Project Control Procedure

Project Control Procedure According to Arief Suadi (1995) control is a process to make an organization achieve its goals. Control is carried out along with the implementation of the project. Project control is carried out so that the project continues to run within the time, cost and performance limits set in the plan. There are several differences between planning and control, namely: Planning concentrates on determining direction and goals, allocating resources, anticipating problems, motivating participants to achieve goals. While control concentrates on controlling work towards goals, effective use of resources, improvements/corrections, providing rewards for achieving goals. There are at least three steps in the project control process, including: a) Determining performance standards such as technical specifications, budgeted costs, schedules or resource requirements. b) Comparing actual performance with standard performance. c) Taking corrective action on the causes of differences in actual performance to standard performance. 1. Project Evaluation Procedure Project evaluation is known as a project feasibility study (or business feasibility study on a business project), which is an assessment of a proposed project (or business), whether it can be implemented (go project) or not (no go project), based on various aspects of the study. The goal is to find out whether a project can be implemented successfully, so as to avoid excessive capital investment for activities that turn out to be unprofitable. Judging from when the evaluation is carried out on the project, 4 types of project evaluations can be distinguished: 1) Evaluation of the proposed project to be established (pre-project evaluation); 2) Evaluation of projects under construction (on-construction project evaluation); 3) Evaluation of projects that have been operationalized (on-going project evaluation). 4) Evaluation of projects that have ended (post-project evaluation study). a. Things to Know in Project Evaluation Before conducting a project evaluation, the following things need to be identified: a) Scope of Project Activities, namely in what areas the project will operate (mission statement of business). b) How the project activities are carried out, namely whether the project will be handled alone, or also handled by (several) other parties. c) Evaluation of aspects that determine the success of the entire project, namely identifying key success factors. d) Facilities required by the project, concerning not only needs such as: materials, labor, and so on, but also supporting facilities such as highways, transportation, and so on. e) The results of the project activities and the costs that must be borne to obtain the results. f) The beneficial or non-beneficial consequences of the project. g) Steps in the plan to establish the project, along with the schedule for each activity. b. Differences in Project Evaluation Intensity Not every project will be studied with the same intensity. Some projects may need to be studied very deeply, covering various influential aspects. Some others may only need to be studied in a few aspects. Some are even studied simply and informally. Several factors determine the intensity of project evaluation studies: a) The amount of funds invested: the greater the funds invested, the greater the intensity of the study. b) The level of project uncertainty: the more difficult it is to estimate sales revenue, costs, cash flow, etc., the more careful the project evaluation study will usually be. c) The complexity of the elements that influence the project: the more complex the factors that influence the project, the more careful and in-depth the project evaluation study will be. c. Institutions That Need Project Evaluations It has been explained in the previous section that project failure can be detrimental to: investors, financing providers, the government. Therefore, they are the institutions that need project evaluation. a) Project owners (investors) and potential business partners: will pay attention to business prospects, namely the level of expected profit along with the level of investment risk. Usually, the higher the level of profit is accompanied by a higher risk b) Financing providers (creditor banks, leasing companies, venture capital companies, underwriters if through the stock exchange, capital goods export credit institutions, and donor institutions that may help finance the project): pay attention to the security of the funds they lend, because they expect that the interest and principal installments of the loan can be paid on time. Therefore, they will pay attention to the pattern of cash flow during the loan period. c) Government: interested in the benefits or impacts of the project on the national economy and its impact on the environment d. Two Types of Feasibility Evaluation To minimize costs and effectiveness of activities, project feasibility evaluation is carried out in two stages: a) Preliminary Evaluation (Preliminary study or Pre-evaluation study) The purpose of the Preliminary Evaluation is to identify critical inhibiting factors that can hinder the running of the business operations of the project to be built. Possible decisions from this stage are cancellation of the investment plan, revision of the investment plan, or continuing the evaluation of the project investment plan to the next stage, namely the project feasibility study. b) Project Feasibility Study The main focus of the project feasibility study is at least centered on four aspects: (1) market and marketing aspects of goods or services to be produced by the project; (2) production, technical and technological aspects; (3) management and human resource aspects; and (4) financial and economic aspects. e. Stages of Project Evaluation Project Evaluation can be divided into several stages: 1) Idea Discovery Stage, namely research on market needs and types of products from the project. If there is more than one idea, then usually the decision maker will be influenced by three factors: (1) business intuition from the decision maker; (2) the decision maker understands the technical aspects of the project; (3) the belief that the project is capable of producing. 2) Research Stage; namely researching several project alternatives with various scientific methods. Starting with collecting data, processing data based on relevant methods, analyzing and interpreting the results of data processing with appropriate analysis tools; concluding the results until the work of making a report on the results. 3) Evaluation Stage (Preliminary Evaluation and Project Feasibility Evaluation). Evaluation means comparing something based on one or more standards or criteria, where these standards or criteria can be quantitative or qualitative. The things that are compared in the project feasibility evaluation are usually the benefits with all the costs that will 4) Feasible Proposal Sorting Stage. If there is more than one project plan proposal that is considered feasible, and if management has limitations in running these projects, then management can determine the priority of feasible proposals based on predetermined ranking criteria. 5) Implementation Plan Stage. After determining which project plan will be run, it is necessary to create a work plan for implementing the construction of the project; starting from determining the type of work, the time required for each job; the number and qualifications of implementing personnel; availability of funds and other resources; management readiness. 6) Implementation Stage, namely the stage of realizing the construction of the project. If the project is completed, the project is operationalized. In this operationalization, studies are also needed to evaluate the operationalization of the project. The results of this evaluation can be used as feedback for the company to always review the project continuously.