Project Identification and Selection Dr. Mohamed Riyazh Khan DoMS

PROJECT IDENTIFICATION AND SELECTION Meaning of Project: “A project typically has a distinct mission that is designed to achieve and a clear termination point, the achievement of the mission” – Newman “As the whole complex of activities involved in using resources to gain benefits” – Gillinger “A project is an organized unit dedicated to the attainment of a goal – the successful completion of a developed project on time, within budget, in conformance with pre-determined programme specifications” – Encyclopedia of Management

PROJECT IDENTIFICATION AND SELECTION Projects can differ in their size, nature, objectives, time duration. Basic attributes of a Project are, i. A course of action ii. Specific objectives iii. Definite time perspective

PROJECT IDENTIFICATION AND SELECTION Project Classification: 1. Quantifiable and Non-Quantifiable projects 2. Sectoral Projects 3. Techno-Economic Projects

PROJECT IDENTIFICATION AND SELECTION Project Classification: 1. Quantifiable and Non-Quantifiable projects Quantifiable – Plausible quantitative assessment of benefits can be made. Projects concerned with industrial development, power generation, mineral development Non-Quantifiable - Plausible quantitative assessment cannot be made. Projects concerned with health education, defence.

PROJECT IDENTIFICATION AND SELECTION Project Classification: 2. Sectoral Projects i. Agriculture and Allied sector ii. Irrigation and power sector iii. Industry and mining sector iv. Transport and Communication sector v. Social services sector

PROJECT IDENTIFICATION AND SELECTION Project Classification: 3. Techno-Economic Projects i. Factor Intensity oriented : a) Capital intensive – large investment in plant and machinery b) Labor intensive – large number of human resources ii. Causation oriented : a) Demand based – demand for certain goods or services b) Raw material based – availability of raw materials, skills iii. Magnitude oriented : Based on the size of investment made – Large, medium or small scale

PROJECT IDENTIFICATION AND SELECTION Project Identification: “A project having a good market” Idea Generation : Discovered from various internal / external sources i. Knowledge of potential customer needs ii. Watching emerging trends in demands for certain projects iii. Scope for producing substitute product iv. Going through some professional magazines v. Success stories of known entrepreneurs vi. Making visits to trade fairs, exhibitions vii. Meeting with Government agencies viii. Ideas given by knowledgeable persons ix. Knowledge about the Government policy, concessions and incentives x. A new product introduced by the competitor

PROJECT IDENTIFICATION AND SELECTION Methods for generating Ideas : 1.Focus groups – Group of individuals providing information in a structured format 2.Problem inventory analysis – A method for obtaining new ideas and solution by focusing on problems 3.Brainstorming – A group method for obtaining new ideas and solutions. Four rules should be followed, i. No criticism is allowed by anyone in the group ii. Freewheeling is allowed iii. Quantity of ideas is desired iv. Combinations and improvements of ideas are encouraged

PROJECT IDENTIFICATION AND SELECTION Methods for generating Ideas : 4.Reverse Brainstorming – A group method for obtaining new ideas focusing on the negative 5.Synectics – A method for individuals to solve problems through one of the four mechanisms, personal, direct, symbolic and fantasy 6.Gordon method – Developing new ideas when the individuals are unaware of the problem 7.Checklist method – Developing a new idea through a list of related issues adapt/modify/magnify/substitute/rearrange

PROJECT IDENTIFICATION AND SELECTION Methods for generating Ideas : 8.Matrix charting – Developing a new idea by listing important elements on two axes of a chart. What/where/who/when/how can it be used? 9.Big-dream approach – Developing a new idea by thinking about constraints 10.Parameter-analysis : Developing a new idea by focusing on parameter identification (analyzing variables in the situation to determine their relative importance) and creative synthesis (solution development)

PROJECT SELECTION Main tool used is SWOT analysis. Zeroing in process – The process involved in selecting a project out of some projects. An Interdependence process Product Raw MaterialOwnership Market Location Labour Working Capital Total Investment