CHAPTER ONE

INTRODUCTION
What is a project?
Many people and organizations have defined what a
project is, or should be differently, but probably the
most authoritative definition is that given by project
management institute:
This states that a project is:
 ‘A unique set of co-ordinated activities, with definite
starting and finishing points, undertaken by an individual
or organization to meet specific objectives within defined
schedule, cost and performance parameters.’
 Con’t….
 Project is a one-shot, time limited, goal directed, major
undertaking, requiring the commitment of varied skills
and resources.
I.M.D. Little and J.A. Mirrless have defined project as
‘’We mean by a project any scheme, or part of scheme, for
investing resources which can reasonably be analyzed
and evaluated as an independent unit.
 Con’t…
 J. Price Gettinger have described project as
“A specific activity with a specific starting point and a
specific ending point intended to accomplish a specific
objective.
 It is something you draw a boundary around at least a
conceptual boundary and say this is the Project”.
 United Nations on the other hand have defined project
“Compilation of data which will enable an appraisal to
be made of the economic advantages and disadvantages
attendant upon the allocation of country’s resources to
the production of specific goods and services.”
 Con’t….
A project is a unique endeavor to produce a set of
deliverables within clearly specified time, cost and
quality constraints.
From the above definitions one can identify the following
characteristics of project:
 Are unique in nature: They don't involve repetitive
processes. Every project undertaken is different from
the last, whereas operational activities often involve
undertaking repetitive (identical) process.
 Have a defined timescale: projects have a clearly
specified start and end date within which the
deliverables must be produced to meet specified
customer requirement.
 con’t….
 Have an approved budget: projects are allocated a level
of financial expenditure within which the deliverables
must be produced to meet specified customer
requirement.
 Have limited resources: at the start of a project an
agreed amount of labor, equipment and materials is
allocated to the project.
 Involve an element of risk: projects entail a level of
uncertainty and therefore carry business risk.
 Achieve beneficial change: the purpose of a project,
typically, is to improve an organization through the
implementation of business change.
Con’t….
Project management is the application of knowledge,
skills, tools, and techniques to project activities to
meet project requirements.
Project management is accomplished through the use
of the following 5 processes:
I. Initiation
II. Planning
III. Execution
IV. Controlling and
V. Closure
Classifications of a project
1. Based on ownership:
 Private sector- mostly projects undertaken by business enterprises.
 Public sector- projects undertaken by national and local government
bodies.
 NGOs- development projects are most often undertaken by non-
government and non- for profit organizations.
2. on the Sources of Finance:
 Government treasury- projects may be entirely financed by government
budget as per its priority. For instance, construction of regional airport.
 Government treasury and external sources- most projects are financed
by the joint partnership of the government and donor groups. For
example, a road project may be financed 50% by the government and 50%
by a foreign donor.
 External sources of Finance- projects may be financed totally by parties
other than the government but established for the well being of the
citizens and the ownership may be for the government or the public.

Con’t…
3. Based on Motive/drive behind the project. Projects
may be categorized as one of three types:
Market-driven: Producing a new product in response
to market needs. For example, a software company
sells products and maintains market share by creating
quality programs that meet consumer needs.
Crisis-driven: Quickly solving a specific problem. For
instance, in response to defective automobile tires, a
manufacturer may quickly organize a project to
manage their recall and replacement, and create a
public relations campaign to address the issue.
Change-driven: Changing operations to match the
current environment or to be more effective.
Con’t…
4. Based on the forces Behind:
 Demand driven/need driven- based on identified unsatisfied demand
project can be created or on unsatisfied basic needs like food, water and
shelter.
 Donor driven- the force behind the financing organization. Donors will
have their own say and influence the types of projects to be established.
 Political Driven- Projects may be established in response to some political
situation such as for example because of national elections, projects by
religious organizations.
Con’t…
5. Based on degree of dependence
Mutually exclusive projects (can execute project A
or B, but not both)
Complementary projects: taking project A increases
the cash flow of project B.
Substitute projects: taking project A decreases the
cash flow of project B.
 Con’t…
6. By project size
Small projects: may be approved by departmental managers.
Large projects : More careful analysis and Board of
Directors' approval is needed for large projects of, say, half a
million dollars or more.
 
Project and Plan
Planning can be defined as a "continuous process that involves
decisions or choices about alternative ways of using available
resources with the aim of achieving a particular goal or set of
goals at some time in the future.“

The rationale for planning is that it serves as a tool that

enhances the effectiveness in mobilizing resources and
enables allocation of resources into priority areas of
development.

The hierarchical relationship among development plans,

programs, tasks, and work packages is depicted below:
 Con’t…
It is necessary to distinguish between projects and
programs because there is sometimes a tendency to use
them interchangeably.
A project refers to an investment activity where
resources are used to create capital assets, which produce
benefits over time and has a beginning and an end with
specific objectives, while
A program is an ongoing development effort (plan)
involving a number of projects. Programs may or may
not necessarily be time bounded. Yet programs cannot
live forever, they have limited life cycle, which however,
may or may not be explicitly stated. So in effect in terms
of time delimitation, there is only relative difference
between programs and projects.
 Con’t…
For instance, a health program may include a water
project as well as construction of a health center; both
aimed at improving the health of a given community
that previously lacked easy access to these essential
facilities
Differences between Projects and Programs
PROJECTS PROGRAMS

specific objectives General objectives

Specific project areas No specific project areas

Specific beneficiaries group No Specific beneficiaries group

Clearly determined and allocated funds No clear and detailed financial resource allocation

Specific lifetime No specific lifetime

 Similarities between Projects and Programs

Projects and programs have similar characteristics in a way

that both are:
 Having objectives;
 Requiring financial, human, material, etc inputs (or
resources);
 Generating outputs, (goods/services), of value;
 Serving as instruments for the execution of development
plans in order to boost the national economy.
 ESTABLISHING PROJECT OBJECTIVES
Once you have clearly identified the problem or
opportunity, the next step is to define the basic objectives
of the project, including:
 What is to be done (specific end results),
 How it will be done (quantity, quality, or special
requirements),
 When it will be complete (deadline), and
 How much it will cost.
 Clearly define the project objectives in terms of the
desired end results.
Con’t…
The project objectives should describe what the project
will accomplish.
 Ask yourself, “If we achieve the stated objectives, will we
consider the project a success?” Consider the three main
aspects of project objectives:

Cost: The money and resources required to get the job

done—including people, equipment, and other
allocations.
Time: The time required to get the job done.
Scope: A description of all the deliverables—the end
products, services, processes, or other results to be
provided at the end of the project, along with their
features, functions, and a description of their quality.
 Con’t…
The project objectives must be SMART (Specific, Measurable, Agreed
upon, Realistic, and Time/Cost-limited).

SMART objectives are:

Specific. The objectives must be so clear and well defined that anyone with
a basic knowledge of the project area can understand them. They must
precisely define what the project will and will not do.
Measurable. Objectives must be defined in measurable terms. If they
cannot be measured, they are too ambiguous and you need to define them
more clearly. To be successful, you must be able to measure and report on
the progress.

Agreed-upon. The project manager, project sponsors, and customers must

agree on the project objectives. All stakeholders must agree that the end
result will solve the problem or respond to the opportunity defined.
 
 Con’t….
 Realistic. The project objectives must be
achievable, given the available resources,
knowledge, skills, and time. It might take some time
and energy to negotiate project objectives that are
realistic.
Time/cost-limited. The objectives need to be
framed within clear time/cost goals. The amount of
available time (budget) as well as any available
flexibility, should be defined