UNIT ONE

INTRODUCTION

1.1. Meaning and Definition of Project

What is a Project?
Project refers to a group of activities that have to be performed with limited resources to yield
specific objectives, in a specific time, and in a specific locality. Thus, a project is a temporary
endeavor employed to create a unique product, service or results. /PMI/
Temporary - every project has a definite end.
Unique - the product or service is differentiated in some distinguished way from all similar
products or services.
Project is an investment on which resources are used to create assets that will produce benefits
over an expanded period of time. It is a unique process, consisting of a set of coordinated and
controlled activities with start and finish dates, undertaken to achieve an objective conforming to
specific requirements, including the constraints of time, cost and resources.
The World Bank: defined it as “capital investment to develop facilities to provide goods and
services”. A major misconception about a project is relating it to only construction or creation of
such physical facilities as buildings, roads and dams. However, project may involve intangible
things such as
 creation of awareness (e.g. about HIV/AIDS),
 eradication of diseases (e.g. polio vaccination),
 capacity building (e.g. training )

1.2. Features of a project

There are some unique features that distinguish a project from other types of corporate activities.
The major characteristics of a Project may include the following.

a. Purpose: Projects have clearly-defined aims and set out to produce clearly-defined results.
Their purpose is to solve a "problem”, and this involves analyzing needs beforehand.
b. Unique and non routine: Every project results to some extent in a new, unique deliverable
or set of deliverables. Although past projects may have produced similar deliverables, for
example, road, no two-road projects are exactly the same.
In addition, although projects may have similar objectives, every project faces a unique set
of environmental, political, and resource issues and constraints. That means projects by
their nature cannot be completely reduced to routine. That is, every project activities are
essentially non repetitive.

c. Projects are limited in time and space: They have a beginning and an end and are
implemented in (a) specific place(s) and context.

d. Bounded by time, cost and quality constraints: Projects have time, cost and quality
constraints. The triangle of time, cost and quality lies at the heart of the project
management. It is the project manager’s task to achieve the required outcome within a pre-
determined schedule and budget whilst maintaining quality standards. When the project is
planned, and also while it is underway, it is necessary to balance these three interrelated
elements.

e. Life Cycle: Like organic entities, projects have life cycles.

f. Projects are complex: Projects call on various planning and implementation skills and
involve various partners and players.

1.3. Projects, Programs and Plans

a. Policy: - Policies determine the environment and frameworks within which change interventions
(or development) take place. Policies are frequently implemented through programs. A policy is
typically described as a principle or rule to guide decisions and achieve rational outcome(s). The
term is not normally used to denote what is actually done; this is normally referred to as either
procedure or protocol. Whereas a policy will contain the 'what' and the 'why', procedures or
protocols contain the 'what', the 'how', the 'where', and the 'when'. A Policy can be considered as
a "Statement of Intent" or a "Commitment". For that reason at least, we can be held accountable
for our “Policy"
 b. Programs: - Program is a collection of projects. The projects must be completed in a
specified order for a program to be complete. Because programs comprise multiple
projects, they are large in scope than a single project. Programs are planned continuous or
ongoing development investment activities that are not generally time-bound. They may
consist of a number of projects with distinctly specified time & resources. Programs
consist of different activities of a government implemented in a formally coordinated
way through ongoing activities and projects.
c. Projects: - Projects are usually the smallest unit of development programs & plans. Projects are
derived from the prevailing development policies. They are fundamental components of the
development efforts of increasing provision of goods. Projects can be shorter term, more location
specific, more easily bounded & managed.
Differences between program & project

Programs Projects

 Has got general objectives  Is specific in objective/Purpose

 May not have specific area  Has specific area/geographic
 May not have specific target groups  Has specific targets groups
 May not have clear & detailed financial allocation  Has clearly determined & allocated fund
 May not have specific time of ending  Has specific life
Similarities between program & project
 Both have purpose/objectives
 Both require input (finance, manpower, material etc)
 Generate over space & time
 Contribute to the development & serve as tools for the execution of development plans

1.4. What is Project Management?

Project Management is a dynamic process of balancing four different factors: time, cost, quality
and scope. These parameters are interrelated and interactive. The relationship generally
represented as an equilateral triangle. It is evident that any change in any one of dimensions would
affect the other. Thus the performance of a project is measured by the degree to which these three
parameters (scope, time and cost) are achieved.

Management in any project is concerned with productivity. This refers to efficiency and
effectiveness. These can be explained as follows:

Efficiency: In order to be efficient, management is concerned with minimizing resource costs.

Efficiency is “doing things right”.

Effectiveness: In order to be effective, management is concerned with getting activities completed.

Effectiveness is “doing right things”.
Role of Project Manager
Experience has shown selection of the right project manager is a critical. The demonstrated
knowledge, skills, and abilities of a project manager have a direct impact on the probability of
success of any project.
The project manager is responsible for management of all aspects of the project. From an overall
perspective, the project manager ensures the project is on time, within budget, and delivers a
product or service at an acceptable level of quality.
A project manager’s role typically includes some or all of the following:
 Providing direction, leadership, and support to project team members.
 Monitors progress of implementation
 Manages resources efficiently
 Motivates staff
 Ensures communication (internal and external)
 Providing teams with advice and input on tasks throughout the project, including
documentation, creation of plans, schedules, and reports.
 Resolving conflicts affecting the project’s resources, schedules, etc.
A major part of project management is related to dealing with "stakeholders", mean someone who
has an interest in the project.
Stakeholder: - Any person, group of people or organization who has a vested interest in the project
now or in the future. Or anybody who is affected by or can affect the project .It should be noted
that:
  stakeholders’ attitude can be both positive (supporting a successful outcome) or
negative (trying to stop the project)
 stakeholders can be both individual and collective (e.g. individual enterprises and
associations of enterprises can both be stakeholders in a project and do not necessarily
have the same interests and opinions)
Stakeholders are important to a project because:
 They can be critical in its success or failure ,
 They can have a much better understanding of the feasibility of different actions and
the resources required to reach certain objectives than an outsider to the project ,
 Their expectations need to be managed ,
 They can provide important information on the progress of the project.
There are six sets of management skills required for project managers to effectively manage a
project. These are:
 Communication skills: includes listening, persuading.
 Organizational skills: includes planning, goal-setting and analyzing.
 Team Building skills: includes empathy & motivation.
 Leadership skills: includes setting example, energetic, developing vision (big picture),
delegating, being positive.
 Coping skills: includes flexibility, creativity, patience, persistence.
 Technological skills: includes experience, project knowledge
1.5. Project Management Environment
All projects are planned and implemented in a social, economic, environmental, political and
international context.
 Cultural and Social Environment is that how a project affects the people and how they
affect the project. This requires understanding of economic, demographic, ethical, ethnic,
religious and cultural sensitivity issues.
 International and Political Environment refers to the knowledge of international, national,
regional or local laws and customs, time zone differences, teleconferencing facilities, level
of use of technology, national holidays, travel means and logistic requirements.
 Physical Environment is the knowledge about local ecology and physical geography that
could affect the project, or be affected by the project.
 UNIT TWO
PROJECT CYCLE
2.1.Meaning and Definition of Project Cycle
Project cycle refers to the various stages through which a project passes from the time of its
inception up to its implementation. It refers to a logical sequence of activities to accomplish the
project’s goals or objectives. The stages through which project proceeds from inception to
implementation are often called “the project cycle”. It is the project’s life cycle through which it
advances from infancy to maturity.
2.2.Project cycle models
There are many models which differ in their perspective, emphasis and level of detail. Some of
these include:-
2.2.1. World Bank /Baum / Project Cycle

The World Bank lends money to low and middle-income countries to support development and
change. Development projects are implemented by borrowing countries following certain rules
and procedures to guarantee that the money reaches its intended target. The World Bank suggested
the stages in the project activities (Baum, 1982) as follows:

i. Project identification
ii. Project preparation
iii. Project appraisal
iv. Project implementation
v. Project evaluation
2.2.2. UNIDO Project Cycle

The United Nations Industrial Development Organization (UNIDO) is the United Nations’
specialized agency with the mandate to promote industrial development in the world’s developing
and least developed nations. The Organization supports governments, businesses and other
stakeholders in their efforts to meet the challenges of, and to remove the barriers to, their industrial
development. To do so, UNIDO mobilizes knowledge and information, builds capacity, and
facilitates the transfer of technology to enhance competitiveness and advance the adoption of
climate change mitigation measures.
UNIDO’s strategy is built upon three pillars:
 Poverty reduction: fostering the engagement of men and women in productive industrial
activities
 Trade capacity-building: enabling industries in developing countries to produce and trade
goods and services that meet national and international industrial standards
 Energy and environment: encouraging the adoption by industries of cleaner, resource
efficient and low-carbon patterns of production and investment.
The development of an industrial investment project from the stage of the initial idea until the plant
is in operation can be shown in the form of a cycle comprising the following three distinct phases.

i. Pre-investment phase

 Identification of investment opportunities (opportunity studies)

 Analysis of project alternatives and preliminary project selection
 Project preparation (pre feasibility and feasibility studies).
 Project appraisal and investment decision (appraisal report) – by the people who
has an interest on the project.
ii. Investment Phase

 Negotiation and contracting

 Engineering design
 Construction
 Reproduction marketing
 Training
 start up
iii. Evaluation and Operating phase
 Replacement and rehabilitation
 Expansion and innovation

This two will lead to identification of a new project and the project life cycle will start again.
2.2.3. Development Project Studies Authority (DEPSA) Project Cycle

The project cycle comprises three major phases:

 i. Pre – investment
ii. Investment
iii. Operation
According to the Guidelines to project planning in Ethiopia (1990), the project model more used
in Ethiopia is related to Development Project Studies Authority (DEPSA) Life cycle model.
In the next we will discuss the World Bank project life cycle model which is mostly applied model
in many projects:
1. Project Identification
2. Project Preparation
3. Project Appraisal
4. Project Implementation
5. Project Monitoring and Evaluation