The Important Aspects of the Project Evaluation - Term Paper Example

Project Evaluation Project Evaluation Affiliation Table of Contents Project Evaluation Project Evaluation Purpose of Evaluation 3 Project Evaluation Significance 4 Types of Evaluation 5 Quantitative Approaches 6 NPV Comparison 7 ROI Comparison 7 PBP Comparison 7 Pacifico and Sobelman Project Ratings 8 Limitations 8 Qualitative Approaches 9 Collective Multifunctional Evaluations 9 Limitations 9 Conclusion 10 References 10 Introduction Project evaluation is a methodical and targeted evaluation of a continuing or finished project. However, the basic objective of project evaluation is to verify the significance and level of accomplishment of project aims, development success, competence, influence and sustainability. In addition, project evaluations as well supply lessons learned into the decision making procedure of the project stakeholders, comprising partners and management. Thus the project evaluation is as well a significant fraction of accountability to its project staff and to the management. In other words, project evaluation offers a step-by-step procedure of recording, gathering and organizing data and information regarding project outcomes, comprising short-term results of tasks, or project deliverables, and instant and longer-term project results like transformations in behavior, processes or policy outcome from the project (GoogleDocs, 2011; Hughes & Cotterell, 2002; Government of Ontario, 2006). This report discusses some of the important aspects of the project evaluation and its application in technology-intensive enterprises. This report discusses the use and application of the project evaluation processes and various quantitative or qualitative approaches to project evaluation and selection. Purpose of Evaluation Usually, project assessment or evaluation is the last stage in the project lifecycle. In this stage analysis is done systematically at the fundamentals of accomplishments as well as failure in the project practice to discover how to plan more effectively for the future. The fundamental aim and objective of this study is to determine the actual value of a program or project as much as probable. In more simple words, project evaluation can be described as "a procedure that tries to find out as methodically as well as objectively as probable the significance, efficiency and influence of actions in the light of the fundamental aims and objectives”. It is, therefore an important examination of the accurate accomplishments and outcomes of a program, project or policy in comparison with the planned tasks, fundamental suppositions, and policy and resource assurance. In addition, it formulates an effort to evaluate impartially the following given main aspects: (Planning Commission, 2011; Hughes & Cotterell, 2002; Government of Ontario, 2006) The significance and strength of the project aims and objectives and design of the project/program in scenario of wider problems of project development policy, project priorities as well as strategies with other issues of critical nature The competence and speed of development of the project/program where attention is paid mostly on managerial efficiency and performance The recognition of causes for the acceptable or unacceptable achievement of the outcomes of the project and to assume critical issues and lessons those can be of significance to other continuing and future projects of a analogous nature. Project Evaluation Significance The results of a project evaluation are useful in offering answers to main project related questions. In addition, project evaluation provides the answers of some of the important questions like what are methods that project tasks are able to be polished to attain effective results. How much progress has been made in the overall project? The project evaluation also offers us main assessments regarding what are preferred results those can be attained in any project? Project evaluation also offers us a detailed analysis of some of the main areas and aspects of the project results and validates the project inputs (Planning Commission, 2011; Hughes & Cotterell, 2002; Government of Ontario, 2006). Types of Evaluation Every successful project involves high level project evaluation. Project evaluation, is important for several reasons as well as to an explicit activity of project. It is not limited to the achievement phase simply however engages a cyclic examinations at a lot of phases. The dissimilar kinds of project assessments performed are: (Planning Commission, 2011; Hughes & Cotterell, 2002) 1. Ex-ante evaluation 2. On-going evaluation and 3. Terminal evaluation/ex-post evaluation In this scenario, the ex-ante pre-approval/evaluation assessments are used pervious to project start and make sure that project is going to be planned in a better way. The on-going project evaluation is carried out by the business itself to reconsider the projected viability of the project tasks for the reason that of the time lag, as external evaluation is performed by an agency which comprises people from different departments to look after the project (Planning Commission, 2011; Hughes & Cotterell, 2002) In addition, the fundamental idea of an on-going/mid-project project evaluation is to help out the project management to formulate suitable modifications in the always changing environments or to correct some inadequacies in the unique design, in order to enhance its competence and general performance (Planning Commission, 2011; Hughes & Cotterell, 2002). Moreover, post-hoc or ex-post evaluation is used to find out the real, different to the predictable, outcomes of employing a project. In this scenario, the intention of project evaluation is mainly to match or compare the real results of the project with the projections formulated at the assessment stage. In addition, the assessment of dissimilar areas and aspects of the project are able to offer significant lessons achieved from knowledge for the latest projects. Additionally, the general influence of the project will result in a number of situations that could be categorized in different categories such as costs and benefits, indirect and direct or intangible and tangible. However, this kind of evaluation is costly, time-consuming and demands for persons with special expertise (Planning Commission, 2011; Hughes & Cotterell, 2002). Quantitative Approaches Quantitative approaches are frequently privileged to facilitate project evaluation as well as selections if the decisions need economic reasons. In addition, the quantitative methods are effectual decision support methods and tools if significant estimations of capital expenditures and future profits could be attained as well as transformed into net present values for making a comparison. Addition, the quantitative methods for project evaluation are simpler for ranking, comparison and selection. Moreover, the quantitative methods are more effective for benchmarking prospects. These methods offer superior input to sensitivity analysis as well as simulation. I have presented below some of the quantitative methods for project evaluation: (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003) NPV Comparison Net Present Value (NPV) is a technique that makes use of discounted cash flow as the foundation for comparing the qualified merit of substitute project prospects. It believes that the entire dealing costs as well as revenues are recognized and that financial analysis is a valid singular foundation used for project selection. We are able to resolve the net present value of a stream of revenues, single revenue and costs expected in the future. It compares the current value of money with the coming period (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). ROI Comparison ROI (Return-on-Investment) is defined as the ratio of net revenue over business project investment. In addition, it involves the revenue on a year-by-year foundations relative to the preliminary investment. Though this is a well-liked project evaluation measure, it does not allow a relative evaluation of option projects by means of variable costs as well as revenues (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). PBP Comparison Pay-Back Period (PBP) is another well-known method for comparing project options. It shows the time period of net profits necessary to return the capital asset formulated on the project. For ease, undiscounted cash flows are frequently employed to compute a quick figure for assessment that is relatively meaningful if organizations deal with a preliminary investment and a steady stream of net profits (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). Pacifico and Sobelman Project Ratings The formerly conversed techniques of assessing projects depend greatly on the supposition that technical as well as commercial achievement is guaranteed and the entire costs and revenues are predicable. Thus, due to these limitations, a lot of businesses have developed their own particular procedures for comparing project options (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). Limitations Besides huge advantages of quantitative methods for project evaluation there are some limitations regarding these methods of evaluation. Below are some of the limitations of these methods: (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003) A lot of success factors in project evaluation are non-quantifiable Likelihood as well as weights transformations Factual measures are not always present Analyses as well as conclusions are frequently ambiguous Technique mask exclusive issues and opportunities Qualitative Approaches These methods could be employed to decide the most excellent, most flourishing or most important alternative, or be incorporated into an analytical structure for collective multifunctional decision making. Below are some of the qualitative approaches of project evaluation: Collective Multifunctional Evaluations Collective multifunctional project evaluations technique heavily depend on subject experts from a variety of functional domains for collectively describing and evaluating wide project accomplishment principles, making use of both quantitative and qualitative techniques. In this scenario, the initial step is to describe the precise organizational areas significant to project success as well as to allocate expert evaluators (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). Limitations Qualitative approach of project evaluation also offers some limitations regarding project evaluation. These techniques are time-consuming and complex process. These evaluation methods are having main issues regarding the biasing with power and politics and also hard to repeat or procedurally (Thamhain, 2004; Hughes & Cotterell, 2002; Maylor, 2003). Conclusion Project evaluation is a methodical and targeted evaluation of a continuing or finished project. However, the basic objective of project evaluation is to verify the significance and level of accomplishment of project aims, development success, competence, influence and sustainability. This report has presented a detailed overview of project evaluation. This report has assessed different aspects of project evaluation. This research has outlined the ways how project evaluation can improve overall project performance and success. This research has also assessed different quantitative and qualitative approaches to project evaluation and selection. References GoogleDocs. (2011). 7. PROJECT EVALUATION. Retrieved October 22, 2011, from https://docs.google.com/a/vu.edu.pk/viewer?a=v&q=cache:WXFTZlsnT-oJ:www.ilo.org/public/english/bureau/pardev/download/development/tcmanual_chapter7.pdf+Project+Evaluation&hl=en&gl=pk&pid=bl&srcid=ADGEESjQb2XF5FhHcMY7vOcVIt3fLn9ay46Ig1E0uaMHy2j7EtJHgcMbQ9F Government of Ontario. (2006, January 12). What is Project Evaluation? Retrieved October 23, 2011, from http://www.reddi.gov.on.ca/track_what.htm Hughes, B., & Cotterell, M. (2002). Software Project Management (3rd ed.). Glasgow: McGraw-Hill Publishing Company. Maylor, H. (2003). Project Management, 3rd edition. Harlow: Pearson Education. Planning Commission. (2011). Chapter- 8: PROJECT EVALUATION . Retrieved October 23, 2011, from http://www.pc.gov.pk/CH-8.htm Thamhain, H. J. (2004). Chapter 210. Project Evaluation and Selection. In H. J. Thamhain, The Engineering Handbook. CRC Press. Read More