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Blog post 14 Oct 2020

The Life of a Project II: Identification of the Project Needs

The Life of a Project II: Identification of the Project Needs

The first part of the series started with an overview of the project management concepts, the project life cycle, and the project management process steps. In Part two of the series, we dive deeper into the first phase of the project life cycle – Needs Identification. We will learn more about identifying and selecting projects, creating requests for proposals and the solicitation process.

product life cycle graph

Identification of Project Needs

The first step in the project life cycle involves determining the needs of the project. What is the problem that we are trying to resolve? Why are we starting this project? The need could be identified as a result of a problem or an opportunity to improve. The overall goal of the project will always be to improve or take advantage of a particular situation.

After the initial need identification, you will have to gather data. The data will assist you in understanding the magnitude of the problem or opportunity. Through quantifying the problem, you can determine if the expected outcome will outweigh the costs associated with the project. If the project's costs outweigh the benefits of the project, it might not be a feasible option to proceed with the project.

As a project manager, there will be many times in your career to determine several needs for the company. Still, the company will have limited funds and people available to pursue the projects. This will put you in a position where you will have to decide on the project that will benefit the company at that given point.

Standard RFP Process Infographics

Project Selection

Project selection is the process that you, as a project manager, will use to determine which of the company’s needs is the most important and should thus be pursued. Before selecting the project, you will have to weigh the different aspects of the projects against each other. This could include:

  • The benefits of each project.
  • The consequences of pursuing one project instead of another.
  • The advantages and disadvantages of the different projects.
  • The different aspects that influence a project can be qualitative, quantitative, tangible and intangible. Let's explain this as follows:
  • Quantitative benefits – can be financial benefits that you can calculate.
  • Intangible benefits – can be improving the image of the company. You can’t see or touch this benefit, but you know it exists.

Luckily there are specific steps that you can follow to assist you in selecting the correct project:

  1. The first step in the project selection process would be to decide on the criteria against which you will evaluate each project. For example, what is the investment required to start each project?
  2. Secondly, we will list the assumptions that form part of the project. For example, the company assumes that it will get a loan to start the project.
  3. In step three, we will collect any information about the different projects to ensure that we make informed decisions. For example, we can gather information about the different projects' financial expectations, the expected revenue streams, implementation costs, and operating costs per project.
  4. Step four is when the project evaluation will occur based on the information obtained in steps one to three.

We suggest that you make use of a group of people to assist you with the selection process. Different people in the organization have different views and would provide opinions based on those views. It could put things in another perspective for you.

After receiving all the feedback from your control panel, you will be in a position to choose the appropriate project to pursue. Next on your to-do list will be to prepare a request for proposal.

Request for Proposal

A request for proposal (RFP) is a document that provides precise information about what a client needs to achieve their goals. This document is made available to prospective contractors/suppliers that could perhaps assist in completing the project. The suppliers then have the opportunity to present a presentation to the company motivating why they would complete the current project and at what cost.

All RFP’s doesn’t have to be a formal process; it could be as informal. Informal RFPs could be in written format or presented orally.

Soliciting Proposals

After the RFP has been successfully created, it will be sent out to the suppliers. You can do this by identifying a closed group of suppliers that you would like to invite or by giving anyone access to submit a bid.

As this is a competitive situation, it would be wise to not provide certain information that you are not prepared to share with all the suppliers. The goal of the RFP process is to get the right person for the project at the most competitive price.

Critical Success Factors

What would be considered factors that are critical to the success of the need identification part of the Project Life Cycle?

  • Before you create an RFP you need to be 100% sure of what you want to achieve with your project.
  • When choosing between different possible project to pursue, make sure that you select the project that will provide the most significant benefit for the company.
  • By using an evaluation committee and excellent evaluation criteria, you will have the best chance to determine which project is the best project to pursue.
  • Do not provide information to certain suppliers in your RFP that you are not willing to provide to other customers.
Identification of the Project Needs

Conclusion

In part two of The Life of a Project, we looked at the identification of the project needs. IPM's Project Management Framework course is designed to help you achieve more goals by using the right tools and techniques of project management.  Where the first step in the process focused on identifying the business needs, selecting the most viable project to proceed with, putting together an RFP and lastly sending out the RFP to possible suppliers. In part three of The Life of a Project, we will look at the next steps in the Project Life Cycle that focuses on developing a proposed solution for the project.