Project Management Phases Quiz

Project Cycle

• A project cycle is a series of events a project follows.
• Stages or phases can be divided in various ways, depending on the involved parties.
• Some stages may overlap.

Project Cycle Meaning

• Refers to the stages of project planning, from initiation to implementation.
• Equivalent to the life cycle of a project, progressing from early stages to maturity.
• Key features include information gathering, analysis, and decision-making.

Project Cycle Approaches

• World Bank project life cycle
• UNIDO (United Nations Industrial Development Organization) project life cycle

World Bank Project Cycle

• Divided into six phases:
  • Identification
  • Pre-feasibility study
  • Feasibility study (technical, financial, economic)
  • Selection and project design
  • Implementation
  • Ex-post evaluation

Project Cycle - Identification Phase

• The first stage is identifying potential projects.

• Finding promising investments requires imagination and awareness of environmental changes, assessing realistically what can be done.

• This phase has two forms, depending on project origin:

  • Private ventures in a market economy context: Initiating party defines project concept, expectations, and objectives.
  • Government-led initiatives: Sectoral data (direct and indirect demand) is a primary source.

• Four major sources of project ideas:

  • Technical specialists
  • Local leaders
  • Entrepreneurs
  • Government policy and plans

• At the identification stage, alternative project options may be considered. Sometimes, projects may not align with national plans but understanding the political history is advisable. Aspects to consider during idea identification:

  • Needs (need assessment surveys)
  • Market demand (domestic or overseas)
  • Resource availability
  • Technology
  • Natural calamities
  • Political considerations
  • Project alternatives

Project Preparation and Analysis Phase

• Commences after project ideas are identified.
• Requires a full range of technical, institutional, economic, and financial conditions to achieve the project's goals.
• Key element: identifying and comparing technical and institutional alternatives for objectives.
• Resource endowment (labor or capital) must be considered.
• Includes feasibility studies.
• Preliminary designs of technical and institutional alternatives will be created.
• Cost-benefit comparisons and detailed investigation are done for satisfactory solutions.
• Consists of pre-feasibility and feasibility studies.

Pre-feasibility Study

• Provides background information to define the project's basic concept leading to the feasibility study stage
• A preliminary assessment of the project's viability
  • Assessing project's prima facie attraction to justify feasibility study
    • Identifying aspects critical to project variability justifying in-depth investigation.
• Obtaining approximate cost/benefit valuation of major components
• Components considered: adequate market availability, project growth potential, investment costs, operational costs, distribution costs, demand/supply factors, and social and environmental considerations.
• Preliminary financial and economic analysis of the project is conducted.

Feasibility Study

• Detailed analysis to determine project viability.
• Focuses on marketing, technical, financial, economic, and ecological aspects.
• Collaboration of specialists (scientists, engineers, economists, sociologists) for accurate data collection.
• Resulting in a feasibility report, which comprises market analysis, technical analysis, organizational analysis, financial analysis, economic analysis, social analysis, and environmental analysis.

Appraisal

• Selecting the most viable project from multiple alternatives.
• Evaluation of project worth/profitability, utilizing various appraisal criteria (non-discounting and discounting criteria).
• Includes assigning cut-off values to criteria.
• Risk analysis is a crucial part of appraisal, which can influence different criteria.
• Finalizing detailed engineering design, manpower and administration requirements and marketing procedures.

Implementation

• Project starts after securing funding following project design preparation.
• Considered the most important project cycle stage.
• Project plans must be realistic and adaptable to changing circumstances.
  • Involves tendering and contract signing.
  • Flexibility is essential due to technical, price, and political changes.
• Implemented in three phases: investment phase, development phase, and project life.
• Investment phase involves major investments lasting 3-5 years.
• Development phase continues for 3-5 years.
• Project life span encompasses the entire duration, from initiation to completion.
• Delays in implementation can lead to cost overruns.

Ex-post Evaluation

• The final evaluation stage of a project to review successes and failures to improve future project planning.
• This often-neglected stage aims to examine the project plan and the actual outcomes.
• Performance reviews are crucial, comparing actual project performance against what was planned.

UNIDO Project Life Cycle

• Divided into three phases:
  • Pre-investment (identification, opportunity study, pre-selection, pre-feasibility, preparation, feasibility studies, project appraisal).
  • Investment (implementation)
  • Operation (operation and ex-post evaluation).