Bureau of ANRS Trade Industry and Market Development

Manufacturing Industry Project

Cycle of Project Management
/Working Manual Part one/
1. Introduction to PCM
1.1 Introduction to Project Cycle Management
 This chapter an overview of project cycle management, a management
approach that should be used to guide LAs in the design and implementation of
effective and efficient projects.
1.2 Definition of ‘Project Cycle Management.
 The systematic process of initiating, planning, implementing, managing and
evaluating projects or programmers’ is known as ‘Project Cycle Management’,
 PCM ; it is also defined as an approach in project management used to guide
management activities and decision-making procedures during the life-cycle of a
project, from the first idea until the last ex-post (afterwards) evaluation.
 PCM involves regulating and supervising the various activities undertaken in
each phase of the project cycle to ensure that projects are; Relevant to
beneficiaries ,Supportive of policies of the sponsor partners ,feasible and
effective .
 Defines project management as ‘the application of knowledge, skills, tools and techniques
to project activities, to meet specific scope, time, cost and quality goals of projects.
 Project Management Body of Knowledge’, a project management guide, and
internationally recognized standard, that provides fundamentals of project management
The application of PCM as an approach to project management has the potential to
address one of the main challenges facing Las.
1.3 Definition of projects
 PCM is applied to projects and it is important to understand what a project is. A project
can be either, a physical structure or a process, therefore may include a plant, process,
system or software. A project can be either large or small.
A project has many definitions therefore;
 Work that is temporary and produces a unique product or service.
 An intervention to conduct activities, in order to provide assistance, that will allow the
users to improve their own situation’’ Confirm who use power point.
 An undertaking for the purpose of achieving established objectives, within a given budget
and time period.
 An investment of resources to produce goods or services.
 Temporary endeavors undertaken to create unique products, services or results.
1.4 Measuring project success or failure
 Projects are said to have failed because they do not meet five criteria or
success conditions which are used to judge their success such as Efficiency,
Effectiveness, Feasibility, Viability, and Sustainability.
 The quality of projects is therefore not measured on arbitrary standards, but
through objective criteria listed above.
 The most significant is ‘effectiveness’, because this criteria measures whether
the ultimate objective of a project has been met i.e. did the project deliver
expected results? ;
 did the conditions of beneficiaries improve? LAs therefore, need to focus on
PCM, because this approach introduces tools and approaches that promote
the success of projects.
 Four of these success criteria are particularly crucial and are elaborated in
such that Efficiency and effectiveness, Effectiveness, Feasibility, Sustainability.
1.5 .Benefits of PCM

 PCM is an important function of project management and can assist local authorities to learn
from past experiences, improve decision making and streamline communication between
various departments.
 PCM should not be considered as a purely technical method with a number of instruments &
stages to be applied mechanically.
 On the contrary, it should be seen as a management method to achieve more effective and
efficient communication within departments, with stakeholders, beneficiaries, financiers and
sponsors, with information feeding backwards and forwards at every project stage.
 PCM has an instrumental role in improving the level and quality of planning, improved ways of
working and ultimately, through improved service delivery, benefits to communities and
citizens will be realized.
 The application of PCM is dependent upon the relative size, complexity, urgency, importance,
novelty and interdependence of other projects.
 This means that small projects with nominal costs, may not be programmed through a formal
project cycle; for example buying of school desks, or issuing a bursary may not require PCM,
but the construction of a school does.
2. Introduction to PCM stages
2.1 Introduction to the Project Life Cycle Stages/Phases
 As stated in typically, the project cycle comprises seven or more standard
project stages, phases or activities, arranged in a logical sequence to
accomplish a project’s goals or objectives, Stage
 such as Policy setting Stage, Project Identification Stage, Appraisal Stage,
Formulation /planning Stage, Contracting/ commitment Stage,
Implementation, monitoring and midterm evaluation Stage or Final
evaluation.
Project Appraisal
Policy setting Stage, Identification Stage,
Stage,

Final evaluation.
Formulation/
Project implementation Contracting/ planning
monitoring and midterm commitment Stage
evaluation Stage Stage,
 

2. Characteristics of the project life cycle

 The project is divided into several distinct phases or stages.
 Each stage is marked by a number of deliverables or phase outputs.
 Usually one phase consists of several sub-phases or activities.
 The stages are progressive each stage should have ‘phase exits’ or completion
points that allow the next stage to be tackled with success.
 Common terminology is used to describe a project cycle. For example:
programming, identification, formulation, financing and evaluation; (words used
to describe various stages may differ slightly but the way of thinking remains the
same)
 A technical review should be carried out at the end of each phase, to review if all
the phase outputs have been achieved.
 This way, a project manager can monitor the application of PCM in a sequential
manner.
3. Stage 1: Policy setting
3.1 Introduction
 The first stage of the project cycle is policy setting and this is the establishment of the development vision guiding the
Local Authority.
 Policy setting includes the strategic planning process whereby the long term direction of the Local Authority is established
and the LA establishment ensures that all systems and budgets support that strategic direction.
 The strategic plan therefore is considered a long-term plan and is often inspired the council’s own mandate for service
delivery, and also by the national policy framework.
 Once the strategic plan is adopted, it becomes the policy guideline or strategic framework of a Local Authority and the
strategic goals and objectives are then implemented in a systematic, incremental manner
3.2 Integrated Planning Approach to Service Delivery

 Integration here refers to consistency and close relationship between the various plans that constitute
local authority planning; i.e. integration between strategic structure plans, corporate strategic plans,
spatial plans, LADP, LASDAP, and annual budgets.
 Integrated planning therefore, is a process of coordinating, harmonizing all the LA plans including spatial
plans, LASDAP plans into a unified strategic master plan with clear goals, objectives, strategies, activities
and procedures to meet them.
 This strategic approach to planning does not contradict the LASDAP guidelines, which advocate that LA
planning can be done at two levels; Strategic Planning: Five year rolling plan, Operation Planning: This is
the short-term plan e.g. LASDAP, annual budget or project plan
3.3 Salient Considerations in Integrated Planning for Service Delivery
3.3.1 Capacity building
Internal issues of capacity building and financial management are equally important for to
support the implementation of integrated development plans, because, strategic planning
requires strong institutional capacity.
LAs must find ways to support their teams to learn the skills of strategic planning and how to
implement strategic plans.
They must also address operational and human resource weaknesses and threats so that the
strategic plans can become a reality. Investing in organizational development programs is
therefore necessary to sustain IDP
3.3.2 Public/Community/Stakeholder Participation
In planning and implementing service delivery, LAs should involve the people- communities,
stakeholders, beneficiaries, benefactors; while looking out for the interests or concerns of
special groups such as the poor, women headed households, the marginalized and vulnerable
requiring affirmative action,
 Strategic planning may only succeed if it has obvious support of the chief
executive, legislative body (Full Council) and all department heads. T
 he lack of top level support creates a strategic plan with a very short life
span. Studies worldwide have shown that projects supported by a strategic
planning framework have a considerably higher success rate.
Strategic planning is a best practice
Today’s vision becomes tomorrow’s reality
Provides a realistic workable framework for results
Responds best to citizen interests
Promotes accountability
Strategic planning requires strong advocates
 Enhances efficiency, effectiveness & good decision making
4. Stage 2: Project Identification
4.1 Introduction
 The CP too box contains detailed guidelines and checklists on how to identify
projects through a participatory needs assessment.
 The project cycle is Project identification or initiation, where LAs identify
projects from an assessment of existing demand for goods or services based
on 3 main sources,
The Council’s Strategic Plan/IDP
The annual LASDAP consultations where citizens articulate their needs
Baseline surveys and diagnostic studies to meet special needs
 The main practice in LAs however, is to follow their primary mandates in the choice
of projects, with additional ‘demand’ projects from LASDAP priorities.
 This planning is often called ‘demand led planning’ and is often disjointed from the
more proactive policy and strategic planning process that has been described in stage
1.
 The problem with this demand approach is that project feasibility and sustainability
is affected because the demands led planning comes
 It is important To determine ‘demand’ projects from communities or stakeholders, 2 key
elements are involved; needs analysis and (ii) situation analysis.
4.2 Needs Analysis
 Analyzing the present actual situation can be ‘problem based’ or ‘opportunity based’. It
concerns identifying the priority problems/ opportunities and their main causes, and
identifying the causes that can be addressed by the project intervention.
4.3 Situation Analysis
 Situation analysis concerns identifying the priority problems/ opportunities and their
main causes. This is an important factor because people’s desires and assessment of
their needs, may be based on ‘symptoms’ of an underlying or situational factor;
addressing the symptoms will not solve the problems.
 A properly planned intervention should therefore combine both needs analysis and
situational analysis, based upon a correct and complete analysis of the existing
situation. This involves analyzing the present actual situation through various methods
as described in the CP tool box.
Project Identification:
Needs Analysis

Over
analysis opportunity all
Project
object
planning
ives
Problem

Situation Analysis

Problem analysis
a. Overall objectives
 Please describe here the overall purpose of the project and outcome.
b. Immediate objectives
 Please describe here the objectives of the different activities that will lead to reaching the
overall objective.
3. Project planning
 A short overall activity plan for the development of the project shall be developed.
5. Stage 3: Appraisal
5.1 Introduction
 The PCM tool 3 and tool 4 contain project appraisal criteria and a ranking template to guide the pre-
feasibility required for project appraisal and ranking.
 Stage 3 of the project cycle is the appraisal stage.
 The aim of an appraisal is to identify and design projects that have a clear foundation for success.
 If the initial idea is perceived to offer sufficient potential benefit, it may to be subjected to an
appraisal, also considered as a pre-feasibility which, if affirmative, is followed by a comprehensive
feasibility study.
 Other words for appraisal are ‘’evaluation, consideration, judgment or review.’’
In reality projects should be appraised a number of times in the project cycle:
 After initial identification, when the decision has to be made whether to continue with an identified project to
the formulation/planning phase
 After formulation, when the decision has to be made whether or not the project will be proposed for funding
 After an approved project has been tendered, when the project proposals as written by the parties
participating in the tender are appraised. Strictly speaking, this appraisal does not concern the project
proper but the bid proposals
5.2 Appraisal steps
An appraisal should be conducted for all projects to determine the ones that meet Prefeasibility criteria.
This appraisal should precede project planning and design and the Parameters Pre-feasibility criteria (Adopted
from DAC criteria for aid effectiveness and MDF PCM criteria)

Effectiveness Feasibility
Efficiency Sustainability

Relevance Appraisal steps

Impact

 Relevance
 The validity of the overall goal and project purpose to the needs of communities
 Immediate results (outputs) are necessary and sufficient to attain the Purpose
 Efficiency
 A project is efficient when the project costs are necessary and sufficient in quantity and quality to achieve
planned objectives
 The degree to which Inputs will be converted into Outputs
 Absence of waste for a given output
 Effectiveness
 The extent to which the project’s objectives will be achieved, and meet the identified needs of beneficiaries
 Feasibility
 Planned activities can be/will be realized and there are/were no major obstacles/risks to affect
expected results. (Economic, physical, environmental, social, technological risk factors)
 The project is realistic from a technical, social/cultural and political perspective
 Sustainability
 The project will continue to meet the needs of beneficiaries long after its completion
 Reliability
 The same activities of the intervention can produce the same results in the future in another
area for another group of beneficiaries
 Impact
 The Purpose and Overall Objectives once achieved will have positive effects on the target
group/communities
 Positive changes outweigh the negative changes produced, directly or indirectly, as a result of
the Implementation of the project
 The durability of the benefits and development effects produced by the project after its
completion
5.3 Appraisal roles
 The appraisal of project proposals is an essential task of LA project managers,
 because their decisions will lead to the most crucial decision in project cycle
management, which is to move the proposal forward to the planning,
commitment and implementation stage.
 Proper appraisal is done in two steps
 Firstly, to decide whether the project is good enough in terms of effectiveness
and impact.
 Secondly whether the project proposal concerned is better than other
proposals.
 In other words whether it is worthwhile to spend scarce funds on this project or
that these funds can better be allocated to other, more cost-effective projects.
 Luckily these decisions do not need to be taken in isolation, and the following
people can help in the appraisal process;
 LASDAP Technical Committee/LASDAP Monitoring Committee: After LASDAP
consultations, conduct a pre-feasibility study as part of ideas identification. (If LAs
are implementing donor financed projects, financing organizations have appraisal
policies for particular types of interventions).
 Based on these pre-appraisal reports, the technical committee presents the most
feasible ideas to the consensus meeting, to decide whether to continue with an
identified project to the planning phase.
 Engineer/Works officer/Town Planning Committee: For complex projects, (e.g. those
requiring high levels of technological/environmental assessment e.g. building of an
abattoir),
 more teams need to participate in the appraisal process, to be collectively
responsible for the more precise worked-out formulations of the project proposal.
 They are expected to work out and commission a comprehensive feasibility study
and submit a feasibility study report to be approved by Council.
5.4 Comprehensive Feasibility study
 In some cases, a project of high capital costs, or one that has high social, economic or
environmental impacts, may require a more comprehensive feasibility study in order to
make a well researched decision. To conduct such a feasibility study, the LA will
require:
 Clear objectives (stated and agreed)
 Market intelligence
 Realistic estimates predictions
 Assessment of risks
 Project execution plan
 The local authority should prepare terms of reference for carrying out a feasibility
study.
 The feasibility may be carried out by an in house team, external consultants or with
the help of officers from the central government.
 The feasibility study should be carried out on the basis of terms of reference
established during the pre-feasibility study stage and as approved by the relevant
departmental head and council committee.
 This study is designed to assist the LA to reach informed and rational choices
concerning the nature and scale of investments in the project and to provide the brief
for subsequent implementation
New Idea generate for industry development