Project Management Scope
The realization of objectives requires systematic planning and careful implementation. To this effect, the application of knowledge, skill, tools and techniques in the project environment, refers to project management. Project identification is an important step in project formulation.
These are conceived with the objective of meeting the market demand, exploiting natural resources, or creating wealth. The project ideas for developmental projects come mainly from the national planning process, whereas industrial projects usually stem from the identification of commercial prospects and profit potential. As projects are a means to achieving certain objectives, there may be several alternative projects that will meet these objectives. It is important to indicate all the other alternatives considered with justification in favor of the specific project proposed for consideration. Sectoral studies, opportunity studies, support studies, and project identification essentially focuses on screening the number of project ideas that come up based on information and data available and based on expert opinions and to come up with a limited number of project options that are promising.
Project management in recent years has proliferated, reaching new heights of sophistication. It has emerged as a distinct area of management practices to meet the challenges of the new economic environment, globalization process, rapid technological advancement, and quality concerns of the stakeholders. In recent years market analysis has undergone a paradigm shift. The demand forecast and projection of the demand-supply gap for products/services can no longer be based on the extrapolation of past trends using statistical tools and techniques. One has to look at multiple parameters that influence the market. Demand projections are to be made keeping in view all possible developments. A review of the projects executed over the years suggests that many projects have failed not because of technological and financial problems but mainly because of the fact that the projects ignored customer requirements and market forces. In market analysis, a number of factors need to be considered covering – product specifications, pricing, channels of distribution, trade practices, the threat of substitutes, domestic and international competition, opportunities for exports, etc.
It should aim at providing an analysis of future market scenarios so that the decision on project investment can be taken in an objective manner keeping in view the market risk and uncertainty. Industrial projects also referred to as commercial projects, are undertaken to provide goods or services for meeting the growing needs of the customers and providing attractive returns to the investors/stakeholders. Following the background, these projects are further grouped into two categories i.e., demand-based and resource/supply base. The demand-based projects are designed to satisfy the customers’ feelings as well the latent needs such as complex fertilizers, agro-processing infrastructure, etc. The resource/supply-based projects are those which take advantage of the available resources like land, water, agricultural produce, raw material, minerals, and even human resource. Projects triggered by successful R&D are also considered supply-based. Examples of resource-based projects include food product units, metallurgical industries, oil refineries, etc. Examples of projects based on human resource (skilled) availability include projects in the IT sector, Clinical Research projects in bio services and others. Development projects are undertaken to facilitate the promotion and acceleration of overall economic development. These projects act as catalysts for economic development providing a cascading effect. Development projects cover sectors like irrigation, agriculture, infrastructure health, and education.
In the recent years, the market analysis has undergone a paradigm shift. The demand forecast and projection of demand-supply gap for products/services can no longer be based on extrapolation of past trends using statistical tools and techniques. One has to look at multiple parameters that influence the market. Demand projections are to be made keeping in view all possible developments. Review of the projects executed over the years suggests that many projects have failed not because of technological and financial problems but mainly because of the fact that the projects ignored customer requirements and market forces. In market analysis a number of factors need to be considered covering – product specifications, pricing, channels of distribution, trade practices, the threat of substitutes, domestic and international competition, opportunities for exports etc. It should aim at providing analysis of future market scenarios so that the decision on project investment can be taken in an objective manner keeping in view the market risk and uncertainty.
Risk and Uncertainty are associated with every project. Risk is related to the occurrence of adverse consequences and is quantifiable. It is analyzed through the probability of occurrences. Whereas uncertainty refers to inherently unpredictable dimensions and is assessed through sensitivity analysis. It is, therefore, necessary to analyze these dimensions during the formulation and appraisal phase of the program.
Author: Amr Sukkar. The article is a shortened version of a webinar on the same topic.