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Projects play an important role in the development process of economies. As a result, they have been described as the building blocks of development. Although there is as yet no generally accepted definition of a project, certain features can be said to characterize any project

The success of any project depends, to a large degree on its planning and management. Planning is supposed to help ensure that the project is not only carried out, but also carried out in the best manner possible. In this session, therefore, we examine steps and issues in project and investment planning

Outline of Presentation
Concepts of project, investment, project planning and management Stages in Project Planning and management Project planning within the framework of the project cycle. Essential elements of a project and investment plan Conclusion

Concepts of Project, Investment and Project Planning

There is yet no consensus as to the definition of a project However, the concept of a project has provided a sound methodology for planning, appraising and implementing of discrete investment activities. As a working definition, several authors have provided various definitions of a project:

Little and Mirrlees (1980) see project as any scheme or part of a scheme, for investing resources which can reasonably be analyzed and evaluated as independent unit. A project is seen primarily as a planning process, which uses scarce resources during a specific time for the purpose of producing some economic returns or output at a later date.

A project may be described as a discrete investment activity, with a specific starting point and a specific ending point, intended to accomplish specific objectives. It comprises a well-defined sequence of investments, which are expected to result in a stream of specific benefits over time.

A project is a capital investment to develop facilities to provide goods and services (Bierman and Smidth, 1970). A project according to UNIDO Manual (1972), involves the utilization in the near future of scarce or at least limited resources in the hope of obtaining in return some benefits over a long period

A project is also seen as an optimum set of investment oriented actions by means of which a defined combination of human and material resources is expected to cause a determined amount of economic and social development. A project in another sense can consist of a set of coordinated activities to bring into existence something of value and the utilization of resources to produce value or benefits at a later date

Features of a Project
Investment of some resources Planning process in investing some scarce resources The invested resources to be capable of analysis and evaluation as an independent unit. The achievement of some specific objective(s)


Costs/benefits or returns on the projects Time dimension in the immediate or future time The size of the project Risk and uncertainty Amount/Cost of the investment


As with project, investment is defined in a number of ways. To an economist, it is the production of actual real capital goods (goods that are themselves used in the production of other goods and services) In the financial and banking sector, investment refers to the purchase of securities from the stock exchange or government securities issued through the banks and other financial institutions.


Replacement of and net addition to fixed capital stock by business and non-profit institutions. Investment as a commitment of funds with the expectation of a positive return commensurate with the level of risk assumed.


In general terms, investment is associated with some opportunity costs (alternative(s) foregone), risk, uncertainty and irreversibility


Project Planning
Project planning can be described simply as the process of preparing for the commitment of resources to a project in the most economical way.


The objective of planning is to ensure that project duration and costs are balanced and that distortions in the allocation of scarce resources are reduced to the barest minimum. Usually, there are several sequences in project planning.


Stages in Project Planning

the preliminary coordinating stage where various parties involved in the project get together and chart a feasible course for the project (project objectives and who to do what); detailed description of the tasks to be undertaken and accomplished in order to achieve the objectives of the project;

drawing up the project budget and schedule of activities description of all project status reports detailing the time, content and direction (who needs the record); and developing a termination plan for the project, to determine in advance how the project benefits will be distributed once the project has achieved its objectives.

Step 1 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 and establish their needs Prioritise the needs and create a set of goals that can be easily measured (follow the SMART principle)


Step 2 Project Deliverables

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 3 Project Schedule

Create a list of tasks that need to be carried out for each deliverable identified in step 2. For each task identify the following:
The amount of effort (hours or days) required to complete the task The resource who will carryout the task

Once you have established the amount of effort for each task, you can workout the effort required for each deliverable and an accurate delivery date. Update your deliverables section with the more accurate delivery dates.


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)


Step 4 Supporting Plans

Human Resource Plan
Identify by name the individuals and organisations 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.


Communications Plan
Create a document showing who needs to be kept informed about the project and how they will receive the information. The most common mechanism is a weekly/monthly progress report, describing how the project is performing, milestones achieved and work planned for the next period.


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. Risks can be tracked using a simple risk log. Add each risk you have identified to your risk log and 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.


Project Planning within the Framework of the Project Cycle

It is convenient to think of project task as taking place in several distinct stages. These stages are commonly referred to as the project cycle. They are closely linked to each other and follow a logical procession. Thus, the distinctions among the various stages of the project cycle are often blurred in practice There are different models of the project cycle


Project Cycle Stages

Pre-identification/Pre-investment Project Identification Project Preparation (pre-feasibility and feasibility studies) Project Appraisal Project Negotiation and Selection Project Implementation Project Monitoring Project Evaluation


This represents the idea stage and it involves activities concerned with surveying, reviewing and inventorizing existing data and information. These include:
natural resource data human resource data socio-economic data


Project Identification
Having achieved a good database, the process of identification of gaps would have been laid. Thus, such gaps, which lead to project ideas, could be generated from:
resource availability market gap need gap

Once a project is identified, the next step is to carry out a project preparation document, which involves pre-feasibility and feasibility studies

Pre-feasibility and Feasibility Studies

While pre-feasibility study makes a preliminary analysis of a proposal, the feasibility study will generally give full details of a project proposal. The proposal is as well known as project identification brief, which contains the objective(s) of the project, identification of the constraints and means of overcoming the constraints


The pre-feasibility gives direction for full detailed study in the feasibility study in which all the technical institutional, economic and financial conditions necessary to achieve the objectives of the project are highlighted. At the conclusion of the feasibility study, a project report would have been prepared The report will serve as a work plan or a guideline to implement the project, provide the basis for appraisal/review and a baseline data for subsequent monitoring and impact evaluation


Project Appraisal
Appraisal involves carefully reviewing all aspects of the project vis--vis the project objectives. The proposal is subjected to sensitivity analysis at this stage. Some explicit appraisal is a necessary part of the decision-making process before funds are committed. It may be advisable to let a separate group of people conduct project appraisal

Aspects of Project Appraisal

Technical Appraisal Institutional Appraisal Financial Appraisal Economic Feasibility (Appraisal) Social Appraisal Environmental Appraisal


Project Negotiation and Selection

This stage involves discussions with the lender(s) or provider(s) of funds or assistance on the measures needed to ensure success for the project. The agreement reached at this stage is further embodied in the project agreement. The proposed project is presented to the policy makers or planners for approval. After the necessary approval, the agreement is signed and the proposed project goes into implementation


Project Implementation
Implementation or project execution refers to the development/construction activities up to the point at which the project becomes fully operational. If there has been good preparation and programming, then efficient and timely implementation depends on good management supervision, technical staff and timely release of funds


Project Procurement
The importance of procurement in project management cannot be overemphasized. It is the heart of project implementation. It is an all embracing concept that describes the process/guideline for the acquisition of the inputs (good and services) for the project. Broadly speaking, the concept deals with contract packages (like what, how, when and who to do it) in respect of input delivery

Project Monitoring
The monitoring unit has been described at large as the police unit. They deal specifically with the supervision of the implementation of the project. They produce periodic report that highlight variances, circumstances, problems and remedies A good monitoring report should result in management decisions to improve its future performance


Project Evaluation
The final phase of the project cycle is the Project Evaluation. While projects may be subject to on-going monitoring/evaluation, there is need for a more comprehensive evaluation. The essence of evaluation is that it often provides an opportunity to learn from experience. Such lessons are built into the design and preparation of future projects

Elements of a Project Plan

Overview: usually a brief summary of the objectives and scope of the project which also lists the major milestones in the project schedule Objectives: a more detailed statement of the general and specific goals that the project seeks to achieve if implemented. General approach: provides, in detail, the approach to be used in implementing the project both in technical and managerial terms; and


Contractual: this aspect of the plan details the responsibilities of all those involved in executing the project, liaison arrangements, project review and termination of agreement procedure, proprietary requirements, specific management and performance agreements such as use of subcontractors as well as technical deliverables, their specification and delivery schedule


Schedule: this is a detailed outline of the various schedules and list of all milestones; Resources: arrangements for funding and other necessary input resources are explicitly stated here along with the establishment of project budget, both capital and non-capital expense requirements, cost monitoring and description of control procedures;


Manpower Requirement: the expected personnel required to achieve the set targets of the project are drawn up along with the organizational structure that will ensure successful implementation of the project; Method of Evaluation: this section should contain a brief description of the procedures to be followed in monitoring performance, collecting data, storing data with a view to evaluating the project against the standard and methods set at the inception of the project


Anticipated Problems: an attempt is made here to anticipate potential problems and/or bottlenecks that may make the goals of the project unrealizable including problems arising from sub-contracting default, technical failure, resource inflow limitation and the like. When such problems are anticipated at the onset, it is easier to tackle if they arise and, if not, the better for the project

Project Management
Monitoring of plans and projects is a systematic management tool or device for observing continuously the activity or output of a system so as to indicate deviations from a planned or normal state. It means the management of definite projects with certain objectives and goals, limited funds and resources and finite time duration. It is also often described as the process of planning and directing a project from its inception to its completion in a given time at a given cost for given end product.


Project management is control, given the constraints of time and finance, of the available material, manpower, and cost of project from its inception to completion The objective of management is to provide the output of a project at minimal cost and time.


World Bank views project management as planning and directing the process of the development of a project to enable it to reach, in the best possible way and with the best possible result, the intended object.


Project Management Institute Project Management is the application of knowledge, skills, tools and techniques in order to meet or exceed stakeholders requirements from a project. In order word, Project Management is the art of directing human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, quality, time and cost, and participants satisfaction.


Project Management Cycle





Large projects are carefully planned using critical path and other methods, great care being taken to ensure the best possible progress of work by analyzing and time-linking all processes and operations relevant to the project.


Operational Management Process The process of project management is an integrative one an action or failure to take action in one area will usually affect other areas.


Successful project management requires actively managing these interactions. A process is a series of actions bringing about a result. In the case of a project, there are five basic management processes viz. initiating, planning, executing, controlling and closing.


Operational management i.e. the management of on-going operations also involves planning, executing and controlling.


Exercising Control During Project Execution In any situation where progress is to be made, some form of plan must be laid down for others to follow. At the end of an allotted time, be it day, week or year, the checking of the estimates targets against the actual performance achieved will indicate the measure of control.


Labour Control Maintaining sufficient labour strength and ensuring that the tasks set for operatives or gangs are carried out within the planned requirements, including the recording of operatives progress


Material Control

The prime function here is to ensure that materials are ordered in good time, and that a very close watch is kept upon planned delivery dates. Material in short supply or late delivery should be chased up immediately, with possible alternatives materials or suppliers being sought. Control on site must be exercised in respect of waste, determination, pilfering and misuse.


Quality Control

The engineering specifications as outlined for the contract must be strictly adhered to. Specific samples of materials used are required to be tested under the supervision of a consulting engineer in order to ensure to compliance with certain standards.


Cost Control

The record kept on costs will be of great value to the estimator when determining future prices so that good documentation and feed-back are taken very serious.


General Progress Control The indication of how much progress has been made relies upon the degree of detail required in relation to the programme of which the work is being carried out, e.g. weekly for master programme, daily for weekly programme. Progress is usually shown in a physical manner by using a colour to block out or underline the estimated duration of task. Another method is shown by means of a percentage column how work is progressing.


Various computer softwares are available nowadays for this exercise, thus removing the drudgery. Critical Path Network/Programme Charting This method is a comparatively new form of planning used in the building industry.


Critical path planning: It should be understood that critical path method does not solve all the problems of the builder but it does help to spot and highlight some of them so that corrective measures can be taken


Network Analysis/Critical Path Method to Project Management

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Network analysis is a vital technique in project management. It enables project managers to take a systematic quantitative structure approach to the problem of managing a project through to successful completion.


The aim of network analysis is to ensure that the project is completed on or before the appointed time and at minimum cost. The entire project is therefore classified into critical and non-critical jobs. The critical jobs are jobs that must be completed at the stipulated time to avoid delay in completion time


The non-critical jobs are jobs that could be delayed for a specific time without affecting the time of completion The critical path method (CPM) and project evaluation and review techniques (PERT) are the two methods for planning, scheduling and controlling a project to ensure its completion within the stipulated time


What a Project Manager Should Know: Alert in detecting unexpected situations, ability to find good solutions to problems that have occurred, and foresight to replan changed circumstances. Understand the project objectives.
the system processes for managing projects; how to get the project to achieve its desired objective through people.


Other Project Management Tools

Gantt charts - are useful tools for planning and scheduling projects. They provide an easy graphical representation of when activities (might) take place. In addition:
Gantt charts allow you to assess how long a project should take; Gantt charts lay out the order in which tasks need to be carried out; Gantt charts help to manage the dependencies between tasks; and Gantt charts determine the resources needed


This paper has highlighted the importance of project (discrete investment activities) in the development process of a nation. Without doubt, projects can made or mar a development process. Thus, the planning of a project is as important as its implementation as well as the evaluation of its impacts


A plan is a necessary guide for the success of any project, and as the saying goes, a project without a plan has been planned to fail. Nevertheless, it must be stressed that the project plan must be a good and workable one, not just any plan. A poorly conceived plan will result in false statistics, costly mistakes, frustration and dashed hopes to both owners and managers of the project. Consequently, the task of project and investment planning must be taken with all seriousness


The careful application of the above steps will not only lead to the successful identification and charter of a project, but will also ensure the most economic process of execution. Every project must have the following elements: Successful completion to specification Handing it over to the end-user (client) Timely completion to meet the clients target Cost effectiveness that it stays within budgetary constraints.


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