PROJECT MANAGEMENT

PROJECT MANAGEMENTCHAPTER 1What is a PROJECT?Insurance company is planning to purchase computers for information process.A steel plant is considering purchasing a furnace.Government plans to build a dam.Mr. X is about to purchase a bike.

PROJECT -A project is a capital investment to develop facilities to provide goods and services.PROJECT MANAGEMENT - Project Management is the planning, analysis, financing, implementation and review of the resources to develop facilities in order to provide goods and services to the society.

CHARACTERISTICS OF PROJECTInvestmentBenefits Time periodSocial cost and benefit (SCBA)Location TYPES OF PROJECTSBased on IndustryBased on sizeBased on objective..etcPHASES OF PROJECT MANAGEMENT / PROJECT LIFE CYCLEIdentificationFormulationAppraisalSelectionImplementationReview

Phase 1: IdentificationProject identification consists of :1. Finding projects ideas2. Choosing the right line of business3. Looking for Opportunity

Phase 2: FormulationTaking a first-look carefully and critically at a project idea to build up a beneficial project The aim of project formulation is to achieve the project objectives with minimum expenditure and adequate resourceProject formulation means to check whether the proposal of project will become reality or not. For this the entrepreneur must examine various factors like the capacity of the firm to produce, the repaying capacity of capital etcPhase 3: AppraisalEconomic: it means that the project must be beneficial to the economic development of the country.Technical: it means the project must have appropriate technology and related features.Managerial: it means the project must have manpower as requiredOperational: it means the capacity of the project must be feasibleFinancial: it means the project must be financially profitable

Phase 4: Selection1. Payback period-should be less then target period. 2. Accounting rate of return-should be greater than target rate. 3. Internal rate of return-should be greater than cost of capital. 4. Benefits cost ratio-should be greater than 1.

Phase 5: Implementation1. Project engineering and designs- site checking, preparation, preparation of blue prints, plant designs, plant engineering, selection of specific machineries and equipments.2. Negotiation and contracting- negotiation and drawing up of legal contracts3. Construction- site preparation, construction of buildings and civil works, execution and installation of machineries and equipments.4. Training- training of engineers, technicians, workers etc. 5. Plant commission- startup of the plant.Phase 6: ReviewPerformance review should be done periodically to compare actual performance.

It helps in providing the feedback and taking corrective actions if required.

PROJECT IDENTIFICATIONSources of good project ideasPreliminary screening of ideasPRESENTATIONPROJECT FORMULATIONPresentationPROJECT REPORTMeaningScopeImportanceContentsProformaPRESENTATIONS