Project Design and Research Methods

ADIGRAT UNIVERSITY
COLLEGE OF SOCIAL SCIENCE AND HUMANITIES
DEPARTMENT OF GEOGRAPHY AND ENVIRONMENTAL STUDIES
COURSE TITLE - PROJECT DESIGN AND MANAGEMENT IN GeES,
COURSE CODE - GeES2072
Module Name and Code: RESEARCH METHODOLOGY, GeESM2071
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Edited By - Dr. Zubairul Islam, Associate Professor, Department of geography and Environmental studies.
zubairul@gmail.com
Compiled by : Dr. Zubairul Islam

COURSE DESCRIPTION
The course is planned to acquaint students with basic principles, approaches, techniques and
activities in the project cycle. Starting from conceiving the idea of a project to its screening,
analysis and project appraisal, financing of the project and project implementation and
finally its evaluation will be the part of the discussion in the course. The course will also
expose the students with basic terminologies and concepts of project development. Further,
the course will be related to project idea identification, project preparation, project appraisal,
planning for project implementation and management and at last project monitoring and
evaluation.
2Compiled by : Dr. Zubairul Islam

COURSE OBJECTIVE
General Course objective and competences to be acquired
Up on the successful completion of the course, students will be able to:
 Understand the basic concepts of project planning and evaluation.
 Identify the major approaches, procedures, techniques in the development of a project.
 Understand the basic techniques of project appraisal.
 Explain the cost and benefit of a given project.
 Develop the skill of project designing.
 Develop the skill of basic techniques of project evaluation/ review.
 Develop small-scale projects in GeES at community level.

COURSE CONTENT
CHAPTER 1: INTRODUCTION TO PROJECT 5-30
1.1 - Introduction
1.2. Fundamentals of Projects
1.3 - Hierarchical Relationships
1.4 - Overview of Project Planning in Ethiopia
CHAPTER 2: THE PROJECT CYCLE: MEANING AND MODELS 31 - 63
2.1 - Project Cycle: Meaning
2.2. The Baum Cycle (World Bank Project Cycle)
2.3. United Nations Industrial Development Organization (UNIDO) - Project Cycle
2.4. The DEPSA’s Project Cycle
CHAPTER 3: PROJECT IDENTIFICATION 64-99
Introduction
3.1 – Pre Identification
3.2 – Project Identification
3.3 – Source of project ideas
3.4 – Activities during Identification phase
3.5. Screening Potentially Promising Ideas
CHAPTER 4: PROJECT MANAGEMENT DISCIPLINE 100-139
4.1 – Scope Management
4.2 – Time Management
4.3 – Project Resource Management
4.4 – Risk Management
4.5. Project Justification Management
4.6 - Stakeholder Management
CHAPTER 5: PROJECT WRITING 140-164
SLIDE NO.

CHAPTER – 1
INTRODUCTION
TO PROJECTS

1.1 - Introduction
All countries have national plans, which explain a range of socio – economic and
environmental objectives and strategies meant to enhance development.
In this regard, projects provide an important means by which investment and other
development expenditures foreseen in the plans can be clarified, justified, and realized.
Development plans and projects are closely interlinked since sound development plans require
good projects as just good projects require sound planning.
Actually, the financial and administrative resources available to governments are always
limited. These resources must be allocated among many sectors and many competing demands.
Project analysis becomes handy in establishing the optimal allocation of resources, given the
objectives. Through project analysis, it is possible to prioritize activities. So that, the higher
priority projects, with greater payoffs both financially and socially, are undertaken.
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1.1 - Introduction

1.2.1. Defining a Project
According to Gittinger (1982), a project is defined as a complex set of activities where
resources are used in expectation of returns and which lends itself to planning, financing, and
implementing as a unit. A Project usually has a specific starting point and a specific ending
point, intending to accomplish specific objectives. It usually has a well-defined sequence of
investment and production activities and a specific group of beneficiaries that can be
identified, quantified, and valued, either socially or monetarily.
Broadly speaking, if development can be thought of as a progression, (with many dimensions:
temporal, spatial, socio-cultural, financial, and economic), meant to improve the quality of life
of people, projects are temporal and spatial units, each with a financial and economic value
and a social impact, that make up the continuum. Projects also have boundaries, which make
them distinguishable from each other. In addition to its time sequence of investment,
production, and benefits, the project normally has a specific geographic location with
identifiable targets and beneficiaries (Little and Mirlees 1974).
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1.2.2. Characteristics of Projects
Projects are the cutting edge of development, which is indicating the significant importance
of projects as the means to bring development. Of course, such development projects
involve huge capital investment in real assets.
The basic characteristic of a capital expenditure (capital investment or capital project or
simply a project) is that it typically involves a current outlay of funds in the expectation of a
stream of benefits far into the future.
Although, a simple, precise definition is not easy to give, nor is it necessary, a few
characteristics of projects can be easily identified as part of the definitions given above. In
this regard,
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 A project constitutes the whole complex of activities in the undertaking that uses
resources to gain benefits.
 Projects involve the commitment of scarce resources to a specific line of action, which
prevents the use of those resources elsewhere. These resources include not only financial
capital, but also, more importantly, raw materials, the product of manufacturing and
services capacity elsewhere in the economy, labor of various kinds, managers and
organizers, and so on. Almost all of these are certain to have alternative possible uses
elsewhere.
 Project resources are committed for a long period to produce benefits that are usually
quite clearly identifiable, but which may not occur or be clearly felt for several years.
Their effects are usually gradual and lasting, but involve waiting for results. This waiting
obviously has a cost.
Major characteristics of projects
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 Projects to which the above points apply are frequently those planned for the public sector.
The planning and examination referred to are usually carried out by government or public
agencies. Private sector projects are also the subject of this kind of planning, especially if
they involve government participation. Within the public sector, systematic planning
procedures can be applied to both directly productive and constraint-removing projects, to
infrastructural and social services projects, as well as those concerned with industrial and
Agricultural development.
 Frequently, projects involve special financial arrangements, including loans from overseas,
development banks, and other agencies. Because relatively few projects are financed simply
from government allocations, the financing arrangements for a project refer to closely
defined actions. This financial definition tends to give projects a clear boundary and
individual identity.
 The pattern of resources commitment in projects is usually for capital investments to be
made to establish productive capacity or physical works, which then have a long life of
operation or use.
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In general, the definition of a project, thus, might go something like this:
"A project is a set of proposals for the investment of resources into a clearly
identified set of actions, (frequently in the public sector,) that are expected to
produce future benefits of a fairly specific kind, the whole series of actions being
the subject of individual planning and examination before being adapted and
implemented within a single overall financial and managerial framework."
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1.2.3. Project Format
To enable the analysis of projects under the scope of the above definitions, a project format as a
tool is conventionally used. This format provides an analytical framework for a proposed
investment in which the cost and benefit accounts are prepared year by year in the form of a
project cost and benefit stream. Information from a wide range of sources feed into the
framework. Since a good plan depends on accurate information, the framework enables various
specialists to judge the accuracy of the information provided and the appropriateness of the
assumptions. The format gives an idea of costs, year by year, so that those responsible for providing
the necessary resources can do their own planning.
The administrative and organizational problems likely to be encountered during implementation
are also detailed in the project format. This enables the planners to make arrangements for
strengthening the Project management if it appears weak. At the same time, managers, planners,
and stakeholders are given better criteria for monitoring the progress of implementation as the
objectives, targets, and work plan are set out at the onset of implementation.
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The project format facilitates systematic and objective examination of results of
alternatives. For instance, the effects of a proposed project on national income and other
objectives can be compared with the effects of projects in other sectors or other projects in
the same sector, or alternative formulations and design of the same project including not
undertaking the project altogether.
Once national objectives are known, unreliability of available data at the national level can
be overcome by confining the project meant to achieve a national objective in a specific
location with a specific target and beneficiaries. Thus, local information on which to base
the analysis can be efficiently gathered, field trials undertaken, and judgment can be made
about social and cultural institutions that might influence the choice of project design and
its pace of implementation.
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1.2.4 - Project Parameters
During a project's life, management focuses on three basic parameters: quality, cost, and time. A
successfully managed project is one that is completed at the specified level of quality; on or before
the deadline; and within the budget. In addition, client satisfaction indicates success and possibility
for replication or sustainability. Each of the parameters is specified in detail during the planning phase
of the project. These specifications then form the basis for controlling the project during the
implementation phase. Below is a framework showing the interrelationships among these
parameters.
Time
Specification Budget Schedule
Cost
Project ParametersProject Parameters
Cost
Time
Performance Budget Schedule
Quality
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Developmental plans
Programs
Projects
Tasks
Work packages
A. Developmental plans
Every nation, be it developed or developing, should have a
systematically elaborated national plan to accelerate economic
growth and further a range of social objectives.
Planning can be defined as a “continuous process that involves
decisions or choices about alternative ways of using available
resources with the aim of achieving a particular goal or set of
goals at some time in the future.” The rationale for planning is
that it serves as a tool that enhances the effectiveness in
mobilizing resources and enables allocation of resources into
priority areas of development. In this regard, development
planning can be regarded as an attempt to raise the rationality of
decision-making.
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National plans and elaborated sectoral programs are of great help in
identifying development projects. A realistic plan should be prepared by
assessing the development potentials in the various sections of the economy.
It is, therefore, obvious that the successful formulation and implementation
of a national development plan depends on the proper selection of projects
and on the consequent sectoral programs. Thus, project formulation and
evaluation, being a continuous and integrated process, is one of the basic
components of economic planning. In order to ensure realistic planning, an
iterative process with a sufficient flow of information, suggestion, and
guidance between decision makers at the macro levels are essential.
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The more elaborated the plans and policies of the governments are, the easier
becomes the work of the project planner. For example, the project planner will
have to refer to such plans and policies to see whether the project being
considered fits well in the plan and contributes most to the fundamental
objectives of the government. These objectives can include self-sustaining
growth, promotion of employment, income distribution, etc.
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B. Programs
Program is a definite plan or scheme of any sequence of operations aimed at the attainment
of the planned objectives. This explanation assumes that a program is a plan of activities with
general objectives that would be derived from the development plan.
It is necessary to distinguish between projects and programs because there is sometimes a
tendency to use them interchangeably. A project refers to an investment activity where
resources are used to create capital assets that produce benefits over time, having a beginning
and an end, and specific objectives pursued; whereas a program is an on-going development
effort. A program is, therefore, a wider concept than a project. It may include one or several
projects at various times whose specific objectives are linked to the achievement of higher
level of common objectives.
For instance, a health program may include a water project as well as construction of a
health center both aimed at improving the health of a given community that previously
lacked easy access to these essential facilities. 18

Projects provide an important means by which investment and other development
expenditures foreseen in plans can be clarified and realized. Sound development plans
require good projects, just as good projects require sound planning. The two are
interdependent.
C. Projects
A sound plan requires a great deal of knowledge about existing and potential projects. Sound planning rests
on the availability of a wide range of information about existing and potential investments and their likely
effects on growth and other national objectives. It is project analysis that provides this information, and the
projects selected for implementation become the vehicle for using resources. Thus, plans require projects.
Realistic planning involves knowing the amount that can be spent on development activities each year and
the resources that will be required for particular kind of project.
Effective project preparation and analysis must be set in the framework of a broader
development plan. Projects are part of an overall development strategy and a broader
planning process.
Projects aim mainly at increasing the production of goods and services, which are fundamental components
of people’s welfare, and the main objective of any development effort is, of course, to advance social well-
being. 19

In general, programs and projects have got their own differences and similarities. For clarity purpose, let’s outline some of
the major differences and similarities of the two concepts (as a summary):
Differences between Project and Programme
PROJECTS PROGRAMS
Specific objective General objectives
Specific projects area No specific project area
Specific beneficiaries group No specific beneficiaries group
Clearly determined and allocated funds No clear and detailed financial resource allocation
Specific lifetime No specific lifetime
Similarities between Project and Programme
Projects and programs have similar characteristics in terms of:
 Having objectives
 Requiring financial, human, material, etc inputs (or resources)
 Generating outputs, (goods/services), of value
 Serving as instruments for the execution of development plans in order to develop the national economy
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D. Tasks
A task is an activity that needs to be accomplished within a defined period of time or by a
deadline. A task can be broken down into assignments which should also have a defined
start and end date or a deadline for completion. One or more assignments on a task puts
the task under execution. Completion of all assignments on a specific task normally renders
the task completed. Tasks can be linked together to create dependencies.
In most projects, tasks may suffer one of two major drawbacks:
•Task dependency: Which is normal as most tasks rely on others to get done. However, this
can lead to the stagnation of a project when many tasks cannot get started unless others
are finished.
•Unclear understanding of the term complete: For example, if a task is 90% complete, does
this mean that it will take only 1/9 of the time already spent on this task to finish it?
Although this is mathematically sound, it is rarely the case when it comes to practice.
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A work package is a subset of a project that can be assigned to a specific part for execution.
Work packages are defined by brief statements of Activity Description, Activity Resources of
Skill and Expertise, Activity Estimates of Effort and Duration, Activity Schedule, Activity Risks,
and Activity Budget. Work Packages are assigned a Work Authorization or Control Account.
Estimates of work packages are used in Earned Value Management to calculate the Planned
Value. Progress made in the work package is used to calculate the Earned Value. Actual costs
charged to the work package are used in variance analysis.
E. Work packages
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1.4.1 - Types of plans and Tools to Attain Development Goals in Ethiopia
• Long-term/ Middle-term Plans - It consists of development plans, broader programs, and bundle of projects.
• Short-term Plan - It is largely composed of projects, tasks, and work packages.
The following are some of the tools used, in addition to basic development programs & programs, in order to
attain development objectives:
 Fiscal policies and Measures (Taxes, Custom duties, government expenditure, etc)
 Monetary policy
 Price policy/control
 Credit policy
 Trade regulation
Generally, a combination of the development programs, projects, and various tools and measures are used to
attain development objectives.
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The Multi Year Planning Cycle for developmental plans focuses on long-term goals and objectives to be achieved.
The Ministry of Finance and Economic Development (MOFED), in this regard, plays an important role in providing
macro economic forecasts of:
•Economic growth;
•GDP;
•Public sector Expenditure;
•Sources of Finance; etc
The MOFED releases Indicative Planning Figures (IPF) that would be used for multi year programming by the
public bodies (the spending units) such as: Ministries, Authorities, Agencies, and commissions.
•Using the IPF, the public bodies in collaboration with MOFED prepare a multi year program of their capital
expenditures on a priority basis as follows:
•On-going,
•Approved, and
•Planned
This comprises the public investment program (PIP) of the spending units. The PIP is a three-year rolling
financial plan of capital expenditures that should include all such items in the planning cycle.
1.4.2. The Planning Cycle in Ethiopia
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National Vision
To see Ethiopia being well developed in terms of social, economic, and
Democratic Dimensions and become a model nation to represent Africa in
the Global Arena
National Mission
The Government is here to ignite nation wide mobilization in the
Agricultural, Industrial, Financial, Tourism, Educational, and Health
sectors in order to put Ethiopia among middle Income Earning Nations in
20 years, i.e. in the year 2020 E.C
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Development Goals & objectives
 To bring sustainable Economic Growth of 10% each year for the next 20 years
 Increase the level of per capita income to about $10,000 in 20 years
 To raise the level of Food self sufficiency to 100% in 10 years
 Reduce the level of poverty by 80% in 15 years & eradicate it in 20 years
 To achieve Educational enrollment as follows
- Primary cycle to 100% in 5 Years
- Secondary cycle to 100% in 10 years
- Tertiary to 80% in 20 years
 To build a healthy society by full health service coverage in 15 years.
 Reduce the level of unemployment by 80% in 15 years
• To build strong political & Democratic society in 10 year, & bring
national consensus on socio, economic, & foreign affairs in 15 years
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Programs
Accelerated Agricultural Development program
Irrigation & Canal Development programs in major River Drainages
Mechanized farm development program
Diversified Agricultural production & marketing programs
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Projects
Large scale Irrigation project on the Omo River
Rehabilitation project on Awash Drainage Irrigation schemes
Gibe 1,2, & 3 Irrigation projects
Irrigation project on the Beles Hydro Electric Drainage
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• Infrastructural service development
• Acquisition of materials & labor for construction
• Employee skill development tasks
• Stage 1 construction Activities in the Area
Tasks
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CHAPTER - 2
THE PROJECT CYCLE:
MEANING AND MODELS

2.1. Project Cycle: Meaning
“What is a project cycle and why?” To answer these basic questions,
we need to see and understand the general features of project
planning and the identifiable tasks therein. In this regard, there
tends to be a natural sequence in the way projects are planned and
carried out. Before any project is actually realized, it goes through
various planning phases. Therefore, the different phases through
which a project passes constitute what is often called “the project
cycle”. The main features of this process are information gathering,
analysis, and decision-making.
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Chapter 2: The Project Cycle: Meaning And Models - 2.1 - Project Cycle: Meaning

Actually, the division into stages is artificial; but it helps us to understand that project planning,
though a continuous process over time, has distinct phases and stages. And therefore,
throughout the project cycle, the primary preoccupation of the analyst is to consider
alternatives, evaluate them, and to make decisions as to which of them should be advanced to
the next stage in the planning process.
The project cycle considers various stages in which each stage not only is grown out of the
proceeding ones but also leads into the subsequent ones. The planning process does not
contain such a strict sequence of events since all the aspects of the project have to be
considered simultaneously and, if necessary, adjusted to one another. Therefore, a project
cycle is a self-renewing cycle in that new projects may grow out of the old ones in a
continuous process and self-sustaining cycle of activity.
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Regarding the classification of the aspects for the purpose of project analysis, there are many
equally valid ways in which the project cycle may be divided and the identifiable stages may
be described.
There are alternative models that deal with the project cycle. However, in this chapter, more
emphasis will be given to the two basic Models that are widely accepted as a model of project
cycle by institutions, analysts, and mostly dealt in academic literatures. These are: “The
Baum’s Cycle (also called the World Bank Project Cycle)” and “The UNIDO Project Cycle”. In
addition to these two, a third model developed by Development Projects Studies Authority
in Ethiopia (called “The DEPSA’s Model”), which is more or less identical with the UNIDO
cycle, will be briefly discussed.
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2.2. The Baum Cycle (World Bank Project Cycle)
A project with the characteristics already outlined above typically run through several definite sequence,
which some writers and institutions have called “a project cycle”. In this regard, the first basic model of a
project cycle developed by Warren C. Baum in 1970. It was by then adopted by the World Bank as a project
cycle. Initially, this model had recognized only four main stages in the project cycle, namely:
1. Identification
2. Preparation
3. Appraisal and Selection
4. Implementation
Later in 1978, the author has added additional two stages called “Negotiation” and Evaluation”. In this version
of the Baum model, negotiation comes after projects pass the appraisal process. It is after appropriate
negotiations that projects become implementation entity. And then, projects that are implemented will be the
concern for evaluation, which usually closes the cycle as it gives rise to the identification of new projects. This
model, therefore, includes a total of six identifiable stages in the project cycle. The World Bank accepted the
amendment and hence, this new version has been in use since then. Thus, each of Baum’s main stages is
discussed briefly below:
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Chapter 2: The Project Cycle: Meaning And Models - 2.2. The Baum Cycle (World Bank Project Cycle)

2.2.1. Identification
The first stage in the project cycle and in the planning process is to find potential projects. The sources of projects may be one
or more of the following:
 Some may be “resource based” and stem from the opportunity to make profitable use of available resources.
 Some projects may be “market based” arising from an identified demand in home or overseas markets.
 Others may be “need-based” where the purpose is to try to make available to all people in an area of minimal amounts of
certain basic material requirements and services.
 Well-informed “technical specialists” and “local leaders” are also common sources of projects. Technical specialists
could identify many areas where they feel new investments might be profitable, while local leaders may have suggestions
about where investments might be carried out.
 Ideas for new projects also come from “proposals to extend and/or expand existing programs and projects” as well as
from identifying technological alternatives.
In general, most projects start as an elementary idea. Eventually, some simple ideas are elaborated into a form to which the
title “project” can be formally applied.
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2.2.2. Preparation
Once projects have been identified, there begins a process of progressively more detailed preparation and
analysis of project plans. At this stage, the project is being seriously considered as a definite investment action.
Project preparation, (also called project formulation), involves pre-feasibility and feasibility studies and covers
the establishment of commercial, technical, institutional, financial, and socio- economic feasibility. Decisions
have to be made on the scope of the project, location and site, soil and hydrological requirements, project size
(farm or factory size), etc.
Resource base investigations are undertaken and alternative forms of projects are explored. Complete
technical specifications of distinct proposals accompanied by full details of financial and economic costs and
benefits are the out come of the project preparation stage. The project now exists as a set of concrete
proposals. Practically, project design and formulation is an area in which local and international consultants are
very active, especially for big projects that cover large areas and have big budgets.
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2.2.3. Appraisal and Selection
After a project has been prepared, it is generally appropriate for a critical review or to conduct
an independent appraisal. This provides an opportunity to re-examine every aspect of the
project plan and determine whether the proposal is appropriate and sound or not before large
sums are committed. Generally, internal government staffs only are used for this work and not
consultants and projects are appraised both in the field and at the desk level. Appraisals
should cover at least seven aspects of a project, each of which must have been given special
consideration during the project preparation phase:
a) Technical: here the appraisers concentrate in verifying whether what is proposed will
work in the way suggested or not.
b) Financial: the appraisers try to see if the requirements for money needed by the project
have been calculated properly, their sources are all identified, and reasonable plans for
their repayment are made where necessary.
c) Commercial: the way the necessary inputs for the project are conceived to be supplied is
examined and the arrangements for the disposal of the products are verified.
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d) Incentive: the appraisers see to it whether things are arranged in such a way that all those
whose participation is required will find it in their interest to take part in the project, at
least to the extent envisaged in the plan.
e) Economic: the appraisers here try to see whether what is proposed is good from the
viewpoint of the national economic development interest, all project effects (positive as
well as negative) are taken into account, and check if all are correctly valued.
f) Managerial: this aspect of the appraisal examines if the capacity exists for operating the
project and see if those responsible ones can operate it satisfactorily. Moreover, it tries to
see if the responsible are given sufficient power and scope to do what is required.
g) Organizational: the appraisers examine the project if it is organized internally and
externally into units, contract, policy, institution, etc. so as to allow the proposals to be
carried out properly and to allow for change as the project develops.
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The appraisal process builds on the project plan but may involve new information if the
appraisal team feels that some of the data used at preparation or some assumptions are faulty.
The implications of the project on the society and the environment are also more thoroughly
investigated and documented. Similarly, the technical design, financial measures, commercial
aspects, incentives, and economic parameters are thoroughly scrutinized. These issues are the
subjects of specialized appraisal report. On the basis of an appraisal report, decisions are made
about whether to go ahead with the project or not. The appraisal may also change the project
plan or develop a new plan, that is, comments made at the appraisal stage frequently give rise
to alterations in the project plan (project proposal).
After appraisal, the viable project proposals are chosen for implementation on the basis of the
priorities of the stakeholders and the available resources.
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2.2.4. Negotiation and Financing
Once the project to be implemented is agreed on, for donor funded projects,
discussions are held on funding and associated aspects of funding such as
conditions for grants, repayment period, interest rates on loans, flow of funds,
contributions from stakeholders, and whether there is co-financing or not. This
culminates into an “Agreement Document” for the project, which binds all the
parties involved during implementation of the project.
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2.2.5. Implementation
The objective of any effort in project planning and analysis clearly is to have a project that
can be implemented to the benefit of the society. Thus, implementation is, perhaps, the most
important part of the project cycle. In this stage, funds are actually distributed to get the
project started and keep running. A major priority during this stage is to ensure that the
project is carried out in the way and within the period that was planned. Problems
frequently occur when the economic and financial environment at implementation
differs from the situation expected during appraisal.
Frequently, original proposals are modified, though usually only with difficulty, because of
the need to get agreement between the parties involved. It is during implementation that
many of the real problems of projects are first identified. Because of this, the feedback
effects on the discovery and design of new projects and also the deficiencies in the
capabilities of the project actor can be revealed. Therefore, to allow the management to
become aware of the difficulties that might arise, recording, monitoring, and progress
reporting are important activities during the implementation stage.
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Some of the aspects of implementation that are of particular relevance to project planning
and analysis are the following:
1. The first is that, the better and more realistic a project plan is, the more likely it is that
the plan can be carried out and the expected benefits realized. This emphasizes once
again the need for careful attention to each aspect of project planning and analysis.
2. The second is that, project implementation must be flexible. Circumstances will
change and project managers must be able to respond intelligently to these changes.
The common ones are: technical changes (soils, water logging, and nitrogen
application); price changes; economic policy and environmental changes; political
changes, etc. And these all will alter the ways in which projects should be
implemented.
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2.2.6. Evaluation
The final phase in the project cycle is evaluation. Once a project has been carried out, it is
often useful, (though not always done), to look back over what took place, to compare actual
progress with the plans, and to judge whether the decisions and actions taken were
responsible and useful. The extent to which the objectives of a project are being realized
provides the primary criterion for an evaluation. The analyst looks systematically at the
elements of success and failure in the project experience to learn how better to plan for the
future.
Evaluation is not limited only to completed projects. It is a most important managerial tool in
on-going projects and rather, formalized evaluation may take place at several times in the life
of a project. Evaluation may be undertaken when the project is in trouble as the first step in a
re-planning effort. Careful evaluation should precede any effort to plan for new projects and
it is also needed to follow-up the progress of projects. And, finally, evaluation should be
undertaken when a project is terminated or is well into routine operation.
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Different groups or units may do the evaluation of projects. Among others,
 Project’s management unit often continuously evaluates its experience as
implementation proceeds.
 The sponsoring agency, perhaps, the operating ministry, the planning agency, or an
external assistance agency may undertake evaluation.
In large and innovative projects, the project’s administrative structure may provide a
separate evaluation unit responsible for monitoring the projects implementation and for
bringing problems to the attention of the projects’ management. Evaluation can help not
only in the management of the project after the initial phase, but also help in the planning
of future projects. Experience with one project can give rise to new ideas for extension of
the project, repetition, the need for “vertically” associating projects that supply inputs to or
process products from this project, and other ideas which become the seeds to generate
new project proposals.
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2.3. UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO) - Project Cycle
The UNIDO has established a project cycle comprising the following three distinct phases:
1. The pre-investment phase 2. The investment phase 3 . The operating phase
Each of these three phases are divided into different stages. In this regard, increasing
importance should be attached to the pre-investment phase as a central point of attention,
because the success or failure of an industrial project ultimately depends on the marketing,
technical, financial, and economic findings and their interpretations, especially in the
feasibility study. To reduce wastage of scarce resources, a clear comprehension of the
sequence of events is required when developing an investment proposal from the
conceptual stage by way of active promotional efforts to the operational stage.
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Chapter 2: The Project Cycle: Meaning And Models - 2.3. United Nations Industrial Development Organization (UNIDO) - Project Cycle

2.3.1 The Pre – investment Phase
According to the UNIDO Manual, the pre-investment phase comprises several stages:
 Identification of investment opportunities (opportunity studies),
 Analysis of project alternatives and preliminary project selection as well as project
preparation (pre-feasibility and feasibility studies), and
 Project appraisal and investment decision (specialized appraisal reports)
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A. Identification of investment opportunities and Pre-feasibility study
Industrial project development starts with the identification of the project idea, a idea of
possibility/desire to produce specific product(s) or to utilize specific resources. Project ideas
may arise from studies of the product-consumption pattern of the country, market studies,
surveys of existing industrial establishments, import schedules, internal resources, geological
surveys, industrial linkages, sectoral and industry analyses, development plans, export
possibilities, experience of other countries, increasing demand for manufactured inputs for
different sectors, studies of technology and development literature etc. All ideas for projects
are valuable and may prove to be the beginning of development.
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The identification of a project idea is followed by a preliminary selection stage. The objective
at this stage is to decide whether a project idea should be studied in detail and what the scope
should be of further studies The findings at this stage are embodied in a pre-feasibility study
(opportunity study)
Opportunity studies are rather sketch in nature and rely more on aggregate estimates than on
detailed analysis. Opportunity studies could be general or specific.
General opportunity studies (“sector approach”) could be area studies designed to
identify opportunities on a given area (Administrative province, backward region); industry
studies to identify opportunities in delimited industrial branch; and resource-based studies
to reveal opportunities based on the utilization of natural, agricultural, or industrial
resources.
Specific project opportunity studies (enterprise approach) are seen in the form of
products with potential for domestic manufacture. A specific project opportunity study may
be defined as the transformation of a project idea into a broad investment proposition.49

A project opportunity study should not involve any substantial cost in its
preparation, as it is intended primarily to highlight the principal investment
aspects of a possible industrial proposition. The purpose of opportunity study is
to arrive at a quick and inexpensive determination of salient facts of an
investment possibility.
The pre-feasibility study is carried out by an investor himself or by an
investment promoter, e.g. a ministry or development agency. It is prepared on the
basis of data that are available in published form or that can be easily collected or
worked out.
If the pre-feasibility study indicates that the proposed project appears to be a
promising one, the decision may be taken to proceed further with the formulation
of the project.
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B. Formulation stage - Feasibility studies
The function of the formulation stage is to study from the technical, economic, financial and
managerial aspects all the alternative ways of accomplishing the objectives of the project
idea, and to present the findings and supporting data in a systematic and logical order. This is
done through complete techno-economic feasibility studies.
The complete feasibility study is the final document in the formulation of a project proposal.
On the basis of this study a decision to implement and finance the project will be taken.
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The feasibility study should contain all technical and economic data that are
essential for the overall economic and social evaluation of a project. The
feasibility study should be so self-contained that on the one hand the evaluator
cannot complain of the lack of data or imperfect analysis and, on the other, the
decision maker cannot find anything hidden or missing. Accumulation and
presentation of all technical and economic facts in a true and complete picture
should be the main objective of this study.
The financial part of the study covers the scope of the investment, including the
net working capital, the production and marketing costs, sales revenue, and the
return on capital invested. Final estimates on investment and production costs
and its subsequent calculations of financial and economic profitability are only
meaningful if the scope of the project is defined unequivocally in order not to
omit any essential part and its related cost.
52

There is no uniform approach or pattern to cover all industrial projects of
whatever type, size or category. The emphasis on the components varies from
project to project. For most industrial projects, however, there is a broad format
of general application – bearing in mind that the larger the project the more
complex will be the information required.
The sensitive parameters such as the size of the market, the production program,
or the mechanical equipment selected should be examined more closely. A
feasibility study should be carried out only if the necessary financing facilities,
as determined by the studies, can be identified with a faire degree of accuracy.
There would be little sense in a feasibility study without the reliable assurance
that, in the event of positive study findings, funds could be made available. For
that reason, possible project financing must be considered as early as the
feasibility study stage, because financing conditions have a direct effect on total
costs and, thus, on the financial feasibility of the project. 53

C. Appraisal Report
When a feasibility study is completed, the various parties will carry out their own judgment
of the investment project in accordance with their individual objectives and evaluation of
expected risks, costs, and gains. Large investment and development finance institutions
have a formalized project appraisal procedure and usually prepare appraisal reports. This is
the reason why project appraisal should be considered an independent stage of the pre-
investment phase, marked by the final investment and financing decisions taken by the
project promoters.
54

Project appraisal as carried out by financial institutions concentrates on the
health of the company to be financed, the returns to be obtained by equity
holders and the protection of its creditors. The techniques applied to appraise
projects in line with these criteria center around technical, commercial,
market, managerial, organizational, and financial and possibly also economic
aspects.
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2.3.2 The investment/implementation Phase
The investment phase can be divided into the following stages:
 Establishing the legal, financial, and organizational framework.
 Tendering, evaluation of tenders, and negotiations.
 Technology acquisition and transfer.
 Detailed engineering design and contract, including tendering& negotiations.
 Acquisition of land, construction work and installation.
 Pre-production marketing, including the securing of supplies and suppliers and setting up
the administration of the firm.
 Recruitment and training of personnel.
 Plant commissioning and start-up.
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Detailed engineering design comprises preparatory work for site preparation, the final
selection of construction planning and time scheduling of factory construction, as well as the
preparation of flow charts, scale drawing, and a wide variety of layouts.
During the stage of tendering and evaluation of bids, it is especially important to receive
comprehensive tenders for goods and services for the project from a sufficiently large
number of national and international suppliers of proven efficiency and with good delivery
capacity.
57

Negotiations and contracting are concerned with the legal obligations arising from the
acquisition of technology the construction of buildings, the purchase and installation of
machinery and equipment and financing. This stage covers the signing of contracts
between the investor or entrepreneur, on the one hand, and the financing institutions,
consultants, architects and suppliers of raw materials and required inputs, on the other.
The construction stage involves site preparation, construction of buildings and other civil
works, together with the erection and installation of equipment in accordance with proper
programming and scheduling.
58

The personnel recruitment and training stage, which should proceed simultaneously with the
construction stage, may prove very crucial for the expected growth of productivity and
efficiency in plant operations.
Of particular relevance is the timely initiation of marketing arrangements to prepare the
market for the new products (pre-production marketing) and secure critical supplies (supply
marketing).
Plant commissioning and start up is usually a brief but technically critical span in project
implementation. It links the proceeding construction phase and the following operational
(production) phase.
In general, it is to be noted that in the pre-investment phase, the quality and dependability of
the project are more important than the time factor, while in the investment phase, the time
factor is more critical in order to keep the project within the forecast made in the feasibility
study.
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2.3.3 - The Operating Phase
The problem of the operating phase needs to be considered from both a short- and a long-
term viewpoint.
 The short-term view relates to the initial after commencement of production when a
number of problems may arise concerning such matters as the applications of production
techniques, operation of equipment, or inadequate labor productivity owing to lack of
qualified staff and labor. Most of these problems have their origin in the implementation
phase.
 The long-term view relates to chosen strategies and the associated production and
marketing costs as well as sales revenues. These have a direct relationship with the
projections made at the pre-investment phase. If such strategies and projection prove
faulty, any remedial measures will not only be difficult but may prove highly expensive.
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2.4. The DEPSA’s Project Cycle
The given outline of the investment and operating phases of an industrial
project is undoubtedly an oversimplification for many projects, and, in fact,
certain other aspects may be revealed that even greater short or long term
impacts.
There are various ways in which the project cycle may be viewed and portrayed
depending on the purpose, emphasis, and detail required to illustrate.
According to the Guidelines to project planning in Ethiopia (1990) of
Development Project Studies Authority (DEPSA), the project cycle comprises
three major phases.
•Pre-investment,
•Investment, and
•Operating phases
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Chapter 2: The Project Cycle: Meaning And Models - 2.4. The DEPSA’s Project Cycle

Each of these three phases may be divided into stages. The Guidelines has divided the Project
cycle into six stages as follows:
1. Identification
2. Preparation
3. Appraisal/decision
4. Implementation
5. Operation
6. Ex-post evaluation
The pre-investment phase consists of the first three stages, the investment phase includes the
fourth stage, and the operation phase covers the last two stages. The project cycle means the
various stages of information gathering and decision-making, which take place between a
project’s inception and completion.
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In reality, these are somewhat artificial, but do serve to emphasize the need to think of project
planning as a process of decision-making taking place over time. Broadly speaking, what is
important about this process is that it should begin with the identification of a number of
alternatives, suing existing information and gathering new data in such a way as to limit
alternatives under consideration to those few, which are most promising.
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CHAPTER - 3
PROJECT
IDENTIFICATION

CHAPTER – 3 - PROJECT IDENTIFICATION
Introduction
3.1 – Pre Identification
3.2 – Project Identification
3.3 – Source of project ideas
3.4 – Activities during Identification phase

Introduction
Project identification is the first step in the strategic planning process. Project identification
is the process of searching potential projects that could feasibly generate benefits in excess
of costs accruing to the society and contributing towards the attainment of specified
development objectives.
All projects begin as an idea – a need or opportunity that is assessed, analyzed, and
ultimately developed into a project which is managed through the project life cycle. It is
during this process that we begin answering the critical question ‘Are we doing the
right project?’
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Chapter 3: Project Identification - Introduction

Who Identify Projects?
The following groups may identify projects:
 Small producers organizations/ producers’ unions
 Large scale individual private sector producers
 Product marketing organizations
 Private sector companies (local /multinational)
 State owned enterprises & organizations
 Government ministries, authorities, agencies, and commissions
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 Development banks, local as well as foreign, and international development agencies
 Other aid agencies and self aid associations
 Local governments; state, regional, and sub-regional authorities
 Local political & pressure groups such as oppositional parties
 NGO's: local or international
 Credit institutions & cooperatives
 Credit unions, saving and loan associations, saving banks, commercial banks, etc.
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3.1. Pre–Identification
“Pre-Identification” is an important start to project identification. The pre-
identification stage involves surveying, reviewing, inventorying, and analysis of
strategies and policies, data about natural resources, and socio-economic
variables. This stage is a synonym to opportunity study under the UNIDO cycle,
which is a very important phase in project planning. Unfortunately, this aspect
of planning is either totally ignored or for which inadequate resources are
provided in most developing countries.
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Chapter 3: Project Identification - 3.1 – Pre Identification

There are a number of reasons for ignoring this aspect in project planning:
 First and, perhaps, most important of all is the sheer ignorance: to learn its importance and
to identify ways of carrying out surveys; inventorying of resources; collection, organization,
and integrating data; and analyzing the information cost-effectively and generate useful
information.
 Secondly, such work tends to be regarded as an extensive task resulting in excessive
overhead costs.
 Thirdly, much of the work has tended to be time consuming and hence, people lack the
initiatives to start it, unable to foresee and measure its benefits, and not patient to wait for
results.
70

Now-a-days, modern technology is transforming the survey methods and the
means for carrying out synthesis and analysis, speeding up some processes,
reducing the costs of surveys, and providing new ways of looking at things.
Identifying existing gaps, generating useful information, accomplishing analysis
of data, and throwing up ideas for possible projects is a pre-requisite to sound
project formulation. In addition, project identification must be carried out within
national, regional, and sectoral development framework and policies. Otherwise,
much time and effort might be wasted in the process of identifying and preparing
projects that might be inconsistent with existing policies, strategies, and priorities
and hence, might turn out to be unfeasible by the end of the day.
Thus, those who are responsible for identifying projects need to be aware of
accepted strategies and policies as well as be in a position to feed back
information to those who are responsible for formulating policies. 71

3.2. Project Identification
The search for promising project ideas is the first step towards establishing a successful
venture. The key to success lays in getting into the right business at the right time. Project
identification is the process of finding projects that could contribute towards achieving
specified development objectives.
Importance of Project Identification
During the Project Identification and Design Phase, time/resources/effort are invested to
define needs, explore opportunities, analyze the project environment, cultivate relationships,
build trust, develop partnerships and design alternatives for project design. The decisions
made during the Project Identification and Design Phase connect to existing strategies and
determine the overall framework within which the project will subsequently evolve.
One of the reasons the Project Identification and Design Phase is of such great importance is
because it provides the most cost-effective opportunity to answer fundamental questions
about the project parameters.
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Chapter 3: Project Identification - 3.2 – Project Identification

As illustrated in Figure below, the easiest time to make changes to a project is at the
beginning of its life. If a project team wants to change the objectives, the calendar or the
budget, it is easier to do this BEFORE the project is underway (spending money, using up
the calendar and investing resources to complete its work).
As the project moves forward in its life cycle there will be other opportunities to revisit
questions of scope/quality, budget/resources and time/calendar. However, once project
implementation begins (staff are hired, activities begin, budgets are allocated, and
deliverables start to become tangible) the cost of changing these project parameters
increases and these changes, in turn, become much harder to manage. Therefore, it is
important that the project manager gather and process data to inform these decisions during
the Project Identification and Design Phase and that the general approach to this phase is
one that is open to creative exploration, brainstorming, visioning and debating of strategy.
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3.3. Source of project ideas
In general, one can distinguish two levels where project ideas are born: The macro- level
and the micro- level.
3.3.1. Macro Source of Project Ideas
Among the various institutions and sources, the following are the most important ones in
developing countries at the macro level:
 Federal/Central or Regional Governments
 Bilateral and Multilateral Agreement
 International Development Agencies
74

In general, in developing countries, the government remains to be the major source of
project for the reason that it:
A. Has the necessary resource for the task
B. Has access to data & information
C. Has the required facilities to conduct survey, studies, and reviews
D. Is fully familiar with the development objective priorities and strategies, i.e. the
development goals, priorities, and strategies often are not clear to private groups.
75

Specifically, project ideas emerge from the following macro sources:
 National policies, strategies, and priorities as may be enunciated (or articulated) by
government from time to time
 National, sectoral, sub-sectoral, or regional plans and strategies supplemented by special
studies, sometimes called opportunity studies, conducted with the explicit aim of
translating national, sectoral, sub-sectoral, and regional programs into specific projects
 General surveys, resource potential surveys, regional studies, master plan and statistical
publications, which indicate directly or indirectly investment opportunities
 Constraints on the development process due to shortage of essential infrastructure
facilities, problems in the balance of payments, etc.
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 Government decisions to correct social and regional inequalities or to satisfy basic needs of
the people through development projects
 A possible external threat that necessitates projects aiming at achieving, for example, self-
sufficiency in basic material, energy, transportation, etc.
 Unusual events such as droughts, floods, earth -quakes, hostilities, etc
 Government decisions to create project-implementing capacity in such areas as
construction, etc.
 At the macro – level, project ideas can also originate from multilateral or bilateral
agreements, development agencies, and as a result of regional or international agreements
in which the country participate
 In addition, inspirations of individuals and institutions, workshops, and development
experiences of other nations may point to some interesting project ideas in the local context
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3.3 - Source of Project Ideas
At the micro – level, many institutions/entities could generate project ideas, among which the
following are the main ones:
A.Private and Public Enterprise
B.Local groups or Organizations
C.Consumer groups and Associations
D.Financial Institutions /Credit Associations
E.Cooperatives, Farmers’ Unions, etc.
F.New Technology Suppliers
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Chapter 3: Project Identification - 3.3 – Source of project idea

There are quite diverse micro-sources of project ideas that emanate from:
The identification of unsatisfied demand or needs
The existence of unused or underutilized natural or human resources and the perception of
opportunities for their efficient use
The need to remove shortages in essential materials, services, or facilities that constrain
development efforts
The initiative of private or public enterprises in response to incentives provided by the
government
The necessity to complement or expand investments previously undertaken
The desire of local groups or organizations to enhance their economic status and improve
their welfare
Analyze the performance of existing industries
Examine the inputs and outputs of various industries 79

Review imports and exports
Look at the suggestions of financial institutions and development agencies
Investigate local materials and resources
Analyze Economic and Social Trends
Study new Technological Developments
Draw clues from consumptions abroad
Explore the possibility of reviving sick units
Attend Trade-fairs (Trade Promotion)
Project proposals may also come from multinational firms, in response to government
investment incentives or else when such firms consider production within the country is a
better way to secure a substantial share of the domestic market for their products.
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While there are a variety of activities that can be completed during this phase, in general terms
the work completed during this phase can be rolled up into three overarching categories:
A. Collecting data;
B. Analyzing data; and
C. Identifying the project intervention logic.
A. Collecting Data
The first step in determining whether you are “doing the right project” is to collect data. The
purpose of this data collection is to broadly explore a wide number and variety of issues,
providing information which, when analyzed, will inform priorities and identify interventions
that will address the challenges in a target area.
3.4 - Activities during Identification phase
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Chapter 3: Project Identification - 3.4 – Activities during Identification phase

Data collection to identifying Project Needs
As part of this broad exploration process, the project team will need to collect data that
identifies community needs in the potential intervention area. However, the data should not be
limited solely to examining issues related to community needs. Other topics to explore should
include the present state of service provision, the existing strengths within the community, an
examination of stakeholders present in the intervention area and more.
One of the challenges when collecting data is that the process can be highly subjective. People
(as individuals and as members of social and interest groups) can have radically different ideas
about what should be defined as a ‘need’ and what should not. As a result, the need definition
process in a single location can result in significantly different results depending on who is
consulted and what approach is employed.
82

An approach to limit the subjectivity of problem definition and to work through differing
perspectives of “real” needs is through the triangulation of assessment data. Triangulation is a
powerful technique that facilitates validation of data through cross verification from more
than two sources. For example, if a study uses only one data collection method/perspective,
the temptation to believe in the findings is strong. If an investigator uses two
methods/perspectives, the results may well clash. However, by using three
methods/perspectives to answer a question, the hope is that the results of at least two of the
three will reinforce each other. On the other hand, if three conflicting answers are produced,
the investigator knows that the question needs to be reframed, methods reconsidered, or both.
At its core, triangulating approaches increases the confidence and validity of study results.
By combining multiple perspectives and methods, researchers can hope to overcome the
weakness or intrinsic biases and the problems that come from single method or a single
observer perspective – thereby increasing the credibility and validity of results. 83

One way to triangulate the process of needs identification is to use an approach introduced by
American sociologist, Jonathan Bradshaw, who believed that needs assessments should explore
four types of need in a community and that the presence of all types of needs would indicate a
“real” need.
Figure 13: Triangulating Needs
Using Bradshaw's Classification 84

As illustrated in last Figure Bradshaw’s four categories of social need included:
•Normative needs - compare the current situation to a set of professional or expert
standards. Often, these needs are identified by a professional or expert – physicians,
engineers, public health professionals, etc. For example, a sanitation expert might
indicate that rates of fecal matter in household water are above the standard
established by the ministry of health.
•Comparative needs – compare the current situation with the situation of others. One
of the most common uses of this approach has been the comparison of people’s
access to resources. This approach recognizes that need is a relative concept and so
any debate about need must take place in the context of a comparison between
people. For example, members of fishing cooperative may observe that the fish stocks
are higher in a nearby town with sanitation facilities.
85

•Felt needs – focus on the thoughts and dreams of the community itself. What the
people themselves believe should be the priority. A felt need is likely to be
subjective and could be better described as a ‘want’. Felt need is necessarily
affected by the knowledge and expectations of the individual, which may be
unrealistic and/or unaffordable. For example, mothers might express displeasure
with the mess and sickly conditions that result from lack of hygienic sanitation –
but might be unaware of alternatives that exist to change the current state.
•Expressed needs – are inferred by observation of the community’s actions. For
example, if there are long waiting lists for a service, then there is an indication
that the community prioritizes that need. At times, the expressed needs are
consistent with what the community has expressed (their felt need). However, at
times, these needs might not be concretely identified publicly (as a felt need) as a
result of political/cultural pressures or because nobody has ever asked. For
example, families might not have expressed their displeasure with the lack of
hygienic sanitation verbally, but are now beginning to identify locations where
they dispose of their household refuse (garbage pits). 86

Types of Data
The data collection process, however, is not limited solely to defining needs. To
fully understand the project context, the project team will need to collect data
regarding a number of areas related to the project environment, including, but not
limited to data related to:
•Project stakeholders
•Community strengths, opportunities and vision
•Successes and capacity
•Biological/physical environment
•Organizational networks
•Infrastructure
•Legal, policy and political institutions
•Social and cultural conditions
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In each of these areas, there are three types of data that may be collected:
•Secondary data – Information available through published and unpublished sources,
including literature reviews, surveys, evaluations, assessments, reports from NGOs, UN
agencies, international organizations and government offices. Secondary data can be very cost
effective and should be the first sources accessed for assessment data. Unfortunately, access
to secondary documents is often limited and care is needed when interpreting secondary data.
Sometimes selective primary data collection will be necessary to verify the reliability and
relevance of secondary data to the specific context, or to obtain deeper, more specific
information.
•Primary quantitative data – In situations where secondary sources do not provide
sufficient assessment information, organizations can collect data via quantitative assessment
approaches (surveys, questionnaires, tests, standardized observation instruments) that focus
on information that can be counted and subjected to statistical analysis.
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Secondary Data Primary Quantitative Data Primary Qualitative Data
•Literature review
•Records review
•Existing statistics
•Indices
•Government
documents
•Other NGOs’
Documents
•Knowledge, practice and
coverage surveys
•Household surveys
•Standardized tests and surveys
•Standardized observation
instruments
•Anthropometric measurements
•Brainstorming
•Affinity diagrams
•Focus groups
•Historical narratives
•Timelines
•Empowerment circles
•Visioning
•Locality mapping
•Semi-structured interviews
•Key informant interviews
.Ranking exercises
Tools for Data Collection
89

Care should be used to select the most appropriate (and cost-effective) tools and approaches to
collect information. Conventional wisdom sometimes indicates that some data collection
approaches are better than others. For example, primary data is often perceived as preferable
to secondary data. However, in practice it is clear that there is a place for multiple data
sources and mixed methods in almost every assessment process.
While primary data collection can be specifically targeted to the precise needs of a proposed
project, collecting primary data can also take a lot of time and money and involve many
people. For this reason, many organizations recommend that the first round of assessment rely
on secondary data, and that subsequent rounds use primary data collection approaches to fill
in the gaps which are not covered by secondary data.
Furthermore, while perceptions often suggest that qualitative data has less accuracy than
quantitative data, quantitative approaches often run the risk of raising expectations among
local communities and partners, and can be especially costly. Qualitative data assessments, in
turn, can be rigorous if planned and implemented with expertise, and can uncover revealing
insights into the reasons behind the trends that are identified through secondary and
quantitative approaches. 90

A combination of secondary and primary methods (including both qualitative
and quantitative tools) in the same data collection process can provide a more
comprehensive, integrated picture from which to make decisions. And, in the
end, it is all about making decisions.
Before starting data collection, one needs to ask ‘How will this data be used?’ If
there is no acceptable answer to the question, do not proceed. Time and
resources are too valuable to be wasted in useless exercises. Regrettably, many
assessment exercises have collected extensive data which have produced large
documents that often sit on the shelf “collecting dust.” These documents are a
poor use of resources, can be an intrusion on the lives of stakeholders, and
create false expectations that could damage important partner and/or beneficiary
relationships.
91

B. Analyzing Data
While the purpose of data collection is to broadly explore a wide number and variety of
issues, the purpose of data analysis is to order and organize the raw data so that useful
information can be extracted from it. More specifically, development projects tend to focus on
two broad categories of analysis:
1.Current State Analysis.
2.Future State Analysis.
Current State Analysis
Current state analysis is the starting point for good project design. It is the process of
understanding the status, condition, trends and key issues affecting people and people’s
livelihoods, ecosystems or institutions in a given geographic context.
A variety of tools exist to conduct data analysis. Each is designed for a specific purpose and
the project team should select their techniques/tools based on the intended objective of the
analysis exercise.
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Objective Tool
Organize information Vulnerability matrices
Prioritize assessment data Mind mapping
Affinity diagrams
Ranking exercises and matrices
Identify current state of service provision Gap assessment analysis
Mapping
Promote critical thinking by project
stakeholders
Group discussions
Focus Groups
Workshops
Investigate cause and effect relationships Force field analysis
Problem trees
Analysis Tools
93

Each of the analysis tools in last Figure is important and all of them can be used to process
the information gathered through data collection process. For example, if the task at hand aims
to organize or classify assessment information, a different analysis tool will be required than
would be the case if the objective were to promote more critical thinking by project
stakeholders.
In practice, however, it is unlikely that a project team will use all of the analysis tools in each
and every project it implements. While it is not within the scope of the PMD Pro to examine
all of the analysis techniques and tools in depth, project managers should feel comfortable:
•Identifying the different tools that exist that can be used to accomplish the different
objectives that are a part of problem analysis;
•Choosing the best tool for each problem analysis objective;
•Developing (over time) the skills and behaviors needed to use the different problem analysis
tools with a variety of groups.
94

Future State Analysis
Once current state analysis is complete, the next step will be to analyze the future
state of the project. This involves asking questions about how the project will
improve the livelihoods, ecosystems or institutions of the project participants.
Future state analysis helps to develop a picture or description of where the project
will lead:
•What will be different in the future if this project is successful at meeting
expectations?
•What will project beneficiaries be able to do that you can’t do now?
•What social change will be enabled?
95

C. Identifying the Project Intervention Logic
Now that the data collection and data analysis processes are complete, the next step is to begin
to identify the project logic. One of the principle tools used to establish the logic of
development projects is the logical framework (logframe) matrix. The logical framework is an
analytical tool used to plan, monitor and evaluate projects. It derives its name from the logical
linkages set out by the planner(s) to connect a project’s means with its ends.
Interpreting the Logical Framework Matrix
The logical framework matrix identifies and communicates the logical relationships in a project
by tracking the vertical and horizontal reasoning that connects the levels of the matrix. The
relationship between the elements on each level of the logical framework illustrates the vertical
logic that will result in the achievement of the project’s ultimate goal. 96

While there are many versions of project logical frameworks, the PMD Pro subscribes to a
four-level logical framework model that includes the following deliverables:
1.Activities are actions taken through which inputs (financial, human, technical, material and
time resources) are mobilized to produce the deliverables (training, constructing, etc.) of a
project for which staff can be held accountable and which, when aggregated, produce outputs.
2.Outputs are real deliverables resulting from project activities. They include products, goods,
services and changes (e.g. people trained with increased knowledge and skill; quality roads
built) that aggregate and contribute to outcomes.
3.Outcomes are what the project expects to accomplish at the beneficiary level (e.g. use of
knowledge and skills in actual practice over time; transportation of goods on constructed roads
over time) and contribute to population-level changes (reduced malnutrition, improved
incomes, improved yields, etc.) that aggregate and help bring about accomplishment of goals
and impact over time.
4.Goals are the highest level desired end results or impacts (transformation, sustainability,
livelihood, well-being etc.) to which the project contributes (the ultimate objective in many
logical frameworks).
97

Once a list of project ideas has been put forward, the first step is to select one or more of
them as potentially promising. This, calls for a quick preliminary screening by experienced
professionals who could also modify some of the proposals.
During the preliminary screening to eliminate ideas, which are not promising, it is required
to look into the aspects such as:
 Compatibility with the promoter
 Consistency with government priorities
 Availability of inputs
 Adequacy of market
 Reasonableness of costs
 Acceptability of risk level 98
Chapter 3: Project Identification - 3.5. Screening Potentially Promising Ideas

During preliminary selection, the analyst should eliminate project proposals that:
 Are technically unsound and risky;
 Have no market for the output;
 Have inadequate supply of inputs;
 Are very costly in relation to benefits;
 Assume over – ambitious sales and profitability.
As a result of the preliminary screening exercise, a project profile, an opportunity study
report, or an identification study report, as appropriate, is prepared showing which project
alternatives should be rejected and which ones may be advanced to the next stage.
99
Chapter 3: Project Identification - 3.5. Screening Potentially Promising Ideas

PROJECT MANAGEMENT
DISCIPLINES
CHAPTER - 4

Project Management Disciplines
To succeed, project managers in the development sector need to develop an array
of project management disciplines that must be applied through the entire life of
the project.
It explores six discipline areas of project managers in the development sector,
including:
1. Scope Management
2. Time Management
3. Project Resource Management
4. Risk Management
5. Project Justification Management
6. Stakeholder Management

4.1 - Discipline 1: Scope Management
Scope management has two components:
Product scope – What is going to be delivered?
Project scope – How will deliverables will be created and delivered?
Tools for Defining Project Scope
The Work Breakdown Structure is the principle tool that project managers use to
define project scope. The WBS is a hierarchical decomposition of the work of a
project. Put simply, the WBS arranges the project scope in an outline or hierarchy of
‘work packages.’
Scope
Management
Product scope
Project scope
The graphic format
The indented format
Work Breakdown
Structure
102
Chapter 4: Project management discipline - 4.1 – Scope Management

In a WBS, every level item has a unique assigned number so that work can be identified and
tracked over time. A WBS may have varying numbers of decomposition levels, but there is a
general scheme for how to number each level so that tasks are uniquely numbered and
correctly summarized. Below is the general convention for how tasks are decomposed:
 Level 1 – Designated by 1.0. This level is the top level of the WBS and is usually the
project name. All other levels are subordinate to this level.
 Level 2 – Designated by 1.X (e.g., 1.1, 1.2). This level is the summary level.
 Level 3 – Designated by 1.X.X (e.g., 1.1.1, 1.1.2). This third level comprises the
subcomponents to each level 2 summary element. This effort continues down until
progressively subordinate levels are assigned for all work required for the entire project.
If tasks are properly subordinated, most project scheduling tools will automatically number
tasks using the above convention. 103

1. The graphic format provides an easy-to-read visual layout of the
relative levels of the work of a project.
The format of the WBS normally takes assumes one of two styles:
2. The indented format has the advantage of being easier to create and
edit on a computer. It is also an easier format to load into project
management software tools such as Microsoft Project, as well as for
printing reports and computerized monitoring.
WBS is a central tool of project managers in most sectors, it is relatively
unknown in the development sector. As project managers begin to adopt
the WBS as a tool to identify the products/services and work of the project,
there will be a number of questions that will inevitably arise. 104

4.2 - Discipline 2: Time Management
Delivering projects on time is one of the biggest challenges faced in project management. To
successfully manage time, project managers require the ability to develop accurate schedules
and to implement them through the life of the project.
The first step in successful time management is schedule planning. The steps in the schedule
planning process include:
Activity Definition –Comprehensively identifying the activities that need to be performed to
produce the project deliverables.
Activity Sequencing – Identifying the relationships that exist among the various schedule
activities.
Activity Resource Estimating – Allocating the type and quantity of resources
available/required to perform each schedule activity.
Activity Duration Estimating – Estimating the time required to complete project activities.
Schedule Development – Creating a project schedule based on activities, sequences,
durations, resources and schedule constraints.
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Chapter 4: Project management discipline - 4.2 – Time Management

Activity Definition and Sequencing
Starting from the WBS, the project team develops an activity list which
comprehensively records all of the activities within the scope of the project (or within
the scope of a specific work package of the project). Next, the project team develops
a network diagram which graphically represents the sequences, relationships and
dependencies between the WBS’s activities.
Using a Network
Diagram to Sequence
Latrine Construction
Activities
106

Activity Resource Estimating
Once the sequence of activities is identified, it is tempting to move straight to activity
duration estimating. First, however, the important step of estimating resources must
be completed.
In short, resources matter. They are one of the central factors influencing the project
duration estimates. Therefore, resource decisions need to be made before duration
estimates can be made. Decisions relating to the number and quality of resources
committed to an activity, in turn, are contingent on a number of factors, including (but
not limited to) the following:
Time – If there is a very tight timeframe, the project may choose to dedicate high
levels of staff, materials and capital equipment to meet time constraints.
Budget – If money is in short supply, the project might choose to invest in a ‘low cost’
resource mix. For example, more manual workers and less machinery are a
preferable low-cost alternative. 107

Regulations and Organizational Policies – Often projects are constrained by labor
laws and/or internal organizational policies that limit work schedules (hours per day,
days per week, holidays per year, family leave policies). These constraints influence
resource availability and consequently duration estimates.
Other Factors that Influence Resource Availability – A number of other factors
influence resource availability, and thereby will influence activity duration estimates.
Some examples of these factors include:
Weather Constraints
Material Constraints
Logistics Constraints
Human Resources Constraints
108

Activity Duration Estimating
Once resource estimates are complete, the network diagram should be revisited and
duration estimates will be added to all the activities. Returning to the Delta River
Project case study, Figure below provides the finalized network diagram for the latrine
construction component of that project.
Network Diagram for the Delta River Project
Latrines Component 109

Schedule Development
Based on the estimates generated through the previous steps, the project team can now develop a project schedule. Within
the development sector, the preferred tool for project schedule development is the Gantt Chart. A Gantt chart uses bars to
graphically represent the schedule of project activities, including their start date, end date, and their expected durations.
Gantt Chart for Latrines Project (limited build out)
In this example, the work packages, tasks and subtasks are on the y-axis, and the time line is on the x-axis. The
bars show when a task should start and when it will be finished. The outlined boxes provide the summary roll up
schedule for the work package. Darker bars show tasks which have been completed. Light cell bars show
work which still must be done. Note that this Gantt chart is designed to be updated, providing the project team
with a tool not only to indicate what activities are planned for which months, but also providing a visual tool to
track which project activities are completed
110

4.3 - Discipline 3: Project Resource Management
As the name suggests, project resource management is the arrangement and
deployment of resources available to a project. Project resources typically include
finances, supplies and inventory and human resource management etc.
At any given time, a Project Manager must know how to effectively arrange
numerous project resources. The manager must know how to create and stick to a
budget so that funds are allocated where they are needed and effectively organize
workers and project personnel so that the right people are assigned appropriate
tasks. In addition, it is necessary to have an effective deployment and flow of
services, supplies and inventory so that the project has access to what it needs,
when and where it needs it and at the most appropriate price.
111
Chapter 4: Project management discipline - 4.3 – Project Resource Management

Managing Project Finances
To exercise prudent financial management of the project, the Project Manager will need to
develop skills in Developing Budgets
Developing Budgets
A budget is a description of the project’s financial plan that includes a list of project cost
estimates. As is the case for all components of the project plan, the key to accurate budgets
is assuring that they are comprehensive and detailed.
All budget items required to deliver the products and services must be included. As a first
step, the project team needs to identify expenses required to deliver project products and
services. These are expenses related to the direct work of the project; including salaries,
vehicles, materials, supplies, equipment, etc. However, it is important not to stop there but
to remember that a comprehensive budget must anticipate expenses related to the indirect
work of the project.
112

Activity Based Budgeting
Activity based budgeting focuses on identifying costs of activities that take place in every area of a project and
determining how those activities relate to one another – including direct and indirect work.
Activity based budgeting have two requirements:.
1) Develop a complete list of activities during scope planning.
2) Work out what will be needed to achieve each activity and estimate how much each will cost.
Simple Activity Based Budget Example
113

Managing the supply chain
Imagine you are building a house. How would you address the complex challenges related
to managing the flow of the goods, and services between their point of origin and their eventual use
in the construction of the house? How do you plan the purchase of materials, establish delivery
schedules, purchase equipment, identify storage facilities for materials, obtain permits, track the
status of all the materials...the list goes on!
There are three components in supply chain management:
Procurement Management – including the identification of what materials and services are needed,
when they needed, and identifying how it will be acquired and by whom. The procured plan also
needs to be integrated with all of the other elements of the project plan to ensure that all
procurement decisions are aligned with the project’s budget, calendar, quality and risk parameters.
Logistics Management – including planning, implementing and controlling the efficient, cost-
effective flow and storage of raw materials, in-process inventory, finished goods and related
information from point of origin to point of consumption for the purpose of conforming to customer
requirements.
Asset Management – including the systems whereby things that are of value to a project are
monitored, maintained and disposed.
114

Human Resources Management
Human resource management is both an art and a science. The art of human resources management
depends on the interpersonal and leadership skills of the Project Manager. Can the project manager
motivate stakeholders? Inspire confidence? Manage conflict? Build team morale? The science of
human resources management depends on effective planning. Human resources planning is an
integral element of a comprehensive project implementation plan. The project’s human resource
management plan identifies the activities and resources required to manage the project team.
Acquiring Project Staff – As part of the function of managing the team, the project team leader must be
clear on the systems for identifying staff candidates, interviewing candidates, identifying selection criteria
and making final selections of project staff.
Identifying Project Staff Assignments – Project staff assignments are the list of project duties, roles
and responsibilities for team members. Staff assignments are often used during the monitoring and
controlling process to evaluate individual team members.
Components of human resources management include:
115

Project Design and Research Methods

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