Wednesday, 2 February 2022

Project and pre-project analysis

When forming the goal of the project, SMART-principles are applied. This makes it possible to set a clearly articulated, achievable goal with a clear time frame. A high-quality design analysis allows you to avoid launching an ineffective plan and identify potential risks that will need to be compensated.

Pre-project analysis and its significance

Most foreign, and recently Russian, companies before starting a full-fledged design prefer to get maximum information about how profitable the investment idea proposed for implementation will be. To do this, analytical work called due diligence is carried out at an early stage. Sometimes this is done on their own, but for professional evaluation there are specialized organizations with qualified experienced specialists and their own methodology of work.Project analysis is displayed on the smartphone.

Pre-project analysis is a functional study conducted at the earliest phase of design, as well as a comparison of data on the expected functions and appearance of the product, object, space (environment). In addition, the availability on the market of analogues of the planned products, production methods and technologies, the use of which will be necessary, is preliminarily considered.

At the same stage, you can get a general idea of the economic and financial potential of the idea, social significance, location of the construction object from different points of view (infrastructural, aesthetic, sanitary-hygienic, logistical).

The main objectives of this phase are:

  • General analysis of the idea (prerequisites, composition of participants, support by government agencies and financial organizations, availability of a preliminary work schedule).
  • Assessment of the viability of the undertaking, the object of investment, its ability to make a profit in the future (rate of profitability, payback period, financial stability).
  • Study of the potential of the client for whom the investment project is designed (market needs and product competitiveness, study of the competitive environment).
  • Search for possible investors and sources of financing.
  • Elaboration of credit or investment conditions.
  • Preliminary consideration of possible risks (in the investment, production and final phase) and the way to insure them.
  • Identification of required technologies and materials, search for suppliers and partner organizations.
  • Pre-design work consists of two consecutive stages: information collection (research) and its methodological processing.The necessary information can be obtained by studying various documentation, including archival, open sources of information, surveys of residents.

The result of the preliminary study is a detailed report. It contains the conclusions of experts on the effectiveness and feasibility of the proposed idea, the justification for investing in it, various options for implementing the plan. In addition to the text description, the report may include graphs, diagrams, tables, statistical material. If a pre-project assessment was carried out, and its conclusions are positive, then it is much easier to find an investor for the implementation of such a project.

Pre-project analysis is especially in demand in construction and architecture. Its essence in this case is to choose for the construction of a residential building a site with the best conditions, which, coupled with the advantages of the housing itself, will provide good sales at high prices. Therefore, before starting the creation of project documentation, it makes sense to professionally study the demographic component (population, birth rate, housing provision), the availability of related social infrastructure (schools, hospitals, kindergartens, shops) and green areas, transport accessibility. It is also important the number of floors and the design of the future structure, landscapes opening from the windows of the panorama.

Basic principles

Since analytical work and the study of the starting conditions of the idea can be carried out both at the pre-investment and project stages, confusion often arises regarding the concept of the essence of pre-project and project analysis. Most often, the same actions are meant, only in the first case they are limited to a short period of time before the start of the design, and in the second - can be used in each of the phases of the project life cycle. At the same time, passing through the steps, from the pre-investment phase to the working documentation, the accuracy of solving the tasks increases.Elements of pre-project analysis.

In order for preliminary work not to become a waste of time and money, the project analysis should adhere to the following principles:

  • Consistency. It is important to take into account all the main factors that can affect the results of the participants and the level of costs. Therefore, in order to create a harmonious system of relations between all participants, it is necessary to prescribe all the mechanisms for implementing the idea (economic and organizational).
  • Complexity. The use of various types of expertise, the purpose of which should be a comprehensive report or a full-fledged business plan.
  • Calculation of the consequences of the implementation of the initiative. Economic, environmental, social consequences are calculated. If quantitative accounting is not possible, then an expert assessment is carried out.
  • Use of current international management standards in the work.
  • Compliance of the plan with the general investment policy or development strategy of the company, region or state.
  • The presence of a positive economic and social effect.

Sufficient quality of project documentation for the formation of conclusions and the preparation of a business plan.

When conducting a project analysis, the approximate costs of implementing the idea and the expected benefits of its implementation are compared.At the same time, a large number of influence factors (internal and external) turn this process into a multi-stage and time-consuming one. The analysis covers all stages of the project, is carried out at all its stages, first of all, during business planning and preparation of feasibility studies.

Types of project analysis

The main types of project analysis used in practice include:

  • technical;
  • organizational;
  • commercial;
  • economic;
  • financial;
  • social;
  • ecological.

Technical analysis studies placement options, alternatives (technical and economic) of the project, availability and availability of the necessary resources (labor, raw materials), costs. An important point is the understanding of the scope of the project and the phased timing of its implementation, an outline of the work schedule. Such analytics is designed to determine the most effective version of the implementation of this idea from the point of view of technology. At the same time, the level of unforeseen expenses after such a study should not exceed 5-15% of the total cost, depending on the complexity and uniqueness of the idea.

  1. Organizational. Examines the current administrative, legal, political situation around the idea being developed, according to the results, a set of measures to improve the situation is proposed. Recommendations on the organizational structure, management, selection and training of personnel are being developed. At this stage, tasks are distributed among the participants in relation to instructions and regulations, their strengths and weaknesses are studied (qualification of personnel, logistics and financial support).
  2. Commercial. This is an assessment of the undertaking from the point of view of the end user of a service or product: the acquisition of resources, the production and marketing of goods. The capacity of the potential sales market (domestic and export), methods for promoting the product, methods of timely deliveries, competitive bidding, the impact of the appearance of a new product on the level of price for it are studied. Measures are proposed that eliminate possible losses from the subsidence of product prices after a new player enters the market.
  3. Economic. A comprehensive approach to the problems, taking into account all the features of the state economy, including issues of taxation, state regulation of individual industries, etc. When studying, calculated prices are applied, taking into account distortions caused by the imperfection of the market, not only the commercial, but also the social effectiveness of the initiative is taken into account.
  4. Financial. Examines the costs and results obtained in relation to each specific participant in the investment project. The purpose of the analysis is to find a balance between obtaining the maximum income and taking into account potential risks, as well as the future structure of liabilities and assets.
  5. Social. Considers the impact of the plan on the external environment both from the positive (creating jobs, improving living conditions, population growth) and from the negative side (deterioration of living conditions, negative impact on the state of people's health). 


Options for measures to improve the attitude of the population to the project are proposed. The following areas are studied:

  • demographic indicators and social-cultural characteristics of the population;
  • structuring the population in the area of implementation of the plan (the number and composition of families, the availability of the necessary labor resources and access to them);
  • compliance of the project with the peculiarities of local culture and religion;
  • the need for mutual obligations between residents and project initiators.
  • The difficulty of social analysis lies in the fact that formal methods are poorly applicable here, there are no standard methods.
  • In each case, decisions based on agreements are made. At the same time, a successful social dialogue can significantly increase the effectiveness of the project.

Ecological. Potential damage to the natural environment is assessed, measures to prevent or mitigate it are proposed. To do this, the estimate should provide funds for measures to protect environmental well-being. On average, this is about 3% of the cost, but sometimes this figure reaches 10%. Not all environmental issues are quantified, so qualitative indicators are often used, such as the impact of certain substances emitted by production on the health of people, animals or plants. If environmental analysis is not taken seriously enough, it can lead to irreversible changes in the state of the environment, for which the owner of the object can be held liable.

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