3.

Project cycle management

 Project cycle refers to the various stages through which

project planning proceeds from the inception to

implementation.

 In other words, it is the life cycle through which a project

advances from infancy to maturity.

 The main features of this cycle are information gathering,

analysis, and decision-making.

1
 Cont.

 Throughout the project cycle, the primary preoccupation of

the analysis is to consider alternatives, evaluate them and to
make decisions on which of them should be advanced to the
next stage.
 There are different approaches to describe the project cycle.
 The two main approaches to project cycle are: the World
Bank and United Nations Industrial Development
Organizations (UNIDO) Approaches .

2
 Project Life Cycle – World Bank Approach

According to World Bank, project cycle involves five

stages; namely,
 project identification,

 preparation,

 appraisal,

 implementation, and

 evaluation.

3
Figure 1: The Project Cycle

4
Project Identification:

The first stage in the project cycle is to find potential projects.

Identification of promising investment opportunities requires

imagination, sensitivity to environmental changes, and a realistic

assessment of what the firm can do.

This phase may take two forms.

If the project is largely a private venture in a widely market economy

context the initiating entity will define the concept, expectation and

objectives of the project.

5
 Cont.

On the other hand, the project idea can also emanate from

government agencies in the context of government development

plans.

In the latter case sectoral information (i.e. the direct and indirect

demands of sectors) is an important source of identification.

In market economy context, anticipated demand for the projects

output is important.

6
 Cont.

In addition, assessment of appropriate technology, scale

of the project, timing of the project etc. are important.

All types of specialists’ input are required at this stage.

This stage is also called pre-feasibility studies.

In this stage, projects that can contribute towards

achieving the specified objectives are identified (listed).

7
 Cont.

 In general, there are four major sources from which ideas or

suggestions for project may come:

 Project ideas from technical specialists;

 Project ideas from local leaders;

 Project ideas from entrepreneurs;

 Project ideas from government policy and plans.

 In addition, project ideas might emanate from:

 New experiments from previous project failures;

8
 Cont.

 New experiments from expansion;

 Replication of successful project tested elsewhere;

 New experiments from shortage or excess of resources;

 External threat;

 Opportunities;

 Internal strengths and/ or weakness and Other sources.

Note that sometimes at identification stage there could be a number of

alternatives that could be examined.

9
 Cont.

 The identification of project ideas is based on several aspects of

development.
 Need- a need assessment survey may show the need for intervention
 Market demand- domestic or overseas
 Resource availability- opportunity to make available resources more
profitable
 Technology- to make use of available technology
 Natural calamity- intervention against natural calamity such as flood or
drought
 Political considerations
10
 Cont.

Possible alternative projects must be adequately assessed.

Project identification is also concerned with elimination of

inferior alternatives (project) from the identified ones.

The output of this stage is projects that is prima-facie (at

first sight or based on first impression) promising and

further work is justified.

11
 Project Preparation:

 Once project ideas have been identified the process of project

preparation starts.
 Preparation stage also called feasibility study is concerned
with the detailed study of all aspects of the projects.

12
 Project Appraisal:

Appraisal is the comprehensive and systematic assessment of all aspects of the

proposed project.

The project is reviewed (appraised) to confirm that it accords with the broad

objectives.

It is to ensure that the project represents a high priority use of the firm’s

resources.

What aspect of the project should be appraised?

The project is appraised from different perspectives: technical, commercial

(market), financial, economic and ecological.

13
 Project Implementation:

It is the stage which the conclusions are reached and decisions made

are put in to action.

What activities should be done during project implementation?

Some of the major activities in project implementation phase

include: Detailed designs and specifications are drawn; Tender

documents are prepared; Bid are invited and evaluated; Orders for

inputs are placed; Contract are signed; workers are hired, trained and

put to work ; and Materials are moved to sites etc.

14
 Project Monitoring and Evaluation:

 Implementation phase is followed by supervision and follow up.

 Monitoring is a continuous process that aims primarily to provide project
management and give the main stakeholders early indications of
progress or lack of progress towards achieving project objectives.
 The execution of the project should be supervised closely and progress
report should be made regularly to ensure that the implementation is
progressing without deviating from the envisaged path and the
objectives of the project have been reached.

15
 Cont.

 Project evaluation is a monitoring (checking) activity in order to:

 Find out how things are going;

 Encourage the project team;

 Check that promised resources are in fact working on project tasks;

 Rapidly learn about concerns and difficulties;

 Show concern for the success of the project; and

 Take corrective action if things go wrong.

16
 Project Life Cycle – UNIDO Approach

 According to UNIDO , project cycle involves three major

phases.

 These are:

 pre-investment phase,

 investment phase (implementation phase), and

 operation phase (operation and ex-post evaluation).

17
 1. Pre-investment phase

 The pre-investment phase includes four major activities;

namely:
 project identification,
 pre-selection,
 project preparation, and

 appraisal.

18
 Project Identification/opportunity study:

 Opportunity study is the main instrument used to quantify the

parameters, information and data required to develop a project
idea in to a proposal.
 What aspects of the project should be analyzed in opportunity
study?
 In opportunity study, the firm is required to analyze the following:
 Availability of resources;

 Future demand for goods, increasing population and increasing

purchasing power;
19
 Cont.

 Import and export substitutions;

 Environmental impact;

 Success of similar projects elsewhere;

 Possible inter-linkage with other industries;
 Expansion through backward linkages (Backward
integration)and forward linkages(Forward integration);

20
 Cont.

 Industrial policies of the government;

 General investment climate of the country;

 Export potentials; and

 Availability and cost of production.

  Generally, opportunity studies can be categorized in to area

studies, industry studies, and resource based studies.

21
 Pre-selection/Pre-feasibility study:

This phase involves the analysis of the following factors:

 Examination (investigation) of all possible project alternatives;

 Ensure that the detailed analysis of the project is justified;

 In-depth investigation of critical areas of the project; and

 examine the stability of the environmental situation at the

location site.

22
 Preparation (feasibility study):

The projects justified by pre-feasibility study enter this

phase for detailed analysis based on investigated

efforts than on guess-estimated.

This stage provides all data, define, and critically

examine the commercial, technical, financial,

economic and environmental aspects for each project.

23
 Cont.

The components of feasibility studies are:

1. Project Background and history:

 Name and address of the promoter;

 Project background;

 Project objectives;

 Outline of the proposed basic project strategies;

 Project location; and

 Economic and industrial policies supporting the project;

24
 Cont.

2. Summary of market analysis and marketing concepts

3. Raw materials and supplies

4. Location, site, and environment

5. Engineering and technology

6. Organization and management

7. Implementation planning and budgeting

8. Financial analysis and investment appraisal

25
 Project Appraisal:

After feasibility studies are completed, the projects should be

presented to the appraising parties.

The appraisal of project is based on the objectives set earlier,

the expected risk, cost, and gain.

The quality of feasibility study makes easier the appraisal work.

If the objective of the appraiser is return on investment, the

project is appraised on this base.

26
 2. Investment Phase

also called implementation phase, includes the following activities:

 Establishing legal, financial and organizational basis;

 Technology acquisition and transfer;

 Detailed engineering, design, contracting, tending and negotiations;

 Acquisition of land, construction works, and installations;

 Pre-production marketing, securing of supplies, and setting up administration;

 Recruitment, training, and placement of workers; and

 Plant commissioning and start up.

27
 3. Operating phase

Once activities listed under investment phase are completed, the

project will go into actual operation.

The operation involves producing the envisaged goods, and sale to the

target market, or renders the envisaged service to the target market.

The project also requires evaluation, which deals with the review of

whether the project is being implemented as per expectation.

The necessary corrective actions should also be taken if deviation is

identified.

28
 Gender in project cycle

Gender mainstreaming should be reflected in all project-related

practices (e.g. decision-making, planning and resource allocation),

and promoted throughout the project cycle as a crosscutting theme.

The IFAD Gender Action Plan 2003-2006 provides a clear and

systematic gender checklist of the main questions and indicators for

the four phases of the project cycle, i.e. needs assessment,

planning/formulation, implementation and monitoring and

evaluation (M&E).

29
 Cont.

Taking gender differences into account in project planning and

analysis: To ensure gender-sensitive design and planning, IFAD

includes the following key gender concerns in the design and

formulation of its projects:

 Context–specific, gender issues and the related gender strategy to

pursue gender equality and women’s empowerment;

 Gender-sensitive targeting, for instance aimed at woman-headed

households; and

30
 Cont.

Operational measures, to ensure gender-equitable

participation in and benefit from project activities, for

example:

(i) set proportion of women participants in planned activities

(ii) empowerment of women in decision-making through

women’s groups and women's associations; and

(iii) involvement of women and women’s organizations.

31
 Cont.

The integration of these gender concerns into projects

requires the following preconditions and support:

 Gender analysis of the project area to identify context-specific key

gender issues and an appropriate gender strategy;

 Integration of gender-specific objectives within the project goals and

objectives;

 Tools and methodologies to address the identified gender issues;

and

32
 Cont.

 Awareness-raising for partners, management and field teams

on gender and the need for greater gender sensitivity.

 When formulating the project, they must consider both external

and internal constraints and opportunities for gender equality.

 External: what opportunities and problems could affect women’s

and men’s equitable participation, access to decision-making and

benefit from the project?

33
 Cont.

Internal: a dialogue within and between different

institutional stakeholders must assess to what extent

project’s implementation institution and its key partners are

willing, able and equipped to work with gender.

 Intervention: what are the appropriate project components

and activities to address the constraints and opportunities

for gender equality?

34
 The Logical Framework Approach (LFA)

LFA: Developed in response to poor planning and monitoring of

Development projects.
 The first logical framework developed for USAID at the end of
1960’s.
 GTZ was responsible for the development of ZOPP or
Zielorientierte Projekt Planung.
 ORAD made a significant contribution in 1990 with their
handbook.
35
 LFA - A participative tool

Mahatma Ghandi’s motto: “something done

for me but without me is something done
against me” still holds true, particularly in
development planning

36
 Cont.

LFA: is a systematic planning procedure for complete project

cycle management.
 It is a problem solving approach which takes into account the
views of all stakeholders.
 It also agrees on the criteria for project success and lists the
major assumptions.

37
 Cont.

Features of LFA: Stakeholder involvement, needs-based

approach, logical intervention approach, framework for

assessing relevance, feasibility and sustainability, results-

oriented – not activity driven, logically sets objectives and

their causal relationships, shows whether objectives have been

achieved: Indicators (for M&E), describes external factors that

influence the project’s success: assumptions and risks.

38
 Cont.

 Main steps in LFA:

 Stakeholder Analysis,
 SWOT Analysis,

 Problem Tree Analysis,

 Objective Tree Analysis,
 Logical Framework Matrix and

 Monitoring and Evaluation.

39
 1. Stakeholder Analysis

 Stakeholder is any individuals, group or organization,

community, with an interest in the outcome of a
program/project.
 Purpose in Stakeholder analysis: To identify:

 The needs and interest of stakeholders

 The organizations, groups that should be encouraged to
participate in different stages of the project;

40
 Cont.

 Potential risks that could put at risk program;

 Opportunities in implementing a program;

 To assess the performance and capacity of the

participating units, divisions of organization.

 Each participating unit has to undertake SWOT analysis.

41
 Table 1. Stakeholder Analysis Matrix

Stakeholders Key Importance to Influence on Participation

Interests Project project

Primary

Secondary

42
 2. SWOT Analysis

SWOT analysis is a tool for institutional appraisal and a brainstorming exercise

in which the representatives of the organization participate fully.

SWOT stands for:

 Strengths- the positive internal attributes of the organisation;

 Weaknesses- the negative internal attributes of the organisation;

 Opportunities- external factors which could improve the organisation’s

prospects;

 Threats- external factors which could undermine the organisation’s prospects

43
 3. Log frame Matrix (LFM)

 LFM: is 4x4 matrix

 Ensures clear statement of objectives (distinction between
purpose and objectives)
 Introduces indicators of progress
 Focuses attention on the assumptions and risks involved

44
 Key Features of the Logical Frame Matrix (LFM)

The LFM is a participatory Planning, Monitoring & Evaluation

tool whose power depends on the degree to which it

incorporates the full range of views of intended beneficiaries

and others who have a stake in the program design.

It is a tool for summarizing the key features of a program and is

best used to help program designers and stakeholders.

45
 Cont.

Objectively Verifiable Indicators: Cost-effective and stated

independently from other levels.

Indicators should make clear how the target group will benefit from

the realization of outputs.

Indicators should be specific in terms of:

 Quality (what?)

 Quantity (how much?)

 Time (when, how long?)

46
 Cont.

 Target Group (who?)

 Place (where?)
 The LFM is used to present information about project
objectives, outputs and activities in a systematic and logical
way.
 The basic LFM contains 16 cells organized into 4 columns and
4 rows, as indicated in the table:

47
 Table 2. The Logical Framework Matrix
Objectives & Intervention Indicators Means of verification Assumptions
activities Logic
Goal
(Impact)

Purpose/ Outcome
Outputs
Activities

48
 Cont.
Goal The broad development impact to which the project contributes –
at a national or sector level- well-being of individuals, families or
communities
Statement Wording: “To contribute to…”
Objective(s)/ The development outcome at the end of the project – more
Outcome(s) specifically the expected benefits to the target group(s)
Statement Wording: “Increased, improved, etc.”

Outputs/ The direct/tangible results (goods &services) that the project

Deliverables delivers, and which are largely under project management control
Statement Wording: “delivered/produced/conducted, etc.”

Activities The tasks (work program) that need to be carried out to deliver the
planned results
Statement Wording: “Prepare, design, construct, research, etc.”

49
 COMPLETE MATRIX OF THE LOGICAL FRAMEWORK
Summary Objectively verifiable Verification Important
indicators methods assumption
Goal The agricultural
household standards
The income of agricultural
households have grown by
Country statistics of
the World Bank
of income and 5% compared to those
nutrition in Western from 1996
Africa grow
Purpose The farmers use new
maize varieties in
10 farmer groups used new
varieties in 12/1998
Final project report A system on
multiplying with
Western African in seeds of selected
regions that are varieities is
infested with striga implemented
Results 1. Corn variety
resistant to striga
Identification of 2 hibrid
varieties and 2 open
Research reports,
publications
Agricultural inputs
(tools, seeds) can be
pollination varieties in found at local
12/1998 markets
Activities 1. To obtian hibrid
lines from IITA
 18 people/months
researchers
Documentation of
the planning of the
Research method is
appropriate for
2. To implement  24 technical research proposal developing a
tests people/months technology that
3. Measure harvest  24 million CFA
prevents losses due
to striga
4. Analyze results

50
51
 4. Problem Tree Analysis

 Purpose: to identify major problems and their main causal

relationships.
 Output: problem tree with cause and effects

 Steps in Undertaking Problem Tree

1. Identify the major problems that the project will address.

State problems in negative manner.
2. Group problems by similarity of concerns.

52
 Cont.

3. Develop the problem tree:

a. Select a focal problem from the list and relate other

problems to the focal problem.

b. If the problem is a cause of the focal problem it is placed

below the focal problem

c. If the problem is an effect of the focal problem is goes

above

53
Figure 2. Problem Tree

54
 5. Analysis of Objectives

 Transforming the problem tree into an objectives

tree by restating the problems as objectives.
 Problem statement converted in to positive
statements.
 Top of the tree is the end that is desired.
 Lower levels are the means to achieving the end.

55
 Cont.

Problem Tree Objective Tree

(Negatives) (Positives)
EFFECT END

MEANS
CAUSE

56
 Cont.

Strategy Analysis (i): 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 represent an

alternative strategy for the future project.

The project objectives set the framework for the strategy of

the project.

57
 Cont.

 Strategy Analysis (ii): 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 the strategy in transforming the means
into results.
4. Consistence with development policies
5. Sustainability of the project
6. Assumptions and risks

58
 Cont.

Assumptions (i): Describe necessary internal and external

conditions in order to ensure that the activities will produce results.

 Assumptions are risks, which can jeopardize the success of the project.

 Are worded positively, i.e. they describe circumstances required to achieve

certain objectives

Assumptions (ii): Should be relevant and probable.

 If an assumption is not important or almost certain, do not include; If an

assumption is unlikely to occur, killer assumption – abandon the project.

59
 Cont.

 Assumptions (iii): Example of Assumptions for the Goal and

Purpose: Political – stability of government staff; Economic
sustainability; and etc.
 Assumptions (iv): Example of Assumptions: Adequate funds
materials; skilled people– training needs; approvals &
contracts – legal, administrative; participation of stakeholders.

60
 Cont.

Indicators: Indicators measure to verify to what extent the results are achieved.

 Specify how the achievement of an objective can be verified or demonstrated.

 Provide a basis for Monitoring and Evaluation.

 3 Dimensions of Indicators: Quantity, Quality and Time

Means of Verification: Tools or means to obtain the information required by the

indicators include: project documents, field verification, ad-hoc studies and like.

61
 6. Monitoring and Evaluation

 Based on the logical framework strengthens, accountability

and transparency provides information for effective
management and helps determine what works are well and
what requires improvement.

62
Table 3. The Logical Framework Terminology

63
 Gender and the logical framework

For planning activities, the logframe should be shared,

as far as possible, with partners to encourage ownership
and allow active participation by women and men in the
process of planning and producing a logframe.

The final plan is the result of the negotiation process

and should fully reflect the principles and priorities of
each party.

64
 Cont.

 Some gender-related questions could be asked during the

development of logical frameworks, as below:

 Could partners express their vision concerning gender and

development, and equality between men and women?

 Did women and men contribute equally to designing the

program project goals and objectives?

65
 Cont.

 Could women and men, in both the target group and the implementation

team, express their points of view on existing problems and ways to address

them?

 Are indicators– qualitative and quantitative– at all levels disaggregated by

gender where relevant?

 Did the project contribute to improving living standards for women and men?

The project intervention area should be in human and social aspects

which could benefit women more.

66
 Purposes of Monitoring and Evaluation

Monitoring (i): is the continuous process of collecting, processing and

assessing information about the:

– Project implementation

– Project progress

– Project impact and effects

– Project environment

Continuous function that aims to provide early indications of

progress or lack thereof in the achievement of results

67
 Cont.

Monitoring (ii): Assumes the validity of the existing plan

 Takes place at project level
 Is the responsibility of the project management
 Is based on the indicators defined in the logical framework

Monitoring Responsibility: Project Management, Activities, Output

indicators, Early outcome indicators, Project Target Group, Outcome
indicators and Impact indicators

68
 Cont.

Evaluation: Time-bound exercise to assess the relevance,

performance and success of on-going or completed projects.

Questions the validity of existing planning related to the

impact of a project, Opens the mind for strategic adjustments,

Evaluation Quality Criteria, Relevance (overall), Efficiency

(activities, outputs), Effectiveness (outputs, outcome), Impact

(outcome, impact) and Sustainability (outcome, impact).

69