Week 1 Corporate
Project Appraisal & Management 3.41213
1.
Why
Study Project Management?
The
Study of Project Management is important is for several reasons;
a) To
enables students to understand the importance of managing a project and the
project life cycle, from the start to completion.
b) Student
will learn that project management evolved; Planning,
Coordination and Control.
c) Students
will learn that all projects share one common characteristics and that is to
deal with the projections of ideas and activities into new endeavours.
d) Students will also learn that about the ever
present elements of risks and uncertainty involved in predicting the successful
outcome of any project.
e) Students
will learn how to foresee or predict the possible dangers and problems, projects
may encounter and to ensure the project is completed successfully.
f) Students
will able to learn about the allocation of resources is to commence and ends.
g) Completion
of project and results as expected by project sponsor and principle
stakeholders within Budget and given timescale.
2.
Brief
History of Project Management
Man-made
projects are not new. Look around you and you will see project whether large or
small are being planned, discussed and build. Projects can either be for an
individual, a firm or for the public, depending on the ownership and allocation
of resources. Projects in most cases are completed successfully, however, in
some cases you will come across projects that will be considered incomplete due
to a variety of reasons such as lack of resources or expertise.
You
just need to read and look at monuments surviving from the earliest civilizations
to wonder how our forefathers can achieve such incredible achievements without
modern technology, equipment etc. Monumental projects that have impact the
minds and amazement of people throughout histories can only reflect the feat
and perseverance of people’s management of such project.
Looking
through history, you will notice that projects are not new to the earth. Of the
Seven Wonders of the World, the pyramids date back to 2650BC, tells us about
the Egyptian civilization.
The
Taj Mahal another wonder of the world is reported to have been constructed by a
workforce of 20,000 persons from the period 1626 to 1648, a period of
approximately 22 years.
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| Picture 1: Egypt Pyramids Image Source: commons.wikimedia.org |
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| Picture 2: Taj Mahal Image Source: www.tajmahal.com |
In
any economy today, economic pressure in terms of demand for goods and services,
such as food, security, education and health are putting pressure on the
government and firms to deliver in terms of building infrastructure and
building new manufacturing plants. Beside demands for goods and services, there
are also the ongoing competitions among competitors in term of product
differentiation, value delivery and customer relationships, quality management,
employment and safety issues. All these issues have contributed to new ideas,
techniques and project management skills.
Before 1900
·
Wonderful projects;
·
People cheap, even
expendable,
·
Urgency not driven by
the rat-race,
·
Management organization
structures seen in the church and the military;
·
No management
scientists,
·
No project management
profession
1900 – 1949
·
Emergence of management
science
·
People begin to study
work and people at work
·
Henry Gantt introduces
his famous planning charts
·
Early development of
critical path networks
1950 – 1969
·
US defence projects
exploit critical path network analysis
·
Mainframe computers can
run project management software in batch mode
·
Project management
becomes a recognized profession
·
More concern for people
at work
1970 – 1979
·
Project management has
two meanings:
-
industrial project
management
-
IT project management
·
Creation of
professional associations
·
More project management
software
·
Legislation for health
and safety
·
Anti-discrimination
laws introduced
1980 – 1989
·
Desktop computers can
run powerful project management software
·
Better graphics, with
colour
·
Managers less dependent
on IT experts
·
Computers cannot now
run arrow networks and precedence becomes the norm
1990 – 2000+
·
PCs and notebooks can
run all applications
·
More interest in
project risk
·
IT and industrial
project management no longer considered so differently
·
Project management is a
respected profession, with flourishing associations
·
Wider acceptance of
project management as a profession
•
Worldwide communication
by satellite and the Internet
3.
Project
Characteristics and Project Types
Project according
to Encyclopaedia of Management is ‘an organized unit dedicated to the
attainment of goal – the successful completion of a development project on
time, within budget, in conformance with pre-determined programme
specifications’[i]
Project
according to Oxford Advanced Learner’s Dictionary is defined as ‘Planned Work –
a planned pieced of work that is designed to find information about something,
to produce something new or to improve something.
Example;
A project can be a research project, a building project, a road construction or
anything. It can be a huge project worth millions of dollars such as the Papua
New Guinea LNG project, or it can be a small project such as building a
residential home worth less than a million dollars.
According
Nagarajan, Project Management comprises or consists of different stages;
·
Project Planning
·
Project Scheduling
·
Project Implementation,
Controlling, Monitoring
In
most cases, most text books have the same stages mentioned however in different
terms, examples; Harvard Business Review (HBR) guide to Project Management
stated Project Stages/Phases as;
·
Project Planning
·
Project Build-up
·
Project Implementation
·
Project Closeout
Projects
may look alike but no two projects are ever the same. Two roads would be
different meaning they may look alike but they are in different locations,
maybe one road is 20 kilometres while the other is 40 kilometres. Even project
organizational structure may differ from each other, the cost, and the number
of people working on the project maybe from different areas, the type of
equipment and machinery use in one project may differ from another.
Some
projects come into being gradually, and others fade out slowly, so that their
precise beginning
3.1.Major characteristics of a Project[ii];
a) Objectives
– What are the set objectives or mission for the project? Example: The project
maybe for the construction of a road from village A to village B covering a
distance of 20 kilometres. Once the construction of the road is completed the
project comes to an end.
In
regard to objectives, HRB[iii]
came up with the acronyms SMART (Specific; Measurable; Action-oriented;
Realistic; Time-limited)
b) Life Cycle –
A project has a life cycle and it consist of the following stages.
Conception Stage
– Where project ideas are conceived.
Design Stage
– Detailed design of different project areas are worked out.
Implementation Stage
– Project is implemented per the design
Commissioning Stage
– Commissioning comes after implementation and indicates the end of the project
life cycle.
c) Definite Time Limit
– A project has a definite time limit meaning it cannot continue forever.
Example: When the road construction from village A to village B is completed,
it means construction started January 2014 and ends in November 2014 at a total
cost of K1.5 million. The maintenance of this road from Village A to village B
is an ongoing process and would not come under the context of project.
d) Uniqueness –
Every project is unique and no two projects are similar. Example: Construction
of road from A to B maybe different from construction another road from C to D
in the sense that there may be different people working on these two project,
locations are not the same, technical specification maybe different,
organization structure of the project may also be different.
e) Team Work
– Any project would require expertise from different fields and disciplines’,
therefore hiring the right people to work on a project is important.
Co-ordination among a diverse group of people is important to ensure a project
is completed through teamwork.
f) Complexity
– When discussing complexity, you are looking at project with a complex or wide
range of activities. For example, you may need appropriate technology for
specific area of work, an appropriate machinery and equipment, the right kind
of person, the financial resources, logistics etc.
g) Sub-Contracting
– When a project is so complex, the option of subcontracting is an advantage.
Reasons being, sub-contractors can manage other activities thus enables the
project to be completed on time and within the available resources. Example;
The PNG LNG project had many sub-contractors working on this huge project thus
the project was able to be completed ahead of schedule.
h) Risk and Uncertainty –
In any projects there are risks and uncertainty and these two tend to go hand
in hand. No project is risk free. Example if there is a major road construction
going through a mountain and a landslide occurs unexpectedly, then there is the
risk or a blowout in your financial estimate, or if the government of a country
is overthrown, there is the risk of the project not being completed.
i)
Customer
Specific Nature – A project normally has a
customer and it has to meet or suit the needs of the customers. Example a
labour ward in an hospital is specifically for delivering mothers, thus the
project have to accommodate the needs of mothers as well as the health workers
and government sanctioned regulations etc.
j)
Change
– Changes occurs during the life span of any project. The changes may come
about from environment factors or other changes. A good example of change would
be change in technology. The new technology may have enable project managers to
discover something new that was not taken into account during project design.
The project realizes that the new method is much better than the previous one
thus changes needed to be done to accommodate such change and keep the project
up to date.
k) Response to
Environments – Projects take shape in response
to the environmental forces.
l)
Forecasting
– Forecasting is an important aspect of project management. Forecasting must be
accurate as much as possible so that resources acquired are sufficient to
complete project within project design.
m) Rational Choice
– Choices are made after all alternative avenues have been considered.
n) Principle of Succession
– During implementation only can the different intricacies of projects will
come to light.
o) Optimality –
Optimum utilization of resources for the overall development and implementation
of a project.
p) Control Mechanism
– Pre-designed control mechanism to ensure completion of the project.
4.
Attributes
of A Good Project Manager
An
effective project manager should have the following skills and capabilities;
a) Planning
and Organizational Skills
b) Personnel
Management Skills
c) Communication
Skills
d) Change
Orientation
e) Ability
to solve problems
f) High
Energy level
g) Effective
Time Management
h) Ability
to take Suggestion
i)
Ability to develop
alternative actions quickly
j)
Team Building Skills
k) Knowledge
of technology
l)
Tolerance for
differences
m) Resources
allocation skills
n) Entrepreneurial
skills
5.
Classifications
of Projects[iv]
a) Based
on type of Activity – industrial and non-industrial projects
b) Based
on the Location of the Project – international/national projects
c) Based
on Project Completion Time – Normal project or Crash projects
d) Based
on Ownership – Private or Public sector project
e) Based
on Size – Small, Medium or Large projects
f) Based
on Need – New Project, Balancing project, Expansion project , Replacement
project, Diversification project, Backward or forward integration project
Lock[v]
(2007) has classified projects into four different general types.
Type 1 Projects - Such
projects are civil engineering, construction, petrochemical, mining and
quarrying etc. These types of projects require huge capital investment and
large amount of resources. Given the complexity of such projects, other
contractors and sub-contractors are involved in the implementation stages to
get the project completed on time and within budget through a consortium or a
joint venture. A good example would be the Exxon Mobil PNG LNG Project.
Type 2 Projects - The
second types of projects are those involved in manufacturing. Such projects
results in the production of equipment and machinery, motor vehicles or any
electronic equipment. You will find project of this nature taking place in a
laboratory, a manufacturing plant. Some of these projects have locations in
more one country. The production of Ford Motor vehicles is a good example
because it has several factory plants located in different countries working on
different areas to complete a Ford vehicle.
Type 3 Projects - According
to Lock (2007), the third type of projects would be in the category of IT
projects and projects associated with management change. You will come across
such projects when there is competition in the market or changes in
environment. Such project comprises introducing new products into the market place,
product differentiation or product modification. Besides introducing new
products, the third type of project also involved management change when an
organization is going through restructuring or when there is an acquisition or
merger in organizations.
When
studying Project Management, students have to remember that not all projects
are conducted for commercial purposes or for profit. Within the national and
local level government sectors, there are projects carried out on behalf of the
government to provide services to its citizens. Example of such projects would
be the construction of classrooms and health centres or the construction of
roads and bridges.
Type 4 Projects
Type
4 projects according to Lock (2007) are projects for pure scientific research
which may result in new discoveries and to some extend can consume a lot of
money. Such projects are highly risky and difficult to define its objectives.
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| Picture 3: Paradise Foods Image Source: www.businessadvantagepng.com |
Additional Notes
Students
can read Morris (1994) if you want to have a comprehensive account of project
management history and also enhance your understanding on the development of
project management.
A
Website that can be useful to students who are interest in pursuing further
understanding and knowledge on project management can visit the following
website; www.projectmanagement9.com
[i] Project Management 3rd Edition, K. Nagarajan (2007) New Age
[ii] Project Management 3rd Edition K. Nagarajan. (2007) New
Age
[iii] Harvard Business Review Guide to Project Management (2013)
[iv] Project Management 3rd Edition K. Nagarajan (2007) New
Age
[v] Project Management 9th Edition D. Lock (2007) Gower
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