Project cycle management (PCM) is a project management approach that addresses the complexities of a project through all of its phases, while maintaining alignment with the strategy and objectives agreed upon by stakeholders at the onset.
PCM helps with structuring and determining the phases of the project, how those phases look and how to approach tasks in those phases. It also assists in planning and review and can be used when managing multiple projects at the same time. Project cycle management is most commonly used in the European Union, but it can be used in any organization that needs a structured way to manage projects.
What Is Project Cycle Management?
As noted above, project cycle management is a methodology for managing projects. It provides structure to the process, but it also includes consulting stakeholders and providing them with relevant information throughout the life cycle of the project. This helps to inform the best possible decisions.
The European Union (EU) uses project cycle management to make sure that it funds projects that are aligned with its objectives. The European Commission adopted project cycle management in 1992 as its primary set of project design and management tools.
The cycle of management operations within project cycle management is broken up into five phases:
- Evaluation & Audit
This cycle highlights decision-making criteria and procedures, which are defined at each specific phase. The phases themselves are progressive (each needing completion before moving on to the next), and new projects are informed by the results of the final phase: evaluation and audit.
What Does Project Cycle Management Do?
Project cycle management helps projects stay supportive of the policy objectives of the organization that initiated the project. It helps projects stay relevant to the strategy that had been agreed upon, along with the needs of stakeholders and/or customers.
Project cycle management also ensures that the project itself is feasible. Through cycle management, projects are protected from wasting valuable resources by deciding if they can be realistically achieved and are worthwhile before execution, as well as noting if the benefits of the project are sustainable.
In order to do all this, project cycle management requires that stakeholders participate. It also requires the use of the logical framework approach and other tools to support the process. There is also an incorporation of quality assessment criteria and documentation at each stage of the project.
What Is the Logical Framework Approach?
The logical framework approach is an analytical methodology used for management. It is an effective approach, but it’s not a substitute for experience or professional judgement. Think of it as a complementary feature when also working with financial analysis and environmental impact studies.
Basically, the logical framework approach is a method for designing, monitoring and evaluating. It takes the form of a four-by-four project table with rows that represent types of events that occur when implementing a project, such as activities, outputs, purposes and goals.
Project cycle management emphasizes the use of a logical framework approach to analyze problems and figure out what is the best solution through project design, in order to achieve a successful implementation.
Documentation in Project Cycle Management
According to the EU project requirements for documentation (and project cycle management is mostly a European process), the main official documents that support project cycle management include the following:
- Development policy, country strategy papers and national indicative program documents
- Identification fiche, which is also called an end of indemnification document
- Financing proposal for one or many projects (program), which is sometimes called an action program
- Financing agreement and associated technical and administrative provisions with terms of reference
- Common Relex Information System (CRIS), which includes the implementation report window
- Evaluation and audit reports
Each stage in the project cycle management phase has its unique decision points, responsibilities and options. They are outlined below:
- Programming: The programming phase asks what the developmental priorities are and comes to an agreement of a strategy paper and indicative program.
- Identification: The identification phase there needs to be the completion of the fiche, or financing proposal, after a delegation makes an initial assessment. The proposal is then accepted, modified or denied, and financing is committed or not.
- Formulation: The formulation phase determines if the project is feasible and if it will deliver on the benefits it proposes by completing the financing proposal, along with technical and administrative provisions.
- Implementation: If results are being achieved and resources are being used properly, there is a submission of an annual operating plan, as well as other monitoring reports and reviews to determine if financing needs to continue as planned or change to support new needs.
- Evaluation: Evaluation determines if the project achieved its planned goals by completing an evaluation study, which is planned and managed by a task manager.
- Audit: The audit will see if the project was completed in compliance with law and rules, and if other criteria has been met. The process is usually managed by an audit task manager.
Project Cycle Management Phases
We mentioned that project cycle manage cycle is made up of five phases, so let’s dig deeper into each phase and cover their actual implementation.
The programming phase is when the negotiations take place, which leads to an agreed process documented in an indicative program. The process is meant to identify the main objective of the project and what its priorities are, which creates a relevant and feasible framework for the project.
Past projects are researched to provide precedent and direction for future ones. This process is usually multi-annual and not directly relevant to an individual project, though it’s important for each project to be aware of high-level strategy.
The identification phase analyzes the relevance of the project ideas. This includes the stakeholders and target group of the project. It analyzes potential problems these parties might have and what options there are to address and resolve them.
During this phase many studies are carried out to help identify these ideas and define what actions should take place. All of this will be then collected in a project identification report, which explains the reasons behind the decisions made. This phase is directly relevant to the project, as the project’s structure will be determined at this point.
The formulation phase, with the identification phase, is the financing decision-making part of the project cycle management process. During this phase a quality assessment of the financing proposal is undertaken. Any changes that are recommended to that draft are then applied to the financial proposal, which is either approved or rejected by the competent authority.
If the project is approved, next comes the preparation, negotiation and signing of a financial agreement, which includes the necessary technical and administrative provisions to start the project.
Now that the project has been planned and financed, it’s time to implement it. This can be a long process, sometimes years, depending on the project, and includes three periods: the start-up period, the main implementation period and the closure period.
Throughout the implementation there can be re-planning as schedules and budgets are reviewed, refined and updated. Monitoring and reporting also occur during this phase, establishing controls to make sure that the project remains on track. Reports are now generated to provide data on the project’s progress.
Evaluation & Audit
During this phase the project is assessed in a systematic and objective fashion to determine if objectives were reached as planned. Evaluations can be started as early as the implementation phase, and as well as at the end of the project.
Evaluation can also take place even years afterwards, to assess the impact over time. Evaluation should follow these five criteria: relevance, impact, efficiency, effectiveness and sustainability.
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