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BUSINESS STRATEGIES LIMITED

BUSINESS STRATEGIES LIMITED. LEADERS 2006 WORKSHOP DESIGNING AND IMPLEMENTING PROJECTS LOGICAL FRAMEWORK MONITORING AND EVALUATION. THE PROJECT CYCLE. DEFINITION OF A PROJECT

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BUSINESS STRATEGIES LIMITED

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  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 project’s 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 likelyto 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 theproject, 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 ortganization’s/country’s 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 project’s 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 STATISTICS 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 --LOCATION --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 --SERVICES 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.

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