CPM- Module-1

Introduction to Project, its Stages

and Construction Project
Management:

Prof. Vasanth K. Bhat

Introduction To Project, Its Stages And Construction Project Management:

Project?????
Project is a unique process, consist of a set of
coordinated and controlled activities with start
and finish dates, undertaken to achieve an
objective confirming to specific requirements,
including the constraints of time cost and
resource.
(ISO10006)
Introduction To Project, Its Stages And Construction Project Management:

DEFINATION:-

“A Project is typically an assignment that has an identifiable start and a

finish and consists of a series of discreet, finite tasks. It is a one-shot, time
limited, goal directed major undertaking requiring commitment of varied
skills and resources.
It is a combination of human and non human resources pooled together
in a temporary organisation to achieve a specific purpose”.
Introduction To Project, Its Stages And Construction Project Management:

Project Performance Dimensions

Three major dimensions that define the

project performance are scope, time, and
resource. These parameters are
interrelated and interactive. The
relationship generally represented as an
equilateral triangle.
Performance = f(Scope, Cost, Time)
Introduction To Project, Its Stages And Construction Project Management:

Project Life Cycle Phases……………………….

1. Conceptualization/ Fesibility Phase/Pre- fesibility…

Project manager promotes understanding of project
requirements and client needs from start.

Conception phase, starting with the seed of

an idea, it covers identification of the

product / service, Pre-feasibility, Feasibility

• Sketches
studies and Appraisal and Approval. The project
• Possible
alternatives idea is conceptualized with initial considerations
• Estimated cost
of all possible alternatives for achieving the
• Befits
• Other details for project objectives. As the idea becomes
appraisal and
established a proposal is developed setting out
stakeholder
rationale, method, estimated costs, benefits and
other details for appraisal of the stakeholders.
After reaching a broad consensus on the
proposal the feasibility dimensions are analysed
in detail.
Introduction To Project, Its Stages And Construction Project Management:
2. Planning Phase
On time on budget and on scope

In this phase technical parameters are frozen and the basic designing
of the project is completed. In this phase, technical specifications, cost
estimates, time schedules and steps to mobilies funds and other
resources are finalized for successful completion of project. At the end
of design phase one is ready with blue print for execution of project.

1 Identification of activities and their sequencing

2 Time frame for execution

3 Estimation and budgeting

The output of design phase is usually called

detailed project report (DPR)
Introduction To Project, Its Stages And Construction Project Management:
3.Execution Phase
This phase of the project witnesses the concentrated
activity where the plans are put into operation. Each
activity is monitored, controlled and coordinated to achieve project
objectives. Important activities in this phase are:

1 Communicating with stakeholders

2 Reviewing progress

3 Monitoring cost and time

4 Controlling quality

5 Managing changes
Introduction To Project, Its Stages And Construction Project Management:
4.Termination/Project Closure
As the execution phase reaches its end, the
termination phase starts. Handing over of
constructed facilities, identification of operation
crew, necessary training, etc. are the activities in
this phase. Transfer of over left materials,
reassignment of project team to a new project
are taken in this phase.
Introduction To Project, Its Stages And Construction Project Management:
Project Life Cycle Phases…..

Level of efforts

6%
85%

3%

1 2 3 4

Time
Introduction to Project, its Stages and Construction Project management:

Project

developmental
Industrial/Commercial
Project Classification
nature of work
There is no standard nature of work
(repetitive, non repetitive)
classification of the projects. (repetitive, non repetitive)
However considering project completion time completion time
(long term, shot term etc) (long term, shot term etc)
goals, these can be classified into
two broad groups, industrial and cost cost
developmental. (large, small, etc.) (large, small, etc.)

level of risk level of risk

(high, low, no-risk) (high, low, no-risk)
Introduction to Project, its Stages and Construction Project management:
Difference between Industrial and Developmental Projects
Dimension Industrial Project Developmental Project
Scale of Project Limited Large
Promoters Entrepreneurs or corporates Government, Public Sectors,
NGOs
Investment --- High
Gestation Period --- High

Profitability High, Considered on IRR ( Modest, Considered on ERR

Internal Rate of Return) (Economic Rate of Return)
Finance Stringent debt equity norms Operates on higher debtequity
norms
Source of fund National stock markets and International organizations
from domestic financial like World Bank,
institutions IMF,ADB,DFID and others
mostly as loan ,yet times
providing for some grants.

Interest rates and repayment Market rate and the Very low for borrowed funds
period: repayment period is generally and the repayment period
7 to 10 years extends up to 25 years and
even beyond.
Introduction To Project, Its Stages And Construction Project Management:

Benefits of Project Management Approach

The rationale for following project management approach is as follows.

• Project management approach will help in handling complex, costly and risky assignments by
providing interdisciplinary approach in handling the assignments. Example: R&D
organizations.
• Project management approaches help in handling assignments in a specified time frame with
definite start and completion points .Example handling customer orders by Industries involved
in production of capital goods.
• Project management approaches provide task orientation to personnel in an Organization in
handling assignments. Example: Organizations in IT sector handling software development
assignments for clients.
Introduction To Project, Its Stages And Construction Project Management:

Study Areas In PM (project management)

PROJECT FORMULATION

OPPORTUNITY STUDIES/Support Studies (investment opportunities/macro lvl / agencies envolved in

economic planning & development)

IDENTIFICATION OF PRODUCT/SERVICE

PREFEASIBILITY STUDY

FEASIBILITY STUDY
(TECHNO ECONOMIC FEASIBILITY)

PROJECT APPRAISAL

DETAILED PROJECT REPORT

Introduction To Project, Its Stages And Construction Project Management:

Opportunity Studies
An opportunity study identifies investment
opportunities and is normally undertaken at
macro level by agencies involved in
economic planning and development.
In general opportunity studies there are
three types of study – Area Study,
sectoral and Sub-sectoral Studies and
Resource Based Studies. Opportunity
Studies and Support studies provide sound
basis for project identification.
Introduction To Project, Its Stages And Construction Project
Management:

Pre feasibility Studies / Opportunity Studies

market potential, magnitude of investment, , technical feasibility, financial analysis, risk analysis etc.

It should be viewed as an intermediate

stages between a project opportunity study
and a detailed feasibility study.
the difference being primarily the extent of
details of the information obtained.
It is the process of gathering facts and
opinions pertaining to the project. This
information is then vetted for the purpose of
tentatively determining whether the project
idea is worth pursuing furthering.
Introduction To Project, Its Stages And Construction Project Management:

Feasibility Study
clarifications of objectives, logical planning, minimal risk, and a successful cost effective project

A feasibility study is not an end in itself but only a means to arrive at an investment decision. The
preparation of a feasibility study report is often made difficulty by the number of alternatives (regarding
the choice of technology, plant capacity, location, financing etc.) and assumptions on which the decisions
are made. The project feasibility studies focus on

- Economic and Market Analysis

- Technical Analysis
- Financial Analysis
- Economic Benefits
- Project Risk and Uncertainty
- Management Aspects
Introduction To Project, Its Stages And Construction Project Management:

Technical Analysis

• Technology - Availability • Availability skilled man power

• - Alternatives • \Location
• - Latest / state-of-art • Logistics
• - Other implications • Environmental consideration – pollution, etc.,
• Plant capacity - Market demand • Requirement buildings/ foundation
• - Technological parameters • Other relevant details
• Inputs - Raw materials
• - Components
• - Power
• - Water
• - Fuel
• - Others
Introduction To Project, Its Stages And Construction Project
Management:

Environmental Impact Studies:

All most all projects have some impact on

environment. Current concern of quality requires the
environmental clearance for all projects. Therefore
environ impact analysis needs to be undertaken
before commencement of feasibility study.
Introduction To Project, Its Stages And Construction Project Management:

Environmental Impact Studies:

Objectives of Environmental Impact Studies:
• To identify and describe the environmental resources/values (ER/Vs) or the environmental
attributes (EA) which will be affected by the project (in a quantified manner as far as
possible).

• To describe, measure and assess the environmental effects that the proposed project will
have on the ER/Vs.

• To describe the alternatives to the proposed project which could accomplish the same
results but with a different set of environmental effects The environmental impact studies
would facilitate providing necessary remedial measures in terms of the equipment's and
facilities to be provided in the project to comply with the environmental regulation
specifications.
Introduction To Project, Its Stages And Construction Project Management:

Financial Analysis
The Financial Analysis, examines the viability of the project from financial or
commercial considerations and indicates the return on the investments. Some of
the commonly used techniques for financial analysis are as follows.

 Pay-back period.

 Return on Investment (ROI)

 Net Present Value (NPV)

 Profitability Index(PI)/Benefit Cost Ratio

Internal Rate of Return (IRR)

Introduction To Project, Its Stages And Construction Project Management:

Project Appraisal
The project appraisal is the process of critical examination and analysis of the
proposal in totality. The appraisal goes beyond the analysis presented in the
feasibility report. At this stage, if required compilation of additional information
and further analysis of project dimensions are undertaken. At the end of the
process an appraisal note is prepared for facilitating decision on the project
implementation.

The appraisal process generally concentrates on the following

aspects.
Introduction To Project, Its Stages And Construction Project Management:

Market Appraisal: Technical Appraisal:

Focusing on demand projections, Covering product mix, Capacity,
adequacy of marketing infrastructure Process of manufacture
and competence of the key marketing engineering know-how and
personnel. technical collaboration, Raw
materials and consumables,
Location and site, Building, Plant
and equipment's, Manpower
requirements and Breakeven point.
Introduction To Project, Its Stages And Construction Project
Management:

Environmental Appraisal: Impact on Financial Appraisal: Capital, rate of

land use and micro-environment, return, specifications, contingencies,
commitment of natural resources, and cost projection, capacity utilization,
Government policy. and financing pattern.

Economic Appraisal: Considered as Managerial Appraisal: Focuses on

a supportive appraisal it reviews promoters, organization structure,
economic rate of return, effective rate managerial personnel, and HR
of protection and domestic resource management.
cost.
Introduction To Project, Its Stages And Construction Project Management:

Social Cost Benefit Analysis (SCBA):

Social Cost Benefit Analysis is a
methodology for evaluating projects from the
social point of view and focuses on social
cost and benefits of a project.
Introduction To Project, Its Stages And Construction Project Management:

Detailed Project Report (DPR)

Once the projects are appraised and the investment decisions are made a Detailed Project
Report (DPR) is prepared. It provides all the relevant details including design drawings,
specifications, detailed cost estimates etc. and this would act as a blue print for project
implementation.
Introduction to Project, its Stages and Construction Project
management:

WHAT IS CONSTRUCTION PROJECT MANAGEMENT?

Construction project management, often

referred to as CM, is a professional service. It
uses specific project management techniques
that oversee the planning, design, and of
course, the construction of a project from start
to finish. The most important aspects to control
in construction our time, cost and quality.
Introduction to Project, its Stages and Construction Project
management:

THE DIFFERENCE BETWEEN CONSTRUCTION MANAGEMENT AND PROJECT MANAGEMENT

Construction management and project management are closely

linked. However, a number of key differences between the two
types of management do exist. • Construction management is
• Construction projects are usually carried out by large beneficial for owners or clients
companies that do not feel they would be
• Construction management often does not have a qualified enough to be part of
manager on the site at all times.Usually, the protocol is that the decision process and
a manager will come onto this site from time to time to check therefore do not need to be.
on progress. Construction management takes
• Project management is usually involved with the care of these decisions for them.
management of a specific project.
• Project management allows for more scope in the owners
having control over all aspects of the project. Owners, in
turn, tend to feel more satis􀁾 ed with this high level of
control they possess over the project.
Introduction to Project, its Stages and Construction Project
management:

seven branches of construction. These include are:

• Agricultural
• Residential
• Institutional
• Heavy Civil
• Commercial
• Industrial
• Environmental
Construction Management or construction project management

Construction Management or construction project

management (CPM) is the overall planning, co-ordination and
control of a project from beginning to completion. CPM is
aimed at meeting client’s requirement in order to produce a
functionally and financially viable project.
Introduction to Project, its Stages and Construction Project management:

Market demands
or perceived needs
Definition of project
objectives & scope
Conceptual planning
and feasibility study
Conceptual plan or
Design and preliminary design
engineering
Construction plans
Procurement and and specifications
construction
Completion of
Start up for construction
occupancy
Acceptance of
Operation and facility
maintenance
Fulfilment of useful
life
Disposal of facility
THANKU