Project Management Practices in India
Below is an excerpt of the report published by Indicus Analytics and Ace Global in 2010.
The effect of the global recession has spread to every corner of the world and India is no exception. However, in the past few years, the economy has bounced back and India ison a high-growth trajectory with a gross domestic product (GDP) growth rate of 6–10% propelled by infrastructure development. This surge in infrastructure investment is largely due to the increase in foreign direct investment (FDI) over the past few years. The eleventh Five Year Plan (2007–12) has allocated US$514 billion for infrastructure investment. India’s growth story over the next five years, therefore, is largely dependent on the management of its big spend on the infrastructure environment. Successful and timely execution of major projects is crucial to maintain this growth trajectory.
Common issues facing most projects, particularly government-sponsored projects, are time delays and cost overruns. Any industrial activity in India requires multiple clearances from the time of project incorporation until its completion and launch. For successful implementation of any project in the country, hands-on involvement is essential to obtain project-related clearances. The implementation status of most projects points out the gaps in the application of project management practices. Therefore, learning and utilizing project management is crucial for India to continue on its high-growth trajectory in the coming years.
Objectives of the study:
The study was aimed at understanding and evaluating the importance given to the application of project management principles in projects conducted by the private and public sectors in India.
Key findings from the study:
The study reveals that project management practices across the country differ according to the size and complexity of the project and whether it is a public or private sector initiative. Capital-intensive sectors, such as power; steel; engineering, procurement & construction (EPC); and the IT sector that handles multidimensional projects, displayed a higher maturity level of project management practices in their organizations. Although project management practices have been more widely adopted by the private sector, the public sector is now opening up to these practices. Presently, many public sector organizations are emphasizing on training programs and strengthening their existing project management units and professionals. “Lack of clarity of benefits” and “lack of client-led demand in India” are the main barriers to the adoption of project management practices in the country.
The study revealed the categorization of project management structures in the country as follows:
- The project is considered as a part of the functional organization and is contained in one or more of the functional units of the organization.
- The project is housed as a separate unit coordinated by the project manager who also has complete authority over people and physical resources assigned to the project.
- The project is handled by outsourced structures such as project management consultants.
Respondents of the study questionnaire and interviews exhibited contrasting views on their perception of project management. The importance of the need for project management practices is widely accepted, but there are differing opinions regarding whether project management is to be treated as a separate discipline. Strong advocates for a specialist branch include professionals from the academic field and training providers. However, there are others who consider project management as an intuitive process carried out in private and public sector organizations without any specific training or orientation.
The industry mainly views project management as a “time management tool,” contributing to the successful and timely completion of projects with minimal cost overruns. Successful implementation of projects using project management practices is a main contributory factor to revenue growth in organizations.
Project management practices are still in the nascent stage in the country. Many organizations still shy away from adopting them. The main challenges foreseen in adopting these practices are as follows:
- There is still uncertainty regarding the scope of the term “project management.” Many respondents considered project management as more of an execution and monitoring tool rather than a planning tool.
- Most organizations fail to realizethe need for project management practices in implementing small and uncomplicated projects.
- Project management is considered more as an institutional need. Moreover, most respondents who have undergone certification opined that investment in project management training and certification should be borne by the organization and not the individual.
- Lack of trained manpower limits productivity and creates a wide gap between expected results and the actual end result itself.
The study revealed that the lack of clarity in defining and classifying the discipline of project management is the basic cause for resistance in adopting project management practices. Even though many of the respondents were aware of project management, they had a myopic view of the basic concepts.
Another hurdle of project management in an organization lies in quantifying cost-benefit trade-offs. Adoption of project management practices in organizations provides quantitative benefits in terms of cost and time. Quality improvement in implementation of projects is rarely considered as a benefit. Many respondents were also of the opinion that neither incentives nor penalties for good or bad performances were reason enough to adopt project management practices.
Another crucial area the study focused on was estimating the demand for project management professionals in the country. The demand analysis was done by a process of triangulation using two approaches:
- Companies were filtered on the basis of capital, revenue, and employee strength.
- Various upcoming projects in both the public and private sector were identified, and the project staffing for various types of projects were also identified.
On the basis of the factors given above, conclusions drawn from the study revealed that the overall stock of project management practitioners in India is estimated at 96,399, which would likely to go up to over 215,187 by 2012. Nearly 78% of this resource base is estimated to be in the IT sector.
Accurate figures relating to market volume of training and certification programs for project management were unavailable. Moreover, on the basis of the findings from a primary survey and assumptions of future scenarios, the research attempts to develop an estimation of the same. According to these findings, the size of the project management-related training market is estimated at around `800 million in 2009 and expected to reach `1,692 million by 2015, at constant prices, covering around 71,000 people.
Growth drivers for project management:
With the infrastructure boom expected to continue in the coming years, there is a predictable rise in the number of more complex projects, thereby fueling the demand for structured project management processes. This in turn feeds the demand for additional certified project management professionals.
As an increasing share of the Indian IT sector moves to the global IT market, the need for structured project management practices increases. This calls for a larger induction of certified project managers.
A recent trend that is on the rise in the infrastructure sector is funding of large projects by donor agencies. As this continues, it is likely to popularize project management practices in the country with increased demand for more project management methods.
Implementing projects under the public–private partnership mode is expected to create a new demand for project management practices, which is likely to be the largest among all non-IT sectors.
Action areas and priorities for stakeholders:
Action areas for the various stakeholders consisting of the government, industry bodies, and academic institutes have been identified as follows:
- Showcasing the need for project management principles from the planning and appraisal stages of projects.
- Raising the profile of project management institutions.
- Developing and distributing appropriate courseware—targeting government agencies—helps in the proper understanding of project management practices.
- Endorsing project management through demonstrations and documentation.
- Promotion of project management certification down the supply chain beginning with EPC contracts.
- Developing high-quality project management courseware for general as well as sector-specific purposes.
- Obtaining recognition for project management as a professional entity.
- Building awareness among financial institutions and promoting project management certification.