PROJECT MANAGEMENT:

TOOLS, TECHNIQUES AND STRATEGIES OF MANAGING

CONTRIBUTORS

Stephen Kyakulumbye (MMS PPM, PG PPM, BSC COMP. CERT EDUC.)

Mary Ssonko Nabacwa (Ph.D)

Peter Opio (MBA INTERNATIONAL BUSINESS, MSC DEV. ECON)

Martin Kabanda (MBA, PGD M&E, BCOM)

Godfrey Kyasanku (MBA, BA)

Martha Olweny (MMS PPM, PG PPM)

Efrance Sebowa (MASTER OF HRM ED)

Ashton Aryamanya (BEPP, PD M/E)

Vianney Ahumuza (BA ED. MA)

First Edition October 2018 ISBN 9781728906638

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 CONTRIBUTORS

Stephen Kyakulumbye (MMS PPM, PG PPM, BSC COMP. CERT EDUC.)

Mary Ssonko Nabacwa (Ass. Professor, PhD.)

Peter Opio (MBA INTERNATIONAL BUSINESS, MSC DEV. ECON)

Martin Kabanda (MBA, PGD M & E, BCOM)

Godfrey Kyasanku (MBA, BA)

Martha Olweny (MMS PPM, PG PPM)

Efrance Sebowa (Masters Human Resource Manement, B. EDUC)

Ashton Aryamanya (BEPP)

Vianney Ahumuza (BA ED. MA)

© School of Research and Postgraduate Studies

Uganda Christian University

October , 2018

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 CONTRIBUTORS BIOS

STEPHEN KYAKULUMBYE is a Project

Management Lecturer at Uganda Christian University
and Project Management visiting consultant at Uganda
Management Institute. He holds a Bachelor of
Computer Science with Education degree, a
Postgraduate Diploma in Project Planning and
Management, a Master of Management Studies
(Project Planning and Management) degree evaluated
by South African Qualifications Authority (SAQA) to
Mcom. PM Level 9 and is a PhD Scholar at University
of The Western Cape South Africa in Information Systems by time of authorship. As a
project management expert, Stephen has conducted research and presented papers in various
local and international conferences and the most recent where he was awarded a certificate of
distinction for presenting a paper and successfully chairing a project based academic
conference during the 21st Century Academic Conference held at Havard University
Massachusetts USA. Stephen is on the International Editorial Board for the International
Journal of Innovation and Entrepreneurship of the 21st Century Academic Forum based in
Boston 21 Apex Drive, Bozeman, and MT 59718 U.S.A. Stephen is also on the International
Review Team of Journal of Economics and International Business Management JEIBM
based in London UK, India and USA.

MARY SSONKO NABACWA is the Dean, Faculty

of Social Sciences and an Associate Professor of
Gender and Development in the Department of
Development Studies at Uganda Christian University.
She holds a Master of Arts degree in Women Studies
from Makerere University, and a Bachelor of Arts
degree in Social Sciences from Makerere University.
She is also a Research Associate at Makerere Institute
of Social Research. She holds a PhD in Development
Studies of the University of Wales, Swansea, UK. Her
doctorate focused on interests and relationships among
gender focused NGOs with focus on Ugandan NGOs.
Mary has worked as a lecturer, consultant, researcher
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and advisor on development issues especially in relation to gender and development. She has
written a number of papers and publications. Mary has undertaken a number of consultancies
for organizations including ActionAid Aid International Uganda, Concern World Wide
Uganda Chapter, OAK FOUNDATION, World Health International Uganda, GOAL,
Diakonia, Trademark East Africa and Oxfam GB, Uganda.

MARTHA OLWENY
With a master’s degree in Management Studies
and a bachelor’s in Quantitative Economics,
Martha has 13 years’ experience in designing,
implementing and managing Monitoring and
Evaluation (M&E) systems using a Private Sector
Development Approach. Since 2003, when she
graduated from Makerere University, she has
worked with a water services company, and then
four donor-funded nongovernmental
organisations, rising to the level of M&E
manager. She is proficient in data analysis and
presentation using SPSS, Excel and Microsoft
Office programmes. She has also conducted
training courses in such areas as Project Planning,
Logical Framework Approach (LFA), Results
chains, Project Cycle Management (PCM),
Management Information Systems (MIS),
participatory approaches and small business development. She is project passionate, results-
oriented leader, trainer, mentor and team player, always ready to work for long hours under
pressure as long as I get the job excellently done and within deadline. Her work experience
and training has taken me to all regions of Uganda and given me international exposure in
Africa and Europe, which means I can comfortably work with people from diverse
backgrounds.

OPIO PETER is a seasoned lecturer of Economics and Project Planning at Uganda Christian
University. He is a co-opted part time Head of the
Department of Economics and Project Management at the
School of Postgraduate, Kampala University. He has
served as an instructor in Project Management at both
undergraduate and post graduate levels. He has ten years
teaching experience, within which he has accumulated
enormous experience in the field. Given the wealth of
experience, he has been motivated to share his knowledge
in project risk management, because knowledge which is
not shared shocks the beholder.

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JOHN VIANNEY AHUMUZA holds a bachelors degree in Education (BA ED) and masters
degree in Peace and Conflict Studies. He has worked
extensively with CSOs at coordination level in project
implementation, monitoring and evaluation. He has also
presented papers at various fora on the best practices for
project implementation. Currently, he is a lecturer of
Ethics in Foundation Studies Department at Uganda
Christian University.

GODFREY KYASANKU holds an masters degree in

Business and Administration (MBA) Degree from
Makerere University, a Post Graduate Diploma in Project
Planning and Management from Uganda Management
Institute and a Bachelor of Arts Degree in Social Sciences
from Makerere University. He is currently a lecturer in the
Faculty of Business and Administration at Uganda
Christian University. He has also served as an assistant
lecturer at Makerere University and lecturer at Kyambogo
University. His areas of interest include project
management, monitoring and evaluation, entrepreneurship
and strategic planning and management. Godfrey has
lecturing experience of over a decade and as a project
expert and consultant. He has published research works and presented papers in academic
conferences. He has also offered consultancy services to local, international, public and
private organizations in areas of conducting baseline surveys, development monitoring and
evaluation, and impact assessment.

MARTIN KABANDA holds an MBA from the Catholic

University of Milan Italy, a Post Graduate Diploma in
Monitoring and Evaluation from Uganda Management
Institute and a Bachelor of Commerce Degree from Makerere
University. Martin has teaching experience of five years. He is
currently a lecturer in the Faculty of Business and
Administration in project management and entrepreneurship,
where he acts as coordinator of the Bachelor of
Entrepreneurship and Project Planning program. In addition,
Martin oversees collaborations in the Department of
Management and Entrepreneurship on voluntary basis. Martin

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has published research works and presented papers in academic conferences. He has offered
consultancy services to both local and international organizations in the field of monitoring
and evaluation.

AUTHOR EFRANCE SEBBOWA holds a

Masters of Human Resource Management Degree
of Makerere University Kampala. She is a
registered Graduate Educator by the Ministry of
Education and Sports with a Bachelor’s Degree
with Education – Economics of Makerere
University.

She’s currently a Lecturer in the Faculty of

Business and Administration Handling areas of
Human Resource Management, International
Human Resource Management and Organizational
Behavior. Efrance has 15 years teaching
experience, within which she has accumulated
enormous knowledge and experience in fields
Entrepreneurship Education and Human Resource Management in organisations. Her
Academic contributions and areas of Research lie mainly in the field of Human Resource
Management, Organizational Behavior, International Human Resource Management, Project
Human Resource Management, Human Resource Technology and Human Resource
Management in Education. Efrance has presented papers in Academic Workshops and
Conferences related to Human Resource Management Issues in Organizations. She has
offered a number of consultancy services to both local and international organizations on
effective Management of Human Resources to maintain a competitive advantage in business.

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 ACKNOWLEDGEMENTS

A book like this is not written in isolation. We pay special tribute to all those who have
supported its development. In particular, we want to that School of Research and
Postgraduate Studies Uganda Christian University who offered a grant for its development.
For without your support, this knowledge would have remained unpublished. Special thanks
go to the anonymous reviews who ensured that the articles are technically sound. More
thanks go to the language and content editors (Mr Peter Mugume and Mr Aleko Godfrey
respectively) for the work well done.
Many of our anonymous reviewers who gave very constructive comments to the
improvement of this manuscript. Their efforts undoubtedly improved the manuscript
drastically. Your efforts are very much appreciated.

Thank you authors who responded to the call for book chapters and you positively made your
submissions for you have made this manuscript a success.

The following authors are much appreciated:

Professor Mary Ssonko Nabacwa Dean Faculty of Social Sciences UCU

Peter Opio Lecturer Faculty of Business and Administration

UCU

Martin Kabanda Head of Programme Entrepreneurship and

Project Management UCU

Godfrey Kyasanku Lecturer Faculty of Business and Administration

UCU

Martha Olweny Consultant Project Management UMI

Efrance Sebowa Lecturer Human Resource Management UCU

Ashton Aryamanya Teaching Assistant Project Management UCU

Vianney Ahumuza Lecturer Foundation Studies UCU

Thank you so much and may the Almighty Lord Reward you more and more abundantly.

Stephen Kyakulumbye

Lead Author and Editor in Chief

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 FOREWORD

Universities offer a number of courses at both undergraduate and postgraduate level. Within
the various courses are course units. One of the most salient cross cutting course unit is
project planning and management. At UCU this unit is also offered as a programme for the
award of the degree of Bachelor of Entrepreneurship and Project Planning. Other
programmes where it is offered are BBA, BHRM, BEM, BPLM, EMBA, MDEV and BDES
among others. Whereas the names of these courses do not sound exactly the same, the
courses share much in terms of content.

This project aims at producing a project planning and management textbook for use by
students, lecturers and practitioners in the project environment. The authors also document
case studies in the African and Ugandan context of projects that have either failed or
succeeded due to project management related knowledge areas. This project is innovative in a
sense that this simplified bridged version will offer readers with the project management
knowledge areas in a sequential manner since projects have life cycle from initiation/concept,
development, execution, monitoring and evaluation and close out/termination. This will
contribute to the improvement of the project management skills of practitioners and UCU
graduates. Other knowledge specialists document content for cross cutting areas of gender
mainstreaming as pre-liquisite for project design. The main method has been in-depth
secondary review of already existing project planning and management material all aimed at
producing a simplified bridged version. Secondary data search has been triangulated with
primary data collected from practitioners, other lecturers’ opinions/point of view and students
all aimed at documenting best practice for better project management.

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 PREFACE

Project Management Profession now enjoys International Recognition as a result, Project

managers are on demand all over the world. The demand for project managers is not limited
to a specific sector or workplace as most modern organizations pursue their strategies through
the implementation of projects. Project management being a profession, to achieve efficiency
and effectiveness within work setting requires an intersection of skills (Skills-set). i.e. Project
Management Skills, General Management Skills and Technical Skills. These skill set can be
gained through formal and informal project management training. There are a number of
bodies worldwide that are making greater attempts to improve project management
profession through various standards and among these are Project Management Institute
(PMI) that develops the bodies of knowledge, International Association of Project Managers
(IAPM), International Project Management Association (IPMA) that develops the
international competence baseline (IPMA ICB), PRojects in a Controlled Environment
(PRINCE2) that develops the project methodology, South African Qualifications Authority
(SAQA), Global Alliance of Project Profession Standards (GAPPS) among others. All these
bodies provides different approaches and dimensions to the project management discipline.
This Book aims at offering the integration of all these endeavors so that later one who attains
a project management qualification can decide on to the necessary certification and licensing.

A quick library search reveals no project management textbook published by Ugandan

authors and yet GAPPS (2005) recommend that project management practices may need to
be contextualised to a particular project environment. Because of lack of integration and
specific/contextualisation, project management any estimates and studies have placed African
project failures rates as high as 60 percent.

The Chaos Report (Standish, 1994) that globally categorized projects by how they were
concluded highlight the following resolutions: Resolution Type 1, or project success: The
project is completed on-time and on-budget, with all features and functions as initially
specified. Resolution Type 2, or project challenged: The project is completed and operational
but over-budget, over the time estimate, and offers fewer features and functions than
originally specified. Resolution Type 3, or project impaired: The project is cancelled at some
point during the development cycle. Overall, the success rate was only 16.2%, while
challenged projects accounted for 52.7%, and impaired (cancelled) for 31.1% (Standish,
2016). So, why is it that so many of these high-profile projects fail? There are lots of reasons
why this is still happening, but out of that larger pool of factors, failure is attributed to poor
management of the project life phases.

In Uganda, the Budget Monitoring and Accountability Uganda (BMAU, 2015) policy brief
highlights key findings for ineffective project implementation at the Ministry of Agriculture
Animal Industry and Fisheries (MAIFF) but are all project management related. Key issues
are linked to project human resource management, project integration management, project
communications management, project procurement management, project cost management
and project time management All these issues are project management knowledge,
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competence and ethical gaps. This publication is meant to enhance students, practitioners and
lecturers competencies in various project management areas.

The New Vision of March 11th 2015 rated most of the Ugandan University Graduates
negatively in project management, creativity, performance, time management and initiative.
Basing on this study conducted by employers, they used the project management core
competencies to evaluate our graduates and that is why time management came up,
performance in terms of costing and quality and even initiative when it comes to project
scope definition. The facilitating project knowledge areas include: project human resource
management, project communication management (M&E aspects), project procurement
management, project risk management and project integration management. Meanwhile,
there are areas in practical project planning and management which are cross cutting which
also determine the quality of the project. These include: gender mainstreaming, environment
impact assessment during project design, HIV/AIDS and sustainable development strategies.

For this first edition book, it categorizes project management tools and techniques basing on
the project management knowledge by PMBOK as emphasized by PMI but contextualised
the knowledge dimensions to Africa/Uganda. It also includes some cross cutting areas which
are always left out or underestimated during project planning and design. Such cross cutting
issues have been documented to contribute to project failure or success. In other editions, we
shall relate PMBOK areas, IPMA ICBs, PRINCE2, GAPPS among other standards; though
pointing out more precursors to project success in developing or transitional nations like
Uganda.

Please enjoy reading this book and apply the knowledge you get to the actual work
environment by doing The Right Things Right for The First Time. Thank you.

Stephen Kyakulumbye

Lead Author and Editor in Chief

LIST OF ACRONYMS
AACE: American Association of Cost Engineers
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AMS: American Mathematical Society
APM: Association of Project Management
AusAID: Australian Aid
BBA: Bachelor of Business Administration
BDES: Bachelor of Development Studies
BEM: Bachelor of Economics and Management
BHRM: Bachelor of Human Resource Management
BoK: Book
BPLM: Bachelor of Procurement and Logistics Management
BPR: Business Process Re-engineering
CHAOS: Chaos Report
CIA: Central Intelligence Agency
CPM: Critical Path Method
DAC: Development Assistence Committee
DPU: Development Planning Unit
ECSS: European College of Sports Science
EMBA: Executive Master of Business Administration
GAPPS: Global Alliance for Project Profession Standards
GIZ: Gesellschaft für Internationale Zusammenarbeit
ICB: International Competence Baseline
ICESCR: International Covenant on Economic, Social and Cultural Rights
IAPM: International Association of Project Managers
ICT: Information Communications Technology
IPMA: International Project Management Association
ISO: Organization of International Standards
IT: Information Technology
LGDP: Local Government Development Plan
LoGICS: Local Government Information Communication System
MAIFF: Ministry of Agriculture, Animal Industry and Fisheries
MBO: Management By Objectives
MDEV: Master of Development Evaluation
NAADS: National Agricultural Advisory Services
NARO: National Agriculture Research Organization
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NUSAF: Northern Uganda Social Action Fund
OECD: Organization for Economic Cooperation and Development
OPM: Office of the Prime Minister
PCM: Project Cycle Management
PERT: Project Evaluation and Review Technique
P2M: Project and Programme Management
PMBOK: Project Management Body of Knowledge
PMI: Project Management Institute
PPM: Project Planning and Management
PRINCE2: Projects in Controlled Environment
RCDF: Rural Communications Development Fund
SAQA NQF: South African Qualifications Authority National Qualifications Framework
UCU: Uganda Christian University
UTAMU: Uganda Technology and Management University
WBS: Work Breakdown Structure
WID: Women In Development

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TABLE OF CONTENTS
CONTRIBUTORS BIOS ................................................................................................................ 3

ACKNOWLEDGEMENTS ............................................................................................................ 7

PART ONE: PROJECT OVERVIEW ............................................................................................ 1

CHAPTER ONE ............................................................................................................................. 1

PROJECT PLANNING AND MANAGEMENT: CONCEPTS AND DEFINITIONS ................. 1

Stephen Kyakulumbye .................................................................................................................... 1

CHAPTER THREE ...................................................................................................................... 29

PROJECT IDENTIFICATION AND SELECTION STRATEGIES............................................ 29

Stephen Kyakulumbye .................................................................................................................. 29

PROJECT IMPLEMENTATION, MONITORING AND EVALUATION ................................. 51

Martin Kabanda ............................................................................................................................ 51

CHAPTER FIVE .......................................................................................................................... 58

PROJECT SCOPE MANAGEMENT .......................................................................................... 58

Stephen Kyakulumbye and Martha Olweny ................................................................................. 58

CHAPTER EIGHT ..................................................................................................................... 103

PROJECT STAKEHOLDER MANAGEMENT ........................................................................ 103

Godfrey Kyasanku ...................................................................................................................... 103

CHAPTER NINE ........................................................................................................................ 119

PROJECT HUMAN RESOURCE MANAGEMENT ................................................................ 119

Sebbowa Ephrance and Aryamanya Aston ................................................................................. 119

CHAPTER TEN.......................................................................................................................... 136

PROJECT RISK MANAGEMENT ............................................................................................ 136

Peter Opio ................................................................................................................................... 136

CHAPTER TWELVE ................................................................................................................. 176

PROJECT TIME MANAGEMENT ........................................................................................... 176

John Vianney Ahumuza .............................................................................................................. 176

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 CHAPTER THIRTEEN .............................................................................................................. 187

MAINSTREAMING GENDER INTO THE PROJECT LIFE CYCLE ..................................... 187

Stephen Kyakulumbye and Mary Ssonko Nabacwa ................................................................... 187

CHAPTER THIRTEEN PROFESSIONALISM IN PROJECT PLANNING AND

MANAGEMENT: A FOUNDATION FOR QUALITY PROJECT RESULTS ........................ 209

Stephen Kyakulumbye ................................................................................................................ 209

SUMMARY OF THE BOOK ..................................................................................................... 223

ABOUT THE CHIEF EDITOR AND LEAD AUTHOR OF THIS BOOK ............................... 224

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15 | P a g e
 PART ONE: PROJECT OVERVIEW
CHAPTER ONE
PROJECT PLANNING AND MANAGEMENT: CONCEPTS AND DEFINITIONS
Stephen Kyakulumbye

Introduction
Project Planning and Management has gradually emerged overtime from the historical Biblical
era, the first project being the Tower of Babel (Genesis 11:1-9). According to this project, a
united humanity in the generations following the Great Flood, speaking a single language and
migrating eastward, comes to the land of Shinar. There they agree to build a city and a tower tall
enough to reach heaven. God, observing their city and tower, confounds their speech so that they
can no longer understand each other, and scatters them around the world. This was a project
communications management component to impend project success like in any other project.
Some modern scholars have associated the Tower of Babel with known structures, notably the
Etemenanki, a ziggurat dedicated to the Mesopotamian god Marduk by Nabopolassar, the king of
Babylonia about 610 BCE. The Great Ziggurat of Babylon is reported to have been 91 metres
(300 ft) in height (Harris and Stephen, 2002).

In 1974, a book entitled The Project Management Body of Knowledge (PMBOK) was published.
In 1984, the title of this book was changed to A Guide to Project Management Body of
Knowledge. This section provides an overview of some pertinent areas in PMBOK
contextualizing them with African cases. More and more standards are available to improve
project management discipline and they include APM, GAPPS, IAPM, IPMA, P2M, SAQA
NQF Level 5, ISO 21500 among others.

Project Management by knowledge body (PMBOK)

Project management is categorized into two functions:
a. Core functions
1. Project time management
2. Project cost management
3. Project quality management
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 4. Project scope management
b. Facilitating functions
1. Project human resource management
2. Project communication management (M&E aspects)
3. Project procurement management
4. Project risk management
5. Project integration management
6. Project stakeholder management

Definition of a Project
1. According to the Association of Project Managers (1984), “a project is a task of creating an
outcome with predetermined objectives. It involves the complex interaction of resources,
services and organizations”.
2. A project cab be conceptualized as a solution to a problem.
3. Project Management Institute (1987): “Any undertaking with a defined starting point and
defined objectives involves a variety of resources and is unique.
4. A project is any undertaking that has a beginning and end, and is carried out to meet
established goals within cost, schedule and quality objectives.”
5. It can be an endeavor in which human, material and financial resources are organised in a
novel way to undertake a unique scope of work, of a given specification, with constraints of
cost & time so as to achieve beneficial change defined by quantitative and qualitative
objectives.
6. A temporary process undertaken to create one or a few units of a unique product or service
whose attributes are progressively elaborated during the development cycle.
7. Project Management Institute (1996): “ A temporary endeavor undertaken to create a
unique product or service”

Cross cutting issues that relate to a project is that it is a temporary, organized human endeavor
to provide a solution to an identified need. It is not an on-going operational organizational
activity. A project can also be defined as a set of activities that has a starting point and an end

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 with specific objectives to achieve. Therefore projects are activity oriented and they consume
resources in terms of Man, Machinery, Moments, Materials and Management Information
Systems.

This definition clearly shows that a project is different from a statement of work (SOW) in that
project is “a temporary endeavor undertaken to create a unique product or service” while a
SOW is a narrative description of products or services to be supplied under contract.

A project as a process
A project is a process aimed at the achievement of specified objectives. Thus, it is vital to
emphasize that a project refers to a process and not the end product or result. Process can be
defined as a series of actions or operations directed towards generating a particular result. For
instance, in a construction project, the final constructed building is not the project but the product
of the project. The project is a process by which the building is constructed. Projects produce
deliverables referred to as end items/Outputs. However, the product of the process usually has a
life beyond the process. A project goes through five standard processes called project
management process groups:
1. Initiating process group: Those are processes performed to define a new project or a new
phase of an existing project by obtaining authorization to start the project or a phase.
2. Planning process group: This helps to establish the scope of the project (limits and
exclusions also called project boundaries), refines the project objectives and define the
strategy required to execute the project in order to achieve the objectives that the project
was undertaken to achieve.
3. Executing process group: The processes performed to complete the work defined in the
project management plan to satisfy project specifications.
4. Monitoring and controlling process group: These processes require to track, review and
regulate the progress and performance of the project; identify areas in which changes
need to be made; ensures that project execution is as per the plan with the required
quality dimensions. This process group can results into critical decisions of project
terminations, project scale up and project replication.

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 5. Closing process group: They are performed to finalize all activities across all process
groups to formally close the project or phase.

Project management
Project management is the application of knowledge, skills, tools and techniques to project
activities to meet and exceed stakeholder project requirements. Project management is
accomplished through processes, using project mgt knowledge, skills, tools and techniques that
receive inputs & generate outputs. Project management is concerned with the overall planning
and co-ordination of a project from conception to completion aimed at meeting the stated
requirements and ensuring completion on time, within cost and to required quality standards.
Project management is normally reserved for focused, non-repetitive, time-limited activities with
some degree of risk and that are beyond the usual scope of operational activities for which the
organization is responsible.

Prerequisites to success
1. Selection of appropriate processes within the project management process groups that are
required to meet project objectives.
2. Use a defined approach to adopt the product specification/Strategy
3. Comply with requirements to meet stakeholder needs and expectations
4. Balancing the triple constraints demands
5. Even worse: on-time, on-budget, great quality, but delivering something your
organization/customers do not need. Therefore projects should address
stakeholder/beneficiary needs.

Why organizations devote a lot of effort on projects?

1. Compression (shortening) of the product life cycle i.e. time to market for few products with
short life cycles has become increasingly important
2. Global competition: Quality movement of ISO 9000 certification cover design,
procurement, quality assurance and delivery processes
3. Knowledge explosion: Projects encompass latest advances

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 4. Corporate downsizing: Project management is replacing middle management or
organizations outsource project work
5. Increased customer focus: need customised products not generic products in nature
6. Small projects represent big problems: 100s of projects can be implemented concurrently
7. Social Cost Benefit Analysis also called economic analysis: projects need to be evaluated
from the point of view of the society (or economy) as a whole. This forms a foundation for
the chapters within this book.
8. Triple bottom line (planet, people, and profit/benefits): threat of global warming has
brought sustainable business practices to the fore front. Not only focus on profit
maximization to the detriment of the environment and society, effort to reduce carbon
imprint and utilize renewable resources are realised through effective project planning and
management.

Project Attributes
A review of the various project definitions gives rise to distinctive characteristics of projects:
1. Unique: A project is a unique, one-off discrete undertaking. Although similar projects may
have similar objectives, every project faces a unique set of environmental, political and
resource issues as well as constraints. In addition, every project results to some extent in
new, unique deliverable or set of deliverables. It is never repeated exactly. E.g. even
though many thousands of office buildings have been developed, each new facility has a
degree of uniqueness about it (Different owner, different design, different location,
different contractors).
2. Finite: A project is a temporary process, i.e. finite/limited duration. A project has a
beginning and an end at which point one can say its objectives have been accomplished.
Even the resources used on a project are temporary, only needed for the project life time.
3. Multiple Resource, Discipline & Organisations: Each project has a different mix of
discrete skills, technologies, and resources which are brought together to focus on the
attainment of project specific objectives.
4. Life cycle: Projects have a unique and distinctive life cycle that passes through several
distinct stages. The activities and resources change as the project progresses through the

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 cycle. The cycle is characterized by a slow start, through a progressive build-up and peak,
followed by a decline and final termination. At the end, some projects may be incorporated
into the normal on-going operations of the parent organisation.
5. Dynamic: A project operates in a dynamic operational and managerial environment
compared to relatively stable environments of conventional enterprises. The dynamic
nature of projects means that the mixture of resources changes frequently throughout the
project life cycle, varying with the needs of the project. The project work may also
generate dynamic reactions in the environment. For instance, think about food kiosks
developing along a road under construction.
6. Discrete end objectives: Projects are formed to meet identifiable objectives or constraints,
usually specified in terms of scope, time, cost and quality requirements. The end results
must be definable at the beginning. So a project is a goal directed with a single set of
objectives and when these objectives have been achieved, the project is completed.
7. Progressive Elaboration of Specifications: A project emerges out of the awareness by
someone that a problem or opportunity exists. Modifications show a progressive
elaboration of specifications.
8. Part-time use of resources: Projects frequently use resources on a part-time basis,
whereas permanent organizations try to use resources on a full-time basis. The sharing of
resources frequently requires skillful negotiation to see that projects get the necessary
resources to meet objectives throughout their project life.
9. Conflict: More than most managers, the project manager lives in a world characterized by
conflicts. Conflict can be created by competition for the use of organizational resources;
conflict between the project and the project team members’ objectives, etc. The need to
meet tight project objectives while dealing with the complexity and dynamic nature typical
of projects, or because of project team members’ being often accountable to two superiors
at the same time, may generate some conflicts.
10. Change: Projects are created to create change- Projects are the change efforts of society.
The turbulence and dynamic nature of the world, necessitates project managers to be
effective at managing change. All managers must manage change through projects. We

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 undertake projects because we cannot produce or achieve the benefit by doing routine
things.
Programmes and Projects
There are differences and similarities between programmes and projects as illustrated below:
Differences
The differences are as follows
1. Time: A programme is a long term intervention with different aspects, all tailored towards
the attainment of the targeted programme deliverables. A project on the other hand is a
temporary endeavor aimed at generating unique outputs to the community. Thus, whereas
the programme can be long-term, a project can be a short term intervention.
2. Content scope: In terms of the content scope, a programme takes a wider coverage.
3. Taking the organizational structure, a programme is a concern of the organizational goal
while a project addresses a mere purpose. It is thus, a sum of different purposes (projects)
that will lead to the attainment of the goal (at a programmatic level).
4. Programmes are evaluated by their impact while projects are evaluated by considering the
outputs. However, several project outputs, overtime, can constitute to an impact.
5. In terms of planning, a programme takes the strategic plans (made by top managers) while
a project takes the operational plans (made by middle and low level managers).

Similarities
The similarities are as follows:
1. Projects that are complex and spread over a long period can also be called programmes.
2. Projects and programmes may use the same resources, whether human or materials
resources. In terms of the human resources, the same persons that design the programme
can be the same to design a project.
3. Projects refine the programme aspects and make them specific for the purposes of practical
implementation. But the overall outcome may never take cognizance of the differences
between the programme and project.
4. Both aid policy formulation from evidence. Quite a number of policies have been enacted
from projects and programmes

7|Page
Historical Background of Projects
Project management is the discipline of planning, organizing and managing resources to bring
about the successful completion of specific project goals and objectives (Cleland & Gareis
2006). Project management has been practiced since early civilisation before Christ (BC) from
the time of creation because God’s assignments were time bound. Literature reveals that projects
were generally managed by creative architects and engineers themselves with little or no formal
project management training. Kwak & Carayannis (2005) argue that project management has
been in practice since the 1950s, and that organizations started applying systematic project
management tools and techniques to complex projects. Similarly several tools and techniques
have also come along way with the evolution of project management. Gantt commonly known
for his Gantt chart as a project management tool invented the Gantt chart which is a
systematically drawn chart showing when the activities will be implemented by time and this
helps to focus the implementers on the time management aspect which is one of the indicators of
project success in addition to the cost and the scope. Gantt’s work is the forerunner to modern
project management tools including work breakdown structure (WBS) and resource allocation.
This project management function help to organize the projects and hence leading to a successful
project implementation.

As a discipline, Project Management developed from different fields of application including

construction, engineering and defense (Cleland & Gareis 2006). The 1950s marked the
beginning of the modern Project Management era. Project management was formally recognized
as a distinct discipline arising from the management discipline (Cleland & Gareis, 2006). Again,
in the United States, prior to the 1950s, projects were managed on an ad hoc basis using mostly
Gantt charts, and informal techniques and tools. At that time, two mathematical project
scheduling models were developed. The "Critical Path Method" (CPM) developed in a joint
venture by both DuPont Corporation and Remington Rand Corporation for managing plant
maintenance projects. And the "Program Evaluation and Review Technique" or PERT,
developed by Booz-Allen & Hamilton as part of the United States Navy's (in conjunction with
the Lockheed Corporation) Polaris missile submarine program. These mathematical techniques
quickly spread into many private enterprises.
8|Page
At the same time, technology for project cost estimating, cost management and engineering
economics was evolving, with pioneering work by Hans Lang and others. In 1956, the American
Association of Cost Engineers (now AACE International - the Association for the Advancement
of Cost Engineering) was formed by early practitioners of project management and the
associated specialties of planning and scheduling, cost estimating, and cost/schedule control
(project control). AACE has continued its pioneering work and in 2006 released the first ever
integrated process for portfolio, program and project management (Total Cost Management
Framework).

Harrison& Lock (2004) also reveals that in 1969, the Project Management Institute (PMI) was
formed to serve the interests of the project management industry. The premise of PMI is that the
tools and techniques of project management are common even among the widespread application
of projects from the software industry to the construction industry. In 1981, the PMI Board of
Directors authorized the development of what has become “A Guide to the Project Management
Body of Knowledge (PMBOK Guide, 2004),” containing the standards and guidelines of practice
that are widely used throughout the profession. The PMBOK guide emphasizes that for project
success, the process of cost estimation, time planning and scope planning are very critical and if
it carefully handled then the project will be implemented in a balanced manner.

Kousholt (2007) argues that the International Project Management Association (IPMA), founded
in Europe in 1967 has undergone a similar development and instituted the IPMA Competence
Baseline (ICB). The focus of the ICB also begins with knowledge as a foundation, and adds
considerations about relevant experience, interpersonal skills and competence. Both
organizations are now participating in the development of an ISO project management standard.

Project success is commonly measured by what many people defined as project management
meeting the budget, meeting the time schedule, and conforming to the requirements known as the
project scope. This prevalence of project success is so ingrained, that the Standish Group (2001)
has gathered statistics since 1994 on projects in IT that succeeded, failed or were "challenged" on
the criteria mentioned below. The Standish Group categorizes projects into three resolutions
types:

9|Page
Successful: The project is completed on time and on budget, with all features and functions
originally specified.
Challenged: The project is completed and operational, but over-budget, over the time estimate,
and with fewer features and functions than initially specified.
Failed: The project is cancelled before completion or never implemented (Standish Group).

According to the extreme CHAOS Report (2001), only 16-28% of the projects examined were
considered a success. Similarly, projects worldwide are sure to fail if effective project
management principles and methodologies are not provided for their execution. Ample evidence
of these failures exists throughout the world for instance; a British parliamentary criticized the
spiraling costs of the 2012 Olympics Infrastructure costs risen by $1.8 billion over the figure
quoted, the US Navy orders Lockheed to stop work on the new coastal-waters workshop because
of big cost overruns, and in a study of 300 large companies, consulting firm Pear Marwick finds
that 65% of hardware and/or software development projects were significantly behind schedule,
over budget, or failed to deliver value in terms of expected performance. This is particularly
severe in developing countries where necessary skills have not been successfully developed in its
project related work force (Kiberu, 2016).

Theoretical Background
There are several theories that explain project management and success of projects. However this
book examines the theory of projects, theory of management and systems theory to give a
holistic view of the project environment. The theory of management discusses three other sub-
models of management: management–as planning, the dispatching model and the thermostat
model. Management-as-planning has been the widely held – even if most often implicit - view on
intentional action in organizations up to now (Johnston & Brennan 1996). The dispatching
model, closely associated with management-as-planning, has been common in industrial
engineering from the beginning of the 20th century. Likewise, the thermostat model has been the
dominating view on management in the 20th century (Johnston & Brennan 1996). These ideas
were all current when project management emerged. Together they form the theoretical
foundation of present management practice. Below are the theory of the project and theory of

10 | P a g e
management as crystallized by the PMBOK guide and the relationship with the success of
projects:

Theory of Project
The theory of project by Burner (2007-2009) views tasks and operations as a transformation
process. This explains that you have some inputs, a change happens, and presto, you get some
outputs. You throw some garbage in, the team has a go at it, and you get some garbage out. You
provide requirements to certain specifications as input, the operation programming starts, and the
end result is some running program.

Like some Russian Babushka (the little dolls that have little dolls in them) each transformation
can consist of multiple smaller transformations. Requirements specification A, B and C are
inputs, Programming A, B and C happen, and you get as outputs program A, B and C. The
management principles behind this all use the fact that you can play with the inputs, outputs and
decomposition of the tasks.

The theory relates out puts delivered to a success of a project. The management functions play
their role of planning, executing and controlling and at the end of the processes; an output is
expected for a project to be considered as successful. A project that fails to deliver some out puts
is not considered successful. This is because the project will have consumed resources provided
as inputs and no results (outputs) realized.

According to Turner (1993) scope management is the raison d’être of project management. He
defines the purpose of scope management as follows: an adequate or sufficient amount of work
is done, unnecessary work is not done, and the work that is done delivers the stated business
purpose. The scope is defined through the work breakdown structure (WBS). What does Turner
say, from a theoretical point of view? Firstly, he (implicitly) claims that project management is
about managing work; this is the conceptualization. Secondly, he claims that work can be
managed by decomposing the total work effort into smaller chunks of work, which are called
activities and tasks in the PMBOK Guide. Thirdly, he claims that this conceptualization and the
principle of decomposition serves three essential purposes of project management of scope

11 | P a g e
management, time management, and cost management, and that their management and control is
centralized because the tasks are related by sequential dependence. Turner (1993) proposes that
for project management to deliver a successful project with the constraints of time cost and
scope, the tasks in the core areas of scope management, time management and cost management
have to be detailed. This is also supported by the description of Morris of the classic - and still
current - project management approach as follows (Morris, 1994): first, what needs to be done;
second, who is going to do what; third, when actions are to be performed; fourth, how much is
required to be spent in total, how much has been spent so far, and how much has still to be spent
is central to the success of projects.

When we compare this crystallization of project management to the theories of operations

management in general, it is easy to recognize that it rests on the transformation theory (or view)
of production, which has dominated production thinking throughout the 20th century. For
example, Starr (1966) formulates any production process can be viewed as an input-output
system. In other words, there is a set of resources which we call inputs. A transformation process
operates on this set and releases it in a modified form which we call output. The management of
the transformation process is what we mean by production management.

In the transformation view, production is conceptualized as a transformation of inputs to outputs.

There are a number of principles, by means of which production is managed. These principles
suggest, for example, the need to decompose the total transformation hierarchically into smaller
transformations, tasks, and minimizing the cost of each task independently (Kousholt, 2007). The
transformation view has its intellectual origins in economics. The popular value chain theory,
proposed by Porter (1985), is one approach embodying the transformation view. However,
mostly the transformation view has been implicit – so embedded in thinking and practice that it
has formed the basis of an invisible, unspoken paradigm that shapes behaviour.

Theory of Management
Burner (2007-2009) argues that to describe the management part, three theories are needed:
management-as-planning, the dispatching model and the thermostat model. The idea behind

12 | P a g e
management-as-planning is, that management soaks up all the information about the process,
creates a detailed sequence of actions, with time and resources assigned, throws the plan to the
operational level and yields just do what the plan outlined. This last part is the dispatching
model: you issue an order down the chain of command that someone has to start on a task, and
that will be it; the worker will automatically without any hesitation or problem start working on
it. If you have the management-as-planning view of the world you think that there is a direct
relationship between what is on paper (the planning) and what happens in reality.

If you are creating a plan that will be executed blindly, you must be very sure that you know
exactly what must be done; you must almost be able to predict the future. And that is exactly
what the appeal of this approach to management is: it provides a sense of predictability (no
surprises will occur) and you have the ultimate control of the situation; change the planning, and
all the working people will change what they are doing. The thermostat model is the Control and
in this model nothing more than looking for reality to be not in line with the plan, and kick the
real world back into shape, so it fits the plan again. You define upfront the desired situation, you
put in the thermometer ones in a while into the project, and when you do not have the desired
temperature, you correct the process until you have your temperature.

The PMBOK Guide (2004) divides project management processes into initiating, planning,
execution, controlling and closing processes. Let us concentrate on the core processes of
planning, execution and controlling (Figure 3). A central idea is that these processes form a
closed loop: the planning processes provide a plan that is realized by the executing processes,
and variances from the baseline or requests for change lead to corrections in execution or
changes in further plans.

13 | P a g e
Figure 3: The closed loop of managerial processes in project management according to the
PMBOK Guide

Planning processes

Controlling process Executing processes

Correction
Source: PMBOK Guide (2004)

Systems theory
In the 1950’s the main approach to understanding situations was ‘reductionism’ – divide
something into its parts. Ludwig von Bertalnffy proposed systems thinking – discover how
something interacts with its environment. All living things, non-living things and projects are
open systems. Systems theory gives us a way to ‘think about’ open systems. Systems theory lays
the foundation for the analysis and modelling of systems. Systems theory provides an analytical
framework for comprehending dynamic interrelated operating systems. To a project perspective,
systems thinking is holistic approach to problem solving; reflecting on how the organisation and
project relates to its business environment and how factors in the environment can affect the
project. A system can be defined as an identifiable, complex dynamic entity composed of
discernibly different parts or subsystems that are interrelated to and interdependent on each other
and the whole entity with an overall capability to maintain stability and to adapt behaviour in
response to external influences. This can be a true definition for projects as they relate to their
internal and external environment. Systems: are Goal Seeking, are Holistic, have Hierarchy, have
Inputs and Outputs, transform inputs into outputs, consume and/or create Energy, have
Feedback.

As regards systems being holistic, Fredrick Hagel (1770-1831) notes:

– The whole is more than the sum of the parts;

14 | P a g e
 – The whole determines the sum of the parts;

– The parts cannot be understood if considered in isolation from the whole;

– The parts are dynamically interrelated and interdependent;

To a project perspective, projects have sub-systems that work semi-independently to achieve a

given project objective. This is evident when project managers develop a work break down
structure also called project decomposition as will be alluded to in the later chapters.

WHOLE
SYST EM

PLANT LEVEL
MORE GENERAL

SUB
SUB SYST EM
DEPART MENT LEVEL
SYST EM
SUB
SYST EM SYST EMS
CELL LEVEL

WORKST AT ION LEVEL

SUB
MORE DET AIL
SUB SYST EM
SYST EM
PROCESS LEVEL
SUB
SYST EM

Source: Author generated

Conceptual Background

This section provides a conceptual view of various project based on a systems approach (an
understanding of sub-systems within the project entirely. Some are given in form of definition
and others as illustrations. A project is a finite endeavor--having specific start and completion
dates--undertaken to meet particular goals and objectives, usually to bring about beneficial
change or added value. This finite characteristic of projects stands in contrast to processes, or
operations which are repetitive, permanent or semi-permanent functional work to produce
products or services. In practice, the management of these two systems is often found to be quite

15 | P a g e
different, and as such requires the development of distinct technical skills and the adoption of
separate management (Dinsmore, et al 2005).

Another key concept during project management is the triple constraint of projects also plotted
on the project magic triangle. They are deemed to be critical to project success are time, scope
and cost; so that when well balanced, project managers attain project quality (Figure 1).
However, to detail, balancing the competing project constraints, may include, but are not limited
to proper management of: Scope, Quality, Schedule, Budget, Resources, and Risks.

Fig: 1 The Project Management Triangle

Source: A Short Course in Project Management (Carl, 2007)

Carl (2007) argues that “Like any human undertaking, projects need to be performed and
delivered under certain constraints. Traditionally, these constraints have been listed as "scope,"
"time," and "cost" These are also referred to as the "Project Management Triangle," where each
side represents a constraint. One side of the triangle cannot be changed without affecting the
others. A further refinement of the constraints separates product "quality" or "performance" from
scope, and turns quality into a fourth constraint. These three constraints are often competing
constraints: increased scope typically means increased time and increased cost, a tight time
constraint could mean increased costs and reduced scope, and a tight budget could mean
increased time and reduced scope. The discipline of Project Management is about providing the
tools and techniques that enable the project team (not just the project manager) to organize their
work to meet these constraints.
16 | P a g e
Project management is the application of knowledge, skills, tools and techniques to project
activities to meet project goals and objectives. Project management is accomplished through the
application and integration of the project management processes of initiating, planning,
executing, monitoring and controlling, and closing. Managing a project includes: identifying
requirements, establishing clear and achievable objectives, balancing the competing demands
for quality, scope, time and cost, adapting the specifications, plans, and approach to the different
concerns and expectations of the various stakeholders. In project management, Project managers
often talk of a “triple constraint”— project scope, time and cost—in managing competing project
requirements for project success. The three constraints affect the project quality. High quality
projects deliver the required product, service or result within scope, on time, and within budget
(PMBOK 2004). Project management is the discipline of planning, organizing and managing
resources to bring about the successful completion of specific project goals and objectives
(Cleland & Gareis 2006).

Key PM Concepts as adopted and modified from the PMBOK® Guide 5th Edition
The figure below is a conceptual view of the relationships between various project management
concepts as applied in project management:

Figure 2: Project Management concepts

Source: Adopted from PMI, 1999.

17 | P a g e
How these concepts/dimensions relate to a project manager?
It is a responsibility of project managers to satisfy the needs: task needs, team needs, and
individual needs (team members and stakeholders). As project management is a critical strategic
discipline, the project manager becomes the link between the strategy and the team. Projects are
essential to the growth and survival of organizations. Projects create value in the form of
improved business processes, are indispensable in the development of new products and services,
and make it easier for companies to respond to changes in the environment, competition, and the
marketplace.

The project manager’s role therefore becomes increasingly strategic. However, understanding
and applying the knowledge, tools, and techniques that are recognized as good practice are not
sufficient for effective project management. In addition to any area-specific skills and general
management proficiencies required for the project, effective project management requires that
the project manager possess the following competencies:
a) Generally Acceptable Project Management Knowledge and Practice like: project scope
management, project time management, project cost management, project quality
management. These are core project management knowledge areas. Also other
facilitating project management knowledge areas are: project risk management, project
communications management, project integration management, project risk management,
project procurement management among others.
b) Application area knowledge and practice. For instance if it is an ICT project, then the
project manager needs to be versed with such knowledge. If it is engineering, then the
project manager needs to know about engineering disciple.
c) General management knowledge and practice that include planning, organizing,
controlling, commanding, staffing, integrating, directing during the execution of the
project.
However, all these competencies do not stand in isolation but interwoven to give the project
manager a holistic knowledge competency view.

18 | P a g e
PMBOK Guide 5th edition summarizes that effective project management requires that the
project manager possess the following competencies:
Knowledge—Refers to what the project manager knows about project management.
Performance—Refers to what the project manager is able to do or accomplish while applying
his or her project management knowledge.
Personal—Refers to how the project manager behaves when performing the project or related
activity. Personal effectiveness encompasses attitudes, core personality characteristics, and
leadership, which provides the ability to guide the project team while achieving project
objectives and balancing the project constraints.

Relationships Among Portfolios, Programs and Projects

The relationship among portfolios, programs, and projects is such that a portfolio refers to a
collection of projects, programs, sub-portfolios, and operations managed as a group to achieve
strategic objectives. Programs are grouped within a portfolio and are comprised of subprograms,
projects, or other work that are managed in a coordinated fashion in support of the portfolio.
Individual projects that are either within or outside of a program are still considered part of a
portfolio. Although the projects or programs within the portfolio may not necessarily be
interdependent or directly related, they are linked to the organization’s strategic plan by means of
the organization’s portfolio.

Table 1: Comparative Overview of Project, Program, and Portfolio Management

Projects Program Portfolios

Scope Projects have defined Programs have a larger scope Portfolios have an organizational
objectives. Scope is and provide more significant scope that changes with the strategic
progressively elaborated benefits. objectives of the organization.
throughout the project life
cycle.

Change Project managers expect Program managers expect Portfolio managers continuously
change and implement change from both inside and monitor changes in the broader internal

19 | P a g e
 processes to keep change outside the program and are and external environment.
managed and controlled. prepared to manage it.

Planning Project managers Program managers develop the Portfolio managers create and
progressively elaborate overall program plan and maintain necessary processes and
high-level information into create high-level plans to guide communication relative to the
detailed plans throughout detailed planning at the aggregate portfolio.
the project life cycle. component level.

Management Project managers manage Program managers manage the Portfolio managers may manage or
the project team to meet the program staff and the project coordinate portfolio management staff,
project objectives. managers; they provide vision or program and project staff that may
and overall leadership. have reporting responsibilities into the
aggregate portfolio.

Success Success is measured by Success is measured by the Success is measured in terms of the
product and project quality, degree to which the program aggregate investment performance and
timeliness, budget satisfies the needs and benefits benefit realization of the portfolio.
compliance, and degree of for which it was undertaken.
customer satisfaction.

Monitoring Project managers monitor Program managers monitor the Portfolio managers monitor
and control the work of progress of program strategic changes and aggregate
producing the products, components to ensure the resource allocation, performance
services, or results that the overall goals, schedules, results, and risk of the portfolio.
project was undertaken to budget, and benefits of the
produce. program will be met.

Table adopted and modified from PMBOK Guide 5th Edition.

Context of project performance: ICT based projects

ICT has become a critical concept during project management. The unprecedented growth of
information and communication technologies (ICT) driven by microelectronics, computer
hardware and software systems has influenced all facets of computing applications across
organizations. Simultaneously the business environment is becoming increasingly complex with
functional units requiring more and more inter-functional data flow for decision making, timely
and efficient procurement of product parts, management of inventory, accounting, human
resources and distribution of goods and services. In this context, management of organizations
needs efficient information systems to improve competitiveness by cost reduction and better

20 | P a g e
logistics. It is universally recognized by large and small-to medium - size enterprises (SME) that
the capability of providing the right information at the right time brings tremendous rewards to
organizations in a global competitive world of complex business practices.

Governments worldwide are, too, increasingly recognizing the need to facilitate access to public
services for citizens and businesses through strategies including e-government, e-commerce, e-
education (MoICT Policy, 2008). With the Ugandan government’s decentralization of powers
based on devolution of powers, functions and responsibilities intended to improve service
delivery to local beneficiaries, local governments are determined to use every strategy including
ICT to provide better services. This book concentrates on ICT projects integration which
according to Upadhyaya (2011) is defined as a myriad of standalone media, including mobile
telephone, radio, television, video, tele-text, voice information systems as well as computer
mediated networks that link a personal computer to the network. Similarly, Mosleh and Shannak
(2009) as cited by Kyakulumbye and Muhenda (2012) define ICT as the term that encompasses
hardware, software, networks and people. This paper perceives ICT in terms of hardware,
software and people ICT skills that form an integral component in information processing,
generation and application. ICT can facilitate the exchange information and services with
citizens, business and other arms of government in a much faster manner which could result in
improvements in mass processing of essential tasks and public administrative operations (Zhao,
2011; World Bank, 2008).

As a way of mainstreaming ICT, the Government of Uganda (MOICT, Policy, 2008) Information
Technology Policy aimed at facilitating interactions between Governments, government to
citizens, business and citizens, government to business to simplify and enhance its internal and
external communications. Most ICT programmes in local governments in Uganda would be
placed at Local Government Business Information Centers for staff accessibility. For instance
the local government Information Communication System that never worked was developed
under the local government Development Program (LGDP I) and comprised three integrated
parts, namely: (i) Monitoring and Evaluation Subsystem; (ii) Compliance Inspection (CI) Sub-
system; (iii) Computerized Software Sub-system, which would enable the data generated from

21 | P a g e
the M&E sub-system and CI subsystem to be entered, verified, analyzed, stored and
disseminated to the various stakeholders.

The programme was meant to be a multi-sectoral information system covering all sectors in a
local government including: education, health, water, roads, prisons, police, production,
planning, finance and administration, council and social services departments. In spite of such
endeavor, ICT project failure rates is still high as evidenced from very low usability of the
programmes. For instance many estimates and studies have placed ICT project failure rates as
high as 60 percent. This is an extraordinary percentage and represents many billions of wasted
dollars over the years. So, why is it that so many of these high-profile projects fail?
Kyakulumbye & Muhenda (2013) in similar studies conducted in selected districts like Mityana,
Mukono, Kayunga, and Iganga, found low usability of the information centres where ICT
projects are housed and inadequate information for effective decision making in local
government and yet ICT is a critical project enabler. Opande (2009) found that failed rural ICT
projects eat up US$10m in Uganda and that out of 3,863 rural projects implemented by Rural
Communications Development Fund (RCDF), only 923 (24%) have been completed and are still
in operation countrywide. Another documented failed ICT project is the electronic voter
registration in Uganda whose cost was US $22m spent on equipment, consultancy services and
operations and had no benefits because the system was not put to use for the 2001 elections.

Another worthwhile project is the District Business Information Centres (DBICs) project. This
attracted a concessional loan of US$ 106,590,305 from the export/import bank (EXIM) of China
to be paid back over a period of 20 years (Mulira, 2009 as cited by The New Vision 2012). Its
purpose was to power up the National Transmission Backbone Infrastructure and related e-
Government Infrastructure in order to provide availability of Internet and reduce on the
operational costs. Acquiring a loan with a long payback period necessitates establishing value for
money of the proposed intervention. This paper explores the successes and failures of the
Information Technology Projects through in-depth literature review and discussions with key
officers of Uganda, and key informants in relevant ministries involved in ICT projects
deployment.

22 | P a g e
ICT projects failure rates
There have been many reports of unsuccessful ICT related project implementations within
business, including accounts of the inability of Hershey to ship candy at Halloween, Nike losing
shoe orders, and Foxmeyer’s failure to process orders (Cotteleer, 2003). Majed (2000) reported
that 70% of ICT implementations did not achieve their estimated benefits. In other studies, the
percentage of ICT project implementations that can be classified as “failures” ranges from 40%
to 60% or higher (Langenwalter, 2000), and failures of system implementation projects have
been known to lead to problems as serious as organizational bankruptcy (Bulkelery, 1996;
Davenport, 1998; & Markus et al., 2000).

Practitioners tend to discuss the impact of the failure of ICT projects implementation in a relative
sense, referring to the shutting down of the systems, being able to use only part of the system,
suffering business loss, dropping market price, losing both market share and competitive
advantage due to implementation failure, and so on (Deutsch, 1998; Diederich, 1998; Nelson and
Ramstad, 1999). However, there have been various definitions of failure of ICT projects
implementation. Failure has been defined as an implementation that does not achieve a sufficient
Return on Investment (ROI) identified in the project approval phase. Using this definition, it has
been found that failure rates are in the range of 60-90% (Ptak, 2000).

As ICT projects implementation failure rates are so high and the consequent impacts are so
detrimental to business, there is a compelling reason for opening the “black box” to investigate
the project related factors causing failure. In order to examine the causes of failure in the ICT
projects implementation process, a “Project Systems Life Cycle” (Markus et al., 2000)
perspective is adopted, that can help to look at what goes on (e.g., problems experienced and
attempts at problem resolution) at each phase of the experience cycle (Markus et al., 2000).
Previous research has focused on ICT implementation for the definition of project failure
(Lyytinen, 1988). However, the majority of studies have failed to take into account the richness
of the ICT projects failure phenomenon. In this book, we have conducted primary and secondary
empirical investigations into ICT projects failure from the perspectives of management, the
project team, and the consultants involved in ICT implementation. We define critical failure

23 | P a g e
factors or critical success factors (CFFs or CSFs) as the key aspects (areas) where “things must
go wrong” in order for the ICT projects implementation process to achieve a high level of failure
or success respectively.

Linking ICT project failure to the project management life cycle

Generically, project life cycle comprises of the following phases: concept phase, development
phase, evaluation phase and finish or termination phase. At each of these phases is a project
management knowledge area to support effective roll out of phases as per the waterfall model.
For instance clarity of the nature and use of the system from the user’s perspective may lead into
better and successful detailed planning or development. Detailed planning should cater for the
effective business process re-engineering (BPR); good BPR results into effective project
management among others. Based on other similar studies conducted, these phases are collapsed
into three main failure or successful dimensions for ICT projects and these are: consultant
effectiveness, project management effectiveness and quality of Business Process Re-engineering
with each dimension having a project knowledge management area to enhance success.

Analysis of Critical Failure Factors (Adopted from Reviewed Literature)

Critical failure factors were assessed based on the information suggested by participants and
triangulated from the documents describing the ICT project implementation (ICT project plan,
meeting minutes, email communications and so on). The determination of critical failure factors
was based on (1) an understanding of the ICT implementation process from the information
given by participants (2) each participant’s critical failure factors (validated using secondary
source evidence, e.g., implementation related documents, email communications and meeting
minutes) and (3) a relative comparison of the most important critical failure factors with the
approval from the chief informant (such as the project manager).

The fourteen critical failure factors were identified as follows:

Critical Failure Factors for project Company Company Company Company
Implementation A B C D
1. ICT system misfit √ √ √

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2. High turnover rate of project team members √
3. Over-reliance on heavy customization √ √
4. Poor consultant effectiveness √ √ √ √
5. Poor IT infrastructure √
6. Poor knowledge transfer √ √
7. Poor project management effectiveness √ √ √ √
8. Poor quality of Business Process √ √ √ √
Reengineering (BPR)
9. Poor quality of testing √ √ √
10. Poor top management support √ √ √ √
11. Too tight project schedule √ √ √
12. Unclear concept of the nature and use of √ √ √
system from the users’ perspective
13. Unrealistic expectations from top √
management concerning the system
14. Users’ resistance to change √ √

Poor consultant effectiveness

Company A’s consultants were considered by their project team members to be inexperienced
with ICT systems and unable to provide a professional level of advice on systems project
planning. Consultants communicated ineffectively during the project phase due to language
barriers, and they copied the systems configuration directly from the India branch office and only
suggested workarounds without applying professional skills to conduct BPR to bridge the gap
between systems and business processes. A detailed test plan and guidelines were not suggested
to the project team. For company B, the consultants delivered poor quality of training (very brief
and like a pre-sales demonstration), conducted BPR to a poor quality and delivered poor quality
management reports due to insufficient industrial experience. For company C, consultants spent
only two days on training the project team and configuring the systems. They did not provide
any consulting service on BPR, project management, or detailed project implementation. The
project team commented that the service was insufficient and unprofessional. For company D,

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the consultants were inexperienced in using the system, they followed their formal
implementation methodology during only the first two months, BPR was poorly conducted as
they were not satisfied with the consulting fee received from the project. Also, the user
requirement analysis document produced was too wordy (all business process flow charts for
clarifying how to conduct BPR were absent) and the training material (prepared by the
consultants) was found to be too brief and unhelpful.

Poor quality of Business Process Re-engineering (BPR) or project re-engineering

For Company A and B, the project team members disclosed that they had an unclear vision of
why or how to conduct BPR, and their consultants provided unprofessional advice for
conducting BPR. They commented that the consultants provided lots of workarounds to resolve
problems associated with business process mismatch. Project team members found it difficult to
collaborate and contribute to BPR, and the poor quality of BPR led to incorrect system
configuration problems. Business processes were not successfully reengineered to fit with the
systems, and the project teams were unready for the adaptation of new business processes and
they did not have the mind-set for implementing or using the new system. Moreover, during the
BPR process, consultants did not conduct mapping analysis to map the software functionalities
with business requirements, and this led to a mismatch between systems and business processes.
Users and the business process were not ready for system implementation, and thus, the system
could not provide support for business. For company C, as their vendor adopted a customization
strategy and provided a two-day consulting service (all BPR expertise, system implementation
process and testing advice were absent), it took more than eighteen months for vendors to
complete the customization programming (mapping the system functions with the business
processes). For Company D, the project team mentioned that mapping analysis was conducted in
a rush. The high level business process flow diagram was missing, and thus, project team
members and users were unsure of how to reengineer the business process to fit with the system.
The wordy BPR documents which were free from diagrams were insufficient for the project team
to understand how to reengineer the business process for a better adaptation to the new business
process and system usage.

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Poor project management effectiveness
Due to limited project knowledge, capability and poor project management skills, none of the
companies’ project managers could exercise effective project management of system
implementation. They agreed that a failure to plan, lead, manage and monitor the project was a
core factor that resulted in their implementation failure, because the system was complex, and
project teams were required to collaborate with top management, different departments, users
and consultants during implementation process. The ICT project was considered by the project
managers to be challenging and demanding, as it involved managing systems, people (project
team, users and external consultant) as well as re-designing business processes. For companies
B, C and D, the over-tight and unrealistic project time schedule and insufficient human resource
exhausted the project team members and users in coping with the system implementation.
Activities of the different phases could not be conducted thoroughly (e.g., systems configuration
and testing were conducted in a rush). Users could not understand the new system or adapt to the
new business process within the over-tight schedule. None of the project managers in their
studies were able to exercise effective project management control, especially in managing
consultants, and reporting implementation problems to top management whenever necessary. It
is important for the communication and training performance, when conducting BPR, and when
testing system performance. Indeed, in their study, most of the companies’ project team members
lacked project experience (including top management, the project manager, middle level
management and operational staff). However the external consultants were not able to provide
professional advice and so led a failed implementation. They ultimately advise that top
management and project managers need to ensure sufficient knowledge and expertise for ICT
implementation before the start of project implementation. After this case based overview, this
book provides a detailed elucidation of the management of the generic project cycle phases with
their respective project management knowledge areas.

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 PART TWO: PROJECT LIFE CYCLE

CHAPTER TWO

By Stephen Kyakulumbye

2.1 Introduction
A project life cycle is the series of phases that a project passes through from its initiation to its
closure. The phases are generally sequential, and their names and numbers are determined by the
management and control needs of the organization or organizations involved in the project, the
nature of the project itself, and its area of application. The phases can be broken down by
functional or partial objectives, intermediate results or deliverables, specific milestones within
the overall scope of work, or financial availability. Phases are generally time bounded, with a
start and ending or control point. A life cycle can be documented within a methodology. The
project life cycle can be determined or shaped by the unique aspects of the organization,
industry, or technology employed. While every project has a definite start and a definite end, the
specific deliverables and activities that take place in between will vary widely with the project.
The life cycle provides the basic framework for managing the project, regardless of the specific
work involved. This therefore brings us to the concept of Project Cycle Management (PCM)
which can be defined as a method of managing the phases of the project cycle using the
integrated and logical framework approach.

Project life cycles can range along a continuum from predictive or plan-driven approaches at one
end to adaptive or change-driven approaches at the other. In a predictive life, the product and
deliverables are defined at the beginning of the project and any changes to scope are carefully
managed. In an adaptive life cycle, the product is developed over multiple iterations and detailed
scope is defined for each iteration only as the iteration begins.

2.1.1 Characteristics of the project life cycle

Projects vary in size and complexity. Whatever we do in daily life is a project in a sense that it
will have a start and an end. All projects can be mapped to the following generic life cycle
structure:

2|Page
 • Starting the project
• Organizing and preparing
• Carrying out the project work, and
• Closing the project.

PRINCE2 methodology (Projects In a Controlled Environment) categorizes these as: controlled

start, controlled middle and controlled end. This generic life cycle structure is often referred to
when communicating with upper management or other entities less familiar with the details of
the project. It should not be confused with the Project Management Process Groups, because the
processes in a Process Group consist of activities that may be performed and recur within each
phase of a project as well as for the project as a whole. The project life cycle is independent from
the life cycle of the product produced by or modified by the project. However, the project should
take the current life-cycle phase of the product into consideration. This high-level view can
provide a common frame of reference for comparing projects—even if they are dissimilar in
nature.

Projects typically have a slow start, then rapid fast development and slow end. This is in terms of
cost and staffing levels as per the figure below:

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Figure: Typical cost and staff levels across a generic life cycle structure

Starting the Organizing and Carrying out the

Project Preparing work Closing the project
Cost and staffing level

Project Management Project Project Management Accepted Archived

Outputs Charter Plan Deliverables Project Documents
TIME

The generic life cycle structure generally displays the following characteristics:
• Cost and staffing levels are low at the start, peak as the work is carried out, and drop
rapidly as the project draws to a close.
• The typical cost and staffing curve above may not apply to all projects. A project may
require significant expenditures to secure needed resources early in its life cycle, for
instance, or be fully staffed from a point very early in its life cycle.
• Risk and uncertainty are greatest at the start of the project. These factors decrease over
the life of the project as decisions are reached and as deliverables are accepted.
• The ability to influence the final characteristics of the project’s product, without
significantly impacting cost, is highest at the start of the project and decreases as the
project progresses towards completion. The figure illustrates the idea that the cost of

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 making changes and correcting errors typically increases substantially as the project
approaches completion.

However the pattern of slow-rapid-slow progress toward the project goal is common. For
instance, during a construction project, this pattern is very common because at most time, it is a
result of changing the levels of resources used during the successive stages of the life cycle. The
activity pattern of the project can be measured in various ways, such as the money spent on the
project, the number of people working on the project, the amount of materials being utilized, the
percentage of total organizational effort devoted to it, or the amount of conflict generated
between the project and functional units.

Besides changes in the level of activity, the nature and emphasis of the activity also vary. For
example, consider a mix of software development project personnel: during early stages of the
project, users and planners dominate; during middle stages, designers, programmers, code
builders and implementers are in charge; in later stages, end users take over.

Despite changes in the level and mix of activity, three measures of activity are applied during the
full project span: Time, cost and performance. Time as a key constraint refers to the progress of
activities and the extent to which the schedules and deadlines are being met. Cost refers to the
rate of resource expenditure and how it compares to the budget constraint imposed on the
project. Performance refers to the specifications and requirements established for the outputs of
the project (for example, the speed and range of aircraft, the user friendliness of the software, the
consumer appeal of a new product, the results of the polls for the candidate running for an office)
and how they compare to the objectives. Ability to meet the requirements is a measure of quality
of the project outputs. Throughout the project lifecycle, project teams attempt to achieve time,
cost and performance requirements.

2.1.2 Project phases

A project may be divided into any number of phases. A project phase is a collection of logically
related project activities that culminates in the completion of one or more deliverables. Project

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phases are used when the nature of the work to be performed is unique to a portion of the project,
and are typically linked to the development of a specific major deliverable. A phase may
emphasize processes from a particular Project Management Process Group, but it is likely that
most or all processes will be executed in some form in each phase. Project phases typically are
completed sequentially, but can overlap in some project situations. Different phases typically
have a different duration or effort. The high-level nature of project phases makes them an
element of the project life cycle.

The phase structure allows the project to be segmented into logical subsets for ease of
management, planning, and control. The number of phases, the need for phases, and the degree
of control applied depend on the size, complexity, and potential impact of the project. Regardless
of the number of phases comprising a project, all phases have similar characteristics:
• The work has a distinct focus that differs from any other phase. This often involves
different organizations, locations, and skill sets.
• Achieving the primary deliverable or objective of the phase requires controls or processes
unique to the phase or its activities. The repetition of processes across all five Process
Groups (initiating process group, planning process group, monitoring and controlling
process group, executing process group and closing process group), provides an
additional degree of control and defines the boundaries of the phase.
• The closure of a phase ends with some form of transfer or hand-off of the work product
produced as the phase deliverable. This phase end represents a natural point to reassess
the activities underway and to change or terminate the project if necessary. This point
may be referred to as a stage gate, milestone, phase review, phase gate or kill point. In
many cases, the closure of a phase is required to be approved in some form before it can
be considered closed.

Some organizations have established policies that standardize all projects, while others allow the
project team to choose and tailor the most appropriate approach for their individual project. For
instance, one organization may treat a feasibility study as routine pre-project work, another may
treat it as the first phase of a project, and a third may treat the feasibility study as a separate,

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stand-alone project. Likewise, one project team may divide a project into two phases whereas
another project team may choose to manage all the work as a single phase. Much depends on the
nature of the specific project and the style of the project team or organization.

2.1.2.1 Project conceptualization

This phase is at-times referred to as inception phase or programming phase depending on the
nature and magnitude of the project. Critical to the start the project life cycle in the initiating
process group is project conceptualization. Project conceptualisation is the first phase of the
project cycle management. PCM is a method of managing the phases of the Project Cycle using
project principles, tools and techniques. At each stage of the project life cycle, there are critical
success factors required in terms of project knowledge compétences/areas, there principles, tools
and techniques if such a phase is to undertaken successfully.

The project team needs to review the socio-economic indicators, partner countries and donor
priorities. There is need to reach an agreement on sectoral and thematic focus for cooperation
through formulation of feasible strategy. The input documents for this phase include but not
limited to: country investment plans, donor registers and websites, organizational strategic plans,
community needs assessments studies, baseline studies among others. The output for this phase
is a project concept note (PCN)/paper also called a project charter.

If it is an inception, it outlines a methodology and timeline for execution of the project. It

opines the project context, project logic model, the work-plan and an indicative methodology for
execution. Agreement is reached how project work is to be directed and managed. Direct and
Manage Project Work is the process of leading and performing the work defined in the project
management plan and implementing approved changes to achieve the project’s objectives. The
key benefit of this process is that it provides overall management of the project work. Agreed to
implementation strategy is documented in an inception report after an inception meeting.
Another major purpose of this phase is that it sets limits and exclusions for project work so that
during implementation, there is an agreed position. This ensures quality as project work will be
performed within the scope, schedule and cost as per the work plan.

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Prior to inception meetings, there are normally briefings and pre-start up activities. This aims at
ensuring that all parties will remain committed to the project. Some other organizations call it a
project launch meeting that will inform the start up sub-phase. Then the inception meeting is to
review the project context and objectives and, if necessary, revise the implementation plan to fit with
the current situation on the spot - specific objectives should not change, but the means of achieving
them can be adjusted to take into account the changes since the terms of reference were drafted; the
inception report is also a useful opportunity to identify key individuals for the project activities (e.g.
to select the right trainers and target group for training) among others.

Inputs, tools and techniques and outputs

The inputs at this phase are: project implementation plans, approved change requests, enterprise
environmental factors, organization process assets. The tools and techniques are expert judgment,
project management information systems and meetings. The output of this phase to inform main
implementation phase are deliverables, work performance data, change requests, project management
plan updates, project document updates or summarized as a project charter.

Checklist for Drawing Up a Project Charter

A Project Charter is a concise and clear framework that summarizes the work done in the
concept phase of the project. It is a summarized presentation format for project proposals. The
charter comprises a checklist with the following questions:
1. What is the organisational rationale for the project?
2. Are the project objectives (outputs and expected accomplishment) clear and
unambiguous?
3. What actions need to be done?
4. Who is going to do them?
5. What resources are required?
6. What is not going to be done?
7. Is everything feasible and realistic`?
8. Are outputs, expected accomplishment and objectives „measurable“? If so what measures
should be used?
Below can be an outline of the project concept note/charter:
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 1. Project Name:
2. Background / Problem to be addressed
3. Intervention logic (project objectives, expected accomplishment and outputs)
4. Scope (point out „borderline issues“)
5. Team/ Resource roles: Who does what?
6. Project Risk Assessment: Which ones have we anticipated? How are we planning to react
to the major risks (design!!!)
7. Project Milestones: What needs to happen when? Include project review dates
8. (Achievement Measurement: How will we know if we‘ve succeeded?)

Project principles, knowledge areas, tools and techniques

As noted, they key project management principles are this phase are assessing relevancy,
effectiveness, efficiency and sustainability of projects as outlined below and this provides the
assessment criteria of many projects:
▪ Projects are relevant to the real needs of beneficiaries because:
✓ Beneficiaries are actively involved in the planning, implementation and M&E
processes since the outset
✓ Problem analysis is thorough
✓ Goals are clearly stated
▪ Projects are feasible and sustainable; efforts are made to ensure that:
✓ Outputs and objectives are logical
✓ Risks and assumptions are taken into account
✓ Monitoring helps adjusting implementation
✓ Benefits will continue afetr the project
✓ Results from evaluation are used to learn from experience and adapt the content of the
project as well as reshape the new programming phase
▪ Efficiency
✓ Analysis of how successful the project has been in transforming the means (the
resources and inputs allocated to the project) through project activities into concrete
project results.

9|Page
 ▪ Effectiveness
✓ Analysis on how well the production of project results contributes to the achievement
of the project purpose.
✓ Uses base-line information on the pre-project situation as a starting point

Key project knowledge management areas at this phase include project scope management also
called scope definition or statement of works or specification of requirements. Using the ADDIE
Model, it is the analysis phase where feasibility analysis is undertaken. Feasibility assess the
viability of project idea, possibility of successful project completion, reasonable likelihood of
successful completion and the constraints therein, achievability of the project idea and the project
manager and team delve into the question, “Will it work??”

Feasibility
Feasibility is a reasonable like hood that constraints on time and other resources will not prevent
the project from meeting its key intended objectives. It is also the capability of being done with
the means at hand and circumstances as they are. The major purpose of feasibility is to assess the
viability of a project idea-technically, operationally and economically. Many projects have failed
because of detailed implementation before detailed feasibility analysis. By half life or mid-term
or even before, the project develops malfunctions due to lack of feasibility assessment.
Feasibility assessment is the disciplined and documented process of thinking through a project
idea or concept from its logical beginning to its logical end. For example, advancement from a
flipped classroom to purely e-learning model may necessitate determining its potential to be a
viable business given the realities of the economic and social environment in which it will
operate. At phase, there is need to provide the client with a solid foundation upon which the
project will be built. As a road to the project, it will provide:
1. Concept identification
2. Estimates of supportable market
3. Design parameters
4. Estimates
5. Revenue projections

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 6. Net warranted investment

Feasibility assessment will ultimately provide the scope statement which is one of the project
management knowledge areas called project scope management. This assessment has to include:
1. Project Justification
2. Project Objectives
3. Major Deliverables
4. Criteria: Project/ or Phase Successfully Completed
5. Project limits and exclusions.

Types of feasibility
This section provides an outline of some of the types of feasibility that may be undertaken in
consideration to start a new project or development intervention:
Technical Feasibility (TF)
This is the first systematic investigation of Project Design Viability. It is the Foundation of all
other FS. It is an assessment of a Project’s Capabilities. It is an investigation of Technical &
Physical Parameters.

TF Reviews:
– Technical Capability of Human Resource
– Capability of Available at Technical side
– Foreign consultants Role
– Too rigid, & Advanced Technical Specifications
– Cannot be met by organization.
The question is “Can it be built?”
At this analysis, there is need to anticipate Broader Problems with Questions:
1. Adequate “Choice of Available Technologies for Alternative Design” purposes,
considering:
a. Physical layout
b. Engineering design

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 c. Availability of raw materials?
2. Costs of Construction and Operation
a. Machinery
b. Equipment
c. Spare Parts
3. Manpower Requirement:
a. From professional to labor
b. Locally available
c. Responses vary – sector to sector
Primary task of TF is Blueprinting:
a. Manpower needs
b. Resources and design
c. Provide design alternatives
d. A Choice of available technologies and cost estimates for each alternative.

Administration Managerial Study (AMS)

This evaluates strategy of company in carrying out project activities. It provides information &
Guidelines used to improve overall Project Administration.
The project manager in investigating the team examines 4 components:
a. External linkages
b. Internal organization
c. Personnel
d. Management plan
Economic Study (Econ S)
Economic study examines a proposed project in terms of net contribution to industry /economy
and society and it addresses 3 related questions:
a. R-Responsive to “urgent present or anticipated econ/social” need?
b. P-Planned serve intended purpose?
c. B-Benefits - justify project cost?

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It requires a study of all of Economic Implications of the project:
a. Demand & Supply of All project outputs.
b. Ability to provide employment
c. “Multiplier" Effects (-Inc Purchase of goods Effect)
d. Use of Locally Available resources.
e. Assess project Net Contribution to Econ/social welfare of community.
f. Comparison of Economic & Social Benefits generated
g. Benefits > Costs of Project- Economically feasible (Benefit Cost Ratios-
BCR, Profitability analysis/Profitability Index-PI, Net Present Value, Internal Rate of
Return, Modified Net Present value etc are all conducted.

Financial Feasibility
Capability of Project Organization to Raise Funds to implement proposed project. This is
different from economic feasibility.

Cultural Feasibility
Compatibility of Proposed Project vs cultural setup of Project environment.

Social Feasibility
Addresses influences of Project on Social System in Project Environment.

Safety Feasibility
Considered in Project Planning.
Analysis if Project is Capable of being Implemented and Operated Safely with Minimal Adverse
effects on masses.

Environmental Feasibility
-Concern must be shown
-Action must be taken to address all environmental concerns raised or anticipated.

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Political Feasibility
Referred - “Politically Correct Project." Political considerations often dictate direction for a
proposed project.
Market feasibility
Market needs analysis to view:
a) Potential Impacts of Market Demand
b) Competitive Activities,
c) “Divertible" Market Share -Available
At conceptualization, other tools and techniques apart from feasibility studies include: baseline
line studies also called ex-ante evaluations, pilot studies. All these are aimed at establishing the
facts and figures about the proposed intervention.

2.1.2.2 Detailed planning

During detailed planning, project managers need tools and techniques to enable them structure
the main components of development interventions (from social to commercial projects). Such
tools include/; logical framework approach, theory of change, results chain, and logic models
among others. This is based on the 21st century project management requirement of results based
management. For any type of project, there must be clear assessment criteria to ascertain that
results have been realized and therefore monitoring and evaluation frameworks are based.
Unfortunately, many projects lack these tools and techniques and therefore measures cannot be
established. This section provides a number of models and frameworks for easy results
management.

The concept of results based management (RBM)

RBM is a management approach aimed to improve management effectiveness and accountability
in achieving results. RBM is focused on chain results: output, outcomes, and impact. Its focus is
on:
1. Analyzing problems and determining their causes;
2. Identifying measurable changes (results) to be achieved based on problem analysis;
3. Designing strategies and activities that will lead to these changes (results);

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 4. Balancing expected results with the resources available;
5. Monitoring progress regularly and adjusting activities to ensure results are achieved
6. Evaluating, documenting and incorporating lessons learned into next planning phase;
7. Reporting on the results achieved and their contribution to achieving goals;

Alternative approaches to RBM:

1. Inputs
2. Activities
3. Success is measured by expenditure
4. Success is measured by the extent of goods/services delivered and the ratio of inputs to
outputs.

Why Results-Based Management?

1. Resources are shrinking and increasing demand for better quality results
2. Increasing needs to improve efficiency and accountability for results
3. It is a global trend: using results-based management to improve the efficiency of
development program
What is a result?
A result is a describable or measurable change that derived from a cause and effect relationship.
Result = Change
Cause Effect

Key results management terms

Input: these are human, material, financial and other resources that are required to undertake
activities.
Activities: Actions taken or work performed to produce specific outputs through mobilizing
inputs.
Output: these are immediate results as a consequence of completed activities
Outcome: these are likely or achieved short-term and medium-term effects of outputs.

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Impact: long-term effects that are the logical consequence of the achievement of the outcomes.

The core of RBM is the results chain

The levels of results:
– short-term results or outputs;
– medium-term results or outcomes; and,
– Longer-term results or impact.
These are linked together into what is referred to as a results chain as illustrated in figure 1
below.

Source: Author generated

Example of statistical training results chain for none statistical staff

Impact Improved reliability, relevancy and timeliness of official statistics.

Outcome Improved statistical capability of NS staff

Output Improved knowledge and skills of participants

Activity Conducting training courses for participants from East Africa

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Input Funding, equipment and facilities.

Table 1: Example of Improving Supply of Potable Energy Facilities

Impact Improved health conditions in targeted communities.

Outcome Improved access to sustainable energy services for target communities.

Output Improved and renovated energy systems

Activity Designing, constructing new energy facilities.

Input Human resources, training, expert, funding etc.

Key principles of RBM

1. Define expected results first and activities later
2. Foster the active participation of stakeholders
3. Ensure that all stakeholders work towards achieving expected results
4. Apprise your work critically and learn the lessons

Hierarchy of RBM terms

IMPACT
Sustainable improvements in society or well-being of people
OUTCOME
Changes in behavior or improvements in access or quality of resources
OUTPUT
Product of project/ program activities
ACTIVITIES
Activities done by project/program
INPUT
Resources needed to undertake activities

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RBM and Logical Framework Approach (LFA)
A logical framework matrix is a project management tool used to structure the main components
of an intervention. It concentrates on ascertaining logical linkages between intended inputs,
planned activities and expected outputs or results. It is also called Goal Oriented Project
Planning (GOPP) or Objectives Oriented Project Planning (OOPP). The LFA is an RBM tool
used for systematic planning, implementing, monitoring, and evaluating projects/ programmes.

Features of LFA:
The features of LFA are as follows:
1. Stakeholder involvement
2. Needs-based approach
3. Logical intervention approach
4. Framework for assessing relevance, feasibility and sustainability
5. Results-oriented – not activity driven
6. Logically sets objectives and their causal relationships
7. Shows whether objectives have been achieved: Indicators (for M&E)
8. Describes external factors that influence the project’s success: assumptions and risks

Main steps:
The main steps for LFA strategy are as follows:
1. Stakeholder analysis
2. SWOT analysis
3. Problem tree analysis
4. Objective tree analysis
5. Logical framework matrix
6. Monitoring and evaluation

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Stakeholder Analysis
Stakeholder is any individual, group or organization, community, with an interest in the outcome
of a programme/project. This will be alluded to in subsequent chapter as project management
knowledge area on its own.

Purpose of stakeholder analysis

The purpose is to identify:
1. The needs and interest of stakeholders
2. The organizations or groups that should be encouraged to participate in different stages of
the project
3. Potential risks that could put at risk programme
4. Opportunities in implementing a programme

SWOT Analysis
SWOT stands for:
• Strengths - the positive internal attributes of the organisation
• Weaknesses - the negative internal attributes of the organisation
• Opportunities - external factors which can improve the organisation’s prospects
• Threats - external factors which can undermine the organisation’s prospects

The purpose of SWOT Analysis is as follows:

1. To assess the performance and capacity of the participating units, divisions of organization.
2. Each participating unit has to undertake SWOT analysis.
3. SWOT analysis is a tool for institutional appraisal and a brainstorming exercise in which
the representatives of the organization participate fully.

Problem Tree Analysis

Purpose:
To identify major problems and their main causal relationships.
Output:

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A problem tree with causes and effects

Steps in undertaking Problem Tree Analysis

Steps in undertaking problem tree analysis are as follows:
1. Identify the problems that the project will address.
2. State the problems in negative manner.
3. Group problems by similarity of concerns.
4. Develop the problem tree
• chose a focal problem from the list and relate other problems to the focal problem.
• If the problem is a cause of the focal problem it is placed below the focal problem.
• If the problem is an effect of the focal problem it goes above.

Analysis of objectives
Analysis of objectives involves the following:
1. Transforming the problem tree into an objectives tree by restating the problems as
objectives.
2. Problem statement converted into positive statements
3. The top of the tree is the end that is desired
4. The lower levels are the means to achieving the end.

The relationship between the problems tree and the objective tree is as follows:
Problem Tree Objective Tree
a. Effects Development objectives
b. Starter/focal problem Project purpose
c. Causes Results
d. Focal problem Project purpose

Strategy Analysis
The aim of strategy analysis is division of the objectives tree into more consistent smaller sub-
units that may, compose the core for a project. Each of the sub-units of the objective tree can

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represent an alternative strategy for the future project. The project objectives set the framework
for the strategy of the project.
Criteria for selection of the project strategy
1. Relevance the strategy corresponds to the needs of the stakeholders.
2. Effectiveness the lower level objectives of the strategy will contribute to achievement of
the project purpose
3. Efficiency cost-effectiveness of a strategy in transforming the means into results.
4. Consistent with development policies
5. Sustainability of the project
6. Assumptions and risks

The Logframe Matrix

The logical framework matrix is used to present information about project objectives, outputs
and activities in a systematic and logical way. The basic Logframe matrix contains 16 cells
organized into 4 columns and 4 rows, as indicated in the next slide:

Logical Framework Matrix

Table 3: Showing the structure of the logical framework matrix

Intervention logic Objectively Sources of Assumptions/risks

verifiable verification
Indicators

Overall What is the general What are the key What are the What are general factors and
Objective objective, to which the indicators related sources of conditions necessary to

project will contribute ? to the general information for achieve these objectives?
objective? these indicators? Which are the risks?

Project What is the specific What are the key What are the What are general factors and
purpose (= indicators related sources of conditions necessary to
objective, to which the
specific to the specific achieve these objectives?
project information for
objective) objective Which are the risks?
will contribute ? these indicators?

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Expected What are the outputs What are the What are the What factors and conditions
results envisaged to indicators to sources of necessary to obtain results?

achieve the specific measure results information for Which are the risks?

objectives? achieved? these indicators?

Activities What are the activities MEANS: What Costs: What are Pre-conditions:
to be carried out and in are the means the costs to requirements to be met
what sequence in order required to implement such before the project starts
to produce the expected implement these activities
results? activities

Planning stage of the logical framework approach

Intervention logic Objectively Sources of Assumptions/risks

verifiable verification
Indicators

Overall Objective

Project purpose

Expected results

Activities MEANS COSTS Pre-conditions:

IF results are delivered, AND assumptions hold true, THEN the Project Purpose will be
achieved.

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Results Chain and Logical Framework Matrix

RBM LFA

Result Goal/impact

Result Purpose/outcome

Result Output

Result Activities

Source: Author generated

Key: RBM Techniques

1. Start with the results
2. Determine indicators to measure progress towards achieving each result
3. Define explicit targets for each indicator to judge achievement
4. Collect information to verify/monitor the achievement/progress
5. Review, analysis and report actual results
6. RBM are good and useful techniques
7. But it won’t work itself and not sufficient to achieve results
8. RBM depends on the organization's ability to create a management culture that is focused
on results
9. Manage change in your organization

Developing indicators
An indicator is a quantitative or qualitative factor or variable that provides simple and reliable
means to measure achievement, to reflect changes connected to an intervention, or to help assess
performance of an actor.

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Example:
Change of # of qualified and experienced teachers per 1000 children of primary-school age in
area X in one year.

A good indicator: must be verifiable by the evaluator and a third party; must be linked to the
results intended or to significant changes in the situation; must be manageable to collect, present
and to track over time. Some also want indicators to be, ‘‘S.M.A.R.T.E.R‘‘; Specific,
Measureable, Achievable, Relevant, Timebound, Economic, Realistic.

2.1.2.3 Project implementation, monitoring and control

This sub-phase covers the core part of the project cycle; larger projects should have steering
committee, long term projects are generally found to be more effective when they minimize the
number of different short-term consultants. Progress towards a planned objective must be
measured at different levels (project work team / managers, partner institutions, external
monitor) by comparing actual results with planned targets using the specified indicators - it is
inevitable to use regular and timely reporting, to ensure that the management team is aware of all
relevant issues. The final Completion report then includes a summary of progress since the start
and a section on lessons learned. It should also answer the comments made by the task manager
and external monitors. During this phase, comparison is made to the baseline data that was
generated at the initial design of the project during need identification and assessment. The
projected results in the results chain and logical framework matrix are assessed to examine
progress made so far since project start up. Reports generated can be process reports or progress
reports. There can also be mid-term reports generated by external consultants. Without baseline
data at this phase, it would imply measuring the immeasurable.

Progress reports with updated work plan and Monitoring reports reviewing progress towards
the project results indicators - are to be regularly (at least yearly) written and assessed to enable
remedial activities if need be. Steering committee or control day on the spot may be called before
significant decisions are to be made. This phase requires review of the impact of all project
changes and the implementation of approved changes:

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• Corrective action—An intentional activity that realigns the performance of the project work
with the project management plan;
• Preventive action—An intentional activity that ensures the future performance of the project
work is aligned with the project management plan; and/or
• Defect repair—An intentional activity to modify a nonconforming product or product
component.

Inputs, tools and techniques and outputs

The inputs of monitor and control project work are: project management plan, schedule
forecasts, cost forecasts, validated changes, work performance information, organizational
process assets, baseline surveys, feasibility studies. The tools and techniques are expert
judgment, quantitative and qualitative analysis tools, project management information systems,
meetings. The outputs are change requests, work performance reports, project management plan
updates, project documents updates.

2.1.2.4 Project completion or closure

This is the final sub-phase in the implementation phase. Whether premature completion called
termination or mature completion called finish, it remains completion. For successfully finished
projects, recommendations made can be scaling up, replicating or transforming it into a
programme. By scaling up, the same intervention or project is continued beyond the project life
while for replicating, the same project is transferred to be implemented into another geographical
location. Because project that end in a premature nature result into resource wastage, this section
deals more on it to ensure future programming do not end up this way.

Project termination

A project can be said to be terminated when work on the substance of the project has ceased or
slowed to the point that further progress is no longer possible. There are four fundamentally
different ways to close out a project: extinction, addition, integration, and starvation.

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Termination by extinction
The project may end because it has been successful and achieved its goals. The project may also
be stopped because it is unsuccessful or has been superseded. A special case of termination by
extinction is “termination by murder” which can range from political assassination to accidental
projecticide. Two important characteristics of termination by murder are the suddenness of
project demise and the lack of obvious signals that death is imminent; When a decision is made
to terminate a project by extinction, the most noticeable event is that all activity on the substance
of the project ceases.

Termination by Addition

If a project is a major success, it may be terminated by institutionalizing it as a formal part of the

parent organization. Project personnel, property, and equipment are often simply transferred
from the dying project to the newly born division. The transition from project to division
demands a superior level of political sensitivity for successful accomplishment.

Termination by Integration

This method of terminating projects is the most common way of dealing with successful projects,
and the most complex. The property, equipment, material, personnel, and functions of the project
are distributed among the existing elements of the parent organization. In general, the problems
of integration are inversely related to the level of experience that the parent or client has had
with: the technology being integrated and the successful integration of other projects, regardless
of technology. A few of the more important aspects of the transition from project to integrated
operation that must be considered:

• Personnel - where will the team go?

• Manufacturing - is the training complete?

• Accounting/Finance - have the project’s account been closed and audited?

• Engineering - are all drawings complete and on file?

• Information Systems/Software - has the new system been thoroughly tested?

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 • Marketing - is the sales department aware of the change?

Termination by Starvation

This type of project termination is a “slow starvation by budget decrement.” There are many
reasons why senior management does not wish to terminate an unsuccessful or obsolete project:

• Politically dangerous to admit that one has championed a failure

• Terminating a project that has not accomplished its goals is an admission of

failure

When to Terminate a Project

Some questions to ask when considering termination:

• Has the project been obviated by technical advances?

• Is the output of the project still cost-effective?

• Is it time to integrate or add the project as a part of regular operations?

• Are there better alternative uses for the funds, time and personnel devoted to the
project?

• Has a change in the environment altered the need for the project’s output?

Fundamental reasons why some projects fail to produce satisfactory answers to termination
questions: A project organization is not required, Insufficient support from senior management,
Naming the wrong person as project manager, Poor planning. These and a few other reasons, are
the base cause of most project failures. The specific causes derive from these fundamental issues.

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Bibliography
Atkinson, R. (1999). Project management: cost, time and quality, two best guesses and a
phenomenon, its time to accept other success criteria. International journal of project
management, 17(6), 337-342.
Boehm, B. (2000). Project termination doesn't equal project failure. Computer, 33(9), 94-96.
Bollen, N. P. (1999). Real options and product life cycles. Management Science, 45(5), 670-684.
Crawford, P., & Bryce, P. (2003). Project monitoring and evaluation: a method for enhancing the
efficiency and effectiveness of aid project implementation. International journal of project
management, 21(5), 363-373.
Kuruppuarachchi, P. R., Mandal, P., & Smith, R. (2002). IT project implementation strategies for
effective changes: a critical review. Logistics information management, 15(2), 126-137.
Labuschagne, C., & Brent, A. C. (2005). Sustainable project life cycle management: the need to
integrate life cycles in the manufacturing sector. International Journal of Project Management,
23(2), 159-168.
Pinto, J. K. (1990). Project Implementation Profile: a tool to aid project tracking and control.
International Journal of project management, 8(3), 173-182.
Pinto, J. K., & Prescott, J. E. (1988). Variations in critical success factors over the stages in the
project life cycle. Journal of management, 14(1), 5-18.
Pinto, J. K., & Slevin, D. P. (1988, June). Critical success factors across the project life cycle.
Project Management Institute.
Siegelaub, J. M. (2004, January). How PRINCE2 can complement PMBOK and your PMP. In
PMI global congress proceedings (pp. 1-7).
Somers, T. M., & Nelson, K. G. (2004). A taxonomy of players and activities across the ERP
project life cycle. Information & Management, 41(3), 257-278.
Unger, B. N., Kock, A., Gemünden, H. G., & Jonas, D. (2012). Enforcing strategic fit of project
portfolios by project termination: An empirical study on senior management involvement.
International Journal of Project Management, 30(6), 675-685.
Wideman, R. M. (2002). Comparing PRINCE2® with PMBoK®. AEW Services, Vancouver,
BC, Canada.

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 CHAPTER THREE
PROJECT IDENTIFICATION AND SELECTION STRATEGIES
Stephen Kyakulumbye

Introduction
Project identification and selection falls within the first project life cycle stage of project
conceptualization and early state of planning; and the first two project management process
groups (initiating and planning process groups). Quite often, project management team can be
faced with a number of project alternatives upon which management requires scientific
justification for the better or best viable option. There is therefore need for utilization of
qualitative and quantitative identification and selection strategies of projects for candid
management decision back up. This chapter offers an introduction to numeric and none-numeric
project identification and selection strategies.

Non-Numeric project identification strategies

Project identification is the initial phase of the project development cycle. It begins with the
conceiving of ideas or intentions to set up a project; These ideas are then transformed into a
project. Clear project identification allows you to answers questions: How do the projects come
about; Where do projects come from; and why are projects where they are?

Approaches to project identification

There are two major approaches to project identification Top-down and Bottom-up approaches
Top-down approach
1. Projects are identified based on demands from beyond the community.
2. This may include directives from:
o International conventions (such as Kyoto Protocol/climate change).
o International institutions or NGOs that have determined particular priorities and thus
projects.
o National policy makers identifying projects that pertain to party manifestos and/or
national plans.

Advantages of top-down approach

1. It may be a rapid response to disasters like floods, war outbreak because there is limited
time and chance to consult the beneficiaries.
2. It can be effective in providing important services like education, health, water, roads etc.
3. It can contribute to wider national or international objectives and goals
o and therefore potentially be part of a wider benefit
o (as in the case of trans-boundary resources, such as climate, water or others)

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Limitations of top-down approach
1. Does not help in modifying strongly established ideas and beliefs of people.
2. Assumes external individuals know better than the beneficiaries of the service.
3. Communities have little say in planning process rendering approach devoid of human
resource development.
4. Community develops dependency syndrome on outside assistance and does not exploit
their own potential.
5. The development workers (change agents) become stumbling blocks to people-led
development tendency to impose their own biases, etc. on people

Bottom-up approach
In this approach community/beneficiaries are encouraged to identify and plan the projects
themselves with or without outsiders.

Advantages of bottom-up approach

1. Interveners accomplish more with limited resources since people tend to safeguard what
they have provided for themselves.
2. Develops people’s capacity to identify problems and needs and to seek possible solutions
to them.
3. Provides opportunities of educating people.
4. Helps people to work as a team and develop a “WE” attitude - makes project progressive
and sustainable.
5. Resources are effectively managed; dependence reduces, there is increased equity,
initiative, accountability, financial and economic discipline.

Limitations of bottom-up approach

1. Not always effective for projects that require urgency to implement
2. Time-consuming and requires patience and tolerance.
3. People sometimes dislike approach because they do not want to take responsibility for
action.
4. The agency using this approach is never in control and cannot guarantee the results it
would want.
5. The priorities of communities may not fit with national or international priorities that
seek to have a broader impact

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Top-down approaches to project identification
1. The Household (Socio-Economic) Survey
1. Studies social and economic situations of a given area for instance climate, geographical
set-up, economic activities, political set up, education system, culture, diet, social
services, physical infrastructure etc.
2. Method is popular with the UBOS.
3. Uses questionnaires, interviews, documentation, and direct observation.
4. Data is collected, processed and analyzed and projects are then identified

2. Rural Rapid Appraisal

This is referred to as Rapid Rural Appraisal (RRA) when carried out in a rural areas, and Rapid
Urban Appraisal (RUA) in an urban area.
1. Method collects and assesses data quickly using any data collection techniques.
2. Primary purpose is to acquire the information in the shortest time possible and it lowers
the cost. It is rapid because investigation, assessment and identification of projects are
done at the same time.

Rapid appraisal uses the following data collection techniques:

1. Analysis of secondary data sources
2. Interviews
3. Direct observation at site
4. Visualization of Resources like social organizational maps and time series maps.

3. Needs Assessment Survey (NAS)

This is also referred to as situation analysis (SITAN).
o It involves:-
o Fact finding about problems or needs in a given area or community.
o Finding out what is lacking in a given area or community.
o Investigating a situation in a given area.
NAS is carried out to:
✓ Find out the problem in a given community so as to identify the most appropriate solution
(s)/project (s) to solve the problem (s) in question.
✓ Analyze the causes of the problems and seek likely solutions to the problems leading to
project identification.

Bottom-up approaches to project identification

1. Animation
This is a process of stimulating people to become more aware and conscious of problems they
suffer from.

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 o to gain confidence in their ability to deal with these problems and take initiatives
to improve situation.
o Animation makes the community better understand and be prepared to overcome
its problems and take decisions with full responsibility.
✓ Carried out by Animators / Helpers / Change agents.
o (Internal Animators if they come from within the community or External
Animators if from outside.)

2. Facilitation/Community action
✓ an attempt to assist people to get over problems by (say) training them in certain skills,
providing them with the needed information e.g. market information, linking them up
with relevant agencies and organizations to improve access to the needed resources etc.

3. Participatory Appraisal
✓ Project identification should be participatory, and should involve local communities in
identifying and prioritizing their needs.
✓ The DTPC should consider the views of the communities during the screening and
selection of various project proposals and the selection of the preferred proposals for
implementation.
✓ PRA (participatory rural appraisal) when carried out in rural areas; and PUA
(participatory urban appraisal) when carried out in urban areas
✓ PRA/ PUA can be described as a family of approaches, methods and behaviours that
enable people to express and analyze the realities of their lives and conditions, to plan for
themselves what action to take, and to monitor and evaluate the results.
✓ The key to PRA/PUA is that the only external involvement is in facilitation. The
communities themselves determine the issues, priorities and courses of action.

Non-Numeric Project Selection Methodologies

Non-numeric Project Selection does not use numbers. “Easy to dismiss such models as
unscientific (but) they should not be discounted casually. These models are clearly goal-
orientated and directly reflect the primary concerns of the organisation"
Generally used when limited information is available or selection process must be completed
quickly. Examples:
o Sacred cow,
o Operating necessity,
o Competitive necessity,
o Product line extension,
o Comparative benefit model.

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Sacred Cow
✓ projects - idea from top & influential management
✓ Maintained until successfully concluded, or until the boss, personally, recognises the idea
as a failure and terminates it."
✓ Maybe inappropriate, but supported by top management and this is “an important
contributor to project success

Operating Necessity
✓ projects embarked upon with little management discretion
✓ eg collapsing wall
✓ Major consideration- is cost justified.? "If yes, costs kept as low as is consistent with
project success, but project will be funded"

Competitive Necessity
✓ Project selected to maintain organisation's position &/or survival eg: upgrade ageing
production equipment to counter developments from its competitors.

Product Line Extension

✓ Project to develop new product - not be selected based on profitability but "would be
judged on the degree in which it fits the firm's existing product line, fills a gap, strengthens
a weak link, or extends the line in a new, desirable direction”

Peer review
✓ Management want unbiased external assessment of proposed project.
✓ Peer review = send proposal to experts to assess technical merits
✓ Experts submit independent recommendations, or panel
✓ Common in scientific areas particularly government funded R&D project proposals.
✓ Advantages - assessment is expert and objective
✓ However “peer review has long been criticised as a highly subjective approach that is
susceptible to distortions, such as bias in favour of an old boy network”

Comparative Benefit Model

✓ Used to select between diverse projects not easily comparable.
✓ Allows a ranking to be obtained, even though it may not be possible to evaluate the projects
against every project-selection factor. Examples:
o Q-sorting.
o Forced comparison,
o Peer review

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 o Murder board
o Grid profiling,
o Profile modelling

Q-Sorting
This is a structured group process where each person is given set of project cards. Steps:
1. Each person sorts cards into HIGH or LOW priority– based on criteria
2. Cards reviewed & MEDIUM-priority projects extracted
3. HIGHs = HIGH or VERY HIGH. LOWs = LOW or VERY LOW. Now 5 piles
4. Results from all group members grouped & displayed.
5. Results surveyed by each person who can shift any card
6. Results displayed. Opportunity for members to reach consensus.
7. VERY HIGH first considered for funding
8. Group processes often deeply influenced by behavioural factors which Q-sorting tries to
overcome.

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Forced comparison
o Each department ranks projects they wish to take to selection board,
o Each department’s top-ranked project is compared to every other department’s top-
ranked project.
o Board “selects one project based on their collective opinion as to the overall value of the
project obtaining the organisation’s objectives”
o As 1 project selected, that department introduces next project which is then compared to
top-listed projects of other departments.
o Process continues until all projects have been ranked.
o Number of projects selected for approval will be based upon the availability of
organisational resources
Profile model
o Rates projects qualitatively. No numerical assessments are made
o Easy to read and quickly understood presentation.
o Disadvantage - fails to inform whether a project scoring HIGH in certain criteria
outweighs its medium & low scores in other criteria.
o "Thus, there is no way to get a single overall score or rating for each project.

Grid profiling
This is based on 4 project selection criteria most effective for selection purposes:
1. financial benefits,
2. technical benefits
3. enhancement of core competencies
4. harmony with corporate culture
o Grid A - financial benefits - each project placed in cell to reflect its expected level of
costs and financial benefits.
o Process is followed for Grids B, C, D.
o Then overall assessment made by selection team.
o Not too analytical - trust collective insights. “Spent substantial time reviewing proposals
and now know each project intimately”
o Final step - allocate each proposal in a generic ‘super’ benefit-coat grid. - “when all is
said and done, which cell does each belong in?

Murder board
o Panel of people from different parts of organisation who strongly scrutinise project
proposals.
o “they should tear it apart and try to show how it is not workable”
o Proposer must present & defend project before the panel.

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 o Purpose - “not to punish & humiliate project champion but rather to distinguish between
solid and shaky propositions ... the murder board serves the function of ‘reality check’ ”
o Usually used in conjunction with other selection methodologies, such as a profile model,
grid.

Numeric Project Selection Strategies

Quite a number of scientific quantitative models are available to make informed decision during
the project selection endeavors. These include: payback period, net present value, internal rate of
return among others. These are available because of the concept of time value for money during
project implementation.

Reasons for time preference for money

Money has time value. A shilling today is more valuable than a shilling a year to come. Why?
▪ Individuals prefer current consumption to future consumption
▪ Capital can be employed productively to generate positive returns. An investment of one
shilling today would grow to (1+ r) a year hence (r is the rate of return earned on an
investment)
▪ An inflationary period a shilling today represents a greater real purchasing power than a
shilling a year.

Why time value for money (TVM)?

If investors prefer money today, than the same amount of money tomorrow, then for the investor
to part with money today, they need to be compensated for an opportunity cost associated with
future receipts. This compensation is Interest or rate of return on investment

Future value of a single amount

Suppose you invest shillings 1,000 for three years in a savings account that pays 10% interest per
year. If you let your income to be re-invested, what will be you investment after 3 years?
First year: Principle at the beginning 1,000
Interest for the year (1000 x 0.10)=100
Principle at end Shs 1,100
Second year: Principle at beginning 1,100
Interest for the year (1,100x0.10) =110
Principle at end of the year = 1,210
Third year: Principle at beginning 1,210
Interest for the year (1,210x.10) = 121
Principle at end = 1,331

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Compounding
What we have done is called compounding (adding on principle to generate new principle)
PV is present value or principal
r is the rate of interest per annum (compounding factor)
Interest earned in a year = PVr
After one year will be PV + (PVr) = PV1 where 1 is first year
After 2 years = PV1 + (PV1r) = PV2
PV after 2 years becomes PV2 = PV1 + PV1r if PV is compounded at r% per annum
But PV1 = PV+ (PVr) = PV(1+r)
PV2 =PV1 + PV1r = PV1(1+r) but PV1 = PV(1+r)
=PV(1+r)(1+r) = PV(1+r)2
PV3 = PV(1+r)3 PV after n years becomes FVn ie(1+r)nis called future value interest
factor or future value factor.
Therefore FVn = PV(1+r)n

Solving future value problems

▪ To solve future value problems, find future value factors
▪ First for example above you can multiply 1.10 by itself three times or more generally (1+r)
by itself n times. This is tedious when investment period is long
▪ Easy way: Use calculators that have x y. Enter 1.10, press the key labelled xy. Enter 3 and
press the = key to obtain the answer
▪ Use the future value interest factor table (FVIF)

Problem
Suppose you deposit shillings 10,000 today in a bank which pays 10% interest compounded
annually, how much will the deposit grow to after 8 years?
FVn = PV(1+r)n where FVn is the future value of an amount after n years, r is the rate of interest
and n is the number of years.
= 10,000(1 + 10/100)8
= 10,000 (1.10)8
=
10,000 (2.144) = shillings 2,144
Present value of a single amount
Suppose someone promises to give you shillings 10,000 three years later. What is the present
value of this amount if the interest rate is 10%? The present value can be calculated by
discounting shillings 10,000 to the present point of time as follows:
Value three years = shillings 10,000/=
Value two years = shillings 10,000 (1/1.10)
This continues downwards.............
The formula is the inverse of compounding.

37 | P a g e
Discounting
FVn = PV(1+r)n
FVn/
(1+r)n = PV
The factor 1/(1+r)n
is called the discounting factor or the present value interest factor (PVIFr,n). The
present value for a promise of shillings 10,000 10%,3 will be10,000 x PVIFr,n = 10,000 x 0.565
=5,650/=
What is the present value of Shs 10,000 receivable 20 years if the discount rate is 8%? If PVIFr,n
is not in table use:
Shs 10,000(1/1.08)20 =10,000(1/1.08)10(1/1.08)10
= Shs 10,000 (PVIF8%,10)(PVIF8%,10)
= Shs 10,000 (0.463)(0.463)
=Shs 2,140

Time value for money: Annuities

Future value of an annuity
An annuity is a stream of constant cash flows (payments and receipts) occurring at regular
intervals of time. The premium payment of a life insurance policy are an annuity. When the cash
flows occur at the end of each period, the annuity is called an ordinary annuity or a deferred
annuity. When the cashflows occur at the beginning of the period, the annuity is called an
annuity due. We shall focus on deferred annuity
1. Example: Suppose you deposit Shs 100,000 annually in bank for 5 years and your
deposits earn a compound interest of 10%. What will be the value of a series of deposits
(an annuity) at the end of the five years?

The future value of this annuity will be:

FVAn = A[(1+r)n -1]/r where FVAn is the Future Value of an annuity which has a duration of n
periods, A is the constant periodic flow, r is the interest rate per period and n is the duration of
the an annuity.
The term [(1+r)n -1]/r is referred to as the future value interest factor for an annuity (FVIFAr,n)
Therefore future value of an annuity = FVn = A [(1+r)n -1]/r
The accumulated sum will be 100,000 (FVIFA10%, 5years)
100,000[(1.10)5-1]/10
100,000(6.105)

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 610,500/=
2. Knowing what lies in the store for you: Suppose you have decided to deposit 300,000/= per
year in your public provident fund account for 30 years. What will be the accumulated
amount in your provident public fund account at the end of 30 years if the interest rate is 11
percent?
The accumulated will be:
300,000 (FVIFA11%,30years)
300,000 (1.11)30-1)/.11
300,000 (199.02)
50,970,600/=

3. How much should you save annually: You want to buy a house after 5 years when it is
expected to cost 20 million. How much should you save annually if your savings earn a
compound return of 12%?
FVIFAn=5, r=12% = (1+0.12)5-1/0.12 = 6.353
The annual savings should be 20,000,000/6.353 = 3,148,120/=
4. Annual deposit in sinking fund: : A company has an obligation to redeem 500,000
million worth of the bonds 6 years hence-from now. How much should the company
deposit annually in a sinking fund account where it earns 14% interest to accumulate
500,000 million in 6 years time?
FVIFAn=6, r=14% = (1+0.14)6-1/0.14 = 8.536
The annual sinking fund deposit should be 500,000/8.536 = 585,750/=

5. How long should you wait: You want to take up a trip to USA which costs 6,000,000. The
cost is expected to remain unchanged in nominal terms. You can save annually 500,000 to
fulfil your desire. How long will you have to wait if you have to wait for your savings earn
an interest of 12%?
The future value of an annuity of 500,000 that earns an interest of 12% is equated to
6,000,000
500,000 x FVIFAn=?, 12% = 6,000,000
500,000 x (1.12n -1)/0.12= 6,000,000
1.12n -1 = 6,000,000/500,000 x 0.12 =1.44
1.12n = 2.44
n log 1.12 = log 1.44
n x 0.0492 = 0.158/0.0492
n = 3 years approx 3 months

Present value of an annuity

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Suppose you expect to receive 1,000,000 annually for 3 years, each receipt occurring at the end
of the year. What is the present value of this stream of benefits if the discount rate is 10%?
The present value of this annuity is simply the sum of the present values of all the inflows of this
annuity.
PVAn = A{[(1+r)n-1]/r(1+r)n} _________________________
[(1+r)n-1]/r(1+r)n is referred to as the present value interest factor for an annuity (PVIFAr,n).

Application
How much can you borrow for a car: After reviewing your budget, you have determined that you
can afford to pay $12,000 per month for three years towards a new car. You call the finance
company and learn that the going interest on car finance is 1.5% per month for 36 months. How
much can you borrow?
To determine how much you can borrow, we have to calculate the present value of $12,000 per
month for 36months at 1.5% per month.
PVIFAr,n =(1+r)n-1/r(1+r)n = (1+0.015)36-1/0.015(1+0.015)36=27.70
This is multiplied by A which is $12,000 x 27.70 = $332,400
You can therefore borrow $332,400 to buy a car.
Period of loan amortization
Most loans for financing projects are paid in equal periodic installments (monthly, quarterly, or
annually), which cover interest as well as principle repayments. Such are referred to as amortized
loans. During project selection, it is imperative to think about how selected projects will be
financed and one source is debt financing.

Example:
You want to borrow USD 1,080,000 to buy a flat. Your approach Centenary Bank which charges
12.5% interest. You can pay USD 180,000 per year towards loan amortization. What should be
the maturity period of the loan?
The present value of annuity of USD 180,000 is set to equal to USD 1,080,000.
PVAn = A{[(1+r)n-1]/r(1+r)n}
PVAn = present value of an annuity which has a duration of n periods
A= constant periodic flow
r= discount rate.
PVIFAn,r is the present value interest factor of an annuity for n years a r interest rate =
{[(1+r)n-1]/r(1+r)n}
180,000 x PVIFAn,r =1,080,000
180,000 x 1.125n -1 =1,080,000
n
0.125(1.125)
[0.125(1.125)n] 1.125n -1 =6 [0.125(1.125)n]
0.125(1.125)n

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 1.125n-1 =0.75 x 1.125n
0.25 x 1.125n =1
1.125n = 4
nlog1.125 = log 4
n x0.0512 =0.6021
n=11.76 years approximately 12 years.

Determining the loan amortization schedule

For an amortised loan, one would like to establish a) the periodic instalment payment and b) the
loan amortization schedule showing the breakup of the periodic instalment payments between the
interest component and the principle repayment component.

Illustration: Suppose you want to finance your project and you decide to borrow USD 1,000,000
at an interest of 15% and the loan is to be paid in 5 equal instalments payable at the end of each
of the next 5 years. The annual instalment payment A is obtained by:
Loan amount = A X PVIFAn=5, r=15%
A X {[(1+r)n-1]/r(1+r)n}
1,000,000= A X 1.0113571875/0.301703578125
1,000,000 =3.352A
A=298,329

The interest component is the largest for year 1 and progressively declines as the outstanding
loan amount decreases.
Year Beginning amount Annual Interest (3) Principal Remaining
(1) instalment repayment balance (1)-
(2) (2)-(3)=4 (4)=(5)

1 1,000,000 298,329 150,000 148,329 851,671

2 851,671 298,329 127,751 170,578 681,093

3 681,093 298,329 102,164 196,165 484,928

4 484,928 298,329 72,739 225,590 259,338

5 259,338 298,329 38,901 259428 -90

Small balance -90 is due to the rounding off error, otherwise it would be zero.
Investment criteria

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The key steps involved in determining whether a project is worthwhile or not are: estimating the
costs and benefits of the project; assessing the riskiness of the project; calculating the cost capital
and computing the criterion of merit and judge whether the project is good or bad. There is a
discounting criteria and non-discounting criteria as seen in the figure below:

Investment criteria

Discounting criteria Non-discounting

criteria

Net present Benefit cost Internal rate

value Payback period Accounting
ratio of return
rate of
return
1. Pay Back Period
This is the minimum time in which the investment/project repays/recoups the initial investment.
For instance if initial investment is shillings 600 million, the Project earns net benefits cash as:

Year Amount
1 150 m
2 300 m
3 100 m
4 50 m
5 200 m
Example 2:
Project A (600 M) Project B (800 M)
Year Net cash inflows
1 200 300
2 150 200
3 150 200
4 150 200
5 150 200

a) Find the payback period of each project

b) Which project should be recommended for funding?

Therefore project B is better viable because it has less payback period.

Payback Period Methodology
• Determine the yearly net cash flows (NCF)
42 | P a g e
 • Reduce the initial investment with the net cash flows until you have a zero
balance
• The year and month this happens is the payback period

Selection criteria for PBP

• Choose the project with the least PBP if the two projects are mutually exclusive
(they can’t take place at the same time)
• If the two projects are independent, then we choose one or two depending on the
cutoff point

Advantages
• It is simple to understand
• It is cheap to compute
• it tells the minimum time to which our funds are at risk

Disadvantages
• It is not a measure of profitability
• PBP ignores the net cash flows after PBP
• PBP takes time to the only consideration, that other issues are less important

Way forward to cub disadvantages is to have a project score card

Issues Score eg /10 Project score
1
2
Etc

Net Present Value (NPV)

This is the sum of the present values of all the cash flows (positive and negative) that are
expected to occur over the life of the project less initial investment and given by the
formula:
NPV of a project = ∑nt=1 C/(1+r)t-Initial investment where Ct is cash flows at the end of
year t; n=life of the project; r=discount rate.

Example
Project A had initial investment of 600 M and DF is 15%
NCF Year 1 200M
2 150 M
3 150 M
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 4 150 M
5 150 M
Methodology of NPV
1. Determine the Net cash flows
2. Determine the cost of capital and therefore the discount rate
3. from discount rate, generate the discount factors for a number of years
4. apply the discount factors to the net cash inflows to generate the present values
5. total the present values
6. subtract the initial investment from the total present value to obtain the NPV
7. The selection criteria if two projects have the same initial investment and are mutually
exclusive, choose the project that has a higher positive NPV
8. If they are independent, then both projects could be chosen if they satisfy the selection
criteria.

Advantages of NPV
NPV are additive
It is a sum of the net present values of individual projects included in the package
Intermediate cash flows are invested at cost of capital
NPV rule permits time-varying discount rates ie discount rates may differ time form time and
the formula is: NPV of a project = ∑nt=1 C/(1+r)t-Initial investment

In more general forms NPV of a project = ∑nt=1 C/πtj=1(1+rj)-Initial investment where rj= one
period discount rate; π=constant interest rate

Discount rate 14% 15% 16% 18% 20%

Investment cashflow 4,000 5,000 7,000 6,000 5,000
-12,000
PV of C1 =4,000/(1.14) .............................................................3509
PV of C2 =5,000/(1.14*1.15)........................................................3814
PV of C3 =7,000/(1.14*1.15*1.16)..................................................4603
PV of C4 = 6,000/(1.14*1.15*1.16).................................................3344
PV of C5 =5,000/(1.14*1.15*1.16*1.18)............................................2322
Sum to get PV.....................................................................
OR NPV of the project = (3509+3814+4603+3344+2322)-12,000
=5592
• It is a measure of profitability
• it takes into consideration time value of money
• it is simple
• it can be calculated even where we don’t have benefits

44 | P a g e
 • Some projects have multiple internal rates of return, in this case the best measure of
profitability is NPV because it is unique
ie IRR is the rate of discount that equates/brings NPV to zero. It is also called the YIELD.
It is the rate of internal profit generation of the project.

Disadvantages
• We assume that the discount rate remains the same during the project period
• NPV only takes profits as the only important consideration and ignores others
• it is not easy to zero down to cost of capital

Modified Net Present Value

The standard net present value method is based on assumption that the intermediate cashflows
are re-invested at a rate of return equal to the cost of capital. When this assumption is not valid,
the re-investment rates applicable to the intermediate cash flows need to be defined at for
calculating the modified net present value. The steps involved are as follows:
Step 1: Calculate the terminal value of the project’s cash inflows using the explicitly defined re-
investment rates which is supposed to reflect the profitability of the investment opportunities
ahead of the firm.
TV=∑nt=1 CFt(1+r’)n-t where TV=terminal value of the project’s cash inflows; CFt=cash flows at
the end of year t; r’=re-investment rate applicable to the cash inflows of the project
Step 2: Determine the modified net present value
NPV*=TV/(1+r)n-IV (Investment outlay) where NPV*=modified net present value; TV=terminal
value; r=cost of capital; I=Initial outlay.
Consider two projects:
Project X Project Y
Investment outlay 110,000 110,000
Cash inflows
Year 1 31,000 71,000
Year 2 40,000 40,000
Year 3 50,000 40,000
Year 4 70,000 20,000
*
The NPV for X and Y may be calculated for two re-investment rates, 14% and 20% assuming
the cost of capital of 10%.
TV(X)14%=31,000(1.14)3+40,000(1.14)2+50,000(1.14) +70,000 =224,911
TV(X)20%=31,000(1.2)3+40,000(1.2)2+50,000(1.2) +70,000 = 241,168
TV(Y)14%=71,000(1.14)3+40,000(1.14)2+40,000(1.14) +20,000 =223,911
TV(Y)20%=71,000(1.20)3+40,000(1.20)2+40,000(1.20) +20,000 =249,488

Step 2: The NPV* for X and Y for the two re-investment rates are:

45 | P a g e
The NPV* (X)14%= TV(X)14% /(1.10)4-110,000= 43,614
The NPV* (X)20%= TV(X)20% /(1.10)4-110,000= 54,717
The NPV* (Y)14%= TV(Y)14% /(1.10)4-110,000= 42,931
The NPV* (Y)20%= TV(Y)20% /(1.10)4-110,000= 60,000

Cost Benefit Ratio

There are two ways of defining the relationship between benefits and costs:
Benefit Cost ratio: BCR=∑PVB/I
Net Benefit Cost Ratio: NBCR =PVB-1/I =BCR-1 where PVB= present value of benefits
I=Initial investment.
Consider a project being evaluated by a firm that has a cost of capital of 12%.
Initial Investment 100,000
Benefits Year 1 25,000
Year 2 40,000
Year 3 40,000
Year 4 50,000
The benefit cost ratio [25,000/(1.12) + 40,000/(1.12)2 + 40,000/(1.12)3 +
50,000/(1.12)4]/100,000=1.145
NBCR=BCR-1=0.145
Rules for decision:
When BCR or NBCR Rule is
>1 >0 Accept
=1 =0 Indifferent
<1 <0 Reject
Internal Rate of Return (IRR)
This is the discount rate that equates NPV =0 or equates the present value of future cashflows
with the initial investment. It is the value of r in the following equation
Investment ==∑nt=1 Ct/(1+r)t where Ct =cash flows at the end of the year t
r=internal rate of return
n=life of the project
Year 0 1 2 3 4
Cash flow (100,000) 30,000 30,000 40,000 45,000
The process involves extrapolation and interpolation (try and error)
1. Determine the net present value of the two closest rates of return
NPV/15% =802
NPV/16% =1,359
2. Find the sum of the absolute values of the net present values obtained in step 1.
802 + 1,359 =2,161

46 | P a g e
 3. Calculate the ratio of the net present value of the smaller discount rate identified in step 1
to the sum obtained in step 2. If use higher value, subtract from 16%.
802/2,161 = 0.37
4. Add the number obtained in step 3 to the smaller discount rate.
15 + 0.37 = IRR = 15.37%.
Accept: If IRR is greater than the cost of capital
Reject : If IRR is less than the cost of capital

Cost of capital
Is the cost of money you are employing in your business/project. Suppose ABC has capital of
500 million ie 300 million from circles at interest of 50% and 200 million from bank at interest
of 30%. Cost of capital computed would be the weighted cost of capital as 50% + 30%/2 = 40%
This is not true; we need to consider weights.
Weighted average cost of capital K
= 50% X 300 (WEIGHT 1) + 30% X 200 (WEIGHT 2)
300+ 200
150 + 60 / 500 =0.42 =42%
Rate of return for a profitable venture should be greater than the cost of capital.
Project Selection Under Risk
Incorporating risk in the decision process involves the following:
a) Judgmental evaluation
b) Payback period requirement
c) Risk profile method
d) Certainty equivalent method
e) Risk adjusted discount rate

Judgmental evaluation
No use of any formal method for incorporating risk in the decision making process. Managers
only assess the risk and risk characteristics using some of the following tools and techniques:
✓ Documentation
✓ Brainstorming
✓ Delphi technique
✓ Interviewing
✓ Root cause identification/cause-effect
✓ SWOT analysis
Payback period requirement
For risky projects, a shorter payback period is required even if NPV is positive or the IRR
exceeds the hurdle rate. This approach assumes risk as a function of time.

47 | P a g e
It is true the further a benefit lies in the future, the more uncertain it is likely to be because
economic and competitive conditions tend to change over time.

Risk profile method

Managers transform the probability distribution of the NPV into probability distribution of
profitability index and then compare the dispersion of the profitability index with the maximum
risk profile acceptable to management.
The higher the expected value of profitability index, the greater the dispersion that is acceptable
to management. If the profitability index is high, the probability that NPV is negative is
negligible.

Risk adjusted discount rate

This calls for adjusting the discount rate to reflect project risk. If the risk of the project is equal to
the risk of the existing investments of the firm, the discount rate used is the average cost of
capital of the firm; if the discount rate is greater then the risk of the existing investments of the
firm, the discount rate used is higher than the average cost of capital of the firm; if less, the
discount rate used is less than the average cost of the firm.
The risk adjusted discount rate is
rk=i + n + dk
where rk=risk adjusted discount rate for project k
i=risk free rate of interest
n=adjustment of the firm’s normal risk
dk=adjustment of the differential risk of project k
ie (i+ n) measures the firm’s cost of capital; dk may be positive or negative depending on how the
risk of the project under consideration compares with the existing risk of the firm.
The adjustment of the differential risk of project k depends on the management’s perception of
the risk and management’s attitude towards risk (risk return preference). Ie Risk avoidance
◦ Risk acceptance
◦ Risk transference
◦ Risk mitigation
E.g. one of the pharmaceutical firms uses the following risk adjusted discount rates for various
types of investments:
Investment category Risk adjusted discount rates
Replacement investments Cost of capital
Expansion investments Cost of capital + 3%
Investment in related lines Cost of capital + 6%
Investment in new lines Cost of capital + 10%

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Once the project’s risk adjusted discount rates (rk) specified, the project is accepted if its NPV,
calculates as follows is positive:
NPV = ∑nt=1 At/(1+rk)t-I where NPV is net present value of project k
At = expected cash flow for year t
rk = risk adjusted discount rate for project k
I =Initial Investment.
Task: The expected cash flows for a project which involves an investment outlay of 1,000,000
are as follows:
Years 1 2 3 4 5
200,000 300,000 400,000 300,000 200,000
The RADR is 18%. Is the project worthwhile??
What are the limitations of RADR?
a. Difficult to estimate dk consistently
b. Assumes risk increases with time at a constant rate

Certainty equivalent method

The concept of certainty equivalent coefficient
One presents you with a lottery the outcome of which has the following probability distribution:
Outcome Probability
1,000,000 0.3
5,000,000 0.7
You are asked: How much of a certain amount would you accept in lieu of this lottery? SAY you
reply 3,000,000. This amount represents certainty equivalent of the above lottery which has an
expected value (1,000,000 x 0.3 + 5,000,000 x 0.7) = 3,800,000/=
The certainty equivalent coefficient = 3,000,000/3,800,000 =0.79
Under certainty equivalent, the NPV is calculated as follows:
∑nt=1 αtAt/(1+i)t-I where At = expected cash flow for year t
αt= certainty equivalent coefficient for the cash flow of year t
i=risk free interest rate
I=Initial investment

Example: XYZ Limited is considering an investment proposal involving an outlay of 4,500,000.

The expected cash flow and certainty equivalent coefficients are:
Year Expected cash flow CEC
1 1,000,000 0.90
2 1,500,000 0.85
3 2,000,000 0.82
4 2,000,000 0.78
The risk free interest rate is 5%. Calculate the NPV of the proposal.

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Bibliography

Aloini, D., Dulmin, R., & Mininno, V. (2007). Risk management in ERP project introduction:
Review of the literature. Information & Management, 44(6), 547-567.

Ballantine, J., & Stray, S. (1998). Financial appraisal and the IS/IT investment decision making
process. Journal of Information Technology, 13(1), 3-14.

Block, J. (1956). A comparison of the forced and unforced Q-sorting procedures. Educational
and Psychological Measurement, 16(4), 481-493.

Chambers, R. (1981). Rapid rural appraisal: rationale and repertoire. Public administration and
development, 1(2), 95-106.

Chambers, R. (1994). The origins and practice of participatory rural appraisal. World
development, 22(7), 953-969.

Chandra, P. (2009). Projects 7/E. Tata McGraw-Hill Education.

Gunasekaran, A., Ngai, E. W., & McGAUGHEY, R. E. (2006). Information technology and
systems justification: A review for research and applications. European Journal of Operational
Research, 173(3), 957-983.

Gupta, K. (2011). A practical guide to needs assessment. John Wiley & Sons.
Lawton, M. P., Moss, M., Fulcomer, M., & Kleban, M. H. (1982). A research and service
oriented multilevel assessment instrument. Journal of gerontology, 37(1), 91-99.
Protocol, K. (1997). United Nations framework convention on climate change. Kyoto Protocol,
Kyoto, 19.

Mkrkdtth, J. R., & Surksh, N. C. (1986). Justification techniques for advanced manufacturing
technologies. International Journal of Production Research, 24(5), 1043-1057

Scholtz, J. C., Antonishek, B., & Young, J. D. (2005). Implementation of a situation awareness
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Thomas, D. M., & Watson, R. T. (2002). Q-sorting and MIS research: A primer.
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 CHAPTER FOUR

PROJECT IMPLEMENTATION, MONITORING AND EVALUATION

Martin Kabanda
Introduction
Project monitoring in its broader sense is about paying attention to certain things and responding
if those things change in unexpected ways. It may also involve assessing why the changes took
place to pave way for devising appropriate responses. It is done throughout the project’s life
cycle both formally and informally. Monitoring is an internal function in any project or
organization. Monitoring has been defined as “a continuous function that uses the systematic
collection of data on specified indicators to provide management and the main stakeholders of an
ongoing development intervention with indications of the extent of progress and achievement of
objectives and progress in the use of allocated funds.” Crawford & Bryce (2003) contend that
“monitoring is the process of checking that everything is going well and according to plan” In
other words, monitoring is the purposeful and systematic observation, recording and reporting on
project activities. It is about regular checking to find out whether all aspects of the project
(activities, inputs, results etc.) are progressing according to plan and reporting the findings to be
used in making decisions for improving project performance. Evaluation on the other hand is the
process of determining the worth or significance of a program to determine the relevance of
objectives, the efficacy of design and implementation, the efficiency or resource use, and the
sustainability of results. On the other hand, valuation is the systematic and objective assessment
of an ongoing or completed project, program, or policy, including its design, implementation,
and results. The aim is to determine the relevance and fulfillment of objectives, development
efficiency, effectiveness, impact, and sustainability. An evaluation should provide information
that is credible and useful, enabling the incorporation of lessons learned into the decision making
process of both recipients and donors

Background of monitoring and evaluation

M&E also builds greater transparency and accountability in use of project resources. Information
generated through M&E provides project staff with a clearer basis for decision-making. Future
project planning and development is improved when guided by lessons learned from project
experience.

Relationship between M&E

M & E are two different management tools that are closely related, interactive and mutually
supportive. Through routine tracking of project progress, monitoring can provide quantitative
and qualitative data useful for designing and implementing project evaluation exercises. Through
the results of periodic evaluations, monitoring tools and strategies can be refined and further
developed. Both monitoring and evaluation must be planned at the program/ project level.
Baseline data and appropriate indicators of performance and results must be established
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Comparison Between M&E
Item Monitoring Evaluation
Frequency Regular, ongoing Episodic/broken up
Main action Keeping track/oversight Assessment
Basic Improving efficiency Improve effectiveness, impact,
purpose Adjusting work plan future programming
Focus Inputs/outputs, process outcomes, work Effectiveness, relevance, efficiency,
plans impact, sustainability
Information Routine systems, field visits, Same plus
sources stakeholder meetings, output reports, Surveys (pre-post project)
rapid assessments Special studies
Undertaken Project/program managers External evaluators
by Community workers Community (beneficiaries)
Supervisors Project/program managers
Community (beneficiaries) Supervisors
Funders Funders
Other Stakeholders

Monitoring
In practice, covers a wide range of activities and require data collection, but data collection is not
synonymous with monitoring. Monitoring also implies analysis and use of the data. Generally,
the level that records information should be able to use it. Designing data collection systems with
this principle in mind helps improve chances that the data will be collected carefully and put to
use.

Planning a Monitoring System

Planning a monitoring system requires answering key questions:
1. What should be monitored?
✓ Keep information requirements to a bare minimum
✓ Collect info that will be most helpful to those who will use it
2. How?
◼ Select methods to track indicators/report on progress
✓ Observations, interviews, routine reporting, sentinel sites
✓ Piggyback on existing data collection systems
✓ Both formal/informal and quantitative/qualitative methods
✓ Decide how information will be recorded systematically and reported clearly
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 ✓ Consider the time and skills of those who will collect the data
✓ Pretest new monitoring instruments
3. Who should be involved when?
✓ Clearly identifying who will collect information on indicators, when (frequency)
and who will receive it
✓ The monitoring plan should also identify who will be involved in reviewing
progress and providing feedback
4. What resources are needed and available?
o The human and financial cost of gathering, reporting and reviewing data should
be identified
o Needed funding and time should be set aside for this work
5. Consultation and Training
✓ Discuss the monitoring program with a representative group from each level
before it is put into effect
✓ Provide training to those who will be using the monitoring systems
6. Prepare a work plan
✓ for each year
✓ listing the main activities to be carried out, their output, timing and parties
involved
Purposes of project monitoring
✓ Serve as the basis for establishing the project’s information systems
✓ Generate information that will allow project managers to:
o track achievement of project outputs (immediate results of project activities) ,
and
o monitor progress towards achievement of objectives and desired outcomes
(provisional results created by outputs)

Example: Plan to monitor achievement of project outputs

Means of Responsible
Component Frequency
Monitoring Indicator Collection Agency/Person
Output (WHEN)
(HOW) (WHO)

No. of Municipal Plans Municipal Annual Partners

with renewable strategies Planning
Policy approved by local and
governments
Development
Offices

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 % of beneficiaries with Council record + Quarterly CSO Supervisor
Planning and functioning energy NGO Output
Management management committees report

No. of NGO personnel Training Reports Semi- CSO Foundation

trained in alternative Pre-post training annually Trainer
energy technology test Semi- CSO Foundation
Change in knowledge on
scores/Training Annually Trainer
Training energy among trained
NGO personnel Reports Quarterly NGO Supervisor
No. education sessions NGO output
delivered to NGO staff on report
alternative energy
Net value of socially NGO output Quarterly NGO Outreach
marketed ENERGY report Monthly Worker
products CBD service Monthly (for all
Services
statistics indicators)
CBD service
statistics

No. of linked energy NGO output Quarterly NGO Outreach

messages and materials report and Quarterly Worker
created portfolio of IEC Annually NGO Outreach
No. of energy campaign
Integrated materials Worker
events delivered in the
IEC NGO output NGO Supervisor
community during
festival periods reports
Audience reaction to FGD
energy campaigns

Monitoring Plan Tool

Objective Intervention/ Indicator Target Means of Frequency Responsible
Results (Projected Collection Party
Chain Result)
Factor

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How to Use the Tool
1st Column – insert your pre-determined time-bound objective
2nd Column – insert your pre-determined Intervention and the associated Result Chain Factor
3rd Column – list 2 or more of the indicators you selected for the specific intervention-results
chain factor set. Try to include an outcome indicator as well as process indicators.
4th Column - insert a performance target for each indicator – e.g. quantitative estimate of
expected result by EOP
5th Column – insert the Means (HOW) you will gather the information
6th Column – insert the Frequency of data collection (WHEN)
7th Column – Insert the name of the party/agency/person who will be primarily responsible for
collecting/ reporting the information

The Evaluation Process

The various things that need to be done to ensure that the evaluation is successful.
1. Planning for or scoping the Evaluation
2. Designing the Evaluation
3. Conducting the Evaluation
4. Reporting the Evaluation Findings
5. Disseminating and Follow up on the Evaluation Findings

Planning for the Evaluation

o Identify Stakeholders
o Explore program context and gather background materials
o Review of literature : Search for related evaluation, Review previous evaluations
to identify issues, designs and data collection strategies used
o Review and refine or develop a theory of change for the programme

Designing the Evaluation

o Determine the questions and issues
o Identify the main purpose of evaluation, issues of concern and critical timing
needs
o Identify key stakeholders
o Determine resources available
o Assess stakeholders needs
o Prepare evaluation matrix – organizes the evaluation questions and plans for
collecting information to answer them
The evaluation matrix
The Key elements of the Evaluation design matrix
✓ Main evaluation issue

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 ✓ General approach
✓ Questions and sub questions
✓ Measures or indicators
✓ Targets of standards
✓ Presence or absence of baseline data
✓ Design strategy
✓ Data sources
✓ Sample or census
✓ Data collection instrument
✓ Data analysis and graphics
✓ Comments
✓ Note – May change as it moves from planning to implementation
Conducting the evaluation
✓ Brief the client and stakeholders on the evaluation design
✓ Work plan
✓ Data collection
✓ Data analysis
✓ Findings
Reporting the Evaluation Findings
✓ Identify major findings – what works/does not and what needs improvement
✓ Write the draft report
✓ Present draft report
✓ Develop and verify recommendations and lessons
✓ Write final report

Dissemination and follow of Evaluation findings

✓ Determine the needed evaluation products – a briefing, report summary, the full
report,
✓ Identify mechanisms for sharing lessons
✓ Follow up recommendations to determine implementation
✓ Deposit electronic file in read only form in evaluation knowledge repositories
✓ May disseminate in journals or book chapters

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Bibliography

Bertot, J. C., Jaeger, P. T., & Grimes, J. M. (2010). Using ICTs to create a culture of
transparency: E-government and social media as openness and anti-corruption tools for societies.
Government information quarterly, 27(3), 264-271.

Crawford, P., & Bryce, P. (2003). Project monitoring and evaluation: a method for enhancing the
efficiency and effectiveness of aid project implementation. International journal of project
management, 21(5), 363-373.

Environmental, O. (1997). Project evaluation matrix.

Lusthaus, C., Adrien, M. H., & Perstinger, M. (1999). Capacity development: definitions, issues
and implications for planning, monitoring and evaluation. Universalia Occasional Paper, 35(9).

Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.

Kusek, J. Z., & Rist, R. C. (2004). Ten steps to a results-based monitoring and evaluation
system: a handbook for development practitioners. World Bank Publications.

Ouchi, W. G. (1977). The relationship between organizational structure and organizational

control. Administrative science quarterly, 95-113.

Vanderlinde, R., Van Braak, J., & Tondeur, J. (2010). Using an online tool to support
school‐based ICT policy planning in primary education. Journal of Computer Assisted Learning,
26(5), 434-447.

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 CHAPTER FIVE
PROJECT SCOPE MANAGEMENT
Stephen Kyakulumbye and Martha Olweny

Introduction
In the United States, the forefather of project management Henry Gantt, called the father of
planning and the control techniques argue that planning helps you to estimate the time, cost
and scope of the project (Stevens, 2002). From the fact that project success is measured in term
of time, cost and scope (triple constraints), then planning will help to estimate the success of a
project. According to PMI (2002), it is argued through the theory of planning that planning is
structured into ten core processes to include: scope planning, scope definition, activity definition,
resource planning, activity sequencing, activity duration estimating, cost estimating, schedule
development, cost budgeting and project plan development. These processes are the core to
project success. Many more studies have looked at three core processes to include scope
planning, activity duration estimating and cost estimating which seem to determine project
success if well attended to. Johnston & Brennan (1996) argue that comparison to theories in the
general field of operations reveals that the perspective of project management is-as-planning.
Here, it is assumed that the organization consists of a management part and an effectors part.
Management at the operations level is seen to consist of the centralized creation, revision and
implementation of plans. This approach to management views a strong causal connection
between the actions of management and outcomes of the organization. By assuming that
translating a plan into action is the simple process of issuing “orders”, it takes plan production to
be essentially synonymous with action.

Planning is argued as the core stage of project development.The Develop Project Management
Plan process includes the actions necessary to define, integrate, and coordinate all subsidiary
plans into a project management (PMBOK Guide, 2004). This signifies that the management
function of planning is very necessary and detail attention has to be paid to it to enable the
project to meet its objective within the constraints of time, cost and scope. The time planning,
cost estimation and scope definition will define the plan for these constraints .Then further the
smaller constraint plans can be integrated and coordinated to help in the proper management of

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the project and eventually the success of the project. Unfortunately, many projects especially
ICT based projects lack this triple constraint to planning (cost, scope and time)-the project
management core knowledge areas and also the precursor to project quality.

Weaver (2002) observes that the power of regular updates contributes to the project success by
motivating and giving direction to the project team, aiding in identifying and solving problems
and above all open up a communication path for the project team. This simply explains that
management functions of planning must plan for days when to review and give feed back to the
team on project progress which will show whether the soft skills of project success are being
adhered too. Further still, Zwikael and Globerson (2006) argue that performance ranking on
project's success that was found among industries was attributed to the level of quality of
planning. Construction and engineering organizations, which scored the highest on project
success, also obtained the highest score on quality of planning. Production and maintenance
organizations, which scored the lowest on project success, received the lowest score on quality
planning

However Zwikael and Globerson (2006) argue that performance deviation among the industries
is probably due to the difference in the nature of their operations. While construction and
engineering companies are project oriented, as most of their work involves initiation and
execution of new projects, production and maintenance organizations are engaged mostly with
day-to-day operations, and their planning is oriented to that rather than to project planning. This
implies that for project oriented companies, the function of project planning is key to the success
of their projects. This is also true for ICT based projects which are characterized by all the
project life stages as per the systems development life cycle (SDLC).

Scope planning and success of projects

As stated in the PMBOK Guide (2004) Project Scope Management includes the processes
requires to ensure that the project includes all the work required, and only the work required, to
complete the project successfully. Project scope management is primarily concerned with
defining and controlling what is and is not included in the project. Defining what is and
controlling what is not included in the project to help project implementers to have a clear view
of the activities to be implemented and a thorough idea of the overall project scope. This helps to
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set the limits and exclusions of projects. This avoids unnecessary activities being added which
can increase the scope of the project hence affecting the cost and time within which the project is
to be implemented and rendering it unable to meet the desired start-finish time and being over
spent. Many African projects have suffered project slippage due to failure to adhere to the
initially defines scope. Management have always argued the project teams to be flexible but
flexibility is dangerous in that it affects the scope that affects the time that ultimately affects the
cost.

Scenario
For example: What happens when the customer keeps adding requirements? Which constraint
has priority? Project management team has to decide which constraint has priority and therefore
complete a project priority matrix. Here we complete a priority matrix for the project to identify
which criterion is constrained, which should be enhanced and which should be accepted.

Constrain: original parameter is fixed. The project must meet the completion date, specifications
and scope of the project within budget.
Enhance: Given the scope, what do we optimise? In this case, time and cost. Either reduce the
costs or shorten the schedule. The idea of enhancing with regard to performance, means adding
value to the project.

Accept: It is tolerable not to meet the original parameters.

Time Performance Cost

Constrain
Enhance
Accept

Project illustration: Development of a new wireless modem project

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Because Time to market is important to sales, the Project Manager is instructed to take
advantage of every opportunity and reduce completion time. In doing so, going over the budget
is acceptable though not desirable. At the same time, the original performance specifications for
the modem as well as reliability standards cannot be compromised.

The PMBOK Guide (2004) argues that defining and managing the project scope influences the
project’s overall success. Each project requires a careful balance of tools, data sources,
methodologies, processes and procedures, and other factors to ensure that the effort expended on
scoping activities is commensurate with the project’s size, complexity and importance. For
example, a critical project could require formal, thorough and time intensive scoping activities in
place while a routine project could require substantially less documentation and scrutiny. The
project management team documents these scope management decisions in the project scope
management plan. The project scope management plan is a planning tool describing how the
team will define the project scope, develop the detailed project scope statement, define and
develop the work breakdown structure, verify the project scope, and control the project scope.
It’s also argued by PMI (2002) that the preparation of a detailed project scope statement is
critical to project success and builds upon the major deliverables, milestones, assumptions and
constraints that are documented during project initiation in the preliminary project scope
statement. During planning, the project scope is defined and described with greater specificity
because more information about the project is known. Stakeholder needs, wants, and
expectations are analyzed and converted into requirements. The assumptions and constraints are
analyzed for completeness, with additional assumptions and constraints added as necessary. The
project team and other stakeholders, who have additional insight into the preliminary project
scope statement, can perform and prepare the analyses. Critical to scope definition is the work
break structure.

Work break down structure or project decomposition

Work break down structure helps project managers to set deliverables, elements, work packages,
tasks/activities and milestones. It outlines the work to be performed. Provides a Framework for
Defining the Work on the Project - Statement of Works or specification of requirements;

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Provides a Framework for Planning; (Work Not in the WBS is Work Not in the Project). A
Deliverable - Oriented Grouping of Project Elements that Organizes and Defines the Total
Scope of the Project. Each Descending Level Represents an Increasingly Detailed Definition of
the Project Work. A WBS Consists of Elements; The Lowest Level Element in the WBS is
Often Referred to as a Work Package; A Work Package Consists of Tasks or Activities;
Elements are described by Nouns and Activities Contain Verbs. Once the scope and deliverables
have been identified, the work of the project can be successively sub-divided into smaller and
smaller work elements. The outcome of this hierarchical process is called WBS. It is a map of
the project. It identifies all products and work elements and integrates project with current
organization. It establishes a basis for control.

WBS with project as final deliverable

Sample Partial WBS

Level 1 SOFTWARE
PROJECT

TRAINING USER SOFTWARE SYSTEM PROJECT

MATERIALS DOCUMENTS SYSTEM ANALYSIS MGT

SYSTEM
MODULE 1 MODULE 2 MODULE 3 Level 3
TEST

CODING TEST

Source:

Hierarchical WBS
Major project work deliverables/systems are identified first eg software project; Then the sub-
deliverables necessary to accomplish the larger deliverable are defined; The process is repeated

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 until the sub-deliverable detail is small enough to be manageable and where one person can be
responsible; The sub-deliverable is further divided into work packages; Because the lowest sub-
deliverable usually includes several work packages, the work packages are grouped by type of
work e.g. hardware installation, coding, programming, testing; These groupings within a sub-
deliverable are called cost accounts; This grouping facilitates a system for monitoring project
progress by work, cost and responsibility.
Heading
Level 1

Coding the WBS

6
Usefulness of a WBS depends on a coding system; Codes are used to define levels and elements
in the WBS, organizational elements, work packages and budget and cost information; Codes
allow reports to be consolidated at any level in the structure; Use numeric indention.
1.0 Personal computer
1.1 Disk storage units
1.1.1 External USB
1.1.2 Optical

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 1.1.3 Hard disk
1.1.3.1 Mortar
1.1.3.1.1 Sourcing work package
1.1.3.2 Read/write head
1.1.3.2.1 Cost account
The 100 % Rule during project decomposition
The next level decomposition of a WBS element (child level) must represent 100% of the work
applicable to the next higher (parent) element.
Note: If you follow the 100% rule, and define the WBS elements as nouns, you have won the
battle to get an effective WBS.

Types of work break down structures

These are documented as per the PMBOK Guide Definition of a Project: “A temporary
endeavour undertaken to create a unique product, service or result.”

a) Product breakdown: This is Decomposition of the Natural, Physical Structure of the

Deliverable. The Deliverable is a Tangible Product like construction of a house for
engineering project.

b) Service breakdown: Here, there is No Tangible Output Product. The Main Event or
“Service” is the project. Decomposition is based on a Logical Grouping (not Physical
Structure). It is Often Developed Bottom-up and Detailed Activities May be Checklists. An
example is Organization of a conference project.

c) Results project breakdown: The Project does not have a Well-Structured Primary Product
as a Deliverable. It may have Several Products that Collectively Achieve the Planned
“Result.” The Projects are perceived as Process-Based.

Network techniques for project management

Once project is selected and the work break down structure is complete, the focus shifts to its
implementation. This involves the completion of numerous activities as identified in the WBS
(project components) by employing various resources (Ms): Man, Machinery, Materials,

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Moments, Management Information Systems (MIS) and Money. This transforms the project on
paper into reality. Due to the constraints in project resources, network techniques have been
found to be useful in that they establish activity relationships and dependencies. Many successful
organizations in project implementation recommend that a network plan should accompany
feasibility reports. This has been found relevant for Indian projects as noted by Chandra (2004)
but given little attention in African based projects. There are two basic network techniques:
PERT, Gantt and CPM.

Program evaluation review technique (PERT)

Program evaluation review technique (PERT) charts depict task, duration, and dependency
information. It was originally developed to facilitate the planning and scheduling of the Polaris
Fleet Ballistic Missile Project of the US government mainly to handle risk and uncertainty. The
orientation of the PERT is probabilistic. Each chart starts with an initiation node from which the
first task, or tasks, originates. If multiple tasks begin at the same time, they are all started from
the node or branch, or fork out from the starting point. Each task is represented by a line which
states its name or other identifier, its duration, the number of people assigned to it, and in some
cases the initials of the personnel assigned. The other end of the task line is terminated by
another node which identifies the start of another task, or the beginning of any slack time, that is,
waiting time between tasks.

Each task is connected to its successor tasks in this manner forming a network of nodes and
connecting lines. The chart is complete when all final tasks come together at the completion
node. When slack time exists between the end of one task and the start of another, the usual
method is to draw a broken or dotted line between the end of the first task and the start of the
next dependent task.

A PERT chart may have multiple parallel or interconnecting networks of tasks. If the scheduled
project has milestones, checkpoints, or review points (all of which are highly recommended in
any project schedule), the PERT chart will note that all tasks up to that point terminate at the
review node. It should be noted at this point that the project review, approvals, user reviews, and
so forth all take time. This time should never be underestimated when drawing up the project

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plan. It is not unusual for a review to take 1 or 2 weeks. Obtaining management and user
approvals may take even longer.

When drawing up the plan, be sure to include tasks for documentation writing, documentation
editing, project report writing and editing, and report reproduction. These tasks are usually time-
consuming, so don't underestimate how long it will take to complete them.

PERT charts are usually drawn on ruled paper with the horizontal axis indicating time period
divisions in days, weeks, months, and so on. Although it is possible to draw a PERT chart for an
entire project, the usual practice is to break the plans into smaller, more meaningful parts. This is
very helpful if the chart has to be redrawn for any reason, such as skipped or incorrectly
estimated tasks.

Many PERT charts terminate at the major review points, such as at the end of the analysis. Many
organizations include funding reviews in the projects life cycle. Where this is the case, each chart
terminates in the funding review node.

Funding reviews can affect a project in that they may either increase funding, in which case more
people have to make available, or they may decrease funding, in which case fewer people may be
available. Obviously more or less people will affect the length of time it takes to complete the
project.

Critical path method (CPM)

Critical Path Method (CPM) charts are similar to PERT charts and are sometimes known as
PERT/CPM. It was developed independently in 1956-57 by the Du Pont Company in the US to
solve the scheduling problems in industrial settings. It is mainly concerned with the trade-off
between the cost and time constraints. Their application has been in projects that employ fairly
stable technology and are relatively risk free hence its orientation is deterministic. In a CPM
chart, the critical path is indicated. A critical path consists of that set of dependent tasks (each
dependent on the preceding one) which together take the longest time to complete. Although it is
not normally done, a CPM chart can define multiple, equally critical paths. Tasks which fall on
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the critical path should be noted in some way, so that they may be given special attention. One
way is to draw critical path tasks with a double line instead of a single line.
Tasks which fall on the critical path should receive special attention by both the project manager
and the personnel assigned to them. The critical path for any given method may shift as the
project progresses; this can happen when tasks are completed either behind or ahead of schedule,
causing other tasks which may still be on schedule to fall on the new critical path.

Gantt Charts
Gantt was developed by the forefather of project management Henry Gantt, also called the
father of planning and the control techniques that help to estimate the time, cost and scope of
the project. A Gantt chart is a matrix which lists on the vertical axis all the tasks to be
performed. Each row contains a single task identification which usually consists of a number and
name. The horizontal axis is headed by columns indicating estimated task duration, skill level
needed to perform the task, and the name of the person assigned to the task, followed by one
column for each period in the project's duration. Each period may be expressed in hours, days,
weeks, months, and other time units. In some cases it may be necessary to label the period
columns as period 1, period 2, and so on.

The graphics portion of the Gantt chart consists of a horizontal bar for each task connecting the
period start and period ending columns. A set of markers is usually used to indicate estimated
and actual start and end. Each bar on a separate line, and the name of each person assigned to the
task is on a separate line. In many cases when this type of project plan is used, a blank row is left
between tasks. When the project is under way, this row is used to indicate progress, indicated by
a second bar which starts in the period column when the task is actually started and continues
until the task is actually completed. Comparison between estimated start and end and actual start
and end should indicate project status on a task-by-task basis.

Variants of this method include a lower chart which shows personnel allocations on a person-by-
person basis. For this section the vertical axis contains the number of people assigned to the
project, and the columns indicating task duration are left blank, as is the column indicating
person assigned. The graphics consists of the same bar notation as in the upper chart indicates

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that the person is working on a task. The value of this lower chart is evident when it shows slack
time for the project personnel, that is, times when they are not actually working on any project.

Work breakdown structure: network diagramming: understanding dependencies

Dependencies are fundamental to planning a project and also later in understanding the effects of
any problems encountered. If an activity can only begin when another is complete, then we have
a dependency. It is also a link amongst a project’s tasks or elements. There are four kinds of
dependencies with respect to ordering terminal elements (in order of decreasing frequency of
use):
1. Finish starting (FS) A FS B = B can't start before A is finished
A B
FS
(Foundations dug) FS (Concrete poured)
2. Finish to Finish (FF)
A FF B = B cannot finish before A is finished
A
FF
B
(Last chapter written) FF (Entire book written)
3. Start to start (SS)
A SS B = B can't start before A starts
A
SS
B
(Project work started) SS (Project management activities started)
4. Start to finish (SF)
A SF B = B cannot finish before A starts
A
SF

B
(New shift started) SF (Previous shift finished)
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Types of network diagramming
a) Activity of the arrow format (AoA)
The activity on arrow format means that the lines represent tasks and the circles decision
points. Activity name should be written along the line. Each activity has a duration and can
be written below the line.

1
3
2
4 6

From the diagram, the following can be concluded:

• Once project starts we have two activities (1 and 2) with a start to start relationship.
• The results of the two activities have to be brought together before we can start the next
three activities (3,4, 5) i.e. we bring them together using a dummy line (dotted)
• The 3 activities are brought together before we can start the final task.

Activity estimation
1. Conduct interviews 8 days
2. Investigate other systems 4
3. Analyse requirements 3
4. Investigate packages 8
5. Investigate hardware 5
6. Produce a report 5

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We can now establish activities on the critical path. It is made up of activities that if delayed
would result in the delay of the whole project. For instance conduct interviews will take 8 days
whereas investigate other sys will take only 4 days. So a delay of up to 4 days in investigate
other sys will not delay the start of the 3 successor activities.

Once the project gets underway and there are snags (as usually will be); eg if the activity gets
behind schedule, the network lets the project team assess the effect on the other activities and
final outcome of the project. If the activity is not on the critical path, and there is enough
slack/float (delay possible) to accommodate some delay, then put a careful eye on it to ensure
that it doesn’t slip further (activity control). If on Critical Path, then you could add more
resources.

Activity on the node format

This has boxes which represent the activities and arrows represent dependencies between them.
This is the basis of Microsoft Project for Windows operating system and OpenProj software for
Linux and other open source operating systems. We can analyse the critical path by making 2
passes through the model i.e. forward pass where we establish the earliest start time (EST) and
earliest finish time (EFT) for an activity. This is done by addition. We record the EST for each
activity on the top left hand box and obtain the EFT by adding to this the duration of the activity.
The result is then recorded in the top right hand box. Moving through the model, the EST for an
activity is the same as the EFT for its predecessor. Where an activity has more than one
predecessor as does for example produce report then we take the highest of the possible EFT.
Produce report cannot begin until the longest of them is completed which is to investigate
packages. We know from the forward pass that the shortest time in which the project can be
completed is 21 days.

Backward pass (BWP)

We perform the BWP through the model to establish the Latest Start Time and the Latest Finish
Time for each activity. This time is by subtracting the duration from the EFT for the whole
project say of 21 days. The LFT for each activity is recorded in the bottom right hand box and
the LST is arrived at by subtracting the duration of the activity from the LFT. The LFT for an

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activity is the same as the LST of its successor on the model. Where an activity has more than
one successor as does for example conduct interview, the LST used is the smaller of the
alternatives on offer. In this case 8 days for investigates packages. This is because if a larger
figure is used, the start of conduct interviews would be delayed by 5 days. We are now able to
calculate the critical path by calculating by subtracting the EST from the LST i.e. LST-EST. If
there is no remainder from the subtraction, the activity is on the critical path. If there is a
remainder, then this is implying to the float or slack there is in the activity. The float or slack
represents the maximum allowable time that the activity can be delayed.

Time estimation
Once the logic and detail of the network have been established, time estimates must be assigned
to each activity. Many projects fail because insufficient time is given to this detail. Generally,
three time values are obtained for each activity: optimistic time (to), most likely time ™ and
pessimistic time (tp). Optimistic time (O)-is the time required if no hurdles or complications
arise; Most likely time (M)-is the time in which the activity is most likely to be completed;
normal circumstances making allowances for unforeseen delays; Pessimistic time (P)-is the time
required if unusual complications and difficulties arise.
Duration = (O + 4M + P) ÷ 6

Project management using Microsoft project for windows environment and OpenProj for
linux environment
Project management is the planning and control of a project. ICT driven tools enable project
managers to effectively manage single even portfolio of projects. Using such tools allows the
user to resolve conflicts in a continuously changing environment and is necessary to
continuously drive towards the achievement of the baseline project goals. Because project
management should ideally result in the fulfillment of all set targets, a significant part of the
project manager’s work is dealing with conflicts arising from unforeseen resource and task
variations. Most conflicts require the project manager to decide which goals and goal types can
change and which cannot. Project software can be helpful in assisting these decisions by

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illustrating ‘critical paths’ within the project and allow the user to easily identify what impact
any changes would have.

Generally speaking a project should have the following characteristics which can be realized
when computer based tools are used for project management:
Time limitation: Both a start point and an endpoint must be defined for a project. Initially, it is
common for just a start date to be specified and the resultant project plan will determine the end
date.
Clear objective: The objective to be achieved by the project must be clearly defined. For
example, "Launch Product" is a clearly defined goal, whilst "Sale of the Product" (without
quantification) is not a clearly defined goal.
Process structure: The project must be split up into clearly defined tasks. It should not represent
a singular process from beginning to end, but be broken down into distinct stages.
Organizational structure: Projects often require an established organizational structure with
unique skill sets to be effective, but this does depend somewhat on the scale of the project.
Certain terminology is used throughout the OpenProj and Ms Project software, so it would be
useful to familiarize with some of these phrases:
Tasks: The partial activities from which the overall project is composed are called tasks. They
are the smallest units/steps in a project.
Duration: The period between the start time and the finish time of a task.
Predecessors: A task that must be processed before a future dependent task can be started.
Successors: A task that can only be started if a previous dependent task has been processed.
Milestones: Milestones are important intermediate objectives. They often define phase
transitions, critical project stages or intermediate results. They are usually represented as tasks
that have no duration.
Summary tasks: Each chunk of a project with multiple tasks should be headed by a parent task
which is known as a Summary Task. Summary tasks usually terminate with a milestone and have
a fixed result (output). Summary tasks have a duration assigned automatically from their sub-
task’s duration and dependencies.

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Slack: ‘Free slack’ is how much a task can delay without impacting on other tasks. ‘Total slack’
is how much a task can delay without impacting on the end date of the project.
Critical path: This is the shortest path from the beginning to the end of the project. Only tasks
without slack exist on this path (critical path) and are called critical tasks. The project end date is
automatically extended if a task on the critical path slips or has an extended duration.
Resources: Resources refer to all people, time, production and materials required to deliver the
project. A mapping of required resources can be performed for each task. Reliable cost planning
is only possible when real resources and costs are mapped to the tasks.

Forward scheduled: This is where a start date is set for the project and the end date is
automatically calculated from the duration of the operations and the task dependencies.
Backward scheduled: This is where a deadline is set for the project and the latest possible
project start is automatically calculated from the duration of the operations and the task
dependencies.
Fixed duration tasks: The duration for a task is set, regardless of how many resources are
assigned to it.
Effort driven tasks: The duration of a task is dependent on how many resources of the same
type are assigned to it. For example, a deliverable is produced in less time with three employees
than with one.

Activity duration estimation and success of projects

PMBOK Guide (2004) argues that the process of estimating schedule activity durations uses
information on schedule activity scope of work, required resource types, estimated resource
quantities, and resource calendars with resource availabilities. The inputs for the estimates of
schedule activity duration originate from the person or group on the project team who is most
familiar with the nature of the work content in the specific schedule activity. The duration
estimate is progressively elaborated, and the process considers the quality and availability of the
input data. For example, as the project engineering and design work evolves, more detailed and
precise data is available, and the accuracy of the duration estimates improves. Thus, the duration
estimate can be assumed to be progressively more accurate and of better quality. PMBOK Guide
(2004) states that the Activity Duration Estimating process requires that the amount of work
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effort required to complete the schedule activity is estimated, the assumed amount of resources
to be applied to complete the schedule activity is estimated, and the number of work periods
needed to complete the schedule activity is determined. All data and assumptions that support
duration estimating are documented for each activity duration estimate. Estimating the number of
work periods required to complete a schedule activity can require consideration of elapsed time
as a requirement related to a specific type of work. Most project management software for
scheduling will handle this situation by using a project calendar and alternative work-period
resource calendars that are usually identified by the resources that require specific work periods.
The schedule activities will be worked according to the project calendar, and the schedule
activities to which the resources are assigned will also be worked according to the appropriate
resource calendars (PMBOK Guide, 2004).

Cost estimation and success of projects

Estimating schedule activity costs involves developing an approximation of the costs of the
resources needed to complete each schedule activity. In approximating costs, the estimator
considers the possible causes of variation of the cost estimates, including risks. Cost estimating
includes identifying and considering various costing alternatives. For example, in most
application areas, additional work during a design phase is widely held to have the potential for
reducing the cost of the execution phase and product operations. The cost estimating process
considers whether the expected savings can offset the cost of the additional design work. Cost
estimates are generally expressed in units of currency (dollars, euro, yen, etc.) to facilitate
comparisons both within and across projects. In some cases, the estimator can use units of
measure to estimate cost, such as staff hours or staff days, along with their cost estimates, to
facilitate appropriate management control.

Cost estimates can benefit from refinement during the course of the project to reflect the
additional detail available. The accuracy of a project estimate will increase as the project
progresses through the project life cycle. For example, a project in the initiation phase could
have a Rough Order of Magnitude (ROM) estimate in the range of -50 to +100%. Later in the
project, as more information is known, estimates could narrow to a range of -10 to +15%. In
some application areas, there are guidelines for when such refinements are made and for what
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degree of accuracy is expected. Sources of input information come in the form of outputs from
the project processes in Chapters 4 through 6 and 9 through 12. Once received, all of this
information will remain available as inputs to all three of the cost management processes. The
costs for schedule activities are estimated for all resources that will be charged to the project.
This includes, but is not limited to, labour, materials, equipment, services, and facilities, as well
as special categories such as an inflation allowance or a contingency cost. A schedule activity
cost estimate is a quantitative assessment of the likely costs of the resources required to complete
the schedule activity. If the performing organization does not have formally trained project cost
estimators, then the project team will need to supply both the resources and the expertise to
perform project cost estimating activities.

Execution and success of projects

Through the theory of execution, it is argued that the project plan is executed in regard to work
authorization system, which is presented by four sentences:
A work authorization system is a formal procedure for sanctioning project work to ensure that
work is done at the right time and in the proper sequence. The primary mechanism is typically a
written authorization to begin work on a specific activity or work package. The design of the
work authorization system should balance the value of the control provided with the cost of that
control. For example, on many smaller projects, verbal authorizations will be adequate.

The underlying theory of execution turns out to be similar to the concept of job dispatching in
manufacturing where it provides the interface between plan and work. This concept can be traced
back to Emerson (1917). The basic issue in dispatching is allocating or assignment of tasks or
jobs to machines or work crews, usually by a central authority. According to a modern definition,
job dispatching is a procedure that uses logical decision rules to select a job for processing on a
machine that has just come available (Bhaskaran & Pinedo 1991). Obviously, dispatching
consists of two elements: decision (for selecting task for a workstation from those predefined
tasks that are ready for execution), and communicating the assignment (or authorization) to the
workstation. However, in the case of project management, that decision is largely taken care in
planning, and thus dispatching is reduced to mere communication: written or oral authorization
or notification to start work. Here, the underlying theory seems to be the classical theory of
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communication (Shannon & Weaver 1949), where a set of symbols (voice or written speech) is
transmitted from sender to receiver. The work of project execution is a core management
function and the project management team headed by the project manager play an instrumental
role in authorising the project requests. This implies that this management function speeds up the
implementation process and if the verbal or written authorisations are not made in time then this
will affect the time taken to complete the project, the cost will be under spent and the scope of
the project will not be covered hence project success will be affected and the project may end up
in the category of challenged projects. In order to execute the project the project manager, along
with the project management team, directs the performance of the planned project activities, and
manages the various technical and organizational interfaces that exist within the project.

Verbal work authorization and success of projects

The project manager, along with the project management team, directs the performance of the
planned project activities, and manages the various technical and organizational interfaces that
exist within the project (Kerzner, 1998).This signifies that the project manager and his team
takes decisions on when, how and why activities are implemented. This means that the power to
verbally authorize requests and ensure that they are implemented is very important for the project
to succeed within the time, cost and scope constraints. As the project manager makes work
authorisations, this enables deliverables to be produced as outputs from the processes performed
to accomplish the project work planned and scheduled in the project management plan. These
deliverables are defined as project success. Work performance information about the completion
status of the deliverables, and what has been accomplished, is collected as part of project
execution and is fed into the performance reporting process and the project is rated as a success
or a failure.

Written work authorization and success of projects

Project execution also requires implementation of approved corrective actions that will bring
anticipated project performance into compliance with the project management plan. This will
ensure that the paper plan implemented as planned and there is no variance hence leading to the
success of projects. Further still approved preventive actions to reduce the probability of

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potential negative consequences are necessary for making corrections to the project image and
helping the project to achieve its intended objectives.

Controlling and success of projects

Project control can be divided into two core process of : performance reporting and overall
change control. Based on the performance reporting, corrections are prescribed for the executing
processes, and based on the overall change; changes are prescribed for the planning processes.
Here we consider only performance reporting, based on performance baseline, and associated
corrections to execution. They clearly correspond to the cybernetic model of management
control (thermostat model) that consists of the following elements (Hofstede, 1978): there is a
standard of performance, performance is measured at the output (or input), and the possible
variance between the standard and the measured value is used for correcting the process so that
the standard can be reached. This thermostat model is identical to the feedback control model as
defined in modern control theory (Ogunnaike & Ray 1994).This model promotes a feedback
mechanism which helps to check whether the project is achieving the intended objectives as well
as percentage achievement. In so doing the measure of success of the project is on a check and
balance state which helps the project implementers to remain focused.

Monitor and Control Project Work process is performed to monitor project processes associated
with initiating, planning, executing, and closing. Corrective or preventive actions are taken to
control the project performance. Monitoring is an aspect of project management performed
throughout the project. Monitoring includes collecting, measuring, and disseminating
performance information, and assessing measurements and trends to effect process
improvements. Continuous monitoring gives the project management team insight into the health
of the project, and identifies any areas that can require special attention. The monitor and control
project work process is concerned with: comparing actual project performance against the project
management plan, assessing performance to determine whether any corrective or preventive
actions are indicated, and then recommending those actions as necessary, analyzing, tracking,
and monitoring project risks to make sure the risks are identified, their status is reported, and that
appropriate risk response plans are being executed, maintaining an accurate, timely information
base concerning the project’s Product and their associated documentation through project
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completion, providing information to support status reporting, progress measurement, and
forecasting, providing forecasts to update current cost and current schedule information,
monitoring implementation of approved changes when and as they occur.

The corrective actions are documented recommendations required to bring expected future
project performance into conformance with the project management plan. If the corrective
actions are implemented this will reduce the risk of the project failing. Preventive actions are
documented recommendations that reduce the probability of negative consequences associated
with project risks. Forecasts include estimates or predictions of conditions and events in the
project’s future, based on information and knowledge available at the time of the forecast.
Forecasts are updated and reissued based on work performance information provided as the
project is executed. This information is about the project’s past performance that could impact
the project in the future; for example, estimate at completion and estimate to complete. Some
defects, which are found during the quality inspection and audit process, are recommended for
correction.

Performance reporting and the success of projects

The monitor and control project work process is performed to monitor project processes
associated with initiating, planning, executing, and closing. Corrective or preventive actions are
taken to control project performance. Monitoring is an aspect of project management performed
throughout the project cycle. It includes collecting, measuring and disseminating performance
information, and assessing measurements and trends to effect process improvements. Continuous
monitoring gives the project management team insight into the health of the project, and
identifies any areas that can require special attention.

Overall change and success of projects

Prince (2004) argues that one of the outputs of directing and managing project execution is
through changes requested or to revise the project schedule which is often identified while
implementing project work. These changes requested will help management to closely follow the
project to the end and minimise errors related to not achieving the project activities. The

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integrated change control process is performed from project inception through completion.
Change control is necessary because projects seldom run exactly according to the project
management plan. The project management plan, scope statement, and other deliverables must
be maintained by carefully and continuously managing changes, either rejecting changes or
approving and incorporating them into a revised baseline. The integrated change control process
includes the following change management activities in differing levels of detail, based upon
completion of project execution: identifying that a change needs to occur or has occurred,
influencing the factors that circumvent integrated change control so that only approved changes
are implemented, reviewing and approving requested changes, managing the approved changes
when and as they occur, by regulating the flow of requested changes (PMBOK Guide, 2004).

References

Bourne, L (2007), Avoiding successful failure PMT global congress, Asia pacific

Bourne, L& D.H.T. (2003). Tapping into the power lines a 3rd dimension of project management
beyond leading and managing. Proceeding of the management, Moscow Russia

Brian K. W. (2005). Project management paper submitted for publication 22/11/2005.

Burner A. (2007). The human factor from a software project managers perspective accessed at
http://ebookbrowse.com/andreas-burner-2007-the-human-factor-from-a-software-project-managers-
perspective-en-pdf-d221980489 on August 2011.

Carl M. (2007). Measures of Success: Designing, Managing, and Monitoring Conservation and
Development Projects. Washington, D.C: Island Press. ISBN 9781559636124.

Chatfield, Carl (2007). "A short course in Project Management" Microsoft

http://office.microsoft.com/en-us/project/HA102354821033.aspx

Cleland, M. D. I., Gareis R. (2006). Global project management handbook. McGraw-Hill

Professional, 2006. ISBN 0-07-146045-4. p.1-4

Kwak Y. and Carayannis G. 2005 P200. The story of managing projects: an interdisciplinary

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approach published by Greenwood Publishing Group.

Harrison, F. and Lock, D. (2004). Advanced Project Management: A Structured Approach.

Aldershot and Burlington. Gower.

Kousholt B. (2007). Project Management –. Theory and practice.. Nyt Teknisk Forlag. ISBN 87-
571-2603-8. p.59.

David I. Cleland, Roland Gareis (2006). Global project management handbook

Dennis Lock (2007) Project management (9e ed.) Gower Publishing, Ltd., 2007. ISBN
0566087723

Harold K. (1998). Project management: A systems approach to planning, scheduling, controlling

Johnston, R.B. & Brennan, M. (1996). Planning or Organizing: the Implications of Theories of
Activity for Management of Operations. Omega, Int. J. Mgmt. Sc., Vol. 24, No. 4, pp. 367-384
accessed at http://cic.vtt.fi/lean/singapore/koskela&howellfinal.pdf on November, 2011.

Joseph, P. (2003). PMP Project Management Professional Study Guide. McGraw-Hill

Professional, 2003 ISBN 0072230622 p.354

Kerzner H. (1999). Project Management: A Systems Approach to Planning, Scheduling, and

Controlling (8th Ed. ed.). Wiley. ISBN 0-471-22577-0.

Lewis R. Ireland (2006). Project Management. McGraw-Hill Professional, 2006. ISBN

007147160X. p.110

Morris, W.G. (1994) Researching the Unanswered Questions of Project Management. Project
Management Research at the Turn of the Millennium. Proceedings of PMI Research Conference
2000, 21-24 June 2000, Paris, France. Pp. 87-101.

Ofer, Z. and Shlomo, G. (2006). Benchmarking: An international journal on Project Management

vol 13,no 6, pp 688-700.

Paul C. Dinsmore et al (2005) the right projects done right! John Wiley and Sons, 2005. ISBN
0787971138. P.82
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Project Management Institute (PMI), A Guide to the Project Management Body of Knowledge
(PMBOK), 2004.

Sekaran, U. (2000). Research methods for the Business/New York John Wiley and Sons.

Standish Group, Extreme CHAOS (2001), pp 2, Available On-Line at: The story of managing
projects. Elias G. Carayannis et al. 9eds), Greenwood Publishing Group, 2005 ISBN 1567205062.

Starr, E. (1996). The Politics of Standards in Modern Management: Making 'The Project'a
Reality accessed at
http://manchester.academia.edu/DamianHodgson/Papers/1053296/The_Politics_of_Standards_in
_Modern_Management_Makin g_The_Projecta_Reality on October 2011.

Weaver, P (2002) Getting the soft stuff right effective, communication is the key to successful
project outcomes.

Weaver, P. (2007). A simple view of complexity in Project Management. Social processes,

patterns and practices and project knowledge management: A theoretical framework and
empirical investigation. International Journal of Project Management 24, 474-482.

Wortmann, H., (1992). Effects of Risk Identification on Project Outcomes - New Evidence for
the Crucial Role of Communication Among Team Members, International Journal of Project
Organisation and Management .

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 CHAPTER SIX
PROJECT COST MANAGEMENT
Stephen Kyakulumbye

Rationale of project cost management

The importance of effective costing for projects cannot be underestimated. Costing leads to
proper management of projects and for effective and efficient implementation of project scope.
Projects that lack a clear cost schedule are bound to failure as devotion of resources is dependent
upon costs.

Management and cost accounting - responsibility accounting

Cost accounting information is designed for managers. Since managers are taking decisions
only for their own organization, there is no need for the information to be comparable to similar
information from other organizations. Instead, the important criterion is that the information
must be relevant for decisions that managers operating in a particular environment of business
including strategy make. Cost accounting information is commonly used in financial accounting
information, but first we are concentrating in its use by managers to take decisions. The
accountants who handle the cost accounting information add value by providing good
information to managers who are taking decisions. Among the better decisions, the better
performance of one's organization, regardless if it is a manufacturing company, a bank, a non-
profit organization, a government agency, a school club or even a business school. The cost-
accounting system is the result of decisions made by managers of an organization and the
environment in which they make them.

Cost accounting is regarded as the process of collecting, analysing, summarising and evaluating
various alternative courses of action involving costs and advising the management on the most
appropriate course of action based on the cost efficiency and capabilty of the management.

The organizations and managers are most of the times interested in and worried for the costs.
The control of the costs of the past, present and future is part of the job of all the managers in a
company. In the companies that try to have profits, the control of costs affects directly to them.
Knowing the costs of the products is essential for decision-making regarding price and mix
assignation of products and services.

The cost accounting systems can be important sources of information for the managers of a
company. For this reason, the managers understand the forces and weaknesses of the cost
accounting systems, and participate in the evaluation and evolution of the cost measurement and
administration systems. Unlike the accounting systems that help in the preparation of financial
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reports periodically, the cost accounting systems and reports are not subject to rules and
standards like the Generally Accepted Accounting Principles. As a result, there is a wide variety
in the cost accounting systems of the different companies and sometimes even in different parts
of the same company or organization.

The following are different cost accounting approaches:

1. Standardized or standard cost accounting
2. Lean accounting
3. Activity-based costing
4. Resource consumption accounting
5. Throughput accounting
6. Marginal costing/cost-volume-profit analysis

Classical cost elements are:

1. Raw materials
2. Labor
3. Indirect expenses or overhead costs

According to the Chartered Institute of Management Accountants (CIMA date), management

accounting is defined as
"The process of identification, measurement, accumulation, analysis, preparation,
interpretation and communication of information used by management to plan, evaluate
and control within an entity and to assure appropriate use of and accountability for its
resources. Management accounting also comprises the preparation of financial reports
for non-management groups such as shareholders, creditors, regulatory agencies and tax
authorities (CIMA Official Terminology).

The Institute of Management Accountants (IMA date) recently updated its definition as follows:
"Management accounting is a profession that involves partnering in management
decision making, devising planning and performance management systems, and
providing expertise in financial reporting and control to assist management in the
formulation and implementation of an organization’s strategy".

The American Institute of Certified Public Accountants (AICPA date) states that management
accounting as practice extends to the following three areas:

1. Strategic Management—advancing the role of the management accountant as a strategic

partner in the organization.
2. Performance Management—developing the practice of business decision-making and
managing the performance of the organization.
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 3. Risk Management—contributing to frameworks and practices for identifying, measuring,
managing and reporting risks to the achievement of the objectives of the organization.

Differences between management and cost accounting

Though management accounting uses the tools of cost accounting like standard costing, marginal
costing; and many people think that both cost and management accounting are same which is not
the case because there are many differences between the two, here are some of them
1. Cost accounting is concerned with historical cost that is the costs which have been already
incurred while management accounting is concerned with forecasting of the costs and
hence it looks into future unlike cost accounting.
2. The objective of cost accounting is to ascertain the costs and control it while the objective
of management accounting is to provide management all information as and when required
by them so that they can take right decisions at right time.
3. Cost accounting is done for internal parties like top management, owners as well as
external parties like creditors, employees, government, While management accounting is
done for top management only.
4. Cost accounting was evolved many years back and it is limited in its scope while
management accounting is still evolving but its scope is much wider than that of cost
accounting because it uses along with cost accounting other principals of subjects like
statistics, economics etc…

Financial accounting
The purpose of accounting is to provide the information that is needed for sound economic
decision making. The main purpose of financial accounting is to prepare financial reports that
provide information about a firm's performance to external parties such as investors, creditors,
and tax authorities. Managerial accounting contrasts with financial accounting in that managerial
accounting is for internal decision making and does not have to follow any rules issued by
standard-setting bodies. Financial accounting, on the other hand, is performed according to
generally accepted accounting principles (GAAP) guidelines.

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Table: Differences between Financial Accounting, Management and Cost Accounting
Financial Accounting Management Accounting
Primary users External ( Investors, government Internal (Managers of business,
authorities, creditors) employees)
Purpose of Help investors, creditors, and others Help managers plan and control
information make investment, credit, and other business operations
decisions
Timelines Delayed or historical Current and future oriented
restrictions GAAP FASB AND SEC GAAP does not apply, but information
should be restricted to strategic and
operational needs
Nature of Objective, auditable, reliable, More subjective and judgmental, valid,
information consistent and precise relevant and accurate
scope Highly aggregated information about Disaggregated information to support
the overall organization local decisions
Behavioural Concern about adequacy of Concern about how reports will affect
implications disclosure employees behavior
Features Must be accurate and timely Usually approximate but relevant and
Compulsory under company law Is an flexibleExcept for few companies, it is
end in itself not mandatory Is a mean to the end
Segments of It is primarily concerned with Segment reporting is the primary
organisation reporting for the company as a whole. emphasis.
Financial Accounting Cost Accounting
Objective It provides information about It provides information on
financial performance and financial ascertainments of costs to control costs
position of the business. and for decision making about costs.
Nature It classifies records, presents and It classifies, records, presents and
interprets transactions in terms of interprets in a significant manner
money. materials, labour and overhead costs.
Recording of data Records historical data. Records and presents estimated,
budgeted data. It makes use of both
historical costs and predetermined
costs.
Users of External users like shareholders, Used by Internal management at
information creditors, financial analysts, different levels.
government and its agencies,etc.
Analysis of costs It shows profit/loss of the It provides details of costs and profit
and profits organization. of each product, process, job, etc.
Time period They are prepared for a definite They are prepared as and when
period, usually a year. required.
Presentation of A set format is used for presenting There are no set formats for presenting
information financial information. cost information.

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Management accounting
Planning & control are essential for achieving good results in any business. Firstly, a budget is
prepared and, secondly, actual results are compared with budgeted ones. Any difference is made
responsibility of the key individuals who were involved in (i) setting standards, (ii) given
necessary resources and (iii) powers to use them. In order to streamline the process, the entire
organization is broken into various types of centers mainly cost centre, revenue centre, profit
center and investment centre. The organizational budget is divided on these lines and passed on
to the concerned managers. Actual results are collected and displayed in the same form for
comparison. Difference, if any, are highlighted and brought to the notice of the management.
This process is called Responsibility Accounting.

A formal definition of responsibility accounting

Responsibility accounting involves the creation of responsibility centres. A responsibility centre
may be defined as an organization unit for whose performance a manager is held accountable.
Responsibility accounting enables accountability for financial results and outcomes to be
allocated to individuals throughout the organization. The objective is to measure the result of
each responsibility center. It involves accumulating costs and revenues for each responsibility
centre so that deviation from performance target (typically the budget) can be attributed to the
individual who is accountable for the responsibility centre.

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Responsibility Centers and Their Evaluation
Responsibility centers Evaluation methods
Revenue centre Sale price variance
Sale quantity variance
Sale mix variance
Cost centre Raw material variances:
Labor variances
Overhead variances
Profit centre Gross profit
Contribution margin
Investment centre ROI
Residual income
Economic value added
Advantages Disadvantages
Helps manage a large and diversified May create conflicts between various
organization divisions
Motivate managers to optimize their
Undue competition may become dysfunctional
performance
Narrows down vision as overall company
Provide manager freedom to make local
prospective are not considered by individual
decisions
managers.
Top management get more time for policy
May prove costly due to duplication
making and strategic planning
Supports management and individual
specialization based on comparative Problem in coordination across divisions
Advantages

Managerial performance and economic performance

All businesses operate in a complex environment. The traditional approach of centralized control
is not possible. There is a shift towards decentralization. At the same time, the management
wants to retain some sort of control over activities of its managers. When authority is
decentralized and passed on to managers, there is a problem of goal-congruence. This means that
the management will constantly review all operations and activities of individual divisions to
insure that none of them is working against the overall objectives of the company. Such a
behavior is called dysfunctional and is damaging to the company. While evaluating performance
of an individual manager, two factors have to be considered:
1. Should the manager’s job be separated and a manager is rewarded or penalized only for
those activities over which the manager has control.

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 2. Should the manager’s decision be seen in a wider prospective and final judgment is given
only after reviewing full impact of such decisions.
It is obvious that a manager's decisions should be evaluated after seeing their impact on the
bottom line i.e. profitability of the company. But such policy would not be motivational for the
individual manager and the good results may be nullified by the factors not under the control of
the particular manager. Hence, the company follows first approach i.e. managerial performance.

Break even analysis /point (BEP)

Break-even analysis is a technique widely used by production management and management
accountants. It is based on categorizing production costs between those which are "variable"
(costs that change when production output changes) and those that are "fixed" (costs not directly
related to the volume of production). Total variable and fixed costs are compared with sales
revenue in order to determine the level of sales volume, sales value or production at which the
business makes neither a profit nor a loss (the "break-even point").

In the diagram above, the line OA represents the variation of income at varying levels of
production activity ("output"). OB represents the total fixed costs in the business. As output
increases, variable costs are incurred, meaning that total costs (fixed + variable) also increase. At
low levels of output, Costs are greater than Income. At the point of intersection, P, costs are
exactly equal to income, and hence neither profit nor loss is made.

Computation
At BEP, TR=TC; we have BEP in terms of quantity and in terms of revenue.
BEP (Revenue) = P X Q where Q is the quantity at BEP
If TR = TC, Profit = 0 since Profit = TR-TC
Given that P is the selling price of Q
TR = PQ..................................................................... (i)
TC= Fixed Cost (FC) + TVC
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TVC =Variable cost per unit x quantity =VC X Q
TVC=VCQ
TC= FC + VCQ........................................................ (ii)
At break even point TR=TC
Substituting (ii) in equation (i)
PQ= FC + VCQ
FC= PQ-VCQ
FC= Q (P-VC)
Q = FC/(P-VC) This is the formula for break even point in terms of quantity
BEP in terms of Revenue (sales) =P X Q

Exercise
1. Firm XYZ is a manufacturer of reams of paper whose fixed cost is shillings 5,000,000 and
selling price per ream is 8,000/=; variable cost per ream is 7,500/= each. Find the BEP in terms
of quantity and revenue.
Verify that the BEP in terms of quantity is FC (I/P-VC)
S.P is 8,000/= each ream
VC/Ream = 7,500/=
Therefore Q = FC/ (P-VC) = 5,000,000/8,000-7,500
5,000,000/500 =10,000 reams per annum

Therefore this company has to sell approximately 10,000/365 = 30 reams per day making
neither losses nor profits until you break even.
2. ABC is a manufacturer of shoes whose marginal costing is as follows:
Direct labour 5000/=
Direct material 3000/=
SP of a pair of shoes is 10,000/=
If the fixed cost for ABC is Shs 10,000,000, find the BEP in terms of quantity and price
a) If direct labour increases by 20% but others remain constant, what is the new BEP?
BEP in terms of quantity Q = FC/(P-VC)
= 10,000,000/{10,000- (5000+3000)}
10,000,000/2,000
= 5,000 pairs of shoes per annum
Around selling 5,000/365= 14 pairs daily making neither losses nor profits until it breaks
even.
b) New direct labour 120/100 x 5,000 = 6,000/=
Therefore variable cost per unit = 6,000 + 3,000 = 9,000/=
Q= FC/P-VC = 10,000,000/10,000-9,000 = 10,000,000/1,000
=10,000 pairs

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BEP in terms of revenue = P XQ = 10,000 X 10,000
= SHS 100,000,000
More Exercise:
A company is a manufacturer of tiles whose marginal costing is as follows:
Direct labour 50,000/=
Direct material 32,000/=
SP of a pair of shoes is 100,000/=
a) If the fixed cost for the company is shillings 10,000,000, find the BEP in terms of quantity and
price
b) If direct labour increases/reduces by 30% but the others remain constant, what is the new
BEP?
c) Comment on the usefulness of break even analysis
It categorises production costs between those which are "variable" (costs that change
when the production output changes) and those that are "fixed" (costs not directly related
to the volume of production).
It helps to identify the point at which a firm starts to make profits

Project budgeting
Introduction to project budgeting
Once an organization has identified beneficiary needs & changes through forecasting, needs
assessments, baselines; it needs to determine if implementation can be undertaken effectively
and efficiently. This can be accomplished through effective budgeting process. Knowing how to
budget is certainly part of this process. A budget is a master financial plan or a "blueprint for
action" in the future & has 3 parts:
– Operating budget
– Cash flow budget
– Capital expenditure budget

The purpose of a budget

A. A budget is a formal estimate of future revenues, benefits & costs
1. A detailed breakdown of all costs, benefits and revenues is necessary for attaining effective
and efficient goals: Project team members have to analyze operations to develop reliable
estimates of benefits, revenues & costs.
2. If budgeting is done right, it forces better thinking about the project’s goals & purpose & how
to achieve them. It forces management to ask what to be done if certain project target levels are
to not being realized.
B. Making realistic budgets requires clear thinking; As a financial plan of project’s expectations
over time, it should be an assessment of what each phase of the project can accomplish being
aware that projects consume resources to generate outputs.

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1. Make separate budgets for each part of the project phases: inception, detailed planning,
execution, monitoring and evaluation and closure.

Performance analysis, budgeting and budgetary control

A budget is when a plan is expressed quantitatively while budgeting is the process of converting
plans into budgets. Budgets need to be shown in monetary terms ie financial budgets.
When budgets are being drawn up, two main objectives must be uppermost in the mind of
management that is that the budgets are for:
1. Planning: This means a properly coordinated and comprehensive plan for the whole
business. Each part must be interlocked with other parts
2. Control: Just because a plan is set down on paper does not mean that the plan will carry
itself out. Control is exercised via the budgets thus the name budgetary control.
Responsible manager has to follow the guide to help him to produce certain desired results
and the actual achieved results can be compared against the expected ie actual compared
with budget.
3. Budgets help us in cost monitoring

Steps in control process

1. Measuring performance
2. Comparing performance measure to budget
3. Taking corrective action

Tasks in cost control

Make sure that no commitments are made:
1. That exceed their budget allocation
2. Or if they do, make immediate adjustments elsewhere
3. Ensure that all commitments have the venture manager’s approval
4. Regularly collect actual costs to date including work in progress
5. examine cost trends
6. Forecast the cost of the remaining work to complete the current phase or stage
7. Compare total estimated final cost with approved budget
8. Calculate the cost variances line by line to identify specific problem areas
9. Sum up all totals to determine the overall total venture cost variance status
10. Compare that variance with the previous reported variance

Cost control
1. Is a necessary management activity in every phase
2. Most rigorous in the execution phase where most money is spent
3. effective cost control is much more than just collecting expenditures and issuing reports

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 4. main objective is to ensure that all expenditures are as per the budget

Steps involved in cost monitoring

a) Establish a control budget
Budget must be consistent with the way money id going to be spent and thus must follow
budgeting principles:
1. Comprehensive
2. Participatory
3. Flexible
4. Contestable
5. Accountability
b) Conversion process to align the budget with the internal organizational arrangements or
procurement or contract strategy
c) Study what the venture budget covers in terms of scope and content

Cost monitoring skills

a) Allocating skills i.e. scheduling tasks and allocating resources
b) Organizing skills i.e. networking to match problems as they occur
c) Interacting skills-managing people
d) Monitoring skills i.e. setting up an efficient feedback system to facilitate analysis of progress
and taking corrective action-re-planning to recover original budget. Consider tradeoffs -
compromise on schedule, quality and scope; revise budget to accept current situation
e) Decision making skills i.e. terminate project in extreme conditions BCWS, ACWP, BCWP

Earned value concept

During cost monitoring a PM wants to ensure earned value-a method of measuring performance.
It is based on the C/SCSC-cost/schedule control system criteria
Inputs of EV are WBS, project schedule, project budget, budget baseline, work results.
BCWS=budgeted costs of work scheduled.
This represents a total of three components:
1. Budgets for all work packages, scheduled to be completed
2. Budgets for the portion of in-progress work, scheduled to be accomplished
3. Budgets for the overheads for the period

The planned budget for activities scheduled within a given period of time is the baseline
Example: One month project has a budget of Shs 100,000; BCWS-a scheduled cost, predicted
cash flow or a baseline figure of 100,000; The sum is the BCWS.

BCWP=Budgeted cost of work performed (EV) also equal to the sum of th ree components

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1. Budgets for work packages actually completed
2. Budgets applicable to be completed in-process work
3. Overhead budgets
Represents what was done-earned value
EV is used to avoid confusion with money or labour or committed

ACWP=Actual cost of work performed

This is what was paid for=actual
The actual costs incurred in accomplishing the work performed within a given period;
ACWP-accrual or actual cash flow-what was paid for i.e. 85,000/=

Example: After one month, 80% (i.e. Shillings 80,000) of the work has been completed. This is
the budgeted cost of work performed (BCWP) is earned value or what was done in a given
period of time-or physical accomplishment
What are the possible causes of variation between BCWS and ACWP?
What are the possible causes of variation between ACWP and BCWP?

BCTW (budgeted cost for total work) is the budgeted cost for the entire project work
ACC (additional cost for completion) represents estimate for additional cost required for
completing the project

The project may then be monitored basing on the following lines:

Cost Variance : BCWP-ACWP
Schedule Variance in cost terms: BCWP-BCWS
Cost performance index : BCWP/ACWP
Schedule performance index : BCWP/BCWS
Estimated cost performance index BCTW/ (ACWP + ACC)

Illustration:
A project was begun on 1st January 2012 and was expected to be completed by 30th December
2012. The project is being reviewed this month when the following information has been
developed:
BCWS shillings 1,500,000
BCWP shillings 1,400,000
ACWP shillings 1,600,000
BCTW shillings 2,500,000
ACC shillings 1,200,000

Cost variance: BCWP-ACWP

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 1,400,000-1,600,000
-200,000
Schedule variance in cost terms: BCWP-BCWS
: 1,400,000-1,500,000
-100,000
Cost performance index : BCWP/ACWP
1,400,000/1,600,000
0.875
Schedule performance index : BCWP/BCWS
=1,400,000/1,500,000
=0.933
Estimated performance index : BCTW/(ACWP + ACC)
=2,500,000/1,600,000 + 1,200,000
= 0.893
Reasons for time and cost overruns
1. Delay in the erection of major equipment
2. Delay in placing orders for critical machinery
3. Delay in delivery of imported and or indigenous equipment
4. Shortage of critical items in the advanced stage of commissioning
5. Shortfall in acquisition of equipment
6. Delay in finalization of foreign or indigenous suppliers
7. Shortage of construction equipment
8. Land acquisition
9. Technical and skilled labour
10. Strikes
11. Delay in release of funds

Cash budget
What is a cash budget?
• Definition: this is an estimation of the cash inputs and outputs of a person or a business
over a specific period of time.
• Most often, cash budgets are used to assess whether or not a business has a sufficient
amount of cash to fulfill regular operations. It can also be used to determine whether too
much of a business' cash is being spent in unproductive ways.
By creating a cash budget - wherein a firm develops a summary of the anticipated revenues,
operating expenditures, purchase and sale of assets, and settlement or admission of debt – one
can determine when there will be a need for more cash resources, and when there will be an
excess of cash.
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 Preparing a cash budget
List items that will bring in cash and take out cash
a) Present cash balance (including bank balance) Shs 800
b) Receipts from debtors will be: July 2000 August 2600 September 5,000 October 7000
November 8000 and December 15000
c) Payments will be July 2500 August 2700 September 6900 October 7800 November 9900
December 10300.
d) July August Sept. Oct. Nov. Dec.
Balance at start of month 800 300 200
Deficit at start of month - - - (1700) (2500)
(4400)
Receipts 2000 2600 5000 7000 8000
15000
2800 2900 5200 5300 5500 10600
Payments (2500) (2700) (6900) (7800) (9900)
(10300)
Balance at end of month 300 200 300
Deficit at end of month (1700) (25000) (4400)

Advantages of cash budgets

The advantages of a cash budget are as follows:
1) Help us to plan ahead
2) How much to borrow
3) Surpluses can be determined
4) Deficits can be determined

Disadvantages
Cash budgets may also cause distortions. Cash inflows do not equate to profit. Cash inflows
resulting from security deposits, fines, the sale of capital assets, or any other one-off, non-
sustainable activity do not necessarily represent reliable ongoing sources of revenue. On the other
hand, reduced cash flow need not always be a cause for concern. At times, selling items with long
credit periods might result in a much larger profit in the long run and will more than cover the
interest associated with securing short-term loans to meet immediate obligations. Managerial
judgment is necessary to interpret the results.

Cash budgets are susceptible to manipulation. For instance, making a huge payout a day or two
before the end of period, instead of a day or two after the start of the next period, may be
misleading. It restricts cash flow for one period and inflates cash flow for the other period. Even if
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company operations are experiencing a loss, postponing payouts might show a positive cash flow.
Similarly, making payments early might result in negative cash flows, even when operations
remain profitable.

A bigger disadvantage is the reliance on estimates. Cash budgets use cash flow one year to
allocate cash for the next year, when there is no guarantee that cash flow levels, or revenue and
expenditure levels, will remain the same. Moreover, with cash budgets, management commits
funds for various projects and expenditures and there is little opportunity to reallocate the funds
based on changed circumstances, unless management decides to revise the budget as a whole.
At times, non-financial factors have a major impact in decisions. For instance, a product might
not generate much cash flow, or generate negative cash flow. People, however, might have a
favorable association with the product, and equate the product with the company, providing
intangible value. Making decisions based solely on a cash budget would leave this product as a
prime candidate for the chopping block. Similarly, one bank may charge a slightly higher rate of
interest, but also offer better customer service than a bank that charges low interest. With a cash
budget, only the low interest rate counts.

Timing of cash and receipts

In drawing up a cash budget, bear it in mind that all payments for units produced would very
rarely be at the same time as production itself ie raw materials might be bought in March and
incorporated in goods being produced in April and paid in May.

Prepare a cash budget using the following information:

The Human Resource Department in your organization has a monthly budget of shillings 15
million shillings to cater for the following monthly department needs.
1. Monthly staff salaries for the department staff shillings 5 million
2. Stationery shillings 500,000
3. Staff break tea shillings 150,000
4. Cleaning materials shillings 300,000
5. The Department needs 2 printers and the Head of Department has identified a supplier
who will deliver these printers in January 2013 at a cost of shillings 500,000 each.
6. The Head of Department is excited about computerizing the Department. A computer and
software packages worth shillings 3 nillion has been ordered and will be paid in February
2013. This will make work more efficient and will cut the stationer costs by 20% per
month, with effect from February 2013.
7. The Administration Department is in charge of the only vehicle that consumes 500 litres
of petrol per month, in addition to a monthly service cost of shillings 500,000. Petrol
currently costs shillings 3,500 per litre but with the volatile economic trend, petrol price
will be shillings 4,000 as from February onwards.

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 8. Because of the poor cash flow situation in the Organization, there will be a 20% budget
cut for every Department as from 1st March 2013.
9. The Department has cash balance of shillings 100,000 at January 2013.

Required
1. Prepare a six months cash budget for the period January-June 2013
2. Recommend any suitable actions for the Head of Department to take to address the poor
cash flow position the Administration Department is likely to encounter in the six
months.
3. What are the limitations of cash budgeting?

Summary outputs for initiation and planning phase

At initiation or concept phase, the output is a concept note or concept paper or project charter
whereas at detailed planning is a technical and financial proposal (budget).

Bibliography

Bhaskaran, K. & Pinedo, M. Dispatching. In: Handbook of Industrial Engineering. G. Salvendy

(ed.), John Wiley, New York. 1991. Pp. 2182-2198.

Emerson, Harrington. 1917. The Twelve Principles of Efficiency. Fifth ed. The Engineering
magazine, New York. p. 423.

Gantt, Henry L. (1919), Organizing for Work, New York, New York, USA: Harcourt, Brace, and
Howe, LCCN 19014919Reprinted by Hive Publishing Company, Easton, Maryland

Johnston, R.B. & Brennan, M. 1996. Planning or Organizing: the Implications of Theories of
Activity for Management of Operations. Omega, Int. J. Mgmt. Sc., Vol. 24, No. 4, pp. 367-384.

Morris, Peter W.G. 2000. Researching the Unanswered Questions of Project Management.
Project Management Research at the Turn of the Millennium. Proceedings of PMI Research
Conference 2000, 21-24 June 2000, Paris, France. Pp.87-101.

PMI (2002). Project Management Institute

PMBOK Guide (2004). A guide to the project management body of knowledge

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 CHAPTER SEVEN

PROJECT INTEGRATION MANAGEMENT

By Stephen Kyakulumbye

Introduction

Project integration management is the main knowledge area that maps throughout the five
process groups: initiating process group, planning process group, executing process group,
monitoring and controlling process group and closing process group. It includes the processes
and activities to identify, define, combine, unify, and coordinate the various processes and
project management activities within the Project Management Process Groups. In the context of
project management, it includes characteristics of unification, consolidation, communication and
integrative actions that are crucial to project success. It also includes the management of
interdependencies among the project knowledge areas. Project integration management processes
are: develop the project charter during initiation process group, develop project management
plan during the planning process group, direct and manage project work during the executing
process group, monitor and control project work; perform integrated change control during the
monitoring and controlling process group and finally close project or phase during the closing
process group. This section highlights the inputs, tools and techniques and outputs during the
various process levels.

4.1 Develop the project charter

Develop Project Charter is the process of developing a document that formally authorizes the
existence of a project and provides the project manager with the authority to apply organizational
resources to project activities. The key benefit of this process is a well-defined project start and
project boundaries, creation of a formal record of the project, and a direct way for senior
management to formally accept and commit to the project.
4.1.1 Develop the project charter: Inputs
4.1.1.1 Project statement of work (sow)
The project statement of work (SOW) is a narrative description of products, services, or results
to be delivered by a project. For internal projects, the project initiator or sponsor provides the

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statement of work based on business needs, product, or service requirements. For external
projects, the statement of work can be received from the customer as part of a bid document,
(e.g., a request for proposal, request for information, or request for bid) or as part of a contract.
The SOW references the following:
a) Business need. An organization’s business need may be based on a market demand,
technological advance, legal requirement, government regulation, or environmental
consideration. Typically, the business need and the cost-benefit analysis are contained in
the business case to justify the project.
b) Product scope description. The product scope description documents the characteristics
of the product, service, or results that the project will be undertaken to create. The
description should also document the relationship between the products, services, or
results being created and the business need that the project will address.
c) Strategic plan. The strategic plan documents the organization’s strategic vision, goals,
and objectives and may contain a high-level mission statement. All projects should be
aligned with their organization’s strategic plan. Strategic plan alignment ensures that each
project contributes to the overall objectives of the organization.

4.1.1.2 Business case

The project charter highlights the business case. A business case or similar document describes
the necessary information from a business standpoint to determine whether or not the project is
worth the required investment. Within the business case is the business need and the cost-benefit
analysis that justify and establish the boundaries of the project. The business case is created as a
result of the following: market demand, organizational need, customer request, technological
advance, legal requirement, policy shift, social need, environmental impacts among others.

4.1.1.3 Agreements
Agreements are used to define initial intentions of the project. They may take forms of contracts,
memorandum of understandings (MoUs), service level agreements (SLA), letter of agreements,
letter of intent, verbal agreements, email and other written agreements. When a project is to be
performed for external customer, a contract is used. Agreements may contain though not limited

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to: about the contacting organization, project limits and exclusions, project objectives,
deliverable definition, rights, copyrights, patents and other proprietary rights, obligations of
stakeholders among others.
4.1.1.4 Enterprise environmental factors
Enterprise environment factors that can influence the Develop Project Charter include:
organizational standard operating procedures (SOPs), policies and process definitions; project
charter template; historical information and lessons learned from previous projects.

4.1.2 Develop the project charter: Tools and techniques

4.1.2.1 Expert judgment
Expertise is special level of knowledge or competency attributed to the holder of a profession.
Expert judgment is therefore used to assess the inputs used to develop the project charter. It is
applied to technical and managerial details during this process. For example, for an ICT based
project like e-learning project expert judgment can be sought from: education specialists, ICT
experts, education policy makers, consultants in the area, project management office,
stakeholders including customers and sponsors among others.
4.1.2.2 Facilitation techniques
On the broadest level, facilitation is using knowledge of group dynamics to design and deliver a
process to help a group achieve desired results.
– Planning meetings.
– Staff meetings.
– Committee meetings.
– Conflict resolution
– Problem solving
Facilitation techniques have broad application within project management processes and guide
the development of the project charter.

4.1.3 Develop the project charter: Outputs

4.1.3.1 Project charter
A Project Charter is a concise and clear framework that summarizes the work done in the
concept phase of the project. It is in the presentation format of a project proposal though more
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summarized. It answers some of the following questions: What is the organisational rationale for
the project? Are the project objectives (outputs and expected accomplishment) clear and
unambiguous? What actions need to be done? Who is going to do them? What resources are
required? What is not going to be done? Is everything feasible and realistic`? Are outputs,
expected accomplishment and obcectives „measurable“? If so what measures should be used?

Project charter outline example

The following may form some of the componets of the project charter:

Project Name:

Background / Problem to be addressed:

Intervention Logic (Project Objectives, Expected Accomplishment and Outputs):

Scope (point out „borderline issues“):

Team/ Resource roles: Who does what?

Budget summary? How much is needed to execute the project?

Project Risk Assessment: Which ones have we anticipated? How are we planning to react to the
major risks (design!!!)

(Project Milestones: What needs to happen when? Include project review dates in this section)

(Achievement Measurement: How will we know if we‘ve succeeded?)

4.2 Develop the project management plan

Develop Project Management Plan is the process of defining, preparing, and coordinating all
subsidiary plans and integrating them into a comprehensive project management plan. The key
benefit of this process is a central document that defines the basis of all project work. The
outputs of the develop project charter become the inputs of this process. They include: project
charter, output from other processes, enterprise environmental factors, organizational process
assets like Standardized guidelines, work instructions, proposal evaluation criteria, and
performance measurement criteria. The tools and techniques of the develop the project
management plan are: expert judgment, facilitation techniques. The outputs for this process will

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depend on the nature and complexity of the project and may include: Project baselines include,
but are not limited to: Scope baseline, Schedule baseline, and Cost baseline.
Subsidiary plans include, but are not limited to: Scope management plan, Requirements
management plan, Schedule management plan, Cost management plan, Quality management
plan, Process improvement plan, Human resource management plan, Communications
management plan, Risk management plan, Procurement management plan and Stakeholder
management plan. In summary, the key processes of Project Integration Management processes
are as follows:
Develop Project Charter—The process of developing a document that formally authorizes the
existence of a project and provides the project manager with the authority to apply organizational
resources to project activities.
Develop Project Management Plan—The process of defining, preparing, and coordinating all
subsidiary plans and integrating them into a comprehensive project management plan. The
project’s integrated baselines and subsidiary plans may be included within the project
management plan.
Direct and Manage Project Work—The process of leading and performing the work defined in
the project management plan and implementing approved changes to achieve the project’s
objectives.
Monitor and Control Project Work—The process of tracking, reviewing, and reporting project
progress against the performance objectives defined in the project management plan.
Perform Integrated Change Control—The process of reviewing all change requests;
approving changes and managing changes to deliverables, organizational process assets, project
documents, and the project management plan; and communicating their disposition.
Close Project or Phase—The process of finalizing all activities across all of the Project
Management Process Groups to formally complete the phase or project.

Reference
Project Management Institute. 2013 A Guide to the Project Management Body of Knowledge
(PMBOK® Guide) – Fifth Edition

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 CHAPTER EIGHT
PROJECT STAKEHOLDER MANAGEMENT
Godfrey Kyasanku

Project Stakeholder Management

According to the Project Management Institute (PMI), the term project stakeholder refers to, ‘an
individual, group, or organization, who may affect, be affected by, or perceive itself to be
affected by a decision, activity, or outcome of a project’ (Project Management Institute, 2013). A
stakeholder is an individual, group, or organization who may affect, be affected by, or perceive
itself to be affected by a decision, activity, or outcome of a project. Stakeholders may be actively
involved in the project or have interests that may be positively or negatively affected by the
performance or completion of the project. Different stakeholders may have competing
expectations that might create conflicts within the project. Stakeholders may also exert influence
over the project, its deliverables, and the project team in order to achieve a set of outcomes that
satisfy strategic business objectives or other needs. Stakeholders include all members of the
project team as well as all interested entities that are internal or external to the organization. The
project team identifies internal and external, positive and negative, and performing and advising
stakeholders in order to determine the project requirements and the expectations of all parties
involved. The project manager should manage the influences of these various stakeholders in
relation to the project requirements to ensure a successful outcome.

Project stakeholder classified

1. Actors are a collective team
2. Stakeholders are particular
3. Factors are situations, conditions, non-human scenarios that affect projects
4. Primary stakeholders: Primary stakeholders are the people and groups most affected by
the outcome of the project and the outcome may be positive or negative. In research
analysis, they are often divided into groups based upon certain demographic factors such
as gender, socioeconomic status, age and ethnicity.
5. Secondary stakeholders: Secondary stakeholders are individuals or groups not directly
affected by the outcome of the project, but still having an interest in it. They often help
provide aid to the primary stakeholders. These groups may include government agencies,
money-lending institutions or monitoring agencies.

Composition of stakeholders
Beneficiaries: Both targeted and untargeted. They form the user group, people who use the
resources or service in an area.
Interest groups: People who have an opinion about or who can affect the use of a resource or a
service.

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Decision makers: People who want to make project decisions.
Key stakeholders are those that can significantly influence or are important to the success of the
project.

The following are some examples of project stakeholders:

• Sponsor. A sponsor is the person or group who provides resources and support for the project
and is accountable for enabling success. The sponsor may be external or internal to the project
manager’s organization. From initial conception through project closure, the sponsor promotes
the project. This includes serving as spokesperson to higher levels of management to gather
support throughout the organization and promoting the benefits the project brings. The sponsor
leads the project through the initiating processes until formally authorized, and plays a
significant role in the development of the initial scope and charter. For issues that are beyond the
control of the project manager, the sponsor serves as an escalation path. The sponsor may also be
involved in other important issues such as authorizing changes in scope, phase-end reviews, and
go/no-go decisions when risks are particularly high. The sponsor also ensures a smooth transfer
of the project’s deliverables into the business of the requesting organization after project closure.
• Customers and users. Customers are the persons or organizations who will approve and
manage the project’s product, service, or result. Users are the persons or organizations who will
use the project’s product, service, or result. Customers and users may be internal or external to
the performing organization and may also exist in multiple layers. For example, the customers
for a new pharmaceutical product could include the doctors who prescribe it, the patients who
use it and the insurers who pay for it. In some application areas, customers and users are
synonymous, while in others, customers refer to the entity acquiring the project’s product, and
users refer to those who will directly utilize the project’s product.
• Sellers. Sellers, also called vendors, suppliers, or contractors, are external companies that enter
into a contractual agreement to provide components or services necessary for the project.
• Business partners. Business partners are external organizations that have a special relationship
with the enterprise, sometimes attained through a certification process. Business partners provide
specialized expertise or fill a specified role such as installation, customization, training, or
support.
• Organizational groups. Organizational groups are internal stakeholders who are affected by
the activities of the project team. Examples of various business elements of an organization that
may be affected by the project include marketing and sales, human resources, legal, finance,
operations, manufacturing, and customer service. These groups support the business environment
where projects are executed, and are therefore affected by the activities of the project. As a
result, there is generally a significant amount of interaction between the various business
elements of an organization and the project team as they work together to achieve project goals.
These groups may provide input to requirements and accept deliverables necessary for a smooth
transition to production or related operations.

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• Functional managers. Functional managers are key individuals who play a management role
within an administrative or functional area of the business, such as human resources, finance,
accounting, or procurement. They are assigned their own permanent staff to carry out the
ongoing work, and they have a clear directive to manage all tasks within their functional area of
responsibility. The functional manager may provide subject matter expertise or their function
may provide services to the project.
• Other stakeholders. Additional stakeholders, such as procurement entities, financial
institutions, government regulators, subject matter experts, consultants, and others, may have a
financial interest in the project, contribute inputs to the project, or have an interest in the
outcome of the project.
Project stakeholders and stakeholder engagement are further defined in Section 13 on Project
Stakeholder

Project Stakeholder Management

Project Stakeholder Management includes the processes required to identify the people, groups,
or organizations that could impact or be impacted by the project, to analyze stakeholder
expectations and their impact on the project, and to develop appropriate management strategies
for effectively engaging stakeholders in project decisions and execution. Stakeholder
management also focuses on continuous communication with stakeholders to understand their
needs and expectations, addressing issues as they occur, managing conflicting interests and
fostering appropriate stakeholder engagement in project decisions and activities. Stakeholder
satisfaction should be managed as a key project objective.

Stakeholder management is a critical component to the successful delivery of any project,

programme or activity. A stakeholder is any individual, group or organization that can affect, be
affected by, or perceive itself to be affected by a programme. Effective Stakeholder Management
creates positive relationships with stakeholders through the appropriate management of their
expectations and agreed objectives. Stakeholder management is a process and control that must
be planned and guided by underlying principles. Stakeholder management within businesses,
organizations, or projects prepares a strategy utilizing information (or intelligence) gathered
during the following common processes.

Stakeholder analysis

This is a process of identifying a project’s key stakeholders, their interests in the project and the
ways those interests affect the risks or viability of the project. It helps in identifying the key
persons or groups affected by a project and contribute to good project design and implementation
and hence project success. Stakeholder management includes the strategy to take in order to
understand and deal with the various interest groups. Structured means process or stepwise way
of doing work.

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Why do a stakeholder analysis?
• Helps PMs to assess project environment
• Draw out the interests of stakeholders in relation to problems which the project is seeking
to address
• Identify and resolve conflicts of interests between stakeholders which may influence the
success of the project
• Identify relations between stakeholders that can be built upon to improve success
• Assess the appropriate type of participation by different stakeholders at successive stages
of the project
• Improve the project’s understanding of the needs of those affected by the problem
• Identify the potential winners and losers as a result of the project
• To reduce or hopefully remove potential negative project impacts
• To identify those who have rights, interests, resources, skills and abilities to take part in
or influence the course of the project
• Identify full alliances which can be built upon
• Identify who should be encouraged to take part in the project planning and
implementation
• Identify and reduce risks

When should SA be done?

• Always at the beginning of the project to draw out the main assumptions which are
needed to make a project viable
• Also when the project is reviewed or revised and when it is evaluated
• In other wards throughout the project life cycle to check that the needs are being
adequately addressed

The 5 concerns of the Stakeholder Analysis

Identification of:
1. Need: What is needed from stakeholders for your success?
2. Support: What support do you have from the stakeholders? Are they for you, against or
they are neutral?
3. Impact: What is the effect of your success on the stakeholders?
4. Power: What is the degree of power which the stakeholders have in relation to your
ability to achieve your goal?
5. Influence: What degree of influence do they have in relation to project goal achievement?

Stakeholder Identification
The first step in your stakeholder analysis is to brainstorm who your stakeholders are. As part of
this, think of all the people who are affected by your work, who have influence or power over it,
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or have an interest in its successful or unsuccessful conclusion. Remember that although
stakeholders may be both organizations and people, ultimately you must communicate with
people. Make sure that you identify the correct individual stakeholders within a stakeholder
organization. So in a nutshell, the stakeholder management comprises four steps, which are
below:
• Identify, recognize and acknowledge stakeholders: The process of identifying the people,
groups, or organizations that could impact or be impacted by a decision, activity, or
outcome of the project; and analyzing and documenting relevant information regarding
their interests, involvement, interdependencies, influence, and potential impact on project
success.
• Determine their influence and interest: The process of developing appropriate management
strategies to effectively engage stakeholders throughout the project life cycle, based on the
analysis of their needs, interests, and potential impact on project success.
• Establish communication management plan: To guide the process of communicating and
working with stakeholders to meet their needs/expectations, address issues as they occur,
and foster appropriate stakeholder engagement in project activities throughout the project
life cycle.
• Influencing and engaging stakeholder: Control Stakeholder Engagement—The process of
monitoring overall project stakeholder relationships and adjusting strategies and plans for
engaging stakeholders.

Framework of the Analysis

Stakeholders Interests Likely to impact on project Priority

Primary Determine e.g. high Determine High/low

Secondary Determine the level Determine High/low

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Prioritize Your Stakeholders

A stakeholders’ matrix showing which strategies to use

Power/influence and
stakeholders/stakeholder mapping
High Keep satisfied but Maximum
Monitor cooperation/manage
closely

Power
Ignore/Monitor with Monitor/Keep informed
minimum effort

Low
Low High

Influence

You may now have a long list of people and organizations that are affected by your work. Some
of these may have the power either to block or advance. Some may be interested in what you are
doing, others may not care. Map out your stakeholders on a Power/Interest Grid as shown by the
image, and classify them by their power over your work and by their interest in your work. There
are other tools available to map out your stakeholders and how best to influence then.

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For example, your boss is likely to have high power and influence over your projects and high
interest. Your family may have high interest, but are unlikely to have power over it. Someone's
position on the grid shows you the actions you have to take with them:
• High power, interested people: these are the people you must fully engage and make the
greatest efforts to satisfy.
• High power, less interested people: put enough work in with these people to keep them
satisfied, but not so much that they become bored with your message.
• Low power, interested people: keep these people adequately informed, and talk to them to
ensure that no major issues are arising. These people can often be very helpful with the
detail of your project.
• Low power, less interested people: again, monitor these people, but do not bore them
with excessive communication.

Understanding Your Key Stakeholders

You now need to know more about your key stakeholders. You need to know how they are likely
to feel about and react to your project. You also need to know how best to engage them in your
project and how best to communicate with them. Key questions that can help you understand
your stakeholders are:
• What financial or emotional interest do they have in the outcome of your work? Is it
positive or negative?

• What motivates them most of all?

• What information do they want from you?

• How do they want to receive information from you? What is the best way of
communicating your message to them?

• What is their current opinion of your work? Is it based on good information?

• Who influences their opinions generally, and who influences their opinion of you? Do
some of these influencers therefore become important stakeholders in their own right?

• If they are not likely to be positive, what will win them around to support your project?

• If you don't think you will be able to win them around, how will you manage their
opposition?

• Who else might be influenced by their opinions? Do these people become stakeholders in
their own right?

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Key principles of Stakeholder engagement
• Communicate: To ensure intended message is understood and the desired response
achieved.
• Consult, early and often: To get the useful information and ideas, ask questions.
• Remember, they are human: Operate with an awareness of human feelings.
• Plan it: Time investment and careful planning against it, has a significant payoff.
• Relationship: Try to engender trust with the stakeholders.
• Simple but not easy: Show your care. Be empathetic. Listen to the stakeholders.
• Managing risk: Stakeholders can be treated as risk and opportunities that have
probabilities and impact.
• Compromise: Compromise across a set of stakeholders' diverging priorities.
• Understand what success is: Explore the value of the project to the stakeholder.
• Take responsibility: Project governance is the key of project success

Organizational Stakeholders
It is well acknowledged that any given organization will have multiple stakeholders including,
but not limited to, customers, shareholders, employees, suppliers, and so forth. Within the field
of marketing, it is believed that customers are one of the most important stakeholders for
managing its long-term value, with a firm's major objective being the management of customer
satisfaction. Others see employee management, though employee job satisfaction and pay, as the
key issue. More recently, it has been shown that organizational stakeholder management as a
multi-faceted activity. Thus, it has been shown that organizations can be more successful if they
manage both their customers and employees jointly, rather than in isolation.

Engaging and Communicating with Stakeholders

With a clear understanding of your Stakeholders, engaging and communicating can be achieved
through a variety of channels based upon who the stakeholder is.
• High power, interested people: Manage closely. Best channels: Issue, Change Logs,
Status Meetings
• High power, less interested people: Keep satisfied. Best channels: Steering Committee,
Board Meeting Updates
• Low power, interested people: Keep informed. Best channels: In-Person, Video, Email
Updates
• Low power, less interested people: Monitor. Best channels: Send Email, Status Reports

Stakeholder Impact on Project Success

Effective project managers understand that to get results they must create an atmosphere of
enablement. This concept is reinforced in research published in The Standish Group's famous
Chaos report which revealed that the majority of information technology projects fail, and for
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those that succeed, what constitutes the top reasons for success. The number one reason for
project success is cited as user involvement. Healthy user involvement is supported by an
emphasis on quality relationships (trust and structure), expectation management (achievable
metrics, timing), and clear business communications (talking and writing plainly). Other
stakeholder-based contributions to project success include executive support (visible sponsorship
toward the core values of the project); the emotional maturity of the project manager (ability to
rally stakeholders to the common purpose); and effective use of the organization's ecosystem
(infrastructure, procurement, facilities, legal, etc.) to support the project. Next is the process to
help you define this universe of stakeholders and what is needed to gain their support.

Conducting a Stakeholder Analysis

Your list of stakeholders can be very large, and you probably don't want to expend equal
emphasis or energy on every stakeholder. Stakeholder analysis involves three key steps:
• Identify the relevant information for each stakeholder: relevant information are things
like their particular interest in the project, their role in the project, their level of authority
(position), needs, and expectations of the project.
• Identify the potential impact or support of each stakeholder: this can be simple like using
two measures low and high.
• Assess how key stakeholders are likely to react to various situations: another measure
like low sensitivity or high sensitivity

Your analysis can be plotted into a 2x2 grid that shows the stakeholder's relationship to the
project. This helps categorize stakeholders and determine where project management should
direct its efforts. It is also a key input into the communications, risk and scope plans.

In the 2x2 grid, the X horizontal axis identifies the level of interest. This is the measure of how
much they will be affected by the outcome of the project from low to high. The Y vertical axis
of the grid identifies the level of power. This is the measure of how much a stakeholder can
affect the outcome of a project from low to high. So in a 2x2 grid there are four squares.

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Stakeholders’ analysis should be done when possible projects are identified. It should be
reviewed at later stages of the project cycles to check that the needs of the stakeholders are being
adequately addressed.

Step 1: Stakeholders Table

Stakeholders Interest Likely impact of the project Priority
Primary
Secondary

Step 2: Table Showing Influence and Stakeholders

Keep satisfied but Monitor Maximum

High
Cooperation/

Manage closely
Importance

Ignore/ Monitor/Keep informed

Low
Monitor with minimum effort
Low Influence High

Stakeholders’ participation in decision-making throughout the whole project cycle (project

planning, implementation, monitoring and evaluation) is likely to result in:
• Improved effectiveness; Participation increases the sense of ownership of the project by
beneficiaries, which increases likelihood of project objectives being achieved.
• Enhanced responsiveness; If people participate at the planning stage, the project is more
likely to target effort and inputs at perceived needs.
• Improved efficiency; If local knowledge and skills are drawn on, the project is more likely
to be of good quality, stay within budget and finish on time. Mistakes can be avoided and
disagreements minimized
• Improved sustainability and sustainable impact; More people are committed to carrying
on the activity after outside support has stopped
• Empowerment and increased self reliance; Active participation helps to develop skills
and confidence amongst beneficiaries.
• Improved transparency and accountability; Because stakeholders are given information
and decision-making power.

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 • Improved equity; If the needs, interests and abilities of all stakeholders are taken into
account

How Does Stakeholder Management Work?

Stakeholder management, in a business project sense, works through a strategy. This strategy is
created using information gathered through the following processes:
• Stakeholder Identification - It is first important to note all the stakeholders involved,
whether internal or external. An ideal way to do this is by creating a stakeholder map.
• Stakeholder Analysis - Through stakeholder analysis, it is the manager's job to identify a
stakeholder's needs, interfaces, expectations, authority and common relationship.
• Stakeholder Matrix - During this process, managers position stakeholders using
information gathered during the stakeholder analysis process. Stakeholders are positioned
according to their level of influence or enrichment they provide to the project.
• Stakeholder Engagement - This is one of the most important processes of stakeholder
management where all stakeholders engage with the manager to get to know each other and
understand each other better, at an executive level.
Thus communication is important for it gives both the manager and stakeholder a chance to
discuss and concur upon expectations and most importantly agree on a common set of
Values and Principals, which all stakeholders will stand by.
• Communicating Information - Here, expectations of communication are agreed upon and
the manner in which communication is managed between the stakeholders is established,
that is, how and when communication is received and who receives it.
• Stakeholder Agreements - This is the Lexicon of the project or the objectives set forth.
All key stakeholders sign this stakeholder agreement, which is a collection of all the agreed
decisions.
In today's modern management project practice, managers and stakeholders favor an honest
and transparent stakeholder relationship.

Failures in Stakeholder Management

Some organizations have poor stakeholder management practices and this arises because of:
• Communicating with a stakeholder too late. This does not allow for ample revision of
stakeholder expectations and hence their views may not be taken into consideration.
• Inviting stakeholders to take part in the decision making process too early. This results in
a complicated decision making process.
• Involving the wrong stakeholders in a project. This results in a reduction in the value of
their contribution and this leads to external criticism in the end.
• The management does not value the contribution of stakeholders. Their participation is
viewed as unimportant and inconsequential.

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Whatever way stakeholder management is approached, it should be done attentively so as to
achieve the best results.

Achieving Good Stakeholder Management

Insufficient involvement and ineffective communication with stakeholders can lead to project
failure. The following are a few ideas that can be used to achieve good stakeholder management
practices:
• Management and stakeholders should work together to draw up a realistic list of goals and
objectives. Engaging stakeholders will improve business performance and they take an
active interest in the project.
• Communication is the key. It is important for stakeholders and management to
communicate throughout the course of the project on a regular basis. This ensures that both
parties will be actively engaged and ensure smooth sailing during the course of the project.
• Agreeing on deliverables is important. This makes sure there is no undue disappointment at
the end. Prototypes and samples during the course of the project helps stakeholders have a
clear understanding regarding the end project.

Managing Stakeholders
Often there is more than one major stakeholder in the project. An increase in the number of
stakeholders adds stress to the project and influences the project’s complexity level. The business
or emotional investment of the stakeholder in the project and the ability of the stakeholder to
influence the project outcomes or execution approach will also influence the stakeholder
complexity of the project. In addition to the number of stakeholders and their level of
investment, the degree to which the project stakeholders agree or disagree influences the
project’s complexity. A small commercial construction project will typically have several
stakeholders. All the building permitting agencies, environmental agencies, and labor and safety
agencies have an interest in the project and can influence the execution plan of the project. The
neighbors will have an interest in the architectural appeal, the noise, and the purpose of the
building.

Relationship Building Tips

Take the time to identify all stakeholders before starting a new project. Include those who are
impacted by the project, as well as groups with the ability to impact the project. Then, begin the
process of building strong relationships with each one using the following method.
• Analyze stakeholders: Conduct a stakeholder analysis, or an assessment of a project’s key
participants, and how the project will affect their problems and needs. Identify their
individual characteristics and interests. Find out what motivates them, as well as what
provokes them. Define roles and level of participation, and determine if there are conflicts
of interest among groups of stakeholders.
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 • Assess influence: Measure the degree to which stakeholders can influence the project. The
more influential a stakeholder is, the more a project manager will need their support. Think
about the question, “What’s in it for them?” when considering stakeholders. Knowing what
each stakeholder needs or wants from the project will enable the project manager to gauge
his or her level of support. And remember to balance support against influence. Is it more
important to have strong support from a stakeholder with little influence, or lukewarm
support from one with a high level of influence?
• Understand their expectations: Nail down stakeholders’ specific expectations. Ask for
clarification when needed to be sure they are completely understood.
• Define “success”: Every stakeholder may have a different idea of what project success
looks like. Discovering this at the end of the project is a formula for failure. Gather
definitions up front and include them in the objectives to help ensure that all stakeholders
will be supportive of the final outcomes.
• Keep stakeholders involved: Don’t just report to stakeholders. Ask for their input. Get to
know them better by scheduling time for coffee, lunch, or quick meetings. Measure each
stakeholder’s capacity to participate and honor time constraints.
• Keep stakeholders informed: Send regular status updates. Daily may be too much;
monthly is not enough. One update per week is usually about right. Hold project meetings
as required, but don’t let too much time pass between meetings. Be sure to answer
stakeholders’ questions and emails promptly. Regular communication is always
appreciated – and may even soften the blow when you have bad news to share.
These are the basics of building strong stakeholder relationships. But as in any relationship, there
are subtleties that every successful project manager understands – such as learning the
differences between and relating well to different types stakeholders.

How to Relate to Different Types of Stakeholders

By conducting a stakeholder analysis, project managers can gather enough information on which
to build strong relationships – regardless of the differences between them. For example, the
needs and wants of a director of marketing will be different from those of a chief information
officer. Therefore, the project manager’s engagement with each will need to be different as well.

Stakeholders with financial concerns will need to know the potential return of the project’s
outcomes. Others will support projects if there is sound evidence of their value to improving
operations, boosting market share, increasing production, or meeting other company objectives.

Keep each stakeholder’s expectations and needs in mind throughout each conversation, report or
email, no matter how casual or formal the communication may be. Remember that the
company’s interests are more important than any individual’s – yours or a stakeholder’s. When
forced to choose between them, put the company’s needs first.

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No matter what their needs or wants, all stakeholders will respect the project manager who:
• Is always honest, even when telling them something they don’t want to hear
• Takes ownership of the project
• Is predictable and reliable
• Stands by his or her decisions
• Takes accountability for mistakes

Supportive Stakeholders are Essential to Project Success

Achieving a project’s objectives takes a focused, well-organized project manager who can
engage with a committed team and gain the support of all stakeholders. Building strong, trusting
relationships with interested parties from the start can make the difference between project
success and failure.

Tools to Help Stakeholder Management

There are many project decelerators, among them lack of stakeholder support. Whether the
stakeholders support your project or not, if they are important to your project, you must secure
their support. How do you do that?

First, you must identify who your stakeholders are. Just because they are important in the
organization does not necessarily mean they are important to your project. Just because they
think they are important does not mean they are. Just because they don’t think they need to be
involved does not mean they do not have to be. The typical suspects: your manager, your
manager’s manager, your client, your client’s manager, any SME (subject matter expert) whose
involvement you need, and the board reviewing and approving your project. Note that in some
situations there are people who think they are stakeholders. From your perspective they may not
be, but be careful how you handle them. They could be influential with those who have the
power to impact your project. Do not dismiss them out of hand.

Second, you need to determine what power they have and what their intentions toward your
project are. Do they have the power to have an impact on your project? Do they support or
oppose you? What strategies do you follow with them?

Third, what’s the relationship among stakeholders? Can you improve your project’s chances by
working with those who support you to improve the views of those who oppose you? Figure 5.2
summarizes the options based on an assessment of your stakeholders’ potential for cooperation

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and potential for threat.

Figure 1.2 Stakeholder Analysis

Now that you have this information, you can complete a stakeholder analysis template (Table
1.1) that will help you define your strategies to improve their support:

Stakeholder How Current What do you What is How could What is

Names and important? level of want from important to stakeholders your
Roles (Low – support? stakeholders? stakeholders? block your strategy for
Med – (Low – efforts? enhancing
High) Med – stakeholder
High) support?

Table 1.1 Stakeholder Analysis Template

Finally, a key piece of your stakeholder management efforts is constant communication to your
stakeholders. Using the information developed above, you should develop a communications
plan that secures your stakeholders’ support.

SH Management strategies
Two basic approaches
1. Buffering: how to protect the project from stakeholder influence/power
2. Bridging: How to cooperate and build interdependencies with key stakeholders

Actions used in buffering

▪ Dealing with the press cautiously/with care
▪ Physical barriers and security systems, protecting the project assets
▪ Signing agreements on matters decided upon

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 ▪ Generating baseline information to guard against challenging the project success
▪ Setting up one group against the other to avoid joint action

Actions that can be used in bridging

▪ Regular meetings
▪ Consultations on major decisions
▪ Use of liaison officers/public relation officers
▪ Networking/collaboration and partnering
▪ Daily briefs to key stakeholders
▪ Stakeholder participation in decision making throughout the whole project cycle. This is
likely to results in improved effectiveness, enhanced responsibility and improved
sustainability

Conclusion: steps in carrying out SHA

In conclusion, stakeholder management is the effective management of all participants in a
project, be it external or internal contributors. In order to achieve an outcome from the projects,
good stakeholder management practices are required. Arguably, the most important element in
stakeholder management is communication where a manager has to spend his 99% time in doing
meetings, checking and replying e-mails and updating and distributing reports, etc.
1. Scan the project environment and identify potentially relevant actors and factors
2. Screen actors and factors for:
✓ Dependency: how important are actors and factors to the successful outcome of the
project
✓ Risk: The likelihood of something going wrong
✓ Power: How much control or influence can be exerted over the actor or factor
3. Identify potential problem of actors and factors. Pay attention to those with these
characteristics: high dependency, high risks and power
4. Develop strategies to deal with problem actors or factors and act on them. In general your
goal should be to reduce dependency and risks and increase your low power over key factors
5. Repeat these steps throughput implementation. This type of context analysis should not be
one time activity. Conditions in the environment are always changing so mgt strategies need to
change.

Reference
Project Management Institute. 2013 A Guide to the Project Management Body of Knowledge
(PMBOK® Guide) – Fifth Edition

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 CHAPTER NINE
PROJECT HUMAN RESOURCE MANAGEMENT
Sebbowa Ephrance and Aryamanya Aston

Introduction
In today’s highly competitive environment, managing people effectively has a significant impact
on the results of a project, most major project failures are related to social issues (Hubbard,
1990). Projects are complex in nature and therefore managing human resources in an appropriate
manner is a key to success in project implementation, these people challenges are considered to
be more difficult to manage than the technical difficulties encountered (Tadinen, 2005). Human
resource management is being renewed in organisations and has become one of the fundamental
functions of the project management, it has changed from an inactive and problem-solving role
to a strategic function, focusing on the retention and development of the best human resources
(Clemmons & Simon, 2001).This chapter is to examines the role of human resource management
in promoting project success since Tom Peters, management consultant and writer quotes “The
difference in productivity between an average team and a turned-on, high performance team is
not 10%, 20% or 30%, but 100%, 200% even 500%!”

Background
Human Resource Management ( HRM ) is a strategic and coherent approach to the
management of an organization’s most valued assets, the people working there who
individually and collectively contribute to the achievement of organizational goals and
objectives (Armstrong, 2006). The strategic role of HR means that HR professionals are
proactive in addressing business realities like project issues and focusing on future project needs
such organizational planning, compensation strategies, performance management, talent
retention and ensuring result oriented management in the project life cycle. Project human
resource management involves the processes required to make the most effective use of people
involved in the project. The processes involves planning for the human resources in the project,
identifying and documenting project roles for the different individuals, assigning them
responsibilities, designing the organizational structure, clearly showing the reporting
relationship, acquiring the project team, getting the needed personnel assigned to and working on
the project, developing the project team, building individual and group skills to enhance project
performance, managing the project team through tracking team member performance, motivating
team members, providing timely remuneration to the project team and providing an open door
policy to listen to employee grievances during the process of executing the project.

Rationale for a project human resource knowledge area

HRM plays a key role in the different stages of the project lifecycle and therefore is a strategic
contributor to project success, human resources should be seen as strategic partners rather than

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administrative costs because during project management the human resource function has a
direct impact on achieving the vision, mission, goals and objectives of a project. Managing
human resources in an appropriate manner is a key for successful implementation of a project,
project implementation results into inevitable change process, which accordingly brings in many
behavioral and managerial challenges such as user resistance, management resistance, employees
lack of motivation, high labour turnover of key personnel, lack of expertise, insufficient human
assets and inadequate training.

Several studies agree that the biggest obstacle to project success are people, organisational issues
and change management (Chen 2001; Gulla and Brasethvik 2000; Kumar et al 2003; Markus et
al 2000).People challenges are considered to be more difficult to manage than the technical
problems (Kumar et al 2003; Skok and Legge 2001; & Aladwani 2001). The success of all the
different stages in the project life cycle depends on human factors like people management,
organisational issues, change management, effective communication, empowerment of team
members, frequent organized meetings, team building, motivation of team members (Hauschildt,
2000).

The life cycle of a project is comprised of four main phases namely the conceptual phase, design
Phase, execution phase and finishing phase. The conceptual phase includes idea generation; the
initiation and roll out of the project; the completion of a feasibility study; and defining the
purpose of the intended project. This is the first phase and its main task is primarily to evaluate
the proposed project aroused from a recognized need, opportunity or problem in relating to the
realization of an organization’s strategic objectives. The development phase involves planning,
designing and appraising the concept of the project. during this phase, the management will
appoint a project manager and key members to participate in the project. The activities in this
phase involve the development of the works, such as scope, tasks, resources, budget and cash-
flows, creation of a timeline, and other activities that need to be undertaken to successfully
achieve the planned project.

The execution phase involves implementation, management, control and construction of the
project. The activities include: setting up the project organization; producing detailed
documentation; procuring materials and services; and organizing, directing and controlling the
project activities toward accomplishing the project’s purpose and objectives. The finishing phase
is the final phase of a project life cycle where the project will be completed, tested and
commissioned, then closed-out and handed over to the client or main stakeholder. This phase
marks the finalization of the project. The activities may include: checklists of outstanding work;
ending the contracts; transferring of the project and responsibility to client who is the end-user;
post-completion review, evaluation and feedback, disbanding the project team, a final statement
of account; and commencing the defect liability obligations. The phase of a project represents the
completion of one or more deliverables.
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Recent evidence shows that projects are failing because of inappropriate use of human resource
policies and practices during project management life cycle for example, among the reasons for
the perceived failure of National Agricultural Advisory Services Project (NAADS-Uganda) was
the bureaucratic organizational structure which was ineffective as far as reaching out to and
empowering individual farmers was concerned, instead of using field-based hands-on training,
NAADS officials used classroom-based training which farmers dodged deliberately because they
disliked its theoretical nature, Its leadership was characterized by incompetence, most of the
NAADS employees were recruited without considering merit and expertise. They were hand-
picked by bigwigs in government based on patronage, nepotism, and influence peddling, this
culminated into project failure (Kiyita, 2014)

When employees are not recruited on merit and expertise but under conditions of patronage,
influence peddling and corruption, it is difficult for them to manage a project competently and
effectively. Research indicates that instead, such employees serve the interests of those who give
them the jobs and they become incompetent to accomplish the project successfully. Teamwork is
at the core of project success, but the level at which it was demonstrated within the NAADS
project was very insignificant. When employees view their managers /or leaders as incompetent,
they are not motivated enough to be effective as they execute their project tasks.

Similarly, Enterprise Resource Project (ERP) implementation fail due to mainly human resource
issues such as behavioural and management related challenges, in the implementation process
many ERP projects have been terminated. The reasons being: end-user not being ready,
resistance to change, lack of user education and training, high turnover of key personnel, lack of
communication and support documentation, the long layer of consultants, technological
problems such as software bugs and configuration difficulties (Kumar et al 2003; Sumner 2000).

Sumner (2000); Welt (1999); Holland et al (1999) have listed people issues in their critical
success factors recommendations when dealing with enterprise resource planning projects. The
human activity issues and problems that companies are encountering should be looked from the
different sides of the staff, internal and external experts, system professionals, management,
vendors, users and other people involved in such projects. Also the skills people possess
influence the outcome of the project. Human factors come into play starting with the pre-
planning stage, before a project is approved, the approval process, project planning and project
implementation through the transition to production status (Burke, Kenney, Kott, & Pflueger,
2001).

Ohashi (2010) reported the seriousness of staff turnover in the donor community projects in
Ethiopia, implementation of development projects was slow and costly because the project

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offices kept losing key staff and often had difficulty filling vacancies, Staff turnover in projects
led to loss of investments in training and experience this was a cost to the project management.

Evans 1994; Zucchi &Edwards (1999): Marjanovic (2002)also concur that the major reason for
failure of projects is the lack of attention towards the human issues, Olson (2004) lists the
foremost reasons of BPR project failures from the study of Sutcliffe’s (1999),these include ;
employee resistance to change, inadequate attention to employee concerns, inadequate and
appropriate staffing, inadequate developer and user tools, mismatch of strategies used and goals,
lack of oversight and failure of leadership commitment.

According to O’Leary (2000) the reason why large number of software implementation projects
fail is because management is paying too little attention to human factors hence in order to
succeed in project implementation, human needs and concerns have to be addressed .Training of
new employees must remain a continuous effort, the importance of training cannot be neglected
and it is not something that should be conducted only before or after the implementation but
rather it has to be present in each part of the project life cycle.

If project success is measured both in terms of bringing the project on time and within budget as
well as the satisfaction with and the ability of the users to benefit, then managing these “human
factors” is the real key to the success of any project. This puts a lot of pressure on the project
leadership and perhaps even more pressure on those who appoint that leadership team to ensure
success.

Human factors that cause problems in project implementation include but are not limited to:
1. Little or no involvement/commitment by project team members in decision making
2. Poor skills among team members, were technical people do not exist expect to provide a
level of support that will get ensure their work can get done.
3. Resistance to change – refusing to see benefits of a new system for all because what is
known works for an individual
4. Lack of role clarity among team members
5. Inadequate staffing – Both technical and functional
6. Scope creep – implementing features outside original scope
7. Inadequate communication by the project managers to their subordinates
8. Conflicts between team members
9. Inadequate training of project team members
10. Inadequate motivation of project team members
11. Inadequate supervision and monitoring by the project management team
12. Lack of planning for the human resource needs in the project life cycle process.
13. Poor recruitment and selection procedure of employees by the project leaders

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Unless management pays more attention to human resource issues during the different stages of
the project life cycle, project failure will continue to persist and organisations will continue to
incur losses.

The role of human resource policies and practices in promoting project success in different
stages of the project life cycle
Organizational planning / Job analysis in the planning phase of the project
To enable the project succeed project managers together with HR managers should carry out
job analysis to enable effective recruitment and selection of team members, establish
performance standards, enable salary administration and employee training, there is need to
collect and record information about all the jobs in the project , Job analysis involves compiling
the Job descriptions in terms of duties, responsibilities, reporting relationship and working
environment of all project team members this promotes role clarity and authority.

Job specification involves identifying the qualifications, skills, project experience, and personal
characteristics an individual must have to perform the project tasks this promotes selection of
competent and skilled team members.
Job evaluation also pays a significant role at this stage, it involves attaching pay to jobs in terms
of salaries and wages basing on skills, experience, seniority and the nature of the working
environment this enables the project leadership have proper planning for employee remuneration
and incentives.

Designing the project organizational chart is similarly important at this stage, the organisational
chart shows the different departments/ functional units, job functions and personnel in those
units, it promotes team work among employees, effective monitoring and supervision by the
project manager and shows authority in project management. The project manager should use the
responsibility assignment matrix to show the people responsible for performing the project tasks.

Human resource planning in project management

The concentration of cost and staffing are slight at the beginning, increasing toward the
completion and decreasing rapidly toward the finishing phase of the project. Human resource
planning should be aligned with the overall project planning phase. Human resource planning
enables the project managers forecast the future human requirements/ needs for the project in
terms of quality and quantity in line with the project goals. The process ensures that ensures that
there is neither surplus nor shortage or human resources in the project life cycle, a surplus or
shortage of human resources is a cost to the project stake holders.

Projects experience staff turnover as a result of promotions, deaths, resignations and transfers
due to failure to develop a departmental human resource strategy and lack of recruitment and

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retention strategy (Mokonyama, 2009). Human resource plans such as the recruitment plan
which looks at the number and nature of skills of people to be employed, the departments in
which they will work and their positions is very significant to ensure that the right people are
recruited for the right jobs at the right time, The redundancy plan also shows who will be
redundant, when the employee will be redundant and the department where he works during the
project lifecycle, plans can be made to lay off those become redundant or retraining them for
new jobs required during project execution, the retention plan, training plan, succession plan and
productivity plan are equally significant at this stage.

Human resource forecasting during project planning requires the project manager to ask the
following questions:
1. How many employees will be required to achieve the project strategic goals?
2. Are these people available within the organization or they are outside?
3. Which employees are likely to leave their jobs and create vacancies?
4. What jobs will need to be filled?
5. What type of skills must the staff have?
6. Which new jobs will be created when the project is initiated?
7. Which jobs will be eliminated?
8. How will situations such as resignations, retirements, dismissals, transfers, promotions,
accidents and death of the employees’ impact on the HR needs during the project lifecycle?
9. How will the external environment - political, economic, social, technological and legal
requirements impact on HR needs during the project life cycle?
10. How many people are expected to stay with the organization until project completion?
11. How and where will the organization get people to fill the vacant jobs to perform the
project tasks?
Answering the above questions enables the manager carry out successful human resource
planning and identifies the HR needs during the project planning stage.

Integrating HR strategies with strategic goals and objectives of the project

The ability to control costs and add value to the project’s output is at its greatest during the
Conceptual Phase, during this stage the human resource manager should align the project
strategy with the human resource strategy, focusing on future project needs such as strategic
planning, compensation strategies, performance management and expected results after closing
the project. HR costs in terms of compensation and reward, recruiting the right, skilled and
competent personnel are minimized while optimumly using the human resources to maximize
output / performance to meet the vision, goals and objectives of the project. In the process of
project implementation there is need for induction training of new employees to their jobs,
introducing them to the working environment, communicating to them company rules and
regulations and the expected performance standards to that the employees meet the set project

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goals, objectives, project mission and vision. This enables the HR strategy produce results
through executing projects that create value.

Project Leadership
Top Management Support and the project team are the two human resource related factors that
have been rated as highly critical to project success (Young & Jordan, 2008). The magic and
power of teams is captured in the term “synergy,” which is derived from a Greek word sunergos:
meaning working together. Project team managers functioning within any form of
organizational structure may have positive synergy and negative synergy. Based on a systems
approach, positive synergy can be found in the phrase “The whole is greater than the sum of its
parts” whereas negative synergy occurs when the whole is less than the sum of its parts. During
an interview with one of the organizational members as to why the enrolments in a certain school
was dropping, a respondent mentioned, “Instead of operating as one big team, we divided into a
series of groups: academics, finance, marketing and a lot of time was taken gossiping and
complaining against each other. As the problem worsened, everyone started covering their
tracks and trying to pass the blame (blame game scenario) on to others. After a while, direct
conversation was avoided and the teams resorted to emails which even escalated the problem too
further since team members started to abandon the school because of poor project leadership.”

To such a negative experience, a positive experience would be one where problems and setbacks
are shared and dealt with straight on. There is need to care about the project and look out for
each other and challenge each other to do better. Meanwhile during project leadership, the
project manager should clearly understand the tools, techniques and practices within the project
human resource management processes which are as follows:
a) Plan Human Resource Management—The process of identifying and documenting
project roles, responsibilities, required skills, reporting relationships, and creating a
staffing management plan.
b) Acquire Project Team—The process of confirming human resource availability and
obtaining the team necessary to complete project activities.
c) Develop Project Team—The process of improving competencies, team member
interaction, and overall team environment to enhance project performance.
d) Manage Project Team—The process of tracking team member performance, providing
feedback, resolving issues, and managing changes to optimize project performance

Plan human resource management

The essence of this process is to acquire the project team / recruit and select the best employees
with the right skills and competences to perform project tasks. It is essential to have people with
right set of business skills, technical skills, interpersonal and information technology skills to
ensure the success of a project because human resource competences have a direct impact on the
outcome of the project. The input at this phase are project management plan, activity resource
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requirements, enterprise environmental factors and organizational process assets. At this phase,
the tools and techniques are organization charts and position descriptions, networking, expert
judgment and meetings. The output will be a human resource management plan.

Acquire project team

The process of locating and encouraging potential applicants to apply for existing job openings
requires maximizing all opportunities in the internal and external sources of recruitment these
include job posting, Promotions, walk ins, website recruitment, gate hiring contractors,
universities, using employment agencies, advertising on radios, television and newspapers,
among others, this is followed by conducting interviews basing on merit and capability and
choosing the best candidate out of the many suitable for the job. Selecting a wrong person for the
job without relevant qualifications for that particular job and at the wrong time is a project cost,
leads to poor quality services, incompetence and project failure. For instance during acquire
project teams phase, some examples of selection criteria that can be used to score team members
are shown as follows:
a) Availability. Identify whether the team member is available to work on the project within
the time period needed. If there are there any concerns for availability during the project
timeline.
b) Cost. Verify if the cost of adding the team member is within the prescribed budget.
c) Experience. Verify that the team member has the relevant experience that will contribute
to the project success.
d) Ability. Verify that the team member has the competencies needed by the project.
e) Knowledge. Consider if the team member has relevant knowledge of the customer,
similar implemented projects, and nuances of the project environment.
f) Skills. Determine whether the member has the relevant skills to use a project tool,
implementation, or training.
g) Attitude. Determine whether the member has the ability to work with others as a
cohesive team.
h) International factors. Consider team member location, time zone and communication
capabilities.
The input of this phase are human resource management plan, enterprise environmental factors
and organizational process assets. The tools and techniques are pre-assignment, negotiation,
acquisition, multi-criteria analysis. The outputs are project staff assignments, resource calendars
and project plan management updates.

Develop project teams

This is the process of improving competencies, team member interaction, and overall team
environment to enhance project performance. The key benefit of this process is that it results in
improved teamwork, enhanced people skills and competencies, motivated employees, reduced
staff turnover rates, and improved overall project performance. Team work is a critical factor for
project success, developing effective project teams is one of the responsibilities of the project
manager. The composition of project teams with competent and skilful project team members
and external consultants influences directly the output of the project.

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Welti (1999) recommends that while structuring the project team including a project leader,
project members and consultants’ trust has to be established among the project team members,
steering committee and consulting company to ensure success of the project. The projects are
more difficult to implement when distrust exists among the project team members, Close
personal communication among the team members, regular meetings, honest and open
information policy, good coaching, support by the project leader and project manager is
significant in the process of team building.

Allocation of responsibility to project members and giving them incentives are some the
measures that help to build trust among team members, all teams involved in the project must
understand, be dedicated, be strongly committed to achieving, maintaining and fulfilling project
goals. They must understand the project management process, its purpose and values, and be
committed to following the steps and necessary procedures. They should also possess adequate
capability, including skill and experience (Ammeter & Dukerich, 2002).

Hoe (2002-2012: 2) outlined that personal problems is a failure factor of project management.
Team members’ problem can affect the schedule of project management. De-motivation is a
killer in project management this requires the project manager to find out the causes and take
immediate action to motivate the team members (Hoe, 2002-2012:1). In Mabula, a community
garden kept running due to the reason that the level of motivation among team members was
very high, On the contrary, in Pepela lack of motivation among the youth was a problem for the
success of a community garden (Maharjan et al, 2003: 3-3). Employees must have necessary
customer service skills to interact effectively with clients.

Work force diversity especially in multinational organization projects leads to a large number of
human resource issues especially with getting team work and producing good results. When the
project has people belonging to different cultures, gender, races, religions, sex then there is need
to be extra careful as there are differences in the points of view and behavior by the different
team members, in this case, something which is considered legal or good by one team member
can be disliked by another member, this affects overall employee performance. Efforts should be
made by project managers to accommodate the different culture diversities at work place a lot of
counseling and employee training is needed to help the diverse workforce adapt to the
organizational culture so as to achieve a common goal through synergy. Team members must
have intercultural sensitivity in order to understand that one’s own preferred way of doing things
is but one of several possible approaches and those other cultures may have different
perspectives and preferences, they must demonstrate comfort with other cultures and be trained
to accept these differences in the working environment to enable project success.

One of the models used to describe team development is the Tuckman ladder (Tuckman, 1965;
Tuckman & Jensen, 1977), which includes five stages of development that teams may go
through. Although it’s common for these stages to occur in order, it’s not uncommon for a team
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to get stuck in a particular stage or slip to an earlier stage. Projects with team members who
worked together in the past may skip a stage.
a) Forming. This phase is where the team meets and learns about the project and their
formal roles and responsibilities. Team members tend to be independent and not as open
in this phase.
b) Storming. During this phase, the team begins to address the project work, technical
decisions, and the project management approach. If team members are not collaborative
and open to differing ideas and perspectives, the environment can become
counterproductive.
c) Norming. In the norming phase, team members begin to work together and adjust their
work habits and behaviors to support the team. The team learns to trust each other.
d) Performing. Teams that reach the performing stage function as a well-organized unit.
They are interdependent and work through issues smoothly and effectively.
e) Adjourning. In the adjourning phase, the team completes the work and moves on from
the project. This typically occurs when staff is released from the project as deliverables
are completed or as part of carrying out the Close Project or Phase process.

The inputs at this phase are: human resource management plans, project staff assignment,
resource calendars, appraisals and project performance review meetings. The tools and
techniques are: interpersonal skills, training, team building activities, ground rules, recognition
and rewards, personnel assessment tools. The outputs are team performance assessments.

Management project teams

HRM creates transformational leaders who are people oriented, empower employees, encourage
participatory management, promote corporate culture, have a shared mission and vision with
project team members. An effective leader is one who is able to exert influence over
subordinates successfully towards achievement of project goals he or she should have an open
door policy that welcomes subordinates to discuss problems with them freely any time.
Hauschildt (2000) identifies seven key sets of talents and abilities that must be present on the
project leadership team to ensure project success: If you are putting together a project
implementation team or if you are the project leader a key first step is to build a team that
contains these talents and abilities:
1. The ability to organize in a situation in which there is some conflict and/or criticism.
2. Experiential knowledge of the appropriate procedures
3. Decision making based on systematic, analytical thinking
4. Creativity and idea generation linked to an ability to carry out the ideas
5. Ability to plan and organize in a way that includes others, with stress on effective
interpersonal skills
6. Ability to motivate others in a context of cooperation and effective communication
7. Ability to attend to the ideas of others and bring disparate thoughts together

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A study by Todryk (1990) revealed that a well-trained project manager is a key factor linked
with project success because as a team builder, he/she can create an effective team. This view is
supported by other studies on project-team training (Rogers, 1990: Thornberry, 1987). People
management drives project success more than technical issues do (Scot-Young & Samon, 2004).

Successful projects require strong leadership skills, it is important to communicate the vision and
inspire the project team to achieve high performance. Project leaders must be influencing since
project managers often have little authority over their team members in a matrix environment,
their ability to influence stakeholders on a timely basis is critical to project success. Key
influencing skills include: Ability to be persuasive and clearly articulate points and positions,
high level of active and effective listening skills, consideration of the various perspectives in any
situation, and gathering relevant and critical information to address important issues and reach
agreements with project team members.

The project manager should be a person, who can create and lead a stimulated and aggressive
team, must be people oriented, be concerned with the behaviour of his team members and their
reactions (Pieterse, 2001: 43). The project manager must possess the necessary basic
management skills and be well versed in project management (Pieterse, 2001: 70). Martin and
Tate (2001: 12-13) outlines the approach to project management which are as follows:

Directive project management; This approach assumes that the project manager can do the best
job of planning and controlling the project. The project manager delegate tasks to team members
and make follow ups to make sure that team members are completing tasks in time. Martin and
Tate (2001: 12) indicated that the approach has the following disadvantages: execution of project
takes longer due to confusion, misunderstanding and network. Team members have little
understanding of the project as a whole and there is little team commitment and ownership to the
project.

The second approach is participating in project management; in this approach the project leader
or manager facilitates the projects management process, leading the team through the steps of
planning and the team monitors the progress of the project under the direction of the project
manager. According to Martin and Tate (2001: 13) advantages of participating in project
management i.e. the second approach are that, each member of the team understands how his or
her individual piece of the project fits to the big picture, more ideas are generated, better
decisions are made, participation creates ownership, which strengthens commitment and
accountability by all team members. Participatory management is a key to project success.

Shonhiwa (2006: 94) laments that lack of management skills leads to deficiency in project
management. Low productivity may go unnoticed for a long time if management does not have
the skills or ability to detect it. What is not known cannot be managed by the manager. If a
manager lacks management skills, his/her response to turmoil within an organization often
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manifests itself in staff de-motivation, lack of team effort, sabotage and absenteeism. Where
there is no cohesion among followers, managers often become rigid and disinterested, as they are
compelled to become permanent referees between warring factions.

The project manager must possess interpersonal skills, interpersonal skills mean how we interact
and respond with others through the days using communication and personal skills (Michaels,
2012: 1). An interpersonal skill is referred to as soft skills and includes communication customer
relations, selling and teamwork (Werner and De Simone, 2009: 297). The project manager must
have interpersonal skills of dealing with people, facing conflicts and persuading people to
perform project tasks. It also means being able to behave in a manner appropriate to the situation
and to the person and group involved (Knipe, van der 41 Walt, Van Niekerk, Burger and Nell,
2010: 131). Human resources must be treated professionally and strictly in terms of labour
legislation and the project manager together with his employees need high level of interpersonal
skills. They must be able to handle problems i.e. analysing and solving the problems together
(Eksteen et al, 2005: 332).

One of the important aspects of management of any project is to understand people and be able
to maintain good human relations, being flexible, humble, accessible, friendly and gracious, The
project manager should be able to give guidance to team members and should take the right
decisions during project execution, must emphasize the satisfaction of the personnel, personnel
development and organisational stability (Eksteen et al, 2005: 338-340).

According to Project Management Institute (2008: 240) the project manager should capitalise on
the strengths of project team members using appropriate interpersonal skills which cover mostly
the following: The project leader must always carry out effective decision making, this involves
the ability to negotiate and influence the organisation and the project management team.
guidelines for decision making include focusing on goals to be served, following a decision-
making process, studying the environmental factors, developing personal qualities of the team
members, stimulating team creativity and managing opportunity and risk in the project life cycle.

The project manager must have relationship-building skills, Rothmann & Cooper (2008: 89)
outlined relationship-building skills which include Self-disclosure and feedback, self-disclosure
involves the individual sharing his or herself, thoughts, feelings and experiences with another
individual and is necessary for effective communication and interpersonal relationship in project
execution.
Cooperation means that individuals engage in joint action to accomplish a goal that both want
and it contributes to teamwork in the project. Trust constantly changes as individuals interact and
individuals who lack trust tend to overprotect themselves and their environment, withhold
information and avoid risk taking. Self-presentation, the goal of self-presentation is for one to
present himself or herself the way in which he or she would like to be thought of by the
individual or group he or she is interacting with. Social influence involves persuading and
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politics that can be used to change others attitudes and behaviours. It is a process used to guide
other people towards the adoption of an idea, attitude or action by rational and symbolic means.
It is a problem solving strategy and relies on appeals rather than force this approach can be used
by project managers to manage teams.

Increasing employee productivity and job satisfaction through job design in project
planning and implementation
Job design is the process of determining the tasks to be performed, the methods to be used in
performing the tasks in terms of techniques, systems and procedures and the relationship
between the jobholder and his or her superiors, subordinates and peers (Armstrong, 1998).
During project execution the following techniques of job design can be used for increasing
productivity and getting job satisfaction in project teams, Job simplification/ specialization
involves employing people in well-defined and highly specialized tasks, job rotation were
workers are introduced to various jobs but within their skills ability, they are able to acquire
multiple skills, this caters for quick replacements in case of employee exit before project
completion.

Job enlargement requires adding tasks to a worker but within the same level of ability, senior
project managers can delegate tasks to their subordinates through job enrichment, project team
members can be given flexible working hours especially working mothers with family
responsibilities, Job sharing can also be done to mitigate layoffs during the project life cycle.
Telecommuting strategy can also be used to enable employees perform scheduled tasks outside
the office, work is sent to office on line, this saves transport costs, hiring office space, motivates
the project members for better performance.

Performance management, performance appraisal and performance based pay in project

life cycle.
Organisations are now moving towards result oriented management in projects, their focus is on
the output. Performance management in projects involves aligning the project resources, systems
and employees to the strategic goals and objectives of the project. Project managers must ensure
that there is effective and efficient utilization of the project resources to come up with the desired
output. Project team members should be rewarded according to their contribution towards
achievement of the project goals and objectives at different stages in the project life cycle. Cook-
Davis (2002) asserts that top management needs to constantly monitor the progress of the project
and provide direction to the implementation teams for success. Evaluating the performance of the
project team members to determine how well or how poorly they are performing their tasks is
very significant in the all stages of the project life cycle.
Project functional managers should manage performance through using performance
measurements and performance appraisals to evaluate employee performance basing on the
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project targets. They should set short term but challenging targets by using the approach of
management by objective (MBO), monitor employee performance, give feedback, recognize and
reward competent teams and find ways of improving performance in weak teams. Project
managers should discuss and counsel team members who have not met the project targets find
out the problem and get a solution together with the concerned team members for further
improvement. There must be on-going monitoring, giving feedback / correcting, discussing,
coaching, counseling, mentoring of project team members to meet the expected project goals at
all stages in the project life cycle.

Performance based pay is also significant in project management, it’s an addition to the basic
pay, the pay increases are tied to the achievement of a certain output level / performance in the
project life cycle. Performance based pay should be encouraged to motivate hard working project
team members. It is an additional motivator to the wage or salary after achieving the set project
target. Team based pay is becoming valuable in project management since project managers are
taking on team work as a basic standard to achieve project goals. If the set target is met by the
project team members then the group should be rewarded for their effort. Team based incentive
plans should be used to reward hard working project teams. The payment system encourages
cooperation and team work among the project team members.

Employee training in project implementation

Training is a systematic and planned effort to develop or modify knowledge, skills, attitudes
through learning experiences to achieve effective performance in a particular activity (Dessler,
2004). Training in projects involves all activities designed to enhance the competences of project
team members to complete the project activities. There are many challenges related to training in
projects as each user group has different needs, preferences and learning potential. For instance,
the steering committee members need to have a good project overview and general idea about
the functionality of the system. Project leaders instead require in-depth knowledge about
system’s functionality and project team members have to learn only those functions that are
related to their tasks in addition to understanding the new processes and procedures (Welti,
1999).

The importance of training all project participants cannot be neglected and it is not something
that should be conducted only before or after project implementation but rather it has to be
present in each part of the project life cycle (O’Leary, 2000).Other issues to take into account
with training include assessing the training needs after discovering the performance gap,
measuring training performance and effectiveness, providing the support for training project
managers and teams, documenting the training process, preparing employees for change during
project implementation.

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Different types of training for team members and project managers can be used on the job or off
the job, induction training is used in the initial stages of project implementation it introduces new
employees to the job, organisational culture and working environment, other methods of training
include: case study, demonstrations, brain storming among teams, role play, understudy
techniques, job rotation, assessment centres, coaching, lectures, mentoring, videos, field trips,
group work, computer based training among others the rationale of on-going training in all
stages of the project life cycle is to improve performance of project teams and managers so that
they can meet the project targets.

Employee compensation, reward system and motivation in project management

Retaining talent in project management is a big challenge, project leaders must design an
integrated practice of remunerating employees in accordance to their performance, skills,
knowledge, and experience and market worth, they have a task of retaining the key people with
broad range of skills and specific knowledge in project management. Retaining competent
human resources is closely related to the company’s compensation and reward policy which
requires using both monetary and non-monetary rewards in form of wages, salaries, incentives
and employee benefits, these include allowances such as transport allowance, housing allowance
, medical allowance, salary increment, recognition, training, promotion, certificates of merit,
commission / bonus, autonomy, assigning team leaders extra responsibility, profit sharing, giving
competent teams awards, Project leadership awards, workshops /conferences among others, this
motivates team members to achieve project goals. Motivation of project teams can also be based
on Maslow’s hierarchy of needs theory, Herzberg’s two factor theory, Vroom’s expectancy
theory, equity theory and goal setting theory which project managers can use to motivate human
resources and sustain project achievements.

Effective communication in project implementation

Toney & Power (1997) proposed and validated a measure of top management support, their
measure consists of level of support for the project frequency of attendance at project meetings,
level of involvement in information requirements analysis, and level of involvement in decision-
making relating to the project. The information developed during the conceptual and
development phases is used in the execution and finishing phases. Thus, it is important to ensure
that the project management information system and communication plans are established early.
Open communication and collaboration are essential as these help to clarify expectations and
reduce ambiguity, and build acceptance and employee commitment across departments in the
project. An appropriate network ensures that all the key players in the project are well informed
and are aware of the system and their responsibilities.

Effective communication to project team members is one of the key factors for project success,
the need for adequate communication channels is extremely important in creating an atmosphere

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for successful project implementation (Toney & Power, 1997). Communication is not only
essential within the project team itself, but between the team and the rest of the organization as
well as with the client. Communication refers not only to feedback mechanisms, but the
necessity of exchanging information with both clients and the rest of the organization concerning
project goals.

Project managers must effectively communicate the project changes, change in policies,
procedures and status reports to project team members, this is one of the biggest ways of
motivating project team members and making them more confident of what can be achieved
(Dvir et al 1998.; Larkin, 1996). Horizontal and vertical communication helps to reduce
employee resistance and has a high impact to the acceptance of the organisational culture and
project changes throughout the project life cycle.

Change management in the project life cycle

As the project progresses errors are identified, and the need to implement changes arises
similarly, the cost to change increases as the project progresses through the Project Life Cycle.
Change usually involves learning of new skills, knowledge and expertise. Individuals need to
feel competent and continuously develop their competences. The people who perceive change as
negative wish to hold on to the old way of doing things, feel uncomfortable to trust the
computers, are afraid of failure and have a common belief that their jobs are threatened by the
new automated system (Welti1999;Sumner 2000; Ross 1999).
Middle level managers feel uncomfortable with the change because their jobs can be eliminated
as decision making is pushed down to operational level (Ross, 1999). Other sources for
resistance are project team members not being aware of all the aspects of the change process as
they have not been involved from the beginning, unclear strategic vision, extensive project
schedules, modest financial return, higher costs exceeding the budgeted amount, no value added
to the company’s performance.

Project managers initiate change that causes employee resistance and confusion. Without proper
change management, project implementations can fail. Change management activities must be
done in the early stages of the implementation process and continue throughout adaptation and
acceptance stages. It’s important to prepare employees for change, let them participate in
initiating changes, the project manager should communicate the need for change, the benefits of
change, sharing the change message with employees reduces resistance and makes the
implementation process much smoother more so when the changes are not implemented
simultaneously.
When project team members are involved in the early stages of the major change process, the
quality of solutions is increased, the employees show greater commitment and acceptance to
change, counseling becomes easier for the affected employees, conflicts are reduced and the

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likelihood of smooth implementation is greater, employee fears that their jobs will be eliminated
have to be addressed, since they may be uncertain of job security. Throughout the change
process, project managers must ensure that team members participate in the change process from
initiation/ planning for change up to the implementation stage, they should continuously give
feedback to project teams on the progress of the changes made during the project implementation
process and minimize the negative effect of the changes.

Occupational health and safety in project management

The wide range of project operations has brought into existence new and complex techniques of
completing projects in respect to time and quality as such this has increased risks and hazards in
the working environment, with the advancement in technology there is need for proper attention
to health and safety of the workers performing their tasks at different stages of the project life
cycle, these workers are exposed to workplace hazards, risks and ill health especially in
construction projects and health sector projects. Project managers should ensure that no hazards
harm workers as they perform their tasks, they should work hand in hand with safety officers to
ensure that there is risk assessment at the work place.

Risk Assessment is the process of estimating the probability of a hazard and the magnitude of its
consequences over a specified period of time. It involves determining the hazards that are
significant, minor, fatal, non-fatal at the work place, deciding which worker might be harmed,
how many workers might be harmed, how and where the workers might be harmed, evaluating
the risk, recording all accidents and implementing control measures to eliminate or minimize the
risks, hazards and accidents, it also requires continuously monitoring hazards and reviewing the
measures implemented to make sure they are working effectively.

Workers should be trained to identify and mitigate hazards at the work place, a lot of
sensitization to workers is required to enable them report hazards, accidents and work place
illnesses to the concerned personnel, the project team members working in a risky environment
should be provided with protective gear such as helmets, ear plugs, safety shoes, safety gloves,
overalls etc., they must read safety precautions before operating machines or plant, read and
follow safety messages and comply with the company’s health and safety policy, they should be
aware of emergency procedures in case of fire, explosions, exposure to chemical hazards etc.
Project managers must make use of the Occupational health and safety act of 2006 and safety
manuals to promote a health and safe working environment throughout different stages of the
project life cycle.

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 CHAPTER TEN

PROJECT RISK MANAGEMENT

Peter Opio

Introduction
There are no guarantees on any project. Even the simplest activity can run into unexpected
problems. Any time there’s anything that might occur on your project and change the outcome of
a project activity, we call that a risk. Therefore you can use risk planning to identify potential
problems that could cause trouble for your project, analyze the likelihood of their occurrence,
take action to prevent the risks you can avoid, and minimize the ones that you can’t.

Definition of risk
Risk is a chance of something happening that will have an impact upon objectives. It is measured
in terms of consequences and likelihood. A chance that outcomes will not turn out as planned.
Exposure to the possibility of loss or damage to people, property, or other interests

What is project risk?

This is an uncertain event or condition that, if it occurs, has a positive or negative effect on a
project objective. A risk has a cause and, if it occurs, a consequence.
Project risk includes both threats to the project’s objectives and opportunities to improve on
those objectives

What is risk management?

Risk management has different definitions from different Perspectives.
The insurer or the brokers define it as “The management of pure or non-speculative risks to
which the assets, personnel and income of a business are exposed”. Wideman defines it as “The
art and science of identifying, assessing and responding to project risk throughout the life of a
project and in the best interests of its objectives “

Project management consists of two types of work

Getting all things in the plan done or the administration and Handling all the things that could go
wrong or managing the risks.Risk Management is a facilitating function
If there was no risk in a project the need for project management would fade away, It would
become an administrative task

Risk attributes/ characteristics

• Risk has a future focus
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 • Risk has alternative possibilities
• Risk deals with probabilities
• Risk requires information – ranging from total uncertainty to total certainty
• Risk emphasizes the down side
– Risk = threats + Opportunities;
– Risk = threats,
– Risk = threats-opportunities
• Risk must affect the project objectives

Risk Components
1. Causes 2. Events 3. Effects
Events
This is an incident or a situation which occurs in a particular place during a particular interval of
time. Any specific identifiable action or an act of nature that might happen and that could affect
the outcome of the project. Discrete occurrences e.g. A natural disaster or the departure of a
specific key team member that may affect the project. What may happen to the detriment or in
favour of the project.

Causes
How and why it can go wrong. Only by influencing the causes can the risk be pro-actively
managed

Effects
What are the consequences? project conditions. level of risk. project risk classification.
Project Risk Management Process
Risk Management Planning involves deciding how to approach and plan the risk management
activities for a project. Risk identification -determining which risks might affect the project and
documenting their characteristics. Qualitative Risk Analysis - performing a qualitative analysis
of risks and conditions to prioritize their effects on project objectives. Quantitative Risk Analysis
- measuring the probability and consequences of risks and estimating their implications for
project objectives. Risk Response Planning - developing procedures and techniques to enhance
opportunities and reduce threats to project’s objectives. Risk Monitoring and Control -
monitoring residual risks, identification new risks, executing risk reduction plans, and evaluating
their effectiveness throughout the project life cycle.

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Figure: Risk Management Feedback Loop

Identify, Assess & Prioritize risk

Develop strategies to
Revise policies Measure risks
&procedures as
necessary

Design operational
Test the policies & procedures to
effectiveness of the mitigate risks
internal controls &
evaluate result

Implement controls into

operations & design
Responsibilities for Oversight

Steps in Risk Assessment and Management

Step 1: Identify the risks. Examine the various analyses you may have done; stakeholder,
economic, environmental, social, problem etc. These will usually give many clues.
Step 2: Estimate and evaluate the risks using an Impact / Probability Matrix.
Step 3: Where possible design measures to reduce or eliminate the risk. This is especially
important for risks scored medium or high. Some risks are controllable, others uncontrollable.
Step 4: Return to your Objectives. Redesign your Activities, Output, Objectives and
Goals in the light of the risk analysis. Incorporate your measures to reduce or eliminate risks.

Risk Response (Risk Management, Risk Treatment)

After risk identification and analysis, then one has to. Select and implement appropriate options
for dealing with risk. The strategies include:
– Risk Avoidance
– Risk Reduction

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 – Risk Retention
– Risk Transfer

Risk Avoidance
• Eliminate task or do it differently
• Not undertaking a project
• Undertaking an alternative project
• By eliminating the condition that is causing the risk. For instance, risks associated with a
particular service provider can be avoided if another one is sourced.
• In another perspective, you may have a project associated with implementing a solution in
multiple locations. Once the risk is identified, the sponsor may change the scope of the
project, e.g., to only implement in one location. In this way, the risk of implementing at
multiple locations has been avoided.

Risk Reduction (-Reduce Probability, - lower chance that risk will occur, -Risks with high
probability)

Reduce Impact (- Minimize severity of consequences of risk event should it occur, - Undertake
contingency planning and recovery programme)

Risk Retention (- Planned/Voluntary -conscious and deliberate retention of identified risks, -

Unplanned/Involuntary - retainer has not identified the existence of risk and unwittingly retains
the risk)

Accept the risk and learn from it

In this approach, the project manager might look at the risk and decides to do nothing. This can
happen because of one of the reasons below:
The project manager may notice that the potential impact of the risk on the project is not
substantial enough to require a risk response. This would typically be in the case for low-level
risk that may have a low impact on the project.

Retention
The project managers may feel that the risk should be managed, but the negative impact of the
risk is not worth the cost of the effort required to manage the risk.
There may not be any reasonable and practical activities available to manage the risk. This is
different from the prior reason where the cost is more than the benefit. In this case, there is no
practical way to manage the risk, even if it has been identified as high. E.g.

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Risk Transfer
• By Contract
– In some instances, the responsibility for managing a risk can be removed from the project
by assigning the risk to another entity or third party. For instance, subcontracting a
function to a third party might eliminate that risk for the project team.
– The third party might have a particular expertise that allows them to do the work without
the risk.
– One can only indemnify against consequences
– Insurance is a clear example of moving the risk to another party.

Note: The risk remains

• But can be contained by undertaking an Insurance Policy

Risk Response by Contingency

Contingency Reserve
Contingency Plans
Have a risk contingency budget
• This should be based on the qualitative and quantitative risk analysis.
• Reflect on the would be cost and then the risk contingency.

Principles for Risk Management

• Create value.
• Be an integral part of organizational processes & part of decision making.
• Be systematic and structured, i.e. based on the best available information.
• Be flexible, dynamic and responsive to change. Thus, it should be capable of continual
improvement and enhancement.
• Take into account human factors.
• Be transparent and inclusive.

Risk Management-Some Tips for Project Managers

• Do not take a risk if;
- The benefits are not identified
- There appears to be a large number of alternatives
- There is not sufficient data.
- A contingency plan for recovery is not in place, should the results prove to be less
satisfactory.
• Do not risk a lot for a little
• The organization cannot afford to lose something
• Always plan ahead

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 • Always analyse both the sources and consequences of the risks
• Be prepared to seek advice from experts.
• Consider the controllable and uncontrollable parts of the risk.

Project Risks Management- Skill Requirements

• Project related experience
• Impartiality and objectivity
• Operational analysis
• Data management techniques
• Finance and costing skills
• Interview skills
• Brainstorming skills
• Communication and presentation skills
• Diplomacy
• Sense of humor
• Imagination

Risk: Component and Classification In Project Management:

• A risk can be taken as a chance of something happening that will have an impact on the
project objectives.
• A condition that if it occurs, will have a positive or negative effect on the set project
objectives.
Risk is every where!
Driving in traffic, breathing air in town, expressing your views –demonstrating on
opposition, changing jobs, falling in love etc
Household, companies, NGOs local and central governments are also exposed to risks
Projects inherently contain risks because
Change, multiple use of resources, finite and dynamic
Risk and Project management are integral

Risk Component
Risks have three major components which project managers must understand. These components
are closely related to each other and include the following:

Cause
A cause is a reason why the event can go wrong. In risk management, it is usual to first generate
a list of risk events possible and then a consideration of their possible causes and effects.

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Event
• Usually, when we talk about a risk, we mean an event.
• A risk event is an incident or situation that occurs in a particular place during a particular
interval of time. E.g. Floods, death of a staff member.
• Specifically, a project risk event is any specific identifiable action or an act of any nature
that may happen and that will affect the outcome of the project.
• What may happen to the detriment or in favour of the project
Note
• Events can cause other events, which will create event chains. These event chains can
significantly affect the course of the project.
• For example, requirement changes can cause an activity to be delayed. To accelerate the
activity, the project manager may allocate a resource from another activity, which then leads
to a missed deadline. Eventually, this can lead to the failure of the project.
Effects/consequences
• These are the consequences or the outcomes of an event or situation.
• In project risks, the consequences of a risk event are usually expressed in terms of time,
cost and performance/quality attributes.

Risk Classification
There are a number of risks that are likely to affect the realization of the project objectives. It is,
therefore, important to understand how they are classified.
According to Project Objectives
• Time risks- Failure to meet deadlines
• Quality risks- Failure to meet technical performance requirements
• Cost risks- Failure to accomplish the project within the budget approved
• Scope Risks- Failure to accomplish the intended outcomes

Risk According to Sources

Risks according to sources, includes political risks, economic risks, human behavior risks,
natural events (death of a person), technological risks, management activities and controls etc.
Risks according to the project life cycle
For example, if we consider the Generic Project Life Cycle of CDEF= Conception,
Development, Execution & Finish/Termination, Then we could have:
- Conception risks
- Development risks
- Execution risks
- Termination/finish risks

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According to the process groups
• Initiation process group
• Planning process group
• Execution process group
• Monitoring & controlling process group and
• Closing process group

Degree of control
Controllable and uncontrollable risks. External Vs internal environment. For controllable risks,
the causes and effects can be controlled eg, timely recruitment, staff reporting etc.
Uncontrollable risks on the other hand, are beyond the control of Project Managers as they arise
from the external environment. For example, inflation, politics, technological changes. Just
accord appreciation?

Pure and speculative risks

Pure risks are also called insurable risks, with no potential for gain .e.g. insurance against
accidents, fire etc. They are usually caused by external factors. Speculative have both threats
and opportunities e.g. gambling.

Availability of information
According to the level of information available. We could, thus, have Known or Unknown risks.

Degree of spread
Particular vs fundamental risks, i.e., affecting a single entity of the project or the whole project.

According to the level of Risks and Probabilities

Level of Risks
- High, medium or low risks
Probabilities
- Highly likely to occur, medium likely to occur and unlikely to occur risks.

Risk Identification and Analysis

It is vital for project managers to be risk-aware. By being aware of possible risks, project
managers are in position to respond quickly if a problem occurs. Identifying project risks helps
project managers to focus efforts on the risks that may cause the greatest disruption

What is risk?
A chance of something happening that will have an impact upon objectives. A Risk by its very
nature always has a negative impact. Risk is measured in terms of consequences and likelihood.

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What is project risk? It is an uncertain event or condition that, if it occurs, has a positive or
negative effect on a project’s objective. Project risk includes both threats to the project’s
objectives and opportunities to improve on those objectives.

What is risk identification?

Risk identification is the process of determining risks that could potentially prevent a project
from achieving its objectives. It includes documenting and communicating the concern.

Project Risk Identification

Risk identification involves establishing which risk events are likely to affect the project. The
pre-requisite for successful risk identification exercise lies on a thorough availability of accurate
and reliable information and a solid understanding of the project particularly the scope and its
objectives. The main objective of risk identification is to determine the risks that may affect the
project and document their characteristics. The risk identification process should cover all risks,
regardless of whether or not such risks are within the direct control of the project management.
The process of identifying risk needs to be done in a methodological and logical manner, to
ensure that the correct decision can be made as how we treat each risk.

Who does the identification of risks?

The project team, beneficiaries/end users, donors, other department managers & stakeholders,
hired experts.

Project Identification Methods

The chosen method of identifying risks may depend on culture, industry practice and
compliance. The identification methods are formed by templates or the development of templates
for identifying source, problem or event.
Project risk identification methods
• Objective-Based risk identification
• Scenario-Based risk identification
• Taxonomy-Based risk identification
• Common-Risk checking
• Risk charting
(i) Objective-Based risk identification
• Projects have objectives. Any event that may endanger achieving an objective partly or
completely is identified as a risk.
• The analysis follows a systematic step of each objective the project is set to achieve.
(ii) Scenario-Based risk identification
• The scenarios may be the alternative ways to achieve an objective, or an analysis of the
interaction of forces.

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 • Any event that triggers an undesired scenario alternative is identified as risk.
• Project management scenarios are created, especially the strategies for implementing the
project activities
• Each strategy is evaluated
(iii)Taxonomy-Based risk identification
• This is a breakdown of possible risk sources and their classification based on the
taxonomy and knowledge of the best practices.
• A questionnaire is designed and filled by the relevant stakeholders. The answers to the
questions reveal the possible risks.
• May require historical information/sources.

(iv) Common- based risk checking

In several industries, lists with known risks are available. Each risk on the list can be checked for
the application to a particular situation. This depends on the nature of the industry/organization,
tasks at hand/nature of the project.

(v) Risk charting

This method combines the above approaches by listing resources at risk. Threats to those
resources modify factors which may increase or decrease the risk and the associated
consequences. One can begin with resources and consider the threats they are exposed to and
consequences of each. Alternatively one can start with the threats or risk event and examine
which resources they would affect

Inputs to Risk Identification

Enterprise Environmental Factors:
These are both internal and external factors that surround or influence a project’s success. The
factors that are relevant in our identifying risks area are : Published information–commercial
databases, academic studies, benchmarking and other published studies may be available.
Organizational Process Assets:
Historical information from prior projects (Project files) —organizations involved in the project
may maintain records of previous project results that can be used to identify risks. These may be
final project reports or risk response plans. They may include lessons learned that describe
problems and their resolutions. Project managers can utilize this information to ensure that they
do not commit the same mistakes as their predecessors.
Risk management plan:
Explains how risk management activities are to be carried out in our project, it is an
indispensable resource
The following will be used from the risk management plan for risk identification:
• Assignment of Roles & Responsibilities

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 • Budget and Schedule provisions & allocations to Risk Management activities
• Risk Breakdown Structure

The Project Management Plan:

Risk identification requires an understanding of the project's mission, scope, and objectives of
the owner, sponsor or stakeholders. The following project planning documents (areas) should be
reviewed to identify possible risks: the project charter, project scope, work breakdown structure,
project schedule, cost estimates, resource plan, procurement plan, assumptions list and
constraints list.

Risk identification tools & techniques

These include documentation reviews, brainstorming, Delphi technique, interviewing, expert
judgment, questionnaires and SWOT analysis.

Documentation Reviews
This involves performing a structured review of project plans and assumptions. Start with prior
project files.

Brainstorming
Here the facilitator encourages random inputs from the group. Group members verbally identify
risks that provide the opportunity to build on others’ ideas. To achieve the desired outcome, it is
essential to select participants that are familiar with the topics discussed, relevant documentation
is provided and a facilitator that knows the risk process leads the group.

Interviews
These are an effective way to identify risk areas. Group interviews can assist in identifying the
baseline of risk on a project. The interview process is essentially a questioning process. It is
limited by the effectiveness of the facilitator and the questions that are being asked.
Expert judgment
With this technique, individuals who have experience with similar project in the not too distant
past may use their judgment through interviews or risk facilitation workshop.

SWOT analysis
An effective method for prospective risk identification is a Strengths, Weaknesses, Opportunities
and Threats (SWOT) analysis. A SWOT analysis is a tool commonly used in planning and is an
excellent method for identifying areas of negative and positive risk.

Delphi technique

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 • Here a facilitator distributes a questionnaire to experts, responses are summarized
(anonymously) & re-circulated among the experts for comments.
• This technique is used to achieve a consensus of experts and helps to receive unbiased
data, ensuring that no one person will have undue influence on the outcome
• The Delphi technique is a method by which a consensus of experts can be reached on a
subject such as project risk. Project risk experts are identified but participate
anonymously.
• The Delphi technique helps reduce bias and minimizes the influence of any one person on
the outcome.
Check lists
• Organizations may develop checklists of risks based on information collected from past
procurements.
• The checklist is a quick way to identify risks.
• A checklist should not be considered as complete and the possibility of other risks should
be addressed.
Assumptions analysis
• Consider the assumptions or scenarios used in the project plan.
• Assumptions analysis is a technique that explores assumptions’ accuracy.
• It identifies risks to the project from inaccuracy, inconsistency or incompleteness of
assumptions
Diagramming techniques
• Cause-and-effect diagrams useful for identifying causes of risks.
• System or process flowcharts—show how various elements of a system interrelate and
the mechanism of causation.
Outputs from Risk Identification (Risk Register)
• A risk register provides an easy but effective means for tracking risks once they have
been identified,
• It is a simple template document that records each risk, its status in terms of impact and
probability and indicating the controlling action taken, or required to be taken, together
with a record of monitoring and review having taken place.

What is a risk register?

• A risk register is a comprehensive risk assessment system, used as a formal method of
identifying, quantifying and categorizing risks and providing the means of developing a
cost-effective method of controlling them.
Components of a risk register
• List of identified risks with description,
• List of potential responses (added after responses are developed,
• Root causes of risk,

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 • Updated risk categories. Process could lead to recognition of a new risk category.

Risk analysis

Risk analysis may be undertaken using, qualitative or quantitative techniques

Qualitative techniques are subjective, usually based on individual’s perception of risk which is
shaped by numerous influences including experiences, psychological factors, cultural factors and
social factors.

Qualitative risk analysis

• Qualitative methods are usually used first in risk analysis to obtain a general indication of
the risk issues which may be faced.
• These methods are used certainly when numerical data is insufficient or too difficult to
obtain.
• Qualitative methods are used to generate hypotheses for quantitative testing.
• The methods are simple descriptors (high, medium, low) which are assigned to the
probability of a risk occurring and the impact it may have on the organization
• Quantitative methods are objective, use statistical analyses which aid the measurement of
risks and rely on the thesis that risks are readily quantifiable as long as appropriate
numerical values can be assigned to the probability of a risk event occurring and its
impact on the organization

Quantitative risk analysis methods

• These take the subjectivity out of risk assessment.
• The quantitative methods rank risks by using a single rating comprising the financial
value of a risk multiplied by a weighted probability factor to give the expected value.
• The highest expected value then gives either the best opportunity or the worst risk
outcome.

Risk maps
• These illustrate the complementary nature of impact and probability of a risk.
• The map is a pictorial representation of the risks which have been identified.
• The risks are plotted on the impact against probability graph.
• Risks that most need management action (high impact and high probability risks) are
concentrated on.

Probability/impact of risk occurrence

• There is need to define the probability of occurrence of each risk and its impact.

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 • Statistical analysis is used to determine the probability of an event occurring.
• The impact of risk on a project is usually converted into terms of cost and time or other
resources.
• The impacts can be classified as catastrophic, serious, minor and insignificant.

Categories of possible impact

• Loss of revenue
• Costs and penalties
• Reputation
• Environmental damage
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 • Quality failure
• Health and safety issues
• Legal issues
• Production and distribution issues

Risk Analysis
Project management decisions are made under conditions of certainty, risk, or uncertainty. Risk
refers to a situation where there is more than one possible outcome to a decision and the
probability of each specific outcome is known or can be estimated. Certainty refers to the
situation where there is only one possible outcome to a decision and thus outcome is precisely
known. Uncertainty is the case where there is more than one possible outcome to a decision and
the probability of each specific outcome occurring is not known.

Probability
• The probability of an event is the chance that the event will occur.
• When an event is absolutely certain to happen; we say that the probability is 1.
• When an event can never happen we say probability is zero.
• There is no such a thing as a negative probability (less than impossible)
• Neither a probability greater than 1 (more certain than certain).
• 0 ≤P (A) ≤ 1 Where P (A) is probability of an event A occurring.

Risk
• Risk is part of any project undertaken. It’s a significant, permanent reality faced by
virtually every project manager.
• Project managers need to take risks in order to compete, grow, and capture benefit.

What is risk?
• Risk is a chance of something happening that will have an impact upon objectives. It is
measured in terms of consequences and likelihood (probability).
• Risk is any event which may prevent or impair the achievement of objectives.
• Risk is the potential that a chosen action or activity will lead to an undesirable outcome.

What is project risk?

• Risk is the expression of the likelihood and impact of an uncertain, sudden and extreme
event that, if it occurs, has may impact positively (opportunity) or negatively (threat) on
the achievement of a project or programme objective.

Risk Analysis
• Risk analysis allows a manager to examine the risks that the organization faces.

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 • It is based on a structured approach to thinking through threats followed by an evaluation
of the probability and cost of events occurring.
• Risk analysis forms the basis for risk management and crisis prevention. Here emphasis
is on cost effectiveness.

Quantitative risk analysis

• Quantitative Risk Analysis is performed on risks that have been prioritized by the
Qualitative Risk Analysis process.
• It involves measuring the probability and consequences of risks and estimating their
implications for project objectives.
• Quantitative Risk Analysis gives the project manager ability to see how project schedule
will be affected if certain risks occur. As a result, project managers are able to mitigate
risk factors and manage their projects better.

Measuring Risk with Probability Distributions

• By listing all the possible outcomes of an event and the probability attached to each, we
get a probability distribution.
• If we multiply each possible outcome or profit of an investment by its probability of
occurrence and add these products we get the expected cost or profit of the project.
• The expected profit of an investment is a very important consideration in deciding
whether or not to undertake the project or which of the two or more projects is preferable.
Expected value of X = E(X) = ∑Xi.Pi
Where Xi is the outcome, Pi is the probability of outcome, i=1 to n refers to the number
of possible outcomes.

Example 1
• An investor has two projects A and B. The present value of possible profits and their
respective probabilities are shown in the table below. Which project would be preferred
by investor basing on the expected profit?

Example 1

Project A Project B
Outcome $15,000 $7,000 $3,250 $5,000 $20,000
Probability 0.6 0.4 0.4 0.3 0.3

Sept Sem 2015 Opio peter FOB 15

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Example 1

• The expected profit of project A is:

(15,000 x 0.6) + (7,000 x 0.4)

= (9000 + 2800)

= $11,800

• The expected profit of project B is:

(3,250 x0.4) +(5,000 x 0.3) + (20,000 x 0.3)

= (1300 + 1500 + 6000)

= $8,800

The investor would prefer project A since it makes more profit than project B

Example 2

• If only three states of the economy are possible (boom, normal, or recession) and
probability of each occurring is specified. Given the corresponding investment profits for
project A and project B under the three states of the economy, Calculate the Expected
profits of two projects

Example 2

Project A Project B

State of the Probability of Possible profit Possible profit

Economy occurrence
Boom 0.25 $600 $800
Normal 0.50 $500 $500
Recession 0.25 $400 $200

Opio Peter FOB

Sept Sem 2015 18

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Project A

PROJECT A
State of Probability
Possible profit Expected
economy [P(x)]
(x) outcome
[xP(x)]
Boom 0.25 $600 $150
Normal 0.50 $500 $250
Recession 0.25 $400 $100
Expected profit E(xA) from project A $500

Set.Sem 2015 Opio peter FOB 19

Project B

Project B
State of Probability Possible profit Expected value
Economy P(x) (x) xp(x)
Boom 0.25 $800 $200
Normal 0.50 $500 $250

Recession 0.25 $200 $50

Expected profit E(xB) from project B $ 500

Sept Sem 2015 Opio peter FOB 20

In this case, the expected value of each of the 2 projects is $500, but the range of outcomes for
project A (from $400 in recession-$600 in boom) is much smaller than for project B (from $200
in recession to $800 in boom). Thus, project A is less risky than and is preferable to project B

Absolute Measure of Risk: The Standard Deviation

The tightness or degree of dispersion of a probability distribution can be measured by the

Standard deviation. The Standard deviation (σ) measures the dispersion / distribution of possible
outcomes from the expected value.

Standard deviation = √[∑(Xi – E(x))2.Pi]

• The smaller the standard deviation, the tighter or less dispersed is the distribution, and the
lower the risk.
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Example: 1

Example: Project A

X Xi – E(xA) Pi (Xi – E(xA))2 [Xi -E(XA)]2.Pi

$600 100 0.25 10.000 2,500
500 0 0.50 0 0
400 100 0.25 10,000 2,500
Variance = 5,000

Note: We given the mean x as 500

Standard deviation = √5,000
= ± $70.71

1/22/2016 Opio Peter FOB 23

Example: 2

Project B

X Xi – E(xB) [Xi – E(xB)]2 Pi [Xi – E(xB)]2. Pi

800 300 90,000 0.25 $22,500
500 0 0 0.50 0
200 -300 90,000 0.25 22,500

Variance 45000

Sept Sem 2015 Malunda Netalisire Paul 24

• Standard deviation = √45,000

= ±$ 212.13

• The standard deviations of the probability distribution provide a numerical measure of the
absolute deviations of profits from the mean for each project and confirm a greater
dispersion of profit and risk for project B than project A

Relative Measure of Risks (The Coefficient of Variation)

• The standard deviation is not a good measure to compare the dispersion (relative risk)
associated with two or more probability distributions with different values of means

• The distribution with the largest expected value or mean may have a larger standard
deviation. To measure relative dispersion we use the Coefficient of Variation(V)

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The coefficient of variation

• Coefficient of Variation = (σ/X) x 100

= standard deviation X 100

Expected cash flow

It is used to compare the relative risk of two or more projects. The project with the largest
coefficient of variation will be the most risky

Example: 3

The following are the possible net cash flow of projects M and N and their associated
probabilities over a period of one year operation

Example 3

Project M Project N
Condition Cash flows Probability Cash flow Probability
A 40m 0.2 80 0.2
B 50m 0.4 60 0.1
C 60m 0.3 50 0.4
D 70m 0.1 40 0.3

Opio PeterFOB

Sept Sem 2015 29

Determine for each project

1. Expected net cash flows
2. Variance and standard deviation of the cash flow
3. Compare the risks of the project

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 Considering project M

Condi Cash flow Probability XP [X-E(x)]2 P[X-E(x)]2

tion (x) (P)
A 40 0.2 8 169 33.8
B 50 0.4 20 9 3.6
C 60 0.3 18 49 14.7
D 70 0.1 7 289 28.9
Totals ∑PX= 53 = 81

Opio Peter FOB

Sept Sem 2015 31

• Variance of cash flow of project M is 404.5m

• Standard deviation = √81
=±9m
• Coefficient variation = shs 9m X 100
shs 53m
= 16.98%

Considering project N

Conditio Cash Probability PX [X-E(x)]2 P[X-E(x)]2

n flows
A 80m 0.2 16 676 135.2
B 60m 0.1 6 36 3.6
C 50m 0.4 20 16 6.4
D 40m 0.3 12 196 58.8
Totals ∑Px = 54 204

Sept Sem 2015 Opio Peter FOB 33

• Coefficient of variation of project N is

CV = shs 14.28m x 100
shs 54m
= 26.44%
Project N is more risky than project M

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 • However whether project M or project N should be accepted will depend on the
investor’s attitude towards risk

Incorporating Risk in Capital Budgeting Decisions

• In practice, managers use a number of techniques to incorporate risk in the capital

budgeting decisions, among which is the inclusion of a risk premium in the discount rate.

What is Capital budgeting/ capital investment?

• Capital budgeting refers to the process of evaluating and selecting long term investments
that are consistent with a firm’s goals of maximizing shareholder value.

• Capital budgeting tries to answer the question “will future benefits of this project be large
enough to justify the investment given the risks involved?”

Inclusion of a risk premium in the discount rate

The technique incorporates risk in capital budgeting decisions by adding a risk premium to the
normal rate or the risk free rate to cover for the risk associated with the investment. The sum
gives the risk-adjusted discount rate

The risk-adjusted discount rates

The risk-adjusted discounted rates method deals with an investment project subject to risk. Risk
premium is the difference between the expected rate of return on a risky investment and the rate
of return on a riskless asset.

Net Present Value (NPV)

This is the sum of all the discounted cash out flows and cash inflows of a capital investment
project using a chosen required rate of return or cost of capital as the discount rate. It is the
difference between the present value of the cash inflows and the present value cash out flows that
have been discounted at the investor’s cost of capital. This is the profitability of the project in
present value terms. The NPV is the present value of the net cash inflows less the project’s initial
outlay. An investment project is undertaken if it is NPV is greater than or equal to zero, or larger
than that for an alternate project
Example 4

An investment project requires initial cost of shs 50,000,000 and it is expected to generate cash
flows in years one through four of shs 25,000,000, shs 20,000,000, shs 10,000,000 and shs
10,000,000.

Required

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 a) Determine the NPV at 10% risk free rate

b) Assuming that the project is risky, what will be the NPV if a rate of 15% is required to
allow for the perceived risk? Comment on your results

NPV at risk free rate

Year Cash flows (Shs) Present value factor Present value
at 10% (Shs)
0 (50,000,000) 1.000 (50,000,000)
1 25,000,000 0.909 22,725,000
2 20,000,000 0.826 16,520,000
3 10,000,000 0.751 7,510,000
4 10,000,000 0.683 6,830,000
Total NPV =
3,585,000

Opio Peter

Sept Sem 2015 42

NPV at the risk adjusted discount rate

Year Cash flows(Shs) Present value Present value
factor at 15% (Shs)
0 (50,000,000) 1.000 (50,000,000)
1 25,000,000 0.870 21,750,000
2 20,000,000 0.756 15,000,000
3 10,000,000 0.658 6,580,000
4 10,000,000 0.572 5,720,000
Total NPV = (830,000)

2015 Opio Peter 43

• Example 4

c) We observe that the project will be accepted when no allowance for risk is granted, but it
is unacceptable if a risk premium is added to the discount rate.

The risk-adjusted discount rates

• The Net present value of investment

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 n =∑ Rt - Co

t=1 (1+k)t

Where Rt is the net cash flow or return from the investment in each of the n time periods

K is the risk-adjusted discount rate= (risk free discount rate + risk premium) and Co is the initial
cost of the investment

Example 5

Suppose a firm is considering undertaking an investment project that is expected to generate a

net cash flow or return of $45,000 for the next 5 years and costs initially $100,000 and the risk
adjusted discount rate of the firm for this investment project is 20%. Determine the NPV. Should
the firm undertake the investment?

5
• NPV = ∑ Rt /(1.20)t - Co
t=1
5
= ∑ $45,000 - $100,000
t=1 (1.20)t

5
= $45,000 ( ∑ 1/ (1.20)t - $100,000
t=1
= $45,000 (2.9906) - $100,000
= $ 34,577

• The investment may be taken since the NPV is greater than zero

Note:

An investment project is undertaken if its NPV is greater than or equal to zero or larger than that
for an alternative project

Exercise 1
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Suppose a company is evaluating an investment proposal involving adding a photocopying
section and the investment is to cost 185m with the cash flows given in the table below.
Determine the NPV. Should the company invest in this business?

Year 1 2 3 4
Cash inflows 68.81 56.17 51.07 71.71
(millions)

Exercise 2
ABC Company is considering two mutually exclusive projects. The initial cost of project A is
$4200 and $3800 for project B. Each project has an expected life of four years. Under three
possible states of economy, their annual cash flows and associated probabilities, as shown in
table below. If the risk adjusted discount rate is 10% for project A and 8% for project B which
project should the company implement?

Exercise 2

Economic state Probability Project A Project B

Good 0.3 $2500 $2400
Normal 0.4 $1800 $2500
Bad 0.3 $1500 $1600

2015 Opio Peter 52

A company is considering Projects X and Y with the following information

Project X Y
Expected Net Present Value $60000 227,000
Standard Deviation $40000 135,000

a. Which Project will you recommend for implementation?

b. Will you answer change if you use coefficient of variation as a measure of risk instead of
standard deviation?
c. With clear reasons, which measure is more appropriate in this situation?

Risk Analysis: Measuring probabilities with the normal distribution

The probability distribution of many strategies follow a normal distribution, so that the
probability of a particular outcome falling within the specified range of outcomes can be found
by area under the standard normal distribution, within the specified range. Unlike discrete
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random variables, it is not possible to assign probabilities to particular possible outcomes, so we
produce a continuous probability distribution

Example 1
• Find the probability that the profit from project A (assumed to be approximately normally
distributed and with mean $500 and standard deviation $70.71 falls between $600 and
$500.
Using
Z = (X- mean)/standard deviation
Z = (600 – 500)/70.71
= 1.42
From the normal distribution tables, area between Z=0 and Z = 1.42 is
0.4222
Exercise
a) Determine the probability that profit will fall between $500 and $650 for a project A
with expected value $480 and standard deviation of $71.
b) Determine the probability that the profit for project A will fall between $300 and
$650.

Daily profit made by Nejusa project

in the month of November 2013
Profit (‘000) No. of days
$
20 – 24 2
25 – 29 3
30 – 34 6
35 – 39 5
40 – 44 10
45 - 49 4
Assuming the daily profits are normally distributed
2015 Opio peter 7

• Determine the:
• Mean profit generated by the firm.
• The standard deviation of the profits
• The probability of the project generating profit between 23,000 and 27,000 US dollars.
• The probability of the profit falling between 42,000 and 46,000 US dollars.

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Expected Monetary Value (EMV)
• Risk is inherent in any investment because the future can never be predicted with
absolute certainty.
• To deal with this uncertainty, mathematical techniques such as expected value can help.
• Expected value is the expected outcome multiplied by the probability of its occurrence.
Calculating the EMV of each possible decision path is away to quantify each decision in
monetary terms
When using EMV, you can follow these steps
1. Assign a probability of occurrence for the risk
2. Assign Monetary Value of impact of the risk when it occurs
3. Multiply 1 and 2
Example
• A firm is supposed to be undertaking one of the two mutually exclusive contracts, K and
L, with each contract leading to only three possible outcomes as indicated in the table
below.
On the basis of EMV, which project should the firm undertake?

Example

Contract K Contract L
Probability outcome Probability
0.6 $80,000 0.5 $50,000
0.1 $10,000 0.3 $30,000
0.3 -$30,000 0.2 -$10,000

2015 Opio Peter 12

• EMV (K) = (0.6x80,000)+(0.3x30,000)+

(0.3x-30,000)
= $40,000
• EMV(L) = (0.5x50,000) +(0.3x30,000) +(0.2x-10,000)
= $32,000
On the EMV basis the firm will undertake project k since its expected profit is
higher than the expected profit of project L

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Decision Trees
• Managerial decisions involving risk are often made in stages, with subsequent decisions
and events depending on the outcome of earlier decisions and events.
• A decision tree shows the sequence of possible managerial decisions and their expected
outcomes under each set of circumstances or state of nature.
• These are probability trees adapted so that they can be used for making business
decisions.
• A decision tree is a schematic model of the sequence of steps in a problem and
conditions and consequences of each step.
• In solving decision tree problems, we work from the end of the tree backwards to the start
of the tree.
• As we work backwards, we calculate the expected values at each step. This process
solves the decision problem.
• Calculating Expected Monetary Value using Decision trees is a recommended Tool and
Technique for Quantitative Risk Analysis

Steps to Use Decision Trees Analysis

1. Document a decision in a decision tree

2. Assign a probability of occurrence for the risk pertaining to that decision

3. Assign monetary value of the impact of the risk when it occurs

4. Compute the Expected Monetary Value for each decision path

Example

• A bus operator has a choice of entering into a maintenance contract for a new bus he has
acquired that will cost him $ 2,500 with the contract in operation there is only a 0.1
probability of a break down over the contract period but without it the probability is 0.3.

• The operator reckons that if he can avoid a break down his profit will be $20,000 but this
will drop to $10,000 in the event of such a breakdown. Should he enter into the contract?

• If he enters the maintenance contract

His expected profit will be;

(0.9x 20,000) + (0.1x10, 000) –2,500

= $16500

163 | P a g e
 • If he does not;

His profit is expected to be;

(0.7x20, 000) + (0.3x10, 000)

= $ 17,000.

Decision: no entering contract.

Example 2

• Suppose your organization is using legacy software and some influential stakeholders
believe that by upgrading this software your organization can save millions, while others
feel that staying with the legacy software is the safest option. The stakeholders supporting
the upgrade of the software are further split into two factions;

Those supporting buying the new software and those that support building the
new software – in house

Building the new software is associated with a cost of $500,000

Buying the new software is associated with a cost of $ 750,000

• Staying with the legacy software is associated with a maintenance cost of $100,000

• The impact if the buying of the new software or building the new software is
unsuccessful is $2m. The probability that buying new software will be unsuccessful is
0.05 and the probability of building new software being unsuccessful is 0.4.

• The stay with legacy software option will only lead to one impact which is $2m because
the legacy software is not currently meeting the needs of the company.

From the Decision tree:

The Expected Monetary Value associated with each risk is calculated by multiplying the
probability of the risk with the impact

Building the new software: $2,000,000 X 0.4

= $ 800,000

Buying the new software: $ 2,000,000 X 0,5

= 100,000

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From the Decision tree attached:

Staying with the legacy: $2,000,000 X 1

= 2,000,000

Adding the set up costs to each Expected Monetary Value

Build the new software: $500,000 + $800,000

= $1,300,000

Buy the new software $750,000 + $ 100,000

= $850,000

Staying with the legacy software:

= $100,000 + $2,000,000

= $2,100,000

Decision:

Buying the new software is actually the most cost efficient option even though its
initial set up cost is highest

Example 3

Draru Limited wants to move into a new sales region and must determine which of the two
plants to build. It can build a large plant that costs $4million or a small plant that costs $2million.
The company estimated that the economy will be booming, normal, or in recession is 30%, 40%
and 30%, respectively. The company also estimated the present value (millions of dollars) of net
cash flows for each type of plant under each state of economy to be as indicated in the following
payoff matrix. Construct a decision tree for the firm to show which of the plants the economy
should build. Assume the company is risk neutral

165 | P a g e
 Example 3

State economy Large plant Small plant

/type of plant
Boom $10m $4m
Normal $6m $3m
recession $2m $2m

Opio Peter

2015 31

Usefulness of Decision tree approach

• It clearly brings out the impact assumption and calculation

• It allows a decision maker to visualize assumptions and alternatives in graphic form
which is usually much easier to understand than the more abstract analytical form.

Risk Analysis (Utility Theory): Risk Attitude

Risk attitude influences how project managers make decisions in relation to risk. For some
managers, the prospect of loss weighs heavier than the prospect of a gain. For others the reverse
is true. Risk attitude explains why different people make different decisions within the same risk
environment. The fact that project managers have different risk attitudes means that a project
with a given level of risk exposure might be economically acceptable to one who is a risk taker,
but totally unacceptable to another manager who is risk averse. There are three types of risk
attitudes: risk taking, risk aversion and risk neutral

• Risk averter: the threat of a loss has a greater impact on a decision than the possibility of an
equivalent gain.

• Risk seeker: will take the risk if a situation avails a higher gain even though there is a high
possibility of a larger loss

• Risk-neutral: is more concerned about the expected return on his or her investment, not on
the risk he or she may be taking on.

An Illustration

166 | P a g e
Suppose a project manager is faced with a choice between receiving, say, either $100 with 100%
certainty, or a 50% chance of getting $200.

• The risk-averse manager would generally settle for the "sure thing" or 100% certain $100.
• The risk-seeking manager will opt for the 50% chance of getting $200.
• The risk-neutral manager in this case would have no preference either way, since the
expected value of $100 is the same for both outcomes.

Utility Theory

• Utility theory provides a concept and process for dealing with and measuring a decision-
maker’s preferences to decisions made under risk conditions- “utility theory endeavors to
formulate management’s attitude towards risk”.

• The aim of utility theory is to adjust monetary values, or other variables such as time, to
reflect the decision-maker’s attitude towards those values. So outcomes are measured in
(utils) not Shillings.

• If a decision-maker has a neutral attitude towards risk, this implies that every Shilling
spent or received has a utility measured by its face value.

• However, this may not be in reality, since people are not normally risk-neutral, but
exhibit risk aversion or risk-seeking characteristics.

• This leads to the notion of a utility function that enables monetary values or other
variables to be converted to equivalent utility values.

Diminishing Marginal Utility of Money

• Managers being risk seekers, risk neutral or risk averters is as a result of the principle of
diminishing marginal utility of money

• The diminishing marginal Utility of money means that, the value of additional shilling
decreases as total wealth increases.

• In other words, the change in your life when you move from 0 to 1 million shillings is
larger than the change in life when you move from 1m to 2m.

Diminishing Marginal Utility of Money and risk attitudes

• A risk-averse decision maker displays a diminishing marginal utility of income or wealth.

• A risk neutral decision maker has a constant marginal utility of income or wealth. She
neither seeks nor avoids risk.
167 | P a g e
 • A risk-seeker`s marginal utility of income or wealth increases. The utility function for
the risk seeker increases at an increasing rate

Marginal utility

• Marginal utility refers to how much additional value is derived from one additional unit
of the good or service. Most goods and services are said to have “decreasing marginal
utility.”

• Because most people have a decreasing marginal utility of wealth, a loss of a given
amount has a greater impact than a gain of the same amount

Risk aversion and diminishing marginal utility function

• As an individual gets more and more of something, she values each additional increment
less and less.

• A person is reluctant to accept a bargain with an uncertain payoff rather than another
bargain with more certain, but possibly lower, expected payoff.

Different forms of the utility function

• U = 10 + 2X (X = money or income) indicates a constant marginal utility of income (i.e.,

risk neutral)

• U = 30X - X2 indicates a diminishing marginal utility of income (i.e., risk aversion).

• U = 20X + X2 indicates an increasing marginal utility of income (i.e., risk seeking).

Utility Theory Process

Step 1 Assign a single number utility value for each possible outcome

Step 2 Calculate the expected utility value (EUV) for each alternative

Step 3 Select the alternative with the maximum EUV

Example 2

From Hertz & Thomas (1984)

A firm is deciding whether or not to undertake one or two contracts, K and L that have been
offered to it. It cannot undertake both and suppose that each contract can lead to only three
possible outcomes.

168 | P a g e
Contact K Contact L
Probability Outcome Probability Outcome
0.6 $+80000 0.5 +$50,000
0.1 $+10000 0.3 +$30,000
0.3 $-30000 0.2 -$10,000

Under the Expected Monitory Value approach, the appropriate calculations are;

EMV (K)

= (0.6x $80,000) + (0.1x$10,000)+ (0.3x-$30,000)

= $40,000

EMV (L)

= (0.5x$50,000) + (0.3x$30,000)+ (0.2x-$10,000)

= $32,000

On this basis, contract K would be accepted. However, since K shows a 30% chance of a fairly
large loss of $30,000 whereas L has only a 20% chance of a much smaller loss utility concept
may be useful. The firm might be unwilling to consider making such a large loss as $30,000 and
would tend to opt out of K. this suggests that a formal analysis using utility theory would be
appropriate.

Step 1
Assigning Utility Values

In order to assign utility values to alternative outcomes that logically reflect the risk attitudes of
the decision-maker the following rules must apply;

➢ The more desirable an outcome, the higher the utility value. E.g. winning $50 without
risk has a higher utility value than winning $5 without risk

➢ If outcome A is preferred to outcome B, and outcome B to outcome C, then A will be

preferred to C

➢ If there is indifference between two outcomes, they have equal utility

• The utility of a risk problem is represented by its ‘expected utility value’ (EUV)

• Assign utility values to the extreme monetary values

169 | P a g e
The first step is to select as reference points two monetary values from the alternative outcomes.
For convenience these are usually the extreme values the most favorable and least favorable
values.

For convenience we might assign utility values of 100 for the most favorable and 0 to the least
favorable. These utility values are arbitrary and all that is necessary is that utility increases with
monetary gain. It can be seen that all we are doing is substituting a shilling value by a utility
value

Assign utility values to the extreme monetary values

From the example above; there are, in decreasing order, seven possible outcomes: +80,0000,
+50,000, +30,000, +10,000, 0, -10,000, -30,000. (0 corresponds to taking neither contract)
So we assign a utility value of 100 to the monetary value of +80,000, and 0 to the monetary
value of -30,000.

ii) Assign utility values to all the other monetary outcomes lying between these two extreme
monetary outcomes (method is subjective)

Assuming the following utility values for the example above were obtained as shown in the
table below and the firm’s objective were to utility maximization, which contract should be
undertaken?

Example 2

Money 80,000 50,000 30,000 10,000 0 -10,000 -30,000

Utility 100 90 80 50 30 20 0
value

2015 Opio Peter 30

170 | P a g e
 Considering contract K

money Utility value probability Expected

utility
80,000 100 0.6 60
10,000 50 0.1 5
-30,000 0 0.3 0
Expected utility for contract K 65

2015 Opio Peter 31

Considering contract L

Money Utility value Probability Expected value

50,000 90 0.5 45
30,000 80 0.3 24
-10,000 20 0.2 4
Expected utility of contract L 73

2015 Opio Peter 32

Basing on utility maximization, the firm will take up contract L

• You are considering two investment choices, each costing $5,000. Cash inflows of are
considering two investment choices, each costing $5,000. possible outcomes and their
associated probabilities are:

Investment A Investment B
Probability Cash inflows Probability Cash inflows
0.25 $ 6,000 0.3 $ 5,000
0.50 8,000 0.5 9,000
0.25 10,000 0.2 10,000

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 Assume that your utility function is
given by the following table
Money Utility (Utils)
$5,000 125
$6,000 144
$7,000 161
$8,000 176
$9,000 189
$10,000 200
2015 Opio Peter 35

• Determine:
• The expected value of each investment
• The standard deviation for each investment
• The expected utility value for each investment
• Which investment should be preferred?

Example
• Suppose an investment option A has 90% chance of yielding $100 as profit, and an
investment option B has 20% chance of yielding a profit of $500
Then;
EMV (A) = 0.9 x 100 = 90
EMV (B) = 0.2 x 500 = 100
If a person 1 rates $100 as 10 and $500 as 30 (demonstrating a typical Diminishing Margin
Utility for Money), then;
EU (A) = 0.9 x 10 =9
EU (B) = 0.2 x 30 = 6
Person 1 basing on the Expected Utility (EU) would choose option A

Person 2 may be interested more in winning $500 than $100. To person 2, $500 is more than five
times as good as $100. This fellow will assign a utility of 10 to $100 and a utility of 70 to $500

EU(A) = 0.9x10 =9

EU(B) = 0.2 x 70 = 14

According to the Expected Utility Theory, person 2 should choose B

Example
172 | P a g e
 • Consider the offer to engage in a bet to win $10,000 if a head turns up in the tossing of a
coin or to lose $10,000 if a tail comes up. The expected value of the money won or loss is

EMV = 0.5(10,000) +0.5(-10,000)

=0

Even though the expected value is zero, a risk averter (an individual facing diminishing marginal
utility of money) would gain less utility by winning $10,000 than he would lose by losing
$10,000. This individual may assign

-2 utils to losing $10,000 and 1 util to winning $10,000

• Expected utility E(U) = 0.5x1 + 0.5x(-2)

= -0.5

In such a case, the individual will refuse a fair bet

Example
• An oil-drilling venture offers the chance of investing $10,000 with a 20% probability of a
return of $40,000 if the venture is successful (i.e., oil is found). If unsuccessful, the
$10,000 investment will be lost.
(a)What is the expected monetary return of this investment?
(b) if the utility schedule of individuals A,B, and C is indicated below, what is the
expected utility of the project for each? Which individual(s) would invest in the venture? Why?

Example

Money -$10,000 0 $10,000 $20,000 $30,000 $40,000

Utility of -5 0 4 7 9 10
A
-5 0 5 10 15 20
B
C -5 0 6 13 21 30

2015 Opio Peter 45

(a)The expected monetary return of this investment(R) is

E(R) = 0.2($40,000) + 0.8(-$10,000)

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 = $8,000 -$8,000

=0

(b) The expected utilities of the project for individuals A, B, and C are

E(U) of A = 0.2(10utils) + 0.8(-5 utils)

= 2 utils -4 utils = -2 utils

E(U) of B = 0.2(20 utils) + 0.8(-5utils)

= 4 utils -4 utils = 0 utils

E(U) of C = 0.2(30 utils) +0.8 (-5utils)

= 6 utils – 4utils =2 utils

Only individual C will invest in the venture because only for him/her is the expected utility of
the project positive. Because the marginal utility for money increases, individual C is a risk
seeker. Individual B is indifferent to the venture because the expected utility of the project is
zero. For individual B, the marginal utility is constant, so that he or she is risk neutral

• Individual A will not invest in the venture because the expected utility of the project is
negative. For individual A, the marginal utility for money diminishes, so that he or she is
a risk averter.

Exercise
A manager must determine which of the two products to market. From market studies, the
manager constructed the following payoff matrix of the present value of all future net profits
under all the different possible states of the economy as shown in the table below.
The manager’s utility for money function is

U = 100M-M2 where M refers to profit

Table

Product 1 Product 2
State of the Probability Profit Probability Profit
economy
Boom 0.2 $50 0.2 $30
Normal 0.5 $20 0.4 20
Recession 0.3 0 0.4 10

2015 Opio Peter 51

174 | P a g e
 a) Is the manager a risk seeker, risk neutral, or a risk averter? Use a graph to explain.
b) If the manager’s objective were profit maximization regardless of risk, which product
should he/she introduce
c) If the manager’s objective were utility maximization, which product should he/she
introduce?
d) Why is maximization of the expected value not a valid criterion in decision making
subject to risk? Under what conditions would that criterion be valid?

Risk Review Question

a) “Different people will make different decisions within the same risk environment”. Comment
(3 marks)
b) Wolokoso Company has to decide whether to use TV commercials or Radio Ads as its
advertising strategy. The marketing Department has estimated the profits and the associated
probabilities under each strategy as shown in the table below:
Table:
Television commercials Radio Adverts
Profit Probability Profit Probability
40m 0.2 80 0.2
50m 0.4 60 0.1
60m 0.3 50 0.4
70m 0.1 40 0.3

Required
i. Calculate the expected profit under each of the promotional strategy (3 marks)
ii. Calculate the standard deviation of the distribution of profits for each promotional
strategy (5 marks)
iii. Determine the coefficient of variation for each strategy (2 marks)
iv. Taking into consideration of the risk attitudes of managers, which promotional strategy
should the firm choose? (4 mark)
c) Comment on the usefulness of the analysis in (b) above (3 marks)

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 CHAPTER TWELVE
PROJECT TIME MANAGEMENT
John Vianney Ahumuza

Introduction
Have you ever wondered why some projects succeed while others fail? Project planners and
implementers worldwide have often planned to have successful projects. Surprisingly projects
continue to fail in meeting scheduled targets. This calls for an inquiry as to why this
phenomenon exists in investment world. Whereas many factors continue to be at play, time
factor continues to greatly influence the success of projects. This chapter explains the importance
of time management in successful project implementation. Specific attention is put on best
practices of time management in project planning and implementation. The discussion is built on
the argument that undermining time factor in project planning and implementation results into
unnecessary costs which undermines the success of the project. No matter how best any manager
can be, if least attention is put on the time factor such project is bound to face challenges. The
chapter further maps out steps for good project implementation. The principles for effective time
management is also highlighted to aid the reader appreciate the discussion. Selected Case studies
have been purposely included in the text to emphasize the consequences of undermining time
line schedules .The chapter ends with some recommendations as alternative proposals and a
conclusion.

Background to project time management knowledge area

Time is an essential resource every manager needs to achieve the goals and objectives of an
organization. Its effective utilization in the context of the set goals and objectives of any
established project is key. This correlates with considerations for modern project investments .In
fact Adeojo (2012) clearly stipulates that Time management involves investing time to determine
what one wants out of his day to day activities. He further notes that Effective time management
is the investment of time in such a way that suitable results are achieved from activities within a
specific time range and it emphasizes on effectiveness rather than efficiency. This makes time
factor key in strategic project planning and management.

Time is a necessity for every organization in achieving its goals and objectives. Any deviation
from the original project implementation plans bearers a heavy cost on the investment which
would have been otherwise used for other plans. This poses a great threat to the survival of any
organization. No matter who you are or the professional discipline you subscribe to, the
knowledge of project planning and implementation is now a global human affair. We are often at
the helm of project implementation either at organizational level or personal level. Once the
aspect of time is not taken into account, the resultant consequences indirectly impacts on us.
Therefore, this calls for a study of best practices in time management processes for obtaining

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high performance in project planning and implementation taking into account case studies of
failed projects as a result of the influence of this phenomenon and the resultant consequences.
Understanding the meaning of an entrepreneur
Time management is a critical component of managing successful businesses worldwide.
Understanding the meaning of a business is key in guiding an entrepreneur to meet their targeted
objectives. There are many definitions that have been fronted to define the meaning of a
business. According to Saleemi (2011:7), he defines a business as an organized and systematized
human activity involving production and distribution of goods and services with the object of
selling them at a profit. Inside any business venture lies a critical aspect of entrepreneurship. An
entrepreneur establishes and manages a business for profit making and growth. In fact Kirby
(2003:10) defines an entrepreneur as characterized by principally innovative behavior and one
who employs strategic management practices in business .Khanka ( 2007:9) defines
entrepreneurship as a process involving various actions to be undertaken to establish an
enterprise with innovation and risk-bearing as two basic elements involved in entrepreneurship.
Irrespective of these definitions, time management is key in ensuring successful project ventures.
It is true that some entrepreneurs have often relied on available capital, skilled labor and market
opportunities but have often underestimated the aspect of time management. This has often
increased costs of production and profit maximization and gradually affected the steady growth
of business ventures worldwide. This therefore calls for a serious consideration of good time
management for the sustainability of successful businesses. Project planning on whole is key in
undertaking any modern task. The UK Association of Project Management (APM: 1995) have
produced a UK Body of Knowledge UK (BoK) that provides a definition for project
management as the planning, organisation, monitoring and control of all aspects of a project and
the motivation of all involved to achieve the project objectives safely and within agreed time,
cost and performance criteria. The project manager is the single point of responsibility for
achieving this.

Project management: cost, time and quality viewed on the iron triangle model
For any successful project considering Cost, time and quality is vital. This is because one
indirectly influences the other. The following triangular illustration explains this phenomenon.

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Adopted from Atkinson (1999)
This figure emphasizes the fact that for any successful project, time factor is key in determining
the quality and the costs involved. Project managers need to consider these aspects as vital. Any
stretched time frame influences the costs of any project which indirectly influences the quality of
work. The planning, organization, monitoring and control of all aspects of a project and the
motivation of all involved to achieve the project objectives safely and within agreed time, cost
and performance criteria largely depend upon the project manager.

Strategic time management in project planning

In any business venture, critical reflection must be given to the concept of project time
management. When it comes to project time management, it is not just the time of the project
manager, but it is the time management of the project team. Scheduling is the easiest way of
managing project time. In this approach, the activities of the project are estimated and the
durations are determined based on the resource utilization for each activity. In addition to the
estimate and resource allocation, cost always plays a vital role in time management. This is due
to the fact that schedule over-runs are quite expensive. Tutorials Point simply easy leaning
website1 notes the following Steps of the Time Management Process each addressing a distinct
area of time management in a project:

a. Defining Activities
When it comes to a project, there are a few levels for identifying activities. First of all, the high-
level requirements are broken down into high-level tasks or deliverables. Then, based on the task
granularity, the high-level tasks/deliverables are broken down into activities and presented in the
form of WBS (Work Breakdown Structure).

1
Tutorials point simply easy leaning website revised in 2005.This guidelines indicate that the the
aspect of time management is very key in the implementation of any projec.

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b. Sequencing Activities
In order to manage the project time, it is critical to identify the activity sequence. The activities
identified in the previous step should be sequenced based on the execution order. When
sequencing, the activity interdependencies should be considered.

c. Resource Estimating for Activities

The estimation of amount and the types of resources required for activities is done in this step.
Depending on the number of resources allocated for an activity, its duration varies. Therefore,
the project management team should have a clear understanding about the resources allocation in
order to accurately manage the project time.

d. Duration and Effort Estimation

This is one of the key steps in the project planning process. Since estimates are all about the time
(duration), this step should be completed with a higher accuracy. For this step, there are many
estimation mechanisms in place, so your project should select an appropriate one. Most of the
companies follow either WBS based estimating or Function Points based estimates in this
step.Once the activity estimates are completed, critical path of the project should be identified in
order to determine the total project duration. This is one of the key inputs for the project time
management.

e. Development of the Schedule

In order to create an accurate schedule, a few parameters from the previous steps are required
.Activity sequence, duration of each activity and the resource requirements/allocation for each
activity are the most important factors. In case if you perform this step manually, you may end
up wasting a lot of valuable project planning time. There are many software packages, such as
Microsoft Project, that will assist you to develop reliable and accurate project schedule. As part
of the schedule, you will develop a Gantt chart in order to visually monitor the activities and the
milestones.

f. Schedule Control
No project in the practical world can be executed without changes to the original schedule.
Therefore, it is essential for you to update your project schedule with ongoing changes. All this
calls for strategic master plan to address time factor in successful implementation of projects.

Principles for effective time management

Every successful manager must adhere to best practices of effective time management. This is
because time is a scarce and rare commodity available to man. Its timeline is specific and once it
is lost, it can never be gained. This calls for proper utilization of this scarce commodity.

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According to European Journal of scientific research (2008), the following are principles for
effective time management.

A. Planning: This involves the formulation of goals and definition of practical ways or steps to
be taken to achieving same. If you are committed to bridging the gap between your potential and
your performance, better time management should become your lifestyle choice. There are three
types of plans namely: strategic plan
Intermediate plan and short term plans.

Guidelines for planning include:

1. Be specific about goals.
2. Make goals that are attainable.
3. Set quantity and time targets for same.
4. Mind the association you keep. Do not relate with dream killers.
5. Start little and with what you have.
6. Be sincere.
7. Do not isolate yourself.
8. Be flexible.

B. Organization: Organization means putting all resources you have into plan to achieve
personal goals. Listed below are principles for personal organization at work.
1. Setting your priorities.
2. Time targets are set for priorities.
3. Allow time space for the unexpected.
4. Do not embark on more than one project at a time.
5. Be a productive thinker.
6. Separate duties properly.
7. Work according to your temperament.
8. Do not develop impossible systems.
9. Allow time for idle minute between meetings and major jobs.
10. Focus on results not in activity.

C. Responsibility: The essence of modern management borders on responsibility and

accountability. It is common to find people passing the buck for every iota of failure or
irregularity. Winston Churchill said “The price of greatness is responsibility. The steps towards
responsibility are:
1. Being responsible for who you are.
2. Being responsible for what you can do.
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3. Being responsible for what you have received.
4. Being responsible to those that lead you.

D. Accountability and Integrity: It is one thing to have a goal or dream; it is another thing to
achieve that same goal. At the end of specific periods, it is important for every responsible
person to take stock of actual results of his/her actions and compare same with plans. This calls
for a greater sensitivity in planning and execution of any tasks timely. In fact in the execution of
project monitoring and evaluations, accomplished tasks are correlated with stated timelines. Any
project implementer who ignores timelines leaves any organization vulnerable to incurring
additional expenses which would have been productively invested. Global financial systems can
never be static. This means that any chance lost to implement any project within any stipulated
time framework is susceptible to any fluctuation in global financial trends. This in turn
influences domestic financial markets. All this calls for strategic planning to cater for this
unforeseen phenomenon.

Case studies of failed projects in the context of time management

This section provides three case studies of projects that have been undermined by time
management factor. The same projects reveal the high costs that accrued from this situation.
These are learning lessons to project implementers to take into account time management issue
as key to avoid unique losses.

Case study 1: Failed Electronic Voter Registration in Uganda

This was a citizen service to take photographs of all citizens of voting age using digital cameras.
The photographs were then to be loaded onto a voters' register database. The database was
supposed to be maintained on a mainframe at the Interim Electoral Commission headquarters,
which would be connected to District Electoral Commission offices through the Internet. The
database would be used as the basis for voter identification at polling stations for the 2001
election. The stated purpose behind the application was to weed out impostors who voted in the
names of the dead and absentee voters, and to avoid double registration of voters, which was
rampant in the country. One key stakeholder in the process was the Interim Electoral
Commission, which some have seen as implicated in some of the shortcomings of the system.
All citizen-voters were stakeholders, being affected by the registration process; and all
politicians and political parties had a stake in the registration system.
A total sum of roughly US$22m was spent on equipment, consultancy services and operations.
There were no formal benefits because the system was not put to use for the 2001 elections. The
acrimony which arose out of the electoral process led to a number of court cases between
government and opposition group. Things went wrong at an early stage with the hardware, with
criticism that the tenders for procurement of the digital cameras were not transparent, leading to
problems with the equipment delivered, and with reports that a number of the cameras were
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stolen from what should have been a safe government store. Although citizen photographing did
proceed, it took place within a very short time and many people were not captured by the system.
There were complaints from opposition parties that security agency staff had intervened in the
workings of the computer system. Suspicions were raised of manipulation of voter registrations
in opposition strongholds. Opposition parties felt that names might be removed from the
electoral roll in one place, in order to disenfranchise those who might vote for the opposition,
and put back on in other districts, allowing soldiers to vote many times for the ruling candidates
in the names of the disenfranchised citizens.
When sample voter registers were produced by the system, they were found to be erroneous,
with some photographs not corresponding with names of voters. Coupled with opposition
suspicions, this led the entire exercise to be suspended. Old voter registers were used to conduct
presidential, parliamentary and civic elections in the country in 2001.

Evaluation and Analysis

This voter registration system failed largely because it was a technical instrument introduced into
a highly politicized situation. The timing was not ideal. In the first place all parties needed
enough time to appreciate the benefits of this new technology as win-win results. Time had
already been invested in consultations prior to the project proposal. All was wasted. The fact that
the project was a proposal towards elections with limited consultations from the opposition
created heavy suspicion and mistrust.

Case study 2: Denver Airport Baggage System Case Study

Originally billed as the most advanced system in the world, the baggage handling system at the
new Denver International Airport was to become one of the most notorious examples of project
failure. Originally planned to automate the handling of baggage through the entire airport, the
system proved to be far more complex than some had original believed. The problems building
the system resulted in the newly complete airport sitting idle for 16 months while engineers
worked on getting the baggage system to work. The delay added approximately $560M USD to
the cost of the airport and became a feature article in Scientific American titled the Software’s
Chronic Crisis. At the end of the day, the system that was finally implemented was a shadow of
what was originally planned. Rather than integrating all three concourses into a single system,
the system supported outbound flights on a single concourse only. All other baggage was
handled by a manual tug and trolley system that was hurriedly built when it became clear the
automated system would never meet its goals.

Even the portion of the system that was implemented never functioned properly and in Aug 2005
the system was scrapped altogether. The $1M monthly cost to maintain the system was
outweighing the value the remaining parts of the system offered and using a manual system
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actually cut costs. Contributing factors as reported in the press included underestimation of
complexity, underestimation of schedule and budget and dismissal of advice from experts.

Evaluation and Analysis

This is a clear example of what it takes when any project is delayed beyond the stipulated
timeframe. For this project the monitory expenditure was colossal totaling to about
approximately $560M USD. This could have been used for many other alternative needs on the
project. This calls for strict adherence to stipulated time schedules to enable any project to be a
success.

Case Study 3: The Bird’s Nest Stadium in China

The Bird’s Nest is the main venue of the 2008 Beijing Olympic Games which gives it unique
position in China’s history. Located at the southern part of the Olympic Green in Beijing and
occupying an area of 21 hectares, it has a floor space of 258,000 square meters with seating
capacity amounts to 91,000, including 11,000 temporary seats2. The stadium is designed to host
large-scale sports and entertainment events after the Olympics.

Construction of the Bird’s Nest began in December 2003 and was completed in June 2008. In
December 2007, construction work had been suspended for one and a half year due to the
perceived high construction costs3. Eventually the originally designed retractable roof was
omitted and the whole project was delayed 6 months behind schedule4. The project also
encountered cost overrun from the initial budget of 1.6 to 2 billion RMB 5 to the final cost of 3.5
billion RMB 6.
Evaluation and Analysis

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This example further reveals the cost of suspending projects. A project originally budget for 1.6
billion RMB ended costing 3.5 billion RMB almost double the original price. Think about the
scenario that would occur if the project had been completed in the original stipulated time. China
would have saved a lot of money for other developments. Similarly every project manager must
consider the aspect of sticking to deadlines. All shocks must be incorporated in the original
project proposal.

7.0. Recommendations and conclusion

In light of the above, the following recommendations are proposed to aid best practices of time
management in project planning and implementation.
1. There is a need to consider time as a vital primary factor to be considered in project
implementation. Since it bears a monetary cost once ignored, it must be given absolute
attention.

2. Drawing up of timeline schedules is key in executing a successful project. These must be

consistently and regularly correlated with accomplished tasks. The quicker the project
execution way ahead of timelines the better. The three listed examples in this paper have
revealed a common thread of additional monetary costs once a project suspended or its
designs changed.

3. Compulsory Training of all professionals in training institutions on time management in

project planning and management must be emphasized. This is because project planning
and management is now a human phenomenon.

4. Visualize and Communicate all Project Deliverables and Activities to all involved
stakeholders. In short, the project manager and team must have a picture of the finished
deliverables in the minds of everyone involved. This guides everyone in the same direction
to avoid time wasting.

5. Always pay heed to three key factors for successful project implementation namely; Time,
Budget, and Quality. While project management practices have changed to be more
flexible and open, the foundation remains the same. Project success occurs when it is
delivered on time, within budget, with a level of deliverables that are satisfactory to the
client. The project manager's main role is to keep all team members aware of these three
factors.

In conclusion, every project planner who factors the element of time consideration in project
planning and implementation is bound to succeed. General training for all professionals on time
management in project planning and implementation is key. This calls for all practitioners to
consider this phenomenon vital for project sustainability.

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Bibliography
"Applying Kotter's Change Management Principles to Project Management". Change Leadership
Network. Change Leadership Network. Retrieved 12 July 2015.
Freeman RE (1984) Strategic Management: a Stakeholder Approach. Pitman Series in Business
and Public Policy, Harpercollins College Div; First Edition, 275 p. ISBN 978-0273019138
Project Management Institute (2013): A Guide to the Project Management Body of Knowledge
(PMBOK® Guide), Fifth Edition, Newtown Square, PA, USA: Project Management Institute, p.
589. ISBN 978-1935589679
World Conservation Union M&E Initiative. Situation Analysis: An Approach and Method for
Analyzing the Context of Projects and Programmes. World Conservation Union, Gland,
Switzerland. Available from:
http://www.iucn.org/themes/eval/documents2/situation_analysis/approach_and_method.
Adeojo, Adeyinka(2012) Effective time management for high performance in an organisation
;Thesis for Business School Degree programme in Business Administration International
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Association of Project Management (APM), Body of Knowledge (BoK) Revised January 1995
(version 2).
Effective time management in organization Panacea, European Journal of Scientific research
(2008), vol 24 No1 pp. 130.
Liu. Y. & Zhao, G. et al (2010). “Many Hands, Much Politics, Multiple Risks –
The Case of the 2008 Beijing Olympics Stadium”. Australian Journal of Public Administration
Special Issue: Public-Private Partnerships. Volume 69, Issue Supplement s1, pages S85–S98,
March 2010
National Stadium News (2009 b). “Introduction.” The Official Website of the Beijing 2008
Olympic Games (http://www.n-s.cn/en/generalinfo/introduction/viewed on September 20th
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(http://www.n-s.cn/en/generalinfo/ event schronicle/n214215077.shtml viewed on September
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phenomenon, its time to accept other success criteria; International Journal of Project
Management Vol. 17, No. 6, pp. 337-342
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Business);Saleemi Publications Limited Nairobi Kenya.
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NewDelhi India.
Kirby David ( 2003) , Entrepreneurship; Published by MCGraw-Hill Education UK
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 CHAPTER THIRTEEN
MAINSTREAMING GENDER INTO THE PROJECT LIFE CYCLE
Stephen Kyakulumbye and Mary Ssonko Nabacwa

Introduction
Gender mainstreaming is very important in project management thus should be integrated in the
project life cycle. According the United Nations Economic and Social Council (date and page),
gender mainstreaming is defined as
“…the process of assessing the implications for women and men of any planned action,
including legislation, policies or programmes, in any area and at all levels. It is a
strategy for making the concerns and experiences of women as well as of men an integral
part of the design, implementation, monitoring and evaluation of policies and
programmes in all political, economic and societal spheres, so that women and men
benefit equally, and inequality is not perpetuated.”

Gender mainstreaming should ideally begin right from the program design and approval phase.
Failure to do so results in the impossible task of measuring gendered impacts on projects that
were not designed to address gender concerns in the first place. Gender mainstreaming is not
merely about including women in a project. It therefore does not suffice to record the number of
women attending a training, for instance because this assumes that women and men are equally
able to participate. In reality, women’s and men’s ability to participate in projects differs due to
time availability, skills, decision-making, financial capability, etc. A project could therefore be
considered gender blind if sex disaggregated data is collected with no consideration as to the
constraints that could hinder equal participation. Further, a project – even a women’s only
project - would also be considered gender blind if participating women have no voice or
decision-making power. Gender mainstreaming is about redressing the unjust social and
institutional structures that result in unequal benefits for men and women. Right from the
design/concept phase, projects therefore need to seek to address the constraints that affect
women.
Gender Mainstreaming is a strategy for making the concerns and experiences of both women and
men an integral part of the design, implementation monitoring and evaluation of policies,
programmes and projects. It involves the re-organization, improvement, development and
evaluation of policy processes so that a gender equality perspective is incorporated at all levels
and at all stages of policy making.

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Gender mainstreaming: is the process of integrating a gender equality perspective (women and
men’s needs, interests, priorities, constraints) into the development process systematically and at
every stage (planning, design, implementation, monitoring). Gender integration on the other
hand, is the introduction of gender (‘add on’) in an already designed project, program or policy.
This may be done without analysis and identification of gender concerns and their implications.

Gender analysis The first step to gender mainstreaming is gender analysis (gender responsive
planning and programming). It involves the collection and analysis of sex-disaggregated data
before embarking on design of development interventions (projects). It examines women’s and
men’s specific activities, conditions, needs, access to and control over resources and access to
development benefits and decision making. It explores the differences, commonalties and
interaction between women and men so that projects and policies can identify and meet their
respective needs, thus remedy gender unequal situations. Gender analysis identifies how women
and men are affected by projects and policies differently.

The purpose of gender analysis during project planning and programming is that it:
1. Demonstrates that project design and implementation cannot be gender neutral
2. Reveals connections between gender relations and development interventions
3. Introduces the likely impact of gender relations on the solution to the problem
4. Indicates what the impact is likely to be and alternative courses of action to correct the
inequalities thus informing project design strategy
5. Helps formulate meaningful and realistic expected results, indicators and targets
6. Helps ensure that project strategy is culturally relevant; hence increasing the chance of its
success in the community it is being implemented.

Gender classification of policies

As a tool for helping practitioners and policy-makers determine to what degree a project or a
policy is explicitly working towards transforming unequal gender relations, Naila Kabeer (1992)
classifies policies into the following types:
Gender-blind policies: These recognise no distinction between the sexes. They make
assumptions, which lead to a bias in favour of existing gender relations. Therefore, gender-blind
policies tend to exclude women.
Gender-aware policies: This type of policy recognizes that women are development actors as
well as men; that the nature of women's involvement is determined by gender relations which
make their involvement different, and often unequal; and that consequently women may have
different needs, interests, and priorities which may sometimes conflict with those of men. Within
this category, Kabeer further distinguishes between gender-neutral, gender-specific, and gender-
redistributive policies.

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Gender-neutral policies: use the knowledge of gender differences in a given society to
overcome biases in development interventions, in order to ensure that interventions target and
benefit both sexes effectively to meet their practical gender needs. Gender-neutral policies work
within the existing gender division of resources and responsibilities.
Gender-specific policies: use the knowledge of gender differences in a given context to respond
to the practical gender needs of women or men; they work within the existing gender division of
resources and responsibilities.
Gender-redistributive policies: are intended to transform existing distributions of power and
resources to create a more balanced relationship between women and men, touching on strategic
gender interests. They may target both sexes, or women or men separately.

The History of gender concerns in projects and other development efforts

A concern for gender equality in development is sufficiently well established to be the subject of
historical accounts. Such accounts often describe an evolution in development policy and
planning from a so-called welfare approach, to one which prioritized equity, then efficiency, and
finally to one which espouses women's empowerment as its goal (Moser 1993). Such approaches
are also seen to coexist, either as single policies of a particular government or agency, or mixed-
and-matched within one organisation, in the hope that they will form a coherent whole
(Andersen 1992). There are two well documented gender mainstreaming policy shifts: WID
(Women in Development), which aims to include women in development projects in order to
make them more efficient, and GAD (Gender and Development), which addresses inequalities in
women's and men's social roles in relation to development efforts.

The question of how to integrate women effectively into the development process both as agents
and as beneficiaries has evolved considerably over the past thirty years and has presented a
paradigm challenge to development agencies. The approach taken up internationally in the
1970s, which is referred to as “Women in Development” (WID) focused on women in relation to
the economy and the development process from which women were perceived as being largely
excluded. Central to the thinking on WID was how to conceptualise the nature of the problem as
well as the measures required to achieve real transformation in the lives and position of women
relative to men. With this perspective, measures were taken to integrate women in development
activities though targeted projects or separate components.
More literature reveals that the exclusive focus on women ignored the political, economic and
social relations that men and women were engaged in, and which shape their lives, livelihood
strategies, prospects and well-being. In the African context, this was very critical since the roles
and status assigned to men and women were, and still are, largely culturally determined. In such
a situation, discounting women’s relations with men incurred resistance as it threatened
culturally established patterns of behaviour. In retrospect not only did the WID approach fail to

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challenge or transform unequal gender but it also left the structures, processes and mechanisms
that sustain gender inequality intact.

Due to the limitations of the WID strategy, a new policy framework referred to as GAD emerged
in the early 1990s. Unlike WID, it requires the restructuring of the development mainstream
through the incorporation of the visions, needs and interests of women and men in the definition
of development policies, priorities and strategies. Its focus was not centred on women, but on the
social, political and economic relations as well as the structures and processes that create,
reinforce and sustain inequality on one hand and result in different outcomes for both women
and men on the other hand.

The GAD approach emphasizes the fundamentally social nature of gender differences and
introduces the concept of “gender mainstreaming” as a key strategy for analyzing the
relationship between women and men both within the public as well as the private spheres. It
seeks to be holistic and take account of the link between culture and development, which has
complementary as well as conflictual dimensions. The underlying assumption of the GAD
approach is that women as well as men may be privileged or disadvantaged by social and
economic structures. In this context a better understanding of women’s as well as men’s
perceptions, position and scope for changing gender relations is seen as indispensable. The
gender approach has an agenda to transform unequal gender relations through the empowerment
of both women and men, by enabling them to question cultural values, practices and structures
(African Development Bank Gender Policy, 2001).

The international gender context

A number of international treaties and agreement have been reached in a bid to mainstream
gender into development interventions. These include the following:

The International Covenant on Economic and Cultural Rights (year) which states that men
and women have equal right to work, favourable working conditions, to form and join trade
unions, to social security, to an adequate standard of living and to the highest attainable standard
of physical and mental health.

The Fourth World Conference of Women of (1995) called for gender mainstreaming in the
areas of poverty, human rights, economy, violence against women and armed conflict.

Beijing Platform of Action The Beijing Platform of Action established that gender analysis
should be undertaken on the respective situation and contributions of both women and men
before undertaking development policies and programmes (Mehra & Gupta, 2006).

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Millennium Development Goals had a goal on gender equality and the empowerment of
women in the Millennium Development Goals (MDGs) which re-established the commitment
voiced in Beijing. In outlining the way forward towards achieving that goal, the report of the
Task Force on Education and Gender Equality of the UN Millennium Project (year),
reinforced the importance of investing in gender mainstreaming as a tool. The report reiterated
the need to expedite mainstreaming responses and actions as well as the need to create systems to
hold institutions accountable.

The World Development Report (2012) clearly states that there has been a substantial increase
in the female labor force especially in informal sectors and low wage industries. The challenge
however, is that these women experience inefficiencies, limitations and investment challenges
more than their male counterparts. It is also important to note that throughout the world women
are largely absent from corporate board rooms. Programs for promoting good corporate
governance recognize the need to work towards raising awareness, building capacity, expanding
the discussion on gender diversity on corporate boards and supporting women leaders in those
roles.

OCED DAC Network on Gender Equality (2011) highlights the particular challenges relating
to women’s empowerment that include the need to reach women in remote communities
including cross border traders, factory and domestic workers; support women farmers; support
women’s enterprises including linking rural producers to urban markets; promote women’s
access to credit; design infrastructure programmes that maximize poor women’s and men’s
access to the benefits of such programmes; promote more equitable access, assets and services
such as technology, innovation, credit, banking and financial services; give more attention to
unpaid care; and increase the focus on women’s employment.

The African Legal and Policy gender Context

The African Gender Equality and Women's Rights Monitor (AGM) was formed in 2006 by
gender activists in African countries. They aimed to contribute to the full realization of women
emancipation, the eradication of all forms of discrimination oppression, and abuse and to uplift
women’s rights as human rights. This was to be achieved through the monitoring and
implementation of the international women’s human rights instruments, research and
documentation of good practices on the implementation of those instruments and by supporting
the African Union in addressing gender, family, research, and capacity building. Other initiatives
include the Gender Impact Analysis tool by the Foundation of Women Lawyers in Kenya to
measure government compliance with the International Covenant on Economic Social, Cultural
Rights (ICESCR).

The East African legal and policy context on gender

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The major objective of the East African Community (EAC) is to "develop policies and
programmes aimed at widening and deepening cooperation among the partner states in political,
economic, social and cultural fields, research, and technology, defense, security and legal and
judicial affairs, for their mutual benefit. The enhancement of the role of women in cultural,
social, political, economic and technological development is at the core of EAC activities.
Article 121 of chapter 122 of the Treaty requires partner states to make special provisions for the
increased participation of women in decision-making, business and policy formulation.
Additionally, Kenya, Rwanda and Uganda (need to confirm list of countries) have national
gender policies that seek to redress historical imbalances in women’s access to resources and
opportunities. In spite of the above enabling legal context, women in the EAC face a number of
challenges in projects including but not limited to:
1. Underlying poverty and gender inequalities, uncertain land rights, low literacy and
education, the responsibility of caring for family members and a lack of time for personal
development (time poverty).
2. Men tend to move into positions usually held by women as sectors become mechanized,
such as the case in agriculture, fishing and forestry.
3. Small volume traders who are mainly women lack access to information relating to
markets, rights and obligations, safety and accountability at borders and in customs.
4. Energy, infrastructure and transport studies on the Northern and Central Corridor regions
reveal that transport initiatives can work to reduce the spread of HIV/AIDS.
5. Women make up the majority of informal border workers/cross-border informal traders and
primarily use illegal routes to smuggle food stuffs, cattle, hides and skins. Such illegal
practices put women at risk for heavy fines, the confiscation of their goods, imprisonment
and sexual exploitation by male smugglers and border officials.
There remains much to be done in order to ensure that both men and women enjoy equal access
to resources and opportunities from development efforts. Fortunately, the legal frameworks are
in place. Organizations can make a significant contribution in leveling the playing field in
projects among the East African member states by mainstreaming gender in all activities.
Gender analysis and gender mainstreaming frameworks
Gender analysis is the process of assessing the impact that a development activity may have on
females and males, and on gender relations (the economic and social relationships between males
and females which are constructed and reinforced by social institutions). It is the first step to
gender responsive planning and programming also called gender mainstreaming.

It can be used to ensure that men and women are not disadvantaged by development activities, to
enhance the sustainability and effectiveness of activities, or to identify priority areas for action to
promote equality between women and men.

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During implementation, monitoring and evaluation, gender analysis assists to assess differences
in participation, benefits and impacts between males and females, including progress towards
gender equality and changes in gender relations.

Gender analysis can also be used to assess and build capacity and commitment to gender
sensitive planning and programming in donor and partner organisations; and to identify gender
equality issues and strategies at country, sectoral or thematic programming level.

Gender mainstreaming
The precise meaning of' mainstreaming' as an aim, and the ways in which this can occur, are
contested terrain. Many authors have conceptualized 'mainstreaming' as making gender concerns
the responsibility of all in an organisation, and ensuring that they are integrated into all structures
and all work. This is seen as an alternative to making gender concerns the sole responsibility of a
smaller specialist team or unit. Critics of this approach have pointed out the disadvantages of
trying to achieve the goal of 'mainstreaming' gender by making it everyone's responsibility .They
argue that this may lead to diluting or distorting these issues, or making them disappear
altogether, as a result of lack of consistent attention and resources, sustained commitment on the
part of decision-makers, and of male resistance. In contrast, it is argued that a specialist team,
although it may be working in the 'margins', may oblige organisations to develop and maintain a
more visible and radical commitment to gender equality.

Confusingly, (Del Rosario, 1995) notes that others use a different approach in trying to achieve
'mainstreaming': one which separates out the systems and tasks necessary to address gender
concerns, by establishing national 'machineries' or specialist teams (such as ministries, special
units, and so on). The author asserts that his has been a way in which governments and
organisations can signal their acknowledgement of the importance of women's issues. Yet this
approach, too, has been found wanting. In particular, national machineries have often been
'proven to be weak, under-resourced, vulnerable to changing political fortunes and to co-optation
by political parties' (Byrne & Laire 1996).

Mukhopadhy et al (2015) reveals that the current consensus seems to be that organisations need
to use both approaches - integrating gender concerns throughout the organisation, as well as
maintaining specialist departments or units - in order to avoid marginalization and co-optation of
gender issues. In general, 'mainstreaming' is understood as a welcome departure from an
'integrationist' approach, which is simply concerned with allowing women access to development
activities and bureaucracies. 'Mainstreaming gender is both a technical and political process
which requires shifts in organisational cultures and ways of thinking, as well as in the goals,
structures, and resources allocation of international agencies, government, and NGOs (Kardam
1998).

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Gender mainstreaming: A conceptual framework
To be effective, a gender mainstreaming strategy should initiate and sustain change processes at
multiple levels.
• The organisation itself – its policies, procedures, culture and people.
• The development interventions supported by the organisation, which lie within the
intersection of its own work with the work of its partners.
• The larger national context, including the socio-economic, cultural and political
environment in the country; the policies and programmes of development partners; and the
perspectives and strategies of the women’s movements and other civil society actors.

Within the organisation as well, gender mainstreaming can be conceptualised as playing out in
different domains.
a) The technical domain is constituted of the capacities, tools and instruments for gender
mainstreaming. Gender experts, guidelines and tools for integrating gender into the project
cycle, gender training modules and materials are all located within this domain.
b) The political domain is the site for integration of gender equality concerns into processes
of planning and decision-making within the organization. This is the domain within which
hierarchies are institutionalized, which in turn determines access and control over resources
and decision-making in the organisation.
c) The cultural domain is the arena in which the environment and daily practice of the
organisation are defined, shaped and validated. While processes in this domain may not be
guided by clearly articulated rules and procedures, they are nonetheless critical to gender
mainstreaming. Since it is in this domain that the gap between policy and practice is
created, it is also the space where it can be negotiated and contested.

Each of these domains is intricately linked to the other. In turn, each domain and the system as a
whole are influenced by multiple factors in the external environment – national development
agendas, global discourses, civil society, women’s movements, donor priorities and geo-political
processes and issues.

Power relations are woven into each domain and are manifested in different ways. In the
political domain power is visible in forms of leadership, ability to influence processes of
decision-making and creation and maintenance of hierarchies and the control of resources and
priorities. In the technical domain, unequal power relations are reflected in the ways in which
concepts, discourses and methodologies are defined and shaped – in deciding what is “valid” and
what is not, what is ‘sound’ and what is not, what is ‘objective’ and what is not. In the cultural
domain value systems, attitudes, and relationships all reflect power relations that perpetuate
gender inequality. The implications and impact of each of these, as well as the ways in which
they intersect, should ideally be factored into strategies for gender mainstreaming.

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Conceptual model: Interrelated interventions for mainstreaming gender equality concerns
During any project design and conceptualization, there is need to assess the inter-related
interventions through the administration of a Gender Audit that examine: Political Will and
Commitment, Financial Resources and Technical Capacity, Human Resources, Organizational
Accountability and Organizational Culture and Values. See the framework sample below:

Technical: tools,
Political will: Policy methods,experti
implementation, se, data
support systems, Programme
finance, budgets Individual actors:
knowledge, attitude, level: gender
practices (KAPs), issues in
Cultural: norms,
programmes,
values, knowledge, internalization and
actions on gender lessons and
attitude, practices
best practices
(KAPs), relationships mainstreaming

Adopted and modified from TMEA gender audit (2015)

From the above framework, we posit that political will, culture and technical dimensions are
interwoven and mediated by individual factors can influence project and programme outcomes.
Within the three dimensions of culture, political and technical issues are gender concerns that
need to be addressed than blindly designing interventions which can result into gender conflicts.
However, it has been left to you, the reader, to decide whether the framework is applicable in
your context, whether you will still use the framework, and, if so, how you can compensate for
any limitations. Whenever users have reported adaptations of the gender frameworks which help
to balance or counteract potential limitations, these can be included in mainstreaming efforts. A
number of other frameworks exist and these include:

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Harvard Analytical Framework
The Harvard Analytical Framework is often referred to as the Gender Roles Framework or
Gender Analysis Framework. Published in 1985, it was one of the first frameworks designed for
gender analysis. It was developed by researchers at the Harvard Institute for International
Development in the USA, working in collaboration with the WID office of USAID, at a time
when the 'efficiency approach' to integrating women in development work was gaining
prominence in development circles. It focuses on an analysis of the division of work between
women and men in productive and reproductive work within the household and the community

Gender Analysis frameworks

Before choosing or using the framework, you should consider its weaknesses which other
workers and trainers have found. These potential weaknesses do not invalidate the usefulness of
disaggregated by age, sex and other factors. It is normally used for baseline data collection. It is
best suited for project planning rather than programme or policy planning. It can help project
designers plan activities using four components: activity profile, access and control profile,
influencing factors and project cycle analysis.

1. Activity profile: identifies the productive and reproductive tasks carried out by women and
men.
2. Access and control profile: identifies the resources (land, equipment, labour, cash,
education) women and men use to carry out their tasks, the access to and control over those
resources, and the benefits (asset holding, clothing, food, education, political power) a
household can receive from using these resources.
3. Influencing factors: Refers to the factors that influence the difference in the gender division
of labour and access to and control over resources, including: community norms,
institutional structures, economic and political factors, legal frameworks etc.
4. Project cycle analysis: Refers to four checklists consisting of key issues to consider at each
stage of the project cycle: identification, design, implementation and evaluation.

Moser framework
In reaction to the Women in Development (WID) approach, which in the 1970s encouraged
treating women's issues as separate concerns, the Gender and Development (GAD) approach
argued for an integrated gender-planning perspective in all development work, concentrating on
the power relations between women and men. This approach challenges many of the assumptions
behind traditional planning methods. The Moser Framework was part of this challenge. Caroline
Moser developed it as a method of gender analysis at the Development Planning Unit (DPU),
University of London, UK in the early 1980s. Moving from analysis into action, Caroline Moser,
with Caren Levy of the DPU, further developed it into a gender policy and planning method.

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Moser's method was presented as a mainstream planning methodology in its own right, like
urban or transport planning.

Gender roles identification: women’s triple role

a. Refers to the reproductive, productive and community managing work women engage in as
compared to men who undertake mainly productive and community political activities.
b. By using this element, the Moser framework shows that women perform multiple roles
simultaneously; making visible and valuing reproductive work that is generally not
considered real work.
c. It also highlights that reproductive workload often prevents women from taking part in
development projects.
d. Reproductive work consists of the maintenance of the household and the care of the family
members.
e. Includes child bearing/rearing responsibilities and domestic tasks.
f. Most often exclusively carried out by girls and women.
g. The productive work involves the production of goods and services with an exchange
value.
h. This is work done by both women and men.
i. Women’s productive work is often less valued than men’s.

Gender Analysis Steps

Step 1: Collect sex-disaggregated data/information

This refers to the differentiation by sex of statistical data and other information and is sometimes
called gender-disaggregated data. This means that we must count both males and females when
gathering information for planning, implementing, monitoring and evaluating development
activities. Disaggregating information by sex is a basic good practice requirement for gender-
sensitive programming. Without disaggregated information, it is difficult or impossible to assess
the different impacts of development activities on males or females. It is important to
disaggregate data not only by sex, but also by age (girls and boys, older men and women), race,
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ethnicity, caste/social group and any other socioeconomic group which may be affected
positively or negatively by a development activity.

There are many ways that development workers can gather sex-disaggregated information. Data
collection methods and the quantity of data required will vary according to a range of factors,
including the sector and type of development activity, the scale of the activity, the resources and
time available for data collection during design, implementation and evaluation, and the
institutional context. While there are now many sources of quantitative data on the status of
women and girls, up-to-date and relevant information specific to the location and activity can
sometimes be difficult to get. Sex disaggregated qualitative information based on consultation
with key stakeholders and local women’s groups is also essential.

Participatory methods may provide opportunities to hear from both women and men separately
(for example, participatory ways of gathering information on the gender division of labour, or on
access to resources), and for women and men to hear each other’s perspectives.

The following factors may influence the accuracy and coverage of data:
• Who is present: In some cultures women will respond very differently to questions about their
economic and social activities, and their views about gender relations if men are present. If men
answer questions first, women may remain silent, even if they disagree, or if inaccurate
information is given.
• Time of day, season and location: Women may not be available at certain times of day, and
men may be less likely to be present at other times. It is important to choose both a time and
place which is convenient for women, for individual and group interviews or participatory
information-gathering exercises. Women and men may be less available during peak labour
periods, such as harvesting or transplanting times.
• Who is the facilitator/interviewer: In some cultures and situations, responses to questions will
be more accurate if women gather information from women. Training and supporting
beneficiaries to collect and interpret data is also one way of involving women in project
planning, implementation and monitoring, and may increase the accuracy and quality of data and
its analysis. Class, age, ethnic background and occupation may also influence peoples’
responses. It may be necessary to monitor whether these factors are introducing bias.
• Language difficulties: Men and women may have different proficiency in national (as distinct
from local or ethnic) languages, particularly where gaps in education and literacy between males
and females are significant.

• Collect information on all relevant work: Overlooking unpaid and subsistence work will result
in under-reporting and misrepresentation of both women’s and men’s workload. Without this
information, it can be difficult to identify the constraints which may face them in participating in

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or benefiting from development activities. Much of women’s work is under-valued or ‘invisible’
to men and outsiders. Typically, men may not give accurate information about what women do,
how long it takes to do it, where the work is done, or who benefits from different activities.
• Local women’s organisations: Women’s organisations and groups can be accurate sources of
information about the gender division of labour, patterns of decision making, access to resources,
women’s and men’s needs, priorities and strengths, how gender relations are changing, and the
factors causing changes in gender relations. Often, these organisations have a rich knowledge of
how current development activities and trends are helping or hindering women and men. With
adequate resources, they can be effective catalysts for engaging the participation of women, men,
boys and girls.
• Cross-check data: It is always necessary to cross-check data for accuracy and bias, including
gender bias, regardless of the data collection method used. Local women’s groups and local
female researchers may be good sources for cross-checking, as well as other key community
informants. Cross-checking may assist with analysis of data, and may indicate differences in
perception about social and economic conditions, rather than actual inaccuracy in data collected.
Using a range of reliable informants knowledgeable about the target group and women’s and
men’s experiences is critical.
• Technical and sectoral expertise: It is helpful to have a social scientist with expertise in
participatory data collection and gender analysis on design, implementation and
evaluation/review teams. However, it is just as important for each team member to be
responsible for collecting and analysing sex-disaggregated information in their own sector or
area of expertise.

Step 2: Assess the gender division of labour and patterns of decision making
This step in the gender analysis process describes who does what, within the household,
community, workplace, organisation or sector. Important issues to consider include:
• What work is done, and by whom (female and male adults, elders and children)? One good rule
of thumb is to ask how the gender division of labour will affect the implementation of
program/project activities; and how these activities are likely to affect the gender division of
labour.
• Different types of work to consider are: productive (formal and non-formal sectors),
reproductive, essential household and community services, and community management and
politics. It is also important to explore who makes decisions about different types of work, and
how this is changing. For example, in the education sector, it is important to know in which areas
and at what levels females and males predominate as learners, teachers and decision makers, and
why. In the health sector, women are often traditionally responsible for providing basic health
care in the family and community. It is important to know how men and women are involved in
the provision of health services (formally and non-formally), and how the gender division of
labour, responsibility and decision making in the family impacts on women’s and men’s health.

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Decision making about reproduction, about who in the family is resourced to go to health
centres, tolerance of violence against women, and the physical burden of work can greatly
influence women’s and girls’ health. Understanding decision making patterns can also provide
insight into who has control over labour in the community.
• How much time is needed to undertake each activity, and when is the work done? This
information helps to identify periods when there is a high demand for labour, so that an
assessment can be made of any extra demands that project inputs will make on women, men and
children. This is particularly important for rural development projects, where the scarcest
resource for low-income women is time. For example, the different domestic and productive
workload of girls and boys has been identified as an important factor in both enrolment and
retention rates at school, as well as in educational achievement.
• Where does each activity take place (for example, home, village, marketplace, fields, urban
centre or rural area, and how far away from the household)? This gives insight into female and
male mobility, and allows an assessment to be made of the impact of the program on mobility,
method of travel, the travel time needed to accomplish each activity, and potential ways of
saving time. For example, for women to participate in training activities, timing and location
needs to be carefully considered. In a police project, it is important to know whether women are
stationed in rural areas, and whether they are primarily assigned to office-based activities.
• It is important to consider all the above for each socioeconomic or ethnic group targeted by the
program/project, or affected by the program/project. A good gender analysis is undertaken within
the context of a broader social analysis.
• With most projects and programs, it is also important to have a sex-disaggregated employment
profile of the partner organisation.

Step 3: Assess access to and control over productive resources, assets and benefits
This part of gender analysis describes who has what, within the household, community,
workplace, organisation or sector, including who has power. Questions to be asked include:
• Who has access to productive resources and assets such as land, forests, water supplies,
equipment, labour, capital, credit, new technology and training?
• Who has control over how these resources and assets are used, and over who uses them? It is
important to distinguish between access to these resources (who uses resources informally or
traditionally) and control or decision making power.
• Who belongs to formal or informal groups or organisations, who gets mentored or promoted?
Who benefits from the product of women’s and men’s labour, and who benefits from
development activities and education and training opportunities? Questions to ask include:
– Who benefits from income earned and spent? For example, cash cropping projects often rely
on the unpaid family labour of women and girls, but women are often less likely to control or
have access to income from cash crops.
– Who owns and uses any assets or goods created?

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– Who gains formal or informal political power, prestige or status?
– Who has access to services, for example health and education, and what factors
determine access? For example, the location of facilities, and the attitudes of service providers,
may influence women’s access to health services.
• Who has access to program/project resources, who has access to information from the
project/program, and who participates in project management processes?
Project participation and consultation processes may be designed to enhance women’s and men’s
access to information about the project and the resources which it offers. For example, the
establishment of project implementation groups (such as water user groups, credit groups or
farmer co-operatives) may determine who knows about the program, and who gets control over
its resources.
– How information is distributed and to whom, may determine who has access to training
opportunities by a project.
– Formal education prerequisites for education and training may impact on men and women very
differently.
– These factors will have an impact on women’s and men’s current productive activities and will
often change existing gender relations.

For example, in emergency relief and post-conflict situations, it cannot be assumed that women
will receive equal access to resources unless this is specifically planned for. Women may also
raise different priorities for resources than those identified by the male leadership of displaced
persons. For example, women in Rwandan camps in Tanzania identified a range of priorities and
concerns regarding access to resources once they had gathered together in their own groups, such
as how to get their proper share of food, the need to provide extra food and support to women
caring for unaccompanied children, the need to ensure that single mothers and widows also
receive resources, and the need to provide recreation and schooling for children (Woroniuk et al.
1997).

Step 4: Understand differences in needs and strengths

It is not unusual for men and women to have different perceptions of their needs and strengths.
They may also have different ideas about who does what, who uses what resources, and who
controls resources or makes decisions in other important areas of life. Women and men may also
have different views about gender relations, how they have changed already, and how they
should change in future.
Insights into women’s/girls’ and men’s/boys’ needs and strengths may be gained from finding
out about the gender division of labour, use of and control over resources, and patterns of
decision making. Consultation with participants, in a way which allows both women’s and men’s
voices to be heard, is essential.

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Step 5: Understand the complexity of gender relations in the context of social relations.
Recognizing that development programming occurs in a complex and changing social context,
this aspect of gender analysis considers social, cultural, religious, economic, political,
environmental, demographic, legal and institutional factors and trends, and how they will impact
on the program/project. Questions to be asked include:
• How will these factors and trends influence and change the gender division of labour, women’s
and men’s access to and control over resources and benefits, and other aspects of gender
relations such as decision making?
• How will these factors and trends constrain or facilitate the program/project, and the likelihood
of successfully achieving objectives?
• How might the program influence these factors and trends, either positively or negatively?
• Which factors are changing and why, and which are very difficult to change?

There are many forms of discrimination, which result in violation of basic human rights to both
females and males of all ages. It is important to remember that women face multiple barriers
through different stages of their lives, and to understand the different types of discrimination that
affect both males and females.
This analysis of social context can help to identify assumptions and risks in the logical
framework matrix. Both women’s and men’s experiences and perspectives need to be considered
when identifying critical planning assumptions and risks. Project objectives or methods may
need to be modified in the light of these factors. For example:
• The experiences of boys and girls within the education system need to be considered when
identifying factors which contribute to access to education, and educational outcomes.
• Demographic trends such as male migration may mean there are large seasonal variations or
long-term changes in the numbers of households supported solely by women. If so, assumptions
about the availability of women’s and men’s labour for program activities may need to be
reconsidered. Such factors may also affect boys and girls access to schooling.
• Cultural factors restricting women’s and girls’ mobility may mean that services (for example,
health, education or credit services) are under-utilised if they are located outside the immediate
locality.
• For cultural and religious reasons, it may be important to establish separate groups for women
and men at the community level. Training and consultation may need to occur separately with
women and men, and female extension agents and community workers may be required.
• Legal factors and customary practices may make it very difficult to transfer resources directly
to women (such as ownership of land or hand pumps, or access to credit).

Changing attitudes, economic circumstances and trends may provide opportunities for improving
women’s social, economic and legal status. Analysing such factors and trends may assist
planners to identify areas where the program can address both women’s practical needs, as well

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as their strategic gender interests (as defined by women themselves) to redress current
inequalities in the gender division of labour, and in women’s access to and ownership of
productive resources. Work in post-conflict areas and in humanitarian/emergency relief
situations may also present opportunities for advancing gender equality.

Step 6: Assess barriers and constraints to women and men participating and benefiting
equally in the program/project
Key constraints and barriers to men’s and women’s participation as beneficiaries and decision
makers need to be identified during project design for all components and key activities, based
on information gathered in the steps above. This is an essential step in the process of gender and
social analysis which is often missed. Who benefits and participates, how and why/why not, also
needs to be monitored closely during implementation.

Step 7: Include and resource strategies to promote gender equality in project design and
implementation
Strategies and activities need to be identified to overcome barriers to women and men
participating and benefiting. It is important to assess which constraints, barriers or imbalances
can realistically be addressed over the life of the project. It is also essential to ensure that
strategies are adequately resourced and monitored. For example, gender-sensitive
communication, consultation and participation strategies need to be developed and tested. Project
staff needs to consider how and when contact is made with target groups, and who may be
excluded directly or indirectly by the communication strategies used.

Step 8: Assess counterpart/partner capacity for gender-sensitive planning, implementation

and monitoring
Partner capacity for gender-sensitive implementation is still often overlooked. For most bilateral
and multilateral development projects, the counterpart agency has already been decided long
before implementation commences. Nevertheless, an assessment of counterpart institutional
capacity to implement gender-sensitive activities is essential as early as possible in the project
cycle, so that appropriate strategies for strengthening this capacity can be explored and costed
(Hunt, 2000).

Step 9: Assess the potential for the program/project to empower women and address
strategic interests
It is useful to distinguish between practical gender needs and strategic gender interests which
1
may be addressed during program/project implementation:
Practical gender needs are the immediate and practical needs women have for survival, which do
not challenge existing culture, tradition, the gender division of labour, legal inequalities, or any

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other aspects of women’s lower status or power. Projects which focus on practical gender needs
may make it easier for women and girls to carry out their traditional roles and responsibilities,
and relieve their daily burden of work. These practical needs are shared by all household
members. However, because women are generally responsible for providing these needs for the
family, they are often more easily identified by women as their highest priority needs.

Strategic gender interests focus on bringing about equality between females and males, by
transforming gender relations in some way, by challenging women’s disadvantaged position or
lower status, or by challenging and changing men’s roles and responsibilities. Women may not
always be able to articulate their strategic interests. It is important to have discussions with
women about their role and place in society, their rights, and how they would like things to
change. It is equally important to have discussions with men on these issues. Strategic gender
interests may express women’s and men’s long-term aspirations for equality.
It is possible to address women’s strategic interests by: working with men as well as women (for
example, by raising men’s awareness of the impact of their sexual behaviour and power
inequalities on women’s health); focusing on practical needs in an empowering way, which also
promotes strategic interests (for example, by involving women in decision making in areas where
they do not traditionally have a role or power, such as in the management or maintenance of
water supplies); and using practical needs as an entry point for raising awareness about
inequality and rights, or about women’s and men’s roles and responsibilities and their long term
interests. What is strategic in one social and cultural context may not be strategic in other
contexts. Some examples of strategic gender interests are women’s rights to: live free from
violence; have equal land tenure; have equal control over other productive resources such as
credit, forests, water supplies; be involved in decision making; and have equal educational and
training opportunities and outcomes.

Step 10: Develop gender-sensitive indicators

Gender sensitive performance indicators are essential for monitoring the impact of activities on
males and females, and on changes in gender relations. To be gender sensitive, indicators need
to:
• require the collection of sex-disaggregated information wherever possible on who participates
and benefits;
• assess whether the program/project has different benefits and impacts for males and females,
and assist us to analyse why these differences between women and men occur;
• assess whether the program/project is bringing about a change in gender relations, and assist us
to analyse how gender relations are changing (positively or negatively), and how this impacts on
the achievement of overall program/project objectives; and
• involve both women and men in developing indicators, and in collecting and analysing
information.

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It is important to include a mix of both quantitative and qualitative indicators, in order to assess
benefits, changes in gender relations and other impacts. Reporting on indicators should always
be accompanied by qualitative analysis, to ensure that data is interpreted correctly.
For example, a quantitative gender sensitive indicator for a HIV/AIDS program may measure the
number of males and females who attend awareness-raising workshops. Qualitative indicators
may assess whether females and males can identify ways to protect themselves from HIV
infection, whether they are able to talk about and use condoms with sexual partners, and whether
there is increased community acceptance of women and men living with HIV/AIDS. In a water
and sanitation project, a quantitative indicator may be the number of women represented on
water committees. Qualitative indicators may assess whether women have actively participated
in management and decision making on water committees; or assess men’s and women’s views
on the appropriateness of the location and type of water facility provided.

Step 11: Apply information and analysis through the program/project cycle and to all
major program/project documents
This requires the formulation of a range of questions which will vary according to the nature and
sector of the project/program, and the social and development context. Many agencies now have
useful tools to assist with this process which are available electronically (for example, AusAID
1997).
Each of the above steps needs to be considered throughout the activity cycle, beginning with
country and sectoral programming, and continuing through project design, implementation and
evaluation. For example, during country and sectoral programming, an assessment of partner
government capacity and commitment to gender sensitive programming is critical, along with
other aspects of gender analysis. During project design, the gender analysis process is not
complete until project-specific operational strategies and gender-sensitive indicators are devised
to ensure that both men’s and women’s needs and priorities are systematically addressed. During
implementation, as information is collected to verify indicators, it is important to be prepared to
change the way we carry out programs/projects if we find that there are unintended or harmful
effects, or if we find that women’s or men’s needs or priorities are being overlooked. This may
require changes to objectives, as well as to activities.
Gender perspectives need to be systematically integrated into all major project documents, rather
than confined to a separate section of a document, or to a separate Gender and Development
Strategy. It is particularly important that log frames adequately reflect social and gender analysis
undertaken during design. Explicit references to gender equality outcomes, or to the benefits to
be gained by women and men, are needed in the first column of the log frame, in the statement of
the goal, purpose, objectives or outputs. In addition to gender-sensitive indicators, means of
verification need to ensure that both women’s and men’s voices are heard. Planning assumptions
and risk assessment also need to consider gender dimensions.

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Gender Related Concepts
Empowerment: Describes both the process and the outcome of people - women and men -
taking control over their lives: setting their own agendas, gaining skills (or having their own
skills and knowledge recognized), increasing self-confidence, solving problems, and developing
self reliance. Empowerment implies an expansion in women's ability to make strategic life
choices in a context where this ability was previously denied. In most cases, this requires
transformation of the division of labour and of society.
A Basic Distinction - Sex and Gender: Sex refers to the biological characteristics between men
and women, which are universal and do not change. These sets of biological characteristics are
not mutually exclusive as there are individuals who possess both, but these characteristics tend to
differentiate humans as males and females. Gender therefore refers to the socially given
attributes, roles, activities, responsibilities and needs connected to being men (masculine) and
women (feminine) in a given society at a given time, and as a member of a specific community
within that society. Women and men’s gender identity determines how they are perceived and
how they are expected to think and act as men and women.
Androgyny: To say that someone is androgynous is to say that he or she combines
stereotypically male and female attributes.
Disaggregated Data (Sex): For a gender analysis, all data should be separated by sex in order to
allow differential impacts on men and women to be measured. Sex disaggregated data is
quantitative statistical information on differences and inequalities between women and men.
Female Genital Mutilation (FGM): Female genital mutilation comprises all procedures that
involve partial or total removal of the external female genitalia, or other injury to the female
genital organs for non-medical reasons. The practice is mostly carried out by traditional
circumcisers, who often play other central roles in communities, such as attending childbirths.
Increasingly, however, FGM is being performed by medically trained personnel. FGM is
recognized internationally as a violation of the human rights of girls and women. It reflects deep-
rooted inequality between the sexes, and constitutes an extreme form of discrimination against
women. It is nearly always carried out on minors and is a violation of the rights of children. The
practice also violates a person's rights to health, security and physical integrity, the right to be
free from torture and cruel, inhuman or degrading treatment, and the right to life when the
procedure results in death.
Gender Awareness: Is an understanding that there are socially determined differences between
women & men based on learned behavior, which affect their ability to access and control
resources. This awareness needs to be applied through gender analysis into projects, programs
and policies.
Gender Equality: refers to the equal rights, responsibilities and opportunities of women and
men and girls and boys. Equality does not mean that women and men will become the same but
that women’s and men’s rights, responsibilities and opportunities will not depend on whether

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they are born male or female. Gender equality implies that the interests, needs and priorities of
both women and men are taken into consideration, recognizing the diversity of groups of women
and men.
Gender Equity: this refers to fair treatment for women and men, according to their respective
needs. This may include equal treatment that is different but which is considered equivalent in
terms of rights, benefits, obligations and opportunities. Gender equity denotes an element of
interpretation of social justice, usually based on tradition, custom, religion or culture, which is
most often to the detriment to women. Such use of equity in relation to the advancement of
women is unacceptable.
Gender Mainstreaming: Gender Mainstreaming refers to a process of assessing the
implications for women and men of any planned action, including legislation, policies or
programmes, in any area and at all levels. It is a strategy for making women's as well as men's
concerns and experiences an integral dimension in the design, implementation, monitoring and
evaluation of policies and programmes in all political, economic and social spheres, such that
inequality between men and women is not perpetuated.
Gender-Neutral, Gender-Sensitive, and Gender Transformative: The primary objective
behind gender mainstreaming is to design and implement development projects, programmes
and policies that:
1. Do not reinforce existing gender inequalities- Gender Neutral
2. Attempt to redress existing gender inequalities- Gender Sensitive
3. Transformative: attempt to redefine women and men’s gender roles and relations - Gender
Positive
Checklist for Gender Mainstreaming Projects

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 Checklist for mainstreaming projects

 Conduct a gender analysis

 What is the role of men and women in the economy?
 Do women and men have equitable access and control over project resources?
 What are women’s and men’s needs?
 What opportunities exist for increasing women’s productivity and access to resources?
 Define general project objectives
 Are women’s and men’s needs, constraints and views reflected in the project
objectives?
 Are both women and men (target groups, staff, partners) involved in setting those
objectives, including in decision-making?
 Identify possible negative effects
 Might the project adversely affect the women’s or men’s situation any other way?
 Might the project reduce women’s or men’s access to or control of resources and
benefits?
 What effect will the project have on women in both the short and long term?
 How can the project design be adjusted to increase the positive effects, and reduce or
eliminate the negative effects on women and men?
 Confirm availability of sufficient resources
 Is the allocated budget sufficient to achieve the desired project results?
 Do implementing partners possess the necessary gender expertise to implement a
gender responsive project?
 Identify and select key gender indicators to measure output, outcomes and
impact in line with organization’s overall result framework.
 Are qualitative and quantitative data disaggregated by sex?
 Have steps been taken to ensure that data collected is disaggregated by sex?
 Have regular performance monitoring windows been scheduled into the project
timeline?
 Is the allocation of financial and human resources appropriate to adequately measure
identified gender impacts?
 Have best and worst practices, challenges, achievements and lessons learned during
project planning (gender analysis) and implementation documented and disseminated?
 Document the process for knowledge sharing.
 Have you prepared and posted a summary of your project gender analysis results and
gender indicators (one page) in the organization’s Gender Library?

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 CHAPTER THIRTEEN PROFESSIONALISM IN PROJECT PLANNING AND
MANAGEMENT: A FOUNDATION FOR QUALITY PROJECT RESULTS
A paper presented at the 21st Project Management Conference organized by Institution for Professional
Engineers in Uganda 2016

Stephen Kyakulumbye

Abstract
Project managers are on demand all over the world. Their demand is not limited to a specific
sector or workplace as most modern organisations pursue their strategies through the
implementation of projects. The need for project managers can be found in fields such as
business, IT, construction, academic institutions, government, banking sector among others with
paramount importance in the engineering sector. In a contemporary economy, organisations of
all types practice project management. Most members appointed as project team members start
their careers in project management as novices struggling to find their way in a total new
dispensation of how work is done in a project environment. The need for an orientation of
project members to the project management education and methodologies, processes, culture
and professional conduct may have the ability to enhance productivity and quality of project
results. Within the generic organizational set up there are three various levels (i.e.) the strategic
level, organizational/tactical level and operational level. Management of portfolios, programmes
and projects at these levels is different which call for a need for project staff to adhere to
professionalism. At each level and each life cycle phase, there are varying professional project
management competencies that need to be exhibited if we are to deliver results that adhere to
acceptable quality. By acceptable quality, a client as a primary stakeholder has quality
dimensions in terms of relevance, efficiency, effectiveness and sustainability which are globally
accepted quality standards. This synthesis desk review and practical case study based paper
elucidates and exemplifies the globally acceptable project quality standards, how they are
applicable to the project results chain, highlights and discusses professional hi-cups in some
case study projects and offers five priority dimensions for enhancing professionalism during
project planning and management in order to deliver acceptable positive results.

Key words: Professionalism, results chain, results, quality, quality standards.

Introduction
Project managers are in demand all over the world. The demand for project managers is not limited
to a specific sector or workplace as most modern organisations pursue their strategies through the
implementation of projects. The need for project managers can be found in fields such as Business,
IT, Construction, Engineering, and Banking sector. In the new economy, organisations of all types
practice project management. Most members appointed as project team members start their careers
in project management as novices struggling to find their way in a total new dispensation of how
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work is done. The need for an orientation of project members to the project management education
and methodologies, processes, culture and professional conduct will enhance productivity and
quality of projects.

Within the organizational set up there are three various levels (i.e.) the strategic level,
organizational/tactical level and operational level. Management of portfolios, programmes and
projects at these levels is different which call for a need for project staff to adhere to
professionalism. At each level and each life cycle phase, there is varying professional project
management competencies that need to be exhibited if we are to deliver results that adhere to
acceptable quality. By acceptable quality, a client as a primary stakeholder has quality dimensions
in terms of relevance, efficiency, effectiveness and sustainability; these are globally accepted
quality standards.

Objectives of the paper

The objectives of this paper are as follows:
1. To examine stakeholder quality dimensions in product and service projects
2. To undertake a critical reflection of how components of the result chain affect project quality.
3. To review cases and generate professional precursors to delivery of quality results.
4. To identify priority dimensions for adhering to professionalism for improving project results.

Stakeholder quality dimensions in product and service projects (UN Conceptualization); DAC
criteria, UEA Criteria.
Relevance: The extent to which the objectives of a project have been adapted to national,
organizational and stakeholder needs and are aligned with stakeholder priorities as well as
policies and strategies of their agenda.
Effectiveness: The degree of achievement of the outputs and the extent to which outputs have
contributed to the achievement of the programme outcomes (results).
Efficiency: A measure of how resources/inputs (funds, expertise, time, etc.) are converted into
results. Or the extent to which outputs and/or outcomes are achieved with the appropriate
amount of resources/inputs (funds, expertise, time, administrative costs, etc.).
Sustainability: The continuation of benefits from a development intervention after its termination.

Results chain
This is an internationally recognized “results chain” which assumes that improved input –level
results (for example, service delivery and resources) are necessary to achieve output –level
results. Output –level results, if well implemented, lead to outcome –level results, increased
behavioral change. Outcome –level results ultimately lead to impact –level results hence
improved quality for those affected. It is at this point that we have a counterfactual.

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Adopted from MIT Impact evaluation lecture slide
Impact= the difference with what happened with the program-what would have happened
without the program
The developmental results of achieving
specific outcomes
IMPACTS
Manage towards
What we aim to change? achieving these
results
The medium-term results for specific
beneficiaries that are the consequence
of achieving specific outputs OUTCOMES
What we wish to achieve?

The final products, or goods and

services produced for delivery
OUTPUTS
What we produce or deliver?

The processes or actions that use a Plan, budget,

range of inputs to produce the desired implement and
outputs and ultimately outcomes ACTIVITIES monitor
What we do?

The resources that contribute to

the production and delivery of
outputs INPUTS
What we use to do the work?

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Focus
School construction, road construction, software development, water and sanitation project,
energy saving technology provided to a community, technology related projects, service based
projects, social projects etc. All these are at improvement of livelihood and quality of life.
For example from:

To:

Case Scenarios
Case One
Failure of structures in East Africa with focus on the causes of failures in the construction
phase using the following case scenarios:
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 1. BBJ building construction accident of 1st September, 2004 where 11 deaths and over 26
injuries were reported.
2. St. Peter’s Naalya Senior Secondary School building construction accident where 11
deaths and over 10 serious injuries were recorded.
3. 27 deaths and 86 serious injuries which occurred in 2006, when a church collapsed upon
the congregation during a service. This occurred in Kalerwe, a Kampala city suburb.
4. Collapse of a building that housed a shoe shop (Mini Price Bata) on Ben Kiwanuka Street
in the city centre of Kampala, in 2007, killing three people.
5. Collapse of a building on Lumumba Avenue in Kampala, in 2008, killing two people.
6. Bwebajja complex etc

Predictor Issues/ what goes or went wrong?

1. Poor materials and workmanship, (2) design and construction errors, (3) absence of
professional supervision of site-works, (4) wrong implementation of construction methods,
(5) neglect of design approval procedures.
2. Secondary issues that are complicit to construction failures are:- attempts to severely
minimize construction cost, neglect of inspection and monitoring by local authorities,
influence peddling by proprietors.
3. Rigidity to harness ICT tools to enhance project management (presenter generated)

Case Two
Reasons behind the failure of (NUSAF) project phase one in Uganda: January 15,
2012 Available at https://okwirtonny2011.wordpress.com/2012/01/15/reasons-behind-the-
failure-of-nusaf-p
Northern Uganda Social Action Fund project phase I was criticized for not reaching the intended
beneficiaries as it went into the hands of less poor and more influential people such as
progressive farmers, teachers, village leaders, traders, headsmen and paraprofessionals
(Jorgensen, et al., 2006).

Analysis:
These were the most fluent informants as they knew how to initiate and write project proposals,
they were the people who decided and received the projects on behalf of the poor, it was their
concerns which emerged as the village’s priorities for development and their dominance and
authority in the groups forced other “poor members” to desert the subproject groups!
Although the community demands for subprojects were considered to be high, for instance by
October 2004, 18 districts had submitted proposal summaries of 3,131 desired projects though
not all were funded (Manor, 2007), this confirms NUSAF project demand driven approach.
However, some of these projects were even ghost projects (Uganda Impact Evaluation, 2008)
without members initiated by the political leaders at the local levels, district officials and some

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NUSAF facilitators who wanted to benefit more from the project (Jorgensen et al.,2006), and
other people were members of more than one subproject groups.
Professionalism during project programming and stakeholder management (kick-backs etc)
Outcome: Projects ended up benefiting wrong type of vulnerable people at the expense of the
intended beneficiaries as some of the people who are not vulnerable also registered under this
category. Project manager’s professionalism!
There is perhaps some evidence that NUSAF project has help in some districts, for instance,
Soroti district in north eastern Uganda was named the best performing district in the NUSAF
project phase one (Kavuma, 2010). The district received 8.6 billion shillings (around $ 5million)
from NUSAF project and 114 boreholes were delivered, 165 teachers accommodations were
built, 87 classroom blocks were constructed, 6453 heifers were given to farmers, a 50 kilometer
stretch of road, 93 breeding bulls , 123 ox-ploughs, 121 sewing machines and 412 modern
beehives among others were given to the community (Kavuma, 2010). Professionalism during
project management can yield positive results!

However:
Jorgensen et al., 2006 report reveals: most of the classrooms and teachers houses did not survive
rain for more than two years and were destroyed, most of the laboratories built in secondary
schools were incomplete and most of them have been turned into students dormitories for
accommodation, the animals which were distributed needed the farmers to keep them for more
four years before serving the purpose they were distributed for and some were even sick and
ended up dying. More than half of the boreholes supplied were constructed near the homes of
district leaders and ruling political party representatives at the local levels (Uganda Impact
Evaluation, 2008), and one evaluator eye witness notes, “the chairperson local council five
representative for Bala sub county in Kole district had fenced the borehole on his land and yet it
was provided by NUSAF in 2007”, meaning that the local people could not access the borehole
anymore. Furthermore, most of the project beneficiaries were the less poor people since most of
the “poor and local people” were either kicked off technically that is, they did not know how to
write project proposal or forcefully by other members in the group and to make it worse some
poor people’s names were used in the ghost projects. Professionalism during stakeholder
management can yield negative unintended results!

Case Three
Why some projects in Karamoja fail to work
http://www.monitor.co.ug/artsculture/Reviews/Why-some-projects-in-Karamoja-fail-to-work/-
/691232/2131354/-/145oyqh/-/index.html

Karamoja Museum has failed to take off a year after it was opened in Moroto District. Analysts
attribute such hiccups to minimal community involvement in decision making. File photo

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Professionalism during project design and programming: project stakeholder involvement and
management delivers irrelevant results!

Case Four
Failed Rural ICT Projects Eat up $10 million in Uganda

A cyber café
Districts are grappling with maintenance challenges and a number of portals are turning into
white elephants. Photo file

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Professionalism during project planning and execution: lack project sustainability mechanisms
incorporated!

Case Five
World Bank Cancels Funding for Road Construction Projects in Uganda

The World Bank has announced that it was suspending its support for all road construction
projects in Uganda amid sexual assault claims. The Bank has also cited environmental issues as
part of the reason for cancelling financial support for roads in the country. A report by NGO Joy
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for Children dubbed the impact of the World Bank funded Kamwenge, published last year
revealed increased rates of secondary school dropouts because of pregnancy as a result of alleged
sexual abuse by employees of the construction company.
Outcome: Unintended negative results from the would be wonderful interventions. Homes,
health and livelihoods are put at a state of steady deterioration. “The tragedy that has come to
this village,” One of the village people reacted. Professionalism during project execution;
project team management; a sustainable tomorrow etc!

Case Six
ERP projects, however, have a well-deserved reputation for high rates of failure. The U.S. Air
Force finally canceled the remnants of the Expeditionary Combat Support System (ECSS)
program after about eight years and $1 billion dollars invested. The challenges and risks
associated with deploying large integrated projects are not in any way limited to government
programs—the high failure rates have spanned most industries.
For instance:
Local Government Information Communication System (LoGICS) was developed under the
Local Government Development Program (LGDP I) and is comprised of three integrated parts,
namely:
1. Monitoring and Evaluation Sub-system;
2. Compliance Inspection Sub-system;
3. Computerized Software Sub-system, which enables the data generated from the M&E
sub-system and CI subsystem to be entered, verified, analysed, stored and disseminated
to the various stakeholders. LoGICS is a multi sectoral information system covering all
sectors in a Local Government including: Education, Health, Water, Roads, Prisons,
Police, Production, Planning, Finance and Administration, Council, Social Services.
Professionalism in project scope management and project integration management and
project cycle management!

Case Seven (Presenter scenario)

A million dollar demised premise that has failed due to absence of structural plans. This has
resulted into the project being unutilized and therefore sunk cost. Non evident project
conceptualization and design results into failure for project modification

The Way Forward/Recommendations

a) Priority one: Trainings and professional forums from an education perspective
Constant professional forums and tailored trainings for project managers and project staff
Capacity deficits in the Africa’s construction industry

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Source: Arinaitwe and Ekolu (MUK n.d)

b) Priority two: Adherence to standards/ethical conduct (PMI)

To be ethical, we need to be committed to doing what is right and honorable. We need to set
high standards for ourselves and aspire to meet these standards in all aspects of our lives—at
work, at home, and in service to our profession. Preaching morality is easy but justifying it is
difficult (Mwakali and Irumba, 2207).

Responsibility
Responsibility: Inspirational Standards
It is our duty to take ownership for the decisions we make or fail to make, the actions we take or
fail to take, and the consequences that result.
As practitioners:
We make decisions and take actions based on the best interests of society, public safety,
and the environment.
We accept only those assignments that are consistent with our background, experience,
skills, and qualifications.

Comment: Where developmental or stretch assignments are being considered, we ensure that key
stakeholders receive timely and complete information regarding the gaps in our qualifications so
that they may make informed decisions regarding our suitability for a particular assignment. In
the case of a contracting arrangement, we only bid on work that our organization is qualified to
perform and we assign only qualified individuals to perform the work.

We fulfill the commitments that we undertake – we do what we say we will do. We set
limits and exclusions (scope, time, cost and quality).
When we make errors or omissions, we take ownership and make corrections promptly.
When we discover errors or omissions caused by others, we communicate them to the
appropriate body as soon they are discovered. We accept accountability for any issues
resulting from our errors or omissions and any resulting consequences.
We protect proprietary or confidential information that has been entrusted to us.

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As practitioners and representatives of our profession, we do not condone or assist others in
engaging in illegal behavior. We report any illegal or unethical conduct. Reporting is not easy
and we recognize that it may have negative consequences. Since recent corporate scandals,
many organizations have adopted policies to protect employees who reveal the truth about
illegal or unethical activities (whistle blowing policies). Some governments have also adopted
legislation to protect employees who come forward with the truth.

Respect
Respect is our duty to show a high regard for ourselves, others, and the resources entrusted to us.
Resources entrusted to us may include people, money, reputation, the safety of others, and
natural or environmental resources.
An environment of respect engenders trust, confidence, and performance excellence by fostering
mutual cooperation—an environment where diverse perspectives and views are encouraged and
valued.

Fairness
Fairness is our duty to make decisions and act impartially and objectively. Our conduct must be
free from competing self interest, prejudice, and favoritism.

Honesty
Honesty is our duty to understand the truth and act in a truthful manner both in our
communications and in our conduct.
c) Priority three: Adoption of culture of ICTs in engineering works from an IS perspective
for planning, design, execution management (information sharing, dissemination, real
time reporting etc.

Use automated tools/computer based tools (like Ms Project or Open Project) to enhance our project
performance competencies in the contemporary project management/ place ICT somewhere. In this
regard, the ability of ICTs in improving the completion time of tasks and operations, enhancing
collaboration level, facilitating accessibility and exchange of information has been proved in other
industries (Stewart and Mohamed, 2003). The use of ICTs improves coordination processes and
collaboration between firms participating in a construction project (Nitithamyong and Skibniewski,
2004). One can find many studies confirming the positive impact of utilising ICTs in construction
industry with an improving effect on costs, scheduling and quality of construction projects in
developed countries (Griffis et al., 1995, Thomas et al., 2001, & Yang, 2004). On the other hand,
improving the information exchange and communications in projects by adopting ICTs in
construction projects has been confirmed by other studies (Adriaanse et al., 2010).

Priority four: Professional project stakeholder management strategies

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Focus is placed at this project knowledge area because projects and programmes are delivered
for and on behalf of people. They own a stake in whatever we do as project professionals.
Therefore effective project stakeholder management is critical to the evaluation of what we
deliver as being of quality. Initially, we need to identify their needs, support, impact, power and
influence in our development interventions.
Two major strategies
Two basic approaches
1. Buffering: how to protect the project from stakeholder influence/power
2. Bridging: How to cooperate and build interdependencies with key stakeholders
Actions used in buffering (power and influence)
▪ Physical barriers and security systems, protecting the project assets
▪ Signing agreements on matters decided upon
▪ Generating baseline information to guard against challenging the project success
▪ Setting up one group against the other to avoid joint action
▪ Dealing with the press cautiously/with care
Actions that can be used in bridging
▪ Regular meetings
▪ Consultations on major decisions
▪ Use of liaison officers/public relation officers
▪ Networking/collaboration and partnering
▪ Daily briefs to key stakeholders
▪ Stakeholder participation in decision making throughout the whole project cycle. This is
likely to results in improved effectiveness, enhanced responsibility and improved
sustainability

Priority five: Conclusion (Biblical or Faith based)

As believers, what do we emulate from our various beliefs: Protestant, Catholic, Pentecostal,
Islam, Buddhist etc contextualized to Uganda?

Ugandan population 35,873,253.5 (July 2012 estimate) categorized by religion

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Source: CIA World Factbook demographic statistics, 2012 as accessed in 2016 at
https://en.wikipedia.org/wiki/Demographics_of_Uganda

There is one way of looking at the difficult task of remaining within the well-known iron triangle
(time, budget, properties/scope/statement of work/requirement definition/specification of
requirement etc) is to perceive this as Biblical Concept of Sin. One definition of sin is a failure to
reach your goal or miss your mark (New Testament Greek Lexicon - King James Version, 2012).
When a hunter, using a bow and arrow fails to hit the heart of the lion, he is in danger of losing
his prey, leaving it hurt (A wounded Lion). So from that as PMs, we have to realize that as
human beings we have the tendency to fail in our endeavors, fail to meet the constraints set
before us, hurting team members with our attitude or even the project owner by not finishing the
project within given constraints. In terms of project management, this is called risk. It is like
trying to shoot with a bent arrow or a damaged rifle. Things can seriously backfire if managed
incorrectly. ][Let’s put professionalism, honesty, integrity and faith in our task execution by
setting our own SOPs compatible with client requirements! We shall deliver quality positive
results in line with the iron-triangle.

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Press, 2001.
2. Murray-Webster R and Thiry M, Gower Handbook of Project Management, 3rd Edition,
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6. Nitithamyong, P. & Skibniewski, M. J. 2004. Web-Based Construction Project
Management Systems: How To Make Them Successful? Automation In Construction, 13,
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7. Stewart, R. A. & Mohamed, S. 2003. Evaluating The Value It Adds To The Process Of
Project Information Management In Construction. Automation In Construction, 12, 407-417.
8. Griffis, F. H., Hogan, D. B. & Li, W. 1995. An Analysis Of The Impact Of Using Three
Dimensional Computer Models In The Management Of Construction. Construction Industry
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9. Adriaanse, A., Voordijk, H. & Dewulf, G. 2010. The Use Of Interorganisational ICT In
United States Construction Projects. Automation In Construction, 19, 73-83.
10. Hosseini, M.R., Chileshe, N., Zuo, J. and Baroudi, B. (2012) ‘Approaches for implementing
ICT technologies within construction industry’, Australasian Journal of Construction
Economics and Building, Conference Series, 1 (2) 1-12

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 SUMMARY OF THE BOOK
Project managers are on demand all over the
world. The demand for project managers is
not limited to a specific sector or workplace
as most modern organisations pursue their
strategies through the implementation of
projects. The need for project managers can
be found in fields such as Business, IT,
Construction, Academic institutions,
Government, Banking sector among others
with paramount importance in the
Engineering sector. In a contemporary
economy, organisations of all types practice
project management. Most members
appointed as project team members start their
careers in project management as novices
struggling to find their way in a total new dispensation of how work is done in a project
environment. The need for an orientation of project members to the project management education
and methodologies, processes, culture and professional conduct may have the ability to enhance
productivity and quality of project results. Within the generic organizational set up there are three
various levels (i.e.) the strategic level, organizational/tactical level and operational level.
Management of portfolios, programmes and projects at these levels is different which call for a
need for project staff to adhere to professionalism. At each level and each life cycle phase, there are
varying professional project management competencies that need to be exhibited if we are to
deliver results that adhere to acceptable quality. By acceptable quality, a client as a primary
stakeholder has quality dimensions in terms of relevance, efficiency, effectiveness and
sustainability which are globally accepted quality standards.

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 ABOUT THE CHIEF EDITOR AND LEAD AUTHOR OF THIS BOOK
Stephen is Certified Senior Project Manager IAPM, Professional Member of the Project Management
Association of South Africa and a Founder Member of the Association of Project Managers, Uganda. He
is a National Research Foundation lecturer at Uganda Christian University (UCU) and project
management visiting consultant at Uganda Management Institute (UMI). He has held various capacities at
Uganda Christian University among which he was the research coordinator at the Faculty of Business and
Administration at Uganda Christian University and also in charge of project community outreach
programmes. As a project management expert, Stephen has carried out research and made presentations in
various local and international conferences. The most recent was where he was awarded a certificate of
distinction for presenting a paper and successfully chairing a project based academic conference during
the 21st Century Academic Conference held at Havard University, in Massachusetts in the United States
of America.

Stephen is on the international editorial board of the International Journal of Innovation and
Entrepreneurship of the 21st Century Academic Forum based in Boston 21 Apex Drive, Bozeman, and
MT 59718 in the USA. Stephen is also on the international review team of the Journal of Economics and
International Business Management JEIBM based in London in the United Kingdom, India and the
United States of America.

Stephen has of recent also presented a duo paper with Professor Mary Ssonko to the project evaluators of
Uganda at Uganda Technology and Management University (UTAMU) entitled, “Methodological
Processes and Considerations for Gender Based Violence Project Evaluation: Enhancement of Capacity
for Evaluation in Uganda.” This workshop was under “The Evaluation Capacity Development Project-
Strengthening Government and Civil Society in Uganda” funded by German Corporation and GIZ. In
addition, he was a keynote speaker at Rotary International Mukono District on the topic Project
Management-Management of Change.

As a way of improving the business and project performance, Stephen has conducted training for
organizations in Uganda and beyond. He was the project management team expert for a gender
mainstreaming consultancy in Trade Projects for Trade Mark East Africa (Uganda, Kenya, Tanzania and
Rwanda); an M/E expert for ACTION AID Uganda, Ministry of Health, World Health Organization and
Uganda Protestant Medical Bureau among others. He has conducted project based training for other
organizations like World Wide Fund, Crown Beverages Ltd, Pride Micro Finance, NARO Uganda,
Rwenzori Bottling Company Limited and Development Initiative International among others. He holds a
Master of Management Studies (Project Planning and Management) equated to a Master of Commerce
Project Management by South African Qualifications Framework, a PGD Project Planning and
Management, BSc. Computer Science with Education and is a PhD Scholar in Project Informatics at
University of Pretoria South Africa. Stephen has acquired hands on experience of over ten year’s
professional experience working in the project sector and development. These are in the areas of
planning, implementing, coordination and evaluation of projects to contribute to project quality.

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APPENDIX
Project Management Process Group and Knowledge Area Mapping according to PMI BOK

Project Management Process Groups

Knowledge Initiating Planning Process Executing Monitoring Closing
Areas Process Group Process and Controlling Process
Group Group Process Group Group
1. Project 1.1 1.2 Develop 1.3 Direct and 1.4 Monitor and 1.6 Close
Integration Develop Project Manage Project Control Project Project
Management Project Management Work Work or Phase
Charter Plan 1.5 Perform
Integrated
Change
Control
2. Project Scope 2.1 Plan Scope 2.5 Validate
Management Management Scope
2.2 Collect 2.6 Control
Requirements Scope
2.3 Define Scope
2.4 Create WBS
3. Project Time 3.1 Plan 3.7 Control
Management Schedule Schedule
Management
3.2 Define
Activities
3.3 Sequence
Activities
3.4 Estimate
Activity
Resources
3.5 Estimate
Activity
Durations
3.6 Develop
Schedule
4. Project Cost 4.1 Plan Cost 4.4 Control Costs
Management Management
4.2 Estimate
Costs
4.3 Determine
Budget
5. Project 5.1 Plan Quality 5.2 Perform 5.3 Control
Quality Management Quality Quality
Management Assurance
6. Project 6.1 Plan Human 6.2 Acquire
Human Resource Project
Resource Management Team
Management 6.3 Develop
Project
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 Team
6.4 Manage
Project
Team
7. Project 7.1 Plan 7.2 Manage 7.3 Control
Communication Communications Communications Communications
s Management
Management
8. Project Risk 8.1 Plan Risk 8.6 Control Risks
Management Management
8.2 Identify
Risks
8.3 Perform
Qualitative Risk
Analysis
8.4 Perform
Quantitative Risk
Analysis
8.5 Plan Risk
Responses
9. Project 9.1 Plan 9.2 Conduct 9.3 Control 9.4 Close
Procurement Procurement Procurements Procurements Procureme
Management Management nts
10. Project 10.1 10.2 Plan 10.3 Manage 10.4 Control
Stakeholder Identify Stakeholder Stakeholder Stakeholder
Management Stakeholder Management Engagement Engagement
s
Source: PMBOK, 5TH EDITION

Each of the project management knowledge area within a project management process group has
inputs, tools and techniques and outputs. The links among the processes in the Project
Management Process Groups are often iterative in nature. For example, the Planning Process
Group provides the Executing Process Group with a documented project management plan early
in the project and then updates the project management plan if changes occur as the project
progresses.

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