12-04-2014, 12:31 PM
PROJECT MANAGEMENT CONCEPTS
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PROJECT
The term “Project” has a wider meaning. A project is accomplished by performing a set of activities.
For example, construction of a house is a project. The construction of a house consists of many
activities like digging of foundation pits, construction of foundations, construction of walls,
construction of roof, fixing of doors and windows, fixing of sanitary fittings, wiring etc. The
construction of a house is accomplished by performing the set of activities. Another aspect of
“project” is the non-routine nature of activities. Each project is unique in the sense that the activities
of a project are unique and non-routine.
A project conumes resources. The resources required for completing a project are men, material,
money and time. The nature of resources is that they are limited and scarce. If a person wants to
construct a house, the first thing that comes to his mind is the financial budget within which the
work should be completed. Thus, resource constraint is a feature of all projects. If one wants to
construct a house at an estimated cost of Rs. 10 lakhs and within a period of 6 months, the project
should be completed subject to these constraints. Thus, we can define a project as an organized
programme of pre determined group of activities that are non-routine in nature and that must be
completed using the available resources within the given time limit.
According to Harison, a project can be defined as a non-routine, non-repetitive, one-off under-
taking, normally with discrete time, financial and technical performance goals. Project Management
institute, USA defines project as ‘a system involving the co-ordination of a number of separate
department entities through out the organization and which must be completed within prescribed
schedules and time constraints.
Definite Time Limit
A project has a definite time limit. It can not continue forever. Construction of a highway connecting
two cities is a project which is to be completed within a given time limit. Maintenance of the highway
is an on going process and it will continue forever. Hence highway maintenance will not come under
the purview of project.
Uniqueness
Every project is unique and no two projects are similar. Setting up a Cement plant and construction
of a highway are no doubt two different projects having unique characteristics. Constructing a
highway between cities A&B and construcing another highway between cities C&D are also unique
in themselves, in view of the differences existing in the organization, infrastructure, location,
technical specifications and the people behind the projects.
Team work
A project normall consists of diversed areas. There will be personnel specialized in their respective
areas. Any project calls for the services of experts from a host of disciplines. Co-ordination among
the diversed areas calls for teamwork. Hence a project can be implemented only with teamwork.
Complexity
A project is a complex set of activities relating to diversed areas. Technology survey, choosing the
appropriate technology, procuring the appropriate machinery and equipment, hiring the right kind of
people, arranging for financial resources, execution of the project in time by proper scheduling of the
different activities etc. contribute to the complexity of the project.
Sub-contracting
This characteristic stems forth in view of the complexity of functions and activities of a project.
Some of the activities are entrusted to sub-contractors to reduce the complexity of the project. Sub-
contracting will be advantageous if it reduces the complexity of the project so that the project
manager can coordinate the remaining activities of the project more effectively. In general, the
greater the complexity of the project, the larger will be the extent to which sub-contracting will be
resorted to. Sub-contracting is also helpful if the sub-con
Based on the Type of Activity
Under this category, projects can be classified as industrial projects and non-industrial projects.
Industrial projects are set up for the production of some goods. Projects like health care projects,
educational projects, irrigation projects, soil conservation projects, pollution control projects,
highwawy projects, water supply projects etc. come under the category of non-industrial projects.
Investments in non-industrial projects are made by the Government and the benefits from such
projects are enjoyed by the entire society of people. It is difficult to quantify the benefits enjoyed by
the society out of non-industrial projects.
Based on the Location of the Project
Under the category, projects can be classified as national projects and international projects. National
projects are those set up with in the national boundaries of a country, while international projects are
set up in other countries. International projects may be either projects set up by the Government or
by the private sector. The following are the major forms of international projects.
· Setting up of fully owned subsidiaries abroad
· Setting up of joint ventures abroad
· Setting up of projects abroad by way of mergers & acquisitions
Handling of international projects needs more expertise and greater efforts in view of higher risk
proportion and procedural formalities involved.
Based on Project Completion Time
Based on the constraints on project completion time, projects can be classified into two types, viz.,
normal projects and crash projects. Normal projects are those for which there is no constraint on
time. Crash projects are those which are to be completed within a stipulated time, even at the cost of
ending up with a higher project cost. For example, construction of canal lining with the condition
that the work should be completed before the monsoon starts is a crash project.