involved in a project shows what
should happen when and there are usually parts that
can’t occur until preceding parts are complete.
Scope: Scope refers to what is included within the
project and what is excluded. The clearer the scope,
the easier for ambiguity to be reduced and risks
minimized.

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 Cost (also known as budget): The budget or cost of
the project sets out your expectation as to how much
the project will cost.
Most of the time in project cost determination the
vendor will provide a quote based on the number of
hours it will take to develop a given feature.

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Q = f (T, C, S)

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 Finally, if you want to change the project scope, it’s going
to either bump up the price or add time to the finish
date, or most likely both.
Another important characteristic of a project is that a
project is temporary. While some projects may run for
years and years, they do have a set goal in mind which,
when completed, will mean the project is over.
Often these projects will end and then a new project will
start which picks up from where the previous project
ended.
One sign of a poorly managed project could be that the
project structure continues to operate for quite some
time after the project has been delivered. Of course,
learning that a project is poorly managed is something
we would rather know sooner than later!!!!
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1.6 Projects and plans
Reading assignment!
How do you differentiate projects and plans?

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1.7 The 3 Major Project Types
1. Civil Engineering, Construction, Petrochemical,
Mining, and Quarrying
Projects in this category are those which spring to
mind most readily whenever industrial projects are
mentioned.
One common feature is that the fulfillment phase
must be conducted on a site that is exposed to the
elements, and usually remote from the contractor's
main office.

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 These projects incur special risks and problems
of organisation. They often require massive capital
investment, and they deserve (but do not always get)
rigorous management of progress, finance, and
quality.
For very large industrial projects the funding and
resources needed are often too great for one contractor
to risk or even find. The organisation and
communications are therefore likely to be complicated
by the participation of many different specialists and
contractors, with the main players possibly acting
together as a consortium or joint venture company..

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2. Manufacturing Projects
Manufacturing projects aim to produce a piece of
equipment or machinery, ship, aircraft, land vehicle or
some other item of specially designed hardware.
The finished product might be purpose-built for a
single customer, or the project could be generated and
funded from within a company for the design and
development of a new product intended for
subsequent manufacture and sale in quantity.
Manufacturing projects are usually conducted in a
factory or other home-based environment, where the
company should be able to exercise on-the-spot
management and provide an optimum environment.

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 Of course, these ideal conditions do not always apply.
Some manufacturing projects can involve work away
from the home base, for example in installation,
commissioning and start-up, initial customer training
and subsequent service and maintenance.
More difficult is the case of a complex product (such
as an aircraft) that is developed and manufactured by a
consortium/group of companies, very possibly
overlapping international borders, with all the
consequent problems of risk, contractual difficulties,
communication, coordination, and control..

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 3. Management Projects
This class of projects proves the point that every
company, whatever its size, can expect to need project
management expertise at least once in its lifetime.
These are the projects that arise when companies
relocate their headquarters, develop and introduce a
new computer system, launch a marketing campaign,
prepare for a trade exhibition, produce feasibility or
other study report, restructure the organisation,
mount a stage show, or generally engage in any
operation that involves the management and co-
ordination of activities to produce an end result that is
not identifiable principally as an item of hardware or
construction.
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 Although management projects might not result in a
visible, tangible creation, much often depends on their
successful outcome. There are well-known cases, for
instance, where failure to implement a new computer
system correctly has caused serious operational
breakdown and has exposed the managers responsible
to public discredit.
Effective project management is at least as important
for these projects as it is for the largest construction or
manufacturing project..

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 Projects can also be classified as:
Type I Projects – Large Engineering Projects:
They have well defined project methods and end
project requirements, such as construction projects.
Type II Projects – Product Development Projects,
Early Space Projects:
They have poorly defined project methods but have
well defined project end requirements.


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 Type III Projects – Software Development
Projects:
In these, the shape of end product proceeds. They have
well defined project methods, but poorly defined
project end requirements.
 Type IV Projects – Organizational Development
Projects, Vision Definition, Assessment of Impact
of Trainings:
They have both poorly defined project methods as well
as project end requirements.
There many other ways of classifying projects like
Type A, Type B and Type C !!!!

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