Project Management

Public vs Private Project Management

Alberto Gomez
MBA, Key Expert EU 2007 PHARE Project Romania

Bucharest, 30 October 2007

Project Cycle Management (PCM), that includes the Logical Framework Matrix (LFM), is the Methodology used by the European Commission (EC) to design , execute and evaluate economic , social and regional Programmes and Projects . It is similar to the one used by all major Multilateral Institutions (UN, WB, IDB, etc.)

The World Bank

Overview of EC Project Cycle Management What is a project?

ISO/PMI: A series of activities aimed at achieving one or more specific objectives within a defined time frame and with a defined budget EC: A project is an instrument which is used to contribute to the achievement of a larger goal (e.g. a programme), which will in its turn supports the implementation of a broader policy

The EC Project Cycle

EC: The way in which projects are planned and carried out; it follows a sequence beginning with an agreed strategy, which leads to an idea for a specific action, which then is formulated, implemented, and evaluated with a view to improve the strategy and define further action

The essential PCM principles are:

use of Logical Framework Approach (LFA) to formulate the project and analyse the problems; production of good quality key documents in each phase to ensure structured and wellinformed decision making; consulting and involving key stakeholders as much as possible.

The main tools supporting Project Cycle Management:

The Project Fiche - or Terms of reference; The Project Logframe Matrix- especially to help assessing what has been achieved against plan; Monitoring reports; Evaluation reports- intermediate and final.

The main tools supporting Project Cycle Management:

The Project Fiche - or Terms of reference; The Project Logframe Matrix- especially to help assessing what has been achieved against plan; Monitoring reports; Evaluation reports- intermediate and final.

Key documents in the PCM:

Country Strategy Paper
Programming

Priority areas, Sectors, timetable Pre feasibility study

Evaluation Report Decision on how to use results for planning

Evaluation

Identification

Project Identification Sheet

Progress & Monitoring Report Decision whether to continue as planned or reorient the project

Which options to study further

Implementation

Formulation

Feasibility study Financial Proposal Financing Agreement

Decision on funding

Decisions to take

Documents to produce

Logical Framework Approach

Stakeholders Analysis Matrix

Stakeholders and basic characteristics Stakeholder 1 Stakeholder 2 Stakeholder . Interests and how affected by the problems Capacity and motivation to bring about change Possible action to address stakeholders interests

Problem Analysis
STEP 1: brainstorm on problems considered to be a priority by the stakeholders STEP 2: select individual starter problem STEP 3: identify related problems to the starter problem STEP 4: begin to establish a cause-effect relationship STEP 5: all other problems are sorted in the same way (cause-effect) STEP 6: problems are connected with cause-effect arrows showing the links STEP 7: revise the diagram to find out if some problems have not been identified STEP 8: the diagram is revised accordingly and distributed
A different, yet similar, method for Problem analysis is the Fishbone diagramme, or Ishikawa Root-cause analysis

Analysis of objectives
SMEs are able to better access int. markets

SMEs build Int. partnerships

SME develop Export Prom. Strategies

SMEs increase int. exposure

SMEs acquire specific skills

SMEs benefit of ad hoc funds

SMEs access advisory services

Analysis of strategies/options
1. if all the problems have to be faced or only a selection of them; 2. positive opportunities on which we can build on (from SWOT); 3. combination of interventions which is likely to better achieve the results and ensure sustainability; 4. which option is best promoting local ownership; 5. which is the most cost effective option; 6. which option best impact on the needs of the poor/most vulnerable groups

Logical Framework Matrix

Project Description
Overall objective: the projects contribution to policy or programme objectives (impact)

Indicators
How the Overall Objective has to be measured including Quantity, Quality, and Time? How the Purpose has to be measured including Quantity, Quality, and Time?

Sources of verification
How will the information be collected, when and by whom?

Assumptions

What are general Assumptions? or major risks?

Purpose (often called specific objectives) direct benefits to the target groups

Same as above

If the purpose is achieved, what assumptions must hold true to achieve the Overall Objective? If results are achieved, what assumptions must hold true to achieve the Purpose?

Results (often called outputs) tangible products or services delivered by the project

How the Results have to be measured including Quantity, Quality, and Time?

Same as above

Activities (sometimes referred to Inputs) which have to be undertaken to deliver the desired results

If activities are completed, what assumptions must hold true to deliver the Results?

Activity Schedule
ID N o m e a tt iv it 22 C2 . I n s t i t u t i o n B u i l d i n g f o r R D P
E s ta b lis h a S tr a te g y C o m m itt e e in e a c h r e g io n Id e n t i f y a n d m e e t w it h m e m b e r s o f t h e S C D e v e lo p m o d a l it i e s & m e c h a n is m f o r t h e o p e r a t i o n o f t h e S C S u b m i t S C m e m b e r s h i p t o E C D e le g a t io n a n d P r o j e c t P a r t n e r s E s ta b lis h W o r k in g G r o u p s in e a c h r e g io n D e f i n e t h e m a t ic W o r k in g G r o u p s Id e n t i f y m e m b e r s o f t h e W o r k i n g G r o u p s D e v e lo p m e c h a n i s m a n d m o d a l i t i e s f o r t h e o p e r a t io n o f t h e W G s S u b m i t W G m e m b e r s h i p t o E C D e l e g a t i o n a n d P r o je c t B e n22 22i e s e /f ic ia r T r a in in g o n R D P fo r b o th S C a n d W G m e m b e r s D e s ig n a n d a g r e e t r a in i n g p r o g r a m m e o n R D P S e le c t p a r t i c i p a n t s O r g a n is e & d e li v e r t r a in in g w o r k s h o p s in R D P E v a lu a t e t h e p e r fo r m a n c e & s u p p l e m e n t a r y t r a i n in g s a s n e e d e d A s s i s t r e g i o n a l o f f i c i a l s w i t h d r a f t i n g R D s t r a t e g i e sR

2222 2222 2222 2222 2222 2222 2222 MG L A S ONDG F MA MG L A S ONDGF MA MG L A SONDGF MA MG L A S OND GF MA MG L A S ONDGF MA MG L A SOND GF MA MG L A S O RDA

STEP : 2 22 L is t m a in a c tiv itie s 22 fro mL o g fra m e

22 22 22 22 22 22 22 22 22 22 22

STEP , : 22 D e fin e e x p e rtis e re q u ire d & a llo c a te ta s k s STEP : 2 D e fin e m ile s to n e s

ST EP : 2 S u m m a r is e S c h e d u lin g o f m a in a c tiv itie s

STEP : 2 B re a k a c tiv itie s In to ta s k s

RDA

RDA

STEP : 2 E s tim a te s-u p , ta rt D u ra tio n & c o m p le tio n

22 22 22 22 22 22 22

DA

A s s i s t t o c a r r y o u t R e g io n a l S o c i o - E c o n o m i c A n a l y s e s A s s i s t t o s e t p r i o r i t ie s & d r a f t R D s t r a t e g i e s A s s i s t t o f o r m u la t e a c t io n p la n s f o r i m p l e m e n t a t i o n o f R D s t r a t e g i e s F a c i li t a t e a c c e p t a n c e o f R D P s b y t h e C e n t r a l G o v e r n e m e n t D e v e lo p & i m p l e m e n t M a r k e t in g S t r a t e g y t o i m p l e m e n t R D P

ST EP : 2 C la rif y s e q u e n c e & dependence

Resource and cost schedule

STEP 1: Copy activities from Activity Schedule STEP 4: Specify units STEP 7: STEP 8: STEP 5: STEP 6: Identify funding Allocate cost codes Specify quantity Estimate unit cost source STEP 9: Schedule costs STEP 10: Calculate total

ACTIVITIES / INPUTS

Unit

Quantity per planning period st nd rd th 2Q 2 Q 2 Q 2Q

Cost per unit

Funding source Cost codes Donor Govt

Cost per planning period st nd rd 2Q 2 Q 2 Q

Project Total
th 2Q

Annual recurrent costs

C22Establish WGs in each region . Equipm ent computers no. fax, modem no. furniture lump Salaries & allow ances office staff mm counterparts mm ETC

2 2 2 2 2

22 22 22 2 22 22 2 2 2 2 22 2 22 2

22 22 22 2 22 22 22 2 22 2

22 22

22 22 22 2 22 22 22 2 22 2 22 2 22 2 22 22 22 22 22 22 22 22

2 2

22 2 22 2

STEP 2: Specify INPUTS

STEP 3: Put inputs into cost categories

STEP 11: Estimate recurrent costs

Monitoring
Focus of the analysis Planned vs actual (efficiency) Risk & Assumptions Design (relevance) Project results (effectiveness) Sustainability Impact Questions to answer
Is the project doing what was originally planned?

Information needed
Activity schedule Resource schedule Logframe matrix Project Reports Interviews Risk matrix Logframe matrix Logframe matrix Stakeholders Analysis (etc LFA) Logframe matrix, Project Reports Interviews

Are the assumptions holding true? Are new risks emerging? Was the project design relevant? Is it still relevant? What difference is the project making? Are the project purposes likely to be sustainable? Will the project impact on the overall objective?

Logframe matrix

Evaluation
Focus of the analysis Relevance Questions to answer
Is the project design relevant?

Information needed
Logframe matrix Stakeholders Analysis, Problem Analysis, Analysis of Objectives, Analysis of Strategies (if available) Monitoring Reports Logframe matrix

Efficiency Effectiveness Impact

How well the various activities transformed the available resources into the intended results?

How far the projects results were used Logframe matrix or their potential benefits were realised? To what extent the benefits received by the target beneficiaries have had a wider overall effect? Are the positive outcomes of the project at purpose level likely to continue after the external funding? Logframe matrix Interviews

Sustainability

Interviews

Eco-Fin Analysis Economic and Financial Analysis

Economic and Financial Analysis (EcoFin Analysis) is one of the relevant forms of analysis of a project among others (institutional, environmental, political, social, gender, etc.). It is not compulsory as is the LogFrame matrix and used by EuropeAid mostly in developing regions, not so much transition or mid-level countries or regions. Financial Analysis focuses on the point of view of one entity or group of institutions (beneficiary, target group, etc.). This is done through Costbenefit analysis or Cost-effectiveness analysis. Economic Analysis on the point of view of society at large... or at least the wider environment of the project. This is done through the Effects Method or the Shadow-pricing method. The philosophy of Eco-Fin analysis is to measure the incremental value of the with-project situation and the without-project situation.

International Private Project Management Techniques

International (public and especially private sector) standards of Project Management are:

ISO 10,006: 2003- Quality Management in projects, 20 pages of text, is a very general standard, only covers quality area, see www.iso.org .

PMBOK (Project Management Body of Knowledge or PMBOK) of the Project Management Institute (PMI), 425 pages its 3rd - 2004 edition. US-based professional association, 170,000 members worldwide and 100 chapters, see www.pmi.org. Certifies project professionals as PMPs . IPMA , www.ipma.ch , Prince 2 www.prince2.com , Ten Step , www.tenstep.com ,etc

Key documents are the Charter, the Scope (similar to terms of reference) and the Project Plan

Comparison Public vs Private PM

It is difficult to compare PCM with the International Project Management Standards; such as PMBOK, the I IPMA, ISO 10,006- Project Quality , the British Prince 2, or other private methodologies (Ten Step, etc) . The origin, vocabulary, areas of knowledge, tools ,sections ,procedures and other general aspects that are very different among standards Nevertheless , a brief comparison will help us to better understand the Key different Methodological aspects on how to manage Public International Projects vs Private funded ones.

Stakeholders analysis in Private PM In private PMI standards there is no specific way to analyze the stakeholders. There is no template or specific technique recommended , although the need to do so is mentioned . Neither ISO 10.006 nor Prince2 specifically mention the stakeholder analysis nor the method to do so.

Problem Analysis and Objectives in Private PM

The Problems referred to in the PCM are not on the Project Management , but on the beneficiaries, and other Project stakeholders, or on the surrounding social ,economic environment which the project wants to solve or tackle

In the International PM Standards these problems have their definition and scope and strategies in their different sections in the Project cycle of the PMBoK . Scope definition and strategies, and product definition and analysis , are also treated in the ISO, IPMA (ICB Level4) and Prince 2 ones. But a difference exists with the International Standards ,since none establishes a specific tool or methodology to carry out the problem or objectives analysis of the target group, as the PCM does (Logical Framework Approach, LFA)

Monitoring and Evaluation in Private PM

PMBoK deals with monitoring and evaluation ,but it does not differentiate specifically between Monitoring (integrated change control) and Evaluation (a project snapshot by an outside observer). IPMA covers these two elements in PM General Element- 27 ISO 10.006 deals marginally about them in sub-clause 8.3, but does not differentiate between permanent monitoring and static evaluation. Prince2 covers the issue about project control and process evaluation ,not about the actual results evaluation

Ecofin in private PM
Economic and Financial Analysis (Eco-Fin): PMBOK mentions the feasibility study in the chapter : Project phase and Product life cycle, but not the type of analysis to carry out IPMA ICB has the PM Content Element 3 Programme and Project Portfolio, but its neither the economic justification , not its technique are mentioned ISO 10.006 does not deal with the Economic and Financial justification , or economic analysis at all. Prince 2 talks about the Business Case as a prerequisite to approve the project, therefore it is part of the process SU 4, as for project brief.

Conclusions
The different objectives of Public and Private PM Projects and Programmes , determine the emphasis in the Methodology. While in International PM ,there are some tools that are obligatory ,in PM Private Methodologies the standards are more varied and flexible. But certainly they are complementary and useful.

Some of the tools and templates used in Private PM methodologies, are very useful and to a certain extent more detailed than the tools necessary to manage a Public Project. And that is positive ,since the a Manager has to use those tools that in her/his mind are more appropriate to achieve the Project deliverables.

Conclusions
There some areas that in the PCM are not covered in depth: it is the human resources, quality ,or risk and alternative strategies during the actual problem. PCM does not go very deep in time management , or critical path, network diagram , or project management office ,PMO . Which is necessary in large and complex projects. A important aspect of PCM is the fact managers do not deal just with the quantitative issues , but with people perceptions of varied stakeholders with sometimes, different interests and agendas.

Conclusions
A Methodological comparison shows that PCM manages the

Project Cycle (design ,plan .execution , monitoring, evaluation, budgeting and indicators) very well, compared with other Private methods such as PMBOK, or IPMA-ICB, ISO 10,006,or Prince2 . The stakeholders, Contracting institutions, implementing institutions and beneficiaries issue ,which is more complex in International PM is also a key difference. Experience in International PM and people management, is a good help for that. The Private PM methodologies deal with some other areas ,such as human resources, team management, quality and risk , and complex and long calendars in more detail. And they have a technical focus principally.

1. 2. 3. 4. 5.

The right people The right skills The right motivation/incentives The right business environment The right leadership

Practice makes perfection !!!! Multumesc !