Monday, November 5, 2012

Why projects are initiated?


Projects are initiated in an organization for various reasons. PMBOK identifies the following five major reasons for initiating projects in an organization:

  1. Market demand: A project may be initiated to meet the market demand. Take the example of Tamil Nadu. The shortage of power supply and the inability to meet the power demand in the state is an example of market demand. This could lead to projects for generation of more power, including alternate sources of power like wind energy, solar power and so on. Another example is the foreseen shortage of water supply in Singapore. This has led to a project for recycling used water and subsequently Singapore has a product called NEWater, which is a recycled water. Increase in traffic congestion has led to metro rail projects worldwide, including Chennai, New Delhi, Doha (Qatar), Singapore, Malaysia and so on.

  2. Strategic Opportunity/ Business Need: Examples of projects initiated due to business needs include ISO certification, Document Management System and so on.

  3. Customer Request: Most straightforward of all the reasons; if your customer has a request to do something for him/ her, it forms a project.

  4. Technological Advance: I do not need to say much about this. Everyone has seen how the smartphones and tablets have revolutionized the way we work and the amount of projects (like apps) that they have generated.

  5. Legal Requirements: The current State Government in Tamil Nadu has implemented compulsory helmets for all two wheeler riders when it assumed power. This naturally would have led to several projects for manufacturing of helmets to meet the demand necessitated by legal requirements. Another example is the legal requirement to digitization of all cable TV operations in major metro cities of India.

1 comment:

  1. Projects have costs and somewhere, someone will require a justification for that cost. In any institution which cares about the bottom line there are only 3 ways you can justify the initiation of a project.

    They are to show that the outcome of the project will:

    1. Increase revenue / reduce costs (typically business driven)
    2. Reduce risk (typically business/ technology driven)
    3. Address a compliance issue (typically governance/audit/regulatory body or technology (standards) driven)

    Every other reason you can think of will reduce to one of the above 3.