BUSINESS

ENTREPRENEURSHIP
BE 2102
 UNIT – 3
Project Management

01 Role of Project
Manager

02 Project Life Cycle 04 Project Evaluation &

Selection

03 Project Investment
Proposal 05 Project Financing
 What is Project?
A “Project” is a temporary endeavor undertaken to create a
unique products, services OR results.
“Project” could be creating a marketing campaign for a new
restaurant or planning a wedding.

More specifically a “Project” is a series of structured tasks,

activities & deliverables that are carefully executed to achieve a
desired outcome.
• The global economy will need 25 million new project management
employees to meet demand by 2030.

• As per “Forbes” following roles are available with the salary (In USD)
(Ref - https://www.forbes.com/advisor/education/certifications/capm-
certification-salary/)

• Project Management Analyst (Average Annual Salary - $95,290)

• Project Coordinator (Average Annual Salary - $48,000)

• Project Manager (Average Annual Salary - $95,370)

• Project Director (Average Annual Salary – Around $127,000)

 Requirements for Project Coordinator

• Eligibility – Secondary Degree, such as a high school diploma, GED

(General Educational Development) or global equivalent.

• Must have completed course – “Certified Associate in Project

Management”

• Full Price – Rs. 17220/- (Member Price – Rs. 12956/-)

What is Project Management?
 Project Management

• Project Management is the application of Knowledge, Skills, Tools, &

Techniques to project activities to meet project requirements.

• It’s the practice of -

• Planning,

• Organizing,

• Executing - the tasks needed to turn a brilliant idea

into a tangible product, service or deliverable.
 Project Management - Example
• Reliance Jio’s raid rollout of its 4G & now 5G network across India
was a massive project.

• In this project, Reliance carried out

• Infrastructure Deployment

• Technology Integration

• Timeline Management

• Supply Chain Management

 Project Management - Example
• Reliance Jio’s raid rollout of its 4G &
now 5G network across India was a
massive project.

• In this project, Reliance carried out

• Infrastructure Deployment – Involved the installation of 1000s of Cell
Towers & fiber optic cables, requiring precise coordination &
logistics.
• Technology Integration – Integrating new technologies & ensuring
seamless network performance required meticulous planning &
execution.
• Timeline Management – Jio’s rapid expansion demanded strict
adherence to timelines & efficient resource allocation.
• Supply Chain Management – Procuring & deploying equipment on
a national scale required complex SCM.
Skills Required by Project Manager

Hard Skills /
Technical Skills

Soft Skills /
People Skills
 Skills Required by Project Manager

Hard Skills / Technical Skills includes –

• Project Planning

• Budget Management

• Risk Management

• Tools & Software – Microsoft Project / Jira

• Scheduling
 Skills Required by Project Manager

Soft Skills / People Skills includes –

• Communication

• Leadership

• Problem Solving

• Negotiation

• Teamwork

• Stakeholder Management
 Role of Project Manager

• The role of project manager is crucial for the successful completion of any
project.

• In a sense, Project Manger is the project’s controller, making sure that

everything works together seamlessly.

• The key roles & responsibilities of PM are

Roles & Responsibility of Project Manager

Activity & Resource Planning

Organizing & Motivating a Team

Controlling Time Management

Cost Estimating & Developing a

Budget
Roles & Responsibility of Project Manager

Ensuring Customer Satisfaction

Analyzing & Managing Project Risk

Monitoring Progress

Managing Reports & Necessary

Documents
 Roles & Responsibilities of Project Manager
i. Activity & Resource Planning - First & foremost, good project managers define the
project’s scope & determine available resources. Good project managers know how to
realistically set time estimates & evaluate the team’s or team’s capability.

ii. Organizing & Motivating a Project Team - Good project managers develop clear,
straightforward plans that stimulate their teams to reach to full potential. They cut down on
bureaucracy & steer their teams down a clear path to the final goal.

iii. Controlling Time Management - Good project managers know how to set realistic
deadlines & how to communicate them consistently to their teams.

iv. Cost Estimating & Developing a Budget - Good project managers know how to keep a
project within its set budget. Even if a project meets a customer’s expectations & is delivered on
time, it will still be a failure if it goes widely over budget. Good Project Managers frequently review
the budget & plan ahead to avoid massive budget overruns.
 Roles & Responsibilities of Project Manager
v. Ensuring Customer Satisfaction One of the key responsibilities of every project manager is to
minimize uncertainty, avoid any unwanted surprises, & involve their customers in the project as
much as is reasonably possible. Good project managers know how to maintain effective
communication & keep the company’s customers up-to-date.

vi. Analyzing & Managing Project Risk - Good project managers know how meticulously &
almost intuitively, identify & evaluate potential risks before the project begins. Project Managers
know how to then avoid risks or at least minimize their impact.

vii. Monitoring Progress - When things don’t go according to plan a project manager needs to
monitor & analyse both expenditure & team performance and to always efficiently take
corrective actions.

viii.Managing Reports & Necessary Documentation - Good project managers can present
comprehensive report documenting that all project requirements were fulfilled, as well as the project’s
history, including what was done, who was involved & what could be done better in the future.
Project Life Cycle
 Project Life Cycle
• Project Life Cycle -

1) Is a series of phases that define the beginning, middle & end of a

project.

2) Provides a roadmap for Project Managers & teams, helping them

to organize & manage their work.

3) Facilitates better control, communication & decision making

throughout the project.
Project Investment
Proposal
 What is Project?

A “Project” is a temporary endeavor undertaken to create a

unique products, services OR results.

“Project” could be creating a marketing campaign for a new

restaurant or planning a wedding.
 FEASIBILITY ANALYSIS

• Is a systematic evaluation of a venture (project) to determine if it’s

viable & worth pursuing.
 Component of Feasibility Analysis
Technical Operational Ecological
Feasibility Feasibility Feasibility

A B C D E F

Market Legal
Financial
Feasibility Feasibility
Feasibility
 Component of Feasibility Analysis
• Market Feasibility -

1) Who are our customers?

2) How big is the market & is it growing?

3) Who are our competitors & what are their Strengths &
Weaknesses?

4) What are the current trends & future trends in the market?
 Component of Feasibility Analysis
• Technical Feasibility -

1) Is the required technology available?

2) Are the necessary resources (equipment, material, personnel)

available?

3) Does the organization have the necessary technical skills?

 Component of Feasibility Analysis
• Financial Feasibility -

1) What are the estimated costs of the venture?

2) What are the projected revenues?

3) Will the venture generate a profit?

4) What is the expected ROI?

 Component of Feasibility Analysis
• Operational Feasibility -

1) Does the organization have necessary structure to support the

venture?

2) Does the organization have the necessary management skills?

3) Are the correct people available to complete the needed work?

 Component of Feasibility Analysis
• Legal Feasibility -

1) What are the applicable regulatory requirements?

2) What are the potential legal risks?

3) Are there any intellectual property concerns?

 Component of Feasibility Analysis
• Ecological Feasibility - Under this following important points needs
to consider

1) Environmental regulations,

2) Waste disposal,

3) Impact on local ecosystems,

Project Evaluation &
Selection
 What is Project?

A “Project” is a temporary endeavor undertaken to create a

unique products, services OR results.

“Project” could be creating a marketing campaign for a new

restaurant or planning a wedding.
 Project Evaluation & Selection

• Important components to Project Management include “Project

Evaluation” & “Selection”, which provide base for informed decisions
on

• Whether to Continue,

• Modify,

• End Project.
Objectives of Project Evaluation
 Objectives of Project Evaluation

1) Performance Measurement

2) Decision Support

3) Stakeholder Communication
 Objectives of Project Evaluation
1) Performance Measurement: It involves evaluating whether a
project is meeting its predefined goals within the set
limitations of time, cost, & scope.

2) Decision Support: Decision-making helps to know the project’s

progress & brings out areas that might need adjustments or
assistance.

3) Stakeholder Communication: Frequent evaluations helps to

communication with stakeholders, keeping them informed of
the project’s progress.
Project Evaluation Methods

Pre Project
Evaluation

Ongoing Project
Evaluation

Post Project
Evaluation
 Project Evaluation Methods

1) Pre-Project Evaluation - This initial assessment determines a

project’s viability & possible impact before it starts.
 Project Evaluation Methods

2) Ongoing Project Evaluation - At different points throughout

the project lifecycle, these assessments are carried out.

Regular assessments allow for adjustments in response to

new information or challenges, enabling real-time
improvements to project execution.
 Project Evaluation Methods

3) Post-Project Evaluation - Upon project completion, this

complete analysis examines the project’s overall performance,
goal attainment & benefits produced.
 Project Selection

• A method of assessing several project ideas to determine which ones

will best assist a company in achieving its strategic & financial goals
is known as Project Selection.
Project Selection Techniques

The Payback
Period

Benefit Cost Ratio

 Project Selection Techniques

• The Payback Period - It measures the time required for the returns on
an investment to cover the total initial costs of the project. This metric
is particularly favored for its simplicity & effectiveness in assessing
investment liquidity risk.

• Benefit Cost Ratio - The Benefit-Cost Ratio is a more comprehensive

financial tool used to compare the benefits & costs of a project,
quantified in monetary terms. It provides a numerical indicator of the
overall value for each rupee invested.
 Project Finance
• Long term projects with a long creation / development / construction
time are financed through Project Finance.

• This indicates that it takes a long time for them to be finished & begin
producing a profit. Therefore, in order to finance them a particular
financial structure is required.
Types of Projects

Infrastructure Projects

Energy & Power Projects

Real Estate &

Construction Projects
 Types of Projects
• Infrastructure Projects – Project Finance is used to finance various
kinds of infrastructure projects such as Bridges, Roads, Airports,
Seaports etc.

• Energy & Power Projects – Project Finance is used to fund wide range
of energy projects including power plant or substation. Such projects
need a long period of time to build & then to operate.

• Real Estate & Construction Projects – The investors in such projects

can include Traditional Bank, Lenders & Equity Providers.
Components of Project Finance

Equity Financing

Angel Investing

Debt Financing
 Component of Project Finance

• Equity Financing – Is a process of raising capital through the sale of

shares.

• Equity financing can come from

• Friends,
• Family,
• Professional Investors,
• IPO (Initial Public Offerings).
 Component of Project Finance
• Angel Investing – A high-net-worth individual who provide financial
backing typically in exchange for ownership equity in company.

• Angel investors provide seed money in exchange for an equity stake

in the company if the idea is viable.

• Angel investing can provide funding to entrepreneurs who can’t use

forms of financing like bank loans.
 Component of Project Finance

• Debt Financing – When a company raises money by selling debt

instruments to investors.

• Debt Instruments include Bonds & Debentures.

• Small & new companies rely on debt financing to buy resources that
will facilitate growth.
Advantages of Project Financing
 Advantages of Project Financing

A. Risk Sharing - The sponsors of a project can share the risk involved
with all the stakeholders of a project, including Government, Lenders,
& other equity investors.

B. Off Balance-Sheet Treatment - The loans taken for a project are

not shown on a sponsor’s balance sheet. As a result, sponsors can
take loans for other activities related to their business.
 Advantages of Project Financing

C. Favorable for Sponsors - The lenders are repaid their loans from the
cash flows of a project & not from the cash flows of its sponsors.

• If a project is unable to generate sufficient cash flows, its lenders

cannot ask its sponsors for loan repayment.
Disadvantages of Project Financing
 Disadvantages of Project Financing

A. Complicated process: It requires the involvement of several

stakeholders, who need to negotiate with each other in terms of how
much risk they want to bear & how much return they expect.

• Besides, they have to negotiate regarding several legal & operational

aspects of a project.
 Disadvantages of Project Financing

B. High Transaction Costs - It requires considerable transaction costs

related to documentation regarding Borrowing, Issuing Stock, etc.

• Besides, several parties are involved in a project, which results in

different kinds of contracting costs.
Process of Project Finance
Process of Project Finance

Before Financing a Project

Financing

After Financing
 Process of Project Finance

A. Before Financing a Project – The process starts with a project sponsor

assessing all the risks involved.

He also finds ways to minimize the risks so that a project remains

viable.

Then, he examines the financial & technical feasibility of a project.

Project Sponsor is typically senior level individual who provides the

necessary resources, support & funding to ensure a project’s success.
 Process of Project Finance

B. Financing – The sponsor makes a list of various kinds of investors

which can provide financing to a project.

After finding the investors, the sponsor has to negotiate the terms of
the contract with them.
 Process of Project Finance

C. After Financing – Having the financing has been arranged, the

sponsor monitors the progress of a project.

He ensures that the project gets completed within the time

mentioned in the contract.

Once the project starts generating cash flows, the sponsor ensures
that the loan taken is repaid to the lenders.
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