Project Evalution

8/9/2019 Project Evalution

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PROJECT EVALUTION

Although project formulation and appraisal process was mentioned in stepwise or sequential fashion, it

should be emphasized that there is much feedback or to and-fro interaction in the entire project

formulation process. The processes of considering financial, manpower, organizational or other resource

constraints, the process of technical feasibility and the processes of financial, socio-economic feasibility

all have various feedbacks. There are various grey areas within all these considerations and there are

many flexibility within the constraints and therefore the entire project formulation and appraisal

process is a multi-round exercise where all the relevant aspects of checking the feasibility and relative

comparison of the projects are taken care of.

Network analysis

Although a few ranked projects can now be selected, the feasibility analysis cannot be complete unless

we apply the Network Techniques. What may emerge after a network analysis may be different from

the earlier result. A technically and financially feasible project may encounter constraints of time;

network techniques may clearly bring out certain errors of omission in the earlier analysis.

Network analysis and implementation planning

Once a project has been selected, we move over to implementation planning for the same. This planning

involves the time plan of the project (what work needs to be done and when?), the cost plan of the

project (how much money needs to be spent and when?), the plan for materials requirement for the

project (what materials are required and when?), the manpower plan for the project and plans for

various other resources. PERT (Programme Evaluation and Review Technique) and CPM (Critical Path

Method) are two such techniques.

As with many management science techniques, the network analysis techniques originated with the

Second World War. These techniques are part of the operations research which were first utilized in the

American Polaris Missiles Project. PERT was the first of the network analysis techniques. Over the years,

network techniques have gained much acceptance in civilian projects all over the world.


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Comparison of bar charts and network techniques

Network techniques are in essence a modification of the old-age bar chart techniques of controlling the

various works in a project. The bar chart has certain drawbacks or difficulties, i.e., it is not capable of

depicting proper relationship in time of the different jobs in a project is shown in the form of a bar chart,

it is difficult to change these charts. The bar charts are, therefore, somewhat static in character. The

network technique helps to overcome this difficulty. PERT and CPM network techniques allow the

project planner and implementer to show graphically the proper sequencing of time, money, materials,

manpower and other resources on the network chart itself.

We shall restrict ourselves to a description of the CPM over here. Later, we shall introduce the related

technique of PERT. But it needs to be reiterated here that both these techniques have much in common

and they fall under the general category of network techniques.

Whether our purpose is to draw a network for CPM or to draw a bar chart, the basic requirement forboth these graphical techniques is to analyze the various work requirements of the project and there

from get a listing of the jobs to be performed in the project from beginning to the end of the project.

This would help us to proceed in a systematic manner rather than listing the jobs in a haphazard

manner. Such a systematic listing of jobs can only produce a systematic graphical presentation of these

jobs, their inter-relationship with another with respect to time and their resource requirements.


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Design of the organization

The very word job connotes that someone has been assigned the responsibility for a task ad that the

responsibility for completion of that should also be clearly understood by the person who is responsible

for the job. It also follows that unless the various jabs are planned by taking into account the

responsibility and the authority to carry it out, the planning for the project becomes meaningless.

Therefore, the organization of the project as a whole becomes an extremely important starting point for

the building up of a network.

The work of implementing the project can be broken into certain major packages or work elements. This

division of labour, naturally, has to be done keeping in view the organization of the project. The

organization of the project can be done in several ways depending upon various factors as mentioned

below.

a) Geographic -- a project may be carried out in two or three different locations so far removedthat it becomes necessary to control these work components as individual units under the

responsibility of the head of the unit.

b) Functional the work in the project may be of different kinds, for instance, civil , electrical,mechanical, geological, etc. these functional areas of work need to be organized separately.

c) Productwise sometimes the work components in the project need to be grouped by means ofthe product such as the water conductor system, the dam, the irrigation channels, etc. Such a

grouping will simplify the organization of the project in some cases.

d)

Timewise the project can sometimes be divided into phase-1, phase-2, etc, based on the time-phasing of the project. In each phasing a major chunk of the project is done. In such a case, it

may be necessary to organize the work of the project according to the time phasing.

The above discussion indicated how the work of a project could be broken down to organize it in a

fashion which would suit that particular project. This Work Break-Down Structure is the first important

step in finding or listing the different jobs that comprise a project. Once the project is broken down at a

gross level in a few work packages, these work packages can be further broken down into smaller work

package, again according to the above considerations. The main point is to recognize the importance of

properly organizing the total work structure of the project. Unless the work structure of the project is

broken down into its component elements in accordance with the structure of the organization found

necessary, the implementation of the project cannot proceed in a systematic manner. The above

aspects of the division and further division of the work are very important before one proceeds with the

drawing of the CPM and PERT charts.


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What is an activity?

As the work of the project gets sub-divided into smaller and smaller work packages, one may reach a

point where further sub-division of the work will be senseless either in terms of controlling the work or

in terms of measuring the work. The smaller sub-division of the work is called a job or an activity.

Based on the above-mentioned broad principles, a listing of activities or jobs is possible. In fact, because

we have proceeded in a systematic manner from gross level to the detailed level division of the work,

this procedure simplifies the identification of each of the jobs. This sub-division also helps in proper

responsibility accounting.

Sequencing relationships between activities

After a list of jobs or activities is obtained, the nest task would be to find the inter-relationships between

these different activities. The inter-relationships to be considered initially are those of a technological

nature. The technology would dicate that certain jobs could be done only when one or more other jobs

are completed. Or the technological aspects may be such that some of the activities or jobs can be done

independently, which means 1 job does not have to wait for the completion of the other job, or that

they can be done simultaneously. This relation between the jobs reflects the arrangement of the

different work components considering different availabilities of the resources such as equipment,

materials or money. One should not consider such restrictions or limitations while making the initial

arrangements of the work. It would be better if initial relationships between jobs are shown entirely

based on technological consideration. When we refer to relationships we are referring to whether a

particular job needs certain other jobs to be completed or whether it can be done simultaneously with

some other jobs or job. Thus, relationships are basically of two kinds- series and parallel.

While drawing the PERT or CPM charts, it is sufficient to know whether and which other jobs are

immediately preceding the job in question. For each of the jobs listed, if we have a list of the

corresponding immediate predecessors, this information would be sufficient to draw the CPM or PERT

network.

Once the organizational and technological aspects of the project are clear, the rest of the work of

putting these details in the form of a PERT or CPM chart is merely mechanical. We shall discuss thesemechanical details below.

Principles of network representation


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As we said earlier, we shall limit ourselves to the Critical Path Method. At this point, we will assume that

we have arrived at the listing of the jobs or activities and their inter-relationships. Our job is now only to

show these in the form of a graph or a pictorial representation.

A job or an activity is shown as an arrow between two full circles as shown in the

figure

The tail of the arrow represents the start of the activity and the head of the arrow represents the end.

The circles at these respective ends, therefore, represent the start and the end of the particular job or

activity. These circles are called events or nodes. Two jobs, where one job follows another are

represented in the figure.. .

The node or event two represents the completion of job or activity A as well as the beginning of job or

activity B.

For easier nomenclature purposes, the activities are identified by their start and end events example job

A shown above can be called as a job or activity (1, 2).

If two jobs or activities can be done simultaneously, they can be shown as in figure..

This representation is similar to what we see in electrical and electronic circuits. When all the activities

in a project are represented in the convention indicated in fig . the pictorial

representation of the project looks like a diagram representing an electrical network. Probably, for this

reason, CPM and the PERT Techniques are known as network techniques.

Let us refer back to figure showing two simultaneous or parallel activities C an D, if we

were to properly follow the nomenclature for the activities, then both C as well as D would be called

activities (5, 6). Since we desire to have an independent nomenclature for each of the activities C and

D, we shall represent them as shown in the figure..

Use of dummy activities

The dotted arrow is included in the figure so that activities C and D have different nomenclature, viz.

(5, 7) and (5, 6). The dotted activity is in fact a non-activity, introduced only for facilitating proper

nomenclature, and therefore, it is an activity consuming neither time, money, material or any other

resources. Such an activity is appropriately called a dummy activity.

Dummy activities are also useful in other situations. Supposing activity C was dependant on the

completion of activities A and B, whereas activity D was dependant only on the completion of


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activity B. In such a case, the proper representation requires the use of a dummy as indicated in the

figure.

The other representation, avoiding the use of the dummy would have not properly represented the

relationship between these activities.

Reverification of sequencing relationships

The CPM network is drawn with the help of the above mentioned principles. It is better if one avoids the

numbering of the events or nodes in the first attempt to develop the network. Different activities are

best identified either by an alphabetical code or better still by a numerical code which can be easily

derived from the detailed Work Breakdown Structure and activity listing. After the first trial of the

network drawing is done, it is better to go back once again to the technical experts and to the top

executives managing this project to verify the accuracy or validity of the different sequencing

relationships between the different jobs. Quite often during this verification procedure, some important

technological factors earlier omitted come to light. It may be noted that only after a few trials and

reverification of the sequencing logic or the inter-relationships of the activities does the final form of

network emerge.

Numbering of the events or nodes

After this stage, one can number the different events in a systematic manner with the numbers

increasing from left to right and from top to bottom. Since the flow of certain dummies may be either

vertically downwards or vertically upwards, depending on the flow of the dummies one may number the

succeeding events. Although such a numbering system helps in identifying the different activities easily,

if one were to carry out further analysis on a computer, such a convention would not be absolutely

necessary. What one should have is an independent identification for each individual activity in terms of

the start and end nodes (events).


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Use of aggregated networks and part networks

For a large project, such as a hydel project for instance, the number of activities mat run into thousands.

Naturally, the compete CPM charts would be quite complicated. Although such a detailed network is

definitely necessary and useful, not all the executives in the different hierarchical levels in an

organization will be interested in all the jobs indicated on such a network. The top level managementmay be interested only in a grosser sub-division of the work and not in too many detailed activities.

Certain functional departmental heads will be interested in only activities related to the work of their

departments and not in the complete CPM chart for the whole project. Because of these considerations,

it is necessary that besides the Master Network there should be various other smaller versions of the

CPM chart showing only l imited portions of the network. Networks have to be presented to different

executives according to their need for planning and their authority and responsibility for the component

of work handled by them in the project. Whenever necessary the relationship of their components of

the job with the other jobs in other departments will also be indicated in the networks which will be

sent to them.

Other tips for drawing networks

For more clarity, while drawing the network one should avoid crossing of activity arrows. Also it is better

to have a minimum number of dummies. It may also add to our understanding of the network if the

network is stratified, i.e., if different activities are shown against the major Work Breakdown Structure

to which they belong.

Once the network has been developed, the corresponding time, cost and other resource requirement

figures need to be put on the different activities of the network, for the purpose of an analysis of thenetwork. The purpose of the network is to provide a plan or a guideline for the implementation of the

project and therefore, an analysis of the various resources required in light of their constraints, if any, as

also of the time required to complete the various phases of the project is extremely important.

Estimation of the time and resource requirements

For this purpose, it is necessary to get the relevant cost, time and resource requirement data for the

various activities. These estimates are the heart of the project planning process. Although it appears

quite simple to get the estimates, a lot of care needs to be exercised while putting the figures on an

activity. There are various ways to get the time requirements of an activity. They could be drawn from

the experience of previous similar work done elsewhere, it could be by means of work standards, or it

could be an educated guess by the technical experts concerned. The choice of a particular technique

depends upon the activity in consideration. However, one should not be satisfied with one figure

obtained from one person. The chances of error can be minimized by discussing such estimates with a


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number of people, in a number of sittings, so as to avoid the errors of either exaggeration, under

estimation, or omission. One may discuss with not only the group or person directly responsible for the

work, but also with his boss, peers, and subordinates. A lot of commonsense and judgement is involved

on the part of the planner in the estimation process. The estimation could very often be more an art

than a science. In spite of the difficulties that the estimation of the cost, time, and resources are fraught

with, good planning could never be done without such estimations however nebulous; many estimates

can be hard figures which are few can question. The judgement process nevertheless has provided, in

quite a majority of cases, very useful data for the project planning.

The network having been developed and the estimates of various resources (inclusive of time) having

been also indicated on the network, we are now ready for the analysis of the network with a view to

provide important planning information for the project.

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Project Evalution