KABARAK UNIVERSITY

ECON 421 – PROJECT APPRAISAL AND EVALUATION

INTRODUCTION TO PROJECT MANAGEMENT:

Definitions of a project
A project is a series of related activities which must be implemented in a logical sequence from a given
start time to a given end time.
A project may be defined as a means of moving from a problem to a solution via a series of planned
activities. It is a set of interrelated activities that has a definite starting and ending point and results in the
accomplishment of a unique often major outcome; or an identifiable goal and an integrated system of
complex but interdependent relationships.
Types of projects
Projects are usually categorized into one of three types below:
 Change driven: The need to change operations to match the environment.
 Market driven: Producing a new product in response to market needs
 Crisis driven: Usually in response to an urgent situation eg. Introducing a replacement of a
defective product
Examples of typical projects:
Personal projects:
Obtain a Bachelors degree, write a report, plan a wedding, build a house, Grow horticultural
products, run a campaign for a political office, etc
Industrial projects:
Construct a processing plant, provide a gas supply to an industrial estate, design a new product, etc
Business projects:
Develop a new course, develop a new computer system, introduce a new product, prepare an annual
report, set up a new office, Implement a new business procedure, etc
Project vs. program
A program is a portfolio (group) of related projects designed to accomplish a common goal over an
extended period of time or to help achieve a common set of business objectives.
A project on the other hand is a unit portfolio within a program with very specific objectives to be achieved
within a specified period of time.
Examples;
1. The national health program has projects such as HIV/AIDS control projects, FP, TB control project
etc.
2. The educational program has free primary and secondary education and expansion of university
education projects.
Programs are contained in an organisation’s or country’s National Development plan for a given period of
time such as 3-5 years.
Characteristics of Projects
A project can generally be defined by its characteristics where the following apply.
a. It involves a single, definable purpose, product or result. An example is a project to repair
impact damage to an aircraft. Once the impact damage is repaired, the project is complete.
b. It usually has defined constraints or targets in terms of cost, schedule (time), and performance
requirements. An example is a time limit. The aircraft with the impact dam- age might have to be
repaired within a specific time frame or lose several hours in its flying schedule. If at all possible,
the repair should be completed within this time frame.
c. It uses skills and talents from multiple professions and organisations. Projects often involve
advanced technology and rely on task interdependencies that may intro- duce new and unique
problems. Task and skill requirements vary from project to project. Repairing aircraft damage might
involve mechanical engineers, aeronautical engineers, safety inspectors, and representatives from
the aircraft manufacturer. These people may work together on the repair as a multidisciplinary team.
d. It is unique. A project is generally a one-off activity that is never repeated exactly. Generally, one
piece of impact damage will be unique. The extent of the damage will depend on what hit, where it
hit, how it hit, how fast it was going, and so on.
e. It is somewhat unfamiliar. It may encompass new technology and hence possess significant
elements of uncertainty and risk. Failure of the project might jeopardise the organisation or its
goals.
f. It is a temporary activity. It is undertaken to accomplish a goal within a given period of time; once
the goal is achieved, the project ceases to exist. This applies to the organisa- tional structure created
to deliver it, as well as to the project itself. Once the aircraft repair is complete, the repair team goes
back to the terminal buildings and either remains on duty or goes home. Next time the team is
needed, it could consist of different people working on a different aircraft under different
conditions.
g. It is part of the process involved in working to achieve a goal. During the process, a project
passes through several distinct phases; as a result, tasks, people, organisational structure; and
resources change as the project moves from one phase to the next. Pro- jects usually have clear start
and finish points. In the case of the aircraft repair, there will be an inspection, an appraisal, a
solution, implementation, finalisation and testing.
h. It is part of an interlinked process. Projects are very rarely carried out in isolation. There is
usually some interlinking between different projects that are being run by any particular
organisation.
i. It is generally of secondary importance to the organisation. Projects are generally not the
primary objective of the organisation. There are exceptions such as pure research and development
organisations and companies that are established purely to plan and execute a single project.
Generally the organisation is concerned with defined functional objectives and the project is
subsidiary to these.
j. It is relatively complex. Projects involve multidisciplinary teams and have defined aims and
objectives. In organisational terms they therefore tend to be relatively complex as compared to the
standard functional processes that operate within the organisation.
PROJECT MANAGEMENT
Project Management
Definitions
 Project management is the application of knowledge, Skills, tools and techniques to project
activities in order to meet or exceed stakeholder needs and expectations from a project.
 Project management is the discipline of planning, organizing, securing and managing resources to
bring about the successful completion of specific project goals.
 Project management is an Approach to management of work within the constraints of time, cost,
and performance requirements.

Importance of project management

Project management is no longer a special need management but rather a standard way of doing business.
An increasing percentage of the typical firm’s effort is being devoted to projects. The future promises an
increase in the importance and its role in the strategic direction of organizations.
The following are some of the reasons why this is so:
1. Compression of the product life cycle – this is one of the most significant driving forces behind the
popularity of project management. For example today hi-tech industries products’ life cycle is
averaging to 3 years as compared to 10 to 15 years 30 years ago.
Time to market a new product is increasingly important and this can be effectively done through
project management.
2. Knowledge explosion – growth in new knowledge has increased the complexity of projects because
projects encompass the latest advances hence the need to integrate divergent technologies.
3. Triple bottom line (planet, people, and profit) - the threat of global warming was brought sustainable
business practices to the fore front. Businesses can no longer simply focus on maximizing profits to
the detriment of the environment and society.
Efforts to reduce environmental degradation and corporate social responsibility can be effectively
done through project management.
4. Corporate downsizing – the last decade has seen a dramatic restructuring of organizational life.
Downsizing and sticking to core competencies as has been the way to survival for many firms.
Middle management is no longer important but is being replaced by project management as a way of
ensuring that things get done. Companies outsource significant segments of project work and project
managers have to manage not only their own people but also their counter parts in different
organizations.
5. Increased customer focus – competition has placed a premium on customer satisfaction. Customers
no longer simply settle for generic products or services. They want customized products/services that
cater for their specific needs.
Project management is critical both to development of customized products and services and to
sustaining inactive relationships with customers.
THE PROJECT MANAGER
Project Manager
A project manager is a professional in the field of project management. Project managers have the
responsibility of the planning, execution, and completion of any project with Limited time and other
resources.
Project Team- Project team refer to a number of people who work closely together to achieve shared
common goals. It is vital to identify all the team members and clearly define their roles and responsibilities.
Team members can have various roles such as engineers, technicians, planners, software specialists, etc.
Projects pose particular problems of building and managing project teams. Project managers should have
good team management skills
What do project managers do?
They fulfill the following broad requirements;
1. Define and review the business case and requirements by regular reviews and controls to ensure that
the client receives the project that he/she wants and needs.
2. Initiate, review and plan the project by establishing its format, direction and base lines that allow for
any variance measurements and change control.
3. Partner with end users, work with project sponsors and other management to establish progress and
direction of the project by achieving goals, reaching targets, solving problems and mitigating risks.
4. Manage the technology, people and change in order to achieve goals, reach targets and deliver the
project on time and within budget.
5. Motivate the project staff by creating an environment conducive to the delivery of the project in the
most cost- effective manner.
6. Be able to manage uncertainty, rapid change, ambiguity, surprises and a less defined environment.
7. Manage the client relationship by using an adequate, complete and formal reporting format that
compliments a respected and productive relationship.
8. Drive the project by leading by example and motivating all concerned until the project
accomplishes its goal.
Qualities/Necessary skills
1) Personal skills
A project manager must be able to motivate and sustain people. This they do by solving problems and
removing obstacles through;
 being straight-forward and knowledgeable
 being positive even when there are difficulties/ problems
 being considerate and respectful - appreciate efforts of team members
 seek consultations from higher management or more experienced people when problems are
too big
2) Technical skills
This depends on the type and size of the project, their structure, resources available and the project
environment.
Questions that the manager may seek to answer;
 What technology?
 Who will do it?
 What quality needs to be achieved?
 What resources need to be outsourced?
3) Management Skills
A project manager needs to understand the many facets of the business aspect of runnin g a project.
This calls for skills, in organization, communication, finance and human resource.
This means a project manager may require studying some of the following topics;
i. Project, initiation, planning and organization
ii. Effective project negotiation
iii. Software for project management e.g. MS-Project
iv. Developing powerful project presentations and reports.
v. Managing risks and making decision
vi. Effective problem and change management
vii. Recruiting people and keeping them
viii. Personnel and project leadership
ix. Performance management.
4) Coping Skills
A project manager has to acquire a number of skills to cope with different situations such as conflict,
uncertainty and doubt by being - flexible, persistent and firm, creative, absorbing large volumes of data,
patient and handling large amounts of stress.
NB/ Projects rarely progress the way that they are defined, hence project managers needs to manage the
uncertainly that comes with that.

RESPONSIBILITIES OF A PROJECT MANAGER

(1) Responsibilities to the parent organization

i. Conservation of resources
ii. Timely and accurate project communication
iii. Careful and competent management of the project
iv. Protect the firm from high risk
v. Accurate reporting of the project status with regard to budget and schedule
(2) Responsibilities to the client
i. Preserve the integrity of the project and the client
ii. Resolve conflict among interested parties
iii. Ensure performance, budgets and deadlines are met
(3) Responsibility to project team members
i. Fairness, respect and honesty
ii. Concern for members future after the project
(4) Other responsibilities
i. Acquiring adequate resources
ii. Acquiring and motivating personnel
iii. Dealing with obstacles
iv. Making project goal trade offs
v. Dealing with failure, risks and fear of failure
vi. Maintaining the breadth of communication
vii. Negotiation

PROJECT CHARACTERISTICS AND SKILLS

i. Strong technical background

ii. A mature individual
iii. Someone who is currently available
iv. Someone on good terms with the senior management
v. A person who can keep the project team happy
vi. One who has worked in several different departments
vii. A person who can walk on/part the waters

ETHICAL ISSUES
A project manager must also have a strong sense of ethics. Some common ethical missteps are: -
i. “wired: bids and contacts – where the winner has already been predetermined
ii. “buy in” – bidding low with the intention of cutting corners or forcing subsequent contract changes
iii. “kickbacks”
iv. “covering” for team members in the name of ‘group cohesion;
v. Taking short cuts to meet deadlines or budgets
vi. Using marginal/substandard materials
vii. Compromising on safety
viii. Violating standards
PROJECT MANAGEMENT CAREER PATHS

Most project managers get their training in one or more of the following ways:-
i. On-the-job
ii. Project management seminars and workshops
iii. Active participation on the programs of the professional societies
iv. Formal education in degreed programs

Difference between Project Management and General Management

1. Project Management involves a temporary undertaking while General Management is a

going concern.
2. In general Management, budgeting is done periodically while in Project Management
budgeting is done for the whole project.
3. General management tends to be specialized e.g., Finance, Operations, Marketing,
Accounting etc. while Project Management requires a multiplicity of skills.
4. The environment of General Management usually tends to be stable while Project
Management’s environment tends to be dynamic- uncertainties and risks are many.
5. The General Management tends to rely on positional authority- main source of authority
while Project Management tends to rely on other sources of influence such as technical
expertise, ability to negotiate with various stakeholders. Project Management will involve
all functions of Management i.e., POSDCB.
6. Project management involves a fluctuating workload while general management involves
an incremental workload

PROJECT PARAMETERS

These are the key issues in Project Management. They include:

A. Quality of the Project.

These are the specifications of the project deliverables. The quality of the project should
be agreed upon by the client and the project team. At the end this, it has to be evaluated
for achievement.
B. Cost

These are the budgetary provisions for projects. This has to be ascertained before the start
of the project. At the end we may experience cost overruns which may be as a result of:
 Poor budgetary estimates

 Probably there are extra-ordinary occurrences like inflation, bad political

climate etc. When these happens, two things will happen
 Need to look for additional funds

 The project stalls.

A cost under-run is a result of

 Overprovision of the cost of the project provided

 Gains in foreign exchange

C. Time
There should be a project schedule to guide the implementation. Promised delivery time
has to be achieved. This may not be achieved due to:
 Time over-run which is as a result of poor management skills for the project

 Extra-ordinary occurrences like bad weather, developments in regulatory environment

e.g. KRA IT based clearing system.

Ways of dealing with time over-runs include: project crashing, penalties, bonuses, etc.

Project Planning a Step-by-Step Guide

The key to a successful project is in the planning. Creating a project plan is the first thing
you should do when undertaking any kind of project. Often project planning is ignored in
favor of getting on with the work. However, many people fail to realize the value of a
project plan in saving time, money and many problems.
Step 1: Mission Statement

A mission statement tells you the fundamental purpose and primary objectives of the
organization. It concentrates on the present. It defines the customer and the critical
processes. It informs you of the desired level of performance. Its prime function is internal
– to define the key measure or measures of the organization's success – and its prime
audience is the leadership team and stakeholders
Step 2: Project Goals

A project is successful when the needs of the stakeholders have been met. A stakeholder is
anybody directly or indirectly impacted by the project. As a first step, it is important to
identify the stakeholders in your project. It is not always easy to identify the stakeholders
of a project, particularly those impacted indirectly. Examples of stakeholders are:
 The project sponsor.

 The customer who receives the deliverables.

 The users of the project outputs.

 The project manager and project team.

Once you understand who the stakeholders are, the next step is to find out their needs. The
best way to do this is by conducting stakeholder interviews. Take time during the
interviews to draw out the true needs that create real benefits. Often stakeholders will talk
about needs that aren't relevant and don't deliver benefits. These can be recorded and set as
a low priority. The next step, once you have conducted all the interviews, and have a
comprehensive list of needs is to prioritize them. From the prioritized list, create a set of
goals that can be easily measured. A technique for doing this is to review them against the
SMART principle. This way it will be easy to know when a goal has been achieved. Once
you have established a clear set of goals, they should be recorded in the project plan. It can
be useful to also include the needs and expectations of your stakeholders. This is the most
difficult part of the planning process

completed. It's time to move on and look at the project deliverables.

Step 3: Project Deliverables

Using the goals you have defined in step 2, create a list of things the project needs to
deliver in order to meet those goals. Specify when and how each item must be delivered.
Add the deliverables to the project plan with an estimated delivery date. More accurate
delivery dates will be established during the scheduling phase, which is next.
Step 4: Project Schedule

Create a list of tasks that need to be carried out for each deliverable identified in step 3.
For each task identify the following:
 The amount of effort (hours or days) required to complete the task.

 The resource i.e. who will carry out the task.

Once you have established the amount of effort for each task, you can work out the effort
required for each deliverable, and an accurate delivery date. Update your deliverables
section with the more accurate delivery dates.
At this point in the planning, you could choose to use a software package such as
Microsoft Project to create your project schedule. Alternatively, use one of the many free
templates available. Input all of the deliverables, tasks, durations and the resources who
will complete each task.
A common problem discovered at this point, is when a project has an imposed delivery
deadline from the sponsor that is not realistic based on your estimates. If you discover that
this is the case, you must contact the sponsor immediately. The options you have in this
situation are:
 Renegotiate the deadline (project delay).

 Employ additional resources (increased cost).

 Reduce the scope of the project (less delivered).

Use the project schedule to justify pursuing one of these options.

Step 5: Supporting Plans

This section deals with plans you should create as part of the planning process. These can
be included directly in the plan.
a) Human Resource Plan

Identify by name, the individuals and organizations with a leading role in the project. For each,
describe their roles and responsibilities on the project. Next, describe the number and type of
people needed to carry out the project. For each resource detail start dates, estimated duration and
the method you will use for obtaining them.
b) Communications Plan

Create a document showing who should be kept informed about the project and how they
will receive the information. The most common mechanism is a weekly or monthly
progress report, describing how the project is performing, milestones achieved and work
planned for the next period.
c) Risk Management Plan

Risk management is an important part of Project Management. Although often

overlooked, it is important to identify as many risks to your project as possible, and be
prepared if something bad happens. Here are some examples of common project risks:
 Time and cost estimates too optimistic.

 Customer review and feedback cycle too slow.

 Unexpected budget cuts.

 Unclear roles and responsibilities.

 Stakeholder input is not sought, or their needs are not properly understood.

 Stakeholders changing requirements after the project has started.

 Stakeholders adding new requirements after the project has started.

 Poor communication resulting in misunderstandings, quality problems and rework.

 Lack of resource commitment.

Risks can be tracked using a simple risk log. Add each risk you have identified to your
risk log; write down what you will do in the event it occurs, and what you will do to
prevent it from occurring. Review your risk log on a regular basis, adding new risks as
they occur during the life of the project. Remember, when risks are ignored, they don't go
away.

THE PROJECT LIFE CYCLE

The Project Life Cycle is a framework for dividing a project into manageable phases. Regardless of scope
or complexity, any project goes through a series of stages during its life. Most projects can be subdivided
into five generic phases:
1. Concept and Initiation phase,
2. Project Idea Screening
3. Design or Planning and Organization phase,
4. Implementation or execution phase and
5. Closure or Exit phase.
The stages may be depicted grammatically as follows
.NB/ The percentages (%) represent the effort, time and resources employed in the project
1. CONCEPTION AND INITIATION STAGE (I)
The project idea germinates. The idea may be identified out of problems and opportunities i.e. a reaction to
a problem or opportunities from which they identify needs to be met, problems or constraints to be solved
hence a basis for initiating a development agenda.
Sources of project ideas.
a. Internal sources.
i. Unsatisfied customer demands or needs
ii. Problems/constraints in development process due to shortage of essential facilities,
services and materials or human resources and other obstacles to development.
iii. Unused/underutilized resources or opportunities for their conversion towards more
productive uses.
iv. Need to compliment other existing investments.
b. External Sources
i. Competitive pressures.
ii. Technological advancement.
iii. Government legislations
iv. Changes in climatic condition
v. Economic pressures e.g., inflation, depression etc.

2. PROJECT IDEA SCREENING (II)

This is some kind of preliminary screening required to eliminate ideas that are not promising.
The following aspects may be looked into;
a. Compatibility with the promoter.
The idea must be compatible with the interest and personality and resources of the entrepreneur.
According to Murphy, a real opportunity has 3 characteristics;
i. Fits the personality of the entrepreneur in terms of ability, training.
ii. Accessible to him (within his reach in terms of understanding and technology)
iii. Offers him/her growth and high return on the invested capital.
b. Consistency with firms/government priorities:-
The idea must be feasible given the national goals or millennium goals and government regulatory
framework.
c. Availability of inputs
The resources required by the project must be reasonably assured. e.g. capital, technical know-how,
raw materials in terms of cost and availability.

d. Adequacy of the market.

The size of the present market must offer the prospect of adequate sales volume; there should be a
potential return on investment. This may require a check on competitors and their market shares,
present domestic market, sales and distribution system, e.t.c.
e. Reasonableness of cost
The cost structure of the proposed project must enable it to realize an acceptable profit. Examine
costs of raw materials, labour, factory and general administration expenses.
f. Acceptability of price level
In assessment of this consider factors like vulnerability to business cycles, technological charges,
competition of local substitutes and imports and the government control over price and distribution.
NB/ All the above is achieved through a feasibility study.

Feasibility Study

Feasibility is the measure of how beneficial the development/ project will be to the wishes
of the society or the workability of a project. Feasibility analysis is the process by which
the feasibility is measured.
It is looked at in 2 ways:-

 Whether the organization can be able to implement it i.e. technical ability etc

 Whether the project justifies the investment i.e. benefits and costs

Feasibility is part of the process of identification, preparation and selection. The purpose
of the Feasibility Analysis is to establish whether the proposed project is attractive enough
to justify a more detailed preparation of the project. After classifying the nature of the
project and defining goals and objectives the next step is to conduct feasibility studies for
each of the alternative project identified.
The basic questions to asked are:-

 Is the project feasible?

 How feasible is the alternatives under consideration?

The aim of the FA is to carry out a preliminary investigation which should help to
determine whether the project should proceed further and how it should proceed. The
relevance of this approach will vary with the nature of the project itself. The more concrete
the project is, the more likely that these will be established produces in relation to
feasibility.

However despite of these benefits of FA, not all projects go through FA. Even those that
must undergo FA, they may not all require detailed FA. These will be dictated by the
nature of the project.
Projects that may not undergo Feasibility Analysis include:

1. The sacred cow project

This is one that is started by powerful individuals in organization or government. These

types of projects are started to satisfy the agenda of the powerful persons behind them. In
many developing countries there are many projects proposed by rich people and even
where F.A are conducted, results may be ignored.

2. The operating Necessity projects

They are those that are required to keep a system in operation e.g. those projects that are
meant to prevent catastrophe or those required to respond to emergencies e.g. projects to
respond to floods, risk.

3. Competitive Necessity projects

These projects are conducted in order to maintain a competitive edge over other organizations

e.g. in response to a competitors actions. They are considered to be of survival importance.

And careful analysis may not be carried out e.g.: New look channel for KBC channel 1
News.

4. Product line Extension

These projects are intended to develop and distribute products that can be said to be related
to existing products. Such projects are carried out e.g. Nivea products.

5. Comparative Benefit Model

This is where projects are carried based on some criteria e.g. where projects are ranked as
good, fair, poor), rank order or through peer review.

This is how some projects may be undertaken only to discover that they are not viable.
However, not every project idea needs to go through FA. It is only those with promising
potential that may be allocated resources for feasibility analysis. These projects may be
identified through preliminary screening and pre-feasibility analysis
STAGES OF FEASIBILITY ANALYSIS

1. Preliminary screening

It examines the new projects ideas in relation to key factors. Key factors determine
whether the project is workable e.g. of key factors are availability of raw materials,
infrastructure, skilled labour etc

2. Pre-feasibility analysis

Look at the basic criteria for those projects that have passed step 1 the purpose is to
determine the sustainability of the project i.e. how successful it will be.
Qualifying projects are ranked and then evaluated subjectively in relation to a few basic
criteria:-
 Availability of adequate machinery

 Project growth potential

 Magnitude of investment/investment costs

 Operation and distribution cost

 Demand and supply factors

 Social and environmental considerations

 Also look at legal viability i.e. not illegal

3. Actual feasibility analysis /study

We conduct a detailed study that culminates in a feasibility report that will be used by the
decision makers for project appraisal. It involves collection and analysis of data in the
field. It may build on the project plan and beings in any new assumption and questions.

A complete FA of a project needs to cover 7 important study areas

 Technical feasibility: includes man power and technological requirements.

 Economic justification: such as the costs and benefits

 Administrative/managerial, including external linkages and internal organization

 Environmental, including present baseline data and the impact of those data

 Social and political including demographic data and social needs

 Financial for funding needs and sources

 Market needs

Importance of FA

a) It provides information in the preliminary design projects.

b) Feasibility and appraisal help to guide the implementation of the project. They point
out potential trouble spots, and help make contingency plans
c) By examining projects, it include criteria and baseline measure to evaluate the project,
providing the peacemaker both for monitoring and the project driving implementation
and for evaluating its overall success and completion
The following are areas in which a feasibility study may be carried out.
a. Economic Analysis
This is also called the social cost benefit analysis. It evaluates a project on the social costs agains the
benefits it will bring.
It seeks to answer questions like;
i. What are the direct economic benefits and costs of the project in terms of efficiency?
ii. What would be the impact of the project on the distribution of income in the society?
iii. What would be the impact of the project on the level of savings and investments in the society?
iv. What would be the contribution of the project towards the fulfillment of certain wants? E.g. self-
sufficiency in food, employment and social order?
b. Technical Analysis
This seeks to establish whether or not available technology can sustain the project and whether the
technology proposed to be employed is appropriate from the social point of view.
c. Financial Analysis
This seeks to ascertain whether the proposed project will be financially viable in terms of debt
servicing and returns expectation of those who provide the capital.
The concerns are;
 Initial investment outlay or cost of the project
 means of financing
 cost of capital
 projected profitability
 break-even point
 cash flows of the project
 worthwhileness of the project (on merit)
 projected financial position
 Level of risk.
d. Operational Analysis
This is done to establish whether the project is socially accepted or there is resistance from the
relevant stakeholders.
e. Market Analysis
This involves analysis of the availability of market for the project output, its size and
accessibility. In this analysis one would be need to look for information such as consumption trends
in the past and present, structure of the competition, and elasticity of demand.
f. Ecological Analysis
These are environmental concerns which are of great concern in the recent years. They range from
pollution by industries for chemicals, solid and other wastes. Questions to be answered may be the:
i. Likelihood of the damage the project may cause to the environment.
ii. The cost of restoration measures that may be required to contain damage within acceptable
limits.
iii. Schematic Diagram for Idea Screening and Feasibility Study

GENERATION OF IDEA

INITIAL IDEA SCREENING

IS IDEA PRIMA FACIE GOOD?

FEASIBILITY STUDY TERMINATE IDEA

IS PROJECT WORTHWHILE?

PREPARE PROPOSAL TERMINATE

DOCUMENTS

FEASIBILITY REPORT

After feasibility studies have been done and completed, they need to be presented in a single
document which should be handed to the stakeholders.

The report has the following parts/contents: -

i. The introduction chapter should clearly list the goals and objectives of the
project=TITLE OF THE PROJECT
ii. EXECUTIVE SUMMARY including terms of reference, brief description of exercise,
key finding and recommendations
iii. PROJECT DEFINITION covering goals and objectives

iv. GENERAL B/GROUND AND INTRODUCTION within outline description of the

options/alternatives, general information e.g. analysis of industry, structure of project,
description etc.
v. CLEAR DEFINITION OF SUCCESS CRITERIA OR FEASIBILITY CRITERIA

vi. FINDINGS OF the FA on marketing analysis, operating requirements and costs,

technical analysis, original analysis, financial analysis, economic analysis, political and
social analysis, environmental impact assessment etc
vii. PRELIMINARY COMPLIANCE-Show the project meets or complies to all the criteria

viii. PLAN FOR THE MANAGEMENT of the project including implementation

ix. CONCLUSION

3. PROJECT DESIGN OR PLANNING AND ORGANIZATION PHASE (III)

This includes a detailed identification and assignment of each task until the end of the project. Project
schedules, resource requirements, cost budget, policies and procedures are developed. It should also
include a risk analysis and a definition of criteria for the successful completion of each deliverable. The
governance process is defined, stake holders identified and reporting frequency and channels agreed.
Such a process results into a project plan.
The following are the functions of a project plan.
a. Provide a basic for organizing the work of the project and allocating responsibilities.
b. Provides a means of communication and coordination between all those involved in the project.
c. Induce people to work ahead – the plan helps people to understand the actual work that must be
done.
d. Fulfill a sense of urgency and time consciousness.
e. Establish the basis for monitoring and control and guides the project execution.
Comprehensive project planning covers the following;
i. planning the project work i.e. spelling out all activities related to the project by use of the following
tools;
- Work breakdown structure (WBS)
- Network diagrams
- Ghantt charts
ii. Planning the manpower
iii. Planning the money/ financial resourcing or costing of the project.
iv. Planning the information system in a specific way.
v. This information is required for monitoring the project.
NB. Planning is often most difficult and unappreciated process in project management.
Plans must be realistic and useful, therefore should be done by people knowledgeable with the work at
hand.

Project Organization
There are three common structures that can be used in the organization of projects. These include:

1. Functional organizational structure

Functional organization is structure in which authority rests with the functional heads; the structure is
sectioned by departmental groups.
Merits
1. Specialization is enhanced
2. Each functional area is given due attention since the structure identifies the basic or essential activities
that are vital for the survival of the firm.
3. Each manager is accountable for his/her work
4. Delegation is easier.
5. It eliminates duplication of effort
6. It is logical because it groups similar activities together
7. It contributes to organizational simplicity
8. It is relatively cheap to manage.
9. It defines a clear career path
Demerits
1. Failure of one functional department may paralyze the work of the entire organization.
2. Members of the organization may lack a broad view of the project since they specialize in only one area
3. There is too much interdependence between functional departments which may lead to conflict e.g. the
sales department will entirely depend on the production department.
4. Managers may try to build their own functional empires/territories.
5. There may be communication problems between the functional departments.
6. Leads to inbreeding since we do not incorporate any external experts.
2. PROJECT TEAM STRUCTURE

Project team structure (also known as pure project/projectized structure) consists of an autonomous project
team, existing independently of the rest of the organization.
The project team is assembled for a specific project under the action of the project manager. The team is
thus temporary and will be disbanded when its project is complete.

Advantages of project team structures

 Good at responding well to an immediate project need.

 Flexibility
 Responsibility for success of project is clearly identified.
 Releases top management from micromanaging operations, so that the management can focus on the
overall company strategy.

Disadvantages of project team structures

 The actual organizational power and authority of the team manager may be a delicate issue.
 Greater administrative overhead.
 In-group vs. Out-group mentality may develop.

3. Matrix structure
Discipline supervisors are responsible for the efforts of the groups constituting assigned project personnel
and for other required resources.
 The members of the groups and their supervisors are charged with the timely completion of the different
tasks and are responsible to the project manager and the functional manager.

The project manager in the matrix structure works with the functional manager to establish the resource
requirements and their timetable utilization on the project, and to work out the revisions required as the
project effort proceeds.
 The functional manager is responsible for ensuring that resources are utilized in the manner best serving
the interests of the organization.
Merits
1. Better resource allocation
2. Different specialists assist in solving complex problems
3. There is a lot of flexibility
4. It stimulates and enhances interdisciplinary co-operation
5. It enables employees to develop a variety of skills since they receive orders from different managers
6. It leads to better control of projects

Demerits
1. The structure results to complex relationships
2. It may result to power struggle where a manager tries to dominate the staff in his/her functional area
and this may lead to confusion among the employees
3. A lot of time is spent on conflict resolution
4. It may turn out to be very costly due to its complexity
5. It is difficult to design and implement.
6. It may lead to divided loyalty due to dual focus of authority
7. The CEO may lose touch or control of the entire organization

PROJECT DESIGN AND FORMULATION

PROJECT FORMULATION

Difficulties arising from formulating development projects include:

1. Technical and Economic difficulties

This comes as a result of lack of enough study to understand the environment in which we
operate- vegetation, rainfall patterns, cycle of seasons etc.
2. Social-Cultural Difficulties

This is the problem of ignoring gender issues, many development projects are designed in
a way that only men participate, and this is wrong since gender equality should be
embraced. Young people are also not given chance to participate in the projects,
marginalized groups, disabled groups are also ignored. Care should be taken to make sure
that all the stakeholders are given equal chance to participate in project formulation.
Never design a project which will not involve almost everybody in the area. The
irresponsibility of beneficiaries in terms of paying loans (cultural credit problems). At
independence the government decided to give credit to farmers who later thought the
government was giving them free money and hence difficulties in payment. Even the issue
of collateral was difficulty because some defaulted to pay. Some money was used for
specific purpose but never used them for intended purpose hence problem of repayment
Way forward

1. The best way forward is to give the credit in stages as you make observations on how
the credit is being put into use and you will have a chance to discover those who might
not repay.
2. Channel the credit through organized groups which must have a fair composition of
men and women. It is the group that is going to deal with the individuals and not the
lending firm.
3. Security first. When formulating a project, there should be a provision for planning for
food security and not ignore the issue of food security which must be given first
priority.
4. The disappointed hopes of Co-Operative- Revive the Co-operatives

5. Increase the degree of participation of peasant farmers

PROJECT DESIGN

This goes in hand with formulation but focuses on the physical aspect of the project. The
formulation informs the design of the project. Designing a project is a challenging task
which may be difficult in situations in which we are doing it for the first time. It is
recommended that the design be done using some framework. The World Bank has
designed a framework with the following

Research Project → Pilot Project →Demonstration Project → Replica Project

Some projects should not be implemented full especially if they are huge and if we do not
clearly understand how the project is going to respond to a given environment. Design
features keep on improving if the project is implemented at stages.

A NEW APPROACH TO FORMULATING DEVELOPMENT PROJECT

1. Global approach to the environment: This is an integrated development. The people we

are planning for should be seen as belonging to a given area which belongs to a global
environment.
2. Responsible and organized beneficiaries. Those people we are planning for must be
responsible and organized and also have a say in the development of the project and
not passive, ―you cannot develop for people; it is people who develop for
themselves‖. Never give any resource free of charge since people cannot value that
resource, charge them a token even if they can‘t afford, they have to contribute.
3. Adult training. The farmers training centers should be encouraged where individuals
learn new techniques and ways of doing things. Adult training should be availed to
everybody, men and women. Resistance is the main challenge- overcoming this is to
use trainers who understand the culture and values of those being trained.

PROJECT PLANNING
Project planning is part of project management, which relates to the use of schedules to plan and
subsequently report progress within the project environment. Planning process not only establishes what is
to be done, but also smoothens the way to make it happen. Many experts believe that proper planning is
essential for project success.

Project planning is a discipline for stating how to complete a project within a certain timeframe, usually
with defined stages, and with designated resources.

Functions of a good project plan:

a. Provides a basic for organizing the work of the project and allocating responsibilities.
b. Provides a means of communication and coordination between all those involved in the project.
c. Induce people to look ahead – the plan helps people to understand the actual work that must be
done.
d. Instills a sense of urgency and time consciousness.
e. Establishes the basis for monitoring and control and guides the project execution.

Detailed planning involves:

• Clearly defining project objectives (definition agreed upon by customers, organizations /contractors
performing the project).
• Dividing and subdividing project scope into major ‘pieces’ or work packages shown by work
breakdown structure (WBS).
• Defining the specific activities that need to be performed for each work package in order to
accomplish the project objectives.
• Graphically portraying the activities inform of network diagrams, Gantt charts, etc .
• Making a time estimate for how long it will take to complete each activity.
• Making a cost estimate for each activity based on the quality and quantity of resources for each
activity.
• Developing a project schedule and budget to determine whether the project can be accomplished
within the required time.
• Documenting a project plan
Project planning tools
1. Work breakdown structures (WBS)
2. Network diagram
3. Gantt charts

1. Work breakdown structure

A complex project is made manageable by first breaking it down into individual components in a
hierarchical structure, known as the work breakdown structure (WBS). A WBS breaks a project down into
manageable pieces or items to help ensure that all the elements needed to complete the project work scope
are identified.
It provides definition to the project scope by showing the hierarchical break down of activities and end
products that must be completed to finish the project. Such a structure defines tasks that can be completed
independently of other tasks, facilitating resource allocation, assignment of responsibilities, and
measurement and control of the project.
Example

The criteria for deciding how much detail or how many levels to put in the WBS are;
1. The level at which a single individual or organ can be assigned responsibility and accountability
for accomplishing the work package.
2. The level at which you want to control the budget and monitor and collect cost data during the
project.
N/B: There is not a single correct WBS for any project i.e. two different project teams might develop
somewhat different WBS for the same project.

Major functions of a WBS

 Allows better and more detailed planning.
 Facilitates the budget and schedule preparation process.
 Facilitates assignments of responsibility to organization and or functional area
 Provides a structure for monitoring grid reporting of project development and progress.
When all the detailed activities have been defined for each of the work packages the next step is to
graphically portray them in a network diagram that shows the appropriate sequence and interrelationship
needed to accomplish the overall project scope.

2. Network diagrams
A network diagram is a sequential and logical group of activities and events diagrammatically illustrating
the relationship between and among them. It shows the inter-relationship of the various jobs or tasks which
make up the overall project and clearly identifies the critical parts of the project.
Terminologies
Activity: An activity is one of the tasks in a project. It consumes resources like time, raw materials,
manpower, equipment, capital etc. In the network diagram an activity is represented by an arrow.
Dummy Activity: It is an activity that does not consume time & resources. It is used to show clear and
logical dependency between activities so as not to violate the rules of drawing a network. They are
represented in the diagram by broken lines ------------------
An event/state/node: An event or node indicates the start or end of an activity; it represents the state of
having completed the job or the state of being ready to start the job. An event has no time duration and
consumes no resource. It is represented on the diagram by a circle.
Network: It is a combination of activities, dummy activities & events in a logical sequence according to
the rules of drawing the network.
Guidelines for drawing network diagrams:
1) A complete network diagram should have only one beginning point and only one end point.
2) The flow of the diagram should be from left to right.
3) Loops are not allowed in the activities since a network is a progression of activities always moving
forward with time i.e. forward ever backward never.
4) All activities must be tied to the network i.e. danglers are not allowed
5) Arrows should not cross each other unless it is absolutely necessary.
6) Arrows should be kept straight and not bent or curved.
7) Each activity is represented by one and only one arrow in the diagram, hence no single activity can
be represented twice in the network.
8) No activity can begin until all activities preceding it are complete.
9) Each activity must have one beginning point and one end point. However many activities may have
the same beginning event and also use the same end event.
10) The length of the arrow is not proportional to its duration.
11) Dummy activities should only be used when absolutely necessary.
12) Once the diagram is complete the events should be numbered serially from left to right. The tail
event number must be smaller than the head event number. Hence each activity must uniquely be
identified by its tail and head event numbers.

Techniques of Network Analysis

There are two main techniques
a. Critical Path Method (CPM)
b. Project Evaluation & Review Technique (PERT)

a. Critical Path Method (CPM)

It is a deterministic model that doesn’t take into account uncertainties involved in execution of an activity.
It assumes that time taken to undertake each activity can be certainly determined i.e. it is known with
certainty and remains constant. It is mostly used to determine the critical path of a project.
A critical path is a sequence of those activities that require maximum time in the conclusion of the project.
It gives the shortest time possible within which the whole project can be completed. To identify the critical
path the following steps are followed.
Steps
I. Identify all the activities and their logical sequence
II. Construct a network
III. Find the Earliest Start Time (EST) by using a forward pass through the network.
IV. Find the Latest Start Time (LST) by using a backward pass through the network.
V. Identify the critical path which consists of those activities with same EST and LST

Notes
a) Each event is illustrated as below.
Activity NO

EST LST

b) To determine the EST when using a forward pass, consider the highest values.
c) To determine the LST when using a backward pass, consider the smallest values.
d) The activities on the critical path are usually denoted by
QUESTION ONE
Consider the simplified scenario for the development of a consumer product through the market test phase
shown in the table below.
Activity Symbol Preceding Time estimated
activities (weeks)
Design promotion campaign A - 3
Initial pricing analysis B - 1
Product design C - 5
Promotional costs analysis D A 1
Manufacture prototype models E C 6
Product cost analysis F E 1
Final pricing analysis G B, D, F 2
Market test H G 8
Required
a) Draw the network for this project.
b) Determine the critical path
c) Shortest project completion time.

QUESTION TWO

Consider a project which has been modeled as follows:

Activity Immediate Predecessor (s) Completion Time (hours)

A - 7
B - 10
C A 4
D A 30
E A 7
F B,C 12
G B,C 15
H E,F 11
I E,F 25
J E,F 6
K D,H 21
L G,J 25
Required:
a. Determine the project’s expected completion time and its critical path.

QUESTION THREE

Central and Eastern Industries is planning to introduce a new mobile phone service. To do so, the
following activities are necessary:

Activity Preceding Expected Time

Activity (weeks)
A - 6
B - 3
C A 5
D A 4
E A 3
F C 3
G D 5
H B, D, E 5
I H 2
J F, G, I 3

Required
a. Draw the network for this project.
b. Determine the critical path
c. Shortest project completion time.

b. Project Evaluation & Review Technique (PERT)

It is a probabilistic model i.e. takes into account uncertainties involved in the completion of activity time. It
is primarily concerned with project time. It is generally used for those projects where time required to
complete various activities is not know with certainty in advance. This is usually the case in projects which
are non repetitive in nature e.g. research and development projects.

It uses three time estimates

i. Optimistic time (Ot)

It is the minimum time required to complete an activity if everything goes according to plan i.e. under an
ideal condition.

ii. Most Likely time (MLt)

It is the most probable time which an activity will take. This is time between optimistic and pessimistic
time.

iii. Pessimistic time (Pt)

It is the best guess estimate of the maximum time that will be required to complete an activity if bad luck
was encountered at each stage.

How to incorporate uncertainties in the PERT model

Uncertainties can be incorporated in the PERT model by assuming that activity time has a beta distribution.
This enables us to calculate the expected time and variance for each activity

Expected time (Et)

This is the average time that an activity would take if it was repeated many times. It is computed as follow

Et = Ot + 4MLt + Pt
6
Activity variance

This is the range or deviations that actual activity time can assume over or below the expected time. It is
given by

Variance = Pt-Ot
6
Project variance

This is the variance of the critical path duration which is in turn the sum of the variances of activities on it.

QUESTION FOUR
A construction project consists of the activities shown below:
Time (weeks)
Activities Optimistic Most likely Pessimistic
1-2 4 6 10
1-3 3 5 9
2-4 7 12 20
2-5 3 5 8
3-4 6 11 15
4-5 4 6 11
4-6 3 9 14
5-6 2 4 8
6-7 3 5 9

Required:
a. The expected time and variance of each activity.
b. A project network for the activities.
c. The expected completion time and variance of the project
d. Probability of completing the project in less than 30 weeks
e. If the project is completed in less than 30 weeks, it will cost Sh.1 million. It will cost Sh.1.5 million
if the project is completed between 30 and 35 weeks and Sh.2 million if it takes more than 35
weeks. Compute the expected cost of the project.

QUESTION FIVE

A construction project consists of the activities shown below:

Time (weeks)
Activities Optimistic Most likely Pessimistic
1-2 1 4 7
1-3 1 4 8
1-4 2 2 8
2-5 1 1 1
3-5 2 5 14
4-6 2 5 8
5-6 3 6 15
Required:
a. The expected time and variance of each activity.
b. A project network for the activities.
c. Critical path
d. The expected completion time and variance of the project
e. Probability of completing the project at least 3 weeks after the expected completion time.
Project time Floats

Float refers to spare time in a network. Activities on the critical path have no float.
If an activity has some float, it means it can be delayed without having any impact on other activities or to
the overall project. By definition, any delay in a critical activity will have a similar delay on the overall
project and therefore such activities have got no float.
There are three types of floats:
a. Total float
This refers to the amount of time an activity or a path of activities could be delayed without affecting the
overall project duration. It is obtained by the following formulae;
Total float = LFT – EST – activity Duration
Critical activities have a total float of zero.
b. Independent float
This is the amount of time an activity can be delayed without affecting the next activity. It is given by the
formulae
Independent float = EFT – LST – Duration
c. Free float
This is the amount of time that an activity can be delayed without affecting any other activity in the project.
It is given by the formula:
Free float = EFT – EST – Duration
Exercise: Compute the total float, independent floats and free float for the activities of the above
project: in Question Two

Project crashing (least cost scheduling)

This is a technique that is used to analyse the cheapest way of reducing the overall project duration. The
sooner a project is completed the better as time is a scarce resource. However, in order to be able to reduce
the duration of an activity, additional resources may need to be employed resulting in an increase in costs.
Since minimization of cost is a desirable objective it becomes necessary to identify how best the project
duration can be reduced while still achieving the objective of minimising costs.

Definitions:
 Normal cost – The cost incurred when an activity is completed within the normal time.
 Normal time – This is the duration an activity would take if available resources are used as
efficiently as possible. It is the time taken to complete an activity when there is no delay and no
rush.
 Crash time – This refers to the shortest possible time it would take to complete an activity if
additional resources were employed.
 Crash cost – cost incurred when an activity is crashed.
 Cost slope – This refers to the additional cost incurred in crashing an activity by a unit time. It
is computed as follows
Crash cost−Normal cost
Cost slope=
Normaltime −Crash time
Crashing Process:
The process of reducing the duration of a project by employing additional resources is referred to as
crashing or least cost scheduling. This process involves reducing project duration by concentrating on those
critical activities that are cheapest to crash.
Rules of crashing
1. Only activities on the critical path are crashed.
2. Start crashing the critical activity with the least cost slope.
3. A critical path must remain critical throughout.
4. Where there are two or more critical paths an activity must be crashed from each path
simultaneously.
5. A non-critical path may become critical after crashing. However after it becomes critical it
must remain critical throughout.
Assumptions made when crashing:
• Cost slope is constant and can be certainly determined.
• There exists a direct linear relationship between time and costs.
Steps involved when crashing
2. Draw the network and do a time analysis (critical Path) based on the normal time.
3. Determine the overall costs of the project using normal costs.
4. Compute the cost slope of the critical activities.
5. Rank the activities in ascending order of their cost slope.
6. Start crashing the critical activity with the least cost slope.
7. Ensure that every reduction effected has an impact on the overall project duration
PROJECT PLANNING MATRIX (PROJECT LOGFRAME)

The Project Logframe is a management tool that aims to promote good project design by clearly
stating the key components how the project is expected to work and how success in the project will
be measured. It ensures that the whole project process is considered before the work begins thereby
avoiding problems that may be costly and difficult to address at a later stage.
The project Logframe takes the form of a 4x4 matrix which enables the decision maker to identify
the project purpose and goals and hence plan for the projects outputs and inputs. This approach was
developed for World Bank projects but it has found application in other projects including the
private sector. It was introduced as a way of ensuring continuous monitoring of projects so as to
take necessary steps as the project progresses. The project Log frame has two types of logic:-

a) Horizontal logic- this is made up of objectively verifiable Indicators, means of

verification and the critical assumptions.
b) Vertical logic- this is made up of the project goal, purpose, project outputs & inputs and
activities to the project.

Project Title: Project Duration: From …… To………

Total Funding: Date Prepared:
Narrative summary Objectively Verifiable Means of Verification Important
Indicators (OVIs) (M o V) assumptions
Goals
Purpose
Outputs
Inputs
Activities

1. Goals: This is the highest-level objective that the project will help to address. It is also known as
the sector goal. The goal is value judgement which satisfies one or more organizational goals.
2. Purpose: This is the immediate objective of the project and is more specific than a goal. It is the
immediate impact or accomplishment of the project i.e. the reason why the project is designed.
3. Outputs: These are the specific deliverable results that the project manager and the entire team
can guarantee.
4. Inputs: These are people, information, and other resources that are expended to produce
the outputs.
5. Activities: These are the tasks undertaken by the project team to produce the outputs.
6. Objectively Verifiable Indicators (OVI’s): This is the evidence which will be used to judge
achievements of the various levels. For inputs the OVIs will be a summary of the project budget
and other resources expended.
7. Means of verification: These are the specific sources of data necessary to verify the indicators
of the goal, purpose, outputs, and inputs. They may include research, project document etc.
8. Important assumptions: These are the external factors which are beyond the control of the
project manager that may affect the sustenance of the objectives, purpose, outputs etc.

Importance of the Logframe

1. It forces the project manager to carefully think through the project and see various
interrelationships in the project.
2. It provides the basis for monitoring and evaluation of the project
3. It guides the implementation of the project
4. It is a requirement by most development partners to give funds.

Example

Name of the Project: From................ To.................

Total Cost Date prepared...........................
Narrative summary Objectively Means of verification Important
Verifiable Indicators assumptions
Goal: To improve the Current deplorable Observation Political
living conditions of living conditions Economical
people living in slums
Purpose: Lack of basic Observation Social-cultural
To improve necessities
sanitation, (sewerage Technological
and drainage) Ecological –
Provision of clean environmental issues
water, eradicate Legal
insecurity, enhance Demographical
food security, reduce Age
congestion, eradicate Sex/gender
social crime, improve Income
Housing, improve on Religious
the road network, Education
Poverty eradication, Physical
Improved Education, ability/disability
improve health care Competitive
Outputs: pit latrines, Improved living Baseline study
piped Conditions, facilities Interviews,
water/boreholes, and infrastructure observation of
drainage ongoing/completed
system, sewerage projects/activities,
system, security measurement,
lighting, police post, Feedback/comments
relief food, youth from beneficiaries.
empowerment, build
a market/stalls, small
scale businesses,
Training, food for
work projects, houses,
schools, hospitals/
clinics/dispensaries
Inputs: Records from the Observation
Funds, labor/skills, project Feedback from
Land, Materials and various stakeholders
equipment
Activities: Recordings from Reports from the
sensitization, previous meetings on media, local
construction, training. necessary authorities
interventions Observation

PROJECT SELECTION

4. IMPLEMENTATION OR EXECUTION PHASE(IV)

The most important issue in this phase is to ensure project activities are properly executed and controlled.
Project manager coordinates his team to ensure that the project is executed according to its scope, quality,
time and cost. The planned solution is implemented to solve the problem specified in the project's
requirements.
5. CLOSURE OR EXIT PHASE (V)
In this last stage, the project manager must ensure that the project is brought to its proper completion. The
closure phase is characterized by a written formal project review report containing the following
components: a formal acceptance of the final product by the client, Weighted Critical Measurements
(matching the initial requirements specified by the client with the final delivered product), rewarding the
team, a list of lessons learned, releasing project resources, and a formal project closure notification to
higher management.

PROJECT PROPOSAL
A project proposal is a detailed account of a succession of activities meant to solve a certain problem. In
order to be successful, the document should: give a logical arrangement of a research idea, demonstrate the
importance of the idea, explain the idea's connection to past actions, and express the activities for the
intended project.
The proposal is written with a specific purpose in mind: to convince someone that the project can and
should be undertaken. Although there isn't a universal format for project proposals, many elements in
proposals are important, and often, mandatory. Above all else, you must remember that a project proposal
is an argument. If you don't present a viable and logical argument, your proposal will likely be rejected.
Foundations give specific proposal guidelines:

PROJECT PROPOSAL FORMAT

SAFARICOM FOUNDATION PROJECT PROPOSAL FORMAT
GENERAL INFORMATION
1. Name of Organisation
2. Project Title
3. Project Location
4. Contact Person
5. Contact Information: Physical Address, Postal Address, Phone Number and Email Address
6. Project Timeline
7. Amount Requested
EXECUTIVE SUMMARY:
Provide a brief overview and summary of the project. It should provide a credible statement that describes
your organization and establish the significance of the project
PROBLEM STATEMENT:
State the challenges identified, the rationale/need to address these challenges and the conditions to be
changed by the project
PROJECT OBJECTIVES:
The objectives should describe the intended outcome of the project and should be SMART (Specific,
Measurable, Accurate, Realistic and Time Bound).
Indicate how the objectives will contribute to the achievement of the project, what difference the project
will make and the time frame during which this will happen.
PROJECT IMPLEMENTATION AND MANAGEMENT PLAN:
Describe the project activities indicating how the objectives will be accomplished, what will be done, who
will do it, who are the implementers, partners and beneficiaries and when it will be done. Describe how the
project will be sustainable after the funding period.
PROJECT MONITORING AND EVALUATION:
Describe how you are going to monitor and evaluate the project so as to assess progress during
implementation and improve the project efficiency as the project moves along.
DOCUMENTATION AND SHARING RESULTS:
Describe how you are going to document the progress of your project during and after implementation.
State how you will document and share your results and let others know of your purpose, methods and
achievements.
PROJECT BUDGET:
Indicate the total cost of the project and also provide a detailed budget for these costs.
PROJECT SELECTION
CAPITAL PROJECT EVALUATION TECHNIQUES:

Project Selection: Is the process by which we identify the projects to be implemented

based on the priorities of the stakeholders. In order to choose the projects, we make use
of models that may be qualitative or quantitative or both.
Whichever models we choose, they need to meet at least some basic criteria. The
criteria of choosing a selection model are: -

a) Realism: The model chosen should reflect the reality of the managers ‘dream and
situation. This way we can have a common basis for comparisons on of projects.
b) Capability: The model chosen should allow the manager to remain focused on the
organization abilities and goals; it should also enable the manager to consider the
likely risks benefits and costs and provide a way of considering the multiple
changes in the environment.
c) Flexibility: The model should be able to accommodate changes within the
environment. It should be self-adjusting and responsive to the changes in the projects
environment with speed and accuracy e.g. it should be easy to carry out each analysis
d) Ease of use: The model should be easy to use and understand. It should be
possible to interpret the results without unnecessarily looking for specialist
interpretation. It should also take a shorter time to execute. Also relates to the case
with which the relevant information is required.
e) Cost: The cost of data gathering and modeling should be moderate, i.e. the cost of
choosing the project should be reasonable in relation to the benefits of project
selection
f) Ease of computerization: It should be easy to automate

A capital project is a long-term investment which requires the use of huge amounts of capital, both
financial and labour, to undertake and complete. E.g. a new building , acquisition of land or property, lease
of property, the refurbishment of an existing building , purchase of an equipment, etc The commitment of
funds to capital projects gives rise to a management decision problem, the solution of which, if incorrectly
arrived at, may seriously impair company profitability and growth. The proper use of evaluation techniques
and criteria should enable management to make more effective decisions which result in future success.
The purpose of investment appraisal is to evaluate whether or not the current sacrifice is worthwhile. The
techniques used may include;
a. Cost/benefit analysis
b. Accounting rate of return method
c. Payback period method
d. Net present value method
e. Profitability index method
f. Internal rate of return method

Cost/benefit analysis
Cost–benefit analysis (CBA), sometimes called benefit–cost analysis (BCA), is a systematic process for
calculating and comparing benefits and costs of a project. It has two purposes:
 To determine if it is a sound investment project
 To provide a basis for comparing projects.
It involves comparing the total expected cost of each option against the total expected benefits, to see
whether the benefits outweigh the costs, and by how much.
The following is a list of steps that comprise a generic cost–benefit analysis.
i. List alternative projects.
ii. List the stakeholders.
iii. Select measurement(s) and measure all cost/benefit elements.
iv. Predict outcome of cost and benefits over relevant time period.
v. Convert all costs and benefits into a common currency.
vi. Apply discount rate.
vii. Calculate net present value of project options.
viii. Perform sensitivity analysis.
ix. Adopt recommended choice.

Accounting rates of return (ARR)

This technique uses accounting information as revealed by the financial statements to measure the
profitability of the investment.
Averageincomeaftertaxanddepreciation
ARR= × 100
Average investment

Initial Investment +residual value

Average investment =
2
Acceptance criterion
 Management should establish the minimum ARR for its projects
 A project whose ARR is higher than the management’s ARR should be accepted and vice versa.
 If the projects are mutually exclusive, chose the one with the highest ARR
Strengths of ARR
i. Simple to understand and use.
ii. Calculate from accounting data which is readily available from financial statements of a
business organization.
iii. Uses returns from entire life of the project to determine project profitability.
Weaknesses of ARR
i. Ignores time value of money.
ii. Uses accounting profits and not cash flows in appraising. Projects. Accounting profits include
non-cash items.
iii. There is no universally acceptable way of computing ARR and this means different parties can
come up with different rates depending on the formula used.

Payback Period Method

Payback refers to the duration required for the project to recoup or recover the initial investment cost.
Initial investment cost is recovered from the future cash inflows expected from the project. If the
project generates a constant annual cash inflow, it’s payback period is computed by dividing the initial
investment cost by the annual constant cash inflows.

Initial Investment
PBP=
annual constant cash inflows ¿
¿
If the project undertaken is to yield un equal cash inflows, its PBP can be determined by adding up the
cash inflows until the total cash inflows are equal to the initial investment cost. It is assumed that the
cash inflows are evenly generated and that cash inflows for a fraction of a year can be calculated
proportionately.
Acceptance criteria
 The management should fix the maximum acceptable PBP for its future projects
 Project whose PBP is less than the managements PBP should be accepted and vice versa.
 If the projects are mutually exclusive, the one with the smallest PBP
Strengths of payback period method include the following:
i. It is simple to understand and easy to calculate
ii. It chooses ventures with the shortest payback period and this minimizes the risks associated
with returns which will be generated some time in future and which may be uncertain.
iii. Choosing of the ventures with the shortest payback period improves the liquidity position of the
company
iv. Payback period is realistic for those companies that which to re-invest intermediary returns.
Weaknesses of payback period method include the following: -
i. It ignores the time value of money.
ii. It ignores cash flows after the payback period
iii. There is no rational basis for setting a maximum payback period
iv. It’s not consistent with the objectives of maximizing the market value of firms shares. Shares values
do not depend on payback period of investment projects.
v. When the project does not yield uniform returns payback period will not be accurate as it will
assume that cash flows occur evenly throughout the year which is unrealistic
Net Present Value (NPV)
This technique recognizes the fact that cash flows arising at different time period differ in value and are
comparable only where their present values are determined. NPV is the difference between the present
value of cash inflows and the present value of cash outflows.
Decision criterion
 Undertake projects with positive NPV
 Reject projects with negative NPV
 If the projects are mutually exclusive, chose the one with the highest positive NPV
Strengths of NPV
i. It recognizes the time value of money.
ii. It takes into account cash flows over the entire life of the project to determine the project
viability.
iii. It ranks projects according to their true profitability
iv. It uses cash flows and not profits and therefore gives a reasonable assessment of the investment
viability.
v. It is consistent with the value additively principle. The NPV’s of various projects can be added
together to determine the increase in the value of the firm.
Weaknesses of NPV
i. It is more difficult to use compared to the traditional methods.
ii. It use the firms cost of capital to discount the cash flows. It thus assumes that the firms cost of
capital is always available for use and is easy to calculate which is not the case.
iii. It is only ideal in ganging the profitability of investments similar in a number of aspects such as
similar economic life, similar initial cost, etc.
iv. It ignores risks associated with an investment. All the firms future projects are evaluated using
the same discount rates irrespective of the differences in their level of risk.
v. Use of the firms cost of capital as an investment discount rate to be applied to the firms future
project is based on the assumption that the firm’s future projects will bear the same risks as the
current projects which is unlikely.
vi. It involves estimates of future cash flows which is a tedious task.

Profitability Index (PI) or benefit Cost Ratio (BCR)

Profitability index is the ratio of cash inflows to the initial cost of the project.
Present Value of cash inflow
PI =
Initial Cost
Decision criterion
 Undertake projects whose PI>1
 Reject projects whose PI<1
 If the projects are mutually exclusive, chose the one with the highest PI
Strengths of PI
i. Recognizes time value of money
ii. Takes into account cash flows over the entire life of the project
iii. Uses cash flows and not profits and therefore gives a reasonable assessment of the investment
viability.

Weaknesses of PI
i. Difficult to use compared to the traditional methods
ii. Assumes that the firm cost of capital is always available for use and easy to calculate which not the
case is.
iii. Involves estimates of feature cash flows which is a tedious task
iv. Ignores risks associated with an investment. All the firms’ future projects are evaluated using the
same discount rates irrespective of the difference in their level of risks.
Internal rate of return (IRR)
IRR is the discount rate at which the NPV of a project is zero
Decision criterion
 Undertake projects whose IRR> cost of capital
 Reject projects whose IRR<Cost of capital
 If the projects are mutually exclusive, chose the one with the highest IRR
Strengths of IRR
i. Takes into account time value of money.
ii. Considers cash flows occurring over the entire life of the project.
iii. Ranks projects according to their true profitability giving the same result as NPV method.
iv. It is consistent with shareholders wealth maximization objectives
v. Uses cash flows and not profits and therefore it gives a reasonable assessment of the project
profitability.

PROJECT FINANCING
Project financing is an innovative and timely financing technique that has been used on many high-profile
corporate projects. Increasingly, project financing is emerging as the preferred alternative to conventional
methods of financing infrastructure and other large-scale projects worldwide.
Project Financing includes understanding the rationale for project financing, how to prepare the financial
plan, assess the risks, design the financing mix, and raise the funds. In addition, one must understand the
logical analyses of why some project financing plans have succeeded while others have failed.
Consideration should be made concerning the public/private infrastructure partnerships, public/private
financing structures; credit requirements of lenders, and how to determine the project's borrowing capacity;
how to prepare cash flow projections and use them to measure expected rates of return; tax and accounting
considerations; and analytical techniques to validate the project's feasibility.
Project finance is different from traditional forms of finance because the financier principally looks to the
assets and revenue of the project in order to secure and service the loan. In contrast to an ordinary
borrowing situation, in a project financing the financier usually has little or no recourse to the non-project
assets of the borrower or the sponsors of the project. In this situation, the credit risk associated with the
borrower is not as important as in an ordinary loan transaction; what is most important is the identification,
analysis, allocation and management of every risk associated with the project.

Risk minimization process

Financiers are concerned with minimizing the dangers of any events which could have a negative impact on
the financial performance of the project, in particular, events which could result in
(1) the project not being completed on time, on budget, or at all
(2) the project not operating at its full capacity;
(3) the project failing to generate sufficient revenue to service the debt;
(4) the project prematurely coming to an end.
The minimization of such risks involves a three step process. The first step requires the identification and
analysis of all the risks that may bear upon the project. The second step is the allocation of those risks
among the parties. The last step involves the creation of mechanisms to manage the risks.
If a risk to the financiers cannot be minimized, the financiers will need to build it into the interest rate
margin for the loan.

STEP 1 - Risk identification and analysis

The project sponsors will usually prepare a feasibility study, e.g. as to the construction and operation of a
mine or pipeline. The financiers will carefully review the study and may engage independent expert
consultants to supplement it. The matters of particular focus will be whether the costs of the project have
been properly assessed and whether the cash-flow streams from the project are properly calculated. Some
risks are analyzed using financial models to determine the project's cash-flow and hence the ability of the
project to meet repayment schedules. Different scenarios will be examined by adjusting economic variables
such as inflation, interest rates, exchange rates and prices for the inputs and output of the project.
STEP 2 - Risk allocation
Once the risks are identified and analyzed, they are allocated by the parties through negotiation of the
contractual framework. Ideally a risk should be allocated to the party who is the most appropriate to bear it
(i.e. who is in the best position to manage, control and insure against it) and who has the financial capacity
to bear it. It has been observed that financiers attempt to allocate uncontrollable risks widely and to ensure
that each party has an interest in fixing such risks. Generally, commercial risks are sought to be allocated to
the private sector and political risks to the state sector.

STEP 3 - Risk management

Risks must be also managed in order to minimize the possibility of the risk event occurring and to
minimize its consequences if it does occur. Financiers need to ensure that the greater the risks that they
bear, the more informed they are and the greater their control over the project.
Since they take security over the entire project and must be prepared to step in and take it over if the
borrower defaults. This requires the financiers to be involved in and monitor the project closely. Such risk
management is facilitated by imposing reporting obligations on the borrower and controls over project
accounts. Such measures may lead to tension between the flexibility desired by borrower and risk
management mechanisms required by the financier.

Types of risks
Of course, every project is different and it is not possible to compile an exhaustive list of risks or to rank
them in order of priority. What is a major risk for one project may be quite minor for another. In a vacuum,
one can just discuss the risks that are common to most projects and possible avenues for minimizing them.
However, it is helpful to categorize the risks according to the phases of the project within which they may
arise:
(1) the design and construction phase;
(2) the operation phase;
It is useful to divide the project in this way when looking at risks because the nature and the allocation of
risks usually change between the construction phase and the operation phase.
1. Construction phase risk - Completion risk
Completion risk allocation is a vital part of the risk allocation of any project. This phase carries the greatest
risk for the financier. Construction carries the danger that the project will not be completed on time, on
budget or at all because of technical, labour, and other construction difficulties. Such delays or cost
increases may delay loan repayments and cause interest and debt to accumulate. They may also jeopardize
contracts for the sale of the project's output and supply contacts for raw materials.
Commonly employed mechanisms for minimizing completion risk before lending takes place include:
(a) obtaining completion guarantees requiring the sponsors to pay all debts and liquidated damages if
completion does not occur by the required date;
(b) ensuring that sponsors have a significant financial interest in the success of the project so that they
remain committed to it by insisting that sponsors inject equity into the project;
(c) requiring the project to be developed under fixed-price, fixed-time turnkey contracts by reputable and
financially sound contractors whose performance is secured by performance bonds or guaranteed by third
parties;
d) obtaining independent experts' reports on the design and construction of the project. Completion risk is
managed during the loan period by methods such as making precompletion phase draw schedules of further
funds conditional on certificates being issued by independent experts to confirm that the construction is
progressing as planned.

2. Operation phase risk - Resource / reserve risk

This is the risk that for a mining project, rail project, power station or toll road there are inadequate inputs
that can be processed or serviced to produce an adequate return. For example, this is the risk that there are
insufficient reserves for a mine, passengers for a railway, fuel for a power station or vehicles for a toll road.
Such resource risks are usually minimized by:
(a) experts' reports as to the existence of the inputs (e.g. detailed reservoir and engineering reports which
classify and quantify the reserves for a mining project) or estimates of public users of the project based on
surveys and other empirical evidence (e.g. the number of passengers who will use a railway);
(b) requiring long term supply contracts for inputs to be entered into as protection against shortages or price
fluctuations (e.g. fuel supply agreements for a power station);
(c) obtaining guarantees that there will be a minimum level of inputs (e.g. from a government that a certain
number of vehicles will use a toll road); and
(d) "take or pay" off-take contacts which require the purchaser to make minimum payments even if the
product cannot be delivered.
a) Operating risk
These are general risks that may affect the cash-flow of the project by increasing the operating costs or
affecting the project's capacity to continue to generate the quantity and quality of the planned output over
the life of the project. Operating risks include, for example, the level of experience and resources of the
operator, inefficiencies in operations or shortages in the supply of skilled labour. The usual way for
minimizing operating risks before lending takes place is to require the project to be operated by a reputable
and financially sound operator whose performance is secured by performance bonds. Operating risks are
managed during the loan period by requiring the provision of detailed reports on the operations of the
project and by controlling cash-flows by requiring the proceeds of the sale of product to be paid into a
tightly regulated proceeds account to ensure that funds are used for approved operating costs only.
b) Market / off-take risk
Obviously, the loan can only be repaid if the product that is generated can be turned into cash.
Market risk is the risk that a buyer cannot be found for the product at a price sufficient to provide adequate
cash-flow to service the debt. The best mechanism for minimizing market risk before lending takes place is
an acceptable forward sales contact entered into with a financially sound purchaser.
3. Risks common to both construction and operational phases
a) Participant / credit risk
These are the risks associated with the sponsors or the borrowers themselves. The question is whether they
have sufficient resources to manage the construction and operation of the project and to efficiently resolve
any problems which may arise. Of course, credit risk is also important for the sponsors' completion
guarantees. To minimize these risks, the financiers need to satisfy themselves that the participants in the
project have the necessary human resources, experience in past projects of this nature and are financially
strong (e.g. so that they can inject funds into an ailing project to save it).
b) Technical risk
This is the risk of technical difficulties in the construction and operation of the project's plant and
equipment, including latent defects. Financiers usually minimize this risk by preferring tried and tested
technologies to new unproven technologies. Technical risk is also minimized before lending takes place by
obtaining experts reports as to the proposed technology.
Technical risks are managed during the loan period by requiring a maintenance retention account to be
maintained to receive a proportion of cash-flows to cover future maintenance expenditure.
c) Currency risk
Currency risks include the risks that:
(a) a depreciation in loan currencies may increase the costs of construction where significant construction
items are sourced offshore; or
(b) a depreciation in the revenue currencies may cause a cash-flow problem in the operating phase.
Mechanisms for minimizing resource include:
(a) matching the currencies of the sales contracts with the currencies of supply contracts as far as possible;
(b) denominating the loan in the most relevant foreign currency;
(c) requiring suitable foreign currency hedging contracts to be entered into.
d) Regulatory / approvals risk
These are risks that government licenses and approvals required to construct or operate the project will not
be issued (or will only be issued subject to onerous conditions), or that the project will be subject to
excessive taxation, royalty payments, or rigid requirements as to local supply or distribution. Such risks
may be reduced by obtaining legal opinions confirming compliance with applicable laws and ensuring that
any necessary approvals are a condition precedent to the drawdown of funds.
e) Political risk
This is the danger of political or financial instability in the host country caused by events such as
insurrections, strikes, suspension of foreign exchange, creeping expropriation and outright nationalization.
It also includes the risk that a government may be able to avoid its contractual obligations through
sovereign immunity doctrines. Common mechanisms for minimizing political risk include:
(a) requiring host country agreements and assurances that project will not be interfered with
(b) obtaining legal opinions as to the applicable laws and the enforceability of contracts with government
entities
c) requiring political risk insurance to be obtained from bodies which provide such insurance (traditionally
government agencies)
(d) involving financiers from a number of different countries, national export credit agencies and
multilateral lending institutions such as a development bank
(e) establishing accounts in stable countries for the receipt of sale proceeds from purchasers.
f) Force majeure risk
This is the risk of events which render the construction or operation of the project impossible, either
temporarily (e.g. minor floods) or permanently (e.g. complete destruction by fire). Mechanisms for
minimizing such risks include:
(a) conducting due diligence as to the possibility of the relevant risks
(b) allocating such risks to other parties as far as possible (e.g. to the builder under the construction
contract)
(c) requiring adequate insurances which note the financiers' interests to be put in place.

SOURCES OF FUNDS
a) Tax Payers through Government budget
b) User of the service or product
c) Private participation
d) External sources such as NGOs, Philanthropic organizations, lending Institutions etc. providing free
money in the form of grants or subsidized loans
PROJECT EXECUTION/IMPLEMENTATION: STAGE IV

Project implementation is the most important part of the project because this is where we
put the plans into action. Result shows that many projects that fail do so during
implementation. Project implementation therefore requires that the project manager
utilizes the resources carefully to achieve project success. The responsibilities of the
project manager during implementation include the following:
 Monitoring the activities  Coordinating/scheduling

 Availing resources  Giving feedback to stakeholders

 Releasing resources  Taking corrective action.

The responsibility can be categorized

1.Controlling Work In Progress 2.Providing
3. Providing resources
feedback
4.Resolving
1. Controlling Work In Progress differences

The project manager has the responsibility of ensuring that implementation meets the
defined project parameters specified in the plan. These parameters will normally have
specified standards to be met.
Controlling WIP involves three things. Namely

 Establishing performance standards

 Taking corrective action.
 Monitoring performance

A. Establishing performance
standards
The project standards are normally detailed at the planning stage. The responsibility of the
project manager during implementation is mainly to keep referring to these standards so as
to ensure that the project team pays attention to them. The project manager has a number
of tools that will enable him/her to ensure that the standards are met. They include
i. The PERT/CPM charts (discussed earlier)

ii. Control Point identification charts. This is a technique that enables the project manager
to carefully think about what is likely to go wrong in each of the project ‘s parameters.
The project manager is then able to know how to identify that something is amiss
during implementation and come up with possible corrective action if this occurs.
Control What is likely to go wrong How and when will I What will I do?

element know?
Quality Quality of materials Testing Reject
Compromised Inspection Rework
Workmanship
Cost Cost overrun Variance analysis Scale down scope

Theft Communication from Alternative sources of

suppliers materials

Physical counting Prosecuting

Timeliness Activity may take longer than Variance analysis Use more labor
Increase efficiency
Scheduled (time overruns)

iii. Project control charts. This uses the budget and scheduled plans and compares them
with the actual performance. Variances on each completed step are then calculated and
tallied to provide accumulated variance for the whole project. Corrective action may
be taken at each step.
Project step Cost Schedule (Time)
(Kshs)
Budget Actual Variance Planned Actual Variance
Foundation

Walling

Roofing
Plastering

Finish
Total

iv. Milestone charts

Milestone charts presents a broad-brush picture of a project schedule and control dates. It
lists the key events that are clearly verifiable by others or that require approval before the
project can proceed. It is particularly useful because it provides a concise summary of the
progress of the project.
Milestone Schedule completion Actual completion
Foundation completed August 20th August 21st
Walling completed January 3rd January 5th

v. Budget control chart

A budget control chart compares the actual cost against the budget. They are of two types

A listing of all the project sub-units with the actual costs compared to the budget. These
are like the project control charts.
A graph of budgeted costs compared to the actual cost. The graph may be a bar graph or
line graph.

vi. Gantt charts

Are used for managing resource allocation against time e.g. labor hours needed.
Designed by Henry Grant and mainly used in construction
vii. Work Breakdown structure (WBS)

A Work break down structures shows the decomposition of a project into sub project and
activities it is a deliverable oriented grouping of project elements that organize and defines
the total scope of the project. The work not in a work break down structures would be
considered outside the scope of the project. The work break down structures is a project
work equivalent of the path bill of materials in manufacturing.

viii. Responsibility matrix

They indicate who is responsible for each kind of the work in a project. It shows the
sharing of responsibility in a project. It is specified by the project organization structure.
Health Centre

Fencing

Walls Fittings Landscaping

Waiting Room Counselling room Rest room Eating room

ix. Project Management Manual

It indicates how each activity in the project should be undertaken or its condition. The
project manual is a very important aspect of implementation because it ensures continuity,
of the project or similar projects.
B. Monitoring performance

This helps the project manager to know what is going on and how actual implementation
compares to planned implementation. With effective monitoring, the project manager
will be able to know if and when corrective action is necessary. The common ways of
monitoring include:
 Reviews/  Auditing
appraisal

 Progress
report
 Inspection  Testing

Progress reviews are communications between the project manager and those responsible
for various sub-units of the project. They can be done in a group or on an individual basis.
They can be either oral or written report. Unlike inspection, they tend to be on a fixed
time schedule
e.g., weekly, monthly, quarterly etc.

Reviews are done in three key areas. Namely:

 Review of progress against the plan

 Review of problems encountered during implementation and how they were handled

 Review of anticipated problems and the proposed strategies of handling them.

Auditing

This is used during the project implementation and after completion of the project.
Common areas to be audited include:
 Financial records

 The purchasing practices

 Security practices

 Maintenance procedures

 Disbursement of funds and materials etc.

Auditors used should be experts in the areas of the project and non-members of the project
team. A report should be written citing the deviations from the desired procedures and
provide recommendations on how to improve these procedures.
Testing

This is done to confirm that the desired quality is being achieved. It is normally done to
check whether the specifications are met.
C. Taking corrective action

As we monitor performance, it may be necessary to take corrective action if

implementation doesn‘t measure up to planned. The corrective actions involve reworking,
use more resources, renegotiation for implementation schedule, abandoning, do nothing,
narrow the project scope, court order, seek alternative sources of materials, offer
incentives, demand compliance etc.
2. Providing feedback

The project manager needs to communicate constantly with the various stakeholders.
Through the feedback, the various groups will learn about the effect of their behavior on
the project.
Feedback serves to maintain good performance and correct poor performance.
3. Provision of resources (and negotiating for the resources).

The project manager has to ensure that materials, supplies, and services are available as
and when they are required. Negotiating is one of the ways to ensure that the resources
are available. The project manager may need to negotiate with suppliers so as to ensure
that the materials are available on time and in the desired quality specifications.
4. Resolving conflicts

Conflict on a project is almost always a certainty. A project manager who goes says they
never have conflict to deal with on their projects just isn‘t paying close enough attention to
what‘s going on. Or they‘re in denial. Conflict is going to happen and it‘s the Project
Manager‘s responsibility to help team members and customers control and resolve these
conflicts. It must happen…the conflict must be dealt with…in order for success to be
realized on the project.

Controlling conflict on the Project

On almost every project, the potential for conflict arises at some point. This is a natural
trend. The project manager should work proactively with all staff to avoid possible
conflicts that may arise. In the event of a conflict, the project manager should be aware
that talking can only resolve so much. The project manger require the necessary skills to
enable him/her resolve such differences so as to ensure successful implementation. For
situations where conflict cannot be resolved through negotiations or arbitration, it is
recommended that the identified individuals be separated or be removed from the project.
It is important to understand that project staff react differently to daily situations and that
during the project life cycle, these members all experience various emotions such as joy,
sadness, jealousy, anger, frustration, and stress—to name but a few. Many conflicts can be
reduced or eliminated by constantly communicating the project objectives to the project
team members. Some of the most common conflicts are:
 Conflict over project priorities  Conflict over technical opinions
and performance
 Conflict over administrative
 Conflict over staffing resources
procedures
 Personality conflicts  Conflict over cost

 Lack of respect for one another  Conflict over schedules

When conflicts do arise, there are several methods to try to resolve them;

 Compromise. Parties consent to agree; each side wins or loses a few points.

 Confrontation. Parties work together to find a solution to the problem.

 Forcing. Power is used to direct the solution. One side gets what the other does not.
 Smoothing. This technique plays down the differences between two groups and gives
strong attention to the points of agreement.
 Withdrawal. This technique involves one party removing him- or herself from the conflict.

Other include: Arbitration, Legal action etc

Approaches to Project Control

1. Traditional approach
Traditionally the project manager measured the actual progress against the predetermined schedules and
actual expenditure against budgets estimates.
The project manager in this case is not in a position to know systematically whether the expenditure
incurred commensurate with the progress.
The method relied on subjective estimates.

2. Performance Analysis (Modern Approach)

This is a systematic performance analysis that calls for answering of the following questions;
I. Is the project as a whole on schedule, ahead or behind schedule? If there is a variation, where
did it occur, why, who is responsible and what will be its implications?
II. Has the cost of the project as a whole been as per the budget estimates less than or more than the
budget estimates? If there is a variation where did it occur, why, who is responsible and what
could be the implications?
III. What is the trend of the performance? What will be the likely finish cost and completion date of
the project and its individual activities.
Performance analysis can be done for the project as a whole or for the individual components of the
project depending on how big (size) or complexity of the project.

Performance analysis seeks to remove the subjectivity in the traditional approach employing an
analytical frame work based on the following terms;

a) BCWS (Budgeted Cost for the Work Scheduled)

This represents the total of 3 components
i) Budget for all work packages scheduled to be completed.
i. Budget for the portion of work in progress scheduled to be accomplished
ii. Budget for the overheads for the period.
b) BCWP - (Budgeted Cost for Work Performed)
This is equal to the sum of 3 components
I. Budgets for work packages actually completed
ii. Budgets applicable to the completed in progress work.
iii. Overhead budgets of the period.

c) ACWP – (Actual Cost of Work Performed)

This represents the actual cost incurred for accomplishing the work performed during a particular time
period.

d) BCTW – (Budgeted Cost for Total Work)

This is simply the total budgeted cost for the entire project work.

e) ACC – Additional Cost for Completion)

This represents the estimate for the additional cost required for completing the project.
Given the above terms, the project may be monitored/controlled along the following lines;
A. Cost Variance;
CV = BCWP – ACWP
B. Schedule Variance;
SV = BCWP – BCWS
C. Cost Performance Index;
CPI = BCWP (as a ratio/fraction/ percentage)
ACWP
D. Schedule Performance Index
SPI = BCWP (as a ratio/fraction/percentage)
BCWS
E. Estimated Cost Performance Index
ECPI = BCTW
(ACWP + ACC) (as a ratio/fraction/percentage)

Illustration;
A project began on 1st Jan 2018 and was expected to be completed by 30th Sept 2019.
The project was reviewed on 30th June 2019. When the following information had been developed.
Kshs.
BCWS 1,500,000
BCWP 1,400,000
ACWP 1,600,000
BCTW 2,500,000
ACC 1,200,000
Required;
Compute; the CV, SV, CPI and the ECPI for the project.

Possible corrective actions

To put the project back on track after identifying deviations, the PM may do the following;
1. Do Nothing
This may be interpreted to mean that the pm is indecisive because there is a possible action to
correct mistakes. At times it may be too late to take an action that will bring the project back on
track.
A wrong action may be taken if a pm is the type who just wants to be seen to be working (making
the situation worse).

N/B There is need for the PM to be conversant with the work at hand and do proper evaluation before a
decision is reached.
2. Adding more staff to speed up work in case of a time overrun.
3. Bringing in more skilled manpower to improve on quality.
4. Using overtime when there is need for additional effort to achieve certain deliverables.
5. Reassigning tasks or switching tasks to correct wrong assignment of responsibilities.
6. Increase or reduce supervision in case of poor team work or when dealing with
qualified/experienced personnel, respectively.
7. Improve on methods of work by streamlining procedures or change resource priorities or phasing of
deliverables completion times.
8. Encouraging the team through resourcing, retreating, team building exercises or introduction of
bonus/financial boost.
9. Sub constructing parts of the work.
PROJECT MONITORING AND EVALUATION
Project monitoring process
This is collecting, recording and reporting information concerning any and all aspects of the project
performance that the PM and other people need to know about the project progress.
It is aimed at improving the efficiency and effectiveness of the project.
Monitoring should be done at regular intervals in order to identify any changes as the project progresses,
e.g., deadline changes, mistakes and disasters.

Designing a monitoring system

1. Identification of key factors to be controlled – time, costs, quality, resources.
2. Collect and analyze data. Data can be collected through observation, questionnaires, interviews,
group discussions and meetings. The forms of data may be
i. Frequency counts – e.g., number of times project reports were late
ii. Raw Numbers – e.g., dates, hours, shillings and amounts of materials used.
iii. Subjective numeric ratings – estimates made by experts on quality.
iv. Indicators – direct measures used by the PM e.g., speed at which change in incorporated into
the project is a measure of team efficiency while response to change is a measure of quality
of the communication system.
v. Verbal measures – this may be done to check on the quality of team members, their co-
operation and morale.
Data is then analyzed highlighting the significant deviations from the plan.
3. Report on Project progress
Reports should be addressed to all concerned with difference in depth and frequency. They should
be consistent with logic of planning, budgeting and scheduling systems. Their purpose is to ensure
achievement of objectives though control.
The following are examples of reporting schedules;
 Project team to PM – many reports on weekly basis
 PM to sponsor – one on weekly basis
 PM to senior management – one on fortnightly or monthly
NB: There should also be ADHOC reports for the sensitive (risky) portions of the project done on daily
basis to the PM.
Any changes emanating from the reports should be updated on the project plan.
Types of reports
1. Routine – done on regular basis to the Pm by the team. They show the normal work on a
prescribed format.
2. Exception – these are directly oriented to the project management decision making and should
be distributed to the team members. They are issued when decisions are to be made on
exception basis, desirable to inform other managers.
3. Special Analysis – these are used to disseminate results of a special studies conducted as part of
a project or response to special problems in the life of a project and are of interest to other PMs.
4. Reports to clients – these are done as per the contract.

The Benefits of Detailed and Timely Reports

1. Mutual understanding of the project goals
2. Awareness of progress of similar/parallel activities and problems
3. More realistic planning for needs of all groups and individuals
4. Understanding of relationships of individual tasks to one another and the overall project
5. Early warning signals of potential problems and delays
6. Minimizing confusion associated with changes
7. Faster mitigation in response to unacceptable work
8. Higher possibility for top management action/attention directed to the needs of the project
9. Keeping client/other parties updated on the status of the project in terms of costs, milestones and
deliverables

MONITORING AND EVALUATION OF A PROJECT

Monitoring is the periodic review of the project inputs, activities, and outputs undertaken
during implementation. It includes the review of the procurement and delivery of inputs,
the schedules of the activities and the extent of progress made in the production of
outputs. Monitoring therefore involves the process of collecting the information about the
actual project performance during implementation. The gap between planned and actual
performance during implementation
The gap between the planned and actual performance is addressed using various control
strategies. The whole purpose of monitoring is to be able to take actions against
information gathered. Monitoring serves and important functions
 Monitoring helps the project manager and other stakeholder to decision aimed at
improving the project.
 Ensure accountability to all those who has stakeholder in the project

 Allows the project management to identify impact of the project, on various parties
involved
Evaluation is a judgement on the effectiveness (operational and strategic) of a project.
There will be no effective judgement if monitoring has not been done. There are three
types of evaluation. Namely
1. EX- ANTE evaluation. This is undertaken before the project starts and it examines the
feasibility of the project.
2. ON-GOING (CONCURRENT) evaluation. This is undertaken during the project
implementation, it analyses the relationship between the project output and its effects
for the purpose of adapting the project to changes in the environment; and as a project
manager try to match the project with the environment. Realign the project for the
better e.g. stop it, dump it, or change strategy.
3. EX-POST (IMPACT) Evaluation. This is done after the project has been implemented
and it examines its stated goals and the types of changes resulting from the project.
The process of project Monitoring and Evaluation includes seven steps. Namely:

1. Preparation of a logical framework

2. Specification of information requirements- what is to be measured?

3. Identify the sources of information

4. Formulation of the research design- how to collect and analyze data

OVI‘s Means of Type of Method of Method of Frequency Who is

verification data collection analysis of responsible
reporting

5. Determination of the timing of research- when and how often must data be
collected?

6. Reporting findings- how should the findings is reported?

7. Assignment of responsibilities: who is to perform the monitoring and

evaluation tasks? Involve both the internal and external evaluators

PROJECT EVALUATION
Evaluation is the comparison of actual project impacts against the agreed strategic plans.
It looks at;
a) What you set out to do
b) What you have accomplished and
c) How you accomplished it
Types of Evaluation
1. Formative (also called check-up) – takes place during the life cycle of a project with
the intension of improving he strategy or way of operation/functioning of the project.

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It is a process used to obtain data in order to revise performance or resources used to
make a project more efficient and effective.
2. Summative (also called Autopsy) – process used for the collection and interpretation
of data for the purpose of judging the value/worth of the project after its completion.
It is drawing of lessons from the completed project.
Why Evaluate?
 To measure if the project met its objectives
 To justify funding in terms of benefits drawn from the project
 To determine the need for further work
 To identify any lessons learnt
What do you Evaluate?
 Performance of personnel to determine the gaps
 Resources used in terms of their provision and utilization
 Outcome of the project in relation to objectives in terms of benefits drawn from the
project.
Who Evaluates?
1. Internal evaluators
2. External evaluators
Advantages of internal evaluators
a) They have the inside information even the unwritten first-hand information
b) They have personal commitment to the project/organization
c) Their results are easily accepted and used
d) Gives them a learning experience for future work
Disadvantages of internal evaluators
a) Personal commitment might be more subjective e.g. may be blind to faults or biased
b) May be inexperienced or lack skills and techniques
c) Lack of integrity hence may ignore the negative aspects of the project
Advantages of external evaluators
a) Their findings are objective and accepted by funding agencies
b) More refined skills hence do professional job

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Disadvantages of external evaluators
a) Expensive
b) Lack first-hand information and knowledge of the project operations
c) Might have preconceived ideas about the PM/project or organization
d) Results might be met with resistance from the implementers of the project

Purposes of an Evaluation
It is generally done to find out if the project provided the customer satisfaction/is it of any
contribution to the organizational goals.
It is specifically done to;
 Identify success and speedup achievements of results
 Identify mistakes, remedy them and avoid them in future
 Use results to improve project performance in the future
 Locate opportunities for future technological advances
 Evaluate quality of project management
 Reconfirm the organization’s interest and commitment to the project
 Clarify relationships between performance, time and costs
 Provide information to clients
NB:-Designing the project evaluation system is same as the monitoring system above.

Writing an Evaluation Report

The report should be addressed to the project sponsor and copies circulated to all interested and
senior officials of the organization. It should contain a statement of what was evaluated,
information collected, how it was collected, processed/analyzed and the conclusion.
Format
1) Introduction – description of the project and its objectives and the aspects to be
evaluated
2) Current status – costs, schedules quality and progress of the project

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3) Critical management issues – issues requiring close monitoring by the senior
management
4) Risk analysis – review of the major risks associated with the project and their impact in
terms of time, costs and performance
5) Future status – conclusions and recommendations for changes in technical aspects,
schedules and budget.

PROJECT RISK MANAGEMENT

Every project initiated has risks associated to it.
Terminologies
1. Risk – possibility of meeting danger or suffering harm.
2. Project risk – the possibility that a project may go wrong or at least may not
produce the desired results.
3. Project risk management – the spermatic process to risk by applying risk
management principles and processes.
If a risk cannot be avoided it can be reduced i.e. its negative impact on the project can be
reduced.
Risk management should be conducted through the whole project lifecycle.
Types of project risks
1. Legal: The project may fail to progress due to legal hurdles. Failure to consider the legal
requirements in areas of safety, environment, tender allocations, permits e.t.c may lead to
disruptions thus hampering its success.
2. Organizational: This may include Changes in program, disagreements between
stakeholders, inadequate planning, and lack of necessary resources.
3. Technical: New innovative methods, poor contractual work, incorrect assessment of
technology
4. Natural risk: Unusual climate conditions, lack of proper compensating environment
measures
5. Financial: Increase in prices of materials, interest rates adjustments, withdrawal of
funding by sponsor, increase in taxes etc
6. Social: Strikes/riots, poor communication with the community.

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7. Political: Political changes in legislation, failure to adhere to requirements e.g. permits.
Components of risk management process
1. Risk identification
2. Risk quantification
3. Risk response development
4. Risk response control
Methods of identifying project risk
This involves identification and naming of the risks. It also includes determining which risk may
adversely affect the project objectives and what the consequences of each risk might be if they
occur. The most common tools and techniques used for developing a list of project risks are
brainstorming, nominal grouping technique, mind mapping, Delphi technique and lessons
learned from similar projects.
1. Brainstorming
The steps involved are as follows:
 Chose a facilitator other than the project manager;
 Chose a scribe to capture the risks and opportunities;
 Use a category or categories to start the creativity flowing; Do not judge or analyze
during this effort; and
 Focus on getting the universe of risks and opportunities for the project.
2. Nominal Grouping Technique
The steps involved are as follows:
 Gather the core team for a risk workshop;
 Use flip-chat paper or a white board the collect the information for the team;
 Begin by requesting that each person identify potential areas of risk;
 Request that each person write about three (3) to five (5) risk events for each area.
Participants should not share lists;
 Request that the first person provide the first item on his/ her list then proceed to the next
person and repeat the request for his/ her first item; and
 Repeat until everyone's items have been listed.
This helps to avoid duplicate listings of the same risk(s) and also saves time taken to perform this
task.

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3. Mind Mapping
The steps involved are as follows:
 Begin by drawing a circle that represents a risk category;
 Represent major risks for that category with lines connecting with the circle;
 For each major risk, identify smaller risks that are part of that risk;
 Do not judge or evaluate at this point; and
 Continue until no more risks can be identified.

At the end of this activity, there should be a fish bone diagram that shows the different
relationships for each risk.
4. Delphi Technique
The steps involved are as follows:
 Identify a person to act as the facilitator;
 The facilitator identifies qualified experts to participate in the exercise;
 The facilitator poses questions to the experts individually;
 The facilitator then conducts a factor analysis on the data to identify common themes;
 This information is shared with the panel of experts for validation;
 The list of themes is refined and again shared with the panel; and
 The facilitator then creates a single results document.

5. Lessons Learned from Similar Projects

The steps involved are as follows:
 Identify comparable projects using the project characteristics;
 Locate the relevant post project review reports;
 Review the lessons learned documents for a list actual risk events that occurred,
response(s) to the risk event, effectiveness of the risk event and any new risks identified
during the project.

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Additionally, categories such as cost, schedule, technology, resources, environmental, legal,
economic and political can be used to group risk. Personal experience and intuition (thinking
outside the box) are also quite useful in risk identification.
Involving the stakeholders early in the project opens communication and there is less risk of
interpreting what the stakeholders want and/ or require.
Make sure that there is an adequate amount of the correct information. By applying more than
one of these various tools and techniques appropriately, the list of risks and opportunities will be
the most comprehensive.
At the end result of the risk identification process the project teams knows what may happen and

Project risk quantification strategies

a) The quantitative approach relies on the use of numeric value. It uses objective data to
determine values and requires an understanding of probability theory. The level of uncertainty is
removed (or at least greatly reduced) due to historical data that must be provided. Below are
some of the quantitative techniques used:
i. Project variance. This is the deviation of returns from the expected value. The higher the
variance the higher the risk
ii. Statistical sums- Used to calculate a range of total project costs from cost estimates and a
range of project completion time.
iii. Simulation of project networks- Results of a schedule simulation may be used to quantify
the risk of various schedule alternatives, different project strategies, different paths
through the network or individual activities
iv. Decision trees- Diagrams that depicts key interactions among decisions and associated
chance events as they are understood by the decision maker. The branches of the tree
represent either decision or chance events. Using the roll back method EMVs of various
decision alternatives are evaluated.

b) The qualitative approach (Expert judgment) - uses subjective values such as High Risk,
Medium Risk or Low Risk. It requires common understanding of the team's preferred ordinal
ranking system and is less precise than the quantitative approach. It relies more on experience
and is an effective way of prioritizing risk.

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Project risk response strategies
The project team should begin in defining the steps for responses to opportunities and threats. A
risk response is performed whenever, a new risk is identified, an existing risk changes,
influential factors change or new information about the project surfaces. When developing a
project's risk response, it should be approached it from a project-wide perspective. Relationships
between risk events are extremely important. The project team should develop risk responses for
each risk event within the sphere of project influence and control.
The following documents can be used to assist in developing the project's risk response plan:
 List of the project's risks, opportunities and threats;
 Project Contract;
 Statement of Work or Scope of Work;
 Schedule;
 Resource List; and
 Any other pertinent information.

There are several ways/strategies of dealing with risks. These include:

1. Risk avoidance. Risk can be eliminated usually by eliminating the cause. An example of
this is using a less complicated or less sophisticated programming language.
2. Risk mitigation. This is done by reducing the risk event probability, risk event value or
both. An example of this is using a proven technology.
3. Risk acceptance. The project team could just decide to accept the consequences and take
it from there. An example of this is changing the relationships on a schedule, thereby
making one or more of the tasks in the sequence late. If the late task(s) are not critical, the
project team will just let it be.
4. Risk transfer. This is done by removing the impact or consequences of the risk event. It
is important to make this distinction from mitigation. An example of transference is
gathering information through user groups and not the project team, insuring some risks,
etc
Project risk monitoring and control
Monitoring risk means to review it and update it continuously.

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 Identify new risks as soon as possible
 Decide where and how to handle that risk
 Look for other risks that might be reduced or eliminated and no longer need coverage
 Check operating volumes - they change so that coverage levels need to change

Risk control is the process of implementing measures to reduce the risk associated with a
hazard. The control process must follow the control hierarchy, in order, as prescribed in some
health and safety legislation. It is important that control measures do not introduce new hazards,
and that the ongoing effectiveness of the controls is monitored.
"Risk control hierarchy": ranks risk control measures in decreasing order of effectiveness:
 elimination of hazard;
 substitution of hazardous processes or materials with safer ones;
 engineering controls;
 administrative controls; and
 Personal protective equipment.
The risk control measures implemented for the hazards identified should always aim to be as
high in the list as practicable
Risk monitoring and control is a continuous process until the project ends
The monitoring and control of risks in project ensures that the resources of a company put aside
for a project is operating properly. Risk monitoring and control therefore helps to ensure that the
project stays on the track or on course. Risks are monitored because projects are usually dynamic
due to constantly changing variables. It’s imperative therefore to keep these variables and their
associated risk stay within the acceptable limits for the project. Risk monitoring control is
performed at the concept phase of the project and ends at the close-our phase. It should be
included in the regular communication process of the project.In particular, risk control is also
performed prior and the during the risk event. It is performed whenever there are changes to the
project scope and on a regularly scheduled basis.
Tools Available for Risk Control
Risk Metrics are appropriate metrics that will aid in monitoring risks on the project. These
include risk events, probability, value and impact. Timeframe, type, priority and status are also
part of this list.
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Monitoring and control tools include:
 Work Breakdown Structure;
 Project budget both estimates and actual ;
 Project schedule;
 Earned value of project activities whether it be actual point-in-time or forecasting;
 Project resource list and plan; and
 Change control log and forms.
Risk triggers are actions, events or circumstances that, if ignored, will cause the occurrence of a
risk event. The project manager needs to identify potential triggers that would indicate that a risk
event will occur and to ensure that these triggers are visible to the project team. He/ she will need
to monitor these triggers frequently.

PROJECT CONCLUSION/TERMINATION PHASE

This means ending a project life cycle and includes the following activities
a. Delivering the project product/services to the client which may entail customer training
and transferring of documents
b. Redeploying projects resources which involve releasing project equipment/materials to
other projects and finding new assignment for the team members.
c. Post-project reviews including assessing performance of the project and capturing lessons
learnt.

Project completion
Upon Project completion
i) Test the project output to see that it works
ii) Write an operations manual
iii) Complete the final drawings
iv) Deliver the project output to the client
v) Train the client’s personnel
vi) Reassign the project personnel
vii) Dispose off surplus equipment, materials and supplies

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viii) Release the facilities
ix) Summarize the major problems encountered and their solutions
x) Document technological advances
xi) Summarize recommendations for future research and development
xii) Summarize lessons learnt in dealing with inter phases
xiii) Write performance evaluation reports on project staff
xiv) Provide feedback on performance of the project staff
xv) Complete the final audit
xvi) Write the final report
xvii) Conduct the project review with top management
xviii) Declare the project complete

Project Termination
When do projects terminate?
a) Upon successful completion
b) When the organization is no longer willing to invest in the time and cost required to
complete the project, given its current status and the expected outcomes (Project
abandonment)
The most common specific reasons for abandonment include:
i) A low probability of technical or commercial success
ii) Low profitability or return on investment or low market potential
iii) Damaging cost growth (an escalation of cost)
iv) A change in competitive factors or market needs
v) Irresolvable technical problems
vi) A higher priority of competing projects
vii) Schedule delays
viii) Legal reasons
ix) Failure of the funding agency to remit the finances
x) Natural calamities

Types of project termination

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1. Termination by extinction
In this case the project has successfully completed or it has failed
Either way, the project substance ceases
2. Termination by addition
A project becomes a formal part of parent organization of like a department
3. Termination by integration
The project assets are distributed to be absorbed by the parent organization
4. Termination by starvation
This involves the withdrawal of life in terms of financial support

TYPICAL ACTIVITIES IN PROJECT TERMINATION

There are seven categories of examples of activities on project termination. Namely
1. Personnel
Dealing with trauma of termination
Finding homes for the team
Who will close the doors?
2. Operations/ Logistics/ manufacturing.
Rethinking systems
Provision of training, maintenance, spares etc.
3. Accounting and Finance
Accounts closed and audited
Resources transferred
4. Engineering
Drawings completed/ on file
Changing procedures clarified
5. Information systems
Configuration and documentation in place
Systems integrated
6. Marketing
Sales and promotion efforts in line

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7. Administration
All organizations are aware of change

STEPS IN THE TERMINATION PROCESS

Review the project and its strategic context on a regular and disciplined basis
Recognize the psychological and social forces that motivate one to ―stay the course‖
Recognize that there are prevailing beliefs and cultural forces that encourage the
commitment of more resources to solve current difficulties and assure that success is just
around the corner.
Define with senior management participation what constitutes both success and failure on
the project.
Listen carefully to the concern of others about the project
Evaluate the real ability of the project team to listen to and hear bad news.
Ask whether the managers ―bet too much of the farm‖ on the project where a termination
Would break the bank resulting in perception of both organizational and personal
failures.
Determine if the project manager feels that a lot of people will have their futures adversely
affected if the project is terminated.
Step back and evaluate the project from an outsider‘s perspective.
Encouragement project team members always to provide accurate information
Consider replacing key members of the project team with new people who can bring a
perspective less influenced by the project and past events.
Build an organizational culture that supports the philosophy that projects are experimental,
temporary use of resources to support organizational strategies and require constant
surveillance to guard against a project becoming a permanent fixture in the organization

PROJECT REPORT/ HISTORY

One of the major aims project termination is development and transmittal of lessons learned
to future projects. One way to do this is through the project report.

CONTENTS OF A PROJECT REPORT

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The project status report should contain the following:
1. Project title. Self-explanatory, but follow whatever format your organization requires
while still making it obvious to you, your team, and your customer what project it is.

2. Project Summary
Provide a brief summary of your project—its purpose, what you were hoping to find out, and a
short description of your main findings.

3. Introduction to Topic
Provide an introduction to the problem being studied and what led to the development of this
project. This may be a re-statement of the problem as defined in your original project proposal.

4. Objectives Statement
State your original objectives as outlined in your project proposal. Include any supplemental
objectives that OFRF requested during our review of your project. Were there any changes in
your objectives as the project unfolded? Please describe any differences from the original
proposal and why these changes were made. This is valuable information for others who are
studying the same topic and essential for our evaluation of the project.

5. Materials and Methods

Describe your project methodologies and materials used. How were treatments applied? What
data were collected and how? Maps or drawings of the site and/or any special apparatus used
are very helpful (hand drawings are fine). Provide as much detail as possible in this section.

6. Project Results
Present your project results. Quantitative results (numerical and/or statistical data) and
qualitative results (descriptions of how well or poorly something worked) are both important.
Tables, graphs and other figures representing your data are excellent ways to summarize data
and present them in an accessible way.

7. Conclusions and Discussion

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Discuss the results of the project and what you found out. What do the results lead do you
believe the project did, or did not, happen? In the end, how useful was this project to you and
the farm operation? How useful do you feel the study and results will be to other organic
farms? Did you encounter any problems during the project? What would you do differently if
you did this project again? Based on what you‘ve learned, what do you think should be studied
next?

8. Outreach
Describe very briefly the type of outreach that you did, or expect to do, including any
publications, tours, or other presentations of your project to the public.

9. References
Provide a list of references you used to help develop your project and/or that you referred to in
the body of your report.

10. Addenda
This is the submission of photos of the project site, of the results of different treatments, and/or
of project co-operators and field demonstrations. Additional materials, such as articles about
the project, academic publications, theses or related research reports, are welcome and
appreciated.
Additional information that can be included:

Detailed budget status. Showing detailed budget information – including forecast

information for the project – keeps everyone informed and ensures that they budget will
never get too far off track before everyone sees it and it becomes a discussion point.
Issues status. You can track all issues separately or as part of the status report. If you
include it on the status report it makes it harder to skip the discussion of this key piece of
information.
Risks status. Same as issues status. Track it either way, but be sure it‘s tracked and
discussed often.

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CHALLENGES OF PREPARATION OF THE REPORT
Since the project history has so much potential benefit, why is it not often done? Possible
reasons include: no one sees if as their job, Project manager has many other priorities as the
project winds down, long duration projects mean many project managers, voluminous record,
little corporate memory, Project managers may be more looking forward than looking back.

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