Project planning is the process of identifying all the activities necessary to successfully complete the project. Project scheduling is the process of determining the sequential order of the planned activities, assigning realistic duration’s to each activity, and determining the start and finish dates for each activity. Thus, project planning is a prerequisite to project scheduling because there is no way to determine the sequence or start and finish dates of activities until they are identified. Techniques for Project Planning and Scheduling The technique used for project planning and scheduling will vary depending upon the project’s size, complexity, duration, personnel, and owner requirements. The project manager must choose a scheduling technique that is simple to use and is easily interpreted by all project participants. There are two methods that are commonly used in project management for the purpose of project planning and scheduling: the bar chart (sometimes Continue reading
Project Management
Characteristics of Project Financing
Project financing involves non-recourse financing of the development and construction of a particular project in which the lender looks principally to the revenues expected to be generated by the project for the repayment of its loan and to the assets of the project as collateral for its loan rather than to the general credit of the project sponsor. Project financing is commonly used as a financing method in capital-intensive industries for projects requiring large investments of funds, such as the construction of power plants, pipelines, transportation systems, mining facilities, industrial facilities, and heavy manufacturing plants. The sponsors (the sponsor(s) or developer(s) of a project financing is the party that organizes all of the other parties and typically controls, and makes an equity investment in, the company or other entity that owns the project) of such projects frequently are not sufficiently creditworthy to obtain traditional financing or are unwilling to take Continue reading
Cash Flow Computations in Project Management
Financial appraisal or evaluation is a must for every project even though the outcome may not be the decision criteria for establishing the project. Financial appraisal of a project deals with cash flows. Cash, which goes out of the firm, is known as cash outflow. Typically an investment in a project is an out flow. The cash that is received in future from the project is an inflow. We should remember that cash is different from income. Cash flow and not income flow is central to project evaluation. The results of an evaluation of a project are only as good as the accuracy of our estimation of cash flows. The following illustrates computation of cash outflow. Cash outflow on installation of a machine includes; Cost of new equipment Labor and erection costs Maintenance cost While computing such outflows we should not include interest costs on debt employed. If the cost Continue reading
Project Management Knowledge Areas
Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Project management is accomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing. The project manager is the person responsible for accomplishing the project objectives. Managing a project includes: Identifying requirements Establishing clear and achievable objectives Balancing the competing demands for quality, scope, time and cost Adapting the specifications, plans, and approach to the different concerns and expectations of the various stakeholders. Project managers often talk of a ‘triple constraint’ – project scope, time and cost – in managing competing project requirements. Project quality is affected by balancing these three factors. High quality projects deliver the required product, service or result within scope, on time, and within budget. The relationship among these factors is such that if any one of the three Continue reading
Build Own Operate Transfer (BOOT) Model
Build Own Operate Transfer (BOOT) funding model of project financing involves a single organization, or consortium (BOOT provider) who designs, builds, funds, owns and operates the project for a defined period of time and then transfers this projects ownership across to a agreed party. BOOT projects are a way for governments to bundle together the design and construction, finance, operations and maintenance and potentially marketing and customer interface aspects of a project and let these as a package to a single private sector service provider. The asset is transferred back to the government after the concession period at little or no cost. The Components of Build Own Operate Transfer (BOOT) Model: Build: The concession grants the promoter the right to design, construct, and finance the project. A construction contract will be required between the promoter and a contractor. The contract is often among the most difficult to negotiate in Continue reading
Project Monitoring and Control
Any project aimed at delivering a product or a service has to go through phases in a planned manner in order to meet the requirements. It is very important to measure the performance of the current status of the project at anytime against its planned version. This helps to tackle any unexpected deviation in time, efforts and cost. It is possible to work according to the project plan only by careful and close monitoring of the project progress. It requires establishing control factors to keep the project on the track of progress. The results of any stage in a project, depends on the inputs to that stage. It is therefore necessary to control all the inputs and the corresponding outputs from a stage. This is achieved through devising proper controls for every stage. A project manager may use certain standard tools to keep the project on track. The project manager Continue reading