Project Management

Department of Agricultural Economics,

University of Nairobi

John Mburu

THE PROJECT CONCEPT • A project represents a particular set of choices

(or interventions) over time to move from a

present situation to an envisaged future

situation

• In essence a project is an instrument of change

DEFINITION OF A PROJECT

• “A proposal for capital investments where a

cost stream results in a certain flow of

benefits over a specified period” (FAO)

• “An investment asset from which we can

expect to realize benefits over an extended

period of time”- (Gittinger, 1982)

• “A proposal for capital investments to create

opportunities for producing goods and

services.”

GENERAL TYPES OF PROJECTS

• Privately financed projects,

including private businesses

• Government (public) projects

(initiatives)

CLASSIFICATION OF DEVELOPMENT PROJECTS

Functional classification:

•Projects aimed at technical innovation

•Expanding the natural resource base

•Improvement in the living conditions of

previously disadvantaged groups

• Improved market infrastructure

•Institutional capacity development

•Multifunctional investment projects

•Policy and institutional reforms

WHY DO PROJECTS FAIL?

• A lack of ownership and responsibility

• Problems of project design and implementation

• The use of inappropriate technology

• Inadequate or inappropriate infrastructure

• Failure to appreciate the social and political

environment

• Administrative problems

• Changing economic situations and market

conditions

• Externally driven project initiatives

• Problems related to poor analysis

• Unrealistic expectations

• Unsupportive policy environment

PROJECT CYCLE

Project Cycle Identification – conceptualization

Preparation – objectives and activities required to achieve objectives

Appraisal – evaluation of alternative options and actions (ex-ante analysis)

Approval/rejection (decision making)

Implementation

Investment period

Development period

Monitoring

Completion

Evaluation (ex-post analysis) including impact assessment

• RESEARCH PROJECTS VS DEVELOPMENT PROJECTS

DIAGNOSIS SOCIO-ECONOMIC

Planning

(screening ex-

ante)

Policy &

Institutional

issues

On-station

experimentation

Assessment

Modification/re-

planning

On-farm

experimentation

(on-going)

Assessment (ex-post)

Modification/re-

planning

Recommendations

Wider dissemination

•Research project

•Development Project

Identification

Preparation and Analysis

Appraisal

Implementation

Evaluation and Impact

IDENTIFICATION

IDENTIFICATION (DIAGNOSIS)

Finding potentially fundable projects

Sources

Technical specialists

Local leaders

Politicians

Existing projects

Sector studies

Communities

Aspects To Consider in Project

Planning & Assessment Technical aspects (physical input-output of

goods and services)

Institutional - Organizational - Managerial

aspects (including customs, tenure, local

organizations, cultural setting)

Social aspects (Broader social implications -

resource and income distribution, employment

opportunities)

Commercial and Business aspects (securing

supplies, market demand)

Aspects To Consider in Project

Planning & Assessment (Cont.)

Financial aspects

Economic aspects (Economic

efficiency, deals with costs and

benefits)

Environmental aspects

(biological and physical effects)

Socio-cultural aspects

Logical Framework

Analysis

(LFA)

Logical Framework Analysis

(LFA

• What is LFA?

– A designing approach that can be used for

planning, designing, implementing and

evaluating projects or programmes

• Steps in LFA

– Situation Analysis

– Strategy Analysis

– Project Planning Matrix

– Implementation

Situation Analysis

(1) Stakeholder Analysis

(2 ) Problem Analysis

(3 ) Objective Analysis

1) Stakeholder Analysis

– Who are the stakeholders involved in the

project, and how are they affected?

• Consider the following:

– Who will be involved in the log-frame

development?

– Where will the development be

conducted?

– Who will facilitate the development of the

log-frame?

– What background materials, papers and

expertise may be needed?

– What materials and logistics are required?

(2) Problem Analysis

Which are the problems the

project is addressing?

What are the root causes of those

problems?

What is the larger picture in

which those problems and their

root causes exist?

-What are the links between the

problems?

Problem Analysis (cont’d)

Problem Tree

• Brainstorming techniques can be used

to identify the main problems

• After all of the problems are displayed

they should then be clustered into

groups of similar issues

• The problem tree is developed by:

1. moving problems from the clusters of

problems

2. adding new problems that emerge

3. problems can be moved up or down the

tree as required

(2) Problem Analysis:

Example of a Problem Tree: one main problem

(EFFECT) a series of lower order problems

(CAUSE)

3) Objectives Analysis • ... a procedure for systematically

– 1. identifying

– 2. categorising

– 3. specifying

– 4. balancing out ...objectives of all parties

involved in a specific situation

• Objectives Tree

– 1. Problems are restated as objectives

– 2. Positive mirror image of the problem

tree

(3) Objective Analysis:

Example of an Objectives Tree: top of the tree is the

END desired, lower levels are the MEANS to the end

MDS 521 IRUNGU 2011

Strategy Analysis

• Searching for and deciding on solutions

• Follows the problems and objectives

analysis

• Prerequisite to designing action strategies

Conducting a Strategy Analysis:

1. Ordering sequence of the problem and

objective trees

2. Clustering objectives

3. Feasibility of different interventions

4. Continuous task in project management

25

The process of strategy formulation

Strategy Analysis

MDS 521 IRUNGU 2011

Project Planning Matrix

(logframe matrix):

• Developed from the strategy analysis

by filling in the columns of the matrix

as shown

Narrative

Summary

(intervention logic)

Objectively

Verifiable

Indicators

Means of

Verification

Important

Assumptions

GOALS /

OBJECTIVES

Measures of goal

achievement

Various sources of

information,

methods

used

Goal / Purpose

linkages

PROJECT

PURPOSE

End of project

status

Various sources of

information,

methods

used

Output / Purpose

linkages

OUTPUTS /

RESULTS

Magnitudes of

outputs,

planned completion

dates

Various sources of

information,

methods

used

Input / Output

linkages

INPUTS /

ACTIVITIES

Types/levels of

resources, starting

dates

Project data, other

sources of

information

Initial Assumptions

regarding the

causality

of the programme

PROJECT IMPLEMENTATION

• Operational phase of a project to

achieve the expected outputs/results

• Plan of Operations

work plans / work schedules

project budget / resources plans

personnel plans

material and equipment plan /

procurement plan / staff training plans

PROJECT MONITORING

AND EVALUATION

WHAT IS MONITORING?

Day-to-day follow up of activities during

implementation to measure progress and

identify deviations

Routine follow up to ensure activities are

proceeding as planned and are on schedule

Routine assessment of activities and results

Answers the question, “what are we doing?”

TYPES OF MONITORING • Progress

– How much was achieved?

– When was it achieved?

– How was it achieved?

– At what cost?

• Process

– What happens?

– Why?

KEY STEPS IN PROGRESS

MONITORING

1. Establishing the monitoring

unit/system

2. Situation review and selecting key

project process and indicators

3. Observing key processes

4. Reflecting on /analysis of results

5. Follow-up action

WHAT IS EVALUATION?

Episodic assessment of overall achievement and impacts

Systematic way of learning from experience to IMPROVE current activities and promote better planning for future action

Designed specifically with intention to attribute changes to intervention itself

Answers the question, “what have we achieved and what impact have we made”

WHY EVALUATE? Determines program effectiveness ,

efficiency, relevance and

sustainability

Shows impact

Strengthens financial responses and

accountability

Promotes a learning culture focused

on service improvement

Promotes replication of successful

interventions (replicability)

MONITORING vs EVALUATION

MONITORING VS EVALUATION

Monitoring Evaluation

Continuous: day-to-day Periodic: important milestones

Documents progress In-depth analysis of achievements

Focuses on inputs and outputs Focuses on outcomes and impacts

Alerts managers to problems Provides managers with strategy

and policy options

Self-assessment External analysis

MONITORING AND EVALUATION M&E Framework

Level Description Frequency

Inputs Resources that are put into the project. Lead to

the achievement of the outputs

Continuous

Outputs Activities or services that the project is providing.

Outputs lead to outcomes

Quarterly

Outcomes Changes in behaviors or skills as a result of the

implemented project. Outcomes are anticipated

to lead to impacts

(short to medium

term)

Impacts Measurable changes e.g. creation of

employment or improved health, in the target

group and the community in general

3-5 years

(long term)

MONITORING SYSTEM • In order to carry out monitoring properly,

it is essential to create a system to

control the flow of information

• The system should ensure that they

define the key information needed,

collect it and disseminate to the groups

of people who need it (eg the decision

makers)

• The system should therefore include

procedures for gathering the info and for

feedback

Four components of a

monitoring system

Collection of information

Aggregation and analysis

Decision Feedback

Monitoring and Evaluation (M&E)

Types of evaluation Type Purpose

Formative Initial assessment of the target populations and

contextual environment. Determines concept and design

Process Seeks to identify the extent to which planned activities

have been achieved and assesses the quality of the

activities/services

Outcome Examines specific program outcomes and

accomplishments. What changes were observed, what

does it mean, and if changes are a result of the

interventions?

Impact Gauges the program’s overall impact and effectiveness.

Aims to strengthen design and replication of effective

programs and strategies

EVALUATION QUESTIONS • Evaluation questions are usually based on

the evaluation criteria

– Relevance

– Effectiveness

– Efficiency

– Impact

– Sustainability

– Replicability /up scaling (if a pilot project)

IMPACT

ANALYSIS/EVALUATION OF

DEVELOPMENT PROJECTS

OVERVIEW OF IMPACT ANALYSIS

• The impacts of a project are

positive or negative effects brought

about by the project

• Is there a likelihood of the overall

goal, or the intended positive

results being achieved by the

project?

• The impacts need to be assessed

across a wide range of viewpoints

DIMENSIONS OF PROJECT ANALYSIS

IMPACT EVALUATION

• Determines if the program had the desired

effects on individuals, households, and

institutions, and if those effects can be

attributed to the program intervention.

• This requires estimating the counterfactual,

what would have happened had the project

never taken place.

• This is done through a comparison or

control group; those who do not participate

in the program, i.e., ‘with’ and ‘without’

project comparisons.

IMPACT EVALUATION: with and

without project comparisons

COST BNEFIT ANALYSIS (CBA) AS A TOOL FOR PROJECT APPRAISAL/EVALUATION

OVERVIEW OF CBA

• Often high magnitudes of different categories of costs (including transaction costs) are incurred in projects

• These costs should be quantified and compared with the potential or actual gains (benefits)

• This is done in a CBA which could be conducted ex ante and ex post

• With ‘with’ and ‘without’ project comparisons ones needs to calculate the incremental net benefit cash flow

STEPS (STRUCTURE) OF A CBA 1. Define the project:

– what kind of resources are being reallocated?

– Who (the population) are gainers and losers over which costs and benefits are to be aggregated, what is their level of operation?

2. Which project impacts/consequences are relevant or economically important, while considering

3. Identifying positive and negative impacts/consequences

– Include also unpriced impacts or externalities

– Exclude transfer payments effects- changes of indirect taxes, additional unemployment benefits becoming payable, etc. These are merely redistributed in the government system

– Determine the physical amounts of the impacts and when in time they occur

STEPS OF A CBA (CONT’D) 4. Monetary valuation of economic benefits and

economic costs – Predict prices for cash flows extending into the future. A real rate of

discount should be used

– Correct market prices where necessary. Shadow prices may be used to reflect true resources scarcity. Consider: imperfect competition, government intervention in the market, and the likelihood of absence of markets

– Calculate prices (relative values in common units) where none exists

5. Apply the decision criteria

NPV>0; B/C>1; largest IRR above cut-off rate (many projects can give multiple IRRs from the same data set and cannot decide among many projects)

Income redistribution issues are not considered. This needs political processes

5. Apply the decision criteria (cont’d)

STEPS OF A CBA (cont’d)

6. Conduct sensitivity analysis – Mainly due to uncertainty: adjust the predictions and assumptions

made