Project life cycle is a popular term in project management practices. Every project has a cycle.
However, many managers do not understand exactly what the project life cycle is and confuse it with project management processes.
In this article, I demonstrate a sample project life cycle to help you understand exactly what it involves. Reference: “Project life cycle example“, https://ossalumni.org/project-life-cycle-example/
Project life cycle: Example
1. Consultation of interested parties
A group of experts analyzed the market of innovative household products, as part of the white goods market in Europe, for the last 6 months.
The survey was conducted both through several public surveys of random users from EU Member States (1000 in number) and through samples of online trade in Europe, as well as physical sales carried out in the country in some of the most large chain stores. After the analysis of the market, the following results were obtained:
- for January-July this year trade grew by 5, 5% compared to last year for the same period, as the most popular and desired among consumers remain innovative products with front-loading, as well as those in white;
- an increase of 4% in the trade of innovative products of “non-standard” size (smaller and more compact than conventional production);
- an increase of 8% marked the trade in innovative products with 14 or more washing programs;
- an increase of 8.5% in the trade of combined innovative products, with the surveyed consumers pointing out “convenience” and “saving time” as the main factors for choosing this product;
- around 18% said they wanted to better reflect and label the actual energy consumption of innovative products (so-called energy consumption);
- 5% of respondents said they would prefer the innovative product to have the so-called. “Child safety mode” to be controlled by a mobile device;
- the predominant part of the sales is carried out in the middle price class – between USD 350 and USD 800;
About 30% of the consumers surveyed said they were willing to pay a higher price for the product, as long as it fully met their needs.
Result: A report was prepared by the team that conducted the study.
2. Creating a business plan
2.1. name: XXX AD prepares a project called “Innovative product”.
I suggest that for a working title, the name be changed to “Machine of the Future”.
2.2. Project contact person: FP, project manager.
2.3. Summary: In April this year A survey was conducted among casual consumers of EU member states, online trade in Europe, as well as physical sales made in the country in some of the largest retail chains.
As a result of the analysis it was concluded that the product has a stable supply and demand on the market, the European consumer, mainly European, is interested in updating this type of equipment.
The share of consumers using the same technique for 20 years remains low. The end user is more and more interested in quality appliances for his money, as he is informed in advance about the technical characteristics, noise level and energy efficiency of the product. Reference: “Project life cycle”, https://bvop.org/posts/projectlifecycle/
In their hectic daily lives, people would prefer to make their lives as easy as possible and reduce the time they spend on household chores (washing and cleaning), for which they need faithful helpers.
Here comes our company and the product we are ready to develop, a product of a new generation, with an innovative interface, features, own operating system, remote control, child safety mode and other important features.
The main goal of the project will be the development and commissioning of a domestic helper – an innovative product.
The biggest challenge for us will be that a large part of the Europen consumer still relies on the established world brands and it will be difficult to change this status quo.
In this regard, it would be good for the “Product of the Future” to “go beyond” the country and to work together with the world’s giants in the field. More on the topic: “Real Project Life Cycle example: phases and characteristics“, https://bpedia.org/real-project-life-cycle-example-phases-and-characteristics/
According to initial data, the product is expected to fall in the middle to upper price range – between 800 and 1300 dollars, and the final price will be offered at the earliest in the presence of a prototype of the product.
2.4 Project activities
2.4.1 Market analysis – performed by the marketing team of the company;
2.4.2 Formation of a project team – term – 1 month; responsible – the director of the company;
2.4.3 Preparation of basic technical specifications of the product – term – 2 months; responsible – the employees of the technical department of the company, included in the project team;
2.4.4 Presentation of the basic technical specifications of the company’s management – deadline – 2 days; responsible – the project manager and the head of the technical department of the company;
2.4.5. Carrying out a study of the image of individual companies, giants in the production of white goods, in particular innovative products with a view to a possible future partnership – term – 2 months; responsible – the employees of the marketing department of the company, included in the project team; Reference: “Project Life Cycle example”, https://phron.org/project-life-cycle-example/
2.4.6. Preparation of technical specifications of the product (complete) – part II – term – 6 months; Responsible – the employees of the technical department of the company, included in the project team + external expert (hired within the project);
2.4.7. Presentation of the summarized technical specifications of the company’s management – deadline – 2 days; responsible – the project manager and the head of the technical department of the company;
2.4.8 Designing a prototype of “Machine of the Future” in a virtual environment – term – 2 months; responsible – the employees of the technical department of the company, included in the project team;
2.4.9. Creation and testing of the product “Machine of the Future” – term – 9 months; Responsible – the employees of the technical department of the company, included in the project team and the project manager, in the part concerning the strict monitoring of the team’s activity;
2.4.10. Presentation of the product to the management of the company and in case of need possible modifications – term – 1 month; responsible – project manager and head of the technical department of the company;
2.4.11. Carrying out a study for the most suitable starting area of distribution in the country and abroad, distribution channels, potential suppliers. Conclusion of contracts, including those with potential future partners, provided for in activity 2.4.5 – term – 3 months; responsible – the employees of the marketing, legal and financial department of the company, included in the project team;
2.4.12. Preparation of marketing strategy. Product Advertising “Product of the Future”. Conclusion of contracts – term – 1 month / purchase of advertising time for a period of at least 6 months – responsible – employees of the marketing department included in the team, as well as the leader of the marketing department and employees of the legal department included in the project team;
2.4.13. Mass production, Placing the product on the market and reaching real customers. Organizing a Grand opening party on the occasion of the successful launch of the product “Product of the Future” – term – 1 month – responsible – the leader of the marketing department of the company;
3. Term of the project – 33 months.
4. Time schedule of the project – beginning – September 2020 / end – month – February 2022.
5. Estimated financial estimates and budget
5.1 Breakdown by project activities:
Activity 2.4.1 – $ 0;
Activity 2.4.2 – 0 dollars for the activity itself, but for each member of the team should be set in the budget an additional hourly wage, depending on the activity and its commitments:
X $ 10 per hour for each marketing employee;
X $ 15 per hour for the head of the marketing department;
X $ 15 per hour for each technical staff member;
X $ 20 per hour for the technical department leader;
X $ 10 per hour for each legal officer;
X $ 15 per hour for the head of the legal department;
X $ 5 per hour for project technical assistant;
The project manager – a fixed salary of USD 25,000 + bonuses;
One-time bonus bonuses in the amount of USD 5,000 for all employees included in the team after the successful completion of the project;
Up to $ 10,000 to hire an external expert on activity 2.4.6;
Activity 2.4.3 – the rate for the relevant experts involved in the development from the previous activity;
Activity 2.4.4 – $ 0;
Activity 2.4.5 – the rate for the relevant experts participating in the survey;
Activity 2.4.6 – the rate for the relevant experts involved in the development + the payment for an external expert (up to $ 10,000);
Activity 2.4.7 – $ 0;
Activity 2.4.8 – the rate for the relevant experts involved in the design;
Activity 2.4.9 – the rate for the relevant experts involved in the implementation of this activity + up to 5 thousand dollars parts for 1 product;
Activity 2.4.10 – $ 0;
Activity 2.4.11 – the rate for the relevant experts involved in the implementation of the activity + up to $ 100,000 for concluding distribution contracts;
Activity 2.4.12 – the rate for the relevant experts involved in the preparation of the strategy + up to $ 600,000 for advertising;
Activity 2.4.13 – the rate for the relevant experts involved in the implementation of the activity + $ 5,000,000 for the initial investment for mass production of the product + up to $ 10,000 for the organization and conduct of the party.
5.2. Estimated total budget – about 8,000,000 dollars with VAT.
6. Risks of default
6.1. Inability to provide timely financial resources for some of the activities, due to lack of investment / investor / funding under the European program;
6.2. Not a good marketing strategy and hence poor market distribution;
6.3. Consumers may not perceive the product as expected in the initial market research;
7. Possible additional investments in the project in order to reduce costs for the company. Options for providing additional financial resources:
7.1. Applying with a ready project proposal for securing 80% funding under the Innovation and Competitiveness Program;
7.2. Attracting a leader in the field of innovative products by concluding a partnership agreement with a clause for 30% participation (providing initial financial capital) and gratuitously providing the name of the leading company in the field to the new product for 9% of monthly sales;
7.3. Attracting a competing company in the project to invest about 40% of the total funds against future return on sales.