03 developing project

8/3/2019 03 Developing Project

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DEVELOPING A PROJECT



INTRODUCTION

y Here we shall discuss

Identifying needs and selecting projects

Developing a request for proposal

The proposal solicitation process



NEEDS IDENTIFICATION It is the initial phase of the project life cycle.

It starts with the recognition of a need, problem oropportunity.

It ends with the issuance of a request forproposal(RFP) (Also referred as RFQ -Request forQuotation or NIT- Notice Inviting Tender)

Before a RFP is proposed, the customer must clearly define the problem or need.

This may mean gathering data about themagnitude of the problem.



Contd--- It is important to try to quantify the problem so as

to determine whether the expected benefits fromimplementing a solution outweigh the costs, if

so, by how much. There are often situations where a company has

identified several needs but has limited funds andpeople available to pursue projects to address

all of those needs. In such cases, the company mustgo through a decision-making process to selectthose needs that, when met, will result in thegreatest overall benefit.



PROJECT SELECTIONIt involves evaluating various needs or

opportunities and then deciding which of these

should move forward as a project to be implemented.The benefits and consequences, advantages and

disadvantages, pluses and minuses of eachopportunity need to be considered and evaluated.

They can be both quantitative and qualitative,tangible and intangible.

Quantitative benefits could be financial, such as anincrease in sales or reduction in costs.



Contd---There also may be intangible benefits associated

with an opportunity such as improving the

companys public image or employee morale.The steps in project selection are as follows:

1. Develop a set of criteria against which theopportunity will be evaluated .

2. List assumptions3. Gather data and information for each opportunity.

4. Evaluate each opportunity against the criteria



. eve op a set o cr ter a aga nst

which the opportunity will be

evaluated These criteria will be probably include both

quantitative and qualitative factors.

(Example) If a company is considering opportunitiesinvolving the development and introduction of severalnew products, it might evaluate each opportunity against the following criteria:

Alignment with company goals

Anticipated sales volumeIncrease in market share

Establishment of new markets



Contd--- Anticipated retail price

Investment required

Estimated manufacturing cost per unitTechnology development required

ROI

Human resources impact

Public reaction

Expected time frame

Regulatory approval



2.LIST ASSUMPTIONS

Its assessment is the basis for evaluation of eachopportunity.

Growth of the demand based on past trends for

different products could be an assumption.

ROI evaluations based on assumptions of certain pricetrends

(Example) If one opportunity is to build an on-site day care center for children and elderly relatives of company employees, one assumption might be thatthe company would be able to obtain a bank loan tobuild such a center.



3.GATHER DATA AND

INFORMATION FOR EACH

OPPORTUNITY

o This is to help ensure an intelligent decision

regarding project selection.o (Example) It may be necessary to gather some

preliminary financial estimates associated witheach opportunity, such as estimated revenue

projections and implementation and operating costs.o These costs may then be analyzed using certain

mathematically based financial models so they can be compared on an equal basis.



Contd----o Such financial or economic models can include

methodologies used to calculate simple payback,discounted cash flow, net present value, internal rate

of return, ROI or life cycle costs associated with eachopportunity being considered.

o In addition to gather hard data, it may also be necessary toobtain other information regarding each opportunity.This could include getting information from variousstakeholders who would be affected by the opportunity.These could be employees, consumers or community residents, depending on the specific opportunity.



4.EVALUATE EACH OPPORTUNITY

AGAINST THE CRITERIA Once all the data and information has been collected,

analysed and summarised for each opportunity, itshould be given to all individuals who are responsible

for performing evaluation. It is beneficial to have several individuals involved in

the evaluation and selection decision in order to get various view points.

Each person on the evaluation and selection team orcommittee should have different background andexperience to bring to the decision making process.



PREPARING A REQUEST FOR

PROPOSAL

The purpose of preparing a request for proposal is to

state, comprehensively and in detail, what isrequired, from the customers point of view, toaddress the identified need.

A good RFP allows contractors or a project team tounderstand what the customer expects so that they can prepare a thorough proposal that will satisfy thecustomers requirements at a realistic price.



GUIDELINES FOR FORMAL RFP1. An RFP must provide a statement of work(SOW)

An SOW deals with the scope of the project,outlining the tasks or work elements the customer

wants the contractor or project team to perform.2. The RFP must include the customer requirements,

which define specifications and attributes.

3. The RFP should state what deliverables the

customer expects the contractor or project teamto provide.

Deliverables are the tangible items that thecontractor is to supply.



Contd---

4. The RFP should list any customer-supplieditems.

5. The RFP might state the approvals required by the customer.

6. Some RFPs mention the type of contract thecustomer intends to use.

7. An RFP might state the payment terms thecustomer intends to use.

8. The RFP should state the required schedule forcompletion of the project.



Contd---

9. The RFP should provide instructions for theformat and content of the contractor proposals.

10. The RFP should indicate the due date by whichthe customer expects potential contractors tosubmit proposals.

11. An RFP may include the evaluation criteria.

12. In rare cases an RFP will indicate the funds thecustomer has available to spend on the project.

13. Example.



Last Lecture .y We were discussing Project development

y Part of Project Definition by Owner.y Project Selection subsequent to

y Assumptions and Criteria for selection

y Data Collection were discussed

y Results in a comprehensive document known as RFP.y RFP Should Cover.

y Scope of Work

y Customer requirement & deliverables

y Format for Different Schedulesy Owner Supplied items

y Approvals Required etc..

y Let us se one real life example of such Document



SOLICITING PROPOSALSy Once the RFP has been prepared, the customer

solicits proposals by notifying potentialcontractors that the RFP is available.

y Business customers and contractors consider the

RFP/ proposal process to be a competitivesituation.

y Customers should be careful not to provide one ormore of the contractors with information that isnot provided to all interested contractors.

y Business or government customers may hold abidders meeting to explain the RFP and answer

questions from interested contractors.



Project Planning



Project Planning (contd..)

03 developing project

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