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BUSINESS STRATEGIES LIMITED

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Title: Slide 1 Author: BSL Last modified by: meeting Created Date: 11/16/2006 9:20:05 PM Document presentation format: On-screen Show Company: Business Strategies Ltd. – PowerPoint PPT presentation

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Title: BUSINESS STRATEGIES LIMITED


1
BUSINESS STRATEGIES LIMITED
  • LEADERS 2006 WORKSHOP
  • DESIGNING AND IMPLEMENTING PROJECTS
  • LOGICAL FRAMEWORK
  • MONITORING AND EVALUATION

2
THE PROJECT CYCLE
  • DEFINITION OF A PROJECT
  • A non-routine, non-repetitive one-off
    undertaking, normally with discrete time,
    financial and technical performance goals.
  • A set of activities which can be separately
    planned, analyzed, financed and managed to
    achieve a specific objective, or set of
    objectives, within a given time, resource budget,
    and existing environmental constraints.
  • A project has a specific beginning point and end
    point (in time) and must be terminated when it is
    clear that the objectives are not achievable or
    no longer desirable.

3
THE PROJECT CYCLE
  • Projects incorporate a wide range of activities
  • Project to yield services rather than physical
    output, e.g. family planning, education, improved
    administrative efficiency.
  • Designed to create output, i.e.
  • (a) sold directly, e,g. agriculture produce,
    clothes, bicycles or
  • (b) given free or below cost, e.g. hospital
    services, education.

4
THE PROJECT CYCLE
  • Planned for a specific geographic area, e.g. an
    irrigation project, a drain, a bridge, etc
  • Developed as a combination of related
    sub-projects in a number of localities e.g. rural
    development projects,
  • Designed for a specific beneficiary group, e.g.
    low income housing projects.
  • .

5
Eg. OF PROJECTS
  • Damage Mitigation for Waste Water and Sewage
    Systems in Montego Bay (Module 2)
  • Building a Disaster Management Resilient Tobago
    Community (Module 3)
  • Improving National Disaster Capacity in Guyana
    (Module 5)
  • Improving Crisis and Emergency Risk
    Communications in Suriname (Module 6)
  • Prepare the Outlines of a Draft Strategic Plan
    for Emergency Evacuation in Ochio Rios (Module 7)

6
THE PROJECT CYCLE
  • Figure 1STAGES OF THE PROJECT CYCLE. (Next
    Slide)
  • CHART 1 illustrates the various stages of the
    project cycle beginning with the
    pre-identification and ending with an impact
    evaluation.

7
SOCIO-ECONOMIC DATA
1
2
3
PRE-IDENTIFICATION --IDEA GENERATION --RESEARCH,
SURVEYS --DATA RETRIEVAL --OPPORTUNITY STUDIES
PROJECT IDENTIFICATION --PREPARATION OF PROJECT
PROFILE --APPRAISAL IN PRINCIPLE
PROJECT PREPARATION --FEASIBILITY
STUDY --PREPARATION OF PROJECT REPORT
NATIONAL AND SECTORAL PLANS AND STRATEGIES
NATURAL RESOURCE DATA
7
6
4
IMPACT EVALUATION
PROJECT IMPLEMENTATION
PROJECT APPRAISAL AND FINAL APPROVAL
PROGRESS MONITORING
PROGAMMING AND BUDGETING
5
8
CHART I THE STAGES OF THE PROJECT
CYCLE (ADAPTED FROM BRUCE, C.M.F., (1980)
8
Phase I PRE-IDENTIFICATION
  • Pre-Identification Where do projects originate?
  • The pre-identification phase refers essentially
    to the less specific research studies and surveys
    that should form part of any system of planning.
  • It involves synthesizing, from national and
    sectoral strategies and policies, project ideas
    which seem worthy of more in-depth investigation.

9
PHASE I PRE-IDENTIFICATION
  • Pre-identification is thus an on-going process
    involving reviewing, inventorying, integrating
    and analysis of strategies, policies natural
    resource data and socio-economic information.

10
Project Identification
  • Assuming that there is a reasonable database and
    development strategies and policies have been
    formulated in sufficient detail to be
    operationally useful - how do we go about
    identifying projects?
  • Two complementary approaches are suggested

11
Project Identification
  • (i) Find out what people want and see how these
    ideas can be fitted into the schema of available
    resources, strategies and policies, taking
    account of physical, human, institutional and
    financial constraints and
  • (ii) Examine existing situations in respect of
    demand and supply of goods and services and look
    at past trends and likely future trends.

12
Project Identification Screening Project Ideas
  • Reasons for Rejection of a Project
  • 1) Inappropriate technology in relation to the
    projects objectives or to local capabilities
  • 2) Excessive risk
  • 3) Inadequate demand for the proposed output or
    lack of comparative advantage
  • 4) Inadequate raw materials or skills
  • 5) Overambitious design in relation to available
    financial resources

13
Project Screening
  • 6)Excessive economic, social, or environmental
    costs relative to the expected benefits
  • 7)Lack of commitment of the intended
    beneficiaries or lack of political support from
    key authorities

14
Project Identification Pre-feasibility
  • Before time and resources are spent there is need
    to develop some feel for whether a project is
    likely to be feasible.
  • A pre-feasibility analysis is necessary to
    serve as a screening process
  • This pre-feasibility analysis should result in a
    Project Profile
  • The Project Profile defines (Pay Special
    Attention)
  • the objectives of the project,
  • identifies project output, inputs and constraints
    and
  • makes a rough assessment of project costs and
    benefits.
  • The profile facilitates approval in principle
    by the relevant authority and serves as a basis
    for detailed feasibility and project preparation.

15
Pre-feasibility study
  • Should be carried out in just enough detail to
    determine the broad justification of the Project
    idea
  • The possible design alternatives to be considered
    further
  • Reasons for the choices made or proposed

16
Pre-feasibility study
  • To permit a decision on the merits of the project
    idea, the study should briefly examine
  • 1) The size and nature of the demand for the
    product or service, and the intended or expected
    beneficiary groups or target areas

17
Pre-feasibility Study
  • 2) The alternative technical solutions or package
    available, with corresponding estimates of
    outputs, including identification of technologies
    already located in local use and their potential
    for improvement
  • 3) The availability of the principal physical and
    human resources and skills that will be required

18
Pre-feasibility Study
  • 4) The magnitude of the costs both for the
    initial investment and for continued operation
  • 5) The magnitude of the financial and economic
    rates of return (where applicable)
  • 6) Any institutional constraints or policy issues
    likely to have an important impact on the
    proposed project

19
The Project Identification Test
  • A project may be deemed to be ready for detailed
    preparation when
  • 1) Major options and alternatives have been
    identified and some initial choices have been
    made.
  • 2) The principal institutional and policy issues
    affecting project outcome have been identified
    and appear amenable to solution.

20
The Identification Test
  • 3) The project options selected are likely to be
    justified, given rough estimates of the expected
    costs and benefits
  • 4) It appears that the project will have adequate
    support both from the political authorities and
    from the intended beneficiaries

21
The Identification Test
  • 5) The prospects are reasonable that adequate
    funding will be available from domestic and if
    needed, external sources
  • 6) A specific preparation program has been
    established.

22
Phase 2 Project Preparation
  • Purpose and Scope
  • The purpose of the feasibility study is to 1)
    provide decision-makers with the basis for
    deciding whether to proceed with the project,
    and,
  • 2) for choosing the most desirable option or
    alternative among the few remaining.

23
Phase 2 Project Preparation
  • Purpose and Scope
  • The purpose of the feasibility study is to 1)
    provide decision-makers with the basis for
    deciding whether to proceed with the project,
    and,
  • 2) for choosing the most desirable option or
    alternative among the few remaining.

24
Purpose and Scope Questions
  • 1) Does the project conform with the
    ortganizations/countrys development objectives
    and priorities?
  • 2) Is the project technically sound, and is it
    the best of the available technical alternatives?

25
Purpose and Scope Questions
  • 4) Is the project administratively workable?
  • 5) Is there adequate demand for the projects
    output?
  • 6) Is the project economically justified and
    financially viable?

26
Purpose and scope Questions
  • 7) Is the project compatible with the customs and
    traditions of the beneficiaries?
  • 8) Is the project environmentally sound?

27
Project Preparation
  • Of primary importance in project preparation is a
    clear definition of project objectives.
  • These objectives must be specific (as opposed to
    broad statements of intention) if their
    achievements are to be measured at the end of the
    project and if project preparation is to proceed
    in a logical fashion.

28
Project Preparation Objectives
  • Objectives should be SMART
  • Specific
  • Measurable
  • Achievable
  • Reasonable
  • Time bound

29
Objectives
  • Defining Objectives
  • 1) An objective is the aim or goal of a project,
    and describes the desired state which the project
    is expected to achieve/contribute to.
  • 2) it provides the reason for undertaking the
    project

30
Objectives
  • A project will have at least two levels of
    objectives
  • 1) A development or higher level
  • 2) An immediate objective or objectives
  • 3) There may also be a transitional level, or
  • intermediate level which is necessary to attain,
    in order to progress from the intermediate to the
    development objective

31
Objectives
  • 1) The development objective will usually be at
    the sectoral or sub-sectoral level.
  • 2) The immediate objective provides the purpose
    of the project and in particular the goal that
    the management of the project will try to achieve.

32
Objectives
  • Development Objective
  • Ensure that
  • It provides adequate justification for the
    project
  • Its progress can be verified either
    quantitatively or qualitatively
  • It is single-purpose, or has multiple purposes
    which are compatible.

33
Objectives
  • Immediate Objectives/Project Objectives
  • An immediate objective should specify the changes
    or improvements that could be expected in the
    target group, region, or organization if the
    project is completed successfully and on time.
  • Immediate objectives are of most importance to
    the project designer

34
Objectives
  • In defining an immediate objective, ensure
  • It states the desired change and where this will
    take place
  • It specifies the magnitude of the change to be
    achieved
  • It indicates the time scale for the change
  • Its progress can be verified quantitatively
  • If it conflicts with another immediate objective,
    priorities are indicated

35
Objectives
  • The way in which the immediate objectives
    contributes to the development objective must be
    obvious.
  • It may be helpful to introduce an intermediate
    objective in order to clarify the logical
    progress and connection.

36
Project Preparation
  • Once these objectives are defined, the
    constraints to achieving them must be
    identified.
  • Some of these constraints are removable by the
    project itself while others are exogenous and
    can only be tackled on a global or national
    basis and not through individual projects.

37
Project Preparation Data Requirements
  • If a project shows merit, additional data would
    be required during project preparation
  • a) Detailed market studies
  • b) Geological or environmental studies
  • c) Investigation of local sources of raw material
  • d) Details of government regulations and policies

38
Data Requirements
  • f) Economic, social, or cultural characteristics
    of the people in the project area
  • g) Availability of technical and managerial
    skills
  • h) Existing or potential sources of local
    capacity for project preparation and
    implementation.

39
Project Preparation
  • Project feasibility involves five important
    aspects
  • Technical
  • Institutional
  • Financial,
  • Economic
  • Social.
  • The project preparation process consists of
    analyzing these five components and designing a
    feasible project. See Figure II

40
IMPLEMENTATION PLANNING --PLANNING --SCHEDULING --
CONTROL --SUPERVISION
DATA SOURCES --MARKET INFORMATION --NATURAL
RESOURCES --HUMAN RESOURCES --SOCIO-ECONOMIC STATI
STICS
NATIONAL PARAMETERS FOR COST-BENEFIT ANALYSIS
FINAL APPRAISAL
FINANCIAL, ECONOMIC AND SOCIAL COST- BENEFIT
ANALYSIS DCF, NVP, IRR RISK, SENSITIVITY
TECHNICAL DESIGN --PRODUCT MIX --TECHNOLOGY --LOCA
TION --SIZE SCALE --INPUTS OUTPUTS
PROJECTIONS OF COST AND BENEFITS CASH FLOW
INSTITUTIONAL ARRANGEMENTS --PROJECT
ORGANIZATION --MANAGEMENT --RELATIONSHIPS
PROJECT SPECIFICATION TECHNICAL DATA
FINANCING PLAN --FINANCE NEEDS --DEBT --EQUITY --S
ERVICES
CHART II FLOW CHART OF THE PROJECT PREPARATION
PROCESS ADAPTED FROM BRUCE, CMF, (1980)
41
Project Design Project Logic and the Log Frame
  • Project objectives are more readily achieved with
    a clear, precise and consistent project design
  • If the purpose and scope of the project are clear
    at the outset, this makes implementation,
    monitoring, and evaluation more straightforward.

42
Project Logic and the Logframe
  • Weaknesses in project formulation
  • 1) A project with no clear objective, or an
    objective that is far too ambitious given the
    available resources.
  • 2). A project designed with two or more
    objectives which actually conflict, or where
    priority is not assigned.
  • 3). A confusion between the different project
    elements, between objectives and outputs, outputs
    and activities and even inputs.
  • 4) Inadequate technical specification of
    objectives, outputs or inputs.

43
Project Logic
  • The Logframe provides a structure for specifying
    the components of a project and the logical
    linkages between a set of means and a set of ends
    in its larger framework

44
PROPJECT LOGIC
  • For a well formulated project the
  • 1) Objectives will be immediately relevant to the
    need
  • 2) They will be realistic and achievable

45
Project Logic
  • 3) The activities and outputs of the project will
    be only those that contribute directly to the
    achievement of the objectives.
  • 4) The project will have clearly defined limits.
    Its organizational structure, institutional
    setting and geographical boundaries will be
    clearly specified.

46
PROJECT LOGIC
  • 5).The project summary must be of value as a
    communication device, so that there is less risk
    of busy administrators finding their
    understanding of the project obscured
  • .

47
Project Logic
  • 6) For managers on the ground the summary clearly
    defines their primary task, serving as a model to
    compare actual implementation
  • 7) The project summary becomes an integral part
    of the whole project preparation, appraisal,
    monitoring, and evaluation process.

48
Project Logic
  • Preparation of the logframe also forces the
    project designer to identify systematically the
    risks inherent in the whole project.
  • The structure of the project summary leads easily
    to the identification and definition of
    performance measures for each stage of the
    hierarchy.
  • These should be time bound and either
    quantifiable or at least capable of being
    assessed.

49
Project Logic
  • The planner has to start thinking in terms of the
    logical hierarchy from the moment when the
    project begins to take shape.
  • Logical consistency is a characteristic of all
    good projects.

50
Project Logic
  • The essential elements of a project are
  • Objectives
  • Outputs
  • Activities
  • Inputs
  • Objectives have been discussed above.

51
Project Logic
  • Project outputs
  • Project outputs are the result of activities
    completed by the project with the use of inputs.
  • The outputs of a project need to be stated in
    such a way that
  • 1) their realization can be identified in terms
    of quantity, quality, time, and place.

52
Project Outputs
  • 2) As for objectives, a target is specified for
    the magnitude of output to be produced and a
    timeline for this
  • 3) It is clear if a certain output is a
    prerequisite for other outputs

53
PROJECT OUTPUTS
  • 4) All inputs necessary for achieving the
    immediate objectives are listed and all outputs
    clearly relate to the immediate objectives.
  • 5) They are feasible within the resources
    available

54
Project Outputs
  • SUMMARY
  • By definition outputs are separate from
    objectives
  • Their confusion is a common design error
  • Outputs are also commonly confused with activities

55
Work Breakdown Structure
  • A WBS is deliverable-oriented grouping of project
    components that organizes and defines the total
    scope of the project. (Slide 50)
  • Work not in the WBS is outside the scope of the
    project
  • The WBS is often used to develop or confirm a
    common understanding of project scope.

56
Work Breakdown Structure
  • 4 broad steps
  • Planning
  • Executing
  • Controlling
  • Closing

57
Work Breakdown Structure
  • A WBS from a previous project can be used for as
    a template for a new project.
  • An important aspect of the WBS is Decomposition
  • Decomposition involves subdividing the major
    project deliverables or sub deliverables into
    smaller, more manageable components until the
    deliverables are defined in sufficient detail to
    support development of project activities

58
Work Breakdown Structure
  • Decomposition involves the following major steps
  • 1) Identify the major deliverables of the
    project, including project management
  • The major deliverables should always be defined
    in terms of how the project will actually be
    organized

59
Work Breakdown structure
  • 2) Decide if adequate cost and duration estimates
    can be developed at the level of detail for each
    deliverable
  • 3) Identify constituent components of the
    deliverable.
  • These should be described in terms of tangible,
    verifiable results to facilitate performance
    measurement.

60
Work Breakdown Structure
  • 4) Verify the correctness of the decomposition.
  • Are the lower level items both necessary and
    sufficient for completion of the decomposed item?
  • Is each item clearly and completely defined?
  • Can each item be appropriately scheduled?
    Budgeted?
  • Assigned to a specific organizational unit who
    will accept responsibility for satisfactory
    completion of the item?

61
The Project Environment
  • The IF..Then logic of the project hierarchy also
    depends on external events or conditions.
  • Basic Premise The achievements and conditions
    specified for each level in the means-ends chain
    ought to be not only necessary, but also
    sufficient to cause the higher level to be
    attained.

62
The Project Environment
  • Risks
  • The linkages underlying the logic of a project
    are subject to a variety of risks
  • 1) inaccuracy of information
  • 2) the uncertainty of the project environment
  • 3) and/or the un-predictable reactions of the
    target group

63
The Project Environment
  • Risks
  • In the absence of definitive data, the project
    designer will have to make assumptions.
  • Each time an assumption is made, a risk that the
    assumption will not hold is introduced, thus
    compromising the performance of the project.

64
The Project Environment
  • Risks
  • In the formulation of a project there will be 4
    main types of risks
  • 1) Inherent Risks
  • 2) Universal Risks
  • 3) Internal Risks
  • 4) External Risks

65
The Project Environment
  • Risks
  • Universal Risks
  • Risk of war, rare extreme climatic events or
    other natural disasters.
  • They must be taken account of in project design
    and may mean the rejection of the project or at
    least its delay until the situation improves.

66
The Project Environment
  • Internal Risks
  • Risks relating to the inputs and activities under
    the control of management, e.g.
  • 1) Delays in the supply of equipment
  • 2) Delays in the assignment of project staff
  • 3) Delays in the supply of materials
  • 4) Delay in the completion of an activity, eg.
    Completion of survey work due to unavailability
    of key staff.

67
The Project Environment
  • External Risks
  • Factors upon which the success of the project
    depends, but which are largely outside the
    control of project management. This is the
    important group of risks that may need to be
    shown in the Logframe.
  • Some factors become risks when agencies external
    to the project management are responsible for
    them.

68
The Project Environment
  • External Risks
  • Introduction of external risk identification in
    the earliest stages of project identification and
    formulation will rapidly screen out unfeasible
    project concepts.

69
The Project Environment
  • Risks
  • The project environment column in the logframe is
    of value for two reasons
  • To prompt iterative improvement of the project
    design
  • To ensure that any remaining risks are carefully
    monitored

70
The Project Environment
  • Risks
  • Having identified a risk during preparation of
    the logframe
  • 1) Reject the project, if the risk is sufficient
    to call into question the viability of the
    project and cannot be realistically removed or
    reduced through re-design

71
The Project Environment
  • 2) Lower or eliminate the risk through re-design
    or by adopting a completely different approach
  • 3) For risks that are acceptable at the time of
    project preparation, state them in the logframe
    and subsequent project documents and monitor them
    through the projects life.

72
The Project Environment
  • Risks
  • In summary, risks occur when
  • Key elements, actions or decisions, upon which
    project success depends, are subject to delay or
    do not materialize.
  • Risks should be identified during the project
    formulation process.

73
The Project Environment
  • Risks Their articulation
  • 1) leads to rejection of non-viable projects or
    redesign of the project to eliminate the risks
  • 2) Makes risks explicit and ensures they are
    monitored during implementation, and that
    complementary action by other agencies is
    forthcoming
  • 3)Facilitates the assessment of risk, helping
    judgment of the projects chances of success
    during final appraisal

74
Progress Monitoring
  • Good progress monitoring highlights any
  • divergences between budgeted and actual
    expenditure, and
  • shortfalls in the physical aspects of
    implementation
  • determines whether budgets or targets were
    realistic in the first place and
  • tries to find out the causes of slow progress
    with a view to effecting corrective action.

75
Impact Evaluation
  • The monitoring of financial and physical progress
    during implementation and operation of a project
    is not enough - progress may be good and on
    target, but the project may not be achieving the
    impact intended.
  • It is thus important to evaluate the impact of
    the project in terms of

76
Impact Evaluation
  1. whether the target beneficiaries are being
    reached
  2. whether the identified constraints have been or
    are being removed
  3. whether the output targets are being met
  4. if the objectives or targets are not being met,
    what lessons can be learnt to improve design of
    new projects
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