PROJECT MANAGEMENT: MEANING, BASIC CONCEPTS AND

IMPORTANCE(Module-1)

Meaning and Definition of Project:

The word "project" has a very broad meaning. All of us use this term in our day-to-
day conversation. We, frequently hear and say about cement project, fertilizer
project, power project, construction of bridge, construction of national high way,
building of ship, construction of hospital, etc. All these represent different projects.
These projects are accomplished by performing a set of activities.
According to Graham Me Leodand Derek Smith, "Project is a co-ordinated effort,
using a combination of human, technical, administrative, and financial resources, in
order to achieve a specific goal within a fixed time period."
Little and Mirrless defined, "a project is any scheme or part of a scheme for investing
resources which can be reasonably analysed and evaluated as an independent
unit.")
Characteristics of a Project
Following are the important characteristics of a project:
1. Objectives :
Every project has a set of well-defined objectives. Once the objectives are attained, the project is
deemed to be completed.
2. Definite Period:
Every project has a definite life span. It is not an endless process. If the period for the construction of
a multi-speciality hospital is fixed as five years, it cannot be continued forever.
It must be completed by five years.
3. Complex Activities:
A project is a complex set of varieties of activities. Selection of suppliers for materials, selection of
technology, procurement of machinery, hiring of human resources, arrangement of finance, etc.
contribute greatly to the complexity of projects.
4. Unique:
No two projects are alike in all respects. They have their own unique characteristics.
Construction of bridge and construction of a fertilizer plant are two different projects.
Construction of a hospital in town A and construction of a hospital in town B are also unique projects
in terms of location, man power requirements, infrastructure, raising of finance, technical
specifications, etc.
5. Life Cycle:
Every project has a life cycle which consists of stages such as conception of project idea, planning
phase, execution phase, organising phase, directing and controlling phase and termination phase.
6. Team Work:
Ordinarily, a project consists of different areas. The success of a project depends on how effectively
these various areas are co-ordinated. Therefore, team work is very vital for the implementation of a
project.
7. Customer-oriented:
Each project offers products or services which are best suited to the interests of the customers.

Classification of Projects
1. Based on Investment:
1. Large Scale Project: Large scale projects are the projects which involve huge investments, say, crores.
E.g., Real Estate Projects, Satellite sending projects of ISRO, Unique Identification Number project of
India, etc.
2. Medium Scale Project: These are the projects which involve medium level investment and are mainly
technology oriented. E.g., Projects related to computer industry, projects related to electronic industry,
etc.
3. Small Scale Project: Small scale projects involve only a lesser investment. E.g., agricultural projects,
manufacturing projects, etc.

2.Based on Ownership:
 1. Public Projects: Public projects are the projects which are undertaken by government agencies.
Construction of roads, construction of bridges, Adult Education Programmes, etc. are examples for
public projects.
2. Private Projects: These are the projects which are undertaken by private enterprises.
Any business-related projects such as construction of houses by real estate builders, software
development, etc. are examples for private projects.
3. Public-Private Partnership Projects: These projects which are undertaken by both government and
private enterprises together. E.g., Generation of electricity by windmill, Garbage collection, etc.
3.Based on Sector:
1. Agricultural Projects: These are the projects which are related to agricultural sector like irrigation
projects, well digging projects, manuring projects, soil upgrading project, etc.
2. Industrial Projects: These are the projects which are related to the industrial manufacturing sectors like
cement industry, steel industry, textile industry, etc.
3. Service Projects: These are the projects which are related to the services sectors like education,
tourism, health, public utilities, etc. For example, adult literacy project, medical camp, general health
check-up camp, etc.
4.Based on Research in Academia:
1. Major Projects: In academia, the major projects are those projects which involve more than one year to
3 or 5 years and minimum funding of 3 lakhs in case of social sciences and 5 lakhs in case of sciences.
2. Minor Projects: The minor projects in academia are those projects which will be completed within a year
and have a maximum funding of 1 lakh in social science and 3 lakhs in case of sciences.
5.Based on Objective:
1) Commercial Projects: These projects are undertaken for commercial purpose and return on
investment is expected out these projects. For example, Toll roads based on BOLT (Build Own
Lease Transfer) model or BOOT (Build Own Operate and Transfer) model, Product launching project,
etc.
2)Social Projects: These projects are undertaken for social purposes. The welfare of the people is the
aim of social projects. These projects are undertaken either by the Government or Service-oriented non-
governmental organizations. For example, Polio Immunization Project, Child Welfare Projects, Adult
Literacy Projects, etc.

6.Based on time required for completion:

1. Long-term projects: Long-term projects take a very long duration to complete. These projects are run for
many years till the objective is reached. For example, eradication of diseases like Polio, Filaria, etc.
2. Medium-term projects: Medium-term projects take a medium-term duration like 3 to 5 years for
completion. For example, modernization projects, computerization of operations, etc.
3.Short-term projects: Short-term projects are executed within a short period, normally within a year. For
example, pond cleaning project, health camps, software development, etc.
4) Very short-term projects: By very name you can understand that these projects are completed within a
very short period, say, within a day. For example, product launch project.
7. Based on risk involved:
1. High Risk Projects: These projects involve a very high degree of risk. For example, nuclear energy
project, thermal energy project, satellite projects, etc. If the project is not handled properly, the effect will
be very adverse. Thus, high precautionary measures are to be taken to commission these projects.
2. Low Risk Projects: These projects do not involve risk and they are carried out in the normal course of
action. For example, road and bridge construction, house construction, etc.

8.Based on functions:
1.Marketing Projects: Marketing projects are taken up in the area of marketing a product or service of an
organization. Marketing road shows, implementing a marketing strategy, etc.
2.Financial Projects: Financial projects are undertaken to raise finance or restructure capital structure.
For example, IPO Project, share split project, etc.
3.Human Resources Projects: Human resource projects are undertaken in the area of human resources
of an organization.E.g., Induction training project, campus recruitment project, etc.
4.IT and Technology Projects: These are undertaken in the area of IT companies or IT related
requirement of any organization. E.g., development of Human Resources Information System,
Marketing Information System, etc.
5.Production Projects: These projects are undertaken in the area of production or manufacturing
operations. For example, overhauling projects, preventive maintenance projects, getting an ISO
certification, etc.

Stages or Phases of Project Life Cycle

(a) Conception (Identification),
(b) Formation (Preparation),
(c) Analysis (Appraisal),
d) Implementation (Supervision),
(e) Operation,
(f) Evaluation.

Project Management
Project management refers to management of project. Project management is
the process of planning, organising, monitoring and controlling of all aspects of a
project. It also includes motivating all involved to achieve project objectives within a
specified time, cost and performance.
Need for Project Management
1. Complexity of projects: Projects involve time, effort, money, etc. Projects are composed of different
tasks, functions and jobs. If there is any fault in planning or implementation of projects, there sources
put in the projects would be a waste.
2. Achievement of objectives : Unless projects are managed well, the objective for which the projects are
undertaken cannot be achieved
3. Planning and implementation of projects: In the absence of project management, it is not possible to
plan and implement the projects properly.
4.Environmental changes: Projects are existing in the environment. The environment keeps on changing.
The environmental changes give rise to environmental challenges. A project should be well equipped to
meet the environmental challenges. The success of the project depends upon how the project is able to
cope with the changing environment.
Without an efficient project management, it is not possible to adapt to the changing environment.
4. Competition: Today projects are functioning in the midst of competition. To face out the competition,
providing of goods or services only is not sufficient. It must provide a
'package' which meets an entire need rather than just part of that need. Only when there is project
management, it is possible to understand the competitive situation and smell the actions of competitors.
Constraints : There are constraints around every project. The constraints are related to time, materials,
demand, labour, technology etc. The success of a project depends on how well it is possible to manage
the so-called constraints. The need for project management arises here.
5. Risk and uncertainty: Projects are functioning in the midst of risk and uncertainty. At every stage of
project life cycle, there are challenges and problems. As the project moves, new challenges and
problems may arise. These give rise to risk and uncertainty. The risks and uncertainties can not be
eliminated. But their impact can be minimised. This is possible through proper management of projects.
Project management is also needed to manage the different phases of project life cycle.
6. Time overrun and cost overrun: In most of the cases, it may not be possible to complete the project
within the time schedule and budget cost. If a project takes more time than the scheduled time, it is
known as time overrun. Similarly, if a project incurs more costs than budgeted, it is called cost overrun.
Through proper management, it will be possible to avoid or at least reduce the incidence of time over
run and cost overrun.
7. Project control and evaluation: For project control and evaluation, project management is inevitable.
Evaluation is done either at the end of the project or few years after the completion of the project. This
gives an insight as to what went right or wrong as regards achievement of project.

Benefits of Project Management

Following are the major benefits offered by project management techniques:
1. Project management provides a roadmap for easy project completion.
2. Project management techniques help for making trade-offs between conflicting goals and priorities of
enterprise.
3. In addition to facilitate better control and coordination of various project activities, project management
helps in reducing time, lowering costs, and ensures higher order results.
4. It provides clear description of work to be performed and thereby minimises the conflicts.
5. It helps to identify the responsilities in respect of each task more easily.
6. It enables to reduce the need for continuous reporting.
7. It helps to specify the time limits for completion of each task.
8. It facilitates the measurement of accomplishment against each plan.