Unit 4: Project management

• Project: a temporary endeavour with a defined beginning and end to create a unique product, service or result (PMI).
• Project management: applying knowledge, skills, tools and techniques to meet project requirements within scope, time, cost and quality (the triple constraint).

• Facets of project analysis (Prasanna Chandra): market and demand analysis, technical analysis, financial analysis, economic (social cost–benefit) analysis, ecological analysis.
• Key issues: time and cost overruns, scope creep, stakeholder management, risk, financing, approvals.

• Sources of ideas: analysis of performance of industries, input–output analysis, import substitution, export opportunities, government plans and incentives, technology trends, unfulfilled needs.
• Screening criteria: compatibility with promoters, consistency with government priorities, availability of inputs, market size, reasonable cost, acceptable risk.
• Pre-feasibility and feasibility studies; detailed project report (DPR).

• Investment criteria: payback, ARR, NPV, IRR, profitability index, DSCR (for lenders).

• Risk analysis: sensitivity analysis, scenario analysis, simulation, decision trees, break-even analysis, risk-adjusted discount rate.

• Means of finance: promoters' equity, term loans (banks, FIs), debentures, public issue, external commercial borrowings, government subsidies, venture capital and private equity, lease finance, unsecured loans; project finance for infrastructure (non-recourse, SPV-based).

Venture capital (VC) is long-term equity or equity-linked finance provided to new, innovative, high-risk, high-growth ventures, along with management support.

• Features: equity participation, high risk–high return, long-term (5–10 years), active involvement (board seats, mentoring), exit through IPO, trade sale or buy-back.

• Planning tools: work breakdown structure (WBS), Gantt charts, milestone charts, resource levelling, budgets.
• Control: monitoring progress vs plan, earned value analysis (planned value, earned value, actual cost), corrective action, reporting.

Construction of networks

• Activity (arrow), event (node), dummy activity (dashed — shows dependency without time).
• Rules: each activity has one arrow; no loops; no dangling events; only one start and one end node; dummies to avoid two activities with the same start and end nodes.

• Post-completion audit: compares actual performance (cost, time, benefits) with projections after the project is operational.
• Benefits: improves future forecasting and appraisal, disciplines planners, identifies corrective actions, organisational learning.
• Problems: isolating project cash flows, cost of audit, defensive behaviour.