BUSINESS STRATEGIES LIMITED

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BUSINESS STRATEGIES LIMITED

• LEADERS 2006 WORKSHOP
• DESIGNING AND IMPLEMENTING PROJECTS
• LOGICAL FRAMEWORK
• MONITORING AND EVALUATION

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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.

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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.

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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.
• .

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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)

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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.

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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
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6
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IMPACT EVALUATION
PROJECT IMPLEMENTATION
PROJECT APPRAISAL AND FINAL APPROVAL
PROGRESS MONITORING
PROGAMMING AND BUDGETING
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CHART I THE STAGES OF THE PROJECT
CYCLE (ADAPTED FROM BRUCE, C.M.F., (1980)
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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.

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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.

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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

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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.

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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

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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

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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.

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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

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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

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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

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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

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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.

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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

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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.

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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.

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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.

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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?

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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?

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Purpose and scope Questions

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

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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.

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Project Preparation Objectives

• Objectives should be SMART
• Specific
• Measurable
• Achievable
• Reasonable
• Time bound

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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

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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

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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.

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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.

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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

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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

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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.

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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.

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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

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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.

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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

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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)
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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.

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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.

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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

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PROPJECT LOGIC

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

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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.

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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
• .

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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.

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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.

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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.

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Project Logic

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

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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.

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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

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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

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Project Outputs

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

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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.

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Work Breakdown Structure

• 4 broad steps
• Planning
• Executing
• Controlling
• Closing

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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

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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

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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.

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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?

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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.

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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

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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.

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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

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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.

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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.

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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.

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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.

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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

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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

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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.

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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.

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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

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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.

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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

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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