Project Management: An Introduction
Posted by admin in Project Management Triangle on July 9, 2011
A Project is a unique undertaking to reach a strategic objective it has a defined begging and end. Resources like staff and funding are allocated specifically for the length of the project. Once completed it should then become integrated into the normal day to day activities of the business. In order to reach a strategic objective A program need to be designed whereby there will be a portfolio of related projects. All individual projects will have their own individual timescales and budgets all being part of the overall project targets.
The program is part of the organisation’s Mission and is part of what the organization does now and in the future. It tends to be ongoing, receives ongoing funds and it has people to attend to it in ongoing basis. Executives are responsible for program Management they mainly aim to manage the inter-relationships between various projects, where appropriate including the management of shared resources, conflict resolution, high level reporting and many other issues. Keeping in mind that the key to program Management is co-ordination and ensuring that those involved in individual projects understand the overall aim of the organisation. Moreover, every project has constraints. The primary constraints are the tradeoff between time, cost and quality. These are often referred to as the “Project Triangle”.
There are four phases for any project (Identified by Gido and Clements)
Phase 1: Identification of a need where there will be an understanding of a feasibility study to decide whether to go ahead with the project considering all alternative solutions.
Phase 2: Development of a proposed solution The most appropriate solution to satisfy the need should then be chosen.
Phase 3: Implementation setting standards for everything that needs to be delivered. Actual performance can then be measured against standard.
Phase 4: Completion Evaluation through selected review and audit of project performance. Continuous Improvement through feedback also known as Total Quality Management (TQM).
A Successful project would have many attributes. It would mostly require the consideration of stakeholders to take ownership of the project and indentifying the role of key stakeholders. Setting of objectives and Identification of the required resources and any limitations or constraints within resources. A time-scale agreed for completion where quality requirements are identified and measured. A financial plan, risk assessment and scenario planning. A project Manager with leadership and communication skills with a Project team. On the other hand, uncertainty is the only factor that is impossible to evaluate because it is impossible to assign probability to an uncertain event. Although a Management Control system is a powerful technique in Project Management it may only reduce the affects of Uncertainty. Therefore, I would recommend Contingency Planning which involves considering alternative actions should uncertain events occur, although it may never be used it is useful to have in place. Read the rest of this entry »
From the Perspective of an Angel Investor
Posted by admin in Investor Funding on July 9, 2011
One of the ideal ways to begin a search for startup funding offered by angel investors is to view the process as if you are one. Investors have plenty of money they are willing to invest in new businesses, but they will first want some assurances that risk is as low as possible given that new companies have an inherently higher risk to begin with. If you imagine yourself as the investor, then the risk becomes much easier to assess in advance while searching for business funding. The first step is to insure you provide answers in the business plan to what would be logical and normal questions about risk.
Any business plan that is prepared for the purpose of finding business funding can use this approach. It doesn’t matter if you are looking for equity partners, angel investors or venture capital. Read your business plan with a critical eye and ask yourself if you would be inclined to approve funding if it was your own money at risk. If you follow a typical business plan format, you have covered the obvious issues like marketing and profit projections, but have you really thought through the plan in the same way a funder would?
It’s difficult to be objective when you have a great idea for a new business, and you believe that it will take the market by storm. Yet it’s important to remember that no one will fund your business until the business concept and plan have been thoroughly scrutinized. Considering your request for funding from the viewpoint of the angel investor can help you keep a sharp edge on the proposal so that it remains focused and on target.
Ask the Question: Am I the Only Investor?
Pretend you are an angel investor who has been asked for money for an untried business. The first questions that will be asked include the following.
· Are there other types of funding that would be more suitable for the business?
· Are business loans an option?
· Has the entrepreneur been searching for funding for a long period of time?
· Have other investors shown an interest in the business?
· Could the risk be minimized by bringing in multiple angel investors?
· Can the entrepreneur prove he or she is qualified to operate this business and able to provide a well developed business plan? Read the rest of this entry »
Funding Real Estate Projects For the Hospitality Industry – Emerging Perspectives
Posted by admin in Project Funding on July 9, 2011
Up until 2007, most hoteliers, investors and developers were buoyant when it came to the growth prospects in the Hospitality industry. They had enough reason to be optimistic as every factor which would influence the industry, directly or indirectly, was on a growth trajectory.
The GDP was growing like never before and the whole world had its eyes on the Indian growth story. Plans of expansion filled the newspapers and press releases and investors were more keen than ever to get a fair share of the pie.
The recession, however, had plans of its own and devoured most of the pie. The global economic slowdown and its effect on the Indian economy has doused the fire of excitement of even the most optimistic developers and investors.
It has resulted in an extreme crunch for investment in the hospitality sector, coupled with the decrease in demand for rooms. This double whammy put to rest most of the ambitious plans of expansion across the country.
All players have been reviewing their plans of development, owing to the increasingly challenging macro economic situation at the moment. The total number of rooms estimated to be added is today nearly half of what was announced earlier. One-fourth of the plans announced so far have failed to materialize, while the rest are hanging on the edge of viability.
DLF, Parsvnath and other developers of similar cadre have scaled down or slowed down their plans of expansion. Parsvnath which had plans of adding at least 10,000 rooms has now stopped acquiring land for any further plans other than the twenty hotels for which they have already done the same.
There have been reports that DLF has been in talks with various Hotel companies to sell eight to nine of their land parcels demarcated for Hotel projects to raise funds. Unitech has sold its Gurgaon Hotel project to reduce its huge debt burden.
Developers are more focused on finishing the projects on hand than on making plans for the future. Divesting the investment heavy Hotel plans seems to be the best way out for the cash strapped, heavily indebted players to survive the present-day economic scenario.
Financial Projections Going Awry
The seeds were sown, the crops were nurtured through the tough inflationary times but when the time to harvest came, the floods of recession washed away the anticipated bounty. Cost and revenue assumptions made during the good times have thus gone for a toss.
When it comes to loan disbursements, real estate is presently the black sheep of the family. Private Banks from which loans were freely available earlier have dried up. Public sector banks which continue to lend, albeit cautiously, now require a higher collateral to lend the same amount.
Non-banking finance companies are either not lending at all or looking at returns in the post 20% range. Private Equity interest in the Hospitality sector has all but dried up. Due to the severe global liquidity crunch and flight of capital to ‘places of origin’, there is a diminishing interest for Private Equity players in foreign markets. This has added to the financial woes of the capital-thirsty developers. Read the rest of this entry »