What is a Project?

• A project is human activity that achieves a

clear objective against a time scale
• A project is an outcome to be achieved
which normally involves completing defined
tasks within expenditure and time limits
• A project is a set of purposeful activities
designed and implemented to achieve
certain results within given resources
Why Project Management?
• The basic purpose for initiating a project is
to accomplish specific goals within specified
time period

• Actual experience with project management

indicates that the majority of organizations
using its experience better control and
better customer relations and probably an
increase in their project’s ROI.
 Project Triangle/
(Project Constraints)
Time

Cost Quality/Performance
 Project Cycle
Situation Analysis

Evaluation Planning

Project Implementation Proposal Writing

 Identification and Project Selection
• Projects have to be identified before they are
formulated. There are many sources of project
identification. The projects may be identified on
the basis of :
~Resource potential
~Investment Opportunities
~Socioeconomic objectives/ targets indicated in
development plans/ programs
~Local needs besides studies based on sectoral
studies, market studies, natural resources,
regional and social balance and political and
strategic considerations.
 Criteria For Project Selection Model

• The proper choice of investment projects is crucial to the long-run

survival of every firm. When a firm chooses a project selection
model, the following criteria are important:
1. Realism: The model should reflect the reality of the manager’s decision
situation including the multiple objectives of both the firm and its
managers. The model should take into account the realities of the firm’s
limitations on facilities, capital, personnel etc. The model should also
include factors that reflect project risks including technical risks of
performance, cost and time as well as market risks of customer rejection
and other implementation risks
2. Capability: The model should be sophisticated enough to deal with
multiple time periods, simulate various situations both internal and
external to the project (e.g., strikes, interest/ exchange rate changes). An
optimizing model will make comparisons including major risks and
constraints on the projects and then select the best overall project or set
of projects.
Criteria For Project Selection Model
(Contd.)
3. Flexibility: The model should give valid results within the range of
conditions that the firm might experience. It should have the ability to be
easily modified, or to be self adjusting in response to changes in the firm’s
environment.
4. Ease of Use: The model should be reasonably convenient, not take a
long time to execute, and be easy to use and understand. It should be easy
to simulate the expected outcomes associated with investments in different
project portfolios.
5. Cost: Data gathering and modeling costs should be low relative to
the cost of the project and must surely be less than the potential benefits of
the project. All costs should be considered, including the costs of data
management and of running the model.
6. Easy Computerization: It must be easy and convenient to gather
and store the information in computer data base, and to manipulate data in
the model through use of a widely available, standard computer package
such as Excel or Oracle in case of mainframe computer.
 PLANNING
• This is the second stage of the project cycle
• Objectives and Methodology of Project Design
• After a project is identified, it has to be given some shape so
as to be able to visualize its objectives/ targets and the cost
involved
• Supervision, Monitoring and Evaluation Mechanisms
• Work plan and Chronogram
• In Pakistan (GoP), the project details are presented in PC-I for
submission to the Planning and other relevant agencies at
federal and provincial levels for appraisal and approval before
implementation
• In case of pre-investment studies and researches, the project
is submitted in PC-II to the relevant agencies at all levels
 Feasibility Studies

• In case of a big project, the first step in preparation

may be, undertaking of a feasibility study so as to
gain knowledge prior to initiating detailed project
formulation
• A large majority of all firms using project
evaluation and selection models use profit/
profitability as the sole measure of acceptability
• Payback period, average rate of return, discounted
cash flow (also referred to as the net present value
method) and Profitability Index (also referred to as
the benefit-cost ratio) are few methods being used
in the industry to estimate the project profitability/
feasibility
 Writing Project Proposal

The preparation and writing of a project proposal is highly

technical task. Different organizations have varied formats of
proposals. But the following components are the requirement
of all formats of proposals:
– Profile of the Organization
– Project Summary
– Statement of Needs
– Problem Selected
– Objectives
– Methodology and Design
– Monitoring and Evaluation
– Work Plan and Chronogram
– Budget
– Future Plans