PHASES OF PROJECT

CYCLE MANAGEMENT
“approach in project management used to
guide management activities and decision-
making procedures during the life-cycle of a
project”
Overview of PCM phases
• Policy setting / programming
• Project identification and selection
• project Appraisal
• Formulation / planning stage
• Financial plan
• Contracting / commitment
• Implementation / monitoring
• Evaluation
• Auditing
• Project closure
Policy setting / programming
• Establishment of development policy for the LA or
organization – strategic planning (long term
direction)
• Analyze situation at national and sectoral level,
reasons:
• Identify problems, constraints and opportunities

• What situation?
• Socio-economic indicators, national and donor priorities

• Aim- provide a relevant and feasible

programming framework within which projects
can be identified and prepared
Project identification
Project identification is the initial phase of the
project development cycle.
 It begins with the conceiving of ideas or intentions
to set up a project.
 These ideas are then transformed into a project.

The aim is to balance local demands, strategic

priorities, ongoing diagnostics, and research or
baseline studies
• Identify projects from an assessment of existing
demand for goods or services
• sources of information:
• strategic plan / integrated Development Plan (IDP)
• Annual service delivery action plan consultations with citizens
• Baseline surveys and diagnostic studies

• To determine ‘demand’ projects from communities

or stakeholders, 2 key elements are involved:
• Need analysis
• Situation analysis
Problem identification via Participatory needs
analysis
• Need Analysis
• Need to identify priority problems/ opportunities, their
causes, - how does project intervention solve the needs?
• What resources are within the community?
• Are they relevant to tackling the problems?
• What are the stakeholders views of solutions to the
problems they experience?
• Situation Analysis
• Need to understand/ investigate the underlying or
situational factor
• Proper intervention should combine both need and
situational analysis
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Project identification
• Clear project identification allows you to
answers questions like:

a) How do the projects come about?

b) Where do projects come from?
c) Why are projects where they are?

Approaches to project identification

There are two major approaches to project
identification
(a) Top-down approach
(b) Bottom-up approach
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Top-Down Approach

• Projects are identified based on demands from

beyond the community.
• This may include directives from:
• international conventions (such as Kyoto
Protocol/climate change)
• international institutions or NGOs that have
determined particular priorities and thus projects
• national policy makers identifying projects that
pertain to party manifestos and/or national plans.
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Advantages of Top-Down Approach

• It may be a rapid response to disasters like
floods, war outbreak because there is limited
time and chance to consult the beneficiaries.
• It can be effective in providing important services
like education, health, water, roads etc.
• It can contribute to wider national or international
objectives and goals
• and therefore potentially be part of a wider benefit
(as in the case of trans-boundary resources, such as
climate, water or others)
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Limitations of Top-Down Approach

• Does not help in modifying strongly established ideas
and beliefs of people.
• Assumes external individuals know better than the
beneficiaries of the service.
• Communities have little say in planning process
rendering approach devoid of human resource
development.
• Community develops dependency syndrome on outside
assistance and does not exploit their own potential.
• The development workers (change agents) become
stumbling blocks to people-led development
• tendency to impose their own biases, etc. on people.
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Bottom-Up Approach
• The community/beneficiaries are encouraged to identify
and plan the projects themselves with or without
outsiders.
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Advantages of Bottom-Up Approach

• Interveners accomplish more with limited
resources since people tend to safeguard what
they have provided for themselves.
• Develops people’s capacity to identify problems
and needs and to seek possible solutions to
them.
• Provides opportunities of educating people.
• Helps people to work as a team and develop a
“WE” attitude - makes project progressive and
sustainable.
• Resources are effectively managed;
dependence reduces, there is increased equity,
initiative, accountability, financial and economic
discipline.
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Limitations of Bottom-Up Approach

• Not always effective for projects that require
urgency to implement
• Time-consuming and requires patience and
tolerance.
• Community may not want to take responsibility for
action.
• The agency using this approach is never in control
and cannot guarantee the results it would want.
• The priorities of communities may not fit with
national or international priorities that seek to have
a broader impact
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Top-down approaches to project

identification
1. The household (socio-economic) survey
• Studies social and economic situations of a given
area
e.g. climate, geographical set-up, economic activities,
political set up, education system, culture, diet, social
services, physical infrastructure etc.
•
• Uses questionnaires, interviews, documentation,
and direct observation.
• Data is collected, processed and analyzed and
projects are then identified
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Top-down approaches to project

identification
2. Rapid appraisal
• Rapid Rural Appraisal (RRA) →in a rural areas,
• Rapid Urban Appraisal (RUA) →in an urban
area.
• Method collects and assesses data quickly using
any data collection techniques.
• Primary purpose is to acquire the information in
the shortest time possible and it lowers the cost.
• It is rapid because investigation, assessment and
identification of projects are done at the same time.
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• Rapid appraisal uses the following data collection

techniques:
• Analysis of secondary data sources
• Interviews
• Direct observation at site
• Visualization of Resources like social
organizational maps and time series maps.
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Top-down approaches to project

identification
3. Needs Assessment Survey
• Also referred to as situation analysis (SITAN).
It involves:-
• Fact finding about problems or needs in a given area or
community.
• Finding out what is lacking in a given area or
community.
• Investigating a situation in a given area.
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NAS is carried out to:

• find out the problem in a given community so

as to identify the most appropriate solution
(s)/project (s) to solve the problem (s) in
question.
• analyze the causes of the problems and seek
likely solutions to the problems leading to
project identification.
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Bottom-up approaches to project

identification
1. Animation
• Process of stimulating people to become more
aware and conscious of problems they suffer from.
 to gain confidence in their ability to deal with these problems and take
initiatives to improve situation.
• Animation makes the community better understand
and be prepared to overcome its problems and take
decisions with full responsibility.
• Carried out by Animators / Helpers / Change
agents.
(Internal Animators if they come from within the
community or External Animators if from outside.)
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Bottom-up approaches to project

identification
2. Facilitation/Community action
• an attempt to assist people to get over problems by
(say) training them in certain skills, providing them with
the needed information
• e.g. market information, linking them up with relevant
agencies and organizations to improve access to the
needed resources etc.
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Bottom-up approaches to project

identification
3. Participatory Appraisal
Project identification is participatory, and involves local
communities identifying and prioritizing their needs.
→ consider the views of the communities during the
screening and selection of various project proposals and
the selection of the preferred proposals for
implementation.
The communities themselves determine the issues,
priorities and courses of action. However, facilitation for
the same is provided
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The problem statement

• The process of project identification ends with the
formulation of a problem statement.
• It takes the form of:
• Listing all the problems/needs in the community/area/
organization.
• Prioritizing the problems and selecting 1 – 3 core (major)
problems.
• Finding out the root causes of the problems.
• Siting the likely effects of the problems on the community.
• Suggesting the probable solutions to the problems.
• Identifying the (projects) from the solutions.
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The screening (pre-feasibility analysis) process

of projects
• Is the technology appropriate to the project’s objectives or
local capabilities?
• Is the risk involved manageable?
• Is the demand for the expected outputs adequate, and does
the project actually have a comparative advantage?
• Will the supply of raw materials or skills be adequate?
• Is the design in agreement with the institutional and
managerial capabilities available?
• Will the recurrent costs be adequately met given the
available financial resources?
• Is there adequate commitment by the intended beneficiaries
and support from central government authorities?
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The screening process of projects (cont.):

• Does the project has negative effects on the

environment? And if yes, can the effects be
mitigated?
• Is the project culturally acceptable by the
community?
• Is the project sustainable?

• The screening process leads to project selection based

on factors such as:
• Technology ▫Equipment
• Market ▫ Investment
• Location
Roles of the project manager in project
identification and selection phase
• defines what the project is
• what the users hope to achieve by undertaking
the project.
• outline a list of project deliverables, the outcome
of a specific set of activities.
• Works with the donor and other stakeholders who
want the project implemented
• Identification of related risks
• Definition of quality, cost, scope and schedule
Project Appraisal / feasibility study
• A process of determining the viability of a
proposed initiative or service and providing a
framework and direction for its development and
delivery.
• Identify and design projects that have clear foundation
for success

• Assess the strengths and weaknesses of a

proposed project and present directions of
activities which will improve a project to achieve
desired results
• feasibility study involves an examination of the
• operations,
• financial,
• Human Resource
• marketing aspects of a business
• on ex ante (before the venture comes into
existence) basis.
• Requires assessment of the following:
• basic data, assumptions, proposed methodology,
review of the work plan(s), cost estimates, and
proposed financing.
• Assessment of the project's organizational and
management aspects are also necessary.
Appraisal stages within the PCM
• After initial project identification – project pre-feasibility
• Whether to continue with an identified project to the
formulation/planning phase
• After formulation
• Whether the project should be proposed for funding
• During tendering - bid proposals
• Project proposals written by interested parties are appraised
Appraisal roles
• to decide whether the project is good enough in terms of
effectiveness and impact.
• whether the project proposal concerned is better than
other proposals
 Criteria for pre-feasibility analysis
Project criteria Interpretation
Relevance validity of the overall goal and project
purpose to the needs of
communities
-Immediate results (outputs) are
necessary and sufficient to attain
the Purpose
Efficiency the project costs are necessary and
sufficient in quantity and quality to
achieve planned objectives
-The degree to which Inputs will be
converted into Outputs
-Absence of waste for a given output
Project criteria Interpretation
effectiveness The extent to which the project’s
objectives will be achieved, and
meet the identified needs of beneficiaries

feasibility Planned activities can be/will be realized

and there are/were no major
obstacles/risks to affect expected results.
(economic, physical, environmental,
social, technological risk factors)
-The project is realistic from a technical,
social/cultural and political perspective
Sustainability The project will continue to meet the
needs of beneficiaries long after its
completion
Project criteria Interpretation
Replicability The same activities of the intervention
can produce the same results in the
future in another area for another group
of beneficiaries

Impact The Purpose and Overall Objectives

once achieved will have positive effects
on the target group/communities
-Positive changes outweigh the negative
changes produced, directly or indirectly,
as a result of the Implementation of the
project
-The durability of the benefits and
development effects produced by the
project after its completion
ALL FOR TODAY