Project Management: From Needs to Feasibility and Types

Posted on Aug 17, 2024 in Economy

Economic Problems and Project Needs

Multiple Needs:

Limited or different levels of needs exist. The Maslow pyramid categorizes basic needs:

  1. Physiological: Breathing, drinking water, eating, etc.
  2. Safety: Maintaining achieved welfare. Health and physical security. Job security, income, and resources.
  3. Membership: Belonging to families, friends, and groups.
  4. Recognition: Self-recognition, respect, and self-morality.
  5. Self-Actualization: Spontaneity, creativity, and personal growth.

Limited Resources:

Financial, material, human, and time resources are limited.

Scarcity:

Scarcity prioritizes needs and allocates resources based on prioritization.

Project Definition:

A project can be an efficient solution to a specific need, improve satisfaction at the same cost, or achieve the same satisfaction at a lower cost.

Project Formulation and Evaluation

Project Formulation:

Gathering necessary background information for project reports. In some cases, interdisciplinary groups are used.

Project Evaluation:

Expressing an opinion on the feasibility of a project based on defined objectives.

Project Requirements:

  • Consistency: Project objectives and goals align with sectoral, regional, or enterprise needs.
  • Feasibility: Necessary conditions and resources are available for project development.
  • Viability: Potential success of the project, including favorable performance and tested viability.

Types of Feasibility Studies

Technical Feasibility:

Compatibility of technical performance with application possibilities.

Economic Feasibility:

Comparing project results with alternative projects using the same resources.

Financial Feasibility:

Considering the availability of financial resources for project implementation, both internal and external.

Project Types

Project Employer:

A project that implements an enterprise.

Amplification Project:

A project linked to expanding the productive capacity of a joint operation.

Replacement Project:

A project primarily focused on replacing processes or technologies within companies.

Project Acquisition:

A project linked to an investor’s purchase of a company.

Project Resources

Resources with a monetary impact on project implementation.

Investment Resources:

  • Land and buildings
  • Machinery and equipment
  • Facilities
  • Furniture and vehicles
  • Launch costs
  • Royalties
  • Patent
  • Working capital

Operating Resources:

  • Raw materials (MP)
  • Direct labor (MO)
  • Manufacturing overhead (CIF)
  • Sales expenses

Project Life Cycle

Pre-Investment:

  • Ideas: Project name and how it satisfies a need or solves a problem.
  • Profile: Gathering basic information to determine the desirability of further studies.
  • Pre-Feasibility Study: Gathering meaningful information to determine if the idea can be transformed into a project.
  • Feasibility Study: Defining the project with more precision based on pre-feasibility information.

Investment:

Acquiring necessary resources to begin the project.

Operation:

Production phase and commercialization of products generated by the project.

Sources of Project Ideas

Kuriloff Classification:

  • Investment
  • Creativity
  • Innovation
  • Personal interest and obvious needs
  • Observation of efficiencies or deficiencies
  • Discovery of new uses for ordinary things
  • Defection of current employment

Drake Rankings:

  • The unexpected
  • Incongruous situations
  • Necessity of process changes
  • Changes in industry structure
  • Demographics
  • Changes in people’s perceptions
  • New knowledge

General Legal and Regulatory Background

A project is an isolated fact within a larger reality, such as the market, industry, country, region, or city.

Macroeconomic Environment:

  • Periods and macroeconomic cycles (depression, recession, expansion)
  • Effects of macroeconomic variables on the project: Interest rates, inflation, unemployment rate, GDP growth

Sector Environment:

Industrial, agricultural, mining, construction, fisheries, commercial, financial, etc.

Microeconomic Variables:

  • Price elasticity of demand
  • Consumer behavior
  • Evolution of production
  • Prices of production factors

Legal and Regulatory Background:

  • Commercial Aspect: Formalization of the company, type of company, commercial code
  • Tax Aspect: General tax, specific tax, grants, territorial franchises
  • Labor: Individual contract, collective bargaining, labor code
  • Regulatory Aspects: Land tax, regulatory level, patent