Project Analysis and
Evaluation
12/20/2023
Project analysis and evaluation
1
Chapter 1: Introduction to
Project
12/20/2023
Project analysis and evaluation
2
1.1Definition of a project
What is a “Project?”
 An endeavour in which human (or
machine), material and financial
resources are organised in a novel
way, to undertake a unique scope of
work, or given specification, within
constraints of cost and time, so as to
deliver beneficial change by
quantitative and qualitative
objectives”
What is a “Project?”
A series of activities and tasks that
have
– SCOPE
– TIME
– RESOURCES (Cost)
The Three Project
Constraints:
–SCOPE: What work will be done?
–TIME: How long should it take to
complete?
–RESOURCES: What resources
should be committed?
Project Triangle
SCOPE
TIME
RESOURCES
1.2 Characteristics/features of projects
• Project involves the investment of scarce resources
in expectation of future benefits
• Involves a single definable purpose or end-item
• Every project is unique
• Has a defined life span with a beginning and an end.
• A project is a temporary activity – doesn’t mean
short duration
• A project utilises skills and talents from multiple
organisations and professions
• A project has a risk
• Completed by a team of people – Team spirit
• Dynamic in nature
12/20/2023
Project analysis and evaluation
7
Examples of a project
• Developing a new product or service
• Effecting a change in the structure, staffing, or
style of an organization
• Developing or acquiring a new or modified
accounting information system
• Constructing a building or infrastructure
• Building a water system for a community
• Running a campaign for political office
12/20/2023
Project analysis and evaluation
8
1.3 Projects Vs Operations
Project
1. New process or product
2. One objective
3. One shot – limited life
4. More heterogeneous
5. Systems must be created
6. Performance, cost & time less
certain
7. Outside of line organization
8. Violates established practice
12/20/2023
Operations
1. Repeat process or product
2. Several objectives
3. On-going
4. People are homogeneous
5. Systems in place
6. Performance, cost, & time
known
7. Part of the line organization
8. Follows established practice
Project analysis and evaluation
9
1.3 Projects Vs Operations
Common Characteristics between operations and projects are as
follows:
• They are both performed by people
• They are constrained by limited resources
• Both are planned, executed, and controlled
Project
12/20/2023
Operations
Writing a term paper
Taking class notes
Developing a customer handling system
answering customer service calls
Building a new classroom
Cleaning classrooms
Developing a new accounting
information system
Daily entering sales receipts into the
accounting ledger
Project analysis and evaluation
10
1.4 Project Stakeholders
stakeholders
• Stakeholders are people, groups, or institutions, which are likely to
be affected by a proposed project (either negatively or positively),
or those which can affect the outcome of the project.
Primary and Secondary Stakeholders
• Primary stakeholders are the stakeholders who are directly
affected, either positively or negatively by the project
• The secondary stakeholders are stakeholders, which play some
intermediary role and may have an important effect on the project
outcome (E.g. Government & donors)
Target group(s)
• are those people or groups who will be immediately, positively
affected by the project at the purpose level.
Final beneficiaries
• are those who benefit from the project in the long term, at the
level of sector or community
12/20/2023
Project analysis and evaluation
11
1.5 Project Classification
Based on Ownership
• Private sector
• Public sector
• NGO’s
Based on the Sources of Finance
• Project with domestic financing
• Project with foreign financing
• Project with mixed financing
• Project with financial institutions
Based on the Forces Behind
• Demand driven/need driven
• Donor Driven
• Political Driven
Based on purpose
• New projects
• Expansion projects
• Updating projects
12/20/2023
Project analysis and evaluation
12
1.5 Project Classification
Based of Sector
• Industrial project
• Agricultural project
• Educational project
• Health project
Based on risk involved in the project
• High risks project
• Normal risks project
• Low risks project
Based on resources required by the projects
• Project with domestic resources
• Project with foreign resources
Based on speed required for execution of the project
• Normal project
• Crash project
• Disaster project
12/20/2023
Project analysis and evaluation
13
1.5 Project Classification
Based on time horizon
• Long term projects
• Medium term projects
• Short term projects
Based on locality
• Regional
• National
• International
Based on resource use
• Capital intensive projects
• Labor intensive projects
• Energy intensive projects
12/20/2023
Project analysis and evaluation
14
1.6 National development planning &
projects
Dev’t goal
Dev’t
Strategies
Dev’t plan
Project 1
12/20/2023
Project 2
Program 3
Program 2
Program 1
Project 3
Project 1
Project analysis and evaluation
Project 2
Project 1
Project 2
15
1.6 Development planning & projects
Development Goal/ objectives
• statement of intention or aspiration of a government to improve
the living conditions of its people
• It is a comprehensive statement which guides development.
• For example, growth, equity in income distribution, reduction of
unemployment.
Development Strategies
• the general methods of achieving specific objectives at national
or organizational levels.
• describes the essential resources which will be committed to
achieve objectives & how these resources will be organized.
Example, it may ask how to organize the labor force of the
organization or the project.
• It can take different forms such as import substitution, export
promotion, ALI etc,
12/20/2023
Project analysis and evaluation
16
1.6 National development planning &
projects
Plan
• a statement of anticipatory decisions, their interrelations and the
criteria employed in making them
• designed as a means to accomplish strategies
• A national plan covers an entire region, e.g a district or entire
economy and it is made up of proposed programs and projects to
be implemented over a period of time
Program
• A program is open ended in nature and could be on going
investment activities which are not time bound.
• A series of coordinated, related, multiple projects that continue
over an extended time and are intended to achieve a goal.
Project
• a discrete activity aimed at specific objective with a defined
budget and limited timeframe
• Projects often constitute a clear and distinct element of a larger
program.
12/20/2023
Project analysis and evaluation
17
1.6 National development planning &
projects
Program V. Project
. Differences
Program
Project
Scope/Objectivities
Wide/diverse
Narrower/limited
Location
diffused/wide
Specific
Life time
Non-time bound
Time bound
Beneficiaries
Not specific
Specific
Resources
Larger budget
Limited budget
Example:
• Project: completion of a required course in project analysis and evaluation.
• Program: completion of all courses required for an accounting major.
. similarities
12/20/2023
Project analysis and evaluation
18
1.7 Project Management
Can you think of a definition of project management?
• Project management is the planning, organizing,
directing, and controlling of company resources
for a relatively short term objective that has been
established to complete specific goals and
objectives.
• Project management is the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements.
12/20/2023
Project analysis and evaluation
19
1.7 Project Management
Characteristics of project management
 A single designated person, namely the project manager, is
responsible for managing the project organization.
 The project manager acts (to some extent) independently and
outside the normal functional authority structure.
 The project manager is responsible for integrating
multidisciplinary group (different functional specialists) into a
multidisciplinary project team.
 The project manager has to negotiate with individual functional
managers for the use of shared project functional resources
which are under control of functional managers
 Decision-making, accountability, outcomes and rewards are
shared among members of the project team and supporting
functional units
12/20/2023
Project analysis and evaluation
20
1.7 Project Management
Knowledge areas in project management
 Knowledge areas describe the key competencies
that project managers must develop.
– Four core knowledge areas lead to specific project
objectives (scope, time, cost, and quality).
– Four facilitating knowledge areas are the means
through which the project objectives are achieved
(human resources, communication, risk, and
procurement management).
– One knowledge area (project integration management)
affects and is affected by all of the other knowledge
areas.
– All knowledge areas are important!
12/20/2023
Project analysis and evaluation
21
Suggested Skills for Project Managers
• Project managers need both “hard” and
“soft” skills.
– Hard skills include product knowledge and
knowing how to use various project
management tools and techniques.
– Soft skills include being able to work with
various types of people.
22
Suggested Skills for Project Managers
• Communication skills: Listens, persuades.
• Organizational skills: Plans, sets goals, analyzes.
• Team-building skills: Shows empathy, motivates, promotes
esprit de corps.
• Leadership skills: Sets examples, provides vision (big
picture), delegates, positive, energetic.
• Coping skills: Flexible, creative, patient, persistent.
• Technology skills: Experience, project knowledge.
12/20/2023
Project analysis and evaluation
23
Project management V Functional management
Project Manager
Functional Manager
Must oversee many functional areas,
each with its own specialist
In charge of one of the functional
departments
Generalist/ facilitator
Analyst/ Expert
He is required to be more skilled at
He is more skilled at analysis. He is specialist
synthesis. Must have the ability to put many in certain areas only.
pieces of a task together to form a coherent
whole.
12/20/2023
Uses a system approach. (focuses on
Uses analytical approach. (breaking the
interaction between parts of the system, no
detail analysis on individual parts)
system into smaller and smaller elements)
Main task is resolution of conflict
Main task is optimization
Only in project life duration
Permanent work scenario
Project analysis and evaluation
24
1.8 project Organization structure
• The traditional form of organization is not
suitable for project management.
– a project is a non-routine, non-repetitive undertaking
often plagued with many uncertainties
– the relationships in a project setting are dynamic,
temporary, and flexible
– a project requires a coordination of the efforts of persons
drawn from different functional areas and contributions
of external agencies
• Due to these reasons, project management calls for
a different form of organization
12/20/2023
Project analysis and evaluation
25
1.8 project Organization structure
• Depending on the authority that is given to the
person responsible for the project, the project
organization may take one of the following three
forms:
• Line and staff organization.
• Divisional organization.
• Matrix organization.
12/20/2023
Project analysis and evaluation
26
Line and Staff Organization
• In this form of project organization, a person is appointed with
the primary responsibility of coordinating the work of the
people in the functional departments.
• Such a person, referred to commonly as the project coordinator,
acts essentially in a staff position to facilitate the coordination of
line management in functional departments (focal person) & has
no authority & responsibility for line management.
12/20/2023
Project analysis and evaluation
27
Divisional Organization
• a separate division is set up to implement the project
• Headed by the project manager, this division has its
complement of personnel over whom the project manager
has full line authority.
• It involves creation of a separate goal-oriented division of
the company, with its own functional departments
12/20/2023
Project analysis and evaluation
28
Matrix Organization
• the personnel working on the project have a responsibility to
their functional superior as well to the project manager.
• the authority is shared between the project manager and the
functional managers.
• The project manager integrates the contributions of personnel
in various functional departments toward the realization of
project objectives.
12/20/2023
Project analysis and evaluation
29