project life cycle and phases
TRANSCRIPT
![Page 1: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/1.jpg)
By Abigail Pugal Somera
DM 211 Project Development & Management 2nd Sem 2013-2014 Prof. Josefina B. Bitonio, DPA
![Page 2: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/2.jpg)
To be able to understand the phases of
a Project Life we first have to
understand the different
interpretations of a Project Life Cycle
as interpreted by different global
organizations that deal with
governments.
![Page 3: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/3.jpg)
• ADB Project Cycle
Country Partnership Strategy / Regional
Cooperation Strategy
Preparation
Approval Implementation
Completion /
Evaluation
![Page 4: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/4.jpg)
• World Bank Project Cycle
Country Assistance
Strategy (1)
Identification (2)
Preparation, Appraisal and
Board Approval (3)
Implementation and Supervision
(4)
Implementation and Completion
(5)
Evaluation (6)
![Page 5: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/5.jpg)
Cycle Order ADB World Bank
1 Country Partnership
Strategy / Regional
Cooperation Strategy
Country Assistance
Strategy
2 Preparation Identification
3 Approval Preparation, Appraisal
and Board Approval
4 Implementation Implementation and
Supervision
5 Completion / Evaluation Implementation and
Completion
6 Evaluation
![Page 6: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/6.jpg)
I. Pre – Investment
II. Investment
III. Operations
IV. Evaluation
Support Studies:
•Opportunity Study
•Pre-feasibility Study
•Feasibility Study
•Appraisal and Decision
Negotiation and Contracting
Engineering Design
•Construction and Training
•Start-up
![Page 7: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/7.jpg)
![Page 8: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/8.jpg)
• Objective/s: • Find Promising Business Opportunities
• Screen According to Criteria
• Classify for Further Study or Later Consideration
• Characteristics:
• Preliminary Information from Knowledgeable Individuals and
Promotion Agencies
![Page 9: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/9.jpg)
Develop Selection Criteria
Screen Ideas vs. Criteria
Acceptable?
Reject Rework Later
Reconsider
Further Study
Scan Sources of Ideas and Lists
Profile Readily Available Data
YES
NO
![Page 10: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/10.jpg)
• Investment Opportunities
• Demand
• Linkages
• Problems
• Resources
• Development
• Trade
• Technology
• Government Policy
• External Constraints
• Sources of Ideas
• National, Regional Development Plans
• Sector Studies
• Local Resource Studies
• Other Countries’ Experience
• Product Classification Lists
![Page 11: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/11.jpg)
• Size and Growth of Market
• Local Resources
• Plant Size
• Appropriate Technology
• Size of Investment
• Estimated Financial Indicators
• Requirements and Constraints
![Page 12: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/12.jpg)
• Varies according to Investigator
• Investor
•Lender
• Risk of All Concerned
![Page 13: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/13.jpg)
• Set-up Screening System to Measure Long-Term
Potential
• Concentrate on Best Prospects
• Quick Negative Decision Better than Delay
• Assure Commitment of Potential Sponsor to
Implementation
![Page 14: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/14.jpg)
Micro
• Business Concept
• Investors
• Market
• Resources
• Entrepreneur
• Criteria Satisfaction
Macro
• Business Climate
• Business Cycle
• Economic Trend
![Page 15: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/15.jpg)
Allocation of Investment Resources
![Page 16: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/16.jpg)
SU
PPO
RT S
TU
DIE
S
PROJECT IDENTIFICATION
OPPORTUNITY STUDY
PRE-FEASIBILITY STUDY
FEASIBILITY STUDY
APPRA
ISA
L
ITER
ATI
ON
S
IMPLEMENTATION
IDENTICAL SCOPE AT ALL LEVELS,
INCREASING ACCURACY AND
PRECISION
![Page 17: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/17.jpg)
• Related to preparation of investment studies
C • Collecting
O • Organizing
P • Processing
A • Analyzing
![Page 18: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/18.jpg)
• Executive Summary
• Project Background and Basic Idea
• Market Analysis and Marketing Concept
• Raw Materials and Supplies
• Location, Site and Environment
• Engineering and Technology
• Organization and Overhead Costs
• Human Resources
• Implementation, Planning and Budgeting
• Financial Analysis and Investment Appraisal
![Page 19: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/19.jpg)
Objectives:
• Refinement of Business Idea
• Preliminary Evaluation of Alternative Approaches
• Preliminary Assessment of Strengths and Weaknesses of
Concept
Characteristics:
Sketchy, Based more on rough aggregate estimates than on
detailed analysis
![Page 20: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/20.jpg)
Objectives:
• Preliminary Project Assessment
• Identify Project Alternatives
• Identify Critical Aspects that Require Special Support Studies
Characteristics:
Intermediate Level of Detail Based Primarily on Secondary Data
![Page 21: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/21.jpg)
Objectives:
Provide Commercial, Technical, Financial and Economic Information Needed for Investment Decision-Making
Characteristics:
• Clear Project Concepts and Criteria
• Comprehensive Project Design
• Reliable Information, Often Primary Data
• Quantified Prediction or Performance
• Detailed Analysis with High Confidence Level
• Consistent and Defensible Conclusion
![Page 22: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/22.jpg)
Objectives:
Provide Detailed Technical Analysis of Critical Design Features
Characteristics:
• Limited Scope
• Performed by Technical Experts
• Answer Key Questions
• Degree of Rigor Commensurate with Stage of Project
Development
![Page 23: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/23.jpg)
• Markets
• Inputs
• Location
• Technology
• Equipment
![Page 24: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/24.jpg)
Comparing Project Characteristics with Criteria
![Page 25: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/25.jpg)
• All Sectors of Economy
• Revenue and Non-revenue Projects
• All Types of Projects
• New Investment
• Modernization
• Expansion
• Privatization
• Technology Acquisition
• Equipment Replacement
• Public and Private Investment
![Page 26: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/26.jpg)
• Commitment of Scarce Resources
• Expectation of Future Benefits
• Inherent Uncertainties
![Page 27: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/27.jpg)
![Page 28: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/28.jpg)
PARTICIPANT INVESTOR FINANCIER REGULATOR GUARANTOR SUPPLIER
Commercial 1 2 2 1 2
Market 1 2 2 1 2
Technology 1 2 2 2 2
Finance
•Return 1 2 2 2 2
•Liquidity 2 1 3 1 1
•Debt
Service
2 1 3 1 2
Economy 3 3 1 3 3
1 VERY IMPORTANT
2 SOMEWHAT IMPORTANT
3 NOT SO IMPORTANT
![Page 29: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/29.jpg)
• Is it compatible with other Investment Activities?
• Is the Project potentially bankable?
• Does the project make the best use of the Sponsor’s Resources?
• Do I have the capacity to energize the project and to retain its momentum in the face of obstacles to growth?
![Page 30: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/30.jpg)
Local Partner
(on the ability of Foreign
Partner to contribute more
equity)
• “He can afford it.”
• “The exchange rate is
wrong.”
• “He wants our market.”
Foreign Partner
(on the reason to offer lower price for participation)
• “Political and Economic Risk”
• “Low Purchasing Power in the Marketplace”
• “Uncertain Future Earnings”
• “Workers’ Demands”
• “Book Value is Irrelevant”
![Page 31: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/31.jpg)
MICRO
Project Level
COMMERCIAL
PROFITABILITY
MACRO
National Level
NATIONAL
PROFITABILITY
![Page 32: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/32.jpg)
• Does the Project Make Sense for the Country?
• Consistent with Development Goals?
• Positive Impact on Macro-economic Indicators?
• Satisfy Economic Rate of Return Criterion?
![Page 33: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/33.jpg)
• Purpose
• Project Background
• Analysis of
•Commercial / Market
• Technology
• Environmental Impacts
• Institutional / Managerial
• Financial
• Economic and Social
• Conclusion
![Page 34: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/34.jpg)
• Is it a Sound Business Concept?
• Is there a Market for Product
/ Service?
• Is the Marketing Strategy Viable?
• Are the Sales Projections Realistic?
• Is the Distribution Plan Viable?
![Page 35: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/35.jpg)
• Is the production at a competitive price?
• Is the process technology accessible?
• Are the operating conditions sustainable?
• Will we be able to provide the quality demanded by the
market?
• Are the inputs to the planning reliable?
• Are there adequate technical personnel?
![Page 36: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/36.jpg)
• Do process emissions and
effluents meet or exceed
regulated standards?
• Are products environmentally
acceptable?
• Do impacts indicate future
regulatory actions?
![Page 37: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/37.jpg)
• Are the following Competent?
• Entrepreneur
• Implementation Management
• Operations Management
• Is the organization capable of executing
necessary functions?
![Page 38: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/38.jpg)
• Are the financial resources adequate to
planning?
• Will there be adequate returns to the investor?
• Are the financial criteria of other participants
satisfied?
• Are the financial risks and risk sharing
acceptable?
• Is the financial structure acceptable?
![Page 39: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/39.jpg)
• Wrong Timing
• Non-optimal Financing
• Over-estimated Market Potential
• Under-estimated Capital Cost
• Under-estimated Competition
• Planned Capacity Inconsistent with Market
• Unidentified Sources of Skilled Personnel
• Inadequate Infrastructure
• Project Design Alternatives
• Ineffective Planning
![Page 40: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/40.jpg)
![Page 41: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/41.jpg)
The process of identification, analysis and either acceptance or
mitigation of uncertainty in investment decision-making.
Essentially, risk management occurs anytime an investor or fund
manager analyzes and attempts to quantify the potential for
losses in an investment and then takes the appropriate action
(or inaction) given their investment objectives and risk tolerance.
Inadequate risk management can result in severe consequences
for companies as well as individuals. For example, the recession
that began in 2008 was largely caused by the loose credit risk
management of financial firms.
![Page 42: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/42.jpg)
Any project organization is subject to risks. One which finds itself
in a state of perpetual crisis, is failing to manage risks properly.
Failure to manage risks is characterized by inability to decide
what to do, when to do it, and whether enough has been done.
Risk Management is a facet of Quality, using basic techniques of
analysis and measurement to ensure that risks are properly
identified, classified, and managed.
![Page 43: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/43.jpg)
• Identify Uncertainties
Explore the entire project plans and look for areas of uncertainty.
• Analyze Risks
Specify how those areas of uncertainty can impact the performance of the
project, either in duration, cost or meeting the users' requirements.
• Prioritize Risks
Establish which of those Risks should be eliminated completely, because of
potential extreme impact, which should have regular management attention, and which are sufficiently minor to avoid detailed management attention.
![Page 44: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/44.jpg)
• Mitigate Risks
Take whatever actions are possible in advance to reduce the effect of Risk.
It is better to spend money on mitigation than to include contingency in the plan.
• Plan for Emergencies
For all those Risks which are deemed to be significant, have an emergency
plan in place before it happens.
• Measure and Control
Track the effects of the risks identified and manage them to a successful
conclusion.
![Page 45: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/45.jpg)
![Page 46: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/46.jpg)
![Page 47: Project Life Cycle and Phases](https://reader033.vdocuments.site/reader033/viewer/2022052211/554960a9b4c905f24e8b5966/html5/thumbnails/47.jpg)
• UNIDO Methodology for the Identification, Preparation and
Evaluation of Investment Projects, Costa Rica, Sept 23-27, 2002
• http://www.investopedia.com/terms/r/riskmanagement.asp
• http://www.netcomuk.co.uk/~rtusler/project/principl.html