In any business, the most important thing is to start right. This statement is quite true for the now popular project management. Where to start the project? What is a project concept? It is proposed to consider examples and a theoretical basis for answers to these questions in this article.
Project and product life cycle
The management of any project is strictly dependent on the stages of its life cycle.
Passing through certain phases of its development, the project is being modified and requires ever new forms of control and management. It should be noted that the life cycle of the project does not coincide with the life cycle of the product that is created in the process or as a result of its implementation. The product begins its existence from the moment of creation of all its parts and their combination into a single object, which can be implemented or used with benefit for the owner. In this case, the product can be created:
- as a result of the project (if it is one of its goals);
- in the process of its implementation (if the product is one of the stages to achieve any of its goals);
- before the start (if its existence is a condition for the implementation of the project);
- after completion (if it is not the goal).
Thus, the “life lines” of the project and the product may or may not intersect at all, but they always depend on each other.
Project Life Cycle Phases
The main stages are considered:
But this is not the only division. As part of the financial evaluation of projects, the three-stage project life cycle is most often used:
- Pre-investment stage (justification of investments).
- Investment stage (financing).
- Post-investment (assessment of the economic efficiency of the project).
There are more detailed and not so consistent structures of the project life cycle that managers use depending on the scale of the idea, the organizational structure of management in the company, and the business sector. One way or another, the subject of our attention is the very beginning - the initiation phase or, in other words, the concept of the project.
What is initiation?
Initiation, or development of a project concept, includes a whole range of processes, which is ultimately determined by the manager, based on various external and internal factors. Nevertheless, it is worthwhile to give a general list of questions that you have to look for answers at precisely this stage:
- What are the prerequisites for the implementation of this particular project?
- What confirms the need for its implementation?
- What is the external environment of the idea?
- What are the main goals?
- What is the degree of technical feasibility of the idea?
- What are the aggregate financial conditions for the implementation of the idea?
- Is there a clear understanding of the start time?
The project concept plan also includes the following key actions:
- Determining the main way to implement the idea.
- Designation of responsible for implementation.
- Determining the size and composition of the project team.
- Fixing expectations from stakeholders.
- Formation of an enlarged list of processes.
- A comprehensive analysis of the resources needed to achieve established goals.
- Analysis of risks and assumptions.
- Establishment of a general project management plan.
- Authorization (launch).
The concept of the project ultimately boils down to the development of a charter that includes all the issues and problems described above. The accuracy of the numbers indicated in such a document often does not exceed 25%, nevertheless they are necessary for the initial launch of the project.
Formation of a project concept is impossible without the process of developing a document declaring its existence and containing, in addition to the initial requirements and goals, the manager’s authority and the amount of allocated resources.
The charter of the project is clearly structured and should contain the following main sections:
1. List of major changes.
2. The approval sheet.
3. General narrative:
- justification of expediency;
- planned results;
- final product or final target;
- main stages of implementation;
- project stakeholders and their expectations;
- risks, assumptions, limitations;
- process control scheme and teams.
4. The basic principles of the work.
5. Related documents.
When compiling such a document, as a rule, they use the method of expert assessments, the main role in which is played by the qualification of the project manager.
The creation of a project concept is significantly influenced by individuals who are directly interested in the result. The definition of the circle of such persons is necessary to assess the factors affecting the project. As part of this stage, goals are agreed upon with key beneficiaries, roles of direct and indirect stakeholders are identified, risks and uncertainties associated with the inevitable conflict of interests are assessed, and a form for informing these people about the implementation of the idea is developed.
All information on the circle of persons defined in this way is stored in the register of interested parties. This registry is available to the project manager and is used by him to manage zones and the degree of influence on business processes and the team.
Before approval, the concept undergoes a thorough check and adjustment on all elements of its branched structure: the amount of financing, implementation methods, influence factors, risks, etc. The project concept is approved only after approval by all interested parties, including authorities and municipal structures.
The concept of project development is implemented by implementing the plan, which is also fixed in it. In the course of implementing the idea, various changes take place, recorded and approved by management, which affect the final indicators. Monitoring these changes and quality control are perhaps the most important management processes at the concept implementation stage.
Example 1. The concept of a construction project
The development of a construction project concept necessarily includes:
- land analysis;
- building restrictions;
- current state of the territory;
- assessment of its development potential;
- analysis of the real estate market (its capacity, segmentation);
- identification of potential competitors;
- assessment of dynamics, demand volumes;
- identification of potential buyers.
The specificity of the construction project can be considered the variability of the use of the existing land. Development assessment here comes to the fore in the formation of the concept. To make the right choice, SWAT analysis, multivariate modeling and other tools are used.
After solving these priorities, a draft charter is drawn up, which, in addition to the above sections, must contain:
- development concept (main characteristics of the site, transport infrastructure, master plan, recommendations on architectural and planning decisions and building materials and the basics of landscaping);
- marketing concept (pricing strategy, approximate sales / rental schedule, promotion strategy);
- financial scheme (investment requirements, profit forecast, approximate cash flow chart).
Example 2. The concept of implementing an automation system
The development of a project concept for the introduction of an automated sales system for a bookstore should include the following specific sections:
- Evaluation of the online book market in terms of volume and cost of sales.
- Determining the cost of content online store.
- Identification of needs for additional sales markets at an existing bookstore.
The concept of such a modernization of the store’s work will have several goals: creating an online store, ensuring its operability and reaching a specific level of orders through a new online resource.
Such goals can be achieved by successively solving the following tasks:
- development of technical specifications;
- execution of work on the formation of an online store;
- development of a scheme for delivering books from publishers to customers;
- conclusion of contracts with online payment systems.
Example 3. The concept of modernization of production
The concept of a project to introduce new technology into an existing production cycle is always developed taking into account the specifics of the enterprise and the conditions for its functioning. Particular attention is paid to the following steps:
- Identification of “vulnerable links” of the production chain (the introduction of new technology should either replace the problem areas or not provoke their failure due to violation of the integrity of the work cycle).
- Development of a system for the phased introduction of new technology (a plan to include a new unit in the production process is the most important element in the implementation of a modernization project, since the imbalance in the actions of the team and production workers can nullify all the funds spent on re-equipment).
- Assessment of the potential of employees of the enterprise for the management and maintenance of new equipment.
Among the goals of such a project, as a rule, the characteristics of the updated products in terms of volume and speed of release are also indicated.
Given the above, it becomes clear that the concept of the project includes the main provisions regarding its content, economic benefits, feasibility and consequences. In this regard, the conceptual provisions of new ideas necessary for the development or start of a new business, it is necessary to structure, evaluate and coordinate before moving on to real changes and financial injections.