Project Identification: Unit 2

PROJECT
IDENTIFICATION
UNIT 2
Project Selection
Project Selection is a process to assess each project idea and select the project with
the highest priority.
The benefits of Project Selection are:
•a transparent and documented record of why a particular project was selected
•a priority order for projects, that takes into account their importance and how
achievable the project is
Case : Project Identification Based on the Local Problems
UNDP (2006): Lare (a community in Kenya-Africa) is a dry area with no permanent rivers. It receives
an average of 700 millimeters of rainfall a year but this varies widely from one year to another. It is
also unevenly distributed among the seasons. Farmers in Lare have identified four major constraints to
agricultural production, with scarcity of water as a major one. Before 1998, about 70 percent of all
households in the area experienced shortages of water. In addition, not only was there insufficient
water, but it was also of poor quality and caused a high incidence of water born diseases.
In 1999, a project involving nine collaborating institutions was initiated to address rainwater harvesting
practices and water treatment along with other technologies required by the farmers.
Criteria for Selection of Project
• Get out of your comfort zone, competency or expertise
Business Priority • Should be decided after scanning the internal/external environment
Customer Impact • Quantify the impact on customer
Availability of Resources • In terms of manpower, money and time
Apt Time • To be strictly followed
• Should not be primal purpose

Savings Potential • Black belt project should not compensate for quality
• Saves time, cost, effort

Availability of Data • Vanilla project should not be the criteria
• Play safe
Probability of Success • Consider contingencies
Checklist: Should we go ahead?
1. Is there an existing need?
2. Is the issue consistent with organisational aims and mission? Does it fit with our strategic objectives?
3. Does organisation already have commitments on the issue?
4. Can organisation add value to what other organisations are already doing? How?
5. Does organisation have prior experience of the issue?
6. Are other organisations better placed to take on this issue?

7. Does organisation have/can develop enough staff time, skills and knowledge to effectively take up this issue?
8. Does organisation have the financial resources for the project? Or are funding opportunities available?
9. Does organisation have the necessary systems in place for this project?
10. Does organisation have partnerships or collaborations in place to help with this project?
11. Are there risks to staff, partners or users and, if so, can these be managed effectively?
12. What will happen if organisation does nothing?
13. What are the opportunity costs? Would organisation need to stop work on other issues to focus on this project?
(summary)
1. Investment size
2. Location of project
3. Technology to be used
4. Equipment
5. marketing
Case: Risk Analysis of Equipment Delivery
A project team analyzed the risk of some important equipment not arriving at the project on
time. The team identified three pieces of equipment that were critical to the project and
would significantly increase costs if they were late in arriving. One of the vendors, who was
selected to deliver an important piece of equipment, had a history of being late on other
projects. The vendor was good and often took on more work than it could deliver on time.
This risk event (the identified equipment arriving late) was rated as high likelihood with a
high impact. The other two pieces of equipment were potentially a high impact on the project
but with a low probability of occurring.

Importance of Project Identification
1. It has long term consequences (make or break)
2. Involves commitment which can not be easily reversed
3. Ideas are put into action
4. Projects are catalytic agents for economic development
5. Involves creative use of resources- manpower, capital, raw materials etc.
6. Generates value addition and build-up national capital
7. Brings socio-cultural development
8. Leads to development of infra-structure and environment

SCORING MODEL-Selection Technique
1. A committee is formed that lists the relevant criteria to select a project
2. The committee weighs the list according to the importance and priorities of each
project under consideration
3. The weights can be chosen on a 1 to 5 or 1 to 10 scale to distinguish between the

more important and the less important criteria
4. The committee then adds the weighted values and selects a project with highest
score.
SCORING MODEL-Selection Technique
Some typical criteria are:
1. Entry in a new market
2. Similarity to present business line
3. Addition to market share
4. Level of existing and future competition
5. Environmental stipulations
6. Impact on plant safety…………………………………………………………………..

Sources of Information
1. Annual Publications
2. Information about sick units
3. Existing Scenario
4. Import of Ideas from Abroad
5. Availability of Skills and Talents
6. Needs of the Society
7. Import Substitution
8. Export Potential
Feasibility Report
Addresses the Issues of
feasibility (“can we do the project?”)
justification (“should we do the project?”)

Feasibility Report
• A feasibility study attempts to determine the practicality of a project.
• The simplest type of feasibility study answers the yes-or-no question:

"Should we undertake the project?" More complex studies must
answer a more difficult question: "Which (if any) of several projects
should we undertake?"
• Most feasibility studies are internal. E.g., a manufacturer of aircraft

engines might ask its research and development division to consider
a change to ceramic parts.
FIVE AREAS OF PROJECT FEASIBILITY
1. Technical Feasibility - this assessment focuses on the technical resources available to the organization.
Technical feasibility also involves evaluation of the hardware, software, and other technology requirements of
the proposed system. As an exaggerated example, an organization wouldn’t want to try to put Star Trek’s
transporters in their building—currently, this project is not technically feasible.
2. Economic Feasibility - this assessment typically involves a cost/ benefits analysis of the project, helping
organizations determine the viability, cost, and benefits associated with a project before financial resources are
allocated.
3. Legal Feasibility - this assessment investigates whether any aspect of the proposed project conflicts with legal
requirements like zoning laws, data protection acts, or social media laws. Let’s say an organization wants to
construct a new office building in a specific location. A feasibility study might reveal the organization’s ideal
location isn’t zoned for that type of business. That organization has just saved considerable time and effort by
learning that their project was not feasible right from the beginning.
4. Operational Feasibility - this assessment involves undertaking a study to analyze and determine whether—and
how well—the organization’s needs can be met by completing the project.
5. Scheduling Feasibility - this assessment is the most important for project success; after all, a project will fail if
not completed on time.
CRITICALITY OF FEASIBILITY STUDY
•Embarking on a major new business investment
•Investing in a new market or product segment
•Changing strategic or market focus of an existing business
•Opening a new facility, chain of offices or stores
•Moving from small/start-up phase to expansion with VC or other investment
•Any greenfield development that does not duplicate existing business functions
•Investing significant part of personal wealth in own business
•Investing in new technology or operating approaches
•Expanding into an unfamiliar market or territory (overseas)
•Entering an already crowded or highly competitive market segment

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PROJECT

The benefits of Project Selection are:

•a transparent and documented record of why a particular project was selected

Customer Impact • Quantify the impact on customer

Availability of Resources • In terms of manpower, money and time

Apt Time • To be strictly followed

• Should not be primal purpose

• Saves time, cost, effort

1. Is there an existing need?

3. Does organisation already have commitments on the issue?

5. Does organisation have prior experience of the issue?

6. Are other organisations better placed to take on this issue?

12. What will happen if organisation does nothing?

but with a low probability of occurring.

2. Involves commitment which can not be easily reversed

3. Ideas are put into action

4. Projects are catalytic agents for economic development

5. Involves creative use of resources- manpower, capital, raw materials etc.

6. Generates value addition and build-up national capital

7. Brings socio-cultural development

8. Leads to development of infra-structure and environment

3. The weights can be chosen on a 1 to 5 or 1 to 10 scale to distinguish between the

1. Entry in a new market

2. Similarity to present business line

3. Addition to market share

4. Level of existing and future competition

6. Impact on plant safety…………………………………………………………………..

2. Information about sick units

4. Import of Ideas from Abroad

5. Availability of Skills and Talents

6. Needs of the Society

feasibility (“can we do the project?”)

justification (“should we do the project?”)

• The simplest type of feasibility study answers the yes-or-no question:

• Most feasibility studies are internal. E.g., a manufacturer of aircraft

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