Chapter 1 Learning Guide

CHAPTER 1
CHAPTER 1. INTRODUCTION TO PROJECT MANAGEMENT

AND PROJECT START-UP
Introduction to project
management and project
start-up
This document represents the intellectual property of the Inter-American Development Bank (IDB) and the Inter-American Institute for Social
and Economic Development (INDES). Any partial or full reproduction of this document must be reported to: [email protected]
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CHAPTER INTRODUCTION
This chapter presents basic concepts of development projects, a brief analysis

of the environment in which they unfold, their unique characteristics, and the
relationship between development projects and strategies.
This chapter is divided into two units: the first illustrates the project
relationship with a countrys development and financing strategies; the
second unit presents the basic concepts and definitions of project
management, a brief introduction to the most important planning tools and
their use within development projects. This chapter also includes a series of
guiding questions on the main challenges of the lesson. The corresponding
answers will emerge as the subjects raised in each unit are addressed in
depth. These questions are formulated as an invitation to investigate and get
involved in these subjects based on other points of view and sources of
information.
and Economic Development (INDES). Any partial or full reproduction of this document must be reported to: [email protected].
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LEARNING OBJECTIVE
To strengthen the knowledge of elements that influence a project during its
start-up stage through the analysis of its underlying concepts, definitions, and
processes.
Guiding Questions
What is the relationship between a development project and a
countrys development strategy? In what way does this relationship
influence the project?
What are the project restrictions?
What is the managing for results framework? What is the results
matrix?
What are the elements that facilitate the project start-up?
How is project planning facilitated through best international practices
and the use of standard tools?
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Unit I. Management of development projects

Learning objectives
To understand the conceptualization of a project from the perspective of a country's

development targets in order to obtain a better understanding of the factors that
influence a development project. To understand the concepts and definitions for
development project management and incorporate a basic vocabulary.
I.1. Projects and development

Projects and their relationship to development
Projects in the realm of development have the final objective of obtaining concrete results that
help boost a countrys or region's socio-economic development. The implementation of
projects in order to boost development is based on the premise that they will fulfill their
objectives within the constraints of scope, time, and budget. These projects are carried out
under some socio-economic assumptions that reflect a rationale of gradual change, with longterm results only achieved through the attainment of intermediate results. The projects must
reflect this rationale by generating medium-term results along a path of change, whose final
objective is the achievement of sustainable long-term results. This map for change, also known
as the Change Framework, is the graphical representation of the process of change.
Some unique characteristics of development projects include:
Diversity of stakeholders: The projects include various stakeholders, who have

different needs, demands, levels of influence, and interest in the project and who
require proper communication and negotiation in order to reach agreements within
economic, political, social, environmental, gender, and other contexts.
Sustainability: Development projects seek a long-term impact, since the majority of

them focus on achieving socio-economic or environmental changes that do not always
exhibit immediate results upon completion and typically require more time to
materialize. For this reason, there is a need to monitor these changes after closing the
project.
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Social return: Development projects are commonly carried out based upon the needs
of beneficiary community/communities and arise from the country's economic and
social development strategy. They focus on improving living conditions and the
environment, as well as on obtaining a social return, an aspect not necessarily present
in the evaluation of private/corporate projects.
The country's development strategy

Each country has a series of social and economic needs and priorities by which it decides how
to allocate public investment through development projects financed with domestic and
foreign funds. The government determines and identifies these needs within the country's
development strategy, which includes development objectives, strategic priorities, an
international cooperation plan, and the analysis of the socio-economic environment. This
strategy is revisited periodically and is related to government cycles and, in some cases, with a
longer-term vision (10 years).
Organizations that fund development projects, in turn, have key areas of support that
supplement the analysis of the country's social and economic development, and form part of
the negotiations between a government and that entity in order to identify the common areas
of support (Figure I.1). Both parties seek to:
Implement development strategies through adequate operational frameworks in the

areas of planning, budgeting, and performance evaluation.
Prioritize the alignment of international cooperation objectives.
Intensify synergies and collaboration with respect to development policies, strategies,

and performance.
Eliminate the redundancy of efforts in order to achieve the greatest possible return.
Reform and simplify policies and procedures to foster progressive collaboration and
alignment.
Undertake concrete and effective actions in the search for development results.
Combat corruption and the lack of transparency, which prevent mobilization and
effective resource allocation, and divert vital resources intended for poverty
eradication and sustainable economic development.
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Figure I.1. Joint development strategies
Source: Compiled by author
Development projects represent vehicles to help a country improve its development

indicators. In this sense, all development parties are constantly establishing working
frameworks that facilitate collaboration and the efficiency of their actions in order to achieve a
greater impact. One of current standards representative of this effort is the development
effectiveness framework.1
Development effectiveness
The effectiveness of development investments is measured based upon the results achieved
by projects. Most funding organizations have developed tools to achieve greater effectiveness
in development; these are able to measure the results obtained with available resources and
justify whether or not funds raised are achieving the expected results. Organizations receiving
financing (entities executing the projects) use these tools not only as requirements established
by the same funding bodies but also as instruments to measure results and progress in the
achievement of project development targets. The tools that are part of the development
effectiveness framework are characteristic of a new culture of results-oriented management,
which includes four areas: i) strategic planning, ii) risk management, iii) result-based
performance monitoring, and iv) evaluation of results.
For further information, refer to the Paris Declaration document (OECD-DAC) at www.oecd.org.
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I.2. The concept of management of development projects

Basic concepts
Project management, also known as project administration or direction, is a discipline that
serves to guide and integrate the processes necessary to initiate, plan, execute, control and
close projects in order to complete all the work required to execute a project and fulfill the
stipulated scope within defined cost and time constraints.
The development project management encompasses various disciplines of administration,
finance, human resources, communication, risk, procurement, etc. Management entails not
only completing a project on time and according to the established budget, but it also seeks to
achieve results that meet the final objectives (expected socio-economic impact).
Management of development projects is defined as the use of a combination

of tools and techniques arising from good practices and international
standards to ensure the achievement of the projects final specific objectives
(outcome, product, or service) within the planned timeline (schedule), cost
(budget), and scope.
Origin of international good practices and standards
In general terms, the need for project management procedures and methodologies was
initially recognized by the construction and technology industries. This was based on the
rationale that substantial savings in money and resources would be produced by completing
their projects in the shortest possible time and by implementing the most efficient processes,
which would permit the creation of economies of scale and boost profit margins.
In the past 20 years, this concept has proliferated globally in the business world through the
development of various organizations led by the Project Management Institute (PMI). Through
its broad distribution and influence in the Americas, the PMI has been pivotal in the
development and growth of the supply and demand of professionals with project management
expertise, endorsed by an international accreditation issued by said institution.
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The need to rely upon management methodologies or project management in the

development sector has largely emerged in the past decade in response to the search for
results both from the international development community and from countries receiving
development assistance. There are currently various international organizations dedicated to
establishing project management standards. In order of relevance to the Americas, the
following are worthy of mention:
Project Management Institute (PMI). Founded in 1969, it initially focused on the field
of engineering and has continued to change and adapt to the needs of the business
world. To date, through its standards committee and collaborators (including
companies, universities, professional associations, specialists, and project consultants),
the Project Management Institute has created generally accepted international
standards, most notably the Project Management Institute, A Guide to the Project
Management Body of Knowledge, (PMBOK Guide)- Fifth Edition, Project Management
Institute, Inc., 2013.
Projects in Controlled Environments (PRINCE). The PRINCE (Projects in Controlled

Environments) method was originally established in 1989 by the Office of Government
Commerce in the United Kingdom and is currently used as a standard, especially in
that country. Its latest version, PRINCE2, is compatible with any project type.
The International Project Management Association (IPMA). Based in the Netherlands,

it was founded in 1965 and currently represents more than 50 project management
associations in 50 countries.
Association for Project Management (APM). Founded in 1972 as INTERNET UK

(predecessor to IPMA), this organization grants certifications and provides
opportunities to create social networks among its members and partners.
Definitions
Project management uses certain terminology that is important to understand. The following
are some of the most frequently used terms.
Project: A set of coordinated, interrelated activities that seek to fulfill a specific

objective (outcome, product, or service) within a specific period of time, according to a
defined cost and scope. It bears mentioning that successfully completing a project
means fulfilling objectives according the proposed scope, specified cost and
established deadline. The project success is also measured by its quality and the
stakeholders degree of satisfaction, which entails obtaining project benefits.
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Project management: The use of a combination of tools and techniques, arising from
good practices and international standards, to achieve project specific objectives
(outcomes, product, or service) within a planned period of time (schedule), cost
(budget), scope, and quality.
Program: A set of projects with common characteristics, which have been grouped to
obtain better results that would not be achieved if managed individually. Programs
allow for better coordination and resource optimization, and prevent duplication.
Portfolio: A group of projects and programs carried out under the auspices of an
organization. Portfolio management is focused on identifying, prioritizing, authorizing,
administering, and controlling projects, programs and other types of work in order to
achieve strategic organizational objectives.
Managing for Development Results (MfDR): This is a strategy focused on results and
improvements to the sustainability of these results in countries. It provides a coherent
framework in which information on project performance, programs, and portfolios is
used to optimize decision-making. The framework includes practical instruments for
strategic planning, risk management, progress monitoring, and evaluation results. The
concepts upon which the MfDR strategy is based demonstrate that international
development aid can become more effective if appropriation by the country is
improved, if aid is aligned with the country's priorities, if policies and procedures of
development agencies are harmonized, and if care is centered more systematically on
the achievement of development results.
The IDB uses the Project Portfolio concept to refer to projects executed in the
region or a country that support regional or national development strategies.
The project rationale
Within the context of managing for development results, whose objective is to provide
financial resources, technical instruments, and knowledge to implement initiatives conducive
to achieving a chain of successful results, project management is one of the key forms of
knowledge. On one hand, because it ensures that selected projects contribute to strategic
objectives of the countries and the project funding bodies; on the other hand, because it
makes it possible to evaluate whether expected results have been defined based upon
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adequate prioritization: first the results are determined, and then the combination of
resources to achieve them.2
The IDB has migrated toward a new way of managing the project cycle under a results-based
rationale.
It is a logical framework that includes all cycles and parties of public

management, which provides the ordering of cause-effect relationships
between a strategic objective and the program that will be carried out to
achieve it, the inputs that entities executing the project must create or
produce to achieve it, and how to do all this; namely, the rationale for the
entire IDB project aims to adopt a focus on results rather than on activities
and the budgetary cycle in order that the priority may cease to control such
activities (IDB, 2010).
Based on the above, it is clear that in project management it is necessary to define the results
upon which the entire development operation should focus. "Results" are based on
performance indicators and evaluations. A successful result is one that has been well-planned
and has occurred as scheduled in strategic planning, participatory planning, and operational
planning (Figure I.2).
Figure I.2. Elements of results-based planning
Washington, DC: IDB, p. 23.
For further information, see IDB. 2010. Managing for Development Results. Progress and Challenges in Latin America and the
Caribbean. Washington, DC: IDB.
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Considering the elements above, especially planning as a participatory process, it is clear that
all of the project stakeholders, and particularly the final beneficiaries, must agree upon its
results. If the expected results do not meet the expectations and needs of final beneficiaries,
such results will not be successful even if fulfilled as planned. Another element to take into
account when defining results in this context is the generation of a sustainable impact, which
results in the formation of a results chain. In this way, a process is causally linked to its
predecessors and dependents, as defined by the IDB (Figure I.3).
Figure I.3. Concept of causality. Results chain
Source: Various authors (2009) Presentation Integrated Project Management Program (PGIP), 7-Step Methodology.
Washington, DC: IDB
Given that development projects operate in complex environments surrounded by various

stakeholders, difficult operating environments and constraints upon access to resources and
technologies, it is necessary to seriously consider such aspects when designing the project.
In order to effectively manage these complex situations, those responsible for the different
project phases must have a holistic vision of the project that involves understanding the form
in which such will develop during its life cycle. By relying upon this assessment, those
responsible for projects are better equipped to understand the factors that will impact the
project at any given moment.
Projects never exist in isolation and are always influenced by two factors:
Internal environment: These are the circumstances that are relatively controllable by
the entities or organizations responsible for project formulation and execution, such as
the organizational culture, technical and managerial skills, financial solvency, staff
competence, and portfolio analysis.
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External environment: These are the conditions that are not controllable by those
responsible for the projects, such as natural events, political uncertainty and
instability, or perceptions and expectations not expressed by the project stakeholders.
Project restrictions
According to the most well-known conceptualization in the realm of project management,
every project is subject to three constraints: scope (products), time (schedule), and cost
(budget). The project success depends on managers skills and knowledge to consider these
restrictions and develop plans and processes in order to keep them in equilibrium. It is not
sufficient for a project to achieve objectives according to budget or to report that all activities
and products have been executed on time. Apart from balancing the three constraints at all
times, the expected objectives (impact) must be fulfilled (Figure I.4).
Figure I.4. Project restrictions
Lewis, James P. (2005). Project Planning, Scheduling & Control. 4th ed. McGraw Hill.
This figure represents the relationships of dependency between the project restrictions, given
that if one changes, at least one other restriction will be affected as well. For example, a
change to the project plan, which shortens the timeline, can result in higher costs or a reduced
scope.
Scope: This refers to work (products) required to deliver project results as well as the
processes used to produce them; it is the project raison d'tre. One of the main
reasons for a project failure is mismanagement of its scope, either because the time
necessary to define the work was not expended, because there was no agreement
between the stakeholders concerning the project scope or because there was a lack of
management regarding the scope. All of these deficiencies lead to unauthorized or
unbudgeted work known as scope creep. Scope creep or uncontrolled changes to
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scope result in a project incorporating more work than originally authorized, which
typically results in higher-than-anticipated costs and postponement of the initial
completion date.
Time: This pertains to the duration required for all activities needed to complete the
project, and is usually represented by a Gantt chart, a milestone chart, or a network
chart. Despite its importance, this is often the most frequent omission in development
projects. The absence of control over a project time is reflected in unmet deadlines,
incomplete activities, and general delays. Adequate control over the timeline requires
a careful identification of the tasks to be executed, a precise estimate of its duration,
the sequence under which such tasks will be applied, and the manner in which the
project team and resources will be utilized. The timeline approximates the duration of
all the project activities. It is not difficult to discern that initial forecasts do not apply
once the project advances and more knowledge is obtained concerning its
environment; thus, control of time expended as well as the timeline are iterative
processes. At any time, the project team must verify the specific time restrictions or
requirements for the project stakeholders.
Cost: These are the financial resources approved for the execution of project activities
and include all expenses required to achieve the results according to the planned
timeline. In development projects, inadequate costs management may result in
complex situations involving the return of resources and budget allocated to the fiscal
year and, therefore, can result in difficulty appropriating resources in subsequent fiscal
years. There are important factors to take into account in development projects:
budgetary restrictions, budgetary allocation policies, procurement standards and
procedures, etc. These standards affect the acquisition of personnel, equipment,
services, and materials that must be acquired for the project. Those responsible for
executing and supervising the project must be informed of all the existing policies,
guidelines, and procedures applicable to the acquisition of these resources.
Information on previous similar projects may be useful for improving budget
management strategies.
Quality: In development projects, this normally refers to the achievement of the

expected impact through involvement in terms of fulfillment of socio-economic
development targets. It is, therefore, a key factor to take into account in evaluating
the project success.
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Delivery of development projects according to scope, time, and budget is insufficient if the
needs and expectations of stakeholders, who are the final judges of their quality, are not
satisfied. Managing these restrictions requires a careful analysis and agreement on the
priorities for the organization, funding body, and final beneficiaries. Depending on these
factors, a project may place more emphasis on cost and quality than on time and scope. This
type of decision and the establishment of priorities at the start of the project have a
fundamental impact on all subsequent findings and plans.
An understanding of the relationship between these three restrictions allows for better
decision-making if changes need to be made within the project.
The project life and management cycles
Considering a project as a series of interrelated phases ensures a greater likelihood of its
success. In fact, the sum of the project phases is its life cycle. For this reason, the best practice
of dividing the project into several phases renders each of them more manageable. As the life
cycle structure varies depending on the industry and project nature, there is no ideal way of
organizing a project. However, a development project usually has the following life cycle:
Figure I.5. Development project life cycle
Source: Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide)Fifth Edition, Project Management Institute, Inc., 2013, Figure 2-8, page 39.
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A project must successfully complete one phase before proceeding to the next, allowing the
project cycle better control and creating the construction of appropriate links with the internal
and external environment. Each phase should not be viewed independently but rather as a
continuous, interdependent effort, since results from one phase are used as inputs for the
following.
The project management cycle is in the implementation, and monitoring and control phases,
and it consists of five stages necessary to complete the project successfully: i) start, ii)
planning, iii) implementation, iv) monitoring and v) close (Figure I.5).
Figure I.6. Project management stages
The start-up stage leads to planning; once plans are developed and approved, the project
execution or implementation stage begins. As the project progresses, the control or
monitoring process reviews whether the project is fulfilling its goals and objectives; thus, if
changes are needed, the original plans are adapted and the implementation process is
restarted. Once the project has met all of its objectives, and deliverables have been accepted,
the closing stage begins.
Each management stage entails a different level of effort. Figure I.7 shows the stages of
project execution during the implementation, and monitoring and control phases from the
beginning. The level of effort gradually increases from start-up until reaching its inflection
point during implementation. This figure is particularly useful to see the level of financial
impact if the project is exposed to risks or changes. Since the greatest level of effort, including
cost, within the project life occurs during implementation, any change or risk during this stage
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can have a greater impact on the project and demand greater resources and efforts. The figure
also helps to illustrate the level of effort required in the planning phase. Many projects invest
very little time and effort in this stage and, therefore, face various problems during
implementation.
Figure I.7. Effort and time levels during the implementation, and monitoring and control phases
Some organizations standardize the manner in which they execute projects, whereas others
allow project teams to determine whether the tasks to be performed are treated as a separate
project or as a single phase in the project life cycle. For example, while a feasibility study could
be treated as a separate project, it could also be considered the first phase of a project.
When dealing with very complex projects that include multiple components, there may be
various cycles which are dependent upon one another, conditional upon one another, or which
occur in parallel.
Below is an example of a project with two cycles. Figure I.8 shows the beginning and end of the
project albeit with two planning, implementation, and monitoring cycles.
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Figure I.8. Example of a two-cycle project
Large or complex projects may require various cycles, which we will call phases. In some
cases, the completion of a phase may lead to the start of the next one. This allows for review
of the original premises and assumptions that emerged during project design, as a precursor
for starting the next implementation phase and in order to include improvements in project
management processes without needing to wait until the end of the project. There is an
opportunity to learn, adjust and improve the project team's practices, skills and dynamics at
the end of each implementation phase.
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Unit summary
One of the objectives of development projects is to benefit the greatest number of parties in
society; specifically, apart from generating an economic benefit, every development project
normally seeks to produce the greatest impact or social return. Accordingly, development
projects must be related to each country's development strategies in order to ensure a greater
impact. Funding organizations contribute to the financing of those projects that correspond to
the country's development strategies and the sectoral program priorities. Project management
allows for expectations and results to be communicated clearly and concisely, fosters a
teamwork spirit, since it facilitates communication with a common language, and provides the
necessary tools to use project resources as efficiently as possible. In particular, project
management provides a roadmap for the project, including all of its alternatives, describing
how to navigate from beginning to end.
The most important concept related to project management is the assimilation of the intimate
relationship between the three constraints of the project: cost, time, and scope. These
constraints occur in a complex environment of internal and external factors that can have an
impact requiring constant change; consequently, every development project must be
characterized by its flexibility to adjust to these conditions without affecting the achievement
of expected results.
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Unit II. Project start-up

Learning objectives
To understand the fundamental concepts related to project governance in order to

reach a consensus on its objectives and understand its rationale.
To learn about the content and application of the Project Charter (to specify the "what
for" of the project).
To include the results matrix as a point of departure for the start-up phase of project
implementation.
To identify the project stakeholders, the individuals or groups that may affect or be
affected by the project, and analyze how they impact the project and/or how the
project impacts them.
To obtain general knowledge about the tools available for planning the management
of development projects and their inclusion in the start-up stage of project
implementation.
II.1. Project governance

Project governance
What is project governance? It pertains to the conditions that allow for successful
development through the determination of a clear structure for decision-making and oversight
processes. Projects with proper governance have an adequate structure with an organizational
mission, strategy, values, standards, and internal culture.
To what end is project governance important? The most important objective of governance is
to establish clear levels of authority and decision-making. Governance is represented by
individuals, policies, and processes providing the framework for making decisions and adopting
measures to optimize project management. An important way to establish project governance
is to define and identify the roles, responsibilities, and mechanisms for the accountability of
key individuals involved in the project.
How is project governance constructed? In order to provide adequate governance in a
particular project, senior management must define the governance structure before project
start-up. Governance is described in the Project Charter. This document, created based upon
the results matrix and other relevant documents of the project design phase, formally
authorizes the project start-up and:
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presents the project scope, time, and cost at the aggregate level;
analyzes the relationships between the project and various stakeholders;
describes the project governance structure, particularly, mechanisms for monitoring

and control of significant changes; and
assigns the team responsible for project management.
Project Steering Committee

This is the highest level of the project governance structure and is comprised of individuals
with the authority to make high-level decisions. Normally, this group is made up of an
organization's executive management and may include representatives from project funding
organizations and key stakeholders. The Committee's decisions are typically strategic and nonoperational, since they focus on providing support and facilitation so that the team responsible
for project management has the interdepartmental resources and collaboration necessary for
proper implementation. One of the Committee's primary responsibilities is to ensure that the
project objectives are consistent with the strategies and priorities defined during its design and
approval process. Other responsibilities include:
Appointment of the project manager
Approval of the Project Charter
Authorization to use the resources necessary for project execution
Authorization of changes to the original scope of the project.
Resolution of conflicts and issues or incidents beyond the project manager's authority.
Selection and appointment of the project manager

If the project manager does not participate in the project design, as occurs in the majority of
cases, one of the Steering Committee's first decisions is to appoint the manager, that is, the
individual appointed to administer the project resources and achieve its objectives.
Project managers skills
It is not only necessary for the individual responsible for project management to have a good
understanding of its technical aspects, but they must also possess sound management skills,
such as communication, planning, negotiation, group management, decision-making, and
leadership (Table I.1).
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Table I.1. Description of the project manager's skills
SKILLS
DESCRIPTION
Leadership
Encourage individuals assigned to the project to work as a

team with the aim of implementing the plan and achieving
the objective in the most satisfactory manner.
Communication
Constant communication with the team, as well as the

beneficiaries, funding bodies, and the organization's senior
management.
Problem solving
Rapidly identify problems and develop a well-planned

solution, make decisions with sound judgment, setting aside
emotions.
Focused on results
Develop a results-based focus, without wasting resources or

efforts on the administration of details corresponding to
activities and project tasks, concentrating efforts on ensuring
that results are always aligned with the project objectives.
Project manager's authority

Since they are responsible for the project, project managers must make decisions related to
the management and handling of resources available for the project; consequently, when
project managers are appointed, their responsibilities, authority, and specific levels of
decision-making for project administration and control must be defined. These levels of
responsibility and power may vary from one project to another. Authority is based upon an
organization's standards and policies, which determine personnel's roles and responsibilities.
The organization's culture, style, type and structure affect the level of authority in project
management, especially concerning the influence of functional management (performed in
functional organizations).
First actions of project managers
Once new managers receive confirmation of their responsibilities, they must take the first
steps in order to begin the project. These steps are not related to implementation but rather
to project planning, i.e., the detailed development of project management plans, for which
reason managers must know and understand all project dimensions. In other words, they must
review the design documents (the profile, purpose, results matrix, original contract, etc.),
preliminary estimates of execution times, etc.
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The manager must initiate the review of these documents with the team selected to take part
in the project. In some cases, the team may be incomplete, in which case the manager must
temporary include individuals within the organization who can assist in the review and
development of project plans.
II.2. Results matrix (RM)

Definition
The RM is a tool prepared during the project design that enables the development and
presentation of the correlation between the project objectives and sectoral results indicators
aligned with the country's development targets. The RM provides a logical model (the logical
framework is used in some cases) to achieve project results. It is a widely used tool among
development funding organizations (particularly at the IDB) and is an essential input for the
Project Charter, which, as mentioned above, is the most commonly used project management
document. The RM plays a key role in the start-up stage of project implementation, since it
provides inputs into the planning process while serving as a monitoring tool during project
implementation.
One of the project manager's responsibilities is to verify the results matrix validity and
timeliness. Any discrepancies, questions, or proposed changes must be submitted to the
project Steering Committee for approval.
The RM offers relevant information for the project team to familiarize itself very quickly with
the project objectives and contribute more strategically during the execution of activities and
in obtaining results. The results matrix is composed of the following elements:
1. Project objective: This is the expected outcome (final target), expressed as a physical,
financial, institutional, social or environmental development, or other type of
development relative to the projects or program's expected contributions. The
objective must correspond to the what and the what for of the project.
2. Result indicators: These indicators measure progress of expected outcome(s).
Indicators must be specific, measurable, achievable, relevant, and time-specific.
3. Baseline: This represents the values or status of the result indicators at the start of the
project. They serve to measure the changes the project has achieved.
4. Target: The values or status of indicators upon project conclusion; what the project is
expected to achieve.
5. Components:
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Products: Capital goods or services that are produced with the intervention.
Intermediate results: The effects from an intervention that leads to the desired
result.
Result: The events, conditions, or occurrences that indicate the achievement

of the project objective.
6. Year: Degree of progress in the delivery or execution of product(s) in the year during
which progress is recorded.
7. Comments: Explanations about the indicators used, the degree of progress, or any
type of explanatory note (project assumptions to achieve the objective are also
included).
The RM presents and explains the manner in which the development objective must be
achieved; it also includes causal relations between the execution of activities, the delivery of
products, and the achievement of results. The RM also sets forth indicators, baselines, and
targets to document achievements. The matrix is one of the inputs/requirements to prepare
the risk plan. Table I.2 shows how the different RM components are related to each other.
Table I.2. Results matrix
Project objective: This is the expected impact in terms of physical, financial, institutional, social, environmental, or
other type of development relative to the projects or program's expected contributions. It must correspond to the
what and the what for of the program/project.
RESULT INDICATORS
BASELINE
TARGET
Measure the achievement of

expected result(s)
Values/status of result indicators at

the start of the project
Values/status of result indicators at

the end of the project
Component 1
Baseline
Products,
capital goods or
services that
are produced
with the
intervention
Current
value/status of
products at the
start of the
project
Year 1
Year 2
Year 3
Degree of progress in
delivery/execution of product(s)
Target
Comments
Expected
value/status of
products at the
end of the
project
Explanations about
the indicators used,
the degree of
progress, or any
type of explanatory
note
Source: Various authors (2009). Presentation entitled Integrated Project Management Program (PGIP), 7-Step
Methodology. Washington, DC: IDB
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SMART indicators
There are various factors that enable projects to achieve results. They are: i) specifically
defining objectives, ii) determining the specific scope of project involvement, and iii)
identifying beneficiaries. These factors must facilitate the measurement and designation of
specific results derived from the project activities. Poorly defined objectives represent an
obstacle to achieving the management of results-oriented projects and evaluating whether
such results have been reached. Vague objectives and dubious interpretations should be
avoided when defining the project objectives. A more detailed objective leads to greater
comprehension and improves the likelihood that it will be achieved.
Objectives are measured through indicators, including SMART, which use the following basic
principles:
S: Specific. The objective to be defined must be absolutely clear and precise through
the indicator, with no potential ambiguity or interpretation. As a result, it is
understood and has greater chances of being achieved.
M: Measurable. The objective must have a defined indicator that can be measurable
both during and at the end of the project.
A: Achievable. The objective and its indicator must be achievable within the project
budgetary and time constraints.
R: Realistic. The objective and its indicator must be realistic and relevant in relation to
the problem that the project is intended to solve.
T: Timely. The objective and its indicator must have a completion date and
intermediate dates in order to obtain practical results; in other words, there must be a
schedule and delivery date.
The project manager and personnel are responsible for reviewing its objectives and ensuring
that the indicators meet SMART criteria. Ambiguous objectives lead to ambiguous indicators
and may generate erroneous interpretations as to project target achievement. One example of
a project objective that does not meet the conditions of SMART indicators is "Provide drinking
water to the community." This objective, which at first glance seems simple, presents the
following problems: it is not accompanied by an indicator that defines the unit of
measurement; it does not specify whether drinking water will be provided through direct
household access or through a supply center; it does not define the time, or rather, it is
unclear whether this objective needs to be achieved in a month or a year. In order to verify
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whether each objective meets the characteristics of SMART indicators, the project manager
must answer the following questions:
What are we going to achieve?
Who will achieve it?
By when should we achieve it?
How do we know if it has been achieved?
Establishing measurable and relevant targets with which the majority of stakeholders are in
agreement represents the platform for a successful project. By involving important
stakeholders in the process of establishing objectives and SMART indicators, the project
manager generates a greater likelihood that the project will start well.
II.3. Stakeholders matrix

Stakeholders
Stakeholders are groups or individuals that may be impacted positively or negatively by the
project or project results. The management of stakeholders is crucial to the success of
development projects. The process of identifying stakeholders and defining their levels of
interest and influence in the project is the point of departure for developing strategies
intended to achieve the necessary support from key stakeholders, thus enabling project
success. Depending on project type, stakeholders may vary both in number and level of
influence and interest. By classifying stakeholders, the project manager will be in a better
position to use time more efficiently in the development of relationships and project
communications with the most important stakeholders.
Given that stakeholders are individuals or organizations whose interests (for or against the
project) may affect the project successful completion, a stakeholder management plan that
generates a project communications plan is strongly advised.
As shown in Figure I.9, the process for developing the stakeholders matrix begins by identifying
the agencies or individuals that will provide the information needed as process inputs, the
techniques or tools and, finally, the process outputs for clients or users.
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Figure I.9. Development of the stakeholders matrix
Identification of stakeholders
The identification of stakeholders involves selecting all individuals, groups, or entities that will
be impacted by the project or its results. This involves not only identifying those who will
benefit from the project, but also those who will be negatively impacted by it. As in any type of
social intervention, not all development projects are viewed positively. Instead, there are
always individuals, groups, or institutions opposing it due to an array of political, economic,
social, religious, and other motives.
Each project has a group of key stakeholders whose level of impact may significantly impact
the project success. For this reason, the project manager and team must identify the
stakeholders at the start of the project and determine strategies to mitigate any negative
influence or maximize their collaboration and support.
The identification of stakeholders is a process in which the management team, along with
other individuals with experience in similar projects and issues, participate in a brainstorming
process and create a list of all potential stakeholders. Bear in mind that the list created will not
be static, because, as the project progresses, new stakeholders may emerge while others who
were initially identified will cease to be relevant.
Stakeholders may be internal, such as the personnel of executing entities, administrative or
executive personnel of the organization, or the personnel of funding bodies with a high level of
power and influence on the project and its resources; or external, such as project beneficiaries,
the sector's institutions, or civil society organizations that will be impacted by the project
results in one way or another. Given the social nature of development projects, the
involvement of civil society should not only be an exercise of unidirectional communications
but also an opportunity to gather support for the project.
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During brainstorming, the project manager, the team, and any other individuals who may have
relevant information use the information produced during the project approval process, such
as the project profile, the financing proposal, contracts, etc. Besides identifying the individuals
and organizations, it will be very important to obtain information from each stakeholder about
its influence or power over the project. A stakeholder is any individual or group with some
degree of interest in the project. In order to identify them, the following information is
needed:
Name or identification of the stakeholder.
Project objectives or results that will impact the stakeholder.
Level of stakeholder interest.
Stakeholder influence or power.
Positive impact: the result that benefits the stakeholder.
Negative impact: result that negatively impacts the stakeholder.
Project strategies: a list of actions that may be carried out to reduce the negative
impact on the project or bolster the stakeholders interest in the project.
Table I.3 shows the interrelation of the stakeholders matrix components.

Table I.3. Stakeholders identification matrix
Project Supervisor
OBJECTIVES OR
TARGETS
Successful
project
LEVEL OF
INTEREST
LEVEL OF
INFLUENCE
Low
Low
Medium
Medium
High
High
management
POSSIBLE STAKEHOLDER
ACTIONS
STRATEGIES
Positive:
Negative:
Keep supervisor informed
Meet
Project delays
of all progress, changes,
project
and risks
objectives
Source: Various authors (2009). Presentation entitled Integrated Project Management Program (PGIP), 7-Step
Methodology. Washington, DC: IDB
Stakeholders classification matrix

The stakeholders classification matrix is an analysis tool that allows for the classification of the
project stakeholders according to their levels of interest and influence on the project. This
matrix facilitates the ranking of the most important stakeholders in order to develop the
corresponding strategies.
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The process for analyzing and building this matrix is somewhat subjective and greatly depends
on the quality of information that the project has with respect to the stakeholders. Similar to
our comments on the list of stakeholders, their classification can change during the project life.
Thus, those that were initially identified as having a high level of influence on the project can
be reclassified at a lower level at other points during the project life. The stakeholder analysis
is an ongoing task during project implementation.
Once the stakeholder information is complete, the project manager must graph this
information using a 2-x-2 matrix that enables each stakeholder to be classified within the
group for which different strategies are defined (Figure I.10).
Figure I.10. Stakeholders classification matrix
Each of the figure's quadrants contains a strategy that facilitates management of stakeholder
relations.
Low power/low interest = Monitor.
High power/low interest = Keep satisfied.
Low power/high interest = Keep informed.
High power/high interest = Manage closely.
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The strategies that the project team identifies will be directed toward increasing support for
the project and minimizing the negative impact upon stakeholders. These strategies may
include:
Participation in the project activities or events.
Communications to improve information about the project.
Third-party collaboration that can positively influence a stakeholder.
Mitigation of a stakeholder's negative actions.
Given that the information presented in the stakeholders identification matrix may be
sensitive or confidential, the project manager must apply good judgment to the type of
information presented and the level of access to information.
Informational needs of stakeholders
Each stakeholder has different needs for project-related information. In some cases, a
contractual requirement is in place, i.e., the stakeholder and the project have a formal
agreement to deliver information that often includes a specific format and schedule. For
example, the project funding body requires information from the project for use as a tool to
analyze the progress and scheduling of the disbursement of required funds. In other cases,
stakeholder needs are tied to the fulfillment of the country's standards or regulations, e.g., to
use funds for the organization's financial scheduling or to comply with fiduciary or legal
standards.
The project manager must identify and classify these needs in order to plan the time required
to generate and distribute information. The list below serves not only for this purpose but also
as an input for the creation of the project communications plan:
Stakeholder name.
Type of information required.
Date or period in which the information is required.
Information presentation format.
Information approval.
Sending or presenting information

Stakeholders need information to form an opinion about the project in order to decide their
support for the project, to coordinate activities with it, and, above all, to make decisions
concerning the project. The project manager must plan informational activities based upon the
stakeholders priorities and identify those individuals who will be responsible for developing
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and delivering information. Among the most important concepts of information management
are the use of right information, which must reach the right person at the right time.
In this instance, it should be noted that stakeholders at all levels should not only be kept
informed but also involved. Thus, for example, given that civil society or citizen participation
are essential elements in project development, project leads must not only keep communities
affected by the project informed, but they must also secure their involvement in the process of
establishing or validating the project objectives, determine the indicators of success, set
schedules, etc. When these involved parties do not have the appropriate support or level of
leadership and empowerment in the project, this compromises the sustainability of
interventions. Depending on the project type, the civil society may be one of the most
important stakeholders and should remain active throughout the project life.
II.4. Project Charter

What is the Project Charter?
It is an initial/start-up document for project implementation in which the following elements,
among others, are defined: i) scope, time and costs, ii) analysis of stakeholders, iii) governance
structure, and iv) the team responsible for the project.
The Project Charter offers a preliminary vision of the roles and responsibilities of the primary
stakeholders and defines the authority of the project manager. It serves as a reference for the
future of the project and for communicating the project purpose to different stakeholders. The
creation and approval of the Charter by the Steering Committee marks the formal start of the
project and assigns authority to use the resources in project activities.
This document generally includes:
Rationale and purpose of the project: The reason for the project, or rather, what the
project seeks to achieve and the problem that it must solve.
Project objectives: A brief description of the project objectives and the expected
impact.
Project strategy:
o
Brief description of the intervention model.
Scope (most important products) and limits to scope (what the project will
not produce).
Summarized schedule of milestones.
Summarized budget.
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34
High-level risks, assumptions, and restrictions.
Structure of governance.
Management and team.
Change control and monitoring mechanisms.
The Charter is not a document that exhaustively describes the project, nor does it attempt to
replace other documents from the project design and approval phase. The content of the
Charter may vary according to the area of application, characteristics, and complexity of the
project and may include other components besides those previously identified.
Development of the Project Charter
Developing the Project Charter involves the creation of a document that organizes the project
information generated during the design phase, presented in a simple and easy-to-use format
(Figure I.11).
Figure I.11. Project Charter Creation Process
In the majority of cases, the project sponsor creates and approves the Charter. A sponsor is an
individual or group that provides or authorizes the use of financial resources for the project.
When a project is designed, the sponsor proposes and performs the role of the project
spokesperson before the organization's senior management in order to secure their support
and promote the benefits that it will provide. The sponsor guides the project through the
hiring or selection of the manager until he/she is formally appointed and authorized.
Expert opinions are often used to analyze the information necessary to prepare the Project
Charter, and such opinions and experience are applied to technical details. Expert opinions
include the experience provided by any group or individual with specialized knowledge or
training. This is normally available from various places, such as other units within the
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35
organization, as well as from consultants, stakeholders (including funding bodies), professional

and technical associations, in addition to experts on the relevant subject matter.
The Project Charter is an excellent tool for disseminating information about the project to
internal and external parties participating in the project, such as project partners,
beneficiaries, team members, participating groups and departments, as well as individuals and
organizations considered to be stakeholders.
II.5. Project management tools

The importance of planning in project management
Planning is not a process that occurs only once during the project, but rather is a continuous
process throughout its life, given that every plan requires changes and adjustments and that
such modifications, provided that they are properly authorized, alter the original planning.
Figure I.12 presents the cyclical function of planning within project management, especially in
the context of external and internal environments that constantly change initial assumptions
on which original plans are based, which is frequent in any development project. Changes in
the project environment impose a review of plans and adjustments to stick to the original plan.
Figure I.12. Planning phase during two project cycles
Planning entails the processes required to define and establish the project total scope,
determine and refine objectives, and develop the course of action necessary to achieve them.
This planning stage addresses the development of the Multi-Year Execution Plan (MEP) and
other documents necessary to implement the project. The MEP consolidates and integrates all
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subsidiary plans and the baselines of other planning processes (scope, time, cost, risks, etc.).
The planning stage occurs immediately after project start-up.
Project management tools
In the next three modules, this course presents a series of basic tools for planning and
managing the development project. In order to facilitate their use and application through a
simple, easy-to-learn method, the tools are laid out in seven steps that follow a sequential
structure from an executing entity's perspective.
The steps are:
Step 1: Creation of the work breakdown structure (WBS)
Step 2: Preparation of the project schedule
Step 3: Development of the resource utilization curve (S curve)
Step 4: Preparation of the procurement matrix
Step 5: Preparation of the risk matrix
Step 6: Preparation of the communications matrix
Step 7: Creation of the responsibilities assignment matrix (RAM).
The sequence of these seven steps allows for the identification of inputs, techniques and
outputs to develop each tool for planning and managing development projects.
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Unit summary
The project governance is a fundamental aspect for successfully managing decision-making in
development projects. This structure facilitates a clear definition of roles, responsibilities, and
mechanisms for the accountability of the project results.
The tools discussed in this module, which are broadly used in the development sector, are:
The results matrix
The stakeholders matrix
The Project Charter
The use of the results matrix and shareholders matrix is recommended for the preparation of a
good Project Charter.
Apart from the three tools above, we have learned in this module about the cyclical concept of
planning, or rather, we sought to understand effective planning within project management as
a recurrent process extending beyond the planning phase.
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Bibliographical references
Inter-American Development Bank (2010). 2008-2009 Development effectiveness overview.
Working document. March.
Garca Lpez, Roberto and Mauricio Garca Moreno (2010). Managing for development results:
Progress and challenges in Latin America and the Caribbean. Washington, DC: IDB.
Gardiner, Paul (2005). Project Management: A Strategic Planning Approach. New York:
Palgrave-Macmillan.
Meredith, Jack and Samuel Mantel (2003). Project Management: A Managerial Approach. 5th
edition. New York: John Wiley Ed.
Mindtools.com (2011). Pgina Project Management and Planning Tools. United Kingdom.
Mulcahy, Rita (2009). PMP Exam Prep. 6th edition. United States: RMC Publications.
OECD (Organization for Co-operation and Economic Development) and the World Bank (2007).
Sourcebook on Emerging Good Practice in Managing for Development Results, 2nd edition.
Washington, DC: World Bank.
Perea Brand, Jaime (2008). Direccin y gestin de proyectos [Project administration and
management]. 2nd edition. Madrid: Ediciones Daz De Santos.
PM4DEV (2008) Fundamentals of project management. United States: PM4DEV.
Project Management Institute (2013) A Guide to the Project Management Body of Knowledge,
(PMBOK Guide)- Fifth Edition, United States.
SIPOC Diagram, Six Sigma, available at http://www.isixsigma.com.
Several authors (2009). Presentation entitled Integrated Project Management Program (PGIP),
7-Step Methodology. Washington, DC: IDB.
Turley, Frank (2010). The PRINCE2 process model: a magnificent introduction to PRINCE2.
United Kingdom: Creative Commons. Available at www.bubok.es
Westland, Jason (2006). Project Management Life Cycle. London: Kogan Page Limited.
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Index of figures
Figure I.1. Joint development strategies ..................................................................................... 10
Figure I.2. Elements of results-based planning ........................................................................... 14
Figure I.3. Concept of causality. Results chain ............................................................................ 15
Figure I.4. Project restrictions ..................................................................................................... 16
Figure I.5. Development project life cycle................................................................................... 18
Figure I.6. Project management stages ....................................................................................... 19
Figure I.7. Effort and time levels during the implementation, and monitoring and control
phases ......................................................................................................................................... 20
Figure I.8. Example of a two-cycle project .................................................................................. 21
Figure I.9. Development of the stakeholders matrix .................................................................. 30
Figure I.10. Stakeholders classification matrix ............................................................................ 32
Figure I.11. Project Charter Creation Process ............................................................................. 35
Figure I.12. Planning phase during two project cycles ................................................................ 36
Index of tables
Table I.1. Description of the project manager's skills ................................................................. 25
Table I.2. Results matrix .............................................................................................................. 27
Table I.3. Stakeholders identification matrix .............................................................................. 31
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CHAPTER 1

CHAPTER 1. INTRODUCTION TO PROJECT MANAGEMENT

This chapter presents basic concepts of development projects, a brief analysis

Unit I. Management of development projects

To understand the conceptualization of a project from the perspective of a country's

I.1. Projects and development

Diversity of stakeholders: The projects include various stakeholders, who have

Sustainability: Development projects seek a long-term impact, since the majority of

The country's development strategy

Implement development strategies through adequate operational frameworks in the

Prioritize the alignment of international cooperation objectives.

Intensify synergies and collaboration with respect to development policies, strategies,

Figure I.1. Joint development strategies

Source: Compiled by author

Development projects represent vehicles to help a country improve its development

I.2. The concept of management of development projects

Management of development projects is defined as the use of a combination

The need to rely upon management methodologies or project management in the

Projects in Controlled Environments (PRINCE). The PRINCE (Projects in Controlled

The International Project Management Association (IPMA). Based in the Netherlands,

Association for Project Management (APM). Founded in 1972 as INTERNET UK

Project: A set of coordinated, interrelated activities that seek to fulfill a specific

It is a logical framework that includes all cycles and parties of public

Washington, DC: IDB, p. 23.

Given that development projects operate in complex environments surrounded by various

Quality: In development projects, this normally refers to the achievement of the

Source: Compiled by author

Figure I.8. Example of a two-cycle project

Source: Compiled by author

Unit II. Project start-up

To understand the fundamental concepts related to project governance in order to

II.1. Project governance

analyzes the relationships between the project and various stakeholders;

describes the project governance structure, particularly, mechanisms for monitoring

assigns the team responsible for project management.

Project Steering Committee

Appointment of the project manager

Approval of the Project Charter

Authorization to use the resources necessary for project execution

Authorization of changes to the original scope of the project.

Selection and appointment of the project manager

Table I.1. Description of the project manager's skills

Encourage individuals assigned to the project to work as a

Constant communication with the team, as well as the

Rapidly identify problems and develop a well-planned

Develop a results-based focus, without wasting resources or

Project manager's authority

II.2. Results matrix (RM)

Result: The events, conditions, or occurrences that indicate the achievement

Measure the achievement of

Values/status of result indicators at

Values/status of result indicators at

What are we going to achieve?

Who will achieve it?

By when should we achieve it?

How do we know if it has been achieved?

II.3. Stakeholders matrix

Figure I.9. Development of the stakeholders matrix

Name or identification of the stakeholder.