BASICS OF

PROJECT PLANNING
AND
APPRAISAL
Define or Basics of Project Planning and Appraisal

PROJECT: Planned set of interrelated tasks to be executed over a

fixed period and within certain cost and other limitations.

PLANNING: Systematic sequencing and scheduling of

the tasks comprising a project; is called work planning Or Project
planning.
OR
Planning (also called forethought) is the process of thinking about and
organizing the activities required to achieve a desired goal. It involves
the creation and maintenance of a plan, such as psychological aspects
that require conceptual skills.

PROJECT MANAGEMENT: The Flow of knowledge concerned

with principles, techniques, and tools used
in planning, control, monitoring, and review of projects.

APPRAISAL: Systematic and comprehensive review of the economic,

environmental, financial, social, technical and other such aspects of
a project to determine if it will meet its objectives.
 What is a project
Defined start and end, specific scope, cost and duration

A temporary endeavor undertaken to create a unique product, service or result

A series of activities aimed at bringing about clearly specified objectives within

a defined time period and with a defined budget.
Project, Defined
A project is an endeavor to accomplish a specific objective through a unique set of
interrelated tasks and the effective utilization of resources.

It has a well-defined objective stated in terms of scope, schedule, and costs.

Project s are born when a need is identified by the customer the people or
organization willing to provide funds to have the need satisfied.

It is the people (project manager and project team), not the procedures and
techniques, that are critical to accomplishing the project objective.

Procedures and techniques are merely tools to help the people do their jobs.
Project Life Cycle
 Phases of the Project Life Cycle 1
The first phase involves the identification of a need, problem, or opportunity.

The need and requirements are usually written by the client into a
document called a request for proposal (RFP).

Phases of the Project Life Cycle 2

The second phase is the development of a proposed solution to the need or
problem.
This phase results in the submission of a proposal.
The client and the winning contractor negotiate and sign a contract
(agreement).
 Phases of the Project Life Cycle 3
The third phase is performing the project.

Different types of resources are utilized

Results in the accomplishment of the project objective

Phases of the Project Life Cycle 4

The final phase is terminating the project.

Perform close-out activities

Evaluate performance

Invite customer feedback

Project Management Life Cycle
 Benefits of project management
Project management was developed to save time by properly planning a project
and considering all relevant factors which may affect its outcome

The benefits have been proven - it saves time and money - and generates a more
successful outcome . if guidelines are followed.

Even though project management gives you set of tools to schedule and organize, there are
many factors that need to be considered if projects are to be successful. It is not a magical
solution.
Project management does not do the work for you, but helps you to be specific and organized
without losing the overview of what you are doing and why.

Importance of project management

With limited resources, project management can be very important by:

Increasing productivity
Boosting efficiency
Making the most of every resource
Making sure that deadlines are met
 How does project management benefit you?
You will have goal clarity and measurement
Your resources will be coordinated
Your risks will be identified and managed
You will increase the possibilities of time savings
You will increase the possibilities of cost savings
You will increase the possibilities of achieving the agreed outcome
You will increase the possibilities to deliver projects successfully
 Improved quality
Decision-making routes and processes are clearly defined
Deadlines, costs and resources are controlled systematically
All processes in the project management activity chain are coordinated to
ensure they remain in harmony with one another
The result will help you to get:
more speed
greater flexibility
improved quality
 Project success factors
Stakeholder involvement
Executive management support
Clear statement of requirements
Proper planning
Realistic expectations
Smaller project milestones
Competent staff
Ownership
Clear vision and objectives
Hard working and focused staff

To increase the chances of positive outcome, project managers have to think about all of the factor that can
influence positive outcome and the threat of failure, Tomorrow we will discuss and give you hands on
practise on how to use set of tools that analyse different factors of outside- and internal elements that are
useful for project management.
 Project Cycle Management (PCM)
PCM
Is a methodology for the preparation, implementation and evaluation of
projects based on the principles of the logical framework approach

It describes management activities and decision-making procedures used

during the life cycle of a project (key tasks, roles and responsibilities, key
documents and decision options)
What is feasibility?
A feasibility study evaluates the project's potential for success; therefore, perceived objectivity is
an important factor in the credibility of the study for potential investors and lending institutions.
An analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2)
is feasible within the estimated cost, and (3) will be profitable. Feasibility studies are almost
always conducted where large sums are at stake. Also called feasibility analysis.

Operational
feasibility
Measure of
how suitable
project Four feasibility
development tests:
will be to the Schedule
organizer feasibility

Economic
feasibility
(also called Technical
cost/benefit feasibility
feasibility)
What is detailed analysis?
A systematic examination and evaluation of data or information, by breaking it into
its component parts to uncover their interrelationships. Opposite of synthesis.
2.An examination of data and facts to uncover and understand cause-effect relationships,
thus providing basis for problem solving and decision making.

1. Study how current system

works

2. Determine users wants, needs,

and requirements

3. Recommend solution

Sometimes called logical design

 The three PCM principles
Decision making criteria defined at each phase
The phases in the cycle are progressive
Project identification part of structured feedback

Time management
Defining project activities
Activity scheduling
Create and controlling the project activities
 Time management grid
Urgency

Quadrant 1 Quadrant 2
Important but not
Urgent and important
urgent
Importance

"Firefighting" "Quality time"

Quadrant 3 Quadrant 4
Neither urgent nor
Urgent but not important
important
"Distraction" "Time wasting"

There's an old joke when it comes to project management time:

'The first 90 percent of a project schedule takes 90 percent of the time. The last 10 percent takes the
other 90 percent of the time'
 Managing the scope of the project
Project scope management constitutes 'the processes to ensure that the project
includes all of the work required, and only the work required, to complete the
project successfully.

Project scope has several purposes:

It defines what work is needed to complete the project objectives

It determines what is included in the project
It serves as a guide to determine what work is not needed to complete the
project objectives
It serves as a point of reference for what is not included in the project
 Role of a project manager
The role of a project manager is affected by the one-shot nature of the project
The role of a project manager is difficult when team members are still linked to
their permanent work areas
Members may be assigned to several projects simultaneously
Managers must rely on their communication skills and powers of persuasion

If people are put in a project group, how do you make them work on the project as well as
making them perform their normal duties as well?
 Project manager attributes
Leader & manager Knowledgeable about the
organization
Facilitator, coordinator
Political sensitivity
Communicator Conflict: sense, confront, resolve
Credibility: Technical/ Can deal with stress, chaos,
Administrative ambiguity
Work under pressure Planning and follow-through
Ethical dilemmas
Goal-oriented
Innovator
Versatilist
 Project manager duties
Reports to senior management
Communicates with users
Plans and schedules
Obtains and allocates resources
Controls risks
Manages people
Coordinates
Implements quality assurance
Controls the budget
Delivers results
 Governmental projects
Legal constraints on government projects
Laws, statutes, ordinances, directives, regulations, budgets, and policies
Accountability to the public
Accountable to legislative & judicial bodies, interest groups, the press and the
public
Utilization of public resources

In contrast to Government projects are for example, the development of new products within
private companies. Such projects are normally run under the radar and do not have
accountability to the general public. The success of such projects is measured in things like ROI,
profits and sales.
 Project governance
Risk planning
Balancing risk avoidance and risk acceptance
Life cycle management
From concept to replacement
Strategic change
Balancing the solution and the ability to utilize
Value management
Adopting consistent processes, building in quality and adding value
Within lifetime of projects, there are numeral factors that need to be taken care of. The people that work on a project have to remember that
projects can be dynamic and decicions may need to be revised within the project lifetime.

The project governance has to fit within the frame of numerous factors. And along the way there are questions that come up that need to be
aswered, events that happens and may have to be responsed to.
The plan has to be flexible enough to be able to bend and ajust to changes. Good governance has to be able to create the flexibility

Project governance ensures:

That the scope is defined according to all key stakeholders needs
A clear understanding of roles and responsibilities exists
An organizational perspective is honored
The ultimate decisional authority is with an individual, not a committee
The budget is adequate for the scope
Necessary resources are available
Overall project timelines are set and achieved
 Project Appraisal
(Project Planning and Appraisal)
 Project appraisal What?
Project appraisal is a generic term that refers to the
process of assessing, in a structured way, the case for
proceeding with a project or proposal.

In short, project appraisal is the effort of calculating a

project's viability

It often involves comparing various options, using

economic appraisal or some other decision
analysis technique
 Project Appraisal Why?
The prime objective of capital investment is to
make profit by way of investing in various
capital assets
It is a capital investment decision
It has long term effect
Decision once taken is irreversible
Expenditures are high
 Project Appraisal When?
For following Types of projects
Mandatory investment (to comply with statutory
requirement)
Replacement investment
New projects
Expansion projects
Diversification projects
Research and Development projects
Public good/social welfare projects
Infrastructure projects
 Project Appraisal How?

1 Initial Assessment

2 Define problem and long-list

3 Consult and short-list

4 Develop several options

Compare the options and select

5 Project
Project Appraisal Criteria
Appraisal Types

Technical

Financial
Project Economical
Appraisal

Ecological
 Technical Appraisal
Clearly, a project must be technically feasible
Whether pre-requisites for the success of project considered?
Good choices with regard to location, size, process, machines etc.
Is the technology proven or tested? If not, has it ever been successful
elsewhere and can that
success be replicated in current context and conditions?
Does the technology/ process/ equipment technically fit with the
facilitys existing technology/process/ equipment & machinery? If not,
what aspects of the technology / process do not fit and
what measures is the implementing agency planning to take in this
regard?
List of equipments and machinery to be installed with cost and
specifications of the equipment.
Equipment capacity & whether it is as per requirement?
List of recommended equipment suppliers.
 Economic Appraisal

Social cost -benefit analysis

Direct economic benefits and costs in terms of shadow prices
Impact of project on distribution of income in society
Impact on level of savings and investments in society
Impact on fulfillment of national goals :-
(1) Self sufficiency
(2) Employment and
(3) Social order
 Ecological Appraisal
Impact of project on quality of :- Air, Water, Noise,
Vegetation, Human life
Major projects ,such as these, cause environmental
damage
Power plants
Irrigation schemes
Industries like bulk drugs, chemicals and leather
processing.
Likely damage & the cost of restoration
 Financial Appraisal
Traditional Methods
Pay Back Period
Profitability Index (Post pay back)
Rate of Return Method
Time Adjusted Methods
Net Present Value method
Internal Rate of Return Method
Profitability Index Method