What does project analysis mean?

Project analysis is the process of determining the aspects of a project in project management. This analysis helps in identifying whether the project is executing as expected and uses the specified budget. By conducting a project analysis, the current or future problems that occur during the project can be identified.

Types of project analysis

There are five types of project analysis. They are listed below:

• Process analysis
• Budgetary analysis
• Personnel analysis
• Risk analysis
• Client requirement analysis

Process analysis

Business process analysis is the method that is used to examine whether the operations in a business are executed as expected. Process analysis helps in identifying the obstacles that may occur throughout the project execution.

During a project, the management team must continuously check whether the tasks allotted to the teammates are being completed on time. They also need to check if there are any delays in completing the tasks and find out the reasons for the delay. A proper project analysis can save the time of the organization up to a great extent.

Budgetary analysis

The budgetary analysis identifies the components of budget expenditure and revenue in a budget. This helps to understand how to utilize the budget. Every project has to be allotted a budget and the project should be completed within a predefined budget. 

When a client gives a budget in a business, it is the company's responsibility to complete the task within the specified budget. Consequently, it is necessary to determine the project costs and to see if they match the project scope. If required, organizations should also find the areas where the price should be reduced. Once the project begins, a regular budgetary analysis (financial analysis) should be conducted.

Personnel analysis

Personnel analysis involves tracking an employee's task, the performance of the employee, and the duration required for each task. In a project, the employer needs to divide the job between the employees such that the workload gets balanced and the task is accomplished within the given timeframe.

The process of personnel analysis helps to determine the team members' inefficiencies and to plan the project according to the employee's capability. Organizations can also decide whether or not they need to hire new employees for the organization.

Risk analysis

Risk analysis is the process of identifying the risk involved in a project. It defines the probability of occurrence of an undesirable event. It is necessary to check for the possible risks such as natural calamity, labor strikes, or any other events that would cause the work to stop.

The project manager has to dig down through the possible risks involved in the project and should find a solution for them. The analysis can be found by studying previous project records or by examining the current situation.

Client requirement analysis

The entire project depends on the client's requirements. However, sometimes clients fail to explain their needs correctly. Hence, it is mandatory to analyze requirements and prioritize them according to their priority. The high-value requirements need to be completed first and should be delivered as promised.

At this stage, the company should also define different milestones based on the client's requirements. After completion of each milestone, feedback and approval from the client should be taken. This helps in maintaining a proper workflow and relations with the client.

Benefits of project analysis

Companies should not overlook the project analysis process because there are several benefits of conducting a project analysis in a business. Some of the benefits are mentioned below:

• Identifying project feasibility: Sometimes, the project may not fulfill its purpose despite being viable. Using project analysis, the goal and suitability of the project can be identified. Moreover, this helps in checking whether the project is good or not.
• Helps in budgeting: Projects need a budget (money) and they should be accomplished within the predefined budget. The project analysis helps to determine if the project runs on a specified budget and if any issues occur then they should be handled soon.
• Enhances project planning and schedule: Project analysis determines the issues that can occur and helps to overcome them. It then ensures that the project runs smoothly.
• Helps to avoid risks: New projects come with several risks. Project analysis finds out the risks and assists in dealing with them correctly.
• Monitoring and evaluating the project: With a regular project analysis, the assessment of the work becomes easier.

Elements of project analysis

The elements to consider during a project analysis may differ depending on the project. However, the basic elements are as follows:

• Aim: Every project has its objective. Similarly, there is a specific aim to conduct a project analysis. This aim should be defined at the beginning of the analysis. It should also include the scope of the analysis and objectives that should be achieved.
• Methodology/ techniques: This section covers the details of the methods used to conduct the analysis. It describes the tools and strategies deployed for the analysis.
• Timing and duration: The timing of a project analysis defines when the analysis has begun and been executed. Duration is the total length of time taken for the analysis. Both are only rough indicators and not fixed.
• Schedule: Here, the entire analysis is described in detail. Every aspect of the analysis is mentioned in detail. This guides the researcher and helps assess the process easily.
• Success parameters: The success of analysis can be defined using various parameters. Moreover, the efficiency of the analysis can be identified.

Context and Applications

Project analysis is an essential topic for students in courses such as

• Bachelor of Computer Applications
• Bachelor of Science in Information Technology
• Master of Computer Applications
• Master of Science in Information Technology

Common Mistakes

The terms project analysis, business process analysis, and business impact analysis are different in project management. All these processes are used in businesses for various purposes. Students should not misinterpret these terms.

Practice Problems

Q1) What is the first step in project analysis?

1. Identifying scope and objective
2. Specifying the cost-benefit analysis
3. Finding the Covid-19 impacts
4. Tracking the up-to-date client requirements

Answer: Option a

Explanation: In project analysis, the first step is to define the aim and scope of the project. Without this step, it is not possible to find out if the project is suitable or not.

Q2) Which of the following is the responsibility of a project manager?

1. Controlling the budget
2. Allocating resources
3. Tracking the project expenditure
4. All of the above

Answer: Option d

Explanation: A project manager is responsible for most of the tasks involved in the project. These include controlling and tracking the budget and expenditure, tracking the project progress, allocating resources, looking for personnel, and analyzing the client requirements.

Q3) Who is responsible for risk management?

1. Stakeholder
2. Project team
3. Customer
4. WBS

Answer: Option b

Explanation: It is the responsibility of the project team to handle the risk involved in the project and provide appropriate solutions for the risks.

Q4) When does the planning take place in the project management?

1. At the starting of the project
2. At the end of the project
3. During the project execution
4. After the project completes

Answer: Option a

Explanation: Planning is generally the first step that occurs in project management. After planning the project, the project is executed.

Q5) Which of the following is a part of the project life cycle?

1. Identifying the scope of the project
2. Objectives of the project
3. Formulating and planning the activities
4. All of the above

Answer: Option d

Explanation: A project lifecycle begins with identifying the scope and objectives of the project. It also involves planning the activities and specifying the budget.