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Pro Chapter - Three (1) Project MGT

Chapter Three focuses on the process of idea generation and project identification, emphasizing the importance of creativity, environmental awareness, and realistic self-assessment. It outlines a systematic approach that includes generating ideas, monitoring the environment, self-assessment, preliminary screening, and creating a project rating index. The chapter also highlights the significance of SWOT analysis and alignment with organizational objectives and government priorities in identifying viable project ideas.

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Mwalimu Hachalu Faye
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17 views17 pages

Pro Chapter - Three (1) Project MGT

Chapter Three focuses on the process of idea generation and project identification, emphasizing the importance of creativity, environmental awareness, and realistic self-assessment. It outlines a systematic approach that includes generating ideas, monitoring the environment, self-assessment, preliminary screening, and creating a project rating index. The chapter also highlights the significance of SWOT analysis and alignment with organizational objectives and government priorities in identifying viable project ideas.

Uploaded by

Mwalimu Hachalu Faye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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CHAPTER THREE

IDEA GENERATION
(PROJECT
IDENTIFICATION)
1
Introduction

The search for promising project idea is


the first step towards establishing a
successful venture
As traditional saying goes
“ the key to success lies in getting into
the right business at the right time”
Identification of meaningful project idea
requires,
 Imagination
 Sensitivity to environmental changes
 Realistic assessment of what a firm or
organization can do
2
……Cont’d
Identification is often the outcome
of a triggering (iterative/frequent)
process rather than an analytical
exercise.
While the notion/idea
identification is simple, it is
difficult to develop methods or
procedure for accomplishing it.
3
……Cont’d
However, there are certain broad
guidelines which are helpful in the
generation and screening of project ideas

Project identification commonly follows


the following procedure
1. Generation of ideas
2. Monitoring the environment
3. Corporate appraisal ( self assessment)
4. Preliminary screening
5. Project rating index

4
3.1 Generation of Ideas
Most of the new projects ideas are a result of
 Once specialized technical knowledge or
 Marketing expertise or
 Some other competence
To stimulate the flow of project idea the
following are helpful
i. Analysis of Strength, Weaknesses,
Opportunities and Threats (SWOT):
 SWOT analysis represents a conscious,
deliberate , and dynamic effort by an
organization to identify opportunities that can
be exploited.
 Periodic SWOT analysis facilitates the
generation of new idea.
5
……Cont’d
ii. Clear articulation/expression of
objectives
 The operational objectives of the
organization may help to generate ideas
 The operational objective of business firm
for example,
 Cost reduction
 Productivity improvement
 Increase in capacity
 Expansion and growth

Can be helpful in generating the project idea


6
3.2 Monitoring the
Environment
The organization must systematically
monitor the environment in which it will
operate.
In other words the organization is expected
to monitor the following key environmental
factors in relation to each of identified ideas.
Economic aspects
State of the economy
Possible fluctuation in the economy
The degree of integration with the
world economy
7
……Cont’d
National policy
Sectoral policy
Government program
Tax policy
Government support
Financial policy
Technological factor
Availability of technology
Accessibility of the available technology
8
……Cont’d
Socio demographic factor
Population size and distribution
Education level
The nature of competition (for
business firms)
Number of firms in the industry
Nature of entry
Nature of input supply
Availability
Cost of row material 9
3.3 Self Assessment and
Scouting/examining the
Project Idea
A realistic appraisal of the organization’s
strength and weakness is essential to
select the best idea that can be realized as
a successful venture
To screen the project idea in terms of this aspect the
following suggestions are helpful
a) Analyze the industry (sector) and analyzing
the organization in terms of,
Its capacity (i.e., whether the organization
has the capacity to implement or to put into
practice the proposed idea).
Analyze the project in term of the benefit
(profit) that it will provide to the society ( firm)
10
……Cont’d
b) Examine the input or resources requirement
and firms ability to make it available
c) Review its innovativeness
d) Study government plan, outlays, and
guidelines: This analysis is important
because;
It will help to see if the idea is in line with the
government priority area.
To check if there are guideline that need to be
followed if the project idea is acceptable.
f) Suggestion of financial institutions and
development agencies. (that is
investigating priority area of development
agencies )
11
3.4 Preliminary Screening
In some case it is possible to have a long list of
project ideas.
In such cases some kind of preliminary screening is
required to eliminate ideas which are not
promising.
For that purpose the following aspects could be looked
into
a) compatibility with the promoter: The idea should be
compatible with
 the vision, mission, and goal of the
promoter.
In business venture, it should be compatible with
the owner’s objective. In other words,
It has to fit with the personality of the owner
Acceptable to the firm’s owner
It offers the prospect of rapid growth and high return12
……Cont’d
b) Consistence with government priority: Evaluate
the project idea in terms of the government priority.
Here we ask questions like,
Is the project consistent with the national goal and
priority ?
Are there any environmental effect ?
Will there be any difficulty to obtain permission?
c) Availability of inputs
d) Adequacy of the market
e) Cost of the project:
f) Acceptability of risk level : The desirability of the
project idea depends upon the level of risk associated
with it
When a large number of project ideas are
evaluated, it may be helpful to streamline the 13
process of preliminary screening.
3.5 Project Rating
Index
For that purpose a preliminary
evaluation may be translated into
a project rating index.
Steps involved in the process of the
project rating index are,
Identify factors relevant for project
rating
Assign weight to those factors ( the
weight are suppose to reflect their
relative importance)
14
……Cont’d
Rate the proposed idea on various
factors using a suitable rating scale
(typically a 5-7 point scale is used)
For each factor, multiply the factor
rating with the factor weight to get
the factor score
Add all the factor score to get the
overall project rating index
The following table illustrate the
determination of the project rating
index
15
Factors weight 5 4 3 2 1 score
Input availability 0.25 X 0.75

Technical know how 0.1 X 0.40

Reasonableness of cost 0.05 X 0.20

Adequacy of market 0.15 X 0.30

Complementary relationship 0.05 X 0.20

Stability 0.1 X 0.5

Dependency on firm’s 0.2 X 0.2


strength
Consistency with 0.1 X 0.1
government policy
Total 1.00 3.15
16
End of the 3 rd

Chapter!!!

I Thank U!!!

17

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