Project Analysis

7 Key excerpts on "Project Analysis"

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  eBook - ePub

  Proactive Project Management

  • Morten Fangel(Author)
  • 2018(Publication Date)
  • Van Haren Publishing

    (Publisher)

  Besides the managerial project analyses that are dealt with in this chapter, technical analyses also take place in the project as part of the project execution. Some general examples are requirements analyses, market analyses, feasibility analyses and consistency analyses.

  Benefit from spending time on project analyses

  Generally speaking, project analyses are a way of facilitating proactive management in your project. Furthermore, the analyses promote planning and other managerial initiatives that are based on the current conditions in the project and not based on uncritically applying experience from previous projects.

  Provided that the analyses take place by appropriate involvement of the project parties and participants, and by applying an appropriate methodology, the more tangible benefits will be:

  • Achievement of a common knowledge of the project and its context.

  • A more nuanced picture of the conditions via inputs from several parties.

  • The participants are more motivated to participate actively in the project.

  • The available information on the project is challenged/tested.

  • Proposals for initiative are produced, which are later utilized in the planning or other management initiatives.

  • Team building , where the participants gain experience from interacting during the handling of practical assignments.

  As to the last point, it is my experience that the benefit of team building is as important as the formal benefit of information capturing.

  Potential Project Analysis methods

  This chapter presents five Project Analysis methods that can be used individually or together, typically in the order mentioned. The methods are briefly summarized as follows – see also Figure 6.1.3 :

  • Project introduction

  Means of creating a preliminary overview of the existing information regarding the basis for the project implementation – based on a checklist.

  • Situational analysis

  Serves to challenge the presented information – and for bringing in additional information and impulsive proposals. The idea is that the participants guide the discussion topics.

  • Result analysis

  Deals with examining the potential outcome of the project. Serves also to clarify expectations for the project from the participants in the analysis.

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  IEEE Technology and Engineering Management Society Body of Knowledge (TEMSBOK)

  • Elif Kongar, Celia Desmond, Michael Condry, Sudeendra Koushik, Roberto Saracco, Gustavo Giannattasio, Marina Dabić(Authors)
  • 2023(Publication Date)
  • Wiley-IEEE Press

    (Publisher)

  1 Section 1 Business Analysis IEEE Technology and Engineering Management Society Body of Knowledge (TEMSBOK), First Edition. Edited by Gustavo Giannattasio, Elif Kongar, Marina Dabić, Celia Desmond, Michael Condry, Sudeendra Koushik, and Roberto Saracco. © 2024 The Institute of Electrical and Electronics Engineers, Inc. Published 2024 by John Wiley & Sons, Inc. 3 1.1 Profitability Analysis of Projects (Knowledge Area Fundamentals) Financial analysis of projects typically can mean several different things; in this chapter, we talk about ex-ante profitability analysis of projects. Ex-ante profitability analysis means trying to figure out, before starting a project, whether the project will generate wealth – that is, whether or not the project will be able to pay back the costs invested into the project and give a return commensu- rate with the risk the project carries. Profitability analysis is useful, when one is in the wealth creation business that is, when one is engaged in an activity with a profit motive. If a project is made for a purely “academic” reason and the success of the project, or whether it makes money or not, is of no consequence, then profitabil- ity analysis is typically a waste of time and other measures of goodness should be used. Also, if the project is of a trivial, very small size, then using common sense is more advisable than profitability analysis – after all, serious profitability analysis is time-consuming and requires work. Profitability analysis resembles budgeting in that it includes estimating costs and revenues (out- and in-cash- flows) and when they will take place – estimation of the size and the timing of cash-flows is of importance. In fact, profitability analysis is also called “capital budgeting.” Profitability analysis may also be useful when one must choose between projects. This means analyzing the profitability of alternatives and ranking them based (also) on the result of the profit- ability analysis.

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  The Complete Project Management Methodology and Toolkit

  • Gerard M. Hill(Author)
  • 2009(Publication Date)
  • CRC Press

    (Publisher)

  Executives and senior managers need to iden-tify financial analysis models that can be applied to project Project Selection ◾ 75 portfolio management, and specifically to project selection and retention. Assess Preliminary Business Risk Examine the business risk that is associated with the project at hand. This addresses such factors as business competition, marketplace demands, customer demeanor, etc. Its focus is on “business” risk because a project work plan has not yet been constructed to assess potential risks on the project. Details about this effort are presented in the Project Risk Management practice area. Analyze Business Perspective Information Elements Examine the information presented by the business perspec-tive in sufficient detail and as per the available time. Consider potential impacts relative to the following particular findings or indicators: The customer does not have a final statement of work ◾ for the technical effort. The customer has terminated other similar projects ◾ prematurely. The project effort is primarily one that involves a new ◾ technical product or service. Another (competitive) project provider is an on-site ◾ incumbent for the project effort. The project effort is one in which previous project pro-◾ viders have failed. Include these and any other related findings when deliberat-ing the business case recommendation. Analyze Financial Perspective Information Elements Examine the information presented by the financial perspec-tive information in sufficient detail and as per the available time. Consider potential impacts relative to the following particular findings or indicators: The preliminary project cost estimates are larger than ◾ any project done previously. The project investment period is significantly longer or ◾ shorter than normal. The project return on investment is significantly larger ◾ or smaller than normal. The project investment break-even point is uncertain ◾ or very late in the project.

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  Cost-Benefit Analysis for Development

  A Practical Guide

  • (Author)
  • 2013(Publication Date)
  • Asian Development Bank

    (Publisher)

  2. Economic Analysis of Projects: An Overview

  2.1 Introduction

  The starting point for project economic analysis (or cost-benefit analysis [CBA]) is that a financial perspective alone will not capture the gains to society at large and that a quantitative assessment of economic costs and benefits is necessary.1 Financial appraisals of projects are of particular importance because they reveal the adequacy of financial incentives for project beneficiaries to participate in the project, and the degree to which financial resources will be deployed over the project’s life span to ensure financial sustainability. However, financial measures can be highly misleading as indicators of the social welfare improvements of a project. This is because key outputs from many projects are either not sold on a market (for example, non-toll roads, solid waste management, reduction in air and water pollution, health improvements from water supply and sanitation) or are sold in distorted or controlled markets (for example, water and electricity sales subject to administrative pricing). Furthermore, even where project outputs are sold at commercial or market-clearing prices, for large projects with price effects, the benefits in terms of social welfare improvements differ from project revenues.

  This chapter aims to survey some of the key issues relating to the application of project economic analysis to highlight some recent methodological developments and to review its relevance to the current practice of governments and donor agencies.

  Project economic analysis is an analytical framework for converting the costs and benefits of a project to comparable monetary units, so they can be compared systematically and incorporated in a measure of project worth. It originated in the analysis of water resource projects in the United States in the 1930s and as discussed below, retains its relevance in the context of higher income economies. However, CBA as it applies in a development context, which is the focus of this volume, emerged in the late 1960s and early 1970s with the seminal works of the literature (Little and Mirrlees 1969 , 1974; UNIDO 1972 ; Squire and van der Tak 1975).2

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  Early Project Appraisal

  Making the Initial Choices

  • K. Samset(Author)
  • 2010(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Part II Tools and Techniques This Part II comprises ten chapters, each describing a method or tool, customarily used in sequence from an initial idea to a project concept, as illustrated in the block diagram of chapters below. 17. Systems Analysis 19. Strategy Analysis 18. SWOT Analysis 22. Cost Estimation 21. Strategic Frame Requirements 20. Uncertainty Analysis 23. Cash Flow Analysis 25. Progress Analysis 24. Risk Analysis 26. Project Evaluation Project Planning 27. Boondoggles and White Elephants 169 17 Systems Analysis Systems analysis is a collective term for various methodological approaches to find an optimum solution to a problem. Instead of springing from an assumed best solution, systems analysis considers the problem to be solved in its context, described as a system, and asks which conditions must be fulfilled for the system to function. The solution is that which best satisfies the conditions. Such an open approach makes systems analysis a useful tool as an initial approximation on the road from a problem to a successful project. 17.1 An open-ended systematic process In principle, a concept is the best response to one or more tangible needs. A comprehensive approach implies that one must first identify the relevant needs as well as the corresponding functional requirements 17. Systems analysis Concept definition 21. Strategic frame requirements 20. Uncertainty analysis 19. Strategy analysis 18. SWOT analysis K. Samset, Early Project Appraisal © Knut Samset 2010 170 Early Project Appraisal to be met by the concept in the context in which it will fit. 1 The process that leads to identification of a project concept should be as open as possible, in the sense that it’s not excessively constrained to specific operational solutions or tied to a predetermined choice. The process should facilitate unbiased identification of various alternatives.

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  Seven Steps to Mastering Business Analysis

  The Essentials

  • Jamie Champagne(Author)
  • 2020(Publication Date)
  • J. Ross Publishing

    (Publisher)

  Designs may end up being revised more than once since these projects can begin as more of an exploratory discussion, which then leads to projects being generated. The team dynamics are often much more collaborative when working together and considering what changes are possible that would drive positive outcomes. The BA role often facilitates discussions to identify clear goals that align to organizational vision. BAs collaborate with the teams to define descriptions and measurements of what success would look like at the initial onset of these projects. A great amount of analysis occurs throughout the project regarding alternatives and risk analysis in order to help the team and decision makers consider what else is possible that will benefit the organization beyond what processes are followed today. The BA helps bring in the perspective of how to achieve value before, during, and after implementation.

  STRATEGIC PLANNING

  Projects are initiated for very specific reasons, and those reasons can be traced back to an organization’s strategic plan. Strategic planning is an important activity for every enterprise. It is the development of a cohesive, long-term plan for the organization. It helps articulate how the organization will work to achieve the organizational vision. Strategic planning may be performed at the organizational or department/ divisional level. In some large firms, there are entire departments dedicated to strategic planning and measuring the organization’s adherence to the plan.

  Figure 3.2 Strategic planning decomposed

  Most junior to mid-level BAs will not be involved in strategic planning, but it is an important activity for all BAs to comprehend. You need to be able to read and understand the plan because it sets the direction for the organization. BAs should ensure that project work is moving the organization forward in achieving its strategic goals. Many senior-level and experienced BAs participate in strategic planning activities. This is often part of the progression of advancing your analysis activities from targeted-solutions analysis to project-based analysis to more enterprise-level analysis. If you wish to grow in your analysis career, maturing to support enterprise-level analysis is a natural progression beyond project-based work. This type of analysis provides the information that will help the firm choose which projects to undertake in the first place—by looking at not just one project, but rather all projects and how they blend together.

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  Entrepreneurship

  • John R. Bessant, Joe Tidd(Authors)
  • 2018(Publication Date)
  • Wiley

    (Publisher)

  Munich: Peter Pribilla Foundation. Project evaluation usually assumes that there is a choice of projects to pursue, but where there is no choice, project evaluation is still important to help to assess the opportunity costs and what might be expected from pursuing a project. Different situations and contexts demand different approaches to project evaluation. We argued earlier that complexity and uncertainty are two of the most important dimensions for assessing projects. Different types of project will demand specific techniques, or at least different criteria for assessment. A large number of techniques have been developed over the years, and are still being developed and used today. Most of these can be described by means of some common ele- ments which form the core of any project evaluation technique: • Inputs into the assessment include likely costs and benefits in financial terms, probability of technical and market success, market attractiveness, and the strategic importance to the organization. Identify and Manage Critical Risks and Uncertainty 61 • Weighting: Certain data may be given more relevance than other data (e.g., market inputs compared with technical factors), in order to reflect the company’s strategy or the com- pany’s particular views. The data is then processed to arrive at the outcomes. • Balancing a range of projects, as the relative value of a project with respect to other projects is an important factor in situations of competition for limited resources. Portfolio management techniques are specifically devoted to deal with this factor. Economic and cost–benefit approaches are usually based on a combination of expected utility or Bayesian assumptions. Expected utility theory can take into account probabi- listic estimates and subjective preferences, and therefore, deals well with risk aversion, but in practice, utility curves are almost impossible to construct, and individual preferences are different and highly subjective.

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