Preparation and Evaluation of

Social projects
Miguel Rodríguez Albán
Class-2
 THE PROJECT CONCEPT (I)

• The term PROJECT is used in all our activities.

You don't have to be a MANAGER to have
anything to do with projects.
• Project is something that IS NOT, which is still
an IDEA that is expected to crystallize in the
future. However, it is necessary to start acting
today and the actions taken have precise
consequences in the environment of that future
idea, that is, in the success or otherwise of the
Project.
 The Project Concept (II)
Only when the idea you had crystallizes will you
say if the effort was worth it and if what was
done was adequate to achieve it. Some
elements could be missing or superfluous, the
costs could be very high for what was achieved
or much more could have been done than
expected, etc. In general, by contrasting the
idea with the result and looking at the way it
was carried out, we can be satisfied or
dissatisfied. And in the latter case, it will already
be too late. Time and effort will have been
invested in unrepeatable opportunities.
 Project Justification (I )

The development of a project is justified

according to two factors:
• Economic, expressed as the need to avoid
waste, save costs, obtain resources, etc.-
• Achievements, which are manifested in terms
of achieving the proposed objectives, ensuring
the desired effects, avoiding deviations in
results but also in the use of resources,
achieving the goals in time and quality, etc.
 Project Justification (II )
• It is intended then that the resources HE
assign
efficiently to solve a problem and that the
solution thus obtained is effective
in satisfying the customer. The
satisfaction of private interests and
of society as a whole is also
intended. Within the concept of
“well-being” it is not possible to
maintain these two points of view in
opposition.
 Formulation and Evaluation (I)
It must be clear that the

Projects require specifying objectives ,

establishing courses of action and
thinking in advance. in the
results of a project, to guaranteethe
assignment
adequate resources to meet
community needs
 Formulation and evaluation of projects (II )

The project becomes the specific Unit through which

it is planned to provide a solution to a specific need,
taking advantage of an opportunity or solving a
problem.

The formulation and evaluation of projects can be

considered the ideal management tool to allow the
analysis and adequate control of the investment
processes integrally contained in a project.
The Objective of Project Formulation and
 Formulation and evaluation of projects (III )

Evaluation is to verify that the economic,

technical, financial, institutional, political
and organizational effects and implications
of allocating resources towards the
achievement of an objective generate an
adequate benefit-cost relationship.
 STAGES OF A PROJECT (I)

• In the process of preparing the investment

PROJECT there is a logical sequence that
coincides with the stages of the decision
processes, but in this specific case they
refer to the activities and studies previous
,
duly grouped into stages or phases for the
completion of the project.
Formulation and evaluation of projects
Introduction
AIM :
Define whether the investment of resources in a project is
justified.

Scarce
Expensive
Rule out other
project
possibilities
DECISION
RESPONSIBILITY
 PROJECT
MANAGERIAL DEFINITION:
Unit for efficient resource management
MANAGEMENT UNIT
THAT THAT
DO WANNA
TODAY TOMORROW

/ COST BENEFIT
•Money
•Utility
•Time
•Personal impact
•Human Effort
•Coverage
•Machinery and equipment
•Social impact
•Technology
•Environmental
impact
 IMPORTANCE OF THE PROJECT

Making a project before doing things is important because

it allows us to be more master of the circumstances.

CORRECT
 PROJECT PHASES
PROJECT RESULT
IDEA

FORMULATION START UP
AND
NEED EVALUATION
IMPACT

•KNOWLEDGE of •PREINVESTMENT MANAGEMENT of

“EX POST”
REALITY •PRE FEASIBILITY PROJECT
EVALUATION
•FEASIBILITY STUDIES

UP TO HERE LEADER'S
UP TO HERE WE WILL STUDY
RESPONSIBILITY
 FIRST PART:
PROJECT FORMULATION

1.-THE IDEA
The idea of a project comes from knowledge of the
reality for:
IDENTIFY
•take a chance A
•Satisfact a necessity PROBLEM
•correct a situation

B KNOWLEDGE AND CREATIVITY

FUTURE EVISION
B LEADER CAPACITY
 1.-THE
IDEA
WORK METHODOLOGY

•WHAT DO I WANT TO Things in reality

CHANGE? that I would like
to modify
•SELECTION CRITERIA On what basis am
I going to decide?
•DEFINE PRIORITIES Define priorities
for different
interest groups
WORKSHOP #1: PREACTIVITY ACTIVITY

IDENTIFICATION OF ENVIRONMENTAL PROBLEMS The following worksheet

will help you identify what opportunities, needs or defects in your environment you would
like to change.

Please:
•Fill it first each
•Work as a group discussing the individual sheets
• Take out only one item per group.

To fill out the box, observe the following format and keep in mind:

• What you would like to change : List everything you have been thinking about things
that you and your group could do that would represent a business opportunity.
• Need/Opportunity : Please mark with an x, as appropriate. Then it will help you define
your project.
• Criteria: Corresponds to the bases with which you will choose what you want to work
on. In this case they are Interest for the company, the employee fund, the local
community, and one's own taste.
• Priorities : They are the rating that you assign to each thing you want to change,
according to the degree of importance it has in each criterion. Rate from 1 to 4, where 1
is very little interest and 4 is very high interest.
 2.-Define the Problem
It is clearly expressing, in words, the situation we want to
change. It has 2 aspects:

LOCATION
This
How are things?
DIFFERENCE is
How should they be?
really our problem.
DESCRIPTION
That? -----------------• Identity
Where? _________, Location
When? ---------------• Time
Which ones, how many?—, Magnitude
 2.-Define the Problem

WORK METHODOLOGY

•Review the thing you would like to change that your

group has already chosen
•How is the situation currently?
•How should it be?
•Identify the difference between the two situations
•Describe this difference precisely, using the questions.
What, where, when, how much?
WORKSHOP#2:
DEFINITION OF THE PROBLEM
The following worksheet will help you precisely define your problem.

Please:
• Preferably fill it first each
•Work as a group discussing the individual sheets
•Get only one definition of the problem per group .

To fill out the box, observe the following format and keep in mind:
• How things are : List the characteristics that the situation currently has.
• How they should be : Using your and your group's vision of the future, think about how
things should be. Dream and at the same time be realistic. Not pessimistic.
• Difference : Which difference(s) do you find between these two situations. Cross out
those in which you cannot do anything. Point out the main difference. This is your real
problem.
• Description :
• That? What is really wrong? In what object is the difference observed? What object does the
opportunity lie in?
• Where? In what place or geographical area is the difference seen? In what part of the
process?
• When? When did the difference appear? When does the opportunity begin?
• Magnitude: How many times is the problem repeated? How many objects are damaged? How
many (individuals, processes, businesses) are covered by the opportunity?
• FinalProblemDefinition: In a paragraph summarize this work
3.-Causes of the Problem

Until now, you YOU STILL DO NOT HAVE A PROJECT!

He just found a problem and was able to express it clearly!
Now you will find out what is the real cause of the problem.
Do not be fooled! The relationship between the causes and
the problem is not always direct. Generally there are cause
trees. That is, some depend on others. Make sure you get
to the deeper causes!

3.-Causes of the Problem

You know you are dealing with the true cause of the
problem when eliminating this cause eliminates the
problem.
 Search Solution

3.-Causes of the Problem

WORK METHODOLOGY
•Resume the problem that your group already defined
•Make a list of the possible causes of the problem.
•Analyze the causes to see if they are related to each other
in a cause tree
•Select all latest causes
•Analyze these last causes from the perspective of the most
probable cause. Use experience and knowledge. Be
analytical and creative.
• Choose one, as the true cause, always using a
qualification method.
WORKSH
DEFINITION
OP#3 : OF THE PROBLEM
The following worksheet will help you find the most likely cause of your problem.

Please:
• Be very creative. Try to see things from a different perspective
• Work in groups brainstorming. Accept all approaches.
•Discuss and reach an agreement.

To fill out the box, observe the following format and keep in mind:
• Define the Problem : Summarize the definition of the problem you have in workshop2
format. This will help you establish the central idea
• Possible Causes : Write down all the causes that come out of the brainstorming, even
those that seem absurd.
• Test the Possible Causes : Analyze each one and establish dependency
relationships. Use the column of numbers to identify with the same number those that
have a common tree. For each tree, identify the ultimate cause.
• Analyze hypotheses based on experience: It is an optional step that enriches the
analysis. Document experience on facts. Avoid anecdotes.
• Verify the Most Probable Cause: Select among the root causes the one that appears
as the most probable cause. Discuss the procedure and decision. If possible, do a test.
Discuss, listen. decide.
 4.-Alternative Solutions

It consists of finding a way to directly attack the root cause

of the problem, to provide a solution.

This solution that you propose now will truly be your

PROJECT .

You are ready to FORMULATE THE PROJECT and then

evaluate it.
 3.-Causes of the Problem
WORK METHODOLOGY (1)
•Revisit the problem and its true cause

What conditions does the solution

need to meet?
What conditions BOUND
ARIES
would you like it to
have?

MN1©2ES BASES TO DECIDE

 3.-Causes of the Problem
WORK METHODOLOGY (2)

NERMNTIV,S Pose all possible solutions

B Rate the solutions according

to the criteria
B Study Risks

DECIDE
 WORKSH
ALTERNATIVE
OP#4 : SOLUTION
The following worksheet will help you identify the solution to the problem posed.
Please:
• Be very creative. Try to see things from a different perspective. Find out •Work in groups
brainstorming. Accept all approaches.
•Discuss and reach an agreement.

To fill out the boxes, observe the following format and take into account: Objective of the
Decision : Solution to the most probable cause.
• Criteria :
• Limits : Write the conditions that the solution must have anyway.
• Desirable : Write down the conditions that you would like the solution to have.
• Weighting value : Give a numerical value to each desirable condition
according to its importance.
• Alternatives : Write down all the possible decisions. Even the ones that seem ridiculous
• Limits: Analyze each one and check if it meets each of the limits. Cross out those
that do not meet all the limits.
• Desirable:
• Rating: Rate with a number how well the alternative meets each of the
desirable criteria.
• Weight: Enter the weight value.
• Total Score : Multiply the two previous numbers
TWO PART: SPECIALIZED STUDIES

Diagram 7 Project Formulation

 1.-MARKET STUDY

AIM:
Know the expected behavior of the goods and services
produced by the project.

PRODUCT: MARKET:
Applications
Presentation DEMAND:
Related Goods •Variables
•Dimension
Distribution • n C to import
Legislation
OFFER:
•Regime
•Suppliers
CUSTOME PRICES:
R: •Fixation
Potential
Segment
 2 .-TECHNICAL STUDIES
AIM:
Obtain information to decide on the location, size, plant
layout, and project processes.

SIZE PRODUCT
One Size ENGINEERING
Stepped growth Technical Description
Production Process
Furniture and
LOCATION Equipment Inputs
Architecture
ZonePathways SCHEDULE
Resources
•

Activities Times
Regulation
Developm
ent
Exact Site
 3 .-ADMINISTRATIVE PROCESS

AIM:
Decide in advance how the project will be managed .

LEGAL ASPECTS
Health
ANALYSIS Environmental
STRATEGIC Taxes
Nature Municipal Development
Objectives
Programs
STRUCTURE AND
FUNCTIONS
Personal Organization Chart
 4.- FINANCIAL STUDY
AIM:
Gather information on project costs, revenues, money
needs, and budgets.

INVESTMENTS INCOME
Fixed Assets Working
Capital For Sale
Others

COSTS
Operational
•Production Costs
•Financial
Operation Expenses

CASH FLOW
Available
Need for $$$
 4.-FINANCIAL STUDY (2)

BUDGET BREAKEVEN
INCOME = COSTS
To Sales
AQuantity to produce
Materials Consumption
A Raw materials inventory
A Cost of materials ANALYSIS
A Labor
A General expenses FINANCIAL
A Inventories finished products L
AManufacturing indirect costs Rieqnut
id
Capital contributions a e bi z lity
ATreasury
A Balance sheet
Shopping SOURCES OF
A Investment in fixed assets FINANCING
A Profit and Loss. Financial Sector
Banking
Development of
Cooperatives
PART THREE: PROJECT EVALUATION

It is the culminating part of the entire study because it defines

whether the project is convenient or inconvenient , so that its result
determines the ultimate fate of the project: be recommended,
objected to or definitively discarded.

ECONOMIC
☆ Social distribution of benefits among the different strata and
groups of society.
A Geographic distribution of benefits.
A Distribution of benefits between consumption and
investment
A Employment generation.
A Contribution in other aspects, such as the improvement of
external balances, quality of life, environment, etc.
 FINANCIAL

It focuses on the analysis of the profitability of a project, that is, its ability
to generate surpluses such as:
• recover your investment
• obtain additional profits.

Fundamental Elements:

A The expected cash flows

A The effect of time on the value of money given by inflation, money
speculation and risk.
A The evaluation criterion : Net Present Value, Internal Rate of
Return, Benefit-Cost Ratio.
 PROJECT EVALUATION
FUNDAMENTAL CONCEPTPROCESS
IN EVALUATION
FINANCIAL

HOW MUCH IS THE RESULT OF

THIS FLOW IN TODAY'S PESOS?

What will its true value be in 8

years?

What is the rate that makes

me indifferent to both values
?

Discount rate

The mathematical formula that expresses this approach is:

n n
NPV = SUM Ip _ SUM Ep Where:
p=1 p p=1 p I = Income for the period
(1+i) (1+i) E= Expenses of the period
ip==Discount
Period rate
INTRODUCTION FINAL DOCUMENT
Introduction:
Brief description of the origin of the project, explaining: why it was formulated and what its purposes are, what difficulties and limitations were
encountered. Be brief but forceful. It may be the only opportunity to get someone interested in the job.

Project summary:
Synthetic presentation of the most relevant data from all the technical studies carried out, emphasizing the expected results and the effects on the
cooperative and the assumptions used to reach these results. Omit specific references to the methodology of the calculations in this part.

2 .- BODY
- Justification and Terms of Reference:
Explain the background that gave rise to the idea of the project. It includes the analysis of the environment, the problem statement, the
reference frameworks, general and specific objectives, the methodological procedures used and the scope of the project.

- Study of Markets
- Study Technical
- Study Financial
- Assessment
- Plan of Implementation:
This section includes all the conclusions of the previous chapters, with an explicit reference to the results of the financial evaluation, where it is
clearly established whether the project was viable or not, and the reason for these results.

3 .- COMPLEMENT
- Bibliography:
List of all the documents you consulted to carry out your work
Appendices:
Questionnaires used for data collection, tables and graphs prepared by the authors as results of the research carried out, photos, plans,
designs, technical details.
- Annexes:
Supports taken from secondary sources such as statistics, additional tables and graphs, and in general all the information that may be relevant
for the reader and their better understanding of the document.

Bibliography
• Cabal Escandón, María Fernanda (2003).
Formulation and management of projects
in companies in the solidarity sector. Text
UNES – PUJ, Bogotá DC, 147 pp.
• Medina, Felipe (2005). PPT presentations
on Project formulation. UNES – PUJ,
Bogotá DC