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Saturday, May 7, 2011

Chapter 18: Origins of Projects

Projects often originate from sources external to the project, such as a sponsor or a project management office; internally or externally, by an enterprise or a government agency. A project may originate as a result of one or more of the following categories of reasons:

Business/legal requirements:

This category includes projects based on a business need or a legal requirement. These kind of projects are very common in Banks and financial Institutions. For ex: The Central Banks in every country comes up with new rules and regulations to keep the banking industry and the economy stable. So, if the government comes up with a new rule that every bank has to comply with, the banks may initiate projects that would ensure that they are compliant with the new regulations set by the government.

Market Opportunities:

Projects might be started to take advantage of new Opportunities:
• Those based on the market demand. For example, a car manufacturer begins a project to make electric cars based on high oil prices that the customer cannot afford.
• Those based on a customer request. For example, one of the customers of your company requests a product that could be a source of revenue for the company.
• Strategic opportunity/business need. A project that helps implement the business strategy of the organization. However, all other opportunities taken by the organization must also be aligned with the business strategy.
• Those based on a technological advance. For example, several electronics companies authorized projects to manufacture MP3 players following the invention and popularity of MP3 technology.


Projects are also authorized to offer solutions to certain problems in a company or a country or to address social needs in a society. For example, a bank might feel that its website is crashing too often (say once in 15 days or so) and is causing a lot of inconvenience to its customers. So, they might initiate a new project that would look into the shortcomings of the existing system and rectify it.

Ecological impact:

Some industries cause harm to the environment and the ecology where their factories are built. For ex: A Leather Factory might start a new factory to clean up the toxics released from the factory so that, the damage on the River could be minimized.

Social needs

Governmental or nongovernmental organizations initiate projects to satisfy some social needs, such as a project to provide fresh drinking water in an underprivileged community or a project to set up latrines and a sewer system in a village. These kinds of projects based on social needs are often run by nonprofit organizations or by the Government itself. Even if not for profit, the projects in such organizations are also linked to the business needs of the organization because in order to perform the projects, the organization must survive, and in order to survive, the organization must work according to its strategic business plan.

The sources of project requests can vary widely in different organizations. Depending upon your organization, the origins of projects might be inside the organization, outside the organization, or both. Regardless of these sources, an organization performs a project to meet some business objectives in the organization’s strategic plan. So the strategic plan of an organization is still the grand origin of all projects in most cases.

Previous: Introduction to Project Initiation

Next: Understanding Project Selections

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