Project management Generation and screening of idea’s

Project Management

Generation & Screening of Project Ideas

Project management Generation and screening of idea’s

Generation Of Idea

• Barring truly new ideas• Stimulation the flow of ideas

most people adopt somewhat casual and haphazard approach to the generation of project ideas. To stimulate the flow of ideas, the following are helpful: SWOT Analysis

• Clear Articulation of Objectives• Forecasting a conductive climate

Project management Generation and screening of idea’s

Monitoring the EnvironmentEconomic Sector

– State of the economy– Overall rate of growth– Growth rate of

primary, secondary and tertiary sector

– Cyclical fluctuations– Linkage with the

world economy– Trade surplus / deficits– Balance of payment

situations

Governmental Sector– Industrial policy – Government programmes

and projects– Tax framework– Subsidies, incentives, and

concessions– Import and export policies– Financing norms– Lending conditions of

financial Institutions and commercial banks

Project management Generation and screening of idea’s

Monitoring the Environment contd….

• Technological Sector– Emergence of new technologies – Access to technical know-how, foreign as well as indigenous– Receptiveness on the part of industry

• Socio-demographic Sector– Population trends– Age shifts in population– Income distribution– Educational profile– Employment of women– Attitudes toward consumption and investment

Project management Generation and screening of idea’s

Monitoring the Environment contd….

• Competition Sector– Number of firms in the industry and the market share of the top few (four or

five) – Degree of homogeneity and differentiation among products– Entry Barriers– Comparison with substitutes in terms of quality, price, and functional

performance– Marketing policies and practices

• Supplier Sector– Availability and cost of raw materials and sub - assemblies– Availability and cost of energy– Availability and cost of money

Project management Generation and screening of idea’s

Corporate Appraisal

• Marketing and Distribution• Production and Operations• Research and Development• Corporate Resources and Personnel• Finance and Accounting

Project management Generation and screening of idea’s

Corporate Appraisal contd….

• Marketing and Distribution– Market Image– Product line– Market size– Distribution Network– Customer Loyalty– Marketing and Distribution costs

• Production and operations– Condition and capacity of plant and machinery– Availability of raw materials, sub-assemblies, and power– Degree of vertical integration– Location advantage– Cost structure

Project management Generation and screening of idea’s

Corporate Appraisal contd….

• Research and Development – Research capabilities of the firm

– Track record of new product developments

– Laboratories and testing facilities

– Coordination between research and operations

• Corporate Resources and Personnel– Corporate image

– Clout with governmental and regulatory agencies

– Dynamism of top management

– Competence and commitment of employees

– State of industrial relations

Project management Generation and screening of idea’s

Corporate Appraisal contd….

• Finance and Accounting– Financial leverage and borrowing capacity

– Cost of capital

– Tax situation

– Relations with shareholders and creditors

– Accounting and control system

– Cash flows and liquidity

Project management Generation and screening of idea’s

Profit potential of industries :

PORTER MODEL

THE INDUSTRYRivalry Among Existing

Firms

Substitutes

Suppliers Buyers

Potential Entrants

Bargaining Power

of Suppliers

Threat of New Entrants

Bargaining Power Buyers

Threat Of Substitute

Product

Forces Driving Industry Competition

Project management Generation and screening of idea’s

Preliminary Screening

• It is possible to develop a long list of project ideas, a preliminary screening is required to eliminate ideas which prima facie are not promising. The following aspects can be looked into:– Compatibility with the promoter– Consistency with governmental priorities– Availability of inputs– Adequacy of market– Reasonableness of cost– Aacceptability of risk level

Project management Generation and screening of idea’s

Feasibility study report contains:

• A broad indication of demand and availability of the product.

• Required sources for the development of the project.• Selection of suitable process and technology.• Fixation of capacity on the basis of the project.• Process description and layout plans for the project.• Available facilities.• Evaluation of available facilities.• Capital cost.• Profitability analysis.• Project schedule and schedule control.• Design and flow diagrams.

After the preparation of feasibility study report has been prepared, it should be submitted to the experts the concerned departments of operation such as finance, commercial, project etc examine this. In case of any differences, the feasibility study report is discussed with the experts, consultants and is modified according to it.

Project management Generation and screening of idea’s Prefeasibility Study

Generation of Ideas

Initial Screening

Is the Idea Prima Facie Promising ?

Plan Feasibility Study

YesTerminate

No

Conduct Market analysis

Conduct Technical Analysis

Conduct Financial Analysis

Conduct Economic and Ecological analysis

Is the project is worth while ?

Prepare funding proposal TerminateNoYes

Preliminary

Work Analysis

Evaluation

Project management Generation and screening of idea’s

DPR – Detail Project reportPreparation of detailed project report is further step in

firming up the proposal. When an investment proposal has been approved on the basis functional report and the proposal is a major proposal, it would be necessary to detailed project report to firm up the proposal for the capital cost as well as the various facilities. It includes...

• Examination of technological parameters.• Description of the technology to be used.• Broad technical specification.• Evaluation of the existing resources.• Schedule plan.• General layout.• Volume of work.

Project management Generation and screening of idea’s

DPR – Detail Project report contd……

Hence these reports are to be made before investment is made into project. Thus formulation of investment is based on the studies is made. These can be considered as pre-investment decision. Detailed project report is prepared only for the investment decision-making approval, but also execution of the project and also preparation of the plan. Detailed project report additionally includes that is contents in addition to Feasibility study reports are.

• Project description.• Planning and implementation of the project.• Specifications.• Layouts and flow diagrams.

Project management Generation and screening of idea’s

SCBA - Social Cost Benefit Analysis

• Social Cost Benefit Analysis

• UNIDO approach to SCBA

• Little & Minlees Approach to

SCBA.