o je c t M a n a g e m e n t

A d va n c e d P r
)A P M (
Dr. Abdurahman Aliyi
Haramaya University
u s in e s s a n d E c o n o m ic s
College of B
le s o g m a il c o m : E m a il
obbo @ .
P h o n e : + 2 5 1 9 1 2 9 8 6 9 7 4

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 Chapter two

Project Identification

2
 Chapter Two
5

Project
Identification
 Chapter objectives:

 At the end of this c hapter, students can:

• identify feasible project ideas that can solve a certain problem

or exploit possible opportunities, and

• apply different tools in project idea identification and selection.

Contents of the chapter

• Sources of project ideas

• Steps in project identification and
selection
 Situation analysis
 Stakeholders analysis
 SWOT analysis
 Problem analysis
 Objective analysis
Project Life
Cycle

Project Identification (Idea

generation/initiation)

Evaluation/close-out Preparation/
planning

Monitoring and reporting Appraisal and Selection

Implementation Negotiation and Financing

Project Identification-meaning

 It involves the conceiving of ideas or intentions to set up a

project.

 These ideas are then transformed into a workable project.

 Project ideas are normally initiated by a perceived need
[PROBLEM or OPPORTUNITY] in an organization and
converted
into a formal project proposal.
Project Identification-
meaning

 The major focus at the project identification stage is:

– finding project ideas or identifying needs or demands for

projects.

 The activities carried out to generate ideas are generally:

– fact-finding sur vey, discussion with people, reviews of

available
secondary data or documents.
Time for Students Reflection on project idea
generation

 What do you think are the

sources for project ideas?
1.2. Sources of project ideas:

 The community, researchers, experts, local leaders,

policymakers,
entrepreneurs, donors, NGOs, planners, etc.

 Government policy priorities, unusual events, external threats,

unsatisfied
demands, under utilized natural resources, etc.

 The business or government development planning

document

 Needs of clients
 Individuals working in organizations, well informed technical
specialists

 Opportunity studies
Sources of project ideas

 By their very nature, opportunity studies are indicative rather than

detailed and hence are generally based on macro-level parameters and
rough estimates.

 Such studies may also be carried out in one of the following three
directions:
– a given geographical area (Area studies).

– a specific sub-sector of economy or industry, like MSEs,

agriculture,
food-processing, or power generation (Sub-sectorial studies).
– exploitation of renewable and non-renewable natural, agricultural, or
industrial produce like minerals, sugarcane, fishery, plants, and even
geothermal energy sources, etc. (Resource-based studies).
 Approaches to project identification

There are two major approaches to project identification :

(a) Top-down approach
(b) Bottom-up approach
Top-Down Approach

 Projects are identified based on demands from beyond the community.

 This may include directives from:

–international conventions (E.g., UN , Kyoto Protocol/climate change,

WTO, MDGs, Education-for-All and others)

– international institutions that have determined particular priorities and

thus projects

– national policies (policymakers) identifying projects that pertain to

party manifestos and/or national plans and directions.
 Advantages of Top-Down Approach

 It may be a rapid response to disasters like floods, war outbreak

because there is limited time and chance to consult the
beneficiaries.

 It can be effective in providing important services like education,

health, water, roads, etc.

 It can contribute to wider national or international objectives and

goals
Limitations of Top-Down
Approach

 It does not help in modifying strongly established ideas and

beliefs of people.

 It assumes external individuals know better than the

of the service.
beneficiaries

 The communities have little say in the planning process

approach devoid of human resource development.
rendering

 The community develops dependency syndrome on

assistance and does not exploit their own potential.
outside
 Bottom-Up Approach

 In this approach, the community/ beneficiaries are encouraged to

identify and plan the projects by themselves with or
without
outsiders.
 Example: Utilities (power, water, telecom services), health
centers,
schools, etc.
Advantages of Bottom-Up Approach

 Interveners accomplish more with limited resources since

tend to safeguard what they have formulated for themselves.
people

 Develops people’s capacity to identify problems and needs and

seek possible solutions to
them.
 Provides opportunities that educate people.

 Helps people to work as a team and develop a “WE” attitude –

which makes project progressive and sustainable.

 Resources are effectively managed; dependence is reduced;

equity increased; and initiative and accountability are
improved.
Limitations of Bottom-Up Approac
h
 Not always effective for projects that require urgency to
implement.

 Time-consuming and requires patience and tolerance.

 People sometimes dislike this approach because they do not want

to take responsibility for their actions.

 The priorities of communities may not fit with national or

international priorities that seek to have a broader impact.
Project Identification

 Involves needs assessment

- collecting, processing and analyzing data on
problems/needs of communities
 Review of secondary data
- Look at books, sur vey reports/research papers, publications,
media reports, internet etc.
 Collecting and analyzing primary
information
• Community mapping
Interviews
• Focus Group Discussions
(FGDs)
• Other methods
Activities (Steps) in Project identification and
initial screening:

 Situation analysis

 Stakeholders analysis

 SWOT analysis

 Problem analysis

 Objective analysis

 Alternative Tree Analysis or project

selection
a) Situation analysis

 This is about describing the problem or situation to

beaddressed by the project.

. This can be ‘problem based’ or ‘opportunity based’.

. Example:
 Is there any opportunity to establish flour at factory Haramaya?
 what are the prevalent ‘problems’ or ‘opportunity’ at HU?
 is there any opportunity to ser ve people with disability?
 is there any opportunity to establish a Cement Factory
(suitable soil) in Dire dawa?
 is there any opportunity to establish a sugar factory in
eastern Ethiopia?
B. Stakeholder Analysis
23

Stakeholder is any individual, group, organization,

or community with an interest in the outcome of a
program/project.

Key Question
Whose problems or opportunities are we analyzing?
Who will benefit or loose-out, and h ow, from
a
potential project intervention?
Stakeholder Analysis
24

Purpose: is to
identify:
. Needs and interest of stakeholders
. Organizations and groups that should be encouraged
to participate at different stages of the project

. Potential risks that could challenge program

. Foreseen opportunities in implementing a program
Power-interest grid for stakeholder analysis
What is it?
It is a technique used to categories stakeholders based on their power or influence and
interest in a project.

Before using the technique, we should identify all stakeholders involved in the project.
We identify stakeholders by looking at existing documentation, holding workshops,
creating ‘as is’ business process maps and generally talking to people within the business.

Why use a power-interest grid?

It allow to develop strategies to manage all stakeholders effectively.
To create a stakeholder communication plan.

Stakeholders with high power and high interest will want to be engaged with regularly,
whereas stakeholders with low power and low interest do not require regular and
detailed communication (however, this does not necessarily mean that they should be
ignored!).
How do you use a power-interest grid?
By creating a grid or quadrant.
It is important to place the stakeholder where they actually are and not where they (or
you) would like them to be.
Once we have placed the stakeholder within the grid, we can look at which category they
fall under and manage the stakeholder accordingly.
Stakeholder Analysis (3) Power/interest matrix/Grid

A B

High
Context
setter Key Players
Keep Regularly engage
Satisfied
POWER Consult

C D

Low Subject
The Crowd Keep
Minimal Informed
effort Maintain

Low LEVEL OF INTEREST High

Example: Stakeholder Power/Interest Grid for Rental Car Company’s
Project
 C. SWOT
Analysis

SWOT analysis is a tool for institutional appraisal and a

brainstorming exercise in which the representatives of the
organization participate fully.

Strengths

SWOT stands for: Weaknesses

Opportunities

Threats
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 SWOT analysis (2)
27
D. Problem Analysis
(1)
Problem Analysis usually represents the causes and effects of
existing
problems in the project area, in the form of a Problem Tree. It
clarifies the relationships among the identified problems.

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 Problem Analysis
(2)
Relationships of Problems with example
Simply connect causes and effects by directly
“Because”
EFFEC
T I am not motivated to work

I am not sure what My salary is low I get poor respect

to do in this work from the boss

I am lack of My My post is My poor We have

expertise/skills company not high communica different
is not yet tion to ways to
getting boss think
I am lack of
CAUSE profit
29 training
Problem Analysis (3)
30

Steps in Undertaking Problem Tree

1. Identify problems that the project will address. State problems
in negative manner.
2. Group problems by similarity of concerns.
3. Develop the problem tree:
a) Select a Core/Focal problem from the list and relate
other problems to the core/focal problem.
b) If the problem is a cause of the core problem, it is placed
below the core problem on the problem tree.
c) If the problem is an effect of the core problem it goes
above
Problem Analysis
(4)
 E. Objective Analysis
32

 This involves turning a problem tree into an objectives

tree
 Objective Analysis clarifies the means-ends
relationship
between the desirable situation that would be attained and the
solution for attaining it.
 This stage also requires an Objective Tree.
Objective Analysis (2)
33

How to Make the Objective Tree

Step 1: Reformulate all negative situation of the problem tree into positive
that are :
situations
• Desirable
• Realistically achievable
Step 2: Make sure that there is a means - ends (results) relationship (if this
is
implemented then this will be achieved)
The causes become the starting point for the objectives.
The effects become the results of the objectives.
Step 3: IF necessary:
• Revise statements
• Add new objectives if these seem to be relevant and necessary to achieve
the objective at the next higher level
• Delete objectives which do not see suitable or necessary
Objective Analysis (3)

Reformulating of
Problems?
to motivate employees enjoy their jobs

to improve work to improve the salary to improve the

related knowledge scale relationship with boss

to provide adequate to improve to aware the

skills/expertise to make the to facilitate communicati boss to
company employees on with boss understand
profitable promotion employees
to provide proper perspective
trainings
 Assignmen
t
Individual assignment
• Consider the Health sector in Ethiopia at present. Make a
brief situation and SWOT analysis and draw both the
problem and objective trees.
• Develop a problem and objective trees on financial literacy
among Haramaya district Youth
• Develop a problem and objective trees on digital literacy on
among Haramaya district Youth

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 F. Project Selection/ Analysis of
alternatives.
36

Project Selection is a process in which specific project

strategies
are selected from among the objectives and means raised in
objectives analysis, based upon selection criteria.
 Project Selection
(2)
37

How to select the project

1. Divide the objective tree into different clusters of
objectives
2. Name all clusters
3. Remove impossible one to ac hieve
4. Set criteria to make the final selection

Needs, Priority, Gender, Environment,

Difficulty, Budget, Risks, etc,,,,
 Analysis of alternatives

At this stage, there is a need to assess the alternative courses of action

proposed by each objective tree in terms of effectiveness, costs,
feasibility, impact on priority groups, risks involved or other criteria.

Criteria can be:

 Tec
hnical
 Financial
 Economic
 Institutional
 Social/distributional
 Environmental
 Project Selection
39

Example of the Problem Tree ( case of bus traffic accidents) to the

Objective
Tree
Incidence of bus accidents is high

Drivers do not Many technical Road condition is

follow rules problems of buses too bad

Drivers are not Many old Bus is maintained poorly

trained buses

Regular Mechanics Insufficient

New buses tech. is not tech. is equipment
has not been done inadequate at workshop
purchased
 Project Selection-
Cont’d
40

Incidence of bus accidents is high

Drivers do not Many technical Road condition is

follow rules problems of buses too bad

Drivers are not Many old Bus is maintained poorly

trained buses

Regular Mechanics Insufficient

New buses tech. is not tech. is equipment
has not been done inadequate at workshop
purchased
Project Selection

Objective tree

Incidence of bus accidents is

lowered

Driver follows rules Fewer technical Better road

troubles infrastructure

Bus drivers trained Fewer old Bus is maintained adequately

buses

Regular Mechanics Sufficient

New buses tech. check tech. is equipment
purchased done improved provided
Project Selection-
Cont’d
42

Clustered objectives

Incidence of bus accidents is lowered Road Improvement

Approach

Driver follows rules Fewer technical Better road

troubles infrastructure

Bus drivers trained Fewer old Bus is maintained adequately

buses

Driver Training Regular Mechanics Sufficient

Approach New buses tech. check tech. is equipment
purchased done improved provided
Bus Maintenance
Approach
 Preliminary screening
43

 Once some project ideas have been put forward, the next step will be to
select one or more of them as a potentially viable.
 This requires a quick preliminary screening by experienced
professionals.
 At this stage, the screening criteria are rough
 During this stage, the analysts should eliminate project proposals that
are:
. Tec hnically unsound &
.risky
Projects that have no market potential for their outputs
. Have inadequate supply of inputs
. Very costly in relation to benefits
. Assume over ambitious sales and profitability
 Group Assignment (2-groups)
44

 Ta ke the Ethio-Somlai-Oromia conflict situation and conduct

a conflict management research project.
I. Identify potential causes,
II. Identify core effects (nation-wide and community-
specific).
III. Generate possible solutions (pre-occurrence solutions and post-
occurrence
IV.
solutions)
Suggest that such should never occur in Ethiopia
again.
Note: Be honest to yourselves and fully independent as much as possible
(unpartisan,
non-ethnic and unbiased)
ere is the end for chapter two! But …

To see more about this subject…you can take any Project Management book

.Thanks for attention