PROJECT MANAGEMENT

PROJECT INITIATION
THE PROJECT INITIATION STAGE
 Initiation stage is highly instrumental in the life cycle of a project as it defines the boundaries of the
project and gives clarity to all the participants about the objectives, scope, cost and timescale of the
project.
 It sets the baseline for scope, cost and schedule
 Identifies the right people to involve
 Defines what is included in scope
 Identifies items not included in scope
 Breaks project into manageable pieces
 Defines major project deliverables
 Define key project risks
 OBJECTIVES AND DELIVERABLES
OBJECTIVES DELIVERABLES

 Define the project scope & objectives

 Define project timeframe and milestones  Project objectives and Project scope

 Define project deliverables  Project milestones and deliverables

 Define project organization/ stakeholders  Project organization / stakeholders

 Identify project cost elements  Budget approvals and resource allocation

 Identify key risks, issues and  Success factors, constraints, expected

interdependencies expenditure
 Define project monitoring system/ KPIs  Confirm project manager assignment

 Conduct internal analysis to define gaps  Formal Steering Committee approval

Understanding the nature of projects
PM Knowledge Areas – Initiation Processes
Project
 Develop Project  Collect
Charter Project Scope
Integration Requirements
Management
Management  Develop Project  Define Scope
Management Plan  Create WBS
 Direct and Manage Project Execution  Verify Project Scope
 Monitor and Control Project Work  Control Project Scope
 Perform Integrated Change Control
 Close Project or Phase
 Estimate Costs
Project Cost  Determine Budge t
Management
 Define Activities  Control Costs
Project Time  Sequence
Management
Activities
 Plan Quality
 Estimate Activity Resources  Perform Quality
Project Quality
 Estimate Activity Durations Management Assurance
 Develop Schedule  Perform Quality Control
 Control Schedule
Understanding the nature of projects
PM Knowledge Areas – Initiation Processes
Project Human
 Develop Human  Plan Risk
Resources Resource Plan Project Risk Management
Management
Management  Acquire Project  Identify Risks
Team
 Develop Project Team  Perform Qualitative Risk Analysis
 Manage Project Team  Perform Quantitative Risk Analysis
 Plan Risk Responses
 Monitor and Control Risks

 Plan Procurements Project

 Identify
Project
Procurement  Conduct Communication Stakeholders
Management Procurements Management  Plan
Communications
 Administer Procurements  Manage Communication
 Close Procurements  Manage Stakeholder Expectations
 Report Performance
Project Definition

Triggers,
Triggers,
Goals
Goals andand
Objectives
Objectives

Communication ScopeScope
and and
and Deliverables
Deliverables
Assumptions

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Project Initiation

Budget and Vendors ,

Spending Stakeholders

Constraints,
Risks and
Dependencies
Project Definition
Triggers

 Understanding the real triggers behind introducing a project

Triggers,
Triggers, Triggers, is important in defining the project and understanding its
Goals
Goals andand Goals and
Objectives
Objectives Objectives constraints
Comms Plan
Scope and Scope and
 Triggers help define the project’s criticality, priority ,
and
Assumptions
Deliverables Deliverables deadline, impact, expected outcomes, risks, etc…
 Example project triggers:
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Project Initiation Project Initiation
• Responding to an existing problem
Budget and Vendors , • Fulfilling strategic objective
Spending Stakeholders
• Responding to a new or amended
Constraints, legislation
Risks and
Dependencies • etc…
Project definition
Goals and Objectives
 Goals and objectives are statements that describe what the project
Triggers,
Triggers,
Goals
Goals andand
will accomplish, or the business value the project will achieve.
Objectives
Objectives

 Goals are high level statements that

provide overall context for what the
project is trying to achieve, and
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should align to business goals.
 Objectives are lower level statements
that describe the specific, tangible
products and deliverables that the
project will deliver.
Project Definition
Goals and Objectives
 An objectives can be evaluated at the conclusion of
Triggers,
Triggers,
Goals
Goals andand a project to see whether it was achieved or not.
Objectives
Objectives
 Goal statements are designed to be
vague. Objectives should not be vague.
 Objectives need to be well-worded to be
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SMART:
Specific,
Measurable,
Attainable/Achievable,
Realistic and
Time-bound.
Project Definition
Goals and Objectives
 Understanding the real goals and objectives behind
Triggers,
Triggers,
Goals
Goals andand
your project is a key driver to project success
Objectives
Objectives
 Properly articulating project goals and
objectives and confirming them with
project stakeholders leads to reduced
misunderstandings and higher
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success ratio
 Clear goals and SMART objectives
define the target a project needs to
fulfill
The definition of goals and objectives is more
of an art than a science, and it can be difficult
to define them and align them correctly.
Project Definition
Goals and Objectives
 An example of a project goal is:
Triggers,
Triggers,
Goals
Goals andand “To increase the overall satisfaction levels
Objectives
Objectives
for stakeholders calling for support with
their licensing needs".
 The above goal does not specify how
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stakeholder satisfaction will be increased. Is it by
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enhancing technology, or by training people, or
is it by changing strategies.
 Therefore SMART objectives must be defined to
translate the above goal into something
measurable
Project Definition
Goals and Objectives
 An example of an objective statement is: “Enhance the capabilities
Triggers,
Triggers, and skill level of the staff handling stakeholder interactions within a
Goals
Goals andand
Objectives
Objectives period of three months on licensing services.

 The above objective is:

 Specific, Achievable and Realistic
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 Measurable
 Time bound as it should be completed within 3
months
Project Definition
Scope and Deliverables
 Clearly defining project scope leads to SUCCESS
Triggers,
Goals and
Objectives
 Project scope is about clearly articulating what is
Scope and included in your project and more importantly
Deliverables
what is not included
 The main purpose of the scope definition is to
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clearly describe the boundaries of your project
and get all stakeholders to agree to it.
 Scope is tightly linked to the project goals and
objectives
Project Definition
Scope and Deliverables
 It is the project manager’s responsibility to ensure scope is
Triggers, managed throughout the project and scope CREEP (incremental
Goals and
Objectives expansion of the project scope) is avoided.
Scope and  Changes to the scope should be managed by the
Deliverables
project manager in a structured manner via change
control process throughout the project
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 Change control guarantees that impact on Cost
/Budget, Schedule/ Time, Scope/Quality is
defined and agreed amongst all the parties

 Scope is defined at a high level during initiation

stage and is detailed during the planning stage
Project Definition
Scope and Deliverables
 Once the goals / objectives and scope are defined, the
Triggers, project manager needs to clearly define the set of
Goals and
Objectives deliverables that the project is expected to achieve.
Scope and
Deliverables
 Deliverables can be either Tangible or Intangible.

Project Initiation
Project Initiation For example:
 a report, a document or a system upgrade
are considered tangible deliverables
 while deliverables such as “achieving
recognition” or “building capability or human
competence” are intangible
Project Definition
Scope and Deliverables
 Deliverables must be achievable, so when defining a
Triggers,
Goals and
deliverable you should ask yourself “can this actually be
Objectives delivered?”
Scope and
Deliverables

Deliverables must be specific so that

Project Initiation
Project Initiation certain individuals or teams can be
held accountable for achieving them.

 Major deliverables are defined during initiation and

detailed during the planning stage
Project Definition
Vendors
 When defining the project, if there is a need to procure
Triggers, services or products from a specific vendor, the following shall
Goals and
Objectives be defined:
1. the type of capabilities required
2. list of potential vendors that can provide the service
or product that fulfill the required capabilities
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Vendors and
 Vendors form part of the project stakeholders
Stakeholder
 Vendors are engaged by contractual agreements
which are supported by Statement of Work (SoW)
that clearly define the role of the vendor
Project Definition
Stakeholders
 Project stakeholders are entities that have an interest in
Triggers, a given project. These stakeholders may be inside or
Goals and
Objectives outside an organization which:
1. sponsor a project, or
2.have an interest or a gain upon a

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successful completion of a project;
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3.may have a positive or negative influence
Vendors and in the project completion.
Stakeholder
 Stakeholders need to be updated regularly on
project progress or upon achievement of key
milestones. Such communication is covered in
the project communication plan
Project Definition
Stakeholders
 As a project manager you are expected to:
Triggers,
Goals and
Objectives
 Find your stakeholders early (during
initiation)
 Get them involved early
Project Initiation
Project Initiation  Keep them informed – have your
communication plan ready
Vendors and
Stakeholder  Ask them for help when required
 Inform them about project closure and
thank them
Project Definition
Constraints, Risks & Dependencies
 A Constraint is the state of being restricted or
Triggers, compelled to avoid or perform some action.
Goals and
Objectives
 Project constraints include anything
that may limit the project team ability
to complete the project successfully.

Constraints
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 Typically constraints relate to
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resources, cost, personnel,
schedule, scope or quality.
 Clearly understanding the project
Constraints, constraints is important for the
Risks and
Dependencies project manager to plan around
them
Project Definition
Constraints, Risks & Dependencies
 Some example of project constraints are:
Triggers,
Goals and  Cost Constraint:
Objectives
The maximum budget set for this
project is $100,000.
What does this mean for the

Constraints
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project?
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The project needs to plan its
resources and activities in such a
manner that such budget is not
Constraints, exceeded such as using cheaper
Risks and
Dependencies resources, or identifying a more
cost effective vendor or find more
efficient ways to do the work
Project Definition
Constraints, Risks & Dependencies
 Some example of project constraints are:
Triggers,
Goals and  Schedule Constraint:
Objectives Mahindra and Mahindra – Scorpio
Launch

What does this mean for the

Constraints
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project?
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The project needs to be ready for
the launch on that date, which
may have an impact on the
Constraints, resources or on planning the
Risks and
Dependencies activities in parallel or dedicating
key staff for the job, etc...
Project Definition
Constraints, Risks & Dependencies
 Some example of project constraints are:
Triggers,
Goals and  Resources Constraint:
Objectives
Senior safety inspector can only be
available one day a week for the
project

Constraints
What does this mean for the
Project Initiation
Project Initiation
project?
This means that the project needs
to reflect the impact on project
Constraints, timeline and on scheduling the
Risks and
Dependencies activities to effectively use the
time.
Project Definition
Constraints, Risks & Dependencies
 Project risks are areas of concern that may
Triggers, materialize into issues during the life-cycle of
Goals and
Objectives the project and which may impact the
project’s scope, resources, cost or schedule.

 The source of project risks could

Risks
Project Initiation
Project Initiation be financial, technical, contractual,
legal, social, etc…
 Risks must be identified and
managed at the beginning of the
Constraints,
Risks and project and throughout the project
Dependencies
life-cycle
Project Definition
Constraints, Risks & Dependencies
 Risks management goes through the following
Triggers, steps: Risk identification, risk analysis, risk
Goals and
Objectives response and documentation .
 Risks must be monitored and
controlled throughout the project.
Risk control methods include:

Risks
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 Avoid
 Reduce
 Share
Constraints,
Risks and  Accept (with contingency or
Dependencies
without contingency)
 Contain
 Project Definition
Constraints, Risks & Dependencies
RISK SEVERITY LIKELIHOOD RISK LEVEL MITIGATIONS / WARNINGS / REMEDIES

ACCEPTABLE IMPROBABLE LOW

TOLERABLE POSSIBLE MEDIUM

UNDESIRABLE PROBABLE HIGH

Risks
INTOLERABLE EXTREME
Project Definition
Constraints, Risks & Dependencies
 Projects are always dependent on something
Triggers, else or someone else, or other projects may be
Goals and
Objectives dependent on your project.
 Managing project dependencies is

Dependencies
a core skill for project managers

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 Project dependencies establish the
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links, and the type of links,
between your project and the
environment it exists in
Constraints,  Beside the dependencies between
Risks and
Dependencies the project tasks, a project
manager must also manage the
dependencies with other projects
Project Definition
Constraints, Risks & Dependencies
 There are four major types of dependencies:
Triggers,
Goals and
Objectives
 Upstream Internal
Dependencies

Dependencies
 Upstream External
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Dependencies
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 Downstream Internal
Dependencies
 Downstream External
Constraints, Dependencies
Risks and
Dependencies
Project Definition
Budget and Spending
 Clarity of the specified project budget and tracking
Triggers,
Goals and of actual expenditures over time is a necessity.
Objectives

 Many project fail because they go over

and above the expected cost and
planned budget
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 Beside defining the project budget, by
Budget and understanding how the project money
Spending
is spent is important to plan the project
cash flow and keep healthy project
financials.
Project Definition
Communication Plan
 Once all the stakeholders are defined, a project
Triggers,
Goals and communication plan needs to be defined. A high level
Objectives
communication plan is defined in the charter and detailed
Communication
during project planning.
and Assumptions
 A well planned project has a well planned communication
strategy. The following are some options when creating a
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Communication Plan.

 Initiation meeting  Project advisory

 Project kick-off  Sponsor meetings
 Status reports  Audit/Review
 Team meetings  WC/SC meetings
 Target presentations  Post project review
Project Definition
Assumptions
 Finally, all the assumptions that are applicable to
Triggers, your project need to be documented.
Goals and
Objectives
 Examples of project assumptions:
Communication  Working hours of key members
and Assumptions
 Availability of office space
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Project Initiation  Access to specialized resources
 Working hours of the project
 Deliverable review and approval
time
 etc…
Project Definition

Triggers,
Triggers,
Goals
Goals andand
Objectives
Objectives
 Once all the above is defined, it is
Communication ScopeScope
and and
and Deliverables
Deliverables documented in the project charter
Assumptions
 Sign-off on the charter by the
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project manager, PMO manager
Budget and Vendors ,
and sponsor is required to
Spending Stakeholders
ensure commitment to the project
Constraints,
Risks and
Dependencies
Project Initiation

Documenting Business Case

Feasibility Analysis

Terms of reference – Scope

Project Manager and team

Project Initiation Documenting Business Case

•With a sputtering world economy, an organization cannot afford to spend

limited resources without assurance that it has used those resources wisely.

•The formal name for this justification is “Business Case.” While the term
“business” is used, the concept is as relevant in non-commercial
environments—governments, not-for-profits, NGO's, etc.—where it may be
known as a “case statement”
Project Initiation Documenting Business Case

•Vision, Goals and Objectives

•Stakeholders
•Specifications and Requirements
•Project Plan
•Budget and funding
•Allocate Resources
•Create a Schedule
•Communication Plan
•Monitor Progress
Project Initiation Documenting Business Case

•Executive Summary
•Introduction and overview
•Market Analysis
•Assessment of Benefits
•Cost/Benefit Analysis
•Key Assumptions and Dependencies
•Risk and Sensitivity Analysis
•Resource requirement and Cost
•Funding Source/ Timing/ Certainty
•Timescales
•Conclusion/ Recommendation
•Appendices
Project Initiation Feasibility Analysis

Time

Project
Triangle
Quality Cost
 Project Initiation Feasibility Analysis

A Feasibility study is an analysis of how successfully a project

Exceptions :
can be completed, accounting for factors that affect it such as
1. Change in Govt. Policy or
economic, technological, legal and scheduling factors
regulation (Eg. Emission Norms
forcing companies to produce BS-
VI)
A Feasibility analysis is performed by a company when they 2. Investments may be strategic in
want to know whether a project is possible under given nature
certain circumstances 3. A project may not yield a direct
benefit, but it may provide
indirect benefit (Eg. ERP
A good feasibility analysis will show the strengths and deficits implementation )
before the project is planned or budgeted for.
Project Initiation Feasibility Analysis

Social and
Environment Technical
al policy Feasibility
Feasibility

Market Types of Economic

Feasibility Feasibility Feasibility

Scheduling Legal
Feasibility Feasibility
 Project Initiation
Feasibility Analysis
Technical Feasibility
Technical resources availability Appropriateness of Technology
Whether Technical resources meet capacity Utilizes local raw materials
Team’s compatibility Utilizes local manpower or not?
Evaluation of Hardware, software and other Protects ecological balance
technology
Choice of technology depends on - Harmonious with social and cultural conditions

Plant Capacity, Principal Inputs, Investment Outlay Goods and services caters to basic needs or not
and production cost,
Suitability for local economic, social and cultural
Product mix, latest developments conditions
Ease of absorption
 Project Initiation
Feasibility Analysis
Economic Feasibility
Procedure for Economic Analysis of a project
This study typically involves a Cost/Benefit
Analysis of the project, helping 1. Understand the Problem
organizations determine the feasibility, cost 2. Define the energy integrated system
and benefits associated with a project
3. Collect the data
before financial resources are allocated.
4. Interpret the data
It also serves as an independent project 5. Devise the alternatives
assessment and enhances project credibility
6. Evaluate the alternatives
– helping decision makers determine the
positive economic benefits to the 7. Identify the best alternative
organization that the proposed project will 8. Suggest the best alternative to the Director of the Project
provide
9. Monitor the Progress
Project Initiation
Feasibility Analysis
Economic Feasibility - Social Cost Benefit Analysis (SCBA)
• SCBA is methodology for evaluating the projects from the social point of view
• SCBA aids in evaluating an individual projects within the planning framework
• In SCBA focus is on social cost and benefits of the project

These often tend to differ from the cost incurred in monetary terms and benefits earned in monetary terms by
the projects. The principal reasons for the discrepancy are -
1. Market Imperfections -(a. Rationing b. Prescription of minimum wages, c. Foreign exchange regulations)
2. Externalities -
a. It is not deliberately created by the project sponsor but is an outcome of legitimate economic activity,
b. It is beyond the control of persons affected by it, for better of worse
c. It is not traded in the market place

Example – Approach Road, Location of an Airport

 Project Initiation
Feasibility Analysis
Economic Feasibility - Financial
Cost of Project Means of Finance
• It refers to assessment of capital
expenditure involved in launching of Land site development Share capital
the project, the sources of funds, Building and civil work
project profitability and returns to the Term Loan
investors and the entrepreneur. Plant and machinery
• It involves preparation of anticipated Debenture capital
Technical Knowhow and engineering fees
balance sheet, profit and loss a/c and
fund flow statement Preliminary and capital issue expenses Deferred credit
• Covers vital aspects of financial
Margin money for Working capital Miscellaneous Sources
management viz. investment decision,
requirement
financing decision, working capital
decision and dividend decision Initial Cash losses
Project Initiation
Feasibility Analysis
Legal Feasibility

• This assessment investigates whether any aspect of the proposed project conflicts with legal requirements
like zoning laws, data protection acts, or social media laws.

Example – Lets say an organization wants to construct a new office building in a specific location. A feasibility
study might reveal the organization’s ideal location isn’t zoned for that type of business.

In that case organization has just saved considerable time and effort by learning that their project was not
feasible right from the beginning
Project Initiation
Feasibility Analysis
Scheduling Feasibility

• This assessment is most important for the success of the project, after all a project will fail if not completed
on time or time over run will add to the costs.
• In scheduling feasibility, an organization estimates how much time a project will take to complete.

This feasibility study helps in identifying constraints in the proposed project including –

a. Internal Project Constraints ( Technical, Technological, Budget, Resources etc)

b. External Corporate constraints (Financial, Marketing, Export etc)
c. External Constraints (Logistics, Environmental, Laws and regulations)
 Project Initiation
Feasibility Analysis
Market Feasibility

• The first step in project Collection of

Demand
analysis is to estimate the secondary
Forecasting
potential size of the market information
potential for the product
proposed to be manufactured Situational Analysis Characterization of
and get an idea about the and specification of the market
market share that is likely to objectives
be captured.
• It examines marketability of
the proposed product or
service Conduct of Market
Market Planning
Survey
Project Initiation
Feasibility Analysis
Social and Environmental Feasibility

• No organization can afford to ignore the environmental concerns and the social implication.
• They were important from time immemorial and were taken care of by the people in the past when
competition was not very intense and people did not put too much emphasis on monetary aspect.

• Endorsing eco-friendly production

• Consumption and disposal of products
• Sustaining environmental growth

Examples –
Irrigation
Power plants
Industries like – Drugs, chemicals and leather processing that may cause pollution
 Project Initiation
Feasibility Analysis

BENEFITS –
1. Improves project team focus.

2. Identifies new opportunities .

3. Provides valuable information for a “go/no-go” decision.

4. Narrows the business alternatives.

5. Identifies a valid reason to undertake the project.

6. Enhances the success rate by evaluating multiple parameters.

7. Aids decision making on the project.

8. Identifies reasons not to proceed.

Project Initiation
Feasibility Report
A feasibility report is a document that
assesses potential solution to the
business problem or opportunity, and
determines which of these are viable
for further analysis.
The purpose of the feasibility report is
to present the project parameters and
define the potential solution to the
defined problem, need or opportunity
Having brainstormed a variety of potential solutions,
the project team expands on each of these potential
solutions, providing sufficient detail, including very
high-level costing information, to permit the project
leader to recommend the approving authority all of
the viable potential solutions that should be further
analyzed in the next phase (Business Case).
Project constraint and limitations of expenditure are
among the various factors that will determine
vaibility
Project Initiation
Terms of Reference (TOR)

Terms of reference (TOR) define the purpose and

structures of a project, committee, meeting
Terms of reference show how the object in question
negotiation, or any similar collection of people who
will be defined, developed, and verified.
have agreed to work together to accomplish a
shared goal.
They should also provide a documented basis for
making future decisions and for confirming or
Although the terms of reference of a project are
developing a common understanding of the scope
often referred to as the project charter, there are
among stakeholders.
significant differences between the two.
In order to meet these criteria, success factors / risks
A project charter has high-level requirements,
and constraints are fundamental. They are very
assumptions, constraints and descriptions as well as
important for project proposals.
a budget summary without detail, and a milestone-
only schedule.
Project Initiation
Terms of Reference (TOR)

TOR Defines -

What is to be achieved ? – Vision, Objectives, scope and Deliverables

Who will be participant ? – Stakeholders

How it will be achieved ? – Resources and Plan

When it will be achieved ? – Timeline and schedule

TOR should include -

Key success factors, risks and constraints

Project Initiation
Appointing the Project Team

The project team includes the project manager and the group of individuals who
work together on a project to achieve its objectives.

It consists of the project manager, project management staff, and other team
members who are maybe not directly involved with management but carry out
the work related to the project.
 Project Initiation
Appointing the Project Team
Project Manager Project Team
Project Initiation
Setting Up Project Office

Step 1 – Define the objective(s) of the PMO. Be clear on the objectives for the PMO.
Step 2 – Sponsorship. PMO sponsor is vital for success.
Step 3 – Define PMO tools and processes.
Step 4 – PMO organization.
Step 5 – Engage and communicate.
Step 6 – Monthly PMO routines.
Step 7 – PMO charter.