Agenda Project Management Overview Selecting Projects The Aggregate Project Plan

Agenda

Project Management Overview Selecting Projects The Aggregate Project Plan

What Is a Project? A project is “a temporary endeavor

undertaken to create a unique product, service, or result.”*

Operations is work done to sustain the business.

A project ends when its objectives have been reached, or the project has been terminated.

Projects can be large or small and take a short or long time to complete.

*PMI, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (2004), p. 5.

Project Attributes?

Temporary, with unique purpose Goal-directed Collaborative Resources constrained Endeavor Uncertainty

PM Development Goals

According to specification (Scope) Schedule (Time) Within Budget (Cost)

Figure 1-1. The Triple Constraint of Project Management

What is Project Management?

“Project management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.” *

*Project Management Institute, PMBOK 2000

What is Project Management?

Application of Knowledge/Skills/ and Tools/Techniques to Project Activities

Meet/Exceed Expectations

Figure 1-2. Project Management Framework

Project Management Tools and Techniques

Project management tools and techniques assist project managers and their teams in various aspects of project management.

Specific tools and techniques include: Project charters, scope statements, and WBS

(scope). Gantt charts, network diagrams, critical path

analyses, critical chain scheduling (time). Cost estimates and earned value management

(cost). See Table 1-1 in the course book for other

examples.

PM Job Description

5 points Assignment Compare the job description for PM in 3

different industries Example: IT, Finance (banks etc),

Consulting

What is similar What is different

Role of the Project Manager

Leadership and Guidance Planning Customer Relations Technical Leadership Senior Management Liaison

Project Life Cycle

Initiating Processes Planning Processes Executing/Implementation Processes Controlling Processes Closing Processes

Planning Processes

Scope Estimating

Schedule Cost

Staffing Quality Communication

Executing Processes

Plan Execution Quality Assurance Team Development

Controlling Processes

Change Control Scope Project

Quality Control Performance Reporting

Closing Processes

Contract Close Administrative Close

Why do projects still fail

Dependencies are missed Requirements change Things take longer Technology fails to live up to

expectations People leave

PM and Risk

“An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.” *

*Project Management Institute, PMBOK 2000

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Selecting Projects

Factors Is the project potentially profitable.

What is the return on investment Does the firm has the skill and

knowledge to complete the project successfully.

Is it in line with the organization strategy Can it be completed within the time limit

Selecting Projects

Selection Methods Nonnumeric Numeric

Selecting Projects

Nonnumeric Top down or “Scared cow” The Operating/Competitive Necessity

Selecting Projects

Numerical Selection Financial Assessment Method

Payback period, average annual rate of return, etc. Payback period Calculation

Project cost = 100,000 Net cash inflow per year = 25,000 Payback period = 4 years

Selecting Projects Numerical Selection

Financial Assessment Method Discounted Cash Flow

Considers the time value of money, the inflation rate, and the firm’s return-on-investment hurdle rate for projects.

NPV (Net Present Value) = Io + ∑Ft∕(1 + k)t for t=1..n Io= The initial investment, which will be –ve Ft = The net cash flow in period, t k = the required rate of return or hurdle rate 100,000 + 25,0001 / (1+ .10)1

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Agenda


Aggregate Project Plan

Project Portfolio IT projects are usually part of a major

program that an organization wishes to accomplish.

Projects set management Derivative projects Breakthrough projects Platform projects R & D projects


Minor Processchange

Extensive Processchange

Minor Processchange

Extensive ProcesschangeR & D

ProjectsBreakthrough

projects

Platform Projects

Derivativeprojects


Usefulness1. Identification of gaps in types of projects

being undertaken in the organization2. Facilitates evolutions of the resources

commitments of the ongoing or proposed projects

3. Model for employee development

Agenda


Documents

Agenda Project Management Overview Selecting Projects The Aggregate Project Plan