Mastering Project Implementation and Investment Evaluation

Project Implementation: Definition

Implementation is the common thread of understanding between the units involved in the project execution.

Objectives of Project Implementation

1. Establish a detailed and chronological sequence of activities that correspond to the implementation phase of a project.
2. Concrete investment and financing disbursements.
3. Provide as much detail as possible regarding the provisions in the estimated schedule of activities to coordinate the procurement of materials and equipment.
4. Design a viable and coherent pattern in terms of time, physical, material, human, institutional, and financial aspects of the project.

Requirements for an Implementation Plan

1. Description of the program and scope.
2. Description of the execution works.
3. Description of services required.
4. Analytic structure.
5. Project's organizational structure.

Key Items in Implementation Planning

1. Specification of activities to be performed and estimation of their duration.
2. Management of these activities in a network that expresses the chain of dependencies and time constraints that exist between the calculated dates.
3. Features for the initiation and completion of each task, identifying the critical paths.
4. Initiative scheme performance requirements and technical alternatives for each activity and materials.
5. Indicate the possibility and desirability of limiting the duration of the project.

Project Risk Analysis

The risk of a project defines the variability of real cash flows. The greater this variability, the higher the project risk. Risk is manifested in the variability of returns from the project, calculated using the project's cash flow.

Project Evaluation Fundamentals

Project evaluation is any activity aimed at making an investment decision on a project. It involves analyzing the actions proposed in the project in light of a set of criteria and techniques.

Objectives of Project Evaluation

1. Studying the profitability of both the investment and the investor.
2. Compare benefits and costs of investment.
3. Quantify the benefits and effects of project implementation.
4. Determine causes and effects of project implementation.
5. Provide relevant information for decision-making.

Key Evaluation Criteria

1. Use of techniques that consider the chronological value of money.
2. Regarding the origin of resources used for the operation of the project.
3. Regarding whether or not to account for the inflation that affects the acquisition of assets.
4. In regard to the measurement of direct or indirect effects resulting from the project being carried out.
5. Regarding the availability or scarcity of capital.

Techniques for Project Evaluation