Chapter I
Chapter I
Chapter I
Chapter One
An Overview of Project
Planning Analysis
Contents
1. The project concept Pre-feasibility Study (Pre-selection/
Preliminary Screening)
Introduction: Why Project Planning?
Feasibility Study
Definition: What is a Project? Opportunity Studies
Uniqueness of Projects Appraisal of an investment Decision
2. The Importance of project planning Selection of projects/investment
alternatives/
3. The linkage between projects and
Implementation/Investment phase/
programs
The operational phase
4. The Project Cycle Ex-post evaluation/part of the
Identification (Opportunity studies) operational phase/
4
1. Introduction: Why Project Planning?
Before commencement of any project, the first thing that a project manager
need to do is project planning.
Carefully planned project takes into account necessary aspects of a project (e.g.
tasks, milestone, schedule, risks, communication, quality, etc.) and provide a plan
which project team can refer during execution.
Careful & detailed planning help us to reduces risk and in turn uncertainty in
any given project
It helps to make a provision for potential occurrences of uncertainties in
advance.
1. Introduction: Why Project Planning?
What is Project Planning?
A project plan expresses the objectives & requirements of the project in terms of:
Project Scope
Project Schedule
Resource Requirement
project cost estimation
Project Quality and
Project Risk Management
A project planning enables project manager to translate project requirement into
Work breakdown structure (WBS),
tasks list,
resource assignment and risk register, etc.
Elements of Project Planning
1. Project Scope Planning
Any project is expected to provide its stakeholders with certain outcome, which is
commonly termed as project deliverables.
It is the definition of what the project is expected to achieve and specify the budget of both
time and cost that needs to be provisioned to create the project deliverables.
It involves:
Create work break down structure (WBS)
breakdown/ decomposition of project work into distinct work items .
The project scope is generally constrained, with respect to Time, Quality& Resource
Elements of Project Planning
2. Delivery Schedule Planning
Involve identifying list of activities to be performed and create
delivery timeline
Milestones: a significant event in the project.
Generally, project sponsors would refer to list of milestones to trace project delivery in respect of timeline &
cost overrun.
Gantt chart: visual representation of project schedule
Five steps to create delivery schedule
Define Tasks/ Activities
Tasks/ Activities Sequencing
Resources Requirement Estimation
Task Durations Estimation
Schedule Development
Elements of Project Planning
3. Project Resources Planning
Human Resource Plan: we expect from human resource plan
Roles & responsibilities
Plan for materials and equipment required for successful completion of the project.
Elements of Project Planning
4. Project Cost Planning
Identify cost elements to be consumed during the project lifecycles
Monetary resources requirement (people, machinery, material, equipment, space, etc.)
Provisions for risk management (people, machinery, material, equipment, space, etc.)
we expect from Project Cost plan
Cost estimates per activity
2. The importance of project planning:
2. Path (strategy) to be followed and actions to be taken to reach the aims and objectives
3. Schedule.: This is a plan showing when individual /group/ activities will start and end.
6. Organizing and assigning specific people to specific objectives, as well as the Specific
responsibilities for each task.
7. Policy and general guidance for decision making and individual actions
Serving as instruments for the execution of development plans in order to develop the
national economy.
Cont …
Project Program
• Specific objective • General objectives
• Specific projects area • No specific project area
• Specific beneficiaries group • No specific beneficiaries group
• Clearly determined and allotted Fund • No clear and detailed financial resource
allocation
• Specific lifetime • No specific lifetime
Types of Projects
Type 1: civil engineering, construction, petrochemical, mining and quarrying
These types of projects:
incur special risks and problems of organization.
they may require massive capital investment, and they deserve (but do not always get)
rigorous management of progress, finance and quality.
operations are often hazardous so that health and safety
aspects demand special attention, particularly in heavy
work such as construction, tunneling and mining.
Cont…
Project Type 2: Manufacturing
Manufacturing projects result in the production of a piece of mechanical or electronic
equipment, a machine, ship, aircraft, land vehicle, or some other product or item of
specially designed hardware.
The finished product might be purpose-built for a single customer but internal research
and development projects for products to be sold in all market sectors also fall into this
manufacturing category.
Cont…
Project Type 3: IT projects and projects associated with management change
Every company, whatever its size, need this type of project at least once in its lifetime.
These are the projects that arise when companies engage in operations that involve the
management and coordination of activities to produce an end result that is not
identifiable principally as an item of hardware or construction. This may happen when:
companies relocate their headquarters,
restructure the organization,
develop and introduce a new computer system,
launch a marketing campaign,
produce a feasibility or other study report, and
prepare for a trade exhibition.
Cont..
Project Type 4: Pure scientific research projects
Pure scientific research projects (should not be confused with
research and development projects) are truly a special case. They occasionally result in
dramatically profitable discoveries.
They can consume vast amounts of money over many years, yet yield no practical or economic
result.
They carry the highest risk because they attempt to extend the
boundaries of current human knowledge.
The project objectives are usually difficult or impossible to define and there may be no
awareness of the possible outcome.
Therefore, pure research projects are not usually amenable to
the project management methods that can be applied to
industrial, manufacturing or management projects.
Section Two
33
Project cycle
The PC is the several stages of activities, through which projects run, and
which constitute a definite sequence.
PC provides: -
An analytical/logical framework & sequence within which data
can be compiled and analyzed,
Established investment priorities,
Alternatives considered and sector policy issues addressed.
PC imposes: -
A discipline on planners and decision makers,
Ensures the relevant problems and issues are taken into account and
Subjected to systematic analysis before decisions are reached and implemented
Project cycle
The cycles are closely linked to each other and follow a logical procession.
There are Different models of the project cycle- usually relate to the
organisational perspective of the authors.
The first model was drawn up by Baum (1970) for the World Bank.
A. Identification
B. Preparation and Analysis
C. Appraisal and Selection
D. Implementation
E. Evaluation, added later in 1978
UNIDO Approach (adopted by DEPSA in 1991
1. Identification(Opportunity studies):
It analyses :
Cont. …
Natural resources
Environmental impact
Diversification
Cont.
Opportunity studies could be general or specific.
General opportunity studies:
are seen in the form of products with potential for domestic manufacture.
“need-based” : make available to all people in an area of minimal amounts of certain basic
material requirements and services.
Well – informed technical specialists and local leaders are also common sources of projects.
2. Project preparation/Formulation
a. Pre – feasibility studies :
The project idea must be elaborated in a more detailed study.
Therefore, before assigning larger funds for such a study, a further assessment of the project
idea might be made in a pre-feasibility study.
The structure of a pre – feasibility study should be the same as that of a detailed feasibility
study.
b. Support/ Functional studies :
Cover aspects of an investment project, and are required as prerequisites for, or
in support of, pre – feasibility and feasibility studies, particularly large – scale
investment proposals.
In most cases a support study when undertaken either before or together with a
feasibility study, form an integral part of the latter and lessen its burden and
cost.
C. Feasibility Studies
A feasibility study should provide all data necessary for an investment decision.
3. Organizational analysis
4. Financial analysis
5. Economic analysis
7. Environmental analysis
4. Appraisal
a. Appraisal of an investment Decision
independent assessment of the project to identify the weaknesses and strengths
of the study that have a bearing on the decision to invest, and/or to finance the
project.
Independent qualified and experienced team of professionals are needed
Appraisal is the comprehensive and systematic assessment of all aspects of a
project study, addressing particularly issues like:
Specificity of objectives;
Clarity of problems;
Methodology: type and source and appropriateness of data collection techniques and analysis
techniques;
Project specific factors.
Cont.…
Two categories of appraisal criteria have been developed to judge the
worthwhile of a project.
non-discounting criteria
payback period
the accounting rate of return
discounting criteria
Which of the projects is the best option from the existing competing once?
2. Technology acquisition and transfer, including basic and detailed engineering, which
include:
Con. …
tender preparation (hence developing the terms of reference), tendering, tender analysis,
selection of a supplier,
negotiation and contracting;
Procurement of major technology for installation and other inputs necessary for
construction and installation of the system;
3. Engineering design;
4. Construction work
5. Installation and erection;
6. Pre-production marketing, including the securing of supplies and setting up
the administration of the firm
Con. …
7. Recruitment and training of personnel, and
8. Plant commissioning and start-up (Alternatively, this function may be
categorized in the operation phase).
ii. it provides a documented log of experience that is highly valuable in future decision
making;
The major questions that any economic analysis should address are:
1. What is the objective of the project?
2. What will happen if the project proceeds or not?
3. Is the project the best alternative?
4. Does the project have separable components?
5. Winners and losers: who enjoys the music and who pays the piper?
6. What is the project’s fiscal impact?
7. Is the project financially sustainable?
8. What is the project’s environmental impact?
9. Techniques for assessment: is the project worthwhile?
10.Is this a risky project?
12/12/2022 60