Module 1 Session 1.3 Visual 1 Module 1 Understanding the Project and Project Management Session 1.3The Project Preparation/Analysis Process and the Hierarchy of Objectives

Module 1 Session 1.3 Visual 2 Instructional Objectives 1.Describe the process of preparation and analysis 2.Explain the purpose of a feasibility study 3.Name the six “feasibilities” and describe each 4.Describe how a feasibility study is used 5.Describe what is meant by a hierarchy of objectives 6.Create a simple hierarchy of objectives

Module 1 Session 1.3 Visual 3 A Generic Project Life Cycle Identification or Conception Feasibility or Definition Development or Design or Preparation Approval or Appraisal or Financing Implementation (Construction, Manufacture, Development ) Operations Ex Post Evaluation Major Phases or Stages Milestones or Decision Gates Activities or Products or Deliverables Objective of Phase Concept Approved Feasibility Approved Design Approved Project Approved Start-up of Operations Prefeasibility Study Feasibility Study Design Documents Project Analysis Report Completed Project Benefits and an Audit Report Define Needs Define Requirements Develop Specifications FinancingImplement Project Learn From Mistakes

Module 1 Session 1.3 Visual 4 Flowchart of the Project Preparation/Analysis Process Economic Costs and Benefits (Shadow Prices) Economic Cost-Benefit Analysis Financial Costs and Benefits (Market Prices) Financial Cost/Benefit (ROI) Final Appraisal (Feasibility) 1. Technical 2. Financial 3. Economic 4. Institutional 5. Environmental 6. Social Technical Design Implementation and Operational Management Capacity System for Delivery or Distribution to Beneficiaries or Customers Need or Demand Start: Ideas or Concept

Module 1 Session 1.3 Visual 5 Six Types of Feasibility  Technical—Can it be done?  Financial—Is the rate of return acceptable?  Economic—Is the benefit/cost ratio for the country acceptable?  Institutional—Can the organization maintain it?  Environmental—How will it affect the environment?  Social—How will it impact society?

Module 1 Session 1.3 Visual 6 Preparation and Analysis Are Iterative Preparation Analysis IdentificationFeasibilityDesign Ideas Recycle Approval Time ,00010,000 Order of Magnitude of Costs Drop

Module 1 Session 1.3 Visual 7 Another Life Cycle  Wild enthusiasm  Disillusionment  Chaos  Search for the guilty  Punishment of the innocent  Promotion of nonparticipants  Definition of objectives

Module 1 Session 1.3 Visual 8 Hierarchy of Objectives  Clarify need  Clarify requirements  Communicate project objectives  Get input and feedback  Helps expost evaluators measure “right” objectives  Makes relationship of objectives clear

Module 1 Session 1.3 Visual 9 Level of Objective Level of Management Hierarchy of Objectives Policy Strategic Operational Top Policy Objectives Middle Working Project Objectives Input Objectives Strategic Objectives

Module 1 Session 1.3 Visual 10 Hierarchy of Objectives Electric Power Project Policy Objective Strategic Objective Project Objective Input Objective Increase Industrial Production Produce 50 MW Power New Power Plant $10 Million Contract, Land, Labor

Module 1 Session 1.3 Visual 11 Why-How Framework WhyEndsObjectivesGo Up HowMeansStrategyGo Down You can start at any level and go up and down!

Module 1 Session 1.3 Visual 12 An Example  What is the objective?  Praise the glory of God  Build a cathedral  Build a wall  Make square stones  Hit stones with a hammer Why? How?

Module 1 Session 1.3 Visual 13 The Hierarchy and the Why/How Framework Levels of Detail Policy Objectives Strategic Objectives Project Objectives Why How Less Detail More Detail

Module 1 Session 1.3 Visual 14 Hierarchy of Objectives The Cathedral Project Policy Objective Strategic Objectives Project Objectives (Operational) To praise the glory of God To build a cathedral To build a wall To make square stones To hit rocks with a hammer Why? How? Why? How?

Module 1 Session 1.3 Visual 15 Hierarchy of Objectives The Series of Causal Linkages HierarchyTerminology Level of Purpose Examples Policy Results (Impact) Policy Objective Increase Farmer Income ($200/year) Strategic Operational Effects Outputs Activities Strategic Objective Increase Rice Production (50%) Project Objective Input Objectives Inputs

Module 1 Session 1.3 Visual 16 Objective Tree Analysis of Alternative Strategies to Accomplish Objectives Is Key as You Work Down Each Level Increase Rice Production New Practice New Land Switch Crops Import Rice Reduce Consumption Objective Alternative Strategies

Module 1 Session 1.3 Visual 17 Hierarchy of Objectives HierarchyTerminology Level of Purpose Examples Policy Results (Impact) Policy Objective Increase Farmer Income ($200/year) Strategic Operational Effects Outputs Activities Strategic Objective Increase Rice Production (50%) Project Objective Input Objectives Inputs The Series of Causal Linkages Introduce New Farming Practices: New Seeds and Technology People, Money, Seeds, Knowledge

Module 1 Session 1.3 Visual 18 Level of ObjectivesMeans-Ends Chain Policy Objectives Strategic Objectives Project Objectives (Operational) Input Objectives Objectives Loans and extension work with farmers Strategy Bank loan of $10 million Objectives Use new seeds and fertilizer Strategy Loans and extension work with farmers Objectives Increase rice production 50% Strategy Use new seeds and fertilizer Objectives Double farmer income to $200 Strategy Increase rice production 50% Why How Why How Why How Why How Vertical Logic

Module 1 Session 1.3 Visual 19 Project Development Objective (PDO) Outcome IndicatorsUse of Results Information Urban water supplies provide safe water 80 % of systems meet international standards 100 % of time Provide technical assistance to systems failing tests Intermediate results, one per component Results indicators for each component Use for outcome monitoring Component 1 Component Results Framework World Bank Terminology

Module 1 Session 1.3 Visual 20 Measurable Indicators of Results Horizontal Logic (To measure progress and verify assumptions) Assumptions What outside influences may affect the project (if-then relationship) How to measure

Module 1 Session 1.3 Visual 21 Hierarchy of Project Objectives (For definition and measurement/evaluation) Measurable Indicators of Results Policy Objectives Strategic Objectives Project and Operational Objectives Input Objectives Level of ObjectivesMeans-Ends ChainAssumptions Objective (end-outputs) Strategy (means-inputs) Objective Strategy Objective Strategy Objective Strategy Why How Level of effort/ expenditure

Module 1 Session 1.3 Visual 22 Hierarchy of Project Objectives Level of ObjectivesMeans-Ends Chain Measurable Indicators of Results Assumptions Policy Objectives Strategic Objectives Project Objectives Input Objectives Objective (end-outputs) Double farmer income to $200 Strategy (means-inputs) Increase rice production 50% Objective Increase rice production 50% Strategy Use new seeds and fertilizer Objective Use new seeds and fertilizer Strategy Loans and extension work with farmers Objective Loans and extension work with farmers Strategy Bank loan of $10 million per capita income total tons grown tons/hectare number of tons distributed number of loans value of loans level of effort/expenditure Price of rice does not fall with increased production Proper use of fertilizer will increase yields Loans will lead to better practices

Module 1 Session 1.3 Visual 23 The Hierarchy of Objectives  Logical framework with vertical and horizontal logic  Vertical logic = Why? How?  Horizontal logic = Measures and Assumptions  Planning can begin at any vertical level  Policy  Strategic  Operational

Module 1 Session 1.3 Visual 24 The Hierarchy of Objectives  Levels match management levels and interests  Primarily tool for analysts, but also helps project management and evaluators  advice  feedback  communication  consensus building  commitment/motivation  evaluation planning

Module 1 Session 1.3 Visual 25 Summary  Preimplementation phases of life cycle emphasized  Key deliverable = Project Analysis Report  Iterative process of preparation and analysis  Hierarchy of objectives (and results) useful tool  planners  expost evaluators  project management

Module 1 Session 1.3 Visual 26 Coming up:  Making a simple hierarchy of objectives (and results)  How to read a Project Analysis Report (Session 1.4)

Module 1 Session 1.3 Visual 27 Discussion Questions  How can the hierarchy be used for collaborative planning with beneficiaries and others?  Why is a clear definition of objectives essential before implementation?  Contrast the use of the preparation/analysis process during the identification phase with its use during the feasibility phase.