UNIT 12

UNIT 12
Project Evaluation
What Is Project Evaluation?
Project evaluation is the process of measuring the success of a project, program

or portfolio. This is done by gathering data about the project and using an
evaluation method that allows evaluators to find performance improvement
opportunities. Project evaluation is also critical to keep stakeholders updated on the
project status and any changes that might be required to the budget or schedule.
Every aspect of the project such as costs, scope, risks or return on investment
(ROI) is measured to determine if it’s proceeding as planned. If there are road
bumps, this data can inform how projects can improve. Basically, you’re asking the
project a series of questions designed to discover what is working, what can be
improved and whether the project is useful.
The project evaluation process has been around as long as projects themselves. But
when it comes to the science of project management, project evaluation can be
broken down into three main types or methods: pre-project evaluation, ongoing
evaluation and post-project evaluation. Let’s look at the project evaluation process,
what it entails and how you can improve your technique.
Project Evaluation Criteria
The specific details of the project evaluation criteria vary from one project or one
organization to another. In general terms, a project evaluation process goes over
the project constraints including time, cost, scope, resources, risk and quality. In
addition, organizations may add their own business goals, strategic objectives and
other project metrics.
Project Evaluation Methods
There are three points in a project where evaluation is most needed. While you can
evaluate your project at any time, these are points where you should have the
process officially scheduled.
1. Pre-Project Evaluation
In a sense, you’re pre-evaluating your project when you write your project
charter to pitch to the stakeholders. You cannot effectively plan, staff and control a
new project if you’ve first not evaluated it. Pre-project evaluation is the only sure
way you can determine the effectiveness of the project before executing it.
2. Ongoing Project Evaluation
To make sure your project is proceeding as planned and hitting all of the
scheduling and budget milestones you’ve set, it’s crucial that you
constantly monitor and report on your work in real-time. Only by using project
metrics can you measure the success of your project and whether or not you’re
meeting the project’s goals and objectives. It’s strongly recommended that you use
project management dashboards and tracking tools for ongoing evaluation.
3. Post-Project Evaluation
Think of this as a postmortem. Post-project evaluation is when you go through the

project’s paperwork, interview the project team and principles and analyze all
relevant data so you can understand what worked and what went wrong. Only by
developing this clear picture can you resolve issues in upcoming projects.
Project Evaluation Steps
Regardless of when you choose to run a project evaluation, the process always has
four phases: planning, implementation, completion and dissemination of reports.
1. Planning
The ultimate goal of this step is to create a project evaluation plan, a document that
explains all details of your organization’s project evaluation process. When
planning for a project evaluation, it’s important to identify the stakeholders and
what their short-and-long-term goals are. You must make sure that your goals and
objectives for the project are clear, and it’s critical to have settled on criteria that
will tell you whether these goals and objects are being met.
By including the stakeholders in your project evaluation plan, you’ll receive

direction during the course of the project while simultaneously developing a
relationship with the stakeholders. They will get progress reports from you
throughout the project life cycle, and by building this initial relationship, you’ll
likely earn their belief that you can manage the project to their satisfaction.
2. Implementation
While the project is running, you must monitor all aspects to make sure you’re
meeting the schedule and budget. One of the things you should monitor during the
project is the percentage completed. This is something you should do
when creating status reports and meeting with your team. To make sure you’re on
track, hold the team accountable for delivering timely tasks and maintain baseline
dates to know when tasks are due.
Don’t forget to keep an eye on quality. It doesn’t matter if you deliver the project
within the allotted time frame if the product is poor. Maintain quality reviews, and
don’t delegate that responsibility. Instead, take it on yourself.
Maintaining a close relationship with the project budget is just as important as
tracking the schedule and quality. Keep an eye on costs. They will fluctuate
throughout the project, so don’t panic. However, be transparent if you notice a
need growing for more funds. Let your steering committee know as soon as
possible, so there are no surprises.
3. Completion
When you’re done with your project, you still have work to do. You’ll want to take
the data you gathered in the evaluation and learn from it so you can fix problems
that you discovered in the process. Figure out the short- and long-term impacts of
what you learned in the evaluation.
4. Reporting
Once the evaluation is complete, you need to record the results. To do so, you’ll
create a project evaluation report, a document that provides lessons for the future.
Deliver your report to your stakeholders to keep them updated on the project’s
progress.
Benefits of Project Evaluation
Project evaluation is always advisable and it can bring a wide array of benefits to
your organization. As noted above, there are many aspects that can be measured
through the project evaluation process. It’s up to you and your stakeholders to
decide the most critical factors to consider. Here are some of the main benefits of
implementing a project evaluation process.
 Better Project Management: Project evaluation helps you easily find areas
of improvement when it comes to managing your costs, tasks, resources and
time.
 Improves Team performance: Project evaluation allows you to keep track
of your team’s performance and increases accountability.
 Better Project Planning: Helps you compare your project baseline against
actual project performance for better planning and estimating.
 Helps with Stakeholder Management: Having a good relationship with
stakeholders is key to success as a project manager. Creating a project
evaluation report is very important to keep them updated.
Methods of Project Evaluation

1. Return on Investment (ROI)
Undeniably, one of the most widely recognized and employed methods for project
evaluation is Return on Investment, commonly known as ROI. This technique
offers a simple yet powerful way to measure the economic success or failure of a
project.
By comparing the initial outlay with the ultimate revenue generated, the ROI
presents a clear picture of a project’s financial viability. It quantifies the profit or
loss made on a project relative to the amount of money invested.
2. Cost-Benefit Analysis (CBA)

A cost-benefit analysis is another one of the most popular and successful
techniques for evaluating projects. It considers the costs associated with a project
and compares them to the benefits expected to be gained.
3. Net Present Value (NPV)

The NPV measures the present value of all cash flows associated with a project —
both benefits and costs. This approach is often used for long-term projects where
some cash flows are received in the future.
4. Internal Rate of Return (IRR)
IRR is a popular metric used to estimate the profitability of potential investments.
It represents the interest rate at which the Net Present Value (NPV) of a project’s
cash flows amounts to zero. In simpler terms, IRR is the rate at which a project
breaks even in terms of NPV.
5. The Payback Period

The payback period method helps determine the time required for a project to
recoup its initial investment in terms of net cash inflows. It gives a straightforward
view of how quickly an investment can pay back its initial cost but doesn’t
consider any cash flows after the payback period.

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UNIT 12

What Is Project Evaluation?

Project evaluation is the process of measuring the success of a project, program

Project Evaluation Criteria

2. Ongoing Project Evaluation

Think of this as a postmortem. Post-project evaluation is when you go through the

By including the stakeholders in your project evaluation plan, you’ll receive

Benefits of Project Evaluation

Methods of Project Evaluation

2. Cost-Benefit Analysis (CBA)

3. Net Present Value (NPV)

5. The Payback Period

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