Project planning & management

The project cycle

By- Sintayehu H.
MA in Dev’t Economics
Hawassa University
 The Project Cycle
• The way in which projects are planned and carried out
follows a sequence that has become known as the
project cycle.

• The cycle starts with the identification of an idea and

develops that idea into a working plan that can be
implemented and evaluated. Ideas are identified in
the context of an agreed strategy.

• It provides a structure to ensure that stakeholders are

consulted and relevant information is available, so
that informed decisions can be made at key stages in
the life of a project.
 Cont’d
• The generic project cycle has six phases:
 Programming;

 Identification;

 Formulation;

 Financing;

 Implementation; and

 Evaluation.

• The details of what occurs during each phase differ between

institutions, reflecting differences in procedures.
 Cont’d
• However, within all institutions the cycle shares
three common themes:

1. The cycle defines the key decisions, information

requirements and responsibilities at each phase.

2. The phases in the cycle are progressive – each

phase needs to be completed for the next to be
tackled with success.

3. The cycle draws on evaluation to build experience

from existing projects into the design of future
programmes and projects.
The project cycle
 Phases of the project cycle
The phases of the project cycle can be described as follows:

• During the Programming phase, the situation at national and

sectoral level is analysed to identify problems, constraints and
opportunities which development cooperation could address.

• This involves a review of socio-economic indicators, and of

national and donor priorities.

• The purpose is to identify and agree the main objectives and

sectoral priorities for development cooperation, and thus to
provide a relevant and feasible programming framework within
which projects can be identified and prepared.

• For each of these priorities strategies will be formulated that

take account of the lessons of past experience.
 Cont’d
• During the Identification phase, ideas for projects and
other development actions are identified and screened for
further study.

• This involves consultation with the intended beneficiaries

of each action, an analysis of the problems they face, and
the identification of options to address these problems.

• A decision can then be made on the relevance of each

project idea (both to the intended beneficiaries and to the
programming framework), and on which ideas should be
further studied during the Formulation phase.
 Cont’d
• During the Formulation phase, relevant project ideas
are developed into operational project plans.

• Beneficiaries and other stakeholders participate in

the detailed specification of the project idea that is
then assessed for its feasibility (whether it is likely to
succeed) and sustainability (whether it is likely to
generate long term benefits for the beneficiaries).

• On the basis of this assessment, a decision is made

on whether to draw up a formal project proposal and
seek funding for the project.
 Cont’d
• During the Financing phase, project proposals
are examined by the funding agency, and a
decision is taken on whether to fund the
project.

• The funding agency and partner country agree

the modalities of implementation and formalise
these in a legal document which sets out the
arrangements by which the project will be
funded and implemented.
 Cont’d
• During the Implementation phase, the project is mobilised
and executed.

• This may require the tendering and award of contracts for

technical assistance or works and supplies.

• During implementation, and in consultation with beneficiaries

and stakeholders, project management assesses actual
progress against planned progress to determine whether the
project is on track towards achieving its objectives.

• If necessary the project is re-oriented to bring it back on

track, or to modify some of its objectives in the light of any
significant changes that may have occurred since its
formulation.
 Cont’d
• During the Evaluation phase, the funding agency and
partner country assess the project to identify what
has been achieved, and to identify lessons that have
been learned.

• Evaluation findings are used to improve the design of

future projects or programmes.

• Although in the generic cycle the evaluation phase

comes after implementation, it is common practice
also to conduct a mid-term evaluation during
implementation, to identify lessons that can be
applied during the remaining life of the project.
 Cont’d
• Experience among the main donors has shown that
too many decisions concerning projects have been
taken without sufficient consultation with
beneficiaries and stakeholders, and without the
necessary information.

• The purpose of the project cycle is to ensure that

the stakeholders take the decisions, and that
decisions are based on relevant and sufficient
information.

• The separation of the cycle into six phases provides

the minimum basis for effective project
preparation, implementation and evaluation.
 Cont’d
• The separation of the Identification and Formulation
phases is particularly important.

• Project preparation takes place in a social and

political context, where expectations are raised and
often-conflicting demands and aspirations must be
reconciled.

• By adhering to the identification phase, the

relevance of project ideas can be systematically
established before the preparation process is too far
advanced for the idea to be dropped.
 Cont’d
• During the formulation phase, project ideas can
then be fully developed in the knowledge that
they are based on real beneficiary needs and
are sufficiently ‘owned’ by the main
stakeholders.

• In practice, the project cycle might differ

according to the type of programme being
operated.

• Nevertheless, it is very useful to reconcile the

current practice within your area of work with
the steps of the project cycle as outlined here.
 Project Cycle Management

• Project Cycle Management (PCM) was introduced by the

European Commission in the early 1990’s to improve the
quality of project design and management and thereby
to improve aid effectiveness.

• PCM developed out of an analysis of the effectiveness of

development aid undertaken by the OECD Development
Assistance Committee during the late 1980’s.

• Evaluation findings from the DAC members indicated

that a significant proportion of development projects
had performed poorly, and identified a number of
causes:
 Causes for poor performance

􀀺 Poor project planning and preparation

􀀺 Many projects not relevant to beneficiaries
􀀺 Risks were insufficiently taken into account
􀀺 Factors affecting the longer-term sustainability
of project benefits were ignored
􀀺 Lessons from past experience were rarely
incorporated into new policy and practice
 PCM
• Project cycle management integrates the phases in the
project cycle so that issues are examined
systematically, by means of an approach and
methodology which ensures that objectives and issues
of sustainability remain in focus.

• “PCM obliges practitioners in project design to focus on

the real needs of the beneficiaries by requiring a
detailed assessment of the existing situation and by
applying the logical framework method… Right from the
beginning, aspects assuring sustainability are
incorporated in the project design.
 Cont’d
• The strength of PCM is that project documents are
structured according to a standardised format dealing
with all relevant issues, including the assumptions on
which the project is based.

• At each stage in the project cycle, these issues are

examined and revised where necessary and carried
forward to the next stage.

• This system makes the project concept and context in

which it operates clear and visible, and enables
therefore better monitoring and evaluation.”
 Principles of PCM
The principles of PCM can be summarised as follows:
1. Adherence to the phases of the project cycle to ensure a
structured and well-informed decision-making process.

2. Client orientation through the use of participatory planning

workshops at key phases of the project cycle, and the
formulation of the Project Purpose in terms of sustainable
benefits to be delivered to beneficiaries.

3. Incorporation of aspects of sustainability into project design

to ensure sustainable benefits.

4. Use of the Logical Framework Approach to ensure a

consistent analytical approach to project design and
management.
 Cont’d
5. An integrated approach which links the objectives of
each project into the objectives of the Commission and
the national and sectoral objectives within the partner
country; ensures that project work plans and budgets
are prepared on the basis of the project logframe; and
using the basic format to ensure consistent and
comprehensive treatment of key issues throughout a
project’s life.

• PCM brings together aid management principles,

analytical tools and techniques, and applies them within
the structured decision-making process of the project
cycle to ensure that:
 Cont’d
♦ projects are relevant to the agreed strategy and
to the real needs of beneficiaries:

⇒ projects are linked to sectoral, national and

Commission objectives
⇒ beneficiaries are involved in the planning
process from an early stage
⇒ problem analysis is thorough
⇒ objectives are clearly stated in terms of benefits
to target groups
 Cont’d
♦ Projects are feasible in that objectives can be
realistically achieved within the constraints of
the operating environment and the
capabilities of the implementing agencies:

⇒ objectives are logical and measurable

⇒ risks and assumptions, and the implementing
agencies capabilities are taken into account
⇒ monitoring concentrates on relevant targets
 Cont’d
♦ projects are sustainable
⇒ factors affecting sustainability are addressed
as part of project design
⇒ results from evaluation are used to build
lessons learned into the design of future
projects
 PCM Planning and Management Tools
• Project planning and management tools provide
the practical mechanisms by which relevance,
feasibility and sustainability can be achieved.

• The core tool used within PCM for project

planning and management is described Logical
Framework Approach (LFA).

• The LFA is an effective technique for enabling

stakeholders to identify and analyse problems,
and to define objectives and activities which
should be undertaken to resolve these problems.
 LFA
• Using the Logframe structure, planners test the
design of a proposed project to ensure its
relevance, feasibility and sustainability.

• In addition to its role during programme and

project preparation, the LFA is also a key
management tool during implementation and
evaluation.

• It provides the basis for the preparation of

action plans and the development of a
monitoring system, and a framework for
evaluation.
 LFA
• Stakeholders should be involved as fully as
possible, which requires teamwork and strong
facilitation skills on the part of project
planners.

• To be used effectively, other tools for

technical, economic, social and environmental
analysis must support the LFA.

• The tools developed include Environmental

Impact Assessment, Gender Impact Analysis,
and Financial and Economic Analysis.
Thank you!