A project is an important groundwork of an enterprise. An entrepreneur cannot succeed in his enterprise without a project. A project is described as a combination of human and non- human resources put together in a temporary organization to achieve a specified purpose. A project has a single set of objectives and when these objectives are reached, the project is completed. Therefore, a project has a finite and well-defined life span. The objectives of a project are specific and focussed. Thus, a project may be defined as a scientifically evolved plan devised to achieve a specific objective with a specified period of time. A project is a productive activity which can be analyzed, appraised and monitored independently. For example, setting up a plant is a project and when the plant becomes operational, the project is treated as completed.
Characteristics of Project
Every project must have certain features to maintain uniformity and to ensure success. No two projects can be similar. A project has the following features:
(1) Specific objective – Every project has a mission or set of objectives. When these objectives are fulfilled, the project is considered to be completed.
(2) Single entity – A project is one single entity. It means that although various people contribute in a project, the team is often specifically organized for a single project.
(3) Fixed period – Every project has some definite period. After the completion of such period, a project has to terminate.
(4) Life cycle – A project has a life cycle. A project is completed after passing different stages of its life.
(5) Teamwork – A project constitutes various members of different disciplines. Team spirit is necessary to get the project completed. They work to achieve common goal of the project.
(6) Risk and uncertainty – Project is based on forecasting. Therefore, every project is always associated with risk and uncertainty. Degree of risk varies with the nature of the project.
(7) Flexibility – Project process is flexible. Many changes take place throughout life cycle of a project. Flexibility is very useful to complete the project successfully.
(8) Customer-oriented – A project is always customer specific. Project manager has to execute the project according to customer’s requirements. All other things are secondary concern.
(9) Uniqueness – Every project is always unique. No two projects can be similar. The activities, scopes and objectives make them different from each other.
Thus, a project is an economic activity with definite objectives and having a specific beginning and end. A well-planned project includes a correct consideration of alternatives, identification of key issues, broad participation, compactness and enforceability.
Types of Project
Different authorities have classified projects in different ways. Though every project has three basic features like a course of action, specific objective, definite time duration. But at the same time, it is also a acceptable phenomenon that every project has certain unique feature also. So, the project can be classified in various categories on various bases. These are being described here.
(1) Quantifiable and Non Quantifiable Projects – These two broad categories of projects were given by little and mirrless. According to them quantifiable projects are those in which a plausible quantitative assessment of benefits can be made and non-quantifiable projects are those for which such an assessment is not possible. Projects concerned with industrial development, power generation, mineral development, etc. are forming part of quantifiable projects, while project for health, education, welfare and defense, etc., come under the category of non-quantifiable projects.
(2) Sectoral projects – The planning commission has accepted the sectoral criteria to calssify the projects. According to the Indian planning commission, a project may fall in the following sectors.
- Agriculture and allied sectors.
- Irrigation and power sector.
- Industry and mining sector.
- Transport and communication sector.
- Social services sector.
- Miscellaneous sector.
(3) Techno-Economic Projects – Project based on this criteria can be further classified into the following categories.
- Factor intensity oriented classification – On the basis of intensity, project may be classified as capital intensive or labour intensive. If in the project, large scale investment, is made in plant and machinery, the project will be classified as capital intensive. On the other hand, if a project requires a large number of human resources, it is classified as labour-intensive.
- Causation oriented classification – These are based on the determination or cause of the project. It may be demand based or raw-material based projects. The existence of demand for certain goods or services makes the projects demand based and the availability of certain raw material skill or other inputs make the project raw material based project.
- Magnitude oriented classification – Size of investments forms the basis for magnitude oriented projects. In this type, the project may be of large scale, medium-scale and small-scale depending upon the amount of investment involved in it.
(4) Financial Institutions classification – All India and state financial Institutions classify the projects according to their time duration, experience and the purpose for which the projects are being prepared. Project under this category can be as under:
- New projects
- Expansion Projects
- Modernisation Projects
- Diversification Projects.
(5) Others – Some other service oriented projects can be classified as follows: Welfare projects, Service Projects, Research and development project, Educational Project etc.