The development of modern economic theory and practice is inextricably linked with the need to analyze and justify certain management decisions, in particular design ones. The allocation of project analysis in a separate direction of applied science was primarily due to the need for a systematic approach to the preparation and evaluation of projects. The design experience at all its stages, accumulated under the conditions of the administrative economy, was based on the principles and methods of the administrative-command system and was detached from modern methodology and rich tools used in world economic science.
Effective use of project analysis in Ukrainian management practice requires a correct understanding of its essence. The variety of views on the subject of project analysis in the domestic literature reflects the different methodological approaches of economists to the characteristics of project analysis, which means:
- a method that allows you to systematically assess the financial and economic benefits of the project;
- the process of analyzing the viability of the project;
- a way to compare the costs of the project and the benefits that will be obtained as a result of its implementation or implementation;
- methodology that allows to assess the financial and economic benefits of projects based on the alternative use of available resources, taking into account macro- and micro economic consequences.
Such a narrow-minded definition of project analysis does not allow us to present a detailed meaningful definition of this discipline, which today is one of the central ones in the training of specialists in countries with developed market economies. In our opinion, the most significant characteristic of project analysis is the
following:
Project analysis is a methodology that is used to identify, compare and justify alternative management decisions and projects, which allows, in turn, to make choices and make verified decisions in conditions of limited resources.
Project analysis is based on the premise that successful projects lead to an improvement in the quality of life and economic development of society, both as a whole and its components. Therefore, the purpose of the course "Project Analysis" is to provide a systematic idea of the principles, methods and means of decision-making that allow more rational use of available resources to meet social and personal needs.
The study of the principles and methods of project analysis allows:
- get acquainted with the main concepts, methods and approaches used in world practice in the analysis of design decisions, the conceptual apparatus of this process;
- identify the most important problems related to the implementation of projects at the national, regional, sectoral and local levels;
- master practical analytical skills, tools necessary for pre-project events;
- give a systematic idea of the methods of evaluation of projects, methods and means of attracting resources for their implementation and mechanisms for managing them.
- The main components of project analysis are: the concept of the project, which determines its main features as an object of research; phases and stages of the life cycle; the principles on which project analysis is based; criteria for the selection and evaluation of projects, as well as aspects of project analysis containing market analysis, technical, institutional, environmental, social, financial and economic analysis.
The methodology of project analysis implies the need to answer the following questions:
understand the purpose of the project
For what perspective are the benefits and costs estimated?
What method of comparing projects is acceptable to use in the version under consideration?
What time horizon is used in benefit and cost estimates?
Meaningful characteristics of the course "Project analysis"
What criteria should be guided when deciding to refuse or accept a project?
The modern practice of managing the economic development of the country allows the use of project analysis to rationalize the distribution of national resources.
Evolution of project analysis
The emergence of project analysis is associated with the development of economic theory of the social sector. Scientific work "On the measurement of the usefulness of social works" was the first attempt to calculate the net gain from the implementation of projects.Continued his research on the economics of the public sector, which suggested that the allocation of society's resources could best be carried out through a combination of market approaches to the relationship between taxes and costs.
The practical application of these scientific approaches was implemented in 1936 in the United States, when a legislatively adopted flood control act required that the benefits received from the project (regardless of the specific consumer) exceed the costs incurred. However, there were significant discrepancies in the methods and principles of measuring different benefits. The U.S. government's active funding of water development projects (flood control, irrigation, hydropower, recreation, etc.) has aroused serious interest of economists in assessing public investment. Published in 1950, the work "Proposed methods of economic analysis of projects for year basins" (known as the Green Paper) was the first systematic attempt to combine the theory of economic well-being with the practical tasks of analysis in the evaluation of investment projects.
Over the past two decades, the place and role of social projects in economic development have undergone significant changes for both industrialized and developing countries. International lending, economic support for national projects required the creation and use of a system of financial and economic evaluation, stimulated the interest of scientists and practitioners in project analysis. As a result of these efforts, the "project analysis" methodology appeared, which is closely related to the "benefit-cost" methodology. At the same time, project analysis, like any methodology, has its weaknesses and strengths.
Today, special attention is paid to the methodology of project analysis in countries that are on the path of market management, where social projects play a significant role in the development of the nation.
The concept of project analysis
Project analysis is based on a comparison of benefits and costs associated with the implementation of the project; at the same time, their assessment is carried out in monetary terms.
The concept of project analysis is a set of methodological principles that determine the sequence of collection and methods of data analysis, methods for determining investment priorities, ways to take into account a wide range of aspects before making decisions on the implementation of the project.
One of the main tasks of project analysis is to establish the value of the project, which is determined by the difference in its positive results and negative consequences. According to this assessment of the project, there are complications associated, firstly, with different times of obtaining benefits and spending, and secondly, quantitative and qualitative measurement of the real results of the project.
When preparing the project, the analyst must quantitatively assess all private and public expenses and find out the non-economic impact of the project to provide the persons responsible for developing economic policy with data on this project. Calculations of shadow prices, indicating distortions in the economy, can draw the attention of specialists to taking measures to change the macroeconomic policy of the government.
Project analysis provides an opportunity to review the significance of various aspects and their impact on the project results. Therefore, the role of the analyst often goes beyond the analysis of the project, and his efforts are directed to the disclosure of economic, environmental and social problems present in society at this stage.
Thus, the concept of project analysis concentrates on finding out the costs of the project and studying the results from diverse positions: the interests of shareholders (or other owners); economy as a whole; organizations participating in the project; natural and social external environments in which the project will be carried out. Such methods are aimed at making the developed project expedient from an economic and technical point of view, taking into account not only the technological or purely technical aspects of the project, but also the financing management system, as well as the overall duration of the project results.
The concept of project analysis provides a systematic view of the methods of comparison and evaluation of projects, ways and means of attracting resources for the implementation of projects, as well as the mechanism for managing its life cycle. That is, project analysis is considered as a component of project management.
Project analysis as an internal component of the project management process
Principles of project analysis
The methodology of project analysis is based on a system of principles, the first of which is the principle of alternativeity. It concerns both various opportunities for using resources and ways to achieve project goals, choosing the best options for design solutions. The principle of alternativeity predetermines rational behavior, characterized by the choice of the best option available.
A very important role in the consideration of design decisions is played by the principle of conditionality. An adequate assessment of the project, which is based on economic values, is possible only with a clear distinction between benefits and costs, which, in turn, are caused by the decision to implement the project or abandon it. Project analysis focuses on those variables whose values have changed as a result of accepting the project or abandoning it.
The next principle of project analysis is to consider the quantitative value of the impact of changes that directly relate to the adoption of the project or its deviation. This principle is called margin, or the principle of the growth nature.
Project analysis proceeds from the need to consider the situation "with the project" and "without the project", since this principle allows us to compare what will happen over time in a private business or a particular region or country when implementing the project, and how the situation will develop in case of abandonment of the project. A characteristic feature of the principle of comparing "with the project" and "without a project" is to take into account the changes expected over time in the flows of benefits and costs both for the project situation and without the project.
Since the assessment of the expected benefits and costs of the project is inextricably linked with a change in the value of money over time, project analysis requires a set of the project time horizon and its duration. Therefore, an important principle of project analysis is to determine the start and end of the project, as well as the time when the project will begin to make a profit. The change (shortening or extending the duration of the project) affects the project's revenues and costs. The duration of the project is the time of its existence, which does not depend on the period of attractiveness or unattractiveness of the project.
Project analysis is a methodology used to identify, compare and justify alternative management decisions and projects, which allows, in turn, to make choices and make verified decisions in conditions of limited resources.
The purpose of studying the course "Project Analysis" is to provide a systematic idea of the principles, methods and means of decision-making that allow more rational use of available resources to meet social and personal needs.
The study of project analysis allows: to get acquainted with the main concepts, methods and approaches used in world practice in the analysis of design solutions; identify the most important problems associated with the implementation of investment projects at different levels; master the practical, analytical skills, tools necessary for pre-investment decisions.
In the project analysis, the terms "investment", "investment project" are used as generalized concepts and reflect the use of resources for the purpose of obtaining benefits in the future, for a long period of time.
The concept of project analysis is a set of methodological principles that determine the sequence of collection and methods of data analysis, methods for determining investment priorities, ways to take into account a wide range of aspects before making decisions on the implementation of the project. It concentrates on finding out the costs of the project and studying the results from diverse positions: the interests of shareholders (or other owners); economy as a whole; organizations participating in the project; natural and social external environments in which the project will be carried out.
One of the main tasks of project analysis is to establish the value of the project, which is determined by the difference in its benefits and costs.
The methodology of project analysis is based on the system of the following principles: alternative, conditioning, margin, comparison of the situation "with the project" and "without the project".
- Why is there a different interpretation of the meaningful characteristics of project analysis?
- Determine the purpose and main objectives of studying project analysis.
- What primary questions should be answered when analyzing the project?
- What is the difference between the subject of project analysis research and investment management and business planning?
- The main components of project analysis.
- Evolution of project analysis.
- Basic theoretical concepts of project analysis.
- Basic principles of project analysis.
No comments:
Post a Comment