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The Project Life Cycle refers to a logical sequence of activities to accomplish the projects
goals or objectives. Regardless of scope or complexity, any project goes through a series of
phases during its life. Typically the Project Life Cycle consists of four primary phases, as it is
presented in the following diagram:

Figure 1-3: Project Lifecycle

Phase 1: Project Initiation. In this phase a business problem or an opportunity is identified

and a Business Case which provides alternative solutions is defined. Prior, during or after
the development of the Business Case, a Cost/ Benefit Analysis and a feasibility study are
usually conducted to identify the alternative with the maximum net benefit and investigate
the likelihood of each solution option addressing the business problem. As an outcome of
the Business Case a final recommended solution is put forward. Once the recommended
solution is approved, the Executive and the Project Manager are appointed in order to
participate in the preparation of the Project Fiche, which outlines the scope, objectives,
activities, structure, budget, implementation schedule, risks, constraints and assumptions of
the project. When the Project Fiche is approved, the remaining members of the Project
Management Team are appointed.
Phase 2: Project Planning. This phase includes the planning of all the elements/
parameters of the project so to be ready for implementation. In this perspective, the
 following plans must be developed: Activities Schedule (definition of activities and tasks
sequence, time scheduling), Risk Plan (highlighting of possible risks and actions to mitigate
them), Resource Plan (determination of the labor, equipment, material needed in each
task/stage), Cost Plan (identification of the internal and external costs and their occurrence
in time), Quality Plan (setting of quality targets for the project deliverables and definition of
processes for quality assurance and control), Issue Management Plan (definition of process
for identifying, assessing and resolving issues related to the project), Change Management
Plan (definition of process for managing requests for changes that have a direct impact on
the project), Acceptance Plan (setting of acceptance criteria for the project deliverables and
definition of the processes for executing the acceptance tests), Communication Plan
(definition of information to be distributed to the stakeholders and selection of the
appropriate distribution methods). In addition, it is a common practice during this Phase to
define the Performance Indicators to be used in a later stage for monitoring the project
implementation progress and evaluating the projects performance against predefined
objectives and targets.
Phase 3: Project Execution & Control. This phase involves the execution of each activity
and task defined at the Project Schedule. During the implementation of the activities and
tasks a series of management processes are undertaken to monitor and control: time,
resources, cost, risks, quality, issues, changes, deliverables acceptance procedure,
communication, etc.
The Implementing Agency is fully responsible for the achievement of all project outcomes.
However, in case that an Implementing Agency decides to subcontract the execution of
parts or of the whole project, it assumes the function of and the responsibilities for
monitoring and controlling the contractors.
Phase 4: Project Closure. This phase includes all activities and tasks that ensure that the
project is completely finished and the contract is properly closed. It also includes the
evaluation of the processes used in the project and of the outcomes achieved.

These phases are sequential and can be broken down into smaller and more manageable
activities. In this Chapter we focus on Phase 1: Project Initiation. During this phase three
stages can be distinguished:
Inception and Prioritising Stage: This is the stage where the needs are identified and
1. addressed and where the project idea is formulated.
Design Stage: This is the intellectual process to develop the project starting from the first
idea; the result is a comprehensive description of the project that is technically approved by
2. the project owner.
Project Approval and Appointment of Project Management Team Stage : This is the final
stage where the project is officially approved, the necessary funds are allocated and the
Project Management Team (apart from the Executive and the Project Manager who have
3. been appointed in the Design Stage) is appointed.
Figure 1-4: The three stages of Project Initiation

The specific steps/ activities involved in each one of the above stages, as well as the order in
which they are undertaken are presented in the following flowchart (Figure 1-5). Analytical
description and guidance on how to perform each of these steps/ activities, is given in the
following subchapters (1.4 1.6).

It is noted that the activities, tools and techniques involved in each of the other phases of
the Project Life Cycle are described in Chapter 7 of this Guide.

Figure 1-5: Flowchart of steps/ activities that take place in the three stages of Project Initiation