Project

Management
(MBA Program)
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 Whatis your Project
Management Experience?

 What
types of projects will
you be involved in?

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 Chapter I. General
Introduction

The basic concept of project

 The concept of project planning has
originated some 70 years ago.
 It appeared in USA and former Soviet
Union in late 1930s.
 It has been widely adopted particularly in
the external funding agencies who finance
public sector projects.
 The last 40 years an extensive application
of project analysis methods particularly in
developing countries were observed.
 Currently managing a project is becoming
exciting new profession.
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Concepts of Project (con…)
 Project managers are in great
demand. They are highly
demanded nearly everywhere.
University
Agricultural rural development
Social works
Individual construction
projects and the like
 It appears that they are required
wherever there is work.
 Any one holding a responsible
position in a project is a project
manager.

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 Concepts of Project (con…)
In order to understand issues
related to project, we must
first understand what a project
really is.
It is common to hear
Cement project
Power project
Refinery project
Road project, Etc.
 While the term project is
common to all of them, the
plants(Organizations) are not.
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The concepts of Project
(Cont…)

Thus, a project is initiated to

achieve a particular mission.
 What ever the mission may be,
the project is completed as
soon as the mission is
accomplished.
 The project lives between
these two cut-off
points( project commencement
and completion). The time span
is known as project life cycle.
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Definition of Project

What is project?
How u can define project

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 Definition of Project
What is project?
There are a number of ways to define
a project.
 Project is in general a building
block of an investment plan.
 A project can be described as a
combination of human and material
resources pulled together in an
organization to achieve a specific
objective.
‘A project is a temporary endeavour
undertaken to achieve a particular
aim and to which project
management can be applied,
regardless of the project’s size,
budget, or timeline’.
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 Definition of Project (con--)
• A Project is an investment activity that
involves expending of financial resources
to create capital assets that produce
benefits over a period of time’ Gittinger
(1996)
• A Project is a temporary organisation,
either as a freestanding entity or now
more commonly as an integrated
component of a programme, set up to
produce something or manage a
particular change.
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 Definition of Project (con--)
• A project is a series of activities aimed at
bringing about clearly specified objectives
within a defined time-period and with a
defined budget. (Aid Delivery Methods, Project
Cycle Management Guidelines Volume 1,
March 2004.)
• A project is a proposal for an
investment to create, expand and/or
develop certain facilities in order to
increase the production of goods
and/or services in a community
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 Definition of Project (Cont…)
According to USA Project Management
Institute,

“Project is a one shot, time limited,

goal directed, major undertaking,
requiring the commitment of varied
skills and resources”

 “Project is an effort that starts from

scratch with a definite mission, generate
activities involving a variety of human and
non-human resources all directed to words
fulfilment of the mission and stops once
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the mission is fulfilled.”
Def. of Project (Cont…)
(ISO document define project as)
“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
requirement including constraints
of time, cost and resources”
A project is neither a physical nor
the end result. It has something to
do with the activities that go on.

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Def. Project (Cont…)
From the above all definitions we can
learn that
A project is an economic/development
activity
 It requires a commitment of scarce

resources
 It brings some benefit from its
accomplishment
 The benefit should exceed its cost

 Implementation of a project needs

resources or inputs.
 Every project converts the given
inputs into outputs through the
13process of implementation.
 Examples of typical projects
are

.
Personal projects: Business projects:
• Obtain an MBA • Develop a new course
• Write a report • Develop a new product
• Plan a wedding • Develop a computer system
• Plant a garden • Prepare an annual report
• Build a house extension, • Set up a new office, etc
etc Public investment projects:
• Education
• Health
Industrial projects:
• Construct a building • Waste disposal
• Provide a gas supply to • Roads
• Electricity
an industrial estate
• Build • Telecommunication, etc..
14 a motorway
 Characteristics of Project

 What do you think some

of the characteristics of
project?

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 Characteristics of Project
 In the same way all works that are
interrelated can be grouped together
and termed as a project.
 Thus, with project there is a concept
of
Wholeness despite diversity of work.
The wholeness concept does exist in a
factory or any organization in any other
work. But, in case of a project the whole
has to be completed in one-shot (once for
all)
There is a missionary zeal, an unknown
force, pushing people forward for
achievement of something beyond their
immediate work.
.

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 Characteristics of Project (cont…)
The special feature of project that differentiate
it from any other on-going activities, are
 Focus: A project has a fixed set of
objectives/goals. It has an established objective.
Once the objectives are achieved the project
ceases to exist.
 Life span: A project can not continue
endlessly. It has to come an end at one time. It
has a defined life span with a beginning and an end.
 Single entity: A project is a single entity and is
normally entrusted to one responsibility centre,
while participants in the projects are many.
- It usually requires the involvement of several
departments and professionals.
 Project is managed by a process of ‘Planning-
Organizing-Directing-Staffing-Monitoring-
Controlling’.
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 Characteristics of Project (cont…)
 Team work: Any project calls for team work-.
The team members may be from different
 discipline,
 organization,
 and even country
 Involves coming together of different individuals
from varied disciplines to bestow their knowledge,
experience and credence towards a total
performance.
 Life cycle: A project has a life cycle reflected
by growth, maturity and decay.. Project life
cycle commences when the idea chosen is
found technically feasible, economically
viable, and politically suitable.

Uniqueness: No two projects are exactly
similar even if the plants are exactly
identical or are duplicated.
 the location,
 the infrastructure,
 the agencies and
 the people make each project unique.

 No two projects are alike in their

execution.
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Characteristics of Project
(cont…)
 Change: A project sees many changes
through out its life while some of these
changes may not have any major
impact, there can be changes which will
change the entire course of the project.
 Unity in diversity: A project is complex
set of verities. Varieties in terms of
 Technology
 Equipment's and material
 People and machinery
 Work culture and ethics

But they remain interrelated

 Project is considered to be a complex
web of things, people and environment.
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 Characteristics of Project (cont…)
 High level of sub contracting : A high
percentage of a work in a project is done
through contractors. The more complex is a
project, the more will be the extent of
contracting.
 Risk and Uncertainty: Every project has a
risk associated with it.
The degree of risk and uncertainty will
depend on how a project has passed through
its various life cycle.
 Flexibility: Project is dynamic in nature and
therefore modifications/changes in original
plans,
20 programmes and budgets are a
 Characteristics of Project (cont…)
 Implementation: Every project needs resources
or inputs where given inputs are to be
converted to output through the process of
implementation.

 Feasibility Study: Feasibility study of the project

is the most exhaustive of all the planning stage.
 The project is systematically examined in depth
at this stage for various aspects like technical,
financial, economical, commercial, social,
managerial and organizational.
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Project Vs program

 What is the difference b/n

project and program?

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Project Vs program
 A project is normally originated from
a plan which can be a national plan or
corporate plan.

 In many cases the term project is

used for what should be termed as
program or work package.

 Some people use the term ‘project’

and ‘program’ interchangeably.
However, there is a quite difference
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between the two.
 Program
 Program in general is a groups of
related projects that are
managed in a coordinated ways
to achieve certain objective. Any
development plan can be
considered as a program.

A program is thus,
 larger in scope,
 activity oriented
 not necessarily time bound and
 its objectives are broader
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Program (Cont …)
Example,
 The national goal: Poverty Eradication
 Strategy: Increase productivity ( in all sectors)
 Development program: Increase agricultural
productivity

This may result in a number of projects like,

 Construction of dams ( irrigation infrastructure)
 Upgrading the skill of agricultural practices
 Construction of training centers
Health program may have a number of projects
like,
 Construction of hospitals
 Training of health officers
 Expansion of health centres
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 Program and Projects
hierarchy
 .

Plan : National, Regional or company plan with development target

Program: Specific program within the frame of national or regional

plan (health, education)

Project: School project, Power plant or housing project

Work Package : Water supply and distribution package, Power

supply and distribution package

Task: Award of water supply contract, Construction of foundation

Activity
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 CONT’’’
• A national plan is a wider concept that
incorporate all sectors of the economy.
• A programme can represent a sector and
is a collection of closely connected
projects.
• A project is an investment activity
derived from a programme where
resources are used to create capital
assets.
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Classification of Project

What do u think some of

the classifications of
project?

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 Classification of Project
Revenue Vs capital project

Project can come in many size and form.

They may be very simple or complex.
Major project types are two. These are,
 Revenue project: Are those which can be
carried out within the normal organizational
structure and normally will be completed within
a single accounting period.
 Capital Project: Are those which can not be
carried out within the normal organizational
structure and are normally stretched over a
number of accounting periods.
In practice many projects fall between these
two
29 broad categories
 Classification of Project (cont
…)
 Capital project always require
considerable capital investment. The main
feature of capital projects are,
 They usually occupy considerable time
 They usually employ huge capital
investment

As a result they do not fit readily into

conventional organizational structure but
cut across functional and time boundaries
and thus, require an organizational
structure particular to themselves.
 When we say project we are mainly
referring
30 to the capital projects.
 Classification of Project (cont
…)

 In general projects be it revenue or

capital can be classified from different
perspectives.
a) On the basis of time horizon project can
be
Long term projects : Like Power plant
project
Medium term projects : like Construction
of a factory
Short term project: Like Exhibition, trade
fair
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Classification of Project (cont
…)

b) On the basis of the type of output:

Project producing tangible Products : Oil mill
Project providing services: Telecom project,
Education etc.
c) On the basis of the scope of the project:
International project : Euro tunnel project
National Project: Ethiopia Hydro power project
Regional Project: Elementary school project
d) Based on the economic sector:
Agricultural project: Irrigation project
Industry project : Cement Project
Service sector project : Bank projects

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 Classification of Project (cont
…)

e) On the basis of technology:

Capital intensive project : Brewery project
Labour intensive project : Textile industry
project
f) Based on location :
Rural Projects
Urban project
g) On the basis of the nature of the
project
Independent project : Hospital, Hydroelectric
power
Complementary project : Airport project,
Runway and airport services are different
projects which are complementary to each other.
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 Project Management

• What is project management?

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 Project Management

It can be defined in different ways.

• Managers of projects engage in planning,
organising, leading and controlling to satisfy
project objectives.
• Focus on content and properties of the
project management system and the
interrelationship between the various
components of the project.
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Cont…

• Project Management is a set of principles,

practices, and techniques applied to lead project
teams and control project schedule, cost, and
performance risks to result in delighted customers.
• Cost, time and performance are the focus.
• Project management includes planning,
organizing, directing, and controlling
activities in addition to motivating what
is usually the most expensive resource
on the project - the people.
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 Cont…

 Peter Morris described project

management as “… the process of
integrating everything that needs to
be done (typically using a number of
special project management
techniques) as the project involves
through its life cycle (from concept to
handover) in order to meet the
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 Cont…

 Rory Burke defined it as follows:

 “… the application of knowledge, skills, tools
and techniques to project activities in order to
meet stake holder’s needs and expectations
from a project.”
 In other words the project manager must do
whatever is required to make the project
happen.

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cont…

•Project Mgt. Is therefore:-

The art of directing and coordinating
human and material resources
throughout the life of a project by
using modern management
techniques to achieve predetermined
objectives of scope, cost, time,
quality and participant satisfaction’.
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 Why Projects Fail?
 Most large-scale programs or projects do not
succeed, mainly driven by inadequate
governance and poor planning.
Large Programs/Projects Success Rates looks like the following.

Successful

16%

53%
31%
Under Perform Cancelled

Source: Standish
40 Group International, Survey from 2500 personnel attending project management training
 cont…
Reasons for Projects Failure
• Others
Poor Organization
Technical Problems and Project
11%
4% Management
Problems with Suppliers Practices
4%
36%
Insufficient Project Personnel
Resources 10%

15%
Ineffective Project Planning 20%

Poorly Defined or Missing

Project Objectives
Source: Standish
41 Group International, Survey from 2500 personnel attending project management training
Why Conduct project analysis?
 To stop bad projects
 To prevent good projects from being
destroyed
 To determine if components of
projects are consistent
 To assess the sources and
magnitudes of risks
 To determine how to reduce risks
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and efficiently share risks
Cont…

 A proper analysis will cause the project

to be redesigned so that it is less likely
to fail.
 World Bank experience shows that the
probability of failure for poorly prepared
projects within 3 years of a project’s life
is 7 times that of well-prepared projects.
 Poorly prepared projects have 16 times
as high a probability of failure within 5
years as compared to well-prepared
projects
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Cont…

 Write a three page (type written) report

on what exactly the project management
practice looks like in the context of the
Ethiopian environment.

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Cont…

Thank
You!!!
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