EIA:

An environmental impact assessment is an assessment of the possible positive or negative impact that a proposed project may have on the environment, together consisting of the environmental, social and economic aspects. The purpose of the assessment is to ensure that decision makers consider the ensuing environmental impacts when deciding whether to proceed with a project. The International Association for Impact Assessment (IAIA) defines an environmental impact assessment as "the process of identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant effects of development proposals prior to major decisions being taken and commitments made."[1] EIAs are unique in that they do not require adherence to a predetermined environmental outcome, but rather they require decision makers to account for environmental values in their decisions and to justify those decisions in light of detailed environmental studies and public comments on the potential environmental impacts of the proposal.[2] EIAs have often been criticized for having too narrow spatial and temporal scope. At present no procedure has been specified for determining a system boundary for the assessment. The system boundary refers to the spatial and temporal boundary of the proposals effects. This boundary is determined by the applicant and the lead assessor, but in practice, almost all EIAs address the direct, on-site effects alone.[4] However, as well as direct effects, developments cause a multitude of indirect effects through consumption of goods and services, production of building materials and machinery, additional land use for activities of various manufacturing and industrial services, mining of resources etc. The indirect effects of developments are often an order of magnitude higher than the direct effects assessed by EIA. Large proposals such as airports or ship yards cause wide ranging national as well as international environmental effects, which should be taken into consideration during the decision-making process.[5] Broadening the scope of EIA can also benefit threatened species conservation. Instead of concentrating on the direct effects of a proposed project on its local environment some EIAs used a landscape approach which focused on much broader relationships between the entire population of a species in question. As a result, an alternative that would cause least amount of negative effects to the population of that species as a whole, rather than the local subpopulation, can be identified and recommended by EIA.[6] There are various methods available to carry out EIAs, some are industry specific and some general methods:

Industrial products - Product environmental life cycle analysis (LCA) is used for identifying and measuring the impact on the environment of industrial products. These EIAs consider technological activities used for various stages of the product: extraction of raw material for the product and for ancillary materials and equipment, through the production and use of the product, right up to the disposal of the product, the ancillary equipment and material.[7]

Genetically modified plants - There are specific methods available to perform EIAs of genetically modified plants. Some of the methods are GMP-RAM, INOVA etc.[8] Fuzzy Arithmetic - EIA methods need specific parameters and variables to be measured to estimate values of impact indicators. However many of the environment impact properties cannot be measured on a scale e.g. landscape quality, lifestyle quality, social acceptance etc. and moreover these indicators are very subjective. Thus to assess the impacts we may need to take the help of information from similar EIAs, expert criteria, sensitivity of affected population etc. To treat this information, which is generally inaccurate, systematically, fuzzy arithmetic and approximate reasoning methods can be utilised. This is called as a fuzzy logic approach.[9]

At the end of the project, an EIA should be followed by an audit. An EIA audit evaluates the performance of an EIA by comparing actual impacts to those that were predicted. The main objective of these audits is to make future EIAs more valid and effective. The two main considerations are:

scientific - to check the accuracy of predictions and explain errors. management- to assess the success of mitigation in reducing impacts.

Some people believe that audits be performed as a rigorous scientific testing of the null hypotheses. While some believe in a simpler approach where you compare what actually occurred against the predictions in the EIA document

EIA concept and eight guiding principles The eight guiding principles...
There are eight guilding principles that govern the entire process of EIA and they are as follows: Participation: An appropriate and timely access to the process for all interested parties. Transparency: All assessment decisions and their basis should be open and accessible. Certainty: The process and timing of the assessment should be agreed in advanced and followed by all participants. Accountability: The decision-makers are responsible to all parties for their action and decisions under the assessment process. Credibility: Assessment is undertaken with professionalism and objectivity. Cost-effectiveness: The assessment process and its outcomes will ensure environmental protection at the least cost to the society.

Flexibility: The assessment process should be able to adapt to deal efficiently with any proposal and decision making situation. Practicality: The information and outputs provided by the assessment process are readily usable in decision making and planning.

EIA process
The EIA process makes sure that environmental issues are raised when a project or plan is first discussed and that all concerns are addressed as a project gains momentum through to implementation. Recommendations made by the EIA may necessitate the redesign of some project components, require further studies, suggest changes which alter the economic viability of the project or cause a delay in project implementation. To be of most benefit it is essential that an environmental assessment is carried out to determine significant impacts early in the project cycle so that recommendations can be built into the design and cost-benefit analysis without causing major delays or increased design costs. To be effective once implementation has commenced, the EIA should lead to a mechanism whereby adequate monitoring is undertaken to realize environmental management. An important output from the EIA process should be the delineation of enabling mechanisms for such effective management. The way in which an EIA is carried out is not rigid: it is a process comprising a series of steps. These steps are outlined below and the techniques more commonly used in EIA are described in some detail in the section Techniques. The main steps in the EIA process are: screening scoping prediction and mitigation management and monitoring audit Figure 1 shows a general flow diagram of the EIA process, how it fits in with parallel technical and economic studies and the role of public participation. In some cases, such as small-scale irrigation schemes, the transition from identification through to detailed design may be rapid and some steps in the EIA procedure may be omitted. Screening often results in a categorization of the project and from this a decision is made on whether or not a full EIA is to be carried out. Scoping is the process of determining which are the most critical issues to study and will involve community participation to some degree. It is at this early stage that EIA can most strongly influence the outline proposal. Detailed prediction and mitigation studies follow scoping and are carried out in parallel with feasibility studies.

 The main output report is called an Environmental Impact Statement, and contains a detailed plan for managing and monitoring environmental impacts both during and after implementation. Finally, an audit of the EIA process is carried out some time after implementation. The audit serves a useful feedback and learning function. PROCES: Resources An EIA team for an irrigation and drainage study is likely to be composed of some or all of the following: a team leader; a hydrologist; an irrigation/drainage engineer; a fisheries biologist/ecologist; an agronomist/pesticide expert; a soil conservation expert; a biological/environmental scientist; an economist, a social scientist and a health scientist (preferably a epidemiologist). The final structure of the team will vary depending on the project. Specialists may also be required for fieldwork, laboratory testing, library research, data processing, surveys and modelling. The team leader will require significant management skill to co-ordinate the work of a team with diverse skills and knowledge. There will be a large number of people involved in EIA apart from the full-time team members. These people will be based in a wide range of organizations, such as the project proposing and authorizing bodies, regulatory authorities and various interest groups. Such personnel would be located in various agencies and also in the private sector; a considerable number will need specific EIA training. The length of the EIA will obviously depend on the programme, plan or project under review. However, the process usually lasts from between 6 and 18 months from preparation through to review. It will normally be approximately the same length as the feasibility study of which it should form an integral part. It is essential that the EIA team and the team carrying out the feasibility study work together and not in isolation from each other. This often provides the only opportunity for design changes to be made and mitigation measures to be incorporated in the project design. The cost of the study will vary considerably and only very general estimates can be given here. Typically, costs vary from between 0.1 and 0.3 percent of the total project cost for large projects over US$ 100 million and from 0.2 to 0.5 percent for projects less than US$ 100 million. For small projects the cost could increase to between 1 and 3 percent of the project cost. Screening Screening is the process of deciding on whether an EIA is required. This may be determined by size (eg greater than a predetermined surface area of irrigated land that would be affected, more than a certain percentage or flow to be diverted or more than a certain capital expenditure). Alternatively it may be based on site-specific information. For example, the repair of a recently destroyed diversion structure is unlikely to require an EIA whilst a major new headwork

structure may. Guidelines for whether or not an EIA is required will be country specific depending on the laws or norms in operation. Legislation often specifies the criteria for screening and full EIA. All major donors screen projects presented for financing to decide whether an EIA is required. The output from the screening process is often a document called an Initial Environmental Examination or Evaluation (IEE). The main conclusion will be a classification of the project according to its likely environmental sensitivity. This will determine whether an EIA is needed and if so to what detail. Scoping Scoping occurs early in the project cycle at the same time as outline planning and pre-feasibility studies. Scoping is the process of identifying the key environmental issues and is perhaps the most important step in an EIA. Several groups, particularly decision makers, the local population and the scientific community, have an interest in helping to deliberate the issues which should be considered, and scoping is designed to canvass their views, (Wathern 1988). Scoping is important for two reasons. First, so that problems can be pinpointed early allowing mitigating design changes to be made before expensive detailed work is carried out. Second, to ensure that detailed prediction work is only carried out for important issues. It is not the purpose of an EIA to carry out exhaustive studies on all environmental impacts for all projects. If key issues are identified and a full scale EIA considered necessary then the scoping should include terms of reference for these further studies. At this stage the option exists for cancelling or drastically revising the project should major environmental problems be identified. Equally it may be the end of the EIA process should the impacts be found to be insignificant. Once this stage has passed, the opportunity for major changes to the project is restricted. Before the scoping exercise can be fully started, the remit of the study needs to be defined and agreed by the relevant parties. These will vary depending on the institutional structure. At a minimum, those who should contribute to determining the remit will include those who decide whether a policy or project is implemented, those carrying out the EIA (or responsible for having it carried out by others) and those carrying out parallel engineering and economic studies relating to the proposal. Chapter 5 gives details on preparing terms of reference for an EIA. A critical issue to determine is the breadth of the study. For example, if a proposed project is to increase the area of irrigated agriculture in a region by 10%, is the remit of the EIA to study the proposal only or also to consider options that would have the same effect on production? A major activity of scoping is to identify key interest groups, both governmental and nongovernmental, and to establish good lines of communication. People who are affected by the project need to hear about it as soon as possible. Their knowledge and perspectives may have a major bearing on the focus of the EIA. Rapid rural appraisal techniques provide a means of assessing the needs and views of the affected population.

The main EIA techniques used in scoping are baseline studies, checklists, matrices and network diagrams. These techniques collect and present knowledge and information in a straightforward way so that logical decisions can be made about which impacts are most significant. Risk and uncertainty are discussed further in the section Managing uncertainty. Prediction and mitigation Once the scoping exercise is complete and the major impacts to be studied have been identified, prediction work can start. This stage forms the central part of an EIA. Several major options are likely to have been proposed either at the scoping stage or before and each option may require separate prediction studies. Realistic and affordable mitigating measures cannot be proposed without first estimating the scope of the impacts, which should be in monetary terms wherever possible. It then becomes important to quantify the impact of the suggested improvements by further prediction work. Clearly, options need to be discarded as soon as their unsuitability can be proved or alternatives shown to be superior in environmental or economic terms, or both. It is also important to test the "without project" scenario. An important outcome of this stage will be recommendations for mitigating measures. This would be contained in the Environmental Impact Statement. Clearly the aim will be to introduce measures which minimize any identified adverse impacts and enhance positive impacts. Formal and informal communication links need to be established with teams carrying out feasibility studies so that their work can take proposals into account. Similarly, feasibility studies may indicate that some options are technically or economically unacceptable and thus environmental prediction work for these options will not be required. Many mitigating measures do not define physical changes but require management or institutional changes or additional investment, such as for health services. Mitigating measures may also be procedural changes, for example, the introduction of, or increase in, irrigation service fees to promote efficiency and water conservation. Table 6 in Chapter 4 describes the most common adverse impacts associated with irrigation and drainage schemes and some appropriate mitigating measures. By the time prediction and mitigation are undertaken, the project preparation will be advanced and a decision will most likely have been made to proceed with the project. Considerable expenditure may have already been made and budgets allocated for the implementation of the project. Major changes could be disruptive to project processing and only accepted if prediction shows that impacts will be considerably worse than originally identified at the scoping stage. For example, an acceptable measure might be to alter the mode of operation of a reservoir to protect downstream fisheries, but a measure proposing an alternative to dam construction could be highly contentious at this stage. To avoid conflict it is important that the EIA process commences early in the project cycle. This phase of an EIA will require good management of a wide range of technical specialists with particular emphasis on:

 prediction methods; interpretation of predictions, with and without mitigating measures; assessment of comparisons. It is important to assess the required level of accuracy of predictions. Mathematical modelling is a valuable technique, but care must be taken to choose models that suit the available data. Because of the level of available knowledge and the complexity of the systems, physical systems are modelled more successfully than ecological systems which in turn are more successfully modelled than social systems. Social studies (including institutional capacity studies) will probably produce output in non-numerical terms. Expert advice, particularly from experts familiar with the locality, can provide quantification of impacts that cannot be modelled. Various techniques are available to remove the bias of individual opinion. Checklists, matrices, networks diagrams, graphical comparisons and overlays, are all techniques developed to help carry out an EIA and present the results of an EIA in a format useful for comparing options. The main quantifiable methods of comparing options are by applying weightings, to environmental impacts or using economic cost-benefit analysis or a combination of the two. Numerical values, or weightings, can be applied to different environmental impacts to (subjectively) define their relative importance. Assigning economic values to all environmental impacts is not recommended as the issues are obscured by the single, final answer. However, economic techniques, can provide insight into comparative importance where different environmental impacts are to be compared, such as either losing more wetlands or resettling a greater number of people. When comparing a range of proposals or a variety of mitigation or enhancement activities, a number of characteristics of different impacts need to be highlighted. The relative importance of impacts needs agreeing, usually following a method of reaching a consensus but including economic considerations. The uncertainty in predicting the impact should be clearly noted. Finally, the time frame in which the impact will occur should be indicated, including whether or not the impact is irreversible. Management and monitoring The part of the EIS covering monitoring and management is often referred to as the Environmental Action Plan or Environmental Management Plan. This section not only sets out the mitigation measures needed for environmental management, both in the short and long term, but also the institutional requirements for implementation. The term 'institutional' is used here in its broadest context to encompass relationships: established by law between individuals and government; between individuals and groups involved in economic transactions; developed to articulate legal, financial and administrative links among public agencies; motivated by socio-psychological stimuli among groups and individuals (Craine, 1971). The above list highlights the breadth of options available for environmental management, namely: changes in law; changes in prices; changes in governmental institutions; and, changes in

culture which may be influenced by education and information dissemination. All the management proposals need to be clearly defined and costed. One of the more straightforward and effective changes is to set-up a monitoring programme with clear definition as to which agencies are responsible for data collection, collation, interpretation and implementation of management measures. The purpose of monitoring is to compare predicted and actual impacts, particularly if the impacts are either very important or the scale of the impact cannot be very accurately predicted. The results of monitoring can be used to manage the environment, particularly to highlight problems early so that action can be taken. The range of parameters requiring monitoring may be broad or narrow and will be dictated by the 'prediction and mitigation' stage of the EIA. Typical areas of concern where monitoring is weak are: water quality, both inflow and outflow; stress in sensitive ecosystems; soil fertility, particularly salinization problems; water related health hazards; equity of water distributions; groundwater levels. The use of satellite imagery to monitor changes in land use and the 'health' of the land and sea is becoming more common and can prove a cost-effective tool, particularly in areas with poor access. Remotely sensed data have the advantage of not being constrained by political and administrative boundaries. They can be used as one particular overlay in a GIS. However, authorization is needed for their use, which may be linked to national security issues, and may thus be hampered by reluctant governments. Monitoring should not be seen as an open-ended commitment to collect data. If the need for monitoring ceases, data collection should cease. Conversely, monitoring may reveal the need for more intensive study and the institutional infrastructure must be sufficiently flexible to adapt to changing demands. The information obtained from monitoring and management can be extremely useful for future EIAs, making them both more accurate and more efficient. The Environmental Management Plan needs to not only include clear recommendations for action and the procedures for their implementation but must also define a programme and costs. It must be quite clear exactly how management and mitigation methods are phased with project implementation and when costs will be incurred. Mitigation and management measures will not be adopted unless they can be shown to be practicable and good value for money. The plan should also stipulate that if, during project implementation, major changes are introduced, or if the project is aborted, the EIA procedures will be re-started to evaluate the effect of such actions. Auditing In order to capitalise on the experience and knowledge gained, the last stage of an EIA is to carry out an Environmental Audit some time after completion of the project or implementation of a programme. It will therefore usually be done by a separate team of specialists to that working on the bulk of the EIA. The audit should include an analysis of the technical, procedural and decision-making aspects of the EIA. Technical aspects include: the adequacy of the baseline studies, the accuracy of predictions and the suitability of mitigation measures. Procedural aspects include: the efficiency of the procedure, the fairness of the public involvement measures and the degree of coordination of roles and responsibilities. Decision-making aspects include: the utility

of the process for decision making and the implications for development, (adapted from Sadler in Wathern, 1988). The audit will determine whether recommendations and requirements made by the earlier EIA steps were incorporated successfully into project implementation. Lessons learnt and formally described in an audit can greatly assist in future EIAs and build up the expertise and efficiency of the concerned institutions. Public participation Projects or programmes have significant impacts on the local population. Whilst the aim is to improve the well being of the population, a lack of understanding of the people and their society may result in development that has considerable negative consequences. More significantly, there may be divergence between national economic interests and those of the local population. For example, the need to increase local rice production to satisfy increasing consumption in the urban area may differ from the needs as perceived by the local farmers. To allow for this, public participation in the planning process is essential. The EIA provides an ideal forum for checking that the affected public have been adequately consulted and their views taken into account in project preparation. The level of consultation will vary depending on the type of plan or project. New projects involving resettlement or displacement will require the most extensive public participation. As stated before, the purpose of an EIA is to improve projects and this, to some extent, can only be achieved by involving those people directly or indirectly affected. The value of environmental amenities is not absolute and consensus is one way of establishing values. Public consultation will reveal new information, improve understanding and enable better choices to be made. Without consultation, legitimate issues may not be heard, leading to conflict and unsustainability. The community should not only be consulted they should be actively involved in environmental matters. The International Union for the Conservation of Nature, IUCN promotes the concept of Primary Environmental Care whereby farmers, for example, with assistance from extension services, are directly involved in environmental management. The earlier the public are involved, the better. Ideally this will be before a development proposal is fully defined. It is an essential feature of successful scoping, at which stage feedback will have the maximum influence. Openness about uncertainty should be a significant feature of this process. As the EIA progresses, public consultation is likely to be decreased though it is important to disseminate information. The publication of the draft Environmental Impact Statement (EIS), will normally be accompanied by some sort of public hearing that needs to be chaired by a person with good communication skills. He/she may not be a member of the EIA team. There are no clear rules about how to involve the public and it is important that the process remains innovative and flexible. In practice, the views of people affected by the plan are likely to be heard through some form of representation rather than directly. It is therefore important to understand how decisions are made locally and what are the methods of communication, including available government extension services. The range of groups outside the formal structure with relevant information are likely to include: technical and scientific societies; Water User Groups; NGOs; experts on local culture; and religious groups. However, it is important to

find out which groups are under-represented and which ones are responsible for access to natural resources, namely: grazing, water, fishing and forest products. The views of racial minorities, women, religious minorities, political minorities and lower cast groups are commonly overlooked, (World Bank, 1991). There has been an enormous increase in the number of environmental NGOs and "Green" pressure groups throughout the world. Such organizations often bring environmental issues to the attention of the local press. However, this should not deter consultation with such organizations as the approach to EIA should be open and positive with the aim of making improvements. Relevant NGOs should be identified and their experience and technical capacity put to good use. In some countries, open public meetings are the most common technique to enable public participation. However, the sort of open debate engendered at such meetings is often both culturally alien and unacceptable. Alternative techniques must be used. Surveys, workshops, small group meetings and interviews with key groups and individuals are all techniques that may be useful. Tools such as maps, models and posters can help to illustrate points and improve communication. Where resettlement is proposed, extensive public participation must be allowed which will, at a minimum, involve an experienced anthropologist or sociologist who speaks the local language. He/she can expect to spend months, rather than weeks, in the field. Information dissemination can be achieved using a number of mechanisms including the broadcasting media, in particular newspapers and radio. Posters and leaflets are also useful and need to be distributed widely to such locations as schools, clinics, post offices, community centres, religious buildings, bus stops, shops etc. The EIA process must be seen to be fair. The public participation/consultation and information dissemination activities need to be planned and budgeted. The social scientist team member should define how and when activities take place and also the strategy: extensive field work is expensive. It is important to note that public participation activities are often reported as a separate section of the final EIA. Where experience of managing community involvement is limited, training is highly recommended. Further reading on public participation can be obtained from: Ahmed L and G K Sammy (1988) and on Rapid Rural Appraisal from Chambers R (1981). Rapid Rural Appraisal techniques may be an appropriate and cost effective method of assessment. Managing uncertainty An EIA involves prediction and thus uncertainty is an integral part. There are two types of uncertainty associated with environmental impact assessments: that associated with the process and, that associated with predictions. With the former the uncertainty is whether the most important impacts have been identified or whether recommendations will be acted upon or ignored. For the latter the uncertainty is in the accuracy of the findings. The main types of uncertainty and the ways in which they can be minimized are discussed by de Jongh in Wathern (1988). They can be summarized as follows: uncertainty of prediction: this is important at the data collection stage and the final certainty will only be resolved once implementation commences. Research can reduce the uncertainty;

 uncertainty of values: this reflects the approach taken in the EIA process. Final certainty will be determined at the time decisions are made. Improved communications and extensive negotiations should reduce this uncertainty; uncertainty of related decision: this affects the decision making element of the EIA process and final certainty will be determined by post evaluation. Improved coordination will reduce uncertainty. The importance of very wide consultation cannot be overemphasized in minimizing the risk of missing important impacts. The significance of impacts is subjective, but the value judgements required are best arrived at by consensus: public participation and consultation with a wide sector of the community will reduce uncertainty. One commonly recurring theme is the dilemma of whether to place greater value on short-term benefits or long-term problems. The accuracy of predictions is dependent on a variety of factors such as lack of data or lack of knowledge. It is important not to focus on predictions that are relatively easy to calculate at the expense of impacts that may be far more significant but difficult to analyse. Prediction capabilities are generally good in the physical and chemical sciences, moderate in ecological sciences and poor in social sciences. Surveys are the most wide-spread technique for estimating people's responses and possible future actions. The results of the EIA should indicate the level of uncertainty with the use of confidence limits and probability analyses wherever possible. Sensitivity analysis similar to that used in economic evaluation, could be used if adequate quantifiable data are available. A range of outcomes can be found by repeating predictions and adjusting key variables. EIA cannot give a precise picture of the future, much as the Economic Internal Rate of Return cannot give a precise indication of economic success. EIA enables uncertainty to be managed and, as such, is an aid to better decision making. A useful management axiom is to preserve flexibility in the face of uncertainty.

CONTRACT MANAGEMENT:
Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.[1] Common commercial contracts include employment letters, sales invoices, purchase orders, and utility contracts. Complex contracts are often necessary for construction projects, goods or services that are highly regulated, goods or services with detailed technical specifications, intellectual property (IP) agreements, and international trade.

What is Contract Management 7 Fundamental Criteria.

Creation: Whilst many companies work from standard contracts, they do have to be created in the first place and they often need to be changed as negotiations progress. Negotiation: Of the contracts to ensure that, the best possible contract is available to both parties. Adherence: To the contracts and all of its sections and aims. Service Level Agreements: (SLA) and Key Performance Indicators (KPI) are set to manage the day-to-day performance of the vendor. Managing Changes: that may be required as the relationship changes and problems arise. Documenting: Any changes that may have been agreed. Analyzing: The benefits that accrue or may be available from the contract.

What is contract management - how do you manage the contract?

Once the contract is fairly negotiated and signed by both companies you need to set up a number of Service Level Agreements that measure service performance and let the vendor know what is expected of them. Most procurement software programs allow you to manage the financial aspects and relationship management. Contract management can be managed by your legal team when problems arise or performance dips.

TYPES OF CONTRACTS:
In the world of business, contracts are used for establishing business deals and partnerships. The parties involved in the business engagement decide the type of the contract. Usually the type of the contract used for the business engagement varies depending on the type of the work and the nature of the industry. The contract is simply an elaborated agreement between two or more parties. One or more parties may provide products or services in return to something provided by other parties (client). The contract type is the key relationship between the parties engaged in the business and the contract type determines the project risk. Let' have a look at most widely used contract types. Fixed Price (Lump Sum) This is the simplest type of all contracts. The terms are quite straightforward and easy to understand. To put in simple, the service provider agrees to provide a defined service for a specific period of time and the client agrees to pay a fixed amount of money for the service. This contract type may define various milestones for the deliveries as well as KPIs (Key Performance Indicators). In addition, the contractor may have an acceptance criteria defined for the milestones and the final delivery. The main advantages of this type of contract is that the contractor knows the total project cost before the project commences. Unit Price In this model, the project is divided into units and the charge for each unit is defined. This contract type can be introduced as one of the more flexible methods compared to fixed price contract. Usually the owner (contractor/client) of the project decides on the estimates and asks the bidders to bid of each element of the project. After bidding, depending on the bid amounts and the qualifications of bidders, the entire project may be given to the same services provider or different units may be allocated to different services providers.

This is a good approach when different project units require different expertise to complete. Cost Plus In this contract model, the services provider is reimbursed for their machinery, labour, and other costs, in addition to contractor paying an agreed fee to the services provider. In this method, the services provider should offer a detailed schedule and the resource allocation for the project. Apart from that, all the costs should be properly listed and should be reported to the contractor periodically. The payments maybe paid by the contractor at a certain frequency (such as monthly, quarterly) or by the end of milestones. Incentive Incentive contracts are usually used when there is some level of uncertainty in the project cost. Although there are nearly-accurate estimations, the technological challenges may impact on the overall resources as well as the effort. This type of contracts is common for the projects involving pilot programs or the project that harness new technologies. There are three cost factors in an Incentive contract; target price, target profit, and the maximum cost. The main mechanism of Incentive contract is to divide any target price overrun between the client and the services provider in order to minimize the business risks for both parties. Retainer (Time and Material - T&M) This is one of the most beautiful engagements that can get into by two or more parties. This engagement type is the most risk-free type where the time and material used for the project are priced. The contractor only requires knowing the time and material for the project in order to make the payments. This type of contracts has short delivery cycles and for each cycle separate estimates are sent of the contractor. Once the contractor signs off the estimate and Statement of Work (SOW), the services provider can start work. Unlike most of the other contract types, retainer contracts are mostly used for long-term business engagements.

Percentage of Construction Fee This type of contracts is used for engineering projects. Based on the resources and material required, the cost for the construction is estimated. Then, the client contracts a service provider and pays a percentage of the cost of the project as the fee for the services provider. As an example, take the scenario of constructing a house. Assume that the estimate comes up to $230,000. When this project is contracted to a services provider, the client may agree to pay 30% of the total cost as the construction fee, which comes up to $69,000. Conclusion Selecting the contract type is the most crucial step of establishing a business agreement with another party. This step determines the possible engagement risks. Therefore, companies should get into contracts where there is a minimum risk for their business. It is always a good idea to engage in fixed bids (fixed priced) whenever the project is shorttermed and predictable. If the project nature is exploratory, it is always best to adopt retainer or cost plus contract types.

contract management PROCESS

Contract management is a continuous process, starting with analysis and evaluation of the customers inquiry, and carrying on until contract closure, upon fulfillment of all contractual obligations.

This process overview indicates that contract management activities seem to belong to the responsibilities of the project manager and the whole project team. In fact, they do; however, in larger projects where we have large contracts it is best practice to involve a full-time contract manager who brings in his professional experience, takes responsibility for that process, and ensures the contribution of all team members.

Contract preparation comprises analysis and evaluation of the other parties requirements, a clear statement of our own requirements, and negotiation in order to reach agreement between the involved parties. After signing the contract, upon handover, the implementation team needs to analyze the contract in order to ensure that they understand what has been signed and needs to be implemented. When preparing and signing a contract in definition and planning phase, we anticipate how we want to implement the required project results, and fix this anticipation in our planning documents. This means that all our project planning is based on assumptions on how the project environment will develop over implementation and closure phase. As a simple matter of life, these assumptions can turn out to be wrong: certain conditions can change, or certain events can happen so that changes or deviations of the plans and of the contract become necessary. Thus, it would be helpful to prepare the project plans and the contract in a way so that those necessary changes can be implemented with mutual agreement of all involved parties. As a first tool for contract management, we integrate a change management process into the contract.

TENDERING: Tender Procedures

A tender process is required under the Councils contract regulations for all contracts that exceed a value of 100,000. There are exemptions, however, to when these tendering procedures are used. The Council will always comply with the EU directives where they are applicable. There are currently four different tender procedures the Council may use: Restricted tender Suppliers who respond to advertisements expressing an interest in tendering are required to complete a pre-qualification questionnaire to show that they have sufficient experience and resources to meet the needs of the procurement opportunity. Only suppliers who are subsequently short-listed can be invited to submit a tender. Open tender All suppliers who request tender documentation will be invited to submit a tender. There is no pre-qualification questionnaire or short-listing stage prior to invitation to tender. This information is requested as part of the tender itself. The open tender procedure is normally only used where the known market place is limited. Negotiated tender A negotiated tender is similar to the restricted tender procedure in that it uses a pre-qualification stage. A negotiated tender procedure, however, allows the Council to negotiate the terms of the contract within strict guidelines prior to awarding the contract. For contracts advertised within the EU this process is only used in exceptional circumstances, for example when a supplier is the sole source of the good or service required, in cases of extreme urgency, or when the precise specification can only be determined by negotiation. For non-EU contracts, however, negotiated tender may be used more widely

Competitive Dialogue A competitive dialogue procedure may be used for particularly complex contracts where an open or restricted tender procedure will not allow the award of a procurement contract. Suppliers will respond to advertisements by submitting an expression of interest in the tender and complete a pre-qualification questionnaire. Suppliers who are short-listed will be invited to participate in a competitive dialogue with the Council. The dialogue is flexible and may include written or verbal submissions and interviews. The dialogue may take place in successive stages to reduce the number of potential suppliers, and at the conclusion of the dialogue the Council will ask potential suppliers to submit their final tender.

TENDERING TYPES:
There are three types of tendering methods used in construction industry! 1. Open Tendering 2. Selective Tendering 3. Negotiated Tendering.

Open tender is an arrangement where an advertisement in local newspapers or trade journals invites contractors to apply for tender documents. A deposit is usually required to ensure that only serious offers are made; Presumably it is needed to cover the cost of copying the documents. Local authorities have been advised against open tendering because it often leads to excessive tender lists where the cost of abortive tendering is considerable. There are instances of selection criteria being applied after the tender has been submitted, so a bid could be rejected if a contractor does not belong to an approved trade association.

Advantages of Open Tender The main advantage of such tendering is as follow:

Give high level of competition and contractors tend to give best prices as compare to other tendering method

There is no list of restrictive tenderer, which does not allow favoritism It is very transparent process which ensures that only the contractor with the best price and meeting all the technical requirements will win the tender. This process is usually manage by procurement board where its staff are trained for such exercises and board ensure that all the procedures involved in tender are followed.

Disadvantages of Open Tender The low price usually detriment of quality and often result in the client obtaining poor quality job and late completion of work. Given that its open tender and thus there are no restrictions on the number of contractor who can bid and become bulky and lengthy job for tender analyses which often result in delays and high cost.

Selective tender: Selective tendering consists of drawing up a list of chosen firms and asking them to tender. It is by far the most common arrangement because it allows price to be the deciding criterion; all other selection factors will have been dealt with at the prequalification stage. There are three ways in which selective tendering lists are drawn up:

An advertisement may produce several interested contractors and suitable Firms are selected to tender. The consultants may contact those they would wish to put on an ad-hoc list. Many local authorities and national bodies keep approved lists of contractors in certain categories, such as work type and cost range. Contractors who ask to be included on select lists of tenderer are usually asked to provide information about their financial and technical performance, particularly about the type of work under consideration. The National Joint Consultative Committee for Building (NJCC) has written the 'Standard form of tendering questionnaire - private edition' so contractors can prepare answers to relevant questions in advance. The questions mainly deal with projects carried out during the previous three years. Once the form has been completed, it can be used for specific projects or for those compiling lists of selected contractors. Ngotiated Tender :under this method normally one contractor is approached and such tender mainly used for specialist work such as lift system or airport project at big level, in such case there are limited number of contractor who do such work in the market .it is based on one-to-one discussion with contractors to negotiated the terms of contract

TYPES OF TENDERS:
Broadly, there are four types of Tenders: Limited Tendering, Open Tendering, Single Tendering and Verbal Tendering

Limited Tendering : This involves issuing Tender to few selected tenderers only. Open Tendering : This means that the Tender is open to any supplier who can quote for the materials as per requirements. This is usually done by publishing the Tender Notice in Newspapers/Trade journals/Internet and other bulletins. Single Tendering : Single Tendering means sending the Tender to one particular party. Normally, it is either for an item where there is only one supplier or for an item where the purchaser has developed confidence in one supplier only and would just like to verify the current price, delivery etc. Single Tenders are also sent for items of proprietary nature. Verbal Tendering : Where there is hardly any time to wait for the supplier to quote Verbal Tendering becomes necessary. This could either be done by telephoning the supplier or across the table.

PROCESS OF TENDERING:
The seven main steps in the tender process are[1]: 1. Tender process is determined: the organisation requesting the tender will determine the type of tender that will be used, as well as what will be involved in the tender process. 2. Request for tender is prepared: the request for tender outlines what is required, the contractual requirements and how you should respond. 3. Tenders are invited: the value, complexity and business category determine how tenders are invited. 4. Suppliers respond: you should first obtain all relevant documentation. Then: a. Attend any pre tender briefing sessions being conducted b. Clarify any uncertainties c. Plan your response d. Prepare your response e. Submit your response in the right format, on time and at the right location

5. Evaluation and selection: each tender will be checked for compliance, and if compliant, then evaluated against the criteria specified in the tender documentation. The tender that offers best value for money will win the business. 6. Notification and debriefing: when a contract has been awarded, the successful tenderer will be advised in writing of the outcome. Unsuccessful tenderers are also advised and offered a debriefing interview. 7. Contracts established and managed: generally a formal agreement will be required between the successful tenderer and the relevant agency.

GLOBAL TENDERING:
Global Tenders is a premier opportunity platform that provides Global Tender Notices/International Competitive Bids/Trade Leads, procurement news, project information from all over the world. An international marketplace designed to help small to large-sized companies do business both domestically and globally. Give your company a competitive advantage and keep yourself abreast on relevant global tender notices/international competitive bids/trade leads by various agencies (government, semigovernment and private) from all over the world. Get valuable tips to expand your business into the international marketplace and government sectors. Penetrate New Markets & Find New Customers. We focus more on quality than on quantity. Global Tenders provides access to a wide range of new business opportunities - both B2B and B2G opportunities. Just one relevant contact is all you need to make a successful deal! Try Global Tenders - and you'll have several!

PERT/ CPM:
PERT, in project management, is the abbreviation for Project Evaluation Review Technique. It is a model which is designed to analyze and represent the tasks involved and the time needed in the completion of a given project.

CPM:
Network analysis technique used in complex project plans with a large number of activities. CPM diagrams (1) all activities, (2) time required for their completion, (3) and how each activity is related to the previous and next activity. A sequence of activities is called a 'path,' and the longest-path in the diagram is the critical path. It is 'critical' because all activities on it must be completed in the designated time, otherwise the whole project will be delayed. Also called critical path analysis or critical path methodology. Read more: http://www.businessdictionary.com/definition/critical-path-methodCPM.html#ixzz1s30L9Njo

PERT/CPM has the following advantages:

a PERT/CPM chart explicitly defines and makes visible dependencies (precedence relationships) between the WBS elements, PERT/CPM facilitates identification of the critical path and makes this visible, PERT/CPM facilitates identification of early start, late start, and slack for each activity, PERT/CPM provides for potentially reduced project duration due to better understanding of dependencies leading to improved overlapping of activities and tasks where feasible.

Disadvantages
PERT/CPM has the following disadvantages: there can be potentially hundreds or thousands of activities and individual dependency relationships, the network charts tend to be large and unwieldy requiring several pages to print and requiring special size paper,

the lack of a timeframe on most PERT/CPM charts makes it harder to show status although colours can help (e.g., specific colour for completed nodes), when the PERT/CPM charts become unwieldy, they are no longer used to manage the project.

Advantages Of The Program Evaluation And Review Technique

So, what are the advantages of using this technique? First off, as aforementioned, PERT makes planning much easier. The PERT chart comes in handy when identifying relationships between tasks and task dependencies thus answering some major questions regarding the time required to complete each task and which task should precede or follow that particular task. Also, there is another related aspect of this type of planning called the Critical Path in the Program Evaluation and Review Technique. This term refers to the longest possible continuous pathway taken from the initial event to the terminal event. Since the Critical Path determines how much time it is going to take to complete the entire project, it helps managers in decision making. Sometimes, if there are delays to be made in some tasks, the Critical Path helps him decide how the task can be delayed without affecting the project completion time. This is another advantage of PERT. For projects in which time matters the most, this technique can help reduce the project duration by helping the planners better understand the activities and their dependencies which in turn can potentially be made into overlapping tasks. In the long run, the power of the PERT is the chart which contains project data and serves as a vital tool for decision making.

Disadvantages Of The Program Evaluation And Review Technique

Despite all of the advantages already mentioned, there are some major downsides to this brilliant method of project planning. To begin with, the charts tend to be quite complex as the size of the project increases. In fact in certain situations it wouldnt be uncommon to end up with thousands of activities and so many dependencies that someone brand new to project planning could become quickly confused and overwhelmed. On top of that, developing, maintaining and updating this chart can be expensive and difficult all at the same time. And sometimes the PERT chart can even extend to multiple pages with a number of sub tasks thus making it all the more complex. The second point against using this technique for project planning would be the prediction inaccuracies it can lead to at times. Unless someone with significant experience is planning the

prjoect using this technique, many of the predictions can go horribly wrong thus interfering with the entire time required to complete the project. The estimation can go wrong due to human error or unforeseen risks and unfortunate events.

Why Do Projects Fail? Learning How to Avoid Project Failure

We can probably all think of projects that have "failed" perhaps processes got worse rather than better, maybe they were cancelled because of cost overruns, or perhaps systems were launched with fundamental errors. How do you know when and why a project has failed? In many cases, the reason for failure is obvious. However, the definition of failure isn't always clear: one project with a significant delay might be described as a failure; yet another, with a similar delay, might be seen as a stunning success. In this article, we'll define project failure, and explore the factors that cause some projects to fail.

Definition of Project Failure

A project is considered a failure when it has not delivered what was required, in line with expectations. Therefore, in order to succeed, a project must deliver to cost, to quality, and on time; and it must deliver the benefits presented in the business case. The requirements for success are clear and absolute right? Unfortunately, it's not that simple. Because the second part of our definition of success is that the project must be delivered "in line with expectations." If key stakeholders agreed that a project had to exceed its initial budget, the project may still be considered a success. Likewise, if a project delivered everything that was in the detailed project designs, it may still be considered a failure if it didn't include vital elements that the key stakeholders needed. This doesn't seem fair, but project success and failure isn't just about the facts, nor is it simply about what was delivered. It's also, crucially, about how the project is perceived.

Reasons for Project Failure

Here are some of the main reasons why projects fail:

The wrong business requirements have been addressed If your project is set up to deliver the "wrong thing," it may be considered a failure even if everything is delivered on time, within budget, and to the required quality. This seems harsh. But if your project doesn't deliver what the organization really needs, this will inevitably negatively affect how it's perceived. This is why it's so important to conduct a thorough business requirements analysis. It's not possible to deliver the business case If your business case can't be delivered, then you have an impossible task. To make things worse, after the business case is approved, delivery of other things then becomes dependent on your project. This makes changing your project's deadlines, budgets and expectations more difficult. For example, once you've promised to deliver a new airport baggage management system, airlines may schedule additional flights for shortly after the system's launch, so that they can take advantage of the new capacity. If the baggage system doesn't work, or if it has major problems during testing, it may be hard to convince senior managers to allow the project to be delayed, because they will have to give up promised increased revenue. When you write your business case, make sure you think through the project requirements in detail, and identify what's needed to ensure that you can deliver those requirements. Don't just list assumptions make sure you explore them thoroughly. Review other, similar projects, so that you don't forget any major items. If you're delivering a new system, review your hardware and interface requirements. If you have major risks, include sufficient contingency resources (people, budget, and time) to manage those risks appropriately. Remember that implementing change is hard! Be realistic, and be ready to have some difficult conversations. For instance, your CEO may be disappointed that he can't have what he wants before the year end, or key users may say that they really need a fully featured product at the end of phase one. However, it will be a lot harder to have these conversations at a future date, when your project is in trouble! Governance is poor Few projects ever start without a sponsor. This is the person who has identified the need for change in an area of the business, and who is committed to making that change happen. He or she plays a vital role in ensuring the project's success. A good sponsor can make a mediocre project fantastic, and a poor sponsor can delay and frustrate a fantastic project team. The project sponsor is supported by the project's governance bodies, usually in the form of a steering group. These governance roles are essential: they provide direction, guidance, and critical review of the project and its progress. As project manager, you're involved in the day-to-day running of the project, but governance groups can take a step back and look at the project from a different perspective. They can ask difficult questions about progress and performance. They may see things that you've overlooked. However,

they can also support you by providing contacts and insights that help you get things done, and by providing "political cover" when you need it. Project managers don't usually have any influence over who their project sponsor is. Sponsors either self-select, or they're chosen because of their position in the organization. However, you often have more influence over who is in your steering group. As such, if you know that your project sponsor lacks passion for the project, or if the sponsor doesn't like to say no to people who keep trying to expand the project scope, then make sure you balance this with tougher or more engaged steering group members. Implementation is poor If you deliver your project competently, you'll avoid poor implementation right? Unfortunately, it's not that clear. Delivery can be complex. You need to manage risks, issues, and scope; manage your team; and communicate with stakeholders. Delivering change is hard, and not everything is in your control. Therefore, being competent isn't enough for good implementation, but it's a good start! There are a lot of tools available to help you. Take our quiz on your project management skills to get started. People lose focus on the project's benefits Projects are based on a list of benefits that must be delivered. For example, you may need a faster customer service process, you may need to produce products more cheaply, or you may need to improve the quality of your service. These benefit statements should be refined so that they're clear, concise, and quantified. From these benefit statements, a set of "things to do" is generated. For example, you may need to consult customers, redesign products, or implement a new system. The outcome of this is a business case document that analyzes the project in terms of costs, and of the benefits will be delivered. The project team then focuses on detailed planning, and on delivering the line items in the project plan building a new system, developing training packs, mapping out new processes, and so on. At this stage, the team may forget about the benefit requirements. This often results in a project deliverable that's well built, but doesn't provide the necessary benefits. For example, if the project plan focuses on designing and building a system, you could get a fantastic system, but one that's not being used by the business. To avoid this problem, adopt a benefits management approach throughout the life of the project, and remember the need to deliver the required benefits when you're planning and delivering your project. The environment changes This is probably the trickiest area. If the business's needs change, then your business case can become outdated before you've actually completed the project. You may have to review your original requirements and goals partway through the project to decide how to proceed, and this may result in changing the scope of your project or even canceling the project altogether! If you're working in an environment that's changing fast, you can help reduce the risks by doing the following: Making timely decisions If the project is clearly not going to be able to deliver the revised requirements, don't ignore this. The sooner you communicate this, and the sooner you make a decision about the project's future, the better.

Considering smaller projects It's more difficult to change direction in a large cruise ship than in a tugboat. So, think about whether a proposed project's scope and delivery timeline are appropriate within your business environment. Delivering projects in smaller pieces is not always appropriate, but it's worth considering. Managing expectations Just because you cancel a project does not automatically mean that the project is considered a failure. This depends on many factors, including how you manage the involvement of key project stakeholders in the decision-making process.

FEASIBILITY STUDY:
Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of the existing business or proposed venture, opportunities and threats as presented by the environment, the resources required to carry through, and ultimately the prospects for success.[1][2] In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.[3] As such, a well-designed feasibility study should provide a historical background of the business or project, description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations.[1] Generally, feasibility studies precede technical development and project implementation. A feasibility study is a detailed analysis of a company and its operations that is conducted in order to predict the results of a specific future course of action. Small business owners may find it helpful to conduct a feasibility study whenever they anticipate making an important strategic decision. For example, a company might perform a feasibility study to evaluate a proposed change in location, the acquisition of another company, a purchase of major equipment or a new computer system, the introduction of a new product or service, or the hiring of additional employees. In such situations, a feasibility study can help a small business's managers understand the impact of any major changes they might contemplate. "Conduct a feasibility study to start your course of action," consultants Judy Capko and Rebecca Anwar suggested in an article for American Medical News . "It will provide you with objective information to evaluate existing services and strengths. You will gain an understanding of the competition and marketplace indicators that affect your [business]. This is the best way for you to grasp the impact of future decisions you may be considering. The feasibility study will help you accurately anticipate what will and will not work in varied situations. You will be able to determine what resources are essential to complete varied situations and gain an understanding of how to draw on your strengths." A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it?

Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established. Feasibility studies address things like where and how the business will operate. They provide indepth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.

IMPORTANCE:
Feasibility Study is basically a study that is done to judge the viability of a new business venture. It is actually a preliminary analysis of a project that lets the people know that whether to proceed with a project or not. A Feasibility study is very important for a business. It makes an analysis of all the aspects of a business. The external factors influencing it and also the internal factors. It also analyzes all the costs associated with the project and how the material would be sourced. On the other hand, it will also make an estimate of how much sales are to be expected and what profits would the project make. If the results of the feasibility study are favorable, it is logical to proceed with it. Whereas on the other hand, if the results are not favorable, no businessman will take a risk on it.

THE IMPORTANCE OF A FEASIBILITY STUDY

A feasibility study will help identify planning issues that would otherwise have been overlooked and could be more difficult to address after the donor's death. Of course, the scope of a feasibility study will certainly be driven by the size of the property and its importance in the context of the client's overall estate plan. As its name implies, both the client and the advisor should approach the feasibility study with the understanding that a conclusion could be reached that the preservation of the property for the next generation is not, in fact, a practical objective in light of all the relevant facts and circumstances. First Step: Understand the Significance of the Property as an Estate Asset The first step in the feasibility study is to determine the relative significance of the property in the overall estate plan. This will require an examination of all of the assets owned by the donor and a determination of the economic value of the property as compared to the value of the entire estate. Even if the economic value of the property is not significant, the sentimental value of the property needs to be considered. Rather than craft a plan to leave the property to all of the donor's children, a better plan might be to leave the property to those children who have expressed an interest in retaining the property. Such planning can create resentment because the family members to whom the property is being allocated may feel that other family members are

receiving more valuable assets. All of these issues need to be discussed with the client and addressed in the feasibility study. Second Step: Identify and Understand the Nature of the Property The second step in the feasibility study is to understand the nature of the property itself and to determine whether there are any legal impediments to a succession plan. The following summarizes a number of property types or characteristics and certain legal or practical issues that can arise in each case. (1) Single Family Residences and Condominiums. The most common form of family property is the single-family residence. Important in planning for such a property is whether the property is part of a homeowners' association or is subject to a zoning ordinance restricting the use of the property as a vacation home for various family members. (2) LongTerm Leaseholds. Occasionally, a family home will be constructed on land that is not owned by the client, but is on land subject to a long-term leasehold (typically 99 years or more).

Why Are Feasibility Studies so Important?

The information you gather and present in your feasibility study will help you:

List in detail all the things you need to make the business work; Identify logistical and other business-related problems and solutions; Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and Serve as a solid foundation for developing your business plan.

Even if you have a great business idea you still have to find a cost-effective way to market and sell your products and services. This is especially important for store-front retail businesses where location could make or break your business. For example, most commercial space leases place restrictions on businesses that can have a dramatic impact on income. A lease may limit business hours/days, parking spaces, restrict the product or service you can offer, and in some cases, even limit the number of customers a business can receive each day.

The Components of a Feasibility Study

Description of the Business: The product or services to be offered and how they will be delivered. Market Feasibility: Includes a description of the industry, current market, anticipated future market potential, competition, sales projections, potential buyers, etc.

Technical Feasibility: Details how you will deliver a product or service (i.e., materials, labor, transportation, where your business will be located, technology needed, etc.). Financial Feasibility: Projects how much start-up capital is needed, sources of capital, returns on investment, etc. Organizational Feasibility: Defines the legal and corporate structure of the business (may also include professional background information about the founders and what skills they can contribute to the business). Conclusions: Discusses how the business can succeed. Be honest in your assessment because investors wont just look at your conclusions they will also look at the data and will question your conclusions if they are unrealistic.

Summary: Feasibility studies contain comprehensive, detailed information about your business structure, your products and services, the market, logistics of how you will actually deliver a product or service, the resources you need to make the business run efficiently, as well as other information about the business.

FACTORS IN FEASIBLITY STUDY:

Technology and system feasibility The assessment is based on an outline design of system requirements in terms of Input, Processes, Output, Fields, Programs, and Procedures. This can be quantified in terms of volumes of data, trends, frequency of updating, etc. in order to estimate whether the new system will perform adequately or not. Technological feasibility is carried out to determine whether the company has the capability, in terms of software, hardware, personnel and expertise, to handle the completion of the project. When writing a feasibility report the following should be taken to consideration:

A brief description of the business to assess more possible factor/s which could affect the study The part of the business being examined The human and economic factor The possible solutions to the problems

At this level, the concern is whether the proposal is both technically and legally feasible (assuming moderate cost). Economic feasibility Economic analysis is the most frequently used method for evaluating the effectiveness of a new system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system. An entrepreneur must accurately weigh the cost versus benefits before taking an action.

Cost-based study: It is important to identify cost and benefit factors, which can be categorized as follows: 1. Development costs; and 2. Operating costs. This is an analysis of the costs to be incurred in the system and the benefits derivable out of the system. Time-based study: This is an analysis of the time required to achieve a return on investments. The future value of a project is also a factor. Legal feasibility Determines whether the proposed system conflicts with legal requirements, e.g. a data processing system must comply with the local Data Protection Acts. Operational feasibility Operational feasibility is a measure of how well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development.[4] Schedule feasibility A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. You need to determine whether the deadlines are mandatory or desirable.

Various approaches have been used in preparing a feasibility study according to individual preferences. Some give more emphasis on ocular observation without quantitative and qualitative verifications of the market and other factors considered in starting or expanding a business enterprise. But some are very careful in their investment by verifying all aspects of the project study in a scientific survey.

Suggested steps to prepare a feasibility study

1. Identify and recognize the people or firms that will be involved in preparing the various aspects of the study. 2. Examine the market feasibility both in terms of ocular observations and the actual scientific survey. Determine if there is ample excess demand and a competitive market position of the project. If not feasible, abandon the idea immediately and think of another business project. 3. Find out if the project or idea is technically feasible. Determine if the resources to be used are available on a long term basis and at a reasonable cost. If not feasible, abandon the project or idea.

4. Proceed with the management study. Management study involves in determining if the organizational set up carry out its function effectively and that qualified persons under the circumstances are available. 5. If management is feasible, determine if it is financially feasible. Financial feasibility means that the budget or financing shall be available at a reasonable cost and there is a financial support and is deemed profitable. 6. If government project, assess the social desirability of the project and it will have an economic benefits to the people living in the community and its vicinities. 7. Lastly, prepare the summary of the feasibility study including the brief description of the project and the major assumptions made such as market projections, share and prices, investment costs, method of financing. Also, prepare the summary of findings and conclusions regarding market feasibility, technical feasibility and financial feasibility.

Conducting a Feasibility Study

Step One: Conduct a Preliminary Analysis The primary purpose of the preliminary analysis is to screen project ideas before extensive time, effort, and money are invested. Two sets of activities are involved. 1. Describe or outline as specifically as possible the planned services, target markets, and unique characteristics of the services by answering these questions:
o o o

Does the practice serve a currently unserved need? (e.g., multicultural populations or age groups who are not currently being served) Does the practice serve an existing market in which demand exceeds supply? Can the practice successfully compete with existing practices because of an "advantageous situation," such as better design, price, location, or availability (e.g., balance assessment and rehabilitation, programmable devices)?

2. Determine whether there are any insurmountable obstacles. A "yes" response to the following indicates that the idea has little chance for success:
o o

Are capital requirements for entry or continuing operations unavailable or unaffordable? Do any factors prevent effective marketing to any or all referral sources?

If the information gathered so far indicates that the idea has potential, then continue with a detailed feasibility study. Step Two: Prepare a Projected Income Statement Anticipated income must cover direct and indirect costs, taking into account the expected income growth curve. Working backward from the anticipated income, the revenue necessary to generate that income can be derived in order to build a projected income statement.

Factors that determine this statement are services provided, fees for services, volume of services, and adjust-ments to revenues (e.g., actual reimbursement levels). Step Three: Conduct a Market Survey A good market survey is crucial. If the planner cannot perform this survey, an outside firm should be hired. The primary objective of a market survey is a realistic projection of revenues. The major steps include:

Define the geographic influence on the market. Review population trends, demographic features, cultural factors, and purchasing power in the community. Analyze competing services in the community to determine their major strengths and weaknesses. Factors to consider include pricing, product lines, sources of referral, location, promotional activities, quality of service, consumer loyalty and satisfaction, and sales. Determine total volume in the market area and estimate expected market share. Estimate market expansion opportunities (e.g., responsiveness to new/enhanced services).

Step Four: Plan Business Organization and Operations At this point, the organization and operations of the business should be planned in sufficient depth to determine the technical feasibility and costs involved in start-up, fixed investment, and operations. Extensive effort is necessary to develop detailed plans for:

Equipment Merchandising methods Facility location and design (or layout) Availability and cost of personnel Supply availability (e.g., vendors, pricing schedules. exclusive or franchised products) Overhead (e.g., utilities, taxes, insurance)

Step Five: Prepare an Opening Day Balance Sheet The Opening Day Balance Sheet should reflect the practice's assets and liabilities as accurately as possible at the time the practice begins, before the practice generates income. Prepare a list of assets required for practice operations. The list should include item, source, cost, and available financing methods. Necessary assets include everything from cash necessary for working capital to buildings and land. Although the resulting list is rather simple, the amount of effort required may be extensive. Liabilities to be incurred and the investment required by the practice must also be clarified. These items need to be considered:

Whether to lease or buy land, buildings, and equipment

How to finance asset purchases How to finance accounts receivable

Step Six: Review and Analyze All Data This review is crucial. The planner should determine if any data or analysis performed should change any of the preceding analyses. Basically, taking this step means "Step back and reflect one more time."

Reexamine the Projected Income Statement and compare with the list of desired assets and the Opening Day Balance Sheet. Given all expenses and liabilities, does the Income Statement reflect realistic expectations? Analyze risk and contingencies. Consider the likelihood of significant changes in the current market that could alter projections.

Step Seven: Make "Go/No Go" Decision All the preceding steps have been aimed at providing data and analysis for the "go/no go" decision. If the analysis indicates that the business should yield at least the desired minimum income and has growth potential, a "go" decision is appropriate. Anything less mandates a "no go" decision. Additional considerations include:

Is there a commitment to make the necessary sacrifices in time, effort and money? Will the activity satisfy long-term aspirations?

How to Prepare a Good Feasibility Report with Format

Since good planning is a pre-requisite for survival and success of any business, ill like to discuss how to write a good Feasibility Report with a good feasibility report format today. Without proper planning, a business may head towards failure if corrective measures are not taken in time. A Feasibility Report is simply a Business Plan. Feasibility Report is a detailed study that examines the profitability, feasibility and effectiveness of a proposed investment opportunity. The report, no matter how elaborate, should be prepared before one undertakes any business or expands the existing one. Feasibility Report can be prepared by the prospective investor or consultancy firms who charge fees depending on the value of the project and how elaborate is the proposed investment opportunity. Based on the Feasibility Report, the entrepreneur can decide to accept or reject the project. If the project is viable and acceptable, the entrepreneur has to estimate initial capital outlay and decide on where and how to raise the funds.

The Uses of Feasibility Report

The Feasibility Report can be used by the entrepreneur in the following areas:

To meet the stipulated requirements of financial institutions. For instance, banks and other financial institutions giving loans to start a business executives demands for a Feasibility Report of the proposed investment. To provide the basic information for effective decision making with respect to the proposed investment. By showing the market potentialities, technical and financial implications of the proposed opportunities, the feasibility report enable the entrepreneur to accept or reject the project. To assist the entrepreneur in developing future plans for the organization. To serve as the basic for measuring the performance of the proposed business.

Components of a Feasibility Report

No two feasibility studies have identical components. However, there are certain critical aspects that must be present in a good feasibility report. Below are the feasibility report format A typical feasibility report format is as below: The nature of the business, Management, Teams, Financial and Economic Analysis and Marketing plan. In other words, the major areas covered by a feasibility study can be divided into nine major areas namely: 1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction Description of the business Market consideration A preliminary Evaluation Management Team Technical Specifications and Production plan Marketing Plans Examination of the critical risks and problems Financial and Economic plans Evaluation and conclusion

SIMULATION:
Simulation is the imitation of the operation of a real-world process or system over time.[1] The act of simulating something first requires that a model be developed; this model represents the key characteristics or behaviors of the selected physical or abstract system or process. The model represents the system itself, whereas the simulation represents the operation of the system over time. Simulation is used in many contexts, such as simulation of technology for performance optimization, safety engineering, testing, training, education, and video games. Training simulators include flight simulators for training aircraft pilots to provide them with a lifelike experience. Simulation is also used with scientific modelling of natural systems or human systems to gain insight into their functioning.[2] Simulation can be used to show the eventual real effects of alternative conditions and courses of action. Simulation is also used when the real system cannot be engaged, because it may not be accessible, or it may be dangerous or unacceptable to engage, or it is being designed but not yet built, or it may simply not exist .[3] Key issues in simulation include acquisition of valid source information about the relevant selection of key characteristics and behaviours, the use of simplifying approximations and assumptions within the simulation, and fidelity and validity of the simulation outcomes.

Importance of Simulation in Business

Remaining competitive in today's global economy means delivering higher quality services and products at better prices. Your customers (and your bottom line) demand continuous improvement, lower costs and shorter delivery times. To ignore these realities will almost certainly result in reduced profitability, or worse.

Simulation Almost a Crystal Ball?

The problem with change is that it is risky; without the proverbial crystal ball, we cannot be certain what to change, or what to change to. There is, however, a way to evaluate the risks before implementing change, so reducing them to well understood levels. Simulation can show you all possible outcomes in your situation - and tell you how likely they are to occur! What this means for you -- the decision maker -- is that you finally have, if not perfect information, the most complete picture possible. You will see what could happen, how likely it is to happen, and so be able to judge which risks to take and which ones to avoid. While simulation cant predict the future, it can help you to choose the best strategy based on the available information before committing significant funds to the process. That's not a bad start! Why not use simulation to improve performance measurements for better manufacturing management? Identify bottlenecks, improve productivity, implement lean manufacturing or perform theory of constraints. Using the latest simulation techniques will help you tighten up your processes to meet stringent market demand and out-perform your competition by using simulation to plan, model, validate, and communicate better ways of getting the job done.

What Can You Simulate?

You can simulate just about anything, but as a general rule, if you can draw a flowchart of your system then you can simulate it. What simulation does is to recreate all of the important and relevant logical rules that tell a system how to work, and how long to take at each stage. It's easy to think of a simulation of a manufacturing process, but you can apply the same logic to health care, call centres, project planning, and any other system where a job or unit of work flows through a number of stages. The processes you'll gain most benefit from simulating are those that involve change over time and randomness; for example a call centre. Nobody can guess at exactly what time the next call will arrive, for how many rings the caller is prepared to wait for an answer, or how long they will wait in a queue listening to music or messages before hanging up. Modelling complex dynamic systems like this effectively in any other way simply isnt practical.

Why Simulate?
Simulation provides a vehicle for a discussion about all aspects of a process. Defining the rules and collecting data force you to consider why elements work in a certain way, and how they could work better. It also brings to the surface inconsistencies and inefficiencies especially between different sections of a process that work independently. There are many process improvements you can make using simulation: higher quality and efficiency from capital assets, better management of inventory, higher return on assets; the list is endless. But some of these improvements could be made without simulation, so the real question is 'Why use simulation instead of another method?'

Simulation vs Real Life Experimentation

Cost: Experimenting in real life is costly. Its not only the capital expenditure of hiring new staff or purchasing new equipment, its the cost of the ramifications of these decisions. What if you fire three staff and then find you can't cope with the workload and you loose customers? The only cost with simulation is the software and the man hours to build the simulation. Repeatability: In real life its really difficult to repeat the exact circumstances again so you only get one chance to collect the results and you can't test different ideas under exactly the same circumstances. So how do you know which idea is really the best? With simulation you can test the same system again and again with different inputs. Time: If you want to know whether hiring another three doctors will reduce patient waiting lists over the next two years you'll actually have to wait two years. With simulation you can run two, ten or even one hundred years into the future in seconds. So you get the answer now instead of when its too late to do anything about it.

Managing change: Aside from the machine operations, companies also have to deal with product changeovers, variability and unpredictable events such as workforce absenteeism, material shortages or accidents. All of these affect the productivity of a production line. Test driving new scenarios: Because of the high cost of both inefficiencies and new equipment, optimizing systems design and operation is critical to improving overall productivity, customer service and the bottom line. Simulation lets you build up your system and then test it; you can combine process simulation and optimization to help demonstrate, predict and measure system performance; you can find out where and why problems occur, (e.g. why a bottleneck builds up), allowing you to identify areas for improvement, test out new ideas and, most importantly understand how a system works without taking any significant risks and before introducing changes to live operations. Communication: With graphical and animated packages you can communicate your understanding and improvement ideas to others. You can visualise how work flows through your system and see its dynamics in fast forward time. You can actually watch bottlenecks building up and see what is causing the problems. Simulation is helping companies take the guesswork out of designing operating systems, and showing them how they might optimize existing operations.

PDCA:
PDCA (plandocheckact or plandocheckadjust) is an iterative four-step management method used in business for the control and continuous improvement of processes and products. It is also known as the Deming circle/cycle/wheel, Shewhart cycle, control circle/cycle, or plandostudyact (PDSA). The steps in each successive PDCA cycle are[2][3] : PLAN Establish the objectives and processes necessary to deliver results in accordance with the expected output (the target or goals). By establishing output expectations, the completeness and accuracy of the specification is also a part of the targeted improvement. When possible start on a small scale to test possible effects. DO Implement the plan, execute the process, make the product. Collect data for charting and analysis in the following "CHECK" and "ACT" steps. CHECK Study the actual results (measured and collected in "DO" above) and compare against the expected results (targets or goals from the "PLAN") to ascertain any differences. Look for deviation in implementation from the plan and also look for the appropriateness/ completeness of the plan to enable the execution i.e.,"Do". Charting data can make this

much easier to see trends over several PDCA cycles and in order to convert the collected data into information. Information is what you need for the next step "ACT". ACT Request corrective actions on significant differences between actual and planned results. Analyze the differences to determine their root causes. Determine where to apply changes that will include improvement of the process or product. When a pass through these four steps does not result in the need to improve, the scope to which PDCA is applied may be refined to plan and improve with more detail in the next iteration of the cycle, or attention needs to be placed in a different stage of the process.

PDSA:
One of the most common tools for improvement is the Deming (or Shewhart) Cycle. This method is also known as Plan-Do-Check-Act (PDCA) or Plan-Do-Study-Act (PDSA) and it is well suited for many improvement projects. Originally known as PDCA, it was revised to PDSA in the early 1990s to reflect misunderstandings of the intent of learning process.

Many quality practitioners believed that the check stage of the process meant to simply measure the improvement and move forward to the Act stage. Deming was stressing the importance of studying the data collected prior to acting upon it by changing the name of the stage to study. Use of the Deming Cycle is so widespread that ISO 9001 includes the methodology as a means of process improvement.

Plan The above picture shows how the Deming Cycle operates. The Plan stage is where it all begins. Prior to implementing a change you must understand both the nature of your current problem and how your process failed to meet a customer requirement. You and/or your problem solving team determine: Which process needs improved How much improvement is required The change to be implemented When the change is to be implemented How you plan to measure the effect of the change

 What will be affected by this change (documents, procedures, etc.). Once you have this plan, its time to move to the DO stage. Do The Do stage is the implementation of the change. Identify the people affected by the change and inform them that youre adapting their process due to customer complaints, multiple failures, continual improvement opportunity, whatever the reason, it is important to let them know about the change. Youll need their buy-in to help ensure the effectiveness of the change. Then implement the change, including the measurements youll need in the Study stage. Monitor the change after implementation to make sure no backsliding occurs. You wouldnt want people to return to the old methods of operation- those methods were causing your company pain to begin with! Study Just as it implies, the Study stage is where youll perform analysis of the data you collected during the Do stage. Considerations include: Did the process improve? By how much? Did we meet the objective for the improvement? Was the process more difficult to use with the new methods? Act The answers from the Study stage define your tasks for the Act stage. For example, if the process didnt improve, theres no point in asking additional questions during the Study stage. But action can be taken- action must be taken! The problem hasnt been solved. The action youd take is to eliminate the change you implemented in the Do stage and return to the Plan stage to consider new options to implement. If the process did improve, youd want to know if there was enough improvement. More simply, if the improvement was to speed up the process, is the process now fast enough to meet requirements? If not, consider additional methods to tweak the process so that you do meet improvement objectives. Again, youre back at the Plan stage of the Deming Cycle. Suppose you met the improvement objectives. Interview the process owner and some process participants to determine their thoughts regarding the change you implemented. They are your immediate customer. You want their feedback. If you didnt make the process harder (read more costly or time consuming) your action in this case would be to standardize your

improvement by changing any required documentation and conduct training regarding the change. Keep in mind that sometimes you will make the process more time consuming. But if the savings from the change more than offset the additional cost, youre likely to have implemented an appropriate change.

Problems With Deming Cycle

The Deming Cycle's application was intended for quality control purposes and proposed continuous improvement in quality of products/experiments.[4] The simple cycle works well in this application, but it is debatable that it should be applied to major organizational improvement. ISO recognized the need to provide better guidance in this regard and published the ISO standard ISO 9004:2000, which replaced the use of the term continuous improvement with continual improvement. The change is not trivial, it recognizes that organizational quality system performance improvement requires significant effort and needs pauses to consolidate change (hence continual and not continuous improvement) (ISO 9004:2000). The Deming Cycle has an inherent circular paradigm, it assumes that everything starts with Planning. Plan has a limited range of meaning. Shewart intended that experiments and quality control should be planned to deliver results in accordance with the specifications (see meaning above), which is good advice. However, Planning was not intended to cover aspects such as creativity, innovation, invention or Complex Adaptive Systems. In these aspects particularly when based upon imagination, it is often impossible or counterproductive to plan (see referenced Wikipedia pages for why this is so). Hence, PDCA is inapplicable in these situations. The Deming Cycle approaches often do not get to the root cause of a problem, especially in adaptive situations which call for an experiential approach but demand much more rigour in analysis and data collection. An adaptive challenge exists where there are no visible solutions to problems, and can exist, for example in areas where chaos, uncertainty, and ambiguity exists, such as new frontiers, and existing complex systems such as Healthcare. Do and Act have the same meaning in English. Dictionaries (Shorter Oxford) provide the following relevant definitions:

Do: verb 1 perform or carry out (an action). 2 achieve or complete (a specified target). 3 act or progress in a specified way. 4 work on (something) to bring it to a required state. Act: verb 1 take action; do something. 2 take effect or have a particular effect. 3 behave in a specified way.

The 'Act' in the Deming Cycle is meant to be interpreted to have a different meaning to 'Do', otherwise it could be as easily have been PDCD or PACA. In PDCA, 'Act' is meant to apply actions to the outcome for necessary improvement (see meaning above), in other words 'Act' means 'Improve' (applying PDCA to itself could result in PDCI). The Deming Cycle is a set of activities (Plan, Do, Check, Act) designed to drive continuous improvement. Initially implemented in manufacturing, it has broad applicability in business. First

developed by Walter Shewhart, it is more commonly called the Deming cycle in Japan where it was popularized by Edwards Deming. Deming Cycle is also known as Shewhart cycle, PDCA, Plan-Do-Check-Act