Explain how project can be evaluated against strategic, technical and economic criteria?

Introduction

Project evaluation is a systematic and objective assessment of an ongoing or completed project. The aim is to determine the relevance and level of achievement of project objectives, development effectiveness, efficiency, impact and sustainability. Evaluating a project against strategic, technical and economic criteria is crucial as it helps in understanding the project's alignment with the organization's goals, its technical feasibility and economic viability.

Strategic Evaluation

Strategic evaluation in project management refers to the process of determining how a project aligns with the strategic goals of an organization. It is important as it ensures that the project contributes to the strategic objectives of the organization and is not just a standalone initiative.

To evaluate a project strategically, tools like SWOT analysis and Balanced Scorecard can be used. SWOT analysis helps in understanding the project's strengths, weaknesses, opportunities, and threats in relation to the organization's strategic goals. On the other hand, the Balanced Scorecard measures the strategic performance of the project in terms of financial performance, customer knowledge, internal business processes, and learning and growth.

For instance, if an organization's strategic goal is to increase market share, a project aimed at developing a new product can be evaluated based on how well it aligns with this goal.

Technical Evaluation

Technical evaluation in project management involves assessing whether a project meets the required technical standards and requirements. It is crucial as it ensures that the project is technically feasible and can be successfully implemented.

Technical feasibility studies and technical performance measures are commonly used for technical evaluation. Technical feasibility studies assess whether the project is technically possible and practical. Technical performance measures, on the other hand, evaluate the project's performance against technical parameters like quality, reliability, and functionality.

For example, a project to develop a new software application can be technically evaluated based on factors like coding standards, software architecture, and functionality.

Economic Evaluation

Economic evaluation in project management refers to the process of determining whether a project is economically viable. It is important as it ensures that the project is financially feasible and offers a good return on investment.

Tools like cost-benefit analysis, Net Present Value (NPV), and Internal Rate of Return (IRR) are commonly used for economic evaluation. Cost-benefit analysis compares the costs and benefits of the project to determine its economic feasibility. NPV and IRR, on the other hand, are financial metrics used to evaluate the profitability of the project.

For instance, a project to build a new factory can be economically evaluated based on its projected costs, expected revenues, and potential financial risks.

Conclusion

Evaluating a project against strategic, technical, and economic criteria is crucial for its success. It ensures that the project aligns with the organization's strategic goals, is technically feasible, and economically viable. These evaluations not only contribute to the successful implementation of the project but also ensure that it adds value to the organization in the long run.

Summary

Project evaluation is a systematic and objective assessment of an ongoing or completed project. Evaluating a project against strategic, technical, and economic criteria is crucial as it helps in understanding the project's alignment with the organization's goals, its technical feasibility, and economic viability.

Analogy

Evaluating a project against strategic, technical, and economic criteria is like assessing a movie based on its storyline, technical effects, and box office success. Just like a good movie needs to have a compelling story, impressive technical effects, and financial success, a project needs to align with strategic goals, be technically feasible, and economically viable.