Chapter Four: Project Planning

The Chapter will focus on:

• Project Planning: concepts and questions
• Logical framework Analysis
• Project Cycle
• Project Process Groups
• Project Phases
• Work breakdown structure (WBS) and work package
• Define Activities
• Tasks, Summary Tasks, and Milestone Tasks
• Sequence Activities
• Task Dependencies
• Precedence diagramming method and Arrow diagramming method
• Project Schedule network diagram
•
 Definition
• Planning is looking into how, why and when scarce resources are
going to be properly allocated and utilized to get the desired outputs.

• Project planning is a key to the development of any economy and it

is very vital to ignite the spark of development.

• It also helps to use the scarce resources in efficient, effective and

result oriented manner.

• Project planning is used as a means of checking the viability of a

particular investment by the government or private firms.
 The Importance of Project Planning
Generally, there are four major reasons to project planning.

i) To increase the effectiveness and efficiency of the operation;

ii). To identify and work towards a common goal;

iii) To establish a means of project monitoring and control;

iV) Besides, project planning helps us to obtain answers to the

questions what, when, how, by whom in order to attain the
specified aims and objectives.
Planning Project

Three satages of Planning:

National Planning- TYDP, GTP

Sectoral Planning- ESDP, HSDP

Project Planning- Suger project, Dams, Roads,

Irrigation,..etc.
 Common Steps in Project Planning
Steps involved in proper project planning:
1. Aims and objectives: The actual aims / quotas / milestones to
be reached within a specified time, according to client
requirements.
2. Path (Strategy) to be followed and actions to be taken to reach
the aims and objectives.
3. Schedule showing when individual/group activities will start
and end.
4. Budget (expenses) involved in order to reach the specified
objectives.
5. Organizing and assigning specific people to a specific objective,
as well as the specific responsibilities for each task.
6. Policy and general guidance for decision making and individual
actions.
7. Detail strategy and plan to execute the actions.
8. Standards and determining quality for each action.
Limitations of a project
• The first problem is measurement problem. Identifying and
measuring the costs and benefits of a capital expenditure
proposal tends to be difficult.

• Another problem is the uncertainty issue. It is impossible to

predict exactly what will happen in future.

• The last issue relates to the temporal spread. The costs and
benefits of a capital expenditure decision are spread out over
a long period of time, usually 10 - 20 years for industrial
projects and 20-50 years for infrastructural projects.

• Such temporal spread creates some problems in estimating

discount rates and establishing equivalences.
 Types of Projects
• New, updating and expansion

• Market based, resource based

• Private, NGOs, and/or government

• Industrial, agricultural and service

 Approaches to Project Planning

• Top-bottom – Centralized
• Bottom- up – Grass root
• Participatory – Blended
 Logical Framework
The Logical Framework Matrix provides a summary of :
• Why a project is carried out
• What the project is expected to achieve
• How the project is going to achieve it
• Which external factors are crucial for its success
• Where to find the information required to assess the success of the project
• Which means are required
• How much the project will cost.
Advantages of the Logical Framework
• Problems are analysed systematically;

• The objectives are clearly formulated, logical and measurable;

• The risks and conditions for success of a project are taken into
account;

• There is an objective basis for monitoring and evaluation.

 The Logical Framework Approach

Analysis phase Planning phase

1. Problem analysis: identifying 4. Logframe: defining the project

stakeholders, their key problems, structure, testing its internal logic
constraints and opportunities, and formulating objectives in
determining cause and effect measurable terms, determining
relationships. means and cost.
2. Analysis of objectives: 5. Activity planning:
developing objectives from the determining the sequence and
identified problems, identifying the relation between the
the relationships between the activities, estimating their
means and the ends. duration , setting the main stages
in the process, assigning
3. Analysis of the strategy: responsibility.
identifying the different
strategies to achieve objectives, 6. Resources planning: from the
determining the major objectives activity schedule, developing the
(overall objectives and project input schedule and the budget.
purpose or specific objective).
 Project Cycle

• Project cycle is the different stages, phases, levels, steps, events

or sequences that a project follows.
• There are several models of project cycle but the most important
ones are:
• Traditional approach
• Process approach
• The European Union project cycle
• The Asian development bank project cycle
• The Integrated planning & management project cycle
• The UNIDO project cycle model.
 Project Cycle…

• The first two are the models of the World Bank.

• The most popular model is the traditional version of the

WB developed in 1970 with four stages and in 1978
transformed to 5 levels and known as Baum Project
Cycle Model.
 Project Cycle (Warren Baum)

Identificatio
n

Evaluation
Preparation
Interactio
n

Implementatio
n Appraisal
 Project Cycle…
Identification

Post-evaluation Pre-feasibility

Implementation Feasibility

Appraisal
 Project Identification
 1st stage to find potential projects. It starts from idea
production
 Sources could be:
• Technical specialists
• Local, regional or national government organizations (eg.
investment authority)
• Review or post-evaluation of past projects
• Plans of different parties (state, corporate)
• Development banks
• Entrepreneurs and
• Bright idea or beyond the ordinal, imagination or IQ
 Bases for Identification
 Felt or pressing need
 Demand and supply (domestic & over seas)
 Resource availability
 Technology availability
 Natural calamity
 Political consideration – eg. to attract FDI
 Project Preparation

• Projects that survive the early stage of successful identification need to be

prepared and analyzed before money is allocated to them.

 Critical element of project preparation is: Identifying and comparing

technical and institutional alternatives for achieving the project’s

objectives.

 Preparation requires feasibility study until satisfactory project is

selected.
It involves generally two steps:
• Pre-feasibility studies
• Feasibility studies
 Pre-feasibility study
• It is a preliminary assessment that formulate the way for
launching the full assessment of feasibility study.

 This phase intended to assess:

• Whether the project is prima-face worthwhile to undertake.

 To identify which aspect requires detail investigation.

• We need to assess all aspects of projects (technical, social.)

 We estimate the financial and economic costs and benefits.

 If it is found worth or viable we have to go to the next step.
Pre-feasibility study…cont
• Some of the main components examined during the pre-
feasibility study include:
• Availability of adequate market;

• Project growth potential;

• Investment costs, operational cost and distribution costs;

• Demand and supply factors; and

• Social and environmental considerations.

 Feasibility Study
• The major difference between the pre-feasibility and
feasibility studies is the amount of depth.

• If the preliminary screening suggests that the project is

prima facie worthwhile, a detailed analysis of the
marketing, technical, financial, economic, and ecological
aspects is undertaken.

• Feasibility study provides a comprehensive review of all

aspects of the project (appraisal) and lays the foundation
for implementing the project and evaluating it when
completed.
• At this stage a team of specialists (scientists, engineers,
economists, sociologists) will need to work together.
• Feasibility - Detail study and report of the project contains:
√ Background of the project
√ Technical Study
√ Market Study
√ Organisation & Management
√ Financial Analysis
√ Economic Analysis
√ Environmental Analysis
√ Cross-cutting Analysis
√ Sensitivity Analysis
√ Risk Analysis
Project Appraisal
• Appraisal is a critical review of all aspects of a project.

• Select the most likely project out of several

alternative projects.
• Review the feasibility study critically;
• Strictly apply sensitivity and risk analysis;
• Compare with standards or establish standards;
• Apply appraisal criteria like target rate, and/or industrial
average; and
• Don’t overlook appraising designs, manpower &
marketing procedures (like 4Ps).
 Project Appraisal…
• If the appraisal team concludes that the project plan is
sound, the investment may proceed.
• But if the appraisal team finds serious flaws, it may be
necessary for the analyst to alter the project plan or to
develop a new plan altogether.

 There are two methods of measuring the project

worthiness.

1. Un-discounted measures

2. Discounted measures
 Implementation
• Project implementation is a phenomenon by which project
studies are translated into reality within their specified time
and budget.
• It covers the period starting from the time decision is made to
invest on the project up to the start of normal production.

• This stage could be divided into, among others, scheduling,

financing, negotiation and contracting, discussing,
constructor training, erection, installation and
commissioning.
 Follow-up, Monitoring & Evaluation

a) Follow-up:
• Follow-up is a method by which a project promoter keeps a
watch on the progress of project implementation.
• In follow-up of project implementation, there is no need to
hurry.
• What is required is diligence and caution, as well as to
know and analyze the sequential relationship of activities
and to identify the important and critical ones.
Monitoring and Evaluation
• The essential first steps of feedback are the processes
of monitoring and evaluation.
• Monitoring provides project management with
information about current and emerging project
problems and data to assess if the project objectives
remain valid.
• It is an ongoing activity used to reassess components
necessary to meet project objectives in the light of
experience as implementation proceeds.
 Primary questions of monitoring
• Are the right inputs being supplied/delivered at the right
time?
• Are the planned inputs producing the planned outputs?
• Are the outputs leading to the achievement of the planned
objectives?
• Is the policy environment consistent with the design
assumptions?
• Are the project objectives still valid?
 Evaluation

 Final phase of project cycle.

 It is an Assessment of project impact.

 Evaluate the success or failure of project whether it finish its

service or not.

 Give lesson for revising of a project.

 Compare actual performance with projected performance.

 It examine the project plan and what is really happened.

 PM Process Groups
• Project management can be viewed as a number of interlinked
processes.
• A process is a series of actions directed toward a particular result.
• The project management process groups include:
• Initiating processes
• Planning processes
• Executing processes
• Monitoring and controlling processes
• Closing processes
• Process groups can be applied to each phase of the project or to
the entire project.
 Initiating Processes
• Defining and authorizing the project
• Prepare project charter
• Register stakeholder
• Determine if the project is worth continuing, should be
redirected, or canceled.
• May take place at the beginning of each phase.
• Reexamine the business need for the project during every
phase of the project life cycle.
 Initiating Processes…
• A project charter is a short document used in project
planning to outline the key aims and benefits of a project.

• It's an at-a-glance guide to why a project is taking place.

• It's used both as a marketing tool, useful to get buy-in from

stakeholders, and a reference point to keep the project on
track.
 Planning Processes
• Scope management plan
• Define the work that needs to be done
• Schedule management plan
• Schedule activities related to the work
• Cost management plan
• Estimate cost for performing the work
• Quality management plan
• Product meets written specifications and intended use
• Procurement management plan
• Decide what resource to procure to accomplish the work
• Revise plan during each phase for changes
• Ensure that the project addresses organization needs
 Execution Processes
• Acquiring project team and resources to carry out various
plans and various tasks;

• Conduct procurement;

• Manage stakeholder expectations;

• Produce product, services, or results of the project or phase;

• Perform quality assurance.

 Monitoring and Controlling Processes

• Measure progress against all plans

• Take corrective actions when there is deviation

• Ensure that progress meet project objectives

• Ensure that the project meets stakeholders’ needs and quality standards

• Reporting performance to stakeholders

• Stakeholder can identify any necessary changes to keep project on track.

Planning, Execution & Control
 Closing Processes
• End the project efficiently;
• Archiving project files;
• Closing out contracts;
• Document lessons learned;
• Receiving formal acceptance of the delivered work from
customers.
 Process Group Output (outcomes)

Initiation Complete project charter, complete a business case (the need for the
project).

Planning Complete project scope, schedule, cost, quality, procurement plans

Work breakdown structure (WBS)
Revise plans, Ensure the plans address organization needs
Execution Take the actions necessary to complete the work described in planning
(e.g. deliver the actual work of the project, perform quality assurance.

Monitoring & Monitor deviations from the plans, take corrective actions to mach
controlling progress with the plans, measure progress toward project objectives,
ensure that deliverable are being completed and objectives are being
met in terms of scope, cost, time, and quality, complete performance
report
Closing Close contracts, Archive files, Gain acceptance for project results,
Report lessons learned.
 Work Breakdown Structure (WBS)

• The WBS represents a logical decomposition of the

work to be performed and focuses on how the
product, service, or result is naturally subdivided. It is
an outline of what work is to be performed.
 Deliverables and Milestones
• Deliverables
• Tangible, verifiable work products
• Reports, presentations, prototypes, etc.
• Milestones
• Significant events or achievements
• Acceptance of deliverables or phase completion
• Cruxes (proof of concepts)
• Quality control
• Keeps team focused
Advantages of Project Process Management
and Analysis
1. It coordinates efforts of various responsible organization.

2. It shows possible problems that may be encountered in the

implementation.
3. It encourages conscious and systematic assessment of
various alternatives.

4. It sets better criteria for monitoring and evaluation

5. It serves as source of data.

 Limitation of Project Process Management
1. Effective project mgt depends on quality of data used and
forecast made
2. There are always risk and uncertainty - no method that
can forecast it 100%.

• Risk - we can predict certain degree of precision

• Uncertainty - we can’t attach any probability

• To minimize risk and uncertainty we may use sensitivity

analysis.
 Limitation of project Process Management ….
3. It is difficult to fully address externalities or secondary
effects.
4. It is difficult to address all objectives of the country.

5. The greater difference between alternative projects the

more difficult to compare them. It requires further
analysis. E.g. Health project and irrigation project
Factors influencing the project
• Organizational System
• Organizational structure- Projectized, strong matrix, balanced
weak matrix and functional.
• Shared vision, values and mission
• Policies and procedures
• Work ethics and work hours
• Geographic distributions of resources and facilities
• Infrastructure
• Existing human resources
• Market condition
• Stakeholders risk management
• Political climate
• Communication channel
• Project MIS
Project Management Areas
PMBOK has identified the following ten areas
• Integration of the project mgt
• Project cost Mgt
• Project scope Mgt
• Project time Mgt
• Project quality Mgt
• Project human resource Mgt
• Project communication Mgt
• Project risk Mgt
• Project procurement Mgt
• Project stakeholders Mgt
 Strategic Success Factors in Project Management
• Project Mission - spell out clearly defined and agreed-upon
objectives in the project plan.
• Top Management Support - it is necessary for top
management to get behind the project at the outset, and
make clear to all personnel involved that they support
successful completion.
• Project’s Action Plan - detailed plan of the required steps
in the implementation process needs to be developed
including all resource requirements.
Case1: Ethiopia is best in project planning but implementation:
comment.