Chapter 1.

Introduction to Project
1.1 Defining a project in a relative sense.

Many provide different definitions for a project based on their own perspective. The following
ones are the common definitions.
 Project is a means of implementing the firm’s plans.
 A project also described as a combination of human and non-human resources pooled
together in a temporary organization it achieve a specified purpose. A project has a single
set of objectives, and a when the objectives are reached, the project is completed.
Therefore, a project has a finite and well-defined life span. Further management must
have a clear idea as to what these objectives are so that there can be no doubt as to when
the project is completed. Project is a “one-shot” major undertaking.
 A project is for setting up a plant and when the plant becomes operational, the project is
treated as completed. A project is neither a physical objective, nor is it the end result. It
has something to do with the activities that go on, which must be the same, whether it is
to build a nuclear power plant or launching a new detergent.
 Project is an organized program of activity carried out to reach a defined goal, often of a
non-recurring nature with a specified terminal point. It is a package of time bound,
scheduled and assembled activities dedicated to the attainment of a specific objective of
successful completion of a work, on time and within the allotted budget. Effective
management of projects is vital for the development of any economy, since development
it self is the effect of a series of successfully managed and completed project.
 A project is an entire set of activities involved in conceiving, planning, appraising,
implementing, monitoring, and evaluating an economic or social undertaking which
involves the employment of scarce resources to create products or services.
 A project is an activity to meet the creation of a unique product or service and thus
activities that are undertaken to accomplish routine activities cannot be considered
projects. For instance, if your project is less than three months old and has fewer than 20
people working on it, you may not be working in what is called a project according to the
definition of the term.

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Implementation of project needs resources or inputs. Every project converts the given
inputs in to outputs through the process of implementation. A project is viewed as a
conversion process. This implies that a project involves a transformation of some form
of inputs into an output. (see the following diagram).

Constraints

Inputs Project Output

Mechanisms
In the above diagram, we observe that project is a conversion process which serves in
transforming inputs into outputs. Inputs represent want or need whereas outputs
represent satisfied need. The outputs, in the short run, lead to outcomes, which in the
long run, should result in impact. Constraints consist of factors such as financial, legal,
ethical, environmental, time, and quality. Mechanisms include people, knowledge of
expertise, capital, tools and techniques, and technology.

Types of projects:
Basically, three types of projects can be identified based on their nature. These are;
1. New projects-The largest type of project around which project analysis group
involves new investment. New investment is designed to establish a new productive
process independent of previous lines of production. They often include a new
organization financially independent of existing organizations.
2. Expansion projects -There are expansion projects that involve repeating or
expanding an existing activity with the same output technology and organization.
3. Updating projects - These are updating projects that involve replacing or changing
some elements in an existing activity without a major change of output. Updating
projects involve some change in technology but within the context of an existing though
possibly reformulated organization.
Examples of a project: -
- The establishment of new business
- The development and introduction of a new services/products
- The development of a management information system
- The introduction of an improvement to an existing process

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 - Acquiring and putting in operation new processing technology
- The production of a new customer newsletter, catalogue or Web site
- Building a house
- Expanding the production capacity of an entity
- Searching for life partner
- Irrigation projects
- Children care project
- Designing and implementing civil service reform programs

Characteristics of Project
Here are some of the characteristic features, which are attributable to most type of
projects.

They have long-term effects- Capital investments have the consequences that extend far in to the
future. They provide the framework for future activities and have a significant impact on the
basic character of a firm such as profitability and competitive positions. They inevitably affect
the company’s future cost structure.

Irreversibility - A wrong capital investment decision often cannot be reversed without incurring
a substantial loss. This is due to the fact that the market for used capital assets (equipment) in
general is ill-organized i.e., the investment may be sold below purchase price or the market for
such as second hand investment may be non-existent.

Substantial outlays -Capital investments require substantial outlays. This is especially the case
with investments in advanced technology. In other words they tide up large amount of scarce
capital resources and prevent the entity from generating benefits (earning profits) from other
investments which could not be undertaken for want of funds.

Purpose: - A project has a fixed set of objectives/mission/goals. Once these objectives,

goals, or mission have been achieved the project will cease to exist or become extinct
from the organizational pyramid.
Life-span:- Project cannot continue infinitely, it is executed, terminated or dead. Every
project is invariably time bound. The time limits are well defined through schedules. It
has a temporary rather than open-ended duration.
Single-time activity: - No project is often repeated. Every project, may it be simple or
complex, small or big, industrial or commercial, government or private, is unique in
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nature and may be vanquished or performed of its quality only at once. However
similar the projects may be, the activities and their comprehension in operations, scope,
deliverable, etc. would indeed change from each other.
Unit of command: - The entire authority and responsibility of handling the project will
usually be entrusted to a single head known as project manger, who will ultimately be
accountable for the whole performance.
Team sprit: - Every project encourages a team sprit amongst the group of people who
participate and are instrumental in reaching the goal. This team consists of different
individuals from varied disciplines to bestow their knowledge, experience, and
credence towards a total performance.
Life-cycle: - The development of a project form the stage of the initial idea until it is put
operation can be shown in the form of cycle comprising a number of phases. Like any
other product, project will also be reflected and influenced by the life-cycle phases and
to which the success or failure in the project can be ascribed.
Uniqueness- Projects are as unique as fingerprints of two individual. No two projects
are alike in their execution even if the plans are duplicated. The deployment and
performance of the resources will vary which convey conformance and confirm to
unique standards and quality.
Flexibility-Change and projects are synonymous. Always a project witness multiples of
modifications and changes in its originals plans, programs and budgets. Only the
modifications and non-routine and non-repetitive activities need careful planning and
re-planning to meet the goals and hence projects are subjected to heavy refinements and
drilling. These constant drills make the projects more dynamic and flexible. Another
prominent reasons why projects are more flexible is that ideas in the conception stage
are only half backed and as the ideas are being prototyped the real dilemma gets
penetrated and clarity makes project ‘fully backed ‘ and ‘crunchy nut’. Therefore, every
project has a room for change and inherently flexible in the early stages of its life-cycle
Abstract and discerning - Projects generally transmigrate through a process called
‘blurred and crystal clear’. When the idea is conceived it may be rich with sparsely 50-
60% information on the SWOT analysis and as it moves further towards various
analytical stage the more diaphanous or limpid it attunes to on the future prospects and

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goals. The initial ‘satellite vision’ of project gets crystallized as programs by using an
effective MIS.
Customer specifics - Projects are not ready-made rather they are made ready. A project
will have a semblance only when there is a demand from a specific customer or group
of customers in the form of sponsored. Therefore, a project is always customer-specific
and considers the constraints on the demand side of economics more often than on the
credits or supply side. The convenience of the supply side of economics such as labor
availability or resources and managerial talent, etc is of secondary concern, primary
being the ‘customer requirement’.
Complex web of things, People and Environment -A project is not contingent to single
factor hermetic. It is a mélange of all the man-made and natural things, which traces a
complex interrelationship amidst for a right cause. This ‘unity of diversity’ is a global
concept for any kind of project.
Subcontracting -Subcontracting is a subset of every project and with out which no
project can be completed unless it is proprietary form or tiny in nature. Subcontracting
is an inescapable fact of project, to be dosage appropriately, with in time.
Risk and Uncertainty-Project undertaking involves costs and benefits that extend far in
to future. And it is impossible to predict perfectly what will happen in future. Hence,
risk and uncertainty is a way of life for projects. However, a well-conceived project may
have lesser degree of risk and uncertainty.
Classification of projects
Basis of classification Classification Examples
- Time horizon(project life) - Long term projects - power construction
- medium term - factory construction
projects - exhibitions&
- short term projects bazaars
- Type of output - Product - Textiles, soft drinks
- Services - Education, health
- Locality - national - universities/Tel, electric
- regional power
- elementary schools
- Market sector - international - coffee exports, international

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 airport
- domestic - any local oriented
- Economic - Agriculture - commercial farming
- Industries - new soft drink factory
- service - bank, insurance
- resource use - capital intensive - Beer factory
- labour intensive - Salt mining

1.2 Plans and projects.

Planning can be defined as a “Continuous process, which involves decisions or choices, about
alternative ways of using available resources, with the aim of achieving particular goals at some
time in the future.”
The rationale of planning is considered effective in mobilizing resources and allocating into
priority area of development. Development Planning can be regarded as an attempt to raise the
rationality of decision – making:

Projects and Programs

Program is a definite plan or scheme of any sequence of operations aimed at the attainment of
the planned objectives. This explanation assumes that program is a plan of activities with
general objectives that would be derived from the development plan.
Programs and projects have got their own differences and similarities. For clarity purpose, let’s
outline some of the major differences and similarities of the two concepts as follows.
Differences
Projects Programs
- Specific objective - General objectives
- Specific projects area - No specific project area
- Specific beneficiaries group - No specific beneficiaries group
- Clearly determined and allotted - No clear and detailed financial
Fund resource allocation
- Specific lifetime - No specific lifetime
Similarities
Projects and programs have similar characteristics in terms of

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 Having objectives
 Requiring resources such as financial, human, material, etc.
 Generating output (goods/services)
 Having future characteristics
 Serving as instruments for the execution of development plans in order to develop the
national economy.
N.B. projects are tools for implementing program objectives i.e the project objectives must aim
at meeting the program objectives. In other words programs are collection of projects and
projects must be completed in specified order for program to be complete. Thus all projects can
be programs where as all programs are not projects.

1.3 Ethiopia’s experience in macro and specific project plans

There are various ways in which the project cycle may be viewed and portrayed
depending on the purpose, emphasis and detail required to illustrate.
According to the Guidelines to project planning in Ethiopia (1990) of Development
Project Studies Authority (DEPSA), the project cycle comprises three major phases.
1. Pre – investment
2. Investment and
3. Operation
Each of these three phases may be divided into stages. The Guidelines has divided the
Project cycle into six stages:
1. Identification
2. Preparation
3. Appraisal/decision
4. Implementation
5. Operation
6. Ex-post evaluation

Role of Project Manager

As things stand today, none of the present generation project manager, including the very
successful ones, come from any of our management schools. They were just given the job-some
succeeded and others did not. Those who succeeded are not many, because only a handful of

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 projects in India were ever completed on time, within budget and performed to expectations.
While the failures of these projects had been analyzed in many seminars and workshops, the role
of project managers and their development did not form the subject of any serious discussion.
There could be two reasons for this: (a) Perhaps no one thinks that success or failure of a project
depends on the project manager; and (b) It may also be that no one considers them as a special
breed of managers. Surprisingly, even some of the practicing project managers themselves
subscribe to these views. The basic roles and responsibilities of a project manager that we are
referring to could be grouped under the following heads. 1. Defining and maintaining the
integrity of a project; 2. Development of project execution plan; 3. Organization for execution of
the plan; 4. Setting of targets and development of systems and procedures for accomplishment of
5. Project objectives and targets; 6. Negotiation for commitments; 7. Direction, coordination and
control of project activities; 8. Contract management; 9. Non-human resource management
including fiscal matters; 10. Identify actual and potential problems and take corrective actions
(Problem-solving); 11. Human resources management; 12. Satisfaction of customer, Government
and the public; and 13. Achievement of project objectives, cash surplus and higher productivity

Key Responsibilities of a Project Manager

1. Initiating

Project managers begin each new project by defining the main objectives of the project, its
purpose, and its scope. They also identify key internal and external stakeholders, discuss shared
expectations, and gain the required authorization necessary to move a project forward.

Important questions that project managers ask during the initiating phase include:

 Why is the project important?

 What’s the specific problem we’re trying to solve?
 What is the desired outcome?
 What are the project’s success criteria?
 Who are the stakeholders on this project? Who is impacted by, or who impacts, this project?
 What are the requirements and constraints within this project?
 What assumptions are we making?
 How will the project be funded?
 What is within our scope? What is not within our scope?
 Has this project been executed before? If so, what was the result? What information from that
past project should be considered in this project?

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 It’s important to recognize that project managers don’t do this on their own. Oftentimes, a
project manager isn’t assigned until much of this work is well underway.

As soon as the project manager is assigned, however, he or she needs to fully engage in the
above work which should culminate in a project being chartered and formally assigned.

2. Planning

Once the charter is approved, project managers work with key stakeholders to create an
integrated project plan focused on attaining the outlined goals.

The plan established during this process helps project managers

oversee scope, cost, timelines, risk, quality issues, and communications. It is during this phase
that project managers will outline key deliverables and milestones and identify the tasks that
must be completed to complete each.

It’s important to note that project “planning” doesn’t actually end until the project does. The
project plan should be treated as a living document that constantly evolves and changes
throughout the project.

3. Executing

During this phase, team members complete the work that has been identified in the project plan
in order to reach the goals of the project. The project manager’s role is to assign this work and to
ensure that tasks are completed as scheduled. The project manager will also typically:

 Protect the team from distractions

 Facilitate issue resolution
 Lead the team in working through project changes

4. Monitoring and Controlling

Despite being listed as the fourth phase, monitoring and controlling processes actually
commence at the beginning of a project and continue throughout planning, execution, and
closing. In the monitoring and controlling phase, a project manager’s work includes:

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 Monitoring the progress of a project
 Managing the project’s budget
 Ensuring that key milestones are reached
 Comparing actual performance against planned/scheduled performance
Of course, things rarely go exactly according to plan. Therefore, a project manager must be
flexible enough to work within a project’s plan but readily adapt when necessary.

5. Closing

During this phase, project managers strive to ensure all activities necessary to achieve the final
result are completed. During the close of a project, project managers will:
Project Management Environment

Certainly the project manager needs to be similarly concerned about the project's technology,
and manage accordingly. This applies to both the implementation and shorter term practical
construction impacts of the project as well as its conceptual development and consequent long
term impacts. However, today's project manager also needs to be attuned to the cultural,
organizational and social environments of the project. Understanding this environment includes
identifying the project stakeholders and their ability to affect its successful outcome. This means
working with people to achieve the best results, especially in the highly technical and complex
environments such as those involving modern day construction projects. Therefore, it is essential
that the project manager and his or her project team are comfortable with, and sympathetic
towards, their cultural, organizational and social surroundings. This leads to the possibility of
influencing the project environment in a positive way, for the better reception of the change
which the project is designed to introduce. For example, peoples' typical resistance to change
will no doubt be evident amongst some of the stakeholders. Others may have vested interests or
personal or group agendas which are only indirectly related to the project. If these can be
identified in good time, they may be dealt with proactively and in such a way that the
corresponding risks, which are otherwise likely to undermine the success of the project, can be
significantly reduced.

 People involved in projects Contribute and work have interests and expectations are project
stake holders

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 Project stakeholders consists of the project environment

Classification of project environment

1. Internal project environment:

 Direct interest on the project.
 Contribute to achieve objectives
 It consists of Project Owner and Project Team includes project Management
Team and Project Team members (Assign roles and responsibilities)

Role of Project Owner

 Initiates the project

 Benefits from its final result
 Responsible to monitor the project objectives
 provides financial or other resources to the project
2. External Project environment:
 Main interest on its outcome or on objectives and phases
 It consists of End Users, Customers, Social Groups and Suppliers (Manage)
 Role of above people - Identify needs, expectations, power, Develop Managing
Strategy, involve them actively in decision making, meet their expectations and
Communicate the benefits

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