Ideas, suggestions and general thoughts about project management for development.

Project Management for Development

What is the PESTEL Analysis?

PESTEL analysis is a strategic planning tool used to evaluate the impact of external factors on a project. It involves an organization's careful consideration of the external environment before starting a new project.  PESTEL analysis stands for "Political, Economic, Social, Technological, Environment and Legal analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. 

The model is a part of the external analysis when conducting a strategic study or research and gives an overview of the different macro-environmental factors that the project must take into consideration. It is a useful strategic tool for understanding the external environment where the project will be implemented.
 Elements of the PESTEL analysis:

  • Political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include the type of goods and services which the government does not want to be provided by the project. Other factors include the political forces that exist in the project area and the level of democracy, participation, and other human rights.
  • Economic factors include economic growth, interest rates, exchange rates, and the inflation rate. These factors have major impacts on how projects operate and make decisions. Exchange rates affect the management of a project by increasing the cost of the goods and services.
  • Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, education levels, work attitudes, crime levels, safety. Projects may change various management strategies to adapt to these social trends.
  • Technological factors include technological aspects such as access to the internet, communications, education, technical support, and the rate of technological change. They can determine the type of technology the project can use.
  • Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as ecotourism and farming. Furthermore, growing awareness of the potential impacts of climate change is affecting how organizations operate and the services they offer.
  • Legal. Factors include changes in legislations, industry regulations, licenses and permits, contractual laws, employment and consumer protection laws, discrimination law and health and safety law. These factors can have an effect on the costs to implement a project.

The PESTEL analysis is an important part of the project design process that helps identify the factors that need to be taken into consideration for the project to be successful.

Interested to learn more? Register for the next session of our online course, Results-Based Project Management for Development Organizations and NGOs, and start building your project management skills. Register here  


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Project Management Constraints

Every project has to manage four basic constraints; scope, schedule, budget and quality. The success of a project depends on the skills and knowledge of a project manager to take into consideration these constraints and develop the plans and processes to keep them in balance. It is not enough for a project to meet the budget targets or to show to the donor that all activities have been completed on time. Development projects need to balance all four constraints if they want to realize the full benefits of a project.

Classical project management usually considers three constrains on a project: scope, time and costs (known as the project triangle), we believe that it is important to place under this category the constraint of quality. For development projects it is not enough to deliver a project according to the scope, on time and under budget; but the project must meet the needs and expectation of the beneficiaries who are the ultimate judges of the project quality.

Managing these constraints requires careful analysis and an agreement on the priorities for the organizations, the donor and the final beneficiaries. Depending on those factors a project may place more importance to the budget and quality than to the schedule or scope; these types of decisions, early in the project, have a fundamental impact on all the project plans that will need to be designed to ensure that the project is able to manage the four constraints. Failure to do that may result in the use of resources on areas that do not contribute to the ultimate success of the project.

The definition of project management implies that projects have specific limits in scope, schedule, budget and quality.  Understanding the combination of elements will allow make better choices when the project needs to make tradeoffs. The use of a triangle helps understand these relationships, adjusting any one of these sides, the other two are affected. For example, a change in the project plan to shorten the schedule might result in an increase in costs or require a decrease in scope.

Want to learn more? Register for the next session of our online course, Fundamentals of Project Management for Development Organizations and NGOs. Register now and obtain a 20% discount with the promo code 20FPM. Click on the link to find out more about this course.  

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