Beruflich Dokumente
Kultur Dokumente
Segment I
Basic Concept, Project Life Cycle, Characteristics and Taxonomy, Organizing for
Projects.
Role and Responsibilities of a Project Manager, Concept of Social Projects, SCBA
What is a Project?
“A project is a one-shot, time-limited, goal-directed, major undertaking,
requiring the commitment of varied skills and resources”.
A project is “ a unique endeavor to produce a set of deliverables within clearly
specified time, cost and quality constraints”.
Projects are temporary in nature, while operations are ongoing. Projects have
definitive start dates and definitive end dates. The project is completed when the
goals and objectives of the project are accomplished. Sometimes projects end when
it’s determined that the goals and objectives cannot be accomplished and the
project is canceled. Operations involve work that is continuous without an ending
date and often repeat the same process. Projects exist to bring about a product or
service that hasn’t existed before.
1. Need Identification
The first step in the project development cycle is to identify components of the
project. Projects may be identified both internally and externally:
• Internal identification takes place when the energy manager identifies a
package of energy saving opportunities during the day-to-day energy management
activities, or from facility audits.
• External identification of energy savings can occur through systematic
energy audits undertaken by a reputable energy auditor or energy service company.
In screening projects, the following criteria should be used to rank-order project
opportunities.
• Cost-effectiveness of energy savings of complete package of measures
(Internal rate of return, net present value, cash flow, average payback)
• no difficulty of quantifying, monitoring, and verifying electricity and fuel
savings.
• Availability of technology, and simplicity of adaptability of the technology
to Indian conditions.
• Other environmental and social cost benefits (such as reduction in local
pollutants, e.g. SOx)
• Reducing costs
• Increasing revenues
• Eliminating waste
• Increasing productivity and efficiency
• Solving a business or functional problem
• Taking advantage of market opportunities
2. Initiation
In this first stage, the scope of the project is defined along with the approach
to be taken to deliver the desired outputs. The project manager is appointed and
in turn, he selects the team members based on their skills and experience. The
most common tools or methodologies used in the initiation stage are Project
Charter, Business Plan, Project Framework (or Overview), Business Case
Justification, and Milestones Reviews.
3. Planning
The second phase should include a detailed identification and assignment of each
task until the end of the project. It should also include a risk analysis and a
definition of a criteria for the successful completion of each deliverable. The
governance process is defined, stake holders identified and reporting frequency
and channels agreed. The most common tools or methodologies used in the planning
stage are Business Plan and Milestones Reviews.
5. Closure
In this last stage, the project manager must ensure that the project is brought to
its proper completion. The closure phase is characterized by a written formal
project review report containing the following components: a formal acceptance of
the final product by the client, Weighted Critical Measurements (matching the
initial requirements specified by the client with the final delivered product),
rewarding the team, a list of lessons learned, releasing project resources, and a
formal project closure notification to higher management. No special tool or
methodology is needed during the closure phase
Since the company eventually will operate the power plant upon its completion, it
is highly important for its staff to monitor the design and construction of the
plant. Such coordination allows the owner not only to assure the quality of
construction but also to be familiar with the design to facilitate future
operation and maintenance. Note the close direct relationships of various
departments of the owner and the consultant. Since the project will last for many
years before its completion, the staff members assigned to the project team are
not expected to rejoin the Engineering Department but will probably be involved in
the future operation of the new plant. Thus, the project team can act
independently toward its designated mission.
Project Manager
A project manager is usually responsible for the success or the failure of the
project. They first need to define the project and then build its work plan. If
the scope of the project is not very clear, or the project is executing poorly,
the manager is held accountable. However, this does not mean that the manager does
all the work by himself (which is practically impossible). There is an entire team
under the project manager, which helps to achieve all the objectives of the
project. However, if something goes wrong, the project manager is ultimately
accountable. Apart from this, depending on the size and the difficulty of the
project, they may need to take on multiple roles. The project manager may need to
assist with gathering business requirements, help to design a database management
system or may prepare project documentation. They may work full time on a large
project, or may work part-time on various projects of a smaller nature; or may
alternatively handle various projects as well as handle other responsibilities
like business analysis and business development.
At times, they may have accountability but not authority. For example, he or she
may be using certain resources but might not have direct control over those
resources. At such times, the manager might find certain limitations over task
execution, which might not take place as they might have liked. Not having direct
control over the state of finances and finance allocation might cause ambiguity.
Project managers use project management software, such as Microsoft Project, to
organize their tasks and workforce. These software packages allow project managers
to produce reports and charts in a few minutes, compared to the several hours it
can take if they do not use a software package. In order to be successful, the
project manager must be given support and authority
by senior management
Organizing
Controlling
Leading
Communicating
Cognitive functions
Self management functions
Motivational and personaldevelopment functions
Customer awareness functions
Organizational savvy functions
2.1 Planning
First, the project manager clearly defines the project objectives and reaches
agreement with the customer on this objective. The manager then communicate this
objective to the project team in such a manner as to create a vision of what will
constitute successful accomplishment of the objective. The project manager
spearheads development of a plan to achieve the project objectives. By involving
the project team in developing this plan, the project manager ensures more
comprehensive plan than he or she could develop alone. Furthermore, such
participation gains the commitment of the team to achieve the plan. The project
manager reviews the plan with the customer to gain endorsement and then sets up
the project management information system-either manual or computerized-for
comparing actual progress to plan progress. It’s important that this system be
explained to the project team so that the team can use it properly to manage the
project.
2.2 Organizing
Organizing involves securing the appropriate resources to perform the work. First,
the project must decide which tasks should be done in-house and which tasks should
be done by subcontractors or consultants. For tasks that will be carried out in-
house, the project manager gains a commitment from the specific people who will
work on the project. For tasks that will be performed by subcontractors, the
project manager clearly defines the work scope and deliverables and negotiates a
contract with each subcontractor. The project manager also assigns responsibility
and delegates’ authority to specific individuals or subcontractors for the various
tasks, with the understanding that they will be accountable for the accomplishment
of their tasks within the assigned budget and schedule. For large projects
involving many individuals, the project manager may designate leaders for specific
group of tasks. Finally, and most important, the task of organizing involves
creating an environment in which the individuals are highly motivated to work
together as a project team.
2.3 Controlling
To control the project, the project manager implements a management information
system designed to track actual progress and compare it with planned progress.
Such a system helps the manager distinguish between busyness and accomplishments.
Project team members monitor the progress of their assigned tasks and regularly
provide data on progress, schedule and cost. These data are supplemented by
regular project review meetings. If actual progress falls behind planned progress
or unexpected events occur the project manager takes immediate action. He or she
obtains input and advice from team members regarding appropriate corrective
actions and how to replan those parts of the project. It’s important that problems
and even potential problems, be identified early and action taken. The project
manager cannot take a “let’s wait and see how things works out” approach- things
never works out on their own. He or she must intervene and be proactive, resolving
problems before they become worse.
2.4 Leading
Project manager fosters development of a common mission and vision to the team
members. He should clearly define roles, responsibilities and performance
expectations for all his team members. He uses leadership style appropriately to
situation or stage of team development. He should be able to foster collaboration
among team members. He should provide clear direction and priorities to his team
members. He should be efficient enough to remove obstacles that hamper team
progress, readiness or effectiveness. He should promote team participation in
problem solving and decision making as appropriate. He should pass credit on to
team, and promotes their positive visibility to upper management. He should
appreciate, promote and leverage the diversity within the team.
2.5 Communicating
The Project Manager should be able to communicate effectively with all levels
inside and outside of the organizations. He should be able to negotiate fairly and
effectively with the customers/subcontractors. He should be able to bring
conflicts into the open and manages it collaboratively and productively with the
help of other team members. He should be able to able to influence without relying
on coercive power or threats. He should be able to convey ideas and information
clearly and concisely, both in writing and orally to all the team members.
• So, to reflect the real value of a project to society, we must consider the
impact of the project on society.
Thus ,when we evaluate a project from the view point of the society (or economy)
as a whole, it is called Social Cost Benefit Analysis (SCBA)/Economic Analysis.
Scope of SCBA
SCBA can be applied to both Public & private investments –
• Public Investment:
SCBA is important specially for the developing countries where govt. plays a
significant role in the economic development.
• Private Investment:
Here, SCBA is also important as the private investments are to be approved by
various governmental & quasi-governmental agencies.
Objectives of SCBA
The main focus of Social Cost Benefit Analysis is to determine:
1. Economic benefits of the project in terms of shadow prices;
2 The impact of the project on the level of savings and investments in the
society;
3. The impact of the project on the distribution of income in the society;
4. The contribution of the project towards the fulfillment of certain merit
wants (self- sufficiency, employment etc).
Significances of SCBA
CBA is unable to reflect social values. Hence SCBA has been emerged with some
interesting significances. These significances also make the SCBA different from
the CBA.
• Market Imperfections
• Externalities
• Taxes & Subsidies
• Concern for Savings
• Concern for Redistribution
• Merit Wants
• Market Imperfections: Market prices, the basis for CBA, do not reflect the
social values under imperfect market competition.
• Externalities: A project may have beneficial or harmful external effects
that are considered in SCBA, not in CBA.
• Taxes & Subsidies: From the social point of view, taxes & subsidies are
nothing but transfer payments. But in CBA, taxes & subsidies are treated as
monetary costs and benefits respectively.
• Concern for Savings: In SCBA, the division between benefits & consumption is
relevant wherein higher valuation is placed on savings. But in CBA such division
is irrelevant.
• Concern for Redistribution: In SCBA, the distribution of benefits is very
much concerning issue where commercial private firm does not bother about it.
• Merit Wants: Merit wants are important from the social point of view and
therefore, SCBA considers these wants.
Approaches to SCBA
There are two principal approaches for Social Cost Benefit Analysis.
A. UNIDO Approach, and
B. L-M Approach.
A. UNIDO Approach: This approach is mainly based on the publication of UNIDO
(United Nation Industrial Development Organization) named Guide to Practical
Project Appraisal in 1978.
B. L-M Approach :I.M.D Little & J.A.Mirlees have developed this approach for
analysis of Social Cost Benefit in Manual of Industrial Project Analysis in
Developing Countries and Project Appraisal & Planning for Developing Countries.
UNIDO Approach
The UNIDO approach of Social Cost Benefit Analysis
involves five stages:
• Calculation of financial profitability of the project measured at market
prices.
• Obtaining the net benefit of the project at shadow (efficiency) prices.
(Objective of SCBA-1)
• Adjustment for the impact of the project on Savings & Investment. (Objective
of SCBA-2)
• Adjustment for the impact of the project on Income Distribution. (Objective
of SCBA-3)
• Adjustment for the impact of the project on Merit and Demerit Goods whose
social values differ from their economic values. (Objective of SCBA-4)
Stage-2: Obtaining the net benefit of the project at economic (shadow) prices
The Commercial Profitability analysis (calculated in stage - 1) would be
sufficient only if the Project is operated in perfect market. Because, only in a
perfect market, market prices can reflect the social value.
If the market is imperfect (most of the cases in reality), net benefit of
the Project is determined by assigning shadow prices to inputs and outputs.
Therefore, developing shadow prices is very much vital.
Shadow Prices reflect the real value of a resource (input or output) to
society.
Shadow Prices are also referred as economic prices, accounting prices,
economic/accounting efficiency prices etc.
Shadow Prices can be defined as the value of the contribution to the
country’s basic socio-economic objectives made by any marginal change in the
availability of commodities (0utput) or factor of production (input).
Example: A project of power station may increase the production of
electricity which contributes to one of the socio-economic objectives of the
country
L-M Approach
• I.M.D. Little and James A. Mirrlees have developed an approach to SCBA which
is famously known as L-M approach.
• The core of this approach is that the social cost of using a resource in
developing countries differs widely from the price paid for it.
• Hence, it requires Shadow Prices to denote the real value of a resource to
society. (mentioned earlier)
Features of L-M Approach
• L-M Numeraire is present uncommitted social income.
• L-M methods opts for savings as the yardstick of their entire approach.
Present savings is more valuable to them than present consumption since the
savings can be converted into investment for future.
• L-M approach rejects the ‘consumption’ numeraire of UNIDO approach since the
authors (L & M) feel that the consumption of all level is valuable.
• This approach measures the cost and benefits in terms of international or
border prices.
Why Border prices?
Because the border prices represent the correct social opportunity costs or
benefits of using or producing a traded goods.
Social Cost-Benefit Analysis (SCBA)
The resources – inputs & outputs – of a project are classified into mainly:
• Labor
• Traded Goods
• Non-traded Goods
Therefore, to find out the real value of these resources, we should calculate –
a) Shadow wage rate (SWR)
b) Shadow price of Traded Goods
c) Shadow price of Non-traded Goods
Key terms
COST-BENEFIT ANALYSIS
Description of the technique
Cost-benefit analysis (CBA) is a method of evaluating the net economic impact of a
public project. Projects typically involve public investments, but in principle
the same methodology is applicable to a variety of interventions, for example,
subsidies for private projects, reforms in regulation, new tax rates. The aim of
CBA is to determine whether a project is desirable from the point of view of
social welfare, by means of the algebraic sum of the time-discounted economic
costs and benefits of the project.
Generally speaking cost-benefit analysis is used in the ex-ante evaluation for the
selection of an investment project. It can also be used ex-post to measure the
economic impact of an intervention. It is used when the effects of an intervention
go beyond the simple financial effects for the private investor. It is normally
used for major infrastructure projects, especially in the transport and
environment sectors, where it is easier to quantify and monetise the non-market
effects. CBA is also used to evaluate projects in the health, education and
cultural heritage sectors.
CBA is not normally used to evaluate programmes and policies, even though in
principle it could be used to study the effect of changes in specific political
parameters (for example customs tariffs, pollution thresholds, etc.).
4. Contracting
5. Implementation
6. Performance Monitoring
Segment II
Market Potentiality Analysis – Identification of opportunities, Evaluation of
market and potential demand. Technical Analysis. Financial Analysis – NPV, IRR,
Payback period.
Market Potential Analysis
Do you know how successfully your newly developed product will sell on the market?
Planning, development and introduction of new products is always associated with
uncertainty. Specific knowledge regarding potential target consumers and their
probable spending on the new product provides you with more certainty concerning
the market success of new product developments. We can offer you precise and
reliable information in this area after conducting a market potential analysis.
Definition and Goals
Market potential describes the maximum capacity of a defined market for a specific
product/ a service within a defined time period. In this context market refers to
the total of all potential consumers with a certain need or desire who are willing
or able to satisfy this need or this desire through the purchase of products /
services. The sales potential can then be derived from the results of the market
potential analysis. Market potential consists of the upper limit of total demand
which would theoretically be converged on at (infinite) rise of marketing
expenditures of all relevant providers (see figure).
Applications
Market potential analyses are especially used for growth or unsaturated markets
for which “market size” cannot simply be estimated through the actual market
volume. Market potential analysis offers decision support for specific questions
for which such as:
Exploration of potential (target) markets Determination of
company locations
Evaluation of ideas (screening) Designation of sales areas
Financial analysis:
Pay back period
The payback period is the exact length of time needed for a firm to recover its
initial investment as calculated from cash inflows. Payback period is the least
precise of all capital budgeting methods because the calculations are in dollars
and not adjusted for the time value of money
THE TIME VALUE OF MONEY
Everyone knows that a dollar today is worth more than a dollar a year from now.
The reason
for this is because of the time value of money
NET PRESENT VALUE (NPV)
The net present value (NPV) method is a difficult capital budgeting technique that
equates the discounted cash flows against the initial investment.
INTERNAL RATE OF RETURN (IRR)
The internal rate of return (IRR) is perhaps the most sophisticated capital
budgeting technique and also more difficult to calculate than NPV. The internal
rate of return is the discount rate where the present value of the cash inflows
exactly equals the initial investment. In other words, IRR is the discount rate
when NPV =0.
Segment III
Project Implementation and control - Network techniques- Project Crashing, Project
Updating, Resource Allocation and leveling. Contractor Schedule and Rescheduling ,
PMIS, Project Audit , ex-post Evaluation.
Features/benefits
Information sharing and real-time business available among customer, supervisor,
affiliate and architect
by using single Web-based interface
• Drawings and documents available in site (Same as headquarters)
• Knowledge Management of field accumulated data (Defect cases/Safety
management cases/new construction methods)
• Site monitoring for process status by business unit (Individual site or
Grouping of construction sites classified by types)
• Flexible interface with other systems (ERP etc)
• Empower each business division for its business
• Maximize consistent information retrieval and reporting.
• Increase workforce productivity
• Improve system response times and aviability.
• Enhance system maintainability