Life Cycle of a Project: 5 Phases | Project Management

This article throws light upon the five main phases involved in project life cycle. The phases are: 1. Project Identification Phase 2. Formulation Phase 3. Detailed Project Planning Phase 4. Project Implementation Phase 5. Project Hand Over Phase.

Phase # 1. Project Identification:

For the purpose of identifying the project, a study of various alternatives is necessary. To assess the merits of alternative proposals, data available with different agencies are studied thoroughly. Economical aspects of these alternatives should also be considered. Topographical maps, official records, geological surveys etc. are also considered.

Phase # 2. Project Formulation Phase:

Next phase after identification of the project is the project formulation phase. This is an important phase and decides whether the project should be executed or not.

Project, formulation is done in following two phases:

1. Preliminary Project Study

2. Feasibility Study.

Phase # 3. Detailed Project Planning (Project Execution Plan) i.e., DPR:

This phase overlaps with the feasibility study and also with the implementation phase.

Generally, this phase deals with the following:

1. Project infrastructure and enabling services.

2. System design.

3. Organisation structure.

4. Project schedules.

5. Budgets.

6. Government clearances/approvals.

7. Finance.

8. Systems and procedures.

9. Identification of project manager and key members of his team.

10. General conditions for purchase and contracts.

11. Site preparation and investigations.

12. Construction material and its sources.

13. Work-packages.

The idea with this planning is for the project to take off smoothly.

There are following four basic objectives of project planning:

i. To eliminate or reduce uncertainty.

ii. To improve efficiency of the operation.

iii. To obtain a better understanding of the objectives.

iv. To provide a basis for monitoring and controlling work.

Following eight major elements must be formulated during the planning phase:

(i) Objectives:

A goal to be achieved within a certain time.

(ii) Programme:

The strategy to be followed and major actions to be taken in order to achieve or exceed objectives.

(iii) Budget:

Planned expenditures require to achieve or exceed desired objectives.

(iv) Organisation:

Design of the number and kinds of position along with corresponding duties required to achieve or exceed objectives.

(v) Forecast,

(vi) Policies,

(vii) Procedure, and

(viii) Standard.

Essential steps in project planning are:

(a) Define the goal.

(b) Identify activities and tasks that must be completed to achieve the goal.

(c) Identify dependencies between activities and tasks.

Phase # 4. Project Implementation Phase:

Project implementation includes:

(а) Developing management plan.

(b) Actual implementation of the project for construction and operation, and

(c) Project monitoring and control.

(a) Developing Management Plan:

After the approval of the feasibility study report the project sponsors need to mobilise resources, develop them to appropriate levels of requirements and create pre-conditions, proce­dures, systems and organisation for their effective use in project implementation.

Initial imple­mentation plans are developed and are translated into activities and tasks, job description and budgets, Personnel recruitment and training; this can be tailored to requirement of specific tasks. Terms of reference of consultants, experts need to be drawn up. Manager and staff need to be recruited and appropriately assigned.

Before construction (implementation) of the project is taken up, the preconstruction project plans must be updated, information gaps must be filled- in, the different estimates must be made more precise and accurate, authorised changes affect­ing schedules, resources, personnel, cost etc. must be incorporated.

Initial internal administrative procedures, organisational policies, accounting and financial system, information collection and processing systems, monitoring and evaluation procedures, arrangement for supervision of sub-contractors, all need to be planned before the actual start of construction work.

If the management plan is not prepared properly in advance, problems and difficulties during the construction phase such as under-defined or fragmented responsibilities among project agencies, inability to obtain required types of personnel in time, short falls in funds, difficulties in obtaining machines and equipment, lack of coordination, inappropriate staff and organisation structure and procedures and ineffective monitoring and control systems, may arise.

Management Plan for project implementation could be grouped in following five categories:

1. Project activation,

2. Specifying & scheduling project work.

3. Developing project organisation

4. Procuring project resources, and

5. Establishing project monitoring and control system. These categories form a sequence of implementation planning activities which precede actual execution of project work.

After the project is approved and detailed project report is prepared but before actual construction work is undertaken, it is essential to prepare a set of relevant contract documents, consisting of mainly the following:

1. Notice inviting tender.

2. Proposal form to be filled by the contractor.

3. General conditions regarding how a contract is to be administered and the relation­ship between parties involved.

4. Special conditions concerning those aspects of the contractual relationship that are peculiar or unique to a given project.

5. Plans and drawings.

6. Specifications.

7. Detailed quantity and cost estimates.

8. Pre-qualification criteria for evaluating the bidder capabilities and experience.

Resource Utilisation:

Project implementation requires the use of various kinds of resources. These may be man­power, plant and machinery, the money, materials. Sometimes space available is limited and hence becomes constraining resource. These resources are limited and their economy is very essential.

Therefore, management of resources is a very important function of the top manage­ment. Each resource costs quite a lot to procure. The ways these resources are utilised indicate how successfully the organisation is going to achieve the project objectives.

Management of the project must ensure that the different resources required must the made available in right quantities, at right time, in the right manner and at right places. The inability to coordinate all project resources into integrated framework is a common problem of projects which leads to ineffective and inefficient use of resources and causes schedule slippages and costs over-runs.

For the success of a project, the resources must be adequate at all time and also they should not remain idle at any time.

Major Project Plan Documents Prepared before Implementation:

The following documents need to be prepared before implementation:

1. Project, Organisation Chart:

Showing organisational responsibility, authorities and relationships, and linear responsibility charts.

2. Commitments and Agreements:

With concerned departments and organisation-formal and legal documents.

3. Administrative Procedures Manual.

4. Work Breakdown Structure:

This gives list of basic project components, which are further broken down into tasks and activities.

5. PERT Network (master schedule):

This shows, in the form of chart, various activities to be performed for the project and their sequence and inter-dependence. These networks could be elaborated in the form of detailed networks.

6. Milestone Bar Chart:

The network schedules are converted into time scale Bar Charts showing major/important events as milestones.

7. Resource Schedule and Plans:

The bar eh art form of presentation of plans can be used for project resources and funds and also for depicting progress. Manual showing re­sources procurement procedure.

8. Reporting Formats:

It would be necessary to design formats for reporting periodically progress and performance on projects for different levels of management within the project and also for Government and funding agencies.

(b) Project Implementation for Construction and Operation:

Next stage in the project cycle is actual implementation of the project for its construction and operation. For proper project implementation, emphasis should be on action as per plan­ning.

For this purpose, organisation set-up and sound project management system should be established so as to manage the projects in a rational and scientific manner, following the latest management principles, tools and techniques. For large international or World Bank aided projects, some-times consultants are also appointed.

During the implementation stage of the project, there is need for continuous monitoring to ensure project implementation as per time and cost schedules. For effective monitoring, it is essential to have a good speed and reliability of communication system and establish the de­pendable information system.

Infrastructure Development:

Non-availability of adequate infrastructure facilities at the right time has been among oth­ers the cause of time and cost over-runs e.g., delays in land acquisition, non-availability of water and power for construction and commissioning.

The infrastructure facilities also include transport arrangements (railway sidings, roads etc.) and communication system. As such care­ful planning realistic scheduling integrated and coordinated implementation and scientific- monitoring and control of infrastructure facilities are essential for successful construction of project within planned time and cost.

(c) Project Monitoring and Control:

The monitoring provides timely information and feedback to the management regarding vital stages in project implementation. Periodic feedback on the progress of the project helps the management to know the achievement of the project and compare it with the targets in order to take appropriate steps for proper implementation of the project. Therefore, the moni­toring is done to identify the areas where corrective action is required to be taken in order to ensure proper implementation as per plan.

For keeping a close watch over project implementation schedule, intensive monitoring is done through PERT network. For timely corrective measures, there is a need for fast and mean­ingful data collection, its analysis and dissemination. For the purpose of fast data collections, latest techniques like, computerised information system, intercoms, wireless-sets, walkie-talkie are adopted.

Tracking and Reporting:

Tracking determines the real progress of the project against expectations i.e., evaluating performance against schedules.

Documentation and reporting consists of preparing and summarising the projected data at the planning stages as one executes the project and when analysis a completed project/current progress in order to provide information for planning future projects/activities of current project.

Project Implementation and Operation Phase:

Next stage in the project cycle is actual implementation of the project for its construction and operation. For proper project implementation, emphasis should be on action as per plan­ning. For this purpose, organisation set up and sound project management system should be established so as to manage the projects in a rational and scientific manner, following the latest management principles, tools and techniques.

During the implementation stage of the project, there is need for continuous monitoring to ensure project implementation as per time and cost schedules. For effective monitoring, it is essential to have a good speed and reliability of communication system and establish the de­pendable information system.

The project implementation phase for an industrial project involves the following activities:

1. Preparation of specifications for equipment and machinery.

2. Ordering of equipment and machinery.

3. Award of construction work to the contractors.

4. Issue of construction drawings.

5. Construction of civil works, and equipment foundation.

6. Erection of equipment and machinery

7. Electrical sub-station and other electrical works.

8. Piping, instrumentation etc.

9. Checking and trial run; and

10. Commissioning of the plant.

Operation Phase:

Operation phase starts after the project is commissioned. Operation phase concerns itself with smooth and uninterrupted operation of the machinery and equipment, developing suit­able norms of productivity, maintaining quality specifications, and satisfactory work progress.

Project Evaluation:

Projects are evaluated and their performance audit is done with the idea of gaining experi­ence for subsequent projects in their identification, preparation and appraisal. This ex-post evaluation is very useful in providing experience for future works, since during execution pro­cess, the attention is more towards the problems being faced at that time.

In the final stage of project, the regular project staff prepares a completion report on the project at the end, which in itself is an exercise in self-evaluation-free, frank and critical. This report is generally reviewed by other agency in public projects and is termed as “ex-post audit of the project”, or “ex-post evaluation.”

These evaluation and completion report both re-estimate the economic rate of return on the basis of actual costs and updated information on operating costs and expected benefits. This evaluation system provides very useful information’s, supplementing and complementing that provided by the project completion reports.

The idea of evaluation is that, past mistakes are not repeated and new approaches, poli­cies, and procedures are adopted to improve the project performance, reduce cost overruns and implementation delays.

Evaluation of the Public projects is based on the benefits and costs analysis instead of on the rate of return or extent of profit expected to occur. Public projects are those projects, which are taken up by the government for the benefit of the public, such as public safety, service, health, education, defence, water supply, roads, irrigation, etc. These projects are financed through government exchequer, and are generally of large in magnitude and multiple in pur­pose.

Since there is no financial effectiveness measure available for such projects, their evalua­tion is difficult. Some of the benefits cannot be converted into money value, and usually they do not pay taxes, therefore the criteria for their economic evaluation is different from that of pri­vate projects. In such cases, general practice is to identify benefits and costs of the projects, and then consider benefit cost ratio as means of economic effectiveness.

Phase # 5. Project Hand-Over Phase:

In this phase drawings, documents, files, operation and maintenance manuals are cata­logued and handed over to the project owner. Any change carried out for fulfillment of contrac­tual obligations in respect of performance has to be completed to the satisfaction of the project owner. Project accounts are closed, materials reconciliation carried out, outstanding payments made and dues collected during this phase.