1

Unit two
Project identifi cation, formulation
and feasibility study
 What is Project Identification?
2

⚫ Project identification is the initial

phase in the project management
process where potential projects
are recognized, analyzed, and
defined based on organizational
needs, opportunities, or challenges.
⚫ Collecting, processing and analyzing
data on problems/needs of
communities.
⚫ The data provides a basis for the next stage
of the project cycle.
 Project Identification
…. 3

⚫ Review of secondary data

 Look at books, census report, survey
reports/research papers, publications,
media reports, internet etc.
 It is essential to critically evaluate

accuracy, relevance, and timeliness of

secondary data.
 Project Identification …
4
⚫ Collecting and analyzing primary data

 Interviews – exchange of questions and answers

between the interviewer and the interviewee.
 Community mapping - engaging local
community members to identify challenges
 Focus Group Discussions - a small, carefully
selected group of participants engages in guided
discussions.
 Observation - watching and recording behaviors,
events, or characteristics
 Other methods
 Project identification…
5

⚫ Clear project identification allows to

answer questions like:

a) How do the projects come about?

b) Where do projects come from?

c) Why are projects where they are?

 Approaches to project
identification
6
• There are two major approaches
to project identification
(a)Top-down approach
(b)Bottom-up approach
 Top-Down
Approach 7

⚫ Projects are identified based on demands

from beyond the community.
⚫ This may include directives from:
 international conventions (e.g., Kyoto

Protocol)
 international institutions or NGOs that
have determined particular priorities
and thus projects
 national policy makers identifying projects
that pertain to national plans.
 Top-down approaches to project
identification 8

1.The household (socio-economic) survey

⚫ Studies on social and economic situations
of a given area
e.g. climate, geographical set-up, economic
activities, political set up, education system,
culture, diet, social services, physical
infrastructure etc.
⚫ Uses questionnaires, interviews, direct
observation, etc.
⚫ Data is collected, processed and analyzed
and projects are then identified.
 Top-down approaches to
project
identification
9

2.Rapid appraisal
⚫ Method collects and assesses data quickly
using any data collection techniques.
⚫ Primary purpose is to acquire the
information in the shortest time possible
and it lowers the cost.
 It is rapid because investigation,
assessment and identification of projects
are done at the same time.
 Cont.….
1
0
⚫ Rapid appraisal uses the following data
collection techniques:
 Analysis of secondary data sources
 Interviews
 Direct observation at site
 Visualization of resources like community
mapping, social organizational maps and
time series maps.
Top-down approaches to project identification
1
1

3.Needs Assessment Survey (NAS)

⚫ Also referred to as situation analysis
It involves:-
 Fact finding about problems or needs in a
given area or community.
 Finding out what is lacking in a given
area or community.
 Investigating a situation in a given

area.
 Con
… 1
2

NAS is carried out to:

⚫ Find out the problem in a given community
so as to identify the most appropriate
solution (s)/project (s) to solve the problem
(s) in question.
⚫ Analyze the causes of the problems and
seek likely solutions to the problems
leading to project identification.
 Advantages of Top-Down
Approach
1
3
⚫ It may be a rapid response to disasters like
floods because there is limited time and
chance to consult the beneficiaries.
⚫ It can be effective in providing important
public goods like education, health, roads
etc.
⚫ It can contribute to wider national or
international objectives and goals and
therefore potentially be part of a wider
benefit
 Limitations of Top-Down
Approach 1
4
⚫ Does not help in changing strongly established
ideas and beliefs of people.
⚫ Assumes external individuals know better
than the beneficiaries of the service.
⚫ Communities have little say in planning process,
rendering the approach devoid of human resource
development.
⚫ Community develops dependency syndrome on
outside assistance and does not exploit their
own potential.
⚫ The development workers become stumbling
blocks to people-led development
 tendency to impose their own biases, etc. on

people.
 Bottom-Up Approach
1
5

⚫ The bottom-up approach emphasizes active

community involvement, fostering trust,
generating ideas, and building consensus.
⚫ In this approach, community/beneficiaries are
encouraged to identify and plan the projects
themselves with or without participation of
outsiders.
⚫ External agents have only facilitation roles.
Bottom-up approaches to project
identification 1
7
1.Animation
⚫ Process of stimulating people to become more
aware and
conscious of problems they suffer from.
to gain confidence in their ability to deal
with these problems and take initiatives to
improve situation.
⚫ It makes the community better understand and be
prepared to overcome its problems and take
decisions with full responsibility.
⚫ Carried out by animators / helpers / change agents.
 Bottom-up approaches to project
identification

2.Facilitation/Community action
⚫ an attempt to assist people to get over problems
by training them in certain skills, providing
them with the needed information, linking
them up with relevant organizations to
improve access to the needed resources etc.
Bottom-up approaches 1to project
identification 9

3.Participatory Appraisal
 Project identification should be
participatory, and should involve local
communities in identifying and prioritizing
their needs.
 The views of the communities should be
considered during the screening and selection
of various project proposals and the selection
of the preferred proposals for implementation.
 Con…
20
⚫ Participatory appraisal (PA) enable people to
express and analyze the realities of their lives
and conditions, to plan for themselves what
action to take, and to monitor and evaluate
the results.
⚫ The key to PA is that the only external
involvement is in facilitation.
⚫ The communities themselves determine the
issues, priorities and courses of action.
 Advantages of Bottom-Up Approach
2
1
⚫ Interveners accomplish more with limited
resources since people tend to safeguard
what they have provided for themselves.
⚫ Develops people’s capacity to identify
problems and needs and to seek possible
solutions to them.
⚫ Provides opportunities of educating people.
⚫ Helps people to work as a team and develop a
“WE” attitude - makes project
progressive and sustainable.
⚫ Resources are effectively managed;
dependences are reduced, there is
increased equity, initiative,
accountability, financial and economic
discipline.
 Limitations of Bottom-Up
Approach 2
2
⚫ Not always effective for projects that require
urgency to implement
⚫ Time-consuming and requires patience and
tolerance.
⚫ People sometimes dislike approach because
they do not want to take responsibility for
action.
⚫ The agency using this approach is never in
control and cannot guarantee the results it
would want.
⚫ The priorities of communities may not fit with
national or international priorities that seek
to have a broader impact.
 The screening process
2
of
projects 3
⚫ Is the technology appropriate to the project’s
objectives or local capabilities?
⚫ Is the risk involved manageable?
⚫ Is the demand for the expected outputs
adequate?
 The screening process of
projects
24

⚫ Will the supply of raw materials adequate?

⚫ Is the design in agreement with the
institutional and managerial capabilities
available?
⚫ Will the recurrent costs be adequately met
given the available financial resources?
⚫ Is there adequate commitment by the intended
beneficiaries and support from government
authorities?
 The screening process of
projects
25
⚫ Does the project have negative
effects on the environment? And if
yes, can the effects be mitigated?
⚫ Is the project culturally acceptable
by the community?
⚫ Is the project sustainable?
 Project Formulation/
Design
⚫ Involves analyzing information gathered
during the identification stage to create a
comprehensive project document.
• Problem analysis – detailed examination of
issues identified.
• It helps in understanding the root causes and
potential solutions.
• Research – conducting thorough research,
including feasibility studies and needs
assessments
• Stakeholder analysis - It helps in
understanding stakeholder needs,
expectations, and levels of influence.
Project Formulation/
Design

• Project document creation: All the

gathered information and analyses are
synthesized into a project write-up or
proposal.
• This document typically includes:
1.Project goals and objectives
2.Detailed project design
3.Resource requirements
4.Cost and benefit estimations
5.Implementation timeline
6.Risk assessments
 The problem
statement 2
7
⚫ The process of project identification ends
with the formulation of a problem
statement.
⚫ It takes the form of:
 Listing all the problems in the area
 Prioritizing the problems and selecting
core/ major problems.
 Finding out the root causes of the

problems.
 Citing the likely effects of the problems
on the community.
 Suggesting the probable solutions to

the problems.
 Identifying the (projects) from the
 Essential characteristics of
projects
28

 For projects to be properly conceived,

the characteristics below must be
clearly defined:
 Objectives
 Expected outputs
 Intended beneficiaries
 Planned lifespan
 Extended outcome of the project
 Principal stakeholders
 Financial plan and source of

financing
 Feasibili
ty 2
9
 All projects are feasible given unlimited
resources and infinite time.
 Unfortunately, most projects must be developed
within a tight budget and with time constraints
(scarce resources!).
 This means that assessing project feasibility
is a required activity for all projects and is a
potentially large undertaking.
 It requires evaluating a wide range of
factors.
 Feasibili
ty 30

⚫ Most feasibility factors are represented by the

following categories:
• Economic

• Technical

• Operational

• Scheduling

• Legal and contractual

• Political
 Economic feasibility
3
1
 Assessing economic feasibility is to identify the
financial benefits and costs associated with the
project.
 It is often referred to as cost-benefit analysis.
⚫ Tangible benefits refers to items that can be
measured in dollars and with certainty.
 Economic feasibility
3
2

⚫ Most tangible benefits will fit within

these categories:
 Cost reduction and avoidance
 Error reduction
 Increased flexibility
 Increased speed of activity
 Improvement of management

planning and control

 Opening new markets and
increasing sales opportunities
 Economic feasibility
3
3
⚫ Intangible benefits refer to items that cannot
be easily measured in dollars or with
certainty.
⚫ E.g., improvement of employee morale,
reduction of waste creation or resource
consumption.
⚫ After determining project benefits, project
costs must be identified.
 Economic feasibility
3
4

⚫ Tangible costs- hardware costs, labor

costs, and operational costs.
⚫ Intangible costs- employee morale,
operational inefficiency.
⚫ Recurring costs-ongoing evolution and
use of system
 Technical
Feasibility
⚫ Technical feasibility refers to the assessment of
whether a proposed project can be successfully
implemented using available technologies,
resources, and expertise.
⚫ Its purpose is to gain an understanding of the
organizations ability to construct the
proposed system.
• Technological requirements- evaluates the
specific technologies needed for the project
• Resource availability - Assesses whether the
organization has the necessary technical
resources
• Risk identification - Identifies technical
challenges, limitations, and risks that could
hinder implementation
 Technical feasibility

⚫ Consequences of not assessing risks:

 Failure to attain expected benefits from the
project.
 Inaccurate project cost estimates
 Inaccurate project duration estimates
 Failure to achieve adequate system
performance levels
 Failure to adequately integrate the new
system with existing hardware, software, or
organizational procedures.
 Operational
feasibility

⚫ Operational feasibility assesses how well a

proposed system or project aligns with an
organization's existing processes, resources,
and strategic objectives.
⚫ It evaluates whether the project can be
successfully implemented and integrated into
the organization's operations without causing
disruptions or future problems.
⚫ It is the measure of how well a proposed
system solves problems and takes advantage of
opportunities identified.
 Schedule Feasibility

⚫ Scheduling feasibility assesses whether a

project can be realistically completed within
the proposed timeline.
⚫ Involves analyzing time constraints,
milestones, resources, and risks to determine
the achievability of the project schedule
 Legal and Contractual
Feasibility

• Legal feasibility involves analyzing whether a

project complies with all relevant laws and
regulations.
• Contractual feasibility involves assessing whether
contractual obligations are manageable and
enforceable.
• It is necessary to look at:
• Copyright

• Labor laws

• Antitrust legislations

• Foreign trade regulations

• Financial reporting standards

• Current or pending contractual obligations

 Political
Feasibility

⚫ It assesses the likelihood that a proposed

project will receive sufficient political
support and approval for
implementation.
⚫ A project's political feasibility is often
determined by its level of political
support versus opposition.
⚫ Too much opposition or too little support
can render a project politically infeasible
 Environmental
issues
 The environmental impact of the project should
also be assessed.
 The project should be environment friendly.