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ContentsDeliberately blank page..............................................................................................................1

Contents........................................................................................................................................... 2

DPM Observer’s Checklist........................................................................................................12

Exercise: Sky Tower Lego Project.........................................................................................14

Exercise: CDEF Framework.....................................................................................................15

Exercise Four: Sky Tower Financial Assessment.............................................................16

Exercise Four: Sky Tower Observer's Checklist...............................................................17

PM’s Sources of Authority........................................................................................................19

Typical Project Concept Checklist........................................................................................20

Selection Criteria........................................................................................................................ 22

Project Definition Exercise..................................................................................................... 23

Cost Benefit Analysis (NZ Treasury)....................................................................................24

Some Types of Benefits.............................................................................................................26

Project Force Field Analysis................................................................................................... 27

Cost Benefit Analysis (CBA).................................................................................................... 28

Net Present Value (NPV).......................................................................................................... 30

NPV Discount Rates................................................................................................................... 31

Net Present Value Exercise..................................................................................................... 32

CBA Discounted Cash Flow Exercise....................................................................................33

Example Project Selection Template...................................................................................34

Project Selection Exercise....................................................................................................... 35

CBA Discounted Cash Flow Exercise Solution...................................................................36

Cost Benefit Analysis Solution............................................................................................... 37

Project financial evaluation....................................................................................................38

Example Project Business Case Format..............................................................................46

Stakeholder Management Process.......................................................................................49

Classifying Stakeholders..........................................................................................................50

Stakeholder Analysis Exercise...............................................................................................51

User Requirements Exercise.................................................................................................. 52

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Survey of Requirements – Example Tool............................................................................53

Statistical Sample Size for +/- 5% Accuracy......................................................................57

Performance Management Survey.......................................................................................58

Stakeholder Consultation Role Play Exercise...................................................................65

Wish List........................................................................................................................................ 66

Solution – NPV Exercise............................................................................................................68

DPM Assignment One: Project Charter..............................................................................69

Example Project Charter..........................................................................................................73

Project Conception: Quiz.........................................................................................................80

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Jim Young - Profile

Jim Young FNZIM is a Project Management Professional (PMP) and Prince2 Practitioner who holds a MBA in International Management and a Doctoral degree in Business Administration. After attending Duntroon Military College in Australia, Jim served as a career officer in the NZ Army. His last military appointments were Director of Transport, Movements and Catering, Commanding Officer NZ Force Maintenance Group (engineering and logistic units) and Commanding Officer Linton Military Camp. He then managed a commercial transport organisation, after which he joined NZIM, becoming their Principal Consultant before establishing his own consultancy SkillPower Ltd that specialises in project management.

Jim has managed a wide variety of projects ranging from the design and construction of a multi-fuel pipeline in Wales to the logistic support for the South Pacific Games and South Pacific Forum in Rarotonga. He has written several papers and three textbooks, the latest of which is “Managing Murphy” about project risk management. He has developed a number of project management handbooks and standards for organisations. He is familiar with most project management methodologies including the PMI PMBOK and UK Prince2 and keeps up to date with developments in this profession.

Jim has delivered project management training for 26 years to over 500 organisations locally and overseas. He has personally developed and regularly presents the following project management training programmes tailored to meet specific in-company needs:

NZIM Diploma in Project Management (Level 5 NZQA qualification) Project Management (one, two or three days) Project Risk Management (one day) Project Sponsorship (one day) Project Stakeholder Management (one day) Project Procurement and Contract Management (one day)

[email protected]

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Jim’s DipPM Blog Items

These papers on project management topics, mostly in answer to questions from DipPM participants, are at http://www.skillpower.co.nz/category/blog/

Marvellous PMP exam Preparation Book Progress reporting – a query PMBOK standard deviation formula is most often wrong Project network diagrams More on stakeholder management TTT training session Project requirements Product and project scope Research projects The upside of quitting a project Project cost overruns!! Project Meetings Multi-project management Stakeholder Management Project Team Retrospective and Continuous Improvement Project Management Terminology Project Feasibility Study Projects and Change Management Project Issue Management NZIM Diploma in Project Management Assignments Project Team Personality Types Quiz Project Success and Failure Inherent Risk Project Management Knowledge Areas and starting the Planning Process Retentions Project Charter Project Evaluation Reports and Lessons Learned Measuring Progress and Predicting Outcomes Free Book Getting Back On Project Budget The “Hardscape” Home Project Project Complexity Project Management Methodologies Project Alliancing Overcoming schedule slippage Project execution Project trade-off analysis The shopping project – contingency time The bulb-sucking project Getting personal with productivity Project probabilities

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http://www.skillpower.co.nz/category/blog/

Project problem solving 101 Resource-constrained scheduling Project value management Project management processes Project management templates Project management methodology Keeping our projects on track Negotiation for Project Managers Project Business Case Project Financial Evaluation Wellington’s Big Projects Stalled! Training with TTT Estimating Video – Introduction to Project Management The Valley of Death A Cardboard Cathedral for Christchurch Benefits-Led Change Initiatives Getting More for Less NZIM Diploma in Project Management “Do you feel lucky? Well, do ya, punk?” Managing Project Risk Book-in-progress: Project Stakeholder ManagementBook-in-progress:

Princess

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DPM Assignments

As an NZIM Diploma in Project Management (DPM) student, during the programme you are required to submit the following four assignments based on an actual project or projects that you undertake outside the periods of classroom tuition:

Assignment One. To prepare a Project Charter, which is a written contract that sets out the project purpose, goal, parameters and other factors that once approved authorises the project manager to plan for the project execution in detail. Preferably to be submitted at the start of Module Two.

Assignment Two. To prepare a Project Plan that details how the project is to be undertaken, showing responsibilities, budgets, schedules, risk management measures and other information needed to ensure the effective and efficient implementation of the project. Preferably to be submitted at the start of Module Three.

Assignment Three. To maintain a dossier of project execution documentation, which includes progress reports, registers for changes, accidents, risks and issues, minutes of meetings, relevant email traffic etc. To be submitted before or together with Assignment Four.

Assignment Four. To prepare a comprehensive Project Report that objectively assesses project performance, documents lessons’ learned, and makes recommendations as appropriate.

Students often ask how long these assignment documents need be. There is no definitive length, other than the assignments need to be of sufficient length to properly achieve their purpose. However, conciseness is appreciated, but not at the expense of clarity or completeness. Excluding cover, contents, amendment record pages and any attachments, a Project Charter might achieve its purpose in no more than say six pages A4 with size 12 font), a Project Plan about 20 pages, the record of project execution material could be contained in a medium size ring-binder folder, and a Post-project Report would not usually exceed 10 pages.

To fulfil the Assignment Three requirement, copies of relevant documentation are best accumulated chronologically in a physical or electronic folder as the project proceeds.

For these assignments, if you are in doubt, it is usually better to include more material than not enough, and for assignment purposes do not refer to documents unless they are attached.

All assignments may be submitted to IMNZ electronically or as hard copies.

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Selecting a Project

Your project is usually work-based, but alternatively may be a personal endeavour or perhaps a community undertaking and ideally meet two important criteria:

1. Be of sufficient size and complexity to realistically practise you in the application of the various tools and techniques that you will be familiarised with during classroom tuition.

2. Be of a duration and schedule that, as far as practicable, conforms to the dates of the DPM programme, such that given the relevant tuition, you can then apply this knowledge immediately to your chosen project and submit the associated assignments in a timely fashion.

It is appreciated that in some instances it may be difficult for you to fully meet this second requirement, and in which case you may need to use only a portion, phase or stage of your selected project for assignment purposes and/or may need to use more than one project – possibly even a different project for all four assignments to ensure their timely submission. And should your project be of duration well beyond the span of the course, an interim project evaluation report that assesses progress and performance to-date will meet the Assignment Four requirement.

If you have concerns about the suitability of your selected project for DPM assignment purposes, please discuss the issue with the trainer. Invariably a satisfactory solution can be agreed.

Assignment Templates

The templates for Assignments One, Two and Four are contained in the course textbook “The Framework” at appendices Three, Eight and Eleven respectively. However, Assignment Three, which is a dossier of project execution documentation, does not lend itself to a template so much as a checklist of possible items as given below.

The templates contained in “The Framework” describe the typical content that we expect students’ assignments to include. However, we appreciate that every project has differences and on occasions some headings given in the templates may not be applicable for your project, and sometimes, additional headings and subject matter may also need to be included. Thus, the templates are guides only for the preparation of assignments and need not be followed slavishly. Nevertheless, it is not appropriate for these assignments that you simply use the format that you typically use in your place of work. Experience has shown that such formats are not usually sufficiently comprehensive or even best practice. If in doubt about this requirement please contact the trainer for clarification.

Assignment Three is a logically assembled record with appropriate cover and content’s page that may include any or all of the following types of documentation to demonstrate that you maintained appropriate records and properly managed issues

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and other realities of project execution. Possible items for inclusion are reviews and audit reports, status and progress reports, risk register, issues register, change register, accident register, lessons learned register, meeting agendas, meeting minutes, email correspondence, stakeholder communications register, requests for changes, newsletters, project diary, contracts, press releases, internal memos, website releases and presentation material.

For this third assignment, evidence of anything that you may have done as the project manager during the implementation of your project would be appropriate. Such activities may include – allocating work, analysing reports, approving payments, arranging reviews and audits, arranging contracts, assesses team members’ performance and holding performance reviews, building relationships, celebrating successes, checking and approving time sheets, assigning and clarifying roles and responsibilities, coaching, counselling and mentoring, communicating with stakeholders, coordinating resources, delegating work packages, escalating issues, establishing targets, evaluating tenders, forecasting expenditure, holding meetings, identifying and resolving new risks, implementing change, maintaining a project journal/diary, leading the project team, listening to stakeholders, maintaining project control, maintaining project registers and files, making decisions, managing conflict, managing issues, monitoring variance, negotiating for resources, practising politics, preparing task briefs, preparing updates for newsletters, procuring resources, producing deliverables, providing advise, providing praise, re-estimating time, cost and resource needs, re-negotiating resources and constraints, reporting progress, rewarding achievements, scheduling and rescheduling work, sharing lessons learned, smoothing and leveling resources, solving problems, tracking project performance, and visiting sites and stakeholders.

Student Presentations

In addition to these four assignments, during the last module, DPM students are required to give a presentation of about 15 minutes duration (excluding subsequent questions and discussion) on their chosen project. The purpose of this exercise is twofold:

1. To practise participants’ presentation skills, given that project managers may need to make such presentations during the life of their project.

2. To share participants’ experiences, knowledge, lessons and learning about project management planning and implementation realities.

Your presentation should cover the following topics:

1. Why the project was undertaken.

2. A summary plan to accomplish the project goal.

3. Progress to date, including significant issues, variances and variations.

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4. An evaluation of the project (if it is completed) or an interim evaluationIn practice, participants may extract relevant information from their assignment work, supplemented where appropriate with graphics. Where possible photographs in particular bring these presentations alive.

Assignment Writing

The Project Management Institute (PMI) and other recognised project management authorities identify effective communication – both written and verbal – as the top credential for effective project managers and the most critical factor for project success.

While the written assignments are assessed primarily for specialised project management content, we also need to ensure such content is readily understandable – preferable so in one read only. On some previous occasions students’ assignments have been unclear, incomplete and verbose.

To help ensure quality assignments, included below are some basic reminders to help you achieve this objective. Also, you will appreciate that during the course of any project we need to prepare both formal and informal written communications. The advantages of writing include a permanent record for us and the receiver, and an opportunity to edit and proofread before we transmit our message. We also have the software to include project pictorials of various types, particularly technical drawings, photographs, network diagrams, flow charts, Gantt charts and other pictorials all of which should be designed for easy comprehension.

Our informal written communications during a project consist primarily of text messages and email traffic, whereas formal written communications are mostly about the preparation and transmission of documents such as project business cases, questionnaires, charters, estimates, communication plans, project implementation plans, contracts, project progress and status reports, requests for variations, meeting agendas and minutes, and post-project reports. We also need to maintain various logs (such as those for variations, risks, issues, accidents and lessons learned). And most of these base versions need to be updated during the life of our project as realities unfold. There are a variety of default templates that help us prepare these documents, but remember they may need to be tailored to better meet our specific needs. For example, we need to assure ourselves that the status reports that we receive from our team members provide us with the information we need and in a timely fashion to properly navigate our project. The default solution may not achieve this objective.

The top two principles for effective written communications are clarity and brevity, and in that order, since it is pointless being so brief that our message is unclear. To achieve clarity, such that our writing is understood and not misunderstood by our recipient we should avoid false generalisations, exaggerations, obscure or trendy words, ambiguous expressions, double negatives, jargon and unfamiliar technical language, gobbledygook, legalese, clichés or out-of-date language, slang, colloquialisms, little known abbreviations and acronyms, euphemisms, politically

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correct language, redundancies, and very small and intricate styles of type. And if giving examples, we should generally favour the familiar over obscure, specific over general, factual over emotional, simple over complex, recent over previous, and positive over negative.

Some reminders to help with the clarity of our writing are to use reader-friendly visuals (diagrams, tables, graphs and photos), present material in logical order, include a glossary, use simple familiar short words, keep sentences and paragraphs mostly short, use adjectives and adverbs sparingly, avoid errors in grammar, punctuation, syntax and spelling, avoid foreign words and expressions, use plain verbs rather than fancy abstract nouns, use headings freely, use white space, use easily read fonts, and use capital letters sparingly.

The most important strategy to achieve a desirably concise style of writing is to be strictly relevant in terms of our purpose for writing. Anything we write that does not help achieve this purpose is irrelevant. In fact, for more complicated writing tasks we might write down the purpose, display it, research and write to achieve it, and eventually evaluate our writing success in terms of it – did we achieve our purpose? Other ideas to achieve brevity are to avoid redundancies, wordiness, meaningless qualifiers, and unnecessary explanations and background information.

On project completion, a report is often required and if our reports include recommendations, it is useful to word such recommendations as specific goals. For example, a vague recommendation such as “The procedure for recording variations should be updated in due course” will most likely ensure that nothing is done. However, a more action-oriented and specific version might read “The project sponsor is to update and publish the procedure for recording variations by 1 June”, which may indeed spawn another small project.

Some ideas to further improve our written submissions are – don’t avoid writing opportunities, seek honest feedback about our writing efforts, understand that a first draft is always a basis for improvement, keep the reader and purpose in mind, and allow time to elapse between writing and revising.

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DPM Observer’s Checklist

Participants’ assignments need to show evidence of these outcomes, some of which are implicit (ie, “understanding evidenced by successfully completing an

overarching task”).

Participant’s Name:_________________________Course:_________

1.1 Understand essential terminology, principles, characteristics and challenges of project management.

1.2 Understand linkage between strategic planning and project selection.

1.3 Recognise influence of organisation and culture on project management.

1.4 Recognise need or opportunity for a project.

1.5 Undertake a concept check to verify project viability.

1.6 Scope a project, and define and prioritise its parameters.

1.7 Consult with client(s) and other stakeholders about their project needs and concerns.

1.8 Establish feasibility and acceptability of a proposed project.

1. Prepare a project proposal

2.1 Prepare a Work Breakdown Structure or task list

2.2.Estimate project task resource needs, duration and cost

2.3 Identify requirements for resource procurement, work outsourced and delegation

2.4 Lead and develop a project team

2.5 Check resource availability, level resource use, conduct a trade-off analysis and prepare a resource schedule

2.6 Pre-empt potential project problems and prepare a risk management plan

2.7 Prepare a network diagram and a Gantt chart

2.8 Develop a budget and cash flow projection

2.9 Communicate with stakeholders

2. Prepare a project plan

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3.1 Establish a project team office

3.2 Negotiate provision of project resources

3.3 Evaluate a proposal/tender and arrange a supply contract for provision of resource(s) and completion of task(s)

3.4 Delegate project tasks or work packages

3.5 Lead and develop a project implementation team

3.6 Motivate team members and obtain their commitment

3.7 Manage a project to meet organisation and contractual obligations

3.8 Communicate with stakeholders

3.9 Manage quality to achieve project performance targets

3.10 Control project progress and take corrective action where appropriate to keep project on track

3.11 Apply earned value analysis and maintain performance records

3.12 Identify and manage implementation risk and issues

3.13 Manage variance, variations and conflicts

3.14 Facilitate an external review

3.15 Produce the final deliverable

3. Maintain project files

4.1 Manage a project to closedown, people, materials and ongoing support

4.2 Recognise and put right defects and attain client signoff

4.3 Assess stakeholder satisfaction

4.4 Assess project performance

4.5 Evaluate project processes

4.6 Evaluate personal, team, individual, project collective team performance

4.7 Identify and record lessons learned

4.8 Assess to the extent the business benefits have been achieved

4. Prepare a project report

Verification by Observer: __________________ Date:_______

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Exercise: Sky Tower Lego Project

Your firm, Ogel Company Limited, has secured a contract to construct a self-supporting model tower with not more than 95 bricks. There are more than 95 bricks in each box.

Your project goal is to build the model given the following objectives/constraints:

1. At maximum possible profit. A price of $3,000 has already been agreed with the project client. Each brick used will cost you $10.

2. As high as possible, but at least 20cm. The client has offered you a bonus of $100 for every centimetre of tower height over 20cm.

3. Within 60 minutes. Each minute from the start of the exercise until you take the bricks from the container will cost you $20. Each minute from when you take out the bricks will cost you $60. Minimum planning time is 15 minutes. There will be some minor changes at the 15 minutes milestone – that’s reality!

4. The finished tower must withstand at least 14 degrees tilt in all directions without collapsing.

5. Blue bricks, if used, may only be used at the base of the tower (ie, first two layers of bricks). Only bricks may be used.

6. The project leader is responsible for achieving the goal. The leader is to employ team members as appropriate, but is not to touch the bricks.

The purpose of this exercise is to practise you working as a small project team to optimise the cost, time and quality objectives for a project. You must meet the material, height, colour, time and stability needs, yet make maximum profit (the success criterion). Don't dismantle your tower until after the exercise critique.

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Exercise: CDEF Framework

STEPS CLUES

Define Possible Project Sufficiently defined to then check feasibility.

Identify Work First step in Develop phase.

Pre-empt Problems What might go wrong? Check the draft plan for potential problems.

Sequence Work Decide logical order in which work elements will be undertaken.

Monitor Progress Identify variance, which is the difference between planned and actual performance.

Review Benefits Last item. Obtain user feedback. Are business case benefits being achieved?

Produce Final Deliverable(s)

Last step in Execute phase.

Close Project Obtain sign-off for deliverable(s) before this.

Prepare Charter Proposal or Terms of Reference

Check Concept Is it a good idea? Only define worthwhile ideas.

Analyse Work Once identified, work elements need to be analysed for their duration and cost.

Finalise Project Plan The plan needs to be approved before the Execute phase starts.

Prepare Draft Plan Once drafted the plan needs to be subjected to stakeholder scrutiny for potential problems.

Evaluate Project How did the project go?

Obtain Sign-0ff First step to closing the project.

Assign Work Formally delegate or contract out the work.

Schedule Work Shows what work elements will be done when and by whom. Gantt chart often used.

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Exercise Four: Sky Tower Financial AssessmentTime Cost

Project Phase Start Time

Finish Time

Minutes Rate Cost

Planning $20 $

Construction $60 $

Total $

Material Cost

Brick Colour Unit Cost Number Used Cost

Blue $30 $

Red $25 $

White $20 $

Black $15 $

Yellow $10 $

Total $

Bonus and Profit

Tower Height - Minimum x $100 = Bonus

................. cm - 20cm x $100 = $ ...............

$3000 + Bonus - Time Cost - Material Cost = Profit

$3000 + ........... - $ .............. - $ .............. = $ ..............

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Exercise Four: Sky Tower Observer's Checklist

QUESTIONS NOTES

Was the exercise brief understood? Was this understanding checked or was it assumed?

Were useful ideas encouraged, contributed and used?

Were options considered for:

base design? tower design?

Did people listen effectively to each other?

Did people co-operate well?

Were any differences and other issues satisfactorily discussed and resolved?

Was the leadership change disruptive?

What sort of style did the leaders adopt:

autocratic (tells them)? consultative (asks first)? participative (works together)? benevolent (free rein)?

First Leader:

Second Leader:

Was there an unofficial or defacto leader?

Were prototypes trialled for:

base design? tower design?

Were potential problems (ie, risks) identified:

in advance? as reality unfolded?

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QUESTIONS NOTES

Were design changes properly managed?

1. Were appropriate risk response measures employed?

Were tasks:

allocated?

adhered to?

Were objectives/constraints periodically checked:

total brick numbers?

expensive bricks avoided?

tilt test?

time management?

blue bricks in base only?

height?

Were design reservations periodically invited and explored?

Was the completed tower evaluated for further value-added improvements before finally declaring the project finished?

Identify one thing that the team might do differently next time in order to increase their profit:

product (design)?

people (behaviour)?

process (method)?

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PM’s Sources of Authority

Project managers do not necessary have organisation positional authority and on some projects they may be required to manage some team members who hold more senior positions in the same organisation. Here are some possible sources of power or influence.

Power Type Definition Example

RewardInducement (proverbial carrot)

“If you work overtime, we’ll give you a bonus.”

CoercivePunishment (proverbial stick)

“If you don’t work overtime, you will not be able to take Saturday off.”

ExpertUse of skills and knowledge

“We need more time to install these PCs. My records show this is how long it takes.”

ReferentReliance on higher source (quoting and name-dropping)

“I’m not happy about this either, but the sponsor says it needs to be done by this date.“

Personal or leadership

Standing up for beliefs, along with interpersonal skills and charisma to inspire/motivate.

“I’ll go with you to talk to the sponsor. I’m sure we can get her to approve more resources.”

Positional

Power that comes from one’s position in the organization — what we mean by “authority.”

“For better or worse, I’m the sponsor and this is the budget I’ve approved.”

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Typical Project Concept Checklist

Ideas for projects should be encouraged and such ideas aren’t necessarily top-down in origin. A checklist such as shown here is a useful tool to quickly identify suitable ideas and cull the duds. No pointing in pursuing suggestions for projects that are clearly unsuitable and fail to meet initial acceptance criteria.

Prepared By:

Date:

Version Number:

Project idea or request is: ____________________________________________

Acceptance Criteria Response Remarks

1. Is the project idea or request in harmony with our organisations:

• Our business purpose / mission?

• Our principles and values?

• Our strategic goals?

• Our existing programmes and projects?

• Our existing policies and protocols?

Circle appropriate response:

Yes / No / Unsure

Yes / No / Unsure

Yes / No / Unsure

Yes / No / Unsure

Yes / No / Unsure

2. Is it a sustainable development? Yes / No / Unsure

3. Is the risk of proceeding likely to be worth the investment?

Yes / No / Unsure

4. Is the project idea likely to be technically feasible?

Yes / No / Unsure

5. Are sufficient resources (people, equipment and materials) likely to be available?

Yes / No / Unsure

6. Are the benefits of implementation likely to exceed project costs? Will the project add value?

Yes / No / Unsure

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7. Is there likely to be sufficient support and demand to proceed?

Yes / No / Unsure

8. Is implementation likely to enhance our public image?

Yes / No / Unsure

Comments:

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Selection Criteria

A project should not be approved unless it promises to contribute to the realisation of the organisation’s vision (ideally a clear and compelling picture of the future, often expressed in present tense – “We are…rather than “We aim to be…). Also, a proposed project should be consistent with the organisation’s purpose or mission (rationale for existing) and not compromise the organisation’s core values or principles.

Example Vision“To contribute as a leading organisation with a strategic focus on Māori workforce training, education and capability-building solutions for the advancement of indigenous wellness.”

Example Mission Statement “We provide a strategic focus for workforce development solutions and advancement of indigenous wellness. We aim to improve the quality, utility and relevance of workforce development and training programmes, strengthen Māori health leadership development and, in doing so, strengthen the responsiveness of services for Māori.”

Example Core Values

Mahi tahi Cooperation

Kia pūmau ki te kaupapa Integrity

Whakapakari i te kaupapa Courage

Ēhara taku toa i te toa takitahi, Leadership

ēngari he toa takimano Caring

Manaaki tangata Honesty

Kia pono te kupu Trustworthiness

Kia tika te mahi Talking face to face

Hē kanohi kitea hē ringa i tū Respect

Whakamana i te tangata Humility

Ngākau whakaiti Professionalism

Whāia te iti kahurangi Unity

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Project Definition Exercise

Purpose To practise you in the preparation of a project definition statement, which is the high-level initial description a proposed project.

TaskSelect a medium-size project perhaps from those listed at pages 37-38 (textbook) and work in small groups to prepare the appropriate project definition statement. Write it up on the whiteboard or on flipchart paper. Allow about 30 – 40 minutes to do this and then we’ll hear and critique your solutions.

ApproachUse the headings at page 109. See also the example at Figure 5.3. In addition, identify the project driver – the most important parameter (scope, time, cost, quality). There might also be some ‘constraints’ that should be included in the definition.

Constraints are usually imposed limitations, over which the project manager will have no control. These will be constraints other than the normal project parameters or objectives, and might include items such as client-specified milestones, company policies, procedures, resource availability, other projects, and the need for business-as-usual to continue without disruption.

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Cost Benefit Analysis (NZ Treasury)

Cost Benefit Analysis (CBA) is a decision making tool that aims to assess the value of a proposed project or competing project proposals. This assessment is done by quantifying all costs and benefits in monetary terms, and then discounting them to present day values using Net Present Value (NPV). If benefits exceed costs the project is usually worth proceeding with. A CBA requires a series of steps:

1. Confirm the desired outcomes of the proposed project.

2. Establish the assumptions and scope underlying the analysis.

3. Decide an appropriate period for the analysis, which may be several years.

4. Identify all significant benefits and costs (Force Field Analysis).

5. Assign monetary values to the benefits and costs, wherever possible.

6. Discount the benefits and costs to present day values (NPV).

7. Consider the effect of risk on costs and benefits.

8. Consider the effect of any intangible costs and benefits that could not be reliably assigned monetary values.

9. Compare benefits and risks to determine the net benefit (value = benefits – costs).

Ideally CBA will demonstrate that the expected benefits of a proposed project exceed the expected costs (that there is a net benefit). If the net benefit is greater than zero then the proposed project may be worth pursuing from a financial perspective, but there may also be other non-financial factors to consider in the project selection process.

As a general rule, the period of analysis should extend to the useful life of the deliverable. However, for some policy projects it is not possible to identify a finite life. In such cases, the recommended approach is to use an analysis period of 10 years, because impacts beyond 10 years tend to be insignificant after the time value of money (Net Present Value) is applied.

Costs and benefits are discounted using Net Present Value (NPV) calculations. An intuitive justification for such discounting is that most people would prefer receiving a dollar today rather than receiving a dollar in a year’s time. This is referred to as the time value of money. A second justification for discounting, and the one that is used in practice to derive the discount rate, is that when a person assesses a project, they will require a return at least as high as they can obtain from any other investment of equal risk. Treasury has recently reviewed the NPV discount rate to

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be used in cost benefit analysis and suggests a default rate of 8%. Sometimes this rate would be increased to allow for project uncertainty.

Intangible costs and benefits are not easily quantifiable in monetary terms. The recommended approach is to capture all identifiable costs and benefits if there is a reasonable basis to include them, but some intangibles can only be quantified in non-monetary terms (for example, one of the benefits from an e-Government initiative might be “time saved” by paying court fines online).

Google “Cost Benefit Analysis NZ Treasury” for a detailed booklet on the topic.

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Some Types of Benefits

Type of Benefit Definition Example

Employee Value Add

Helps the employee do their job or increases their job satisfaction.

Improvement in job satisfaction score due to their increased eligibility for training opportunities.

Customer Value Add

A measure of customer satisfaction or willingness of the customer to tell others about your organisation (in a positive manner).

What is the likelihood of return business or of a customer recommending you to another person?

Cost Reduction A direct reduction in cost of buying a product or a service.

Replacing a printer that has a $5K a month lease with one that has a $3K a month lease.

Supply Chain Improvement

This is where the realisation of the benefit includes both your organisation and another organisation.

Establishing electronic invoicing and payment with a supplier and thus increasing the overall quality of product delivery.

Revenue Increase A change that increases revenue for a product or service.

By introducing an electronic ordering interface we increase in total orders.

Business Efficiency

Changing the people, the process, or the technology to reduce the unit cost of providing a product or service.

Outsourcing the validation of customer credit when the process used to be done in house.

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Project Force Field Analysis

A Force-Field Analysis (FFA) is a useful prelude to a more comprehensive Cost Benefit Analysis (CBA). We first identify and then analyse (but not dollarise) the main positives and negatives of proceeding with a prospective project.

Select a possible project such as moving the organisation to Auckland, or building a swimming pool, sports stadium, playground upgrade etc, and then analyse the proposition using this tool. Reproduce the template on a flipchart page or whiteboard and complete an objective and balanced assessment.

Possible Project:____________________________________________

FORCES FOR FORCES AGAINST

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

6. 6.

7. 7.

8. 8.

9. 9.

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Cost Benefit Analysis (CBA)

In this exercise, your team is working 1400 hours of overtime pa at $50 per hour. Your CEO considers the value of recruiting a sixth team member in order to eliminate this expensive overtime. You decide to check the financial viability of this proposal by forecasting benefits and costs five years into the future. You estimate it will cost $8,000 to recruit the new team member who will be paid $58,000 pa. The cost to setup the new office space will also be $8,000. The rental will be $200 per square metre pa for the extra 10 square metres required. There will also be an extra supervisory cost of $6,000 pa. Based on these figures, you are to determine:

benefit/cost ratio after five years

approximate time in months to the financial breakeven point (BEP)

return on investment (%) after five years (see formula below).

Year Benefits(savings / returns)

Costs(investment / expenses)

AnnualBalance(b-c)

RunningBalance

(a) (b) (c) (d) (e)

One

1400 x $50

= $70,000

Year One expenses:

Two

$70,000

Year Two Expenses:

Three $70,000

Four $70,000

Five $70,000

Totals $350,000

29

Document your key assumptions and identify any additional benefits and costs (quantitative and qualitative) that might also be considered.

ROI =(Net Return - Investment) x 100

Investment

30

Net Present Value (NPV)

NPV recognises the time value of money. Present Value is today’s value of an amount of money in the future. Because of the time value of money, a dollar earned in the future won’t be worth as much as one earned today. The discount rate in the NPV formula is a way to account for this. Organisations have different ways of determining the discount rate, although a common method is to use the expected return of other investment choices with a similar level of risk. In this example the discount rate is 10 percent and the investor wishes to be assured that the project will breakeven before Year Five.

31

Year Cashflow x Discount Factor

= Present Value

0

1

2

3

($100k)

$20k

$60k

$60k

1.000

0.

0.

0.

($100k)

NPV =

NPV Discount Rates

Year 8% 9% 10 % 11% 12%

1 .9259 .9174 .9091 .9009 .8929

2 .8573 .8417 .8264 .8116 .7972

3 .7938 .7722 .7513 .7312 .7118

4 .7350 .7084 .6830 .6587 .6355

5 .6806 .6499 .6209 .5935 .5674

6 .6302 .5963 .5645 .5346 .5066

7 .5835 .5470 .5132 .4817 .4523

8 .5403 .5019 .4665 .4339 .4039

9 .5002 .4604 .4241 .3909 .3606

10 .4632 .4224 .3855 .3522 .3220

11 .4289 .3875 .3505 .3173 .2875

12 .3971 .3555 .3186 .2858 .2567

13 .3677 .3262 .2897 .2575 .2292

14 .3405 .2992 .2633 .2320 .2046

15 .3152 .2745 .2394 .2090 .1827

For a more comprehensive table that shows a wider range of discount rates over a longer period see textbook Figure 5.13 page 128. The rationale for discounting future cash flows is that money received in the future is worth less than money received today. Why? Because you can use money to make more money! It’s about the time value of money. The discount rate is the return we expect from an investment of similar risk.

32

Net Present Value Exercise

Here’s another example. A construction project and product life is expected to be about 10 years, with an estimated product salvage value of $35,000 in year 11. The estimated cashflows over the period are shown below. Using a risk-averse discount rate of 12 percent, will the project have a positive net present value? Round off figures to nearest $1000. In the first three years net cashflows will all be negative.

Year Estimated Cashflows ($K) DiscountFactor

NetPresentValuePositive Negative Net

0

1

2

3

4

5

6

7

8

9

10

11

0

0

0

50

120

115

105

97

90

82

65

35

125

100

90

0

15

0

15

0

15

0

0

0

-125 1.000 -125

Totals

And, in what year do you estimate that this investment would break even? While there are also non-financial criteria, we would accept a project only if its NPV is positive or zero. We would reject a project with negative NPV. While comparing exclusive projects both with positive NPVs, we would usually accept the one with highest NPV.

33

CBA Discounted Cash Flow Exercise

Item Year 0 Year 1 Year 2 Year 3 Year 4

Benefits 0.00 13,000.00 70,000.00 71,000.00 81,000.00

Costs 2,500.00 15,850.00 64,620.00 27,400.00 24,250.00

Net -2,500.00 -2,850.00

Cumulative -2,500.00 -5,350.00

Discount Factor 8%

1.0000 0.9259

Discounted Net

-2,500.00 -2,638.82


-2,500.00 -5,138.82

Label the graph below and plot the project NPV where the vertical scale ranges from -$10,000 to $80,000, each space representing $5,000, and every six spaces on the horizontal scale representing one year.

34

Example Project Selection Template

Weighting Categories and Components

Category Weight

Component Weight

Project 1

Project 2

Project 3

Financial ConsiderationsNet present valuePayback periodCost benefit ratioCategory weight by project

30%40%20%40%

80752055

25307546

75755065

Market ConsiderationsCompetitionPenetrationMarket shareNew marketsCategory weight by project

30%25%25%25%25%

206560036.25

9080859587.5

601010020

Qualitative FactorsSynergies with other projectsFuture leverageStrong internal supportCategory weight by project

15%50%

20%30%

20

503530.25

0

758039

80

808080

Project FactorsResource skillsResource availabilityTechnology availabilityRisk levelDependencies other projectsOperational supportCategory weight by project

25%20%25%25%10%

10%10%

80808070

106570.5

15202020

151017.5

906010090

901008.6

SummaryFinancial scoreMarket scoreQualitative scoreProject scoreTotal Scores

30%30%15%25%

16.510.8754.57517.62549.575

13.826.255.854.450.3

19.56.012.021.559

35

Project Selection Exercise

Complete the following project selection score sheet, which identifies financial selection criteria, shows the relative importance of each criterion by weight, and includes the selection team’s probability distribution for the prospective project’s estimated performance against each of the criteria. A feature of this tool is it recognises there is some uncertainty about future performance. The different views s of the various team members can thus be accommodated. This tool is suitable for prioritising projects based on a comparison of their scores.Your task is to complete the score sheet for the following project:

Project:

Evaluation Criteria

Very Good

5

Good

4

Fair

3

Poor

2

Very Poor

1

Score Weight Total Score

Strategic Alignment

0.2 (20%)

0.3 (30%)

0.3 (30%)

0.2 (20%)

1.0 1.2 0.9 0.4 3.5 10 35

Benefit/Cost Ratio

0.2 0.6 0.2

9

Reward/Risk Ratio

0.1 0.3 0.3 0.3

9

Payback Period

0.1 0.3 0.3 0.2 0.1

6

% Return on Investment

0.3 0.4 0.3

6

Internal Rate of

Return %

0.1 0.3 0.3 0.3

6

Total Project Score:

36

CBA Discounted Cash Flow Exercise Solution

Item Year 0 Year 1 Year 2 Year 3 Year 4

Benefits 0.00 13,000.00 70,000.00 71,000.00 81,000.00

Costs 2,500.00 15,850.00 64,620.00 27,400.00 24,250.00

Net -2,500.00 -2,850.00 5,380.00 43,600.00 56,750.00

Cumulative -2,500.00 -5,350.00 30.00 43,630.00 100,380.00

Discount Factor 8%

1.0000 0.9259 0.8573 0.7938 0.7350

Discounted Net

-2,500.00 -2,638.82 4,612.27 34,609.68 41,711.25

Net Present Value

-2,500.00 -5,138.82 -526.55 34,083.13 75,794.38

37

Cost Benefit Analysis Solution

Year Benefits

(savings/ returns)

Costs

(investment/ expenses)

Annual

Balance

(b-c)

Running

Balance

(a) (b) (c) (d) (e)

One

$1400 x 50

= $70,000

$8,000

$58,000

$8,000

$2,000

$6,000

$82,000 ($12,000) ($12,000)

Two

$70,000

$58,000

$2,000

$6,000

$66,000 $4,000 ($8,000)

Three $70,000 $66,000 $4,000 ($4,000)

Four $70,000 $66,000 $4,000 Nil (BEP)

Five $70,000 $66,000 $4,000 $4,000

Totals $350,000 $346,000

ROI = ($350,000 - $$346,000) x 100 / $346,000 = 1.156%

This is a small ROI and the investment will have risks (both threats and opportunities).

38

Project financial evaluation

All organisations have limited resources, which means that a decision to proceed with a project may sometimes preclude another project from proceeding and/or temporarily impact business-as-usual productivity. So project priorities need to be determined. Among other things a financial evaluation of prospective projects is needed. Some projects promise a better financial return than other projects.

Project Business CaseHistorically, us project managers have not been too concerned about the reason for a project, but have focused on producing the required deliverables (outputs) as per specifications, on time and within budget. This focus is understandable, since achieving these objectives is usually how our project management performance has been assessed. And while these objectives are important, ultimate project success occurs when the project outputs achieve anticipated benefits and sometimes other unanticipated benefits.

Contemporary thinking is that us project managers now need to be conversant with the project business case even though we may not have been involved in its preparation. The business case that identifies project costs and benefits is often prepared by a business analyst or the project sponsor. External changes (political, economic, social, technological, legislative, environmental and competitors’ activities) and internal changes to our project’s objectives of scope, time, cost and quality may affect our project’s resultant benefits. Our project benefits could be nullified, jeopardized or enhanced by factors both within and beyond our control. Additional benefits and disbenefits might be identified as our project proceeds. Also, the need for our project might evaporate.

Project managers now need to understand their project business case, which is the rationale for their project, and appreciate that project changes (variation) may impact benefits for better or for worse. Although benefit realisation remains the overall responsibility of the project sponsor, we project managers need to understand the reasons for our projects and recognise the impact of internal and external changes on our project’s viability. It’s about taking some responsibility for benefit risk management - at least considering the likely impact of changed project objectives on anticipated benefits. In fact, risks to benefits should be recorded, analysed and responded to as we would for risks to project objectives.

39

Cost-Benefit AnalysisInsufficient financial rigor during project evaluation is often identified as a contributing factor to project failure. At the heart of project evaluation and the project business case or justification is usually a Cost-Benefit Analysis (CBA), sometimes called a Benefit-Cost Analysis (BCA), undertaken during project conception and updated periodically during project development and execution phases, where:

Project Value (Net Benefits) = Benefits – Costs

Cost-Benefit Ratio (CBR) = Benefits/Costs

CBA is a widely-used financial assessment tool first introduced by a French engineer, Jules Dupuit, in the 1930s. Unless a prospective project promises to add value or resultant benefits sufficiently exceed costs we would not normally proceed with a project.

The results of a CBA are often expressed as a payback period – how long before positive cash flows equal the investment. The earlier this breakeven point is achieved the better in most instances. Some CEOs prefer to see benefits realised during their term of office. And projects with a more attractive cost to benefit ratio would usually be given higher priority. An exception may be compliance projects necessary to meet new legislative requirements, although the financial consequences or penalties of not doing such projects may well exceed the project cost.

40

The main limitation of the CBA is that some relevant benefits and costs may defy quantification. It is not usually possible to assign every benefit and cost a monetary value. For example, how might we assess the financial value of a project that improves one’s health?

Project evaluation typically involves the identification of various options to achieve the project’s purpose, the gathering of relevant data about the options, analysis of the options, and the selection of the preferred option. The extent or depth of this analysis is usually tailored to the size and risk of the proposed project, since the analysis itself also needs to be cost-effective.

Before we can identify plausible options we need to be very clear about the purpose of the project or the desired “outcome” to be achieved once the project deliverable or “output” is in use. Realistic ways of achieving this required outcome should then be identified, including the “do nothing” or “do without” (maintaining the status quo) option. For example, options for storage might include:

Refurbish or upgrade existing storage facilities.

Hire, build or purchase new storage facilities.

Contract out the storage function.

Hold no stock and apply JIT principles.

Have our supplier hold stock for us.

Keep the current storage solution.

Following the identification and preliminary assessment of options, the most suitable options are then assessed in greater detail against our organisation’s project selection criteria. Weighted criteria recognise that some selection attributes are more important than others. See The Framework pages 135 – 137. One key selection attribute will be estimated costs and benefits.

The estimation of costs should identify whole-of-life costs (ie, both capital and maintenance costs for the expected useful life of the product or service) and we need to be sure that a benefit is a benefit. The following are not benefits:

Our new computer will have an integrated database. This is a feature not a benefit.

Our reorganisation will free up space. This isn’t a benefit unless the free space is used.

Our working environment will be better, which will improve staff morale, motivation and retention. Such benefits are certainly possible, but are usually too vague, too difficult to measure, and too difficult to relate to productivity improvements.

41

Watch too for “benefit contamination” where a benefit claimed by a project is affected by something outside the project. For example, improved staff retention may not be due to the improved working environment project, but due to a worsening national economic climate when employees have no option but to remain with their current employer. Also, on occasions different projects might claim the same benefits.

Costs and benefits are best expressed in monetary terms to enable their comparison on a consistent basis. Here’s an example. Graphic Works’ sales are exceeding targets. Two designers are working over-time, and the owners are considering increasing capacity to meet demand. This would involve leasing more space and hiring two more designers. They decide to complete a Cost-Benefit Analysis.

Currently, the owners of the company have more work than they can cope with, and they are outsourcing to other design firms at a cost of $50 an hour. The company outsources an average of 100 hours of work each month. They estimate that revenue will increase by 50 percent with increased capacity. Per-person production will increase by 10 percent with more working space. The analysis horizon is one year - they expect benefits to exceed costs within the year.

42

Items Description of Costs Costs in First Year

Lease 75 square metres available next door at $180 per square metre

$13,500

Leasehold improvements

Knock out walls and reconfigure office space

$15,000

Hire two more designers

Salary, including benefits $75,000

Recruitment costs $11,250

Recruit training $3,000

Two additional workstations

Furniture and hardware $6,000

Software licences $1,000

Construction downtime

Two weeks at approximately $7,500 revenue per week

$15,000

Total $139,750

Benefits Benefits in First Year

50 percent revenue increase $195,000

Paying in-house designers $15 an hour, versus $50 an hour outsourcing (100 hours per month, on average: savings equals $3,500 a month)

$42,000

10 percent improved productivity per designer ($7,500 + $3,750 = $11,250 revenue per week with a 10 percent increase = $1,125/week)

$58,500

Improved customer service and retention as a result of 100 percent in-house design

$10,000

Total $305,500

The payback time for this project = $139,750 / $305,500 = 0.46 of a year, or approximately 5.5 months. Inevitably, these benefit estimates are mostly

43

subjective, and there is a degree of uncertainty associated with the anticipated revenue increase. However, given this favourable CBA the owners decide to go ahead with the project.


When such costs and benefits are significant and occur over a period of years, the most common financial tool used in conjunction with the CBA is Net Present Value (NPV) when a financial analyst assesses the difference between the estimated streams of costs and benefits of the project, both discounted to present value. NPV is the sum of discounted net cash flows over the appraisal period. NPV discount tables are readily available. See “The Framework” page 128 or www.investopedia.com/calculator/netpresentvalue.aspx. If you are one of those few people who understand the NPV formula you won’t need the tables.

An intuitive justification for NPV discounting is that most people would prefer receiving a dollar today rather than receiving a dollar in a year’s time – recognising the time value of money. In effect, the discount rate is the desired return. NZ Treasury currently recommends a default discount rate of 8% when there is no other agreed discount rate. Private industry uses the Weighted Average Cost of Capital, which calculation is peculiar to each company. Also, the risk-neutral discount rate might be increased to account for an organisation’s risk attitude or appetite.

NPV calculations might be performed using different combinations of worst and best case scenarios. Analytical techniques for assessing risk and uncertainty include:

• Sensitivity Analysis. This illustrates what would happen to costs and benefits if key variables changed. Consider whether better information about the values of these variables could be obtained to limit the uncertainty.

• Risk Analysis. This requires we identify and analyse the risks of proceeding with the project. Costs and benefits then need to be adjusted accordingly. A risk premium can be included in the NPV discount rate – say an extra 5%.

• Scenario Planning. This requires we consider various possible situations or future scenarios. Scenario planning usually focuses on long-term rather than short-term horizons and is used to illustrate a range of technical, economic, social, and political uncertainties, which may affect the success of a project. While both optimistic and pessimistic scenarios should be considered, more attention is usually given to the development of pessimistic or conservative

44

http://www.investopedia.com/calculator/netpresentvalue.aspx

scenarios. Areas where a bias towards optimism may occur are in the under-estimation of future costs and over-estimation of benefits.

Evaluation Process

A project is financially viable if the Net Present Value is greater than zero. That is the total discounted value of benefits is greater than the total discounted costs. If projects offer alternative solutions to a single problem or opportunity, the project with the highest Net Present Value is usually selected. It may be helpful to consider CBA as a process:

1. Confirm with the client the required project outcomes.

2. Decide over what period the analysis should occur. This is the useful life of the asset, but usually not beyond 20 years since impacts beyond this timeframe are usually insignificant given the time value of money (discount effect). And residual, terminal or disposal value of the asset also needs to be considered.

3. List stakeholders – those who would be affected by the project.

4. Identify significant benefits and costs throughout the life of the project and its deliverables. Force Field Analysis (FFA) or structured brainstorming may help.

5. Assign monetary values to benefits and costs where possible, which process might also account for uncertainty. For example a $100,000 benefit of 90% likelihood might be reduced to $90,000.

6. Discount benefits and costs to present values using prevailing discount rates based on the Weighted Average Cost of Capital (WACC) for private organisations and whatever rate Treasury determines should apply to Government project propositions for which 8% is the current default rate allowing for both inflation and opportunity cost.

7. We may or may not consider the effect of any intangible costs and benefits that could not be reliably assigned monetary values.

8. Calculate the payback period.

9. Perform a sensitivity analysis.

10. Rank options.

During the project the CBA, might be reassessed periodically to ensure the project is still a financially viable investment. Sunk costs are not part of this review. Sunk costs are costs that cannot be recovered once they have been incurred. Yet sometimes sunk costs are given as the reason for continuing a failing project. And

45

once the project is completed there may be periodic post-project evaluations to assess whether the anticipated benefits are being or have been achieved. Without such post-project benefit reviews our business case quality will not improve. But such reviews are only completed occasionally, perhaps because the sponsor has moved on or it is thought that the lessons learned will not be applicable to future projects.

Some Limitations

While CBA is the favoured way to assess and compare the financial viability of longer-term and more risky or expensive projects, the tool has some limitations:

• Identifying all relevant costs and benefits and determining whether they are assured, probable, possible or unlikely. We can compensate an older person for the loss of part of their front yard, but how do we compensate for the fact that they no longer feel safe or confident crossing the road to visit friends? And the value attached to the destruction of a habitat is to some “priceless” and to others “worthless”.

• Deciding how far into the future the analysis should reach, how wide the analysis should (ie, to what extent intangible and indirect costs and benefits should be considered?)

• Some large projects have many stakeholders who may be positively or negatively affected by the project. CBA cannot hope to include all stakeholders’ views. And enthusiastic sponsors may under estimate costs and/or over estimate benefits to enhance the chances of project approval.

• Should future generations and “non-human” stakeholders be included in the analysis? Sustainable developments meet the needs of the present without compromising the ability of future generations to meet their own needs.

• The current NPV discount rate may not be applicable in the future. A risk premium might be added.

Another financial assessment technique is Internal Rate of Return (IRR), which is the discount rate at which the NPV of the investment becomes zero. IRR is also used to evaluate the financial attractiveness of a project. If the IRR of a proposed project exceeds an organisation’s required rate of return, that project is desirable. If IRR falls below the required rate of return, the project would be rejected. See “The Framework” pages 114-135 for more detail this and other financial tools used for project evaluation.

While financial evaluation is very important, there are also other factors that determine the suitability of a project – see “The Framework” pages 135-137.

46

Example Project Business Case FormatProject Name:

Prepared By:

Last Update:

Version Number:

(Replace descriptions in red with specific details)

1. Executive Summary

Highlight key points, includes important benefits to be realised by undertaking the project.

2. Reasons

Document reasons for the project (why the outcome is needed) and explain how the project will enable the achievement of organisational goals and strategies.

3. Business Options

Brief describe any different options considered for the project. Options may also include do nothing.

4. Expected Benefits

Record benefits for the selected business option expressed in measurable terms. Benefits should be both qualitative (cashable) and quantitative (non-cashable). They should be aligned to organisation or programme benefits. Tolerances should be set for each benefit and for the aggregated benefit. The project will be a success if…

5. Expected Disbenefits

Record outcomes perceived as negative consequences by one or more stakeholders.

6. Timescale

Timescale of the project (over what period will costs be incurred) and by when benefits will be realised.

7. Costs

Summary of project costs, plus ongoing operational, maintenance and support costs, against the financial value of the benefits over the anticipated life of the deliverable.

47

8. Investment Appraisal

Compares overall benefits and disbenefits to costs for both best and worst case scenarios over a period of the anticipated life of the deliverable. Financial techniques may include Return on Investment (ROI), Payback Period, Discounted Cash Flow, Net Present Value, and Sensitivity Analysis.

9. Risks

Summary of key risks with estimated probabilities and impacts, and strategies for their management.

1. To ensure decision-making is well informed, the business case should be regularly reviewed and updated with actuals and current forecasts for costs and benefits and their associated risks and issues. Sometimes the rationale or justification for the project can change and even evaporate. The business case allows us to judge whether the project is desirable, viable and achievable.

2. Business options may include:

1. Do nothing. Usually the baseline starting point against which to evaluate other options.

2. Do the minimum. This is the amount of resources to achieve a result that is satisfactory.

3. Do something more. This is more than the minimum and is determined by benefits that are possible and achievable.

3. The link from the project’s outputs to outcomes and benefits should be clearly identified and kept visible to those involved, otherwise the original purpose of the project can get lost. Projects are usually named after the output, which could create the impression the output is the sole purpose of the project, whereas the business case benefits should be the focus. Also, since outcomes and benefits are usually only realised after the project has finished, it is easy for project managers to become solely output focused.

4. Quantification of benefits enables tolerances to be set, allowing the project manager to work within those boundaries before escalating issues to the project sponsor. Disbenefits result in undesirable outcomes rather than unintended results. In fact, sometimes the disbenefits could be an indicator that the benefits are being realised. The project should not include any tasks and deliverables that do not directly or indirectly enable the benefits that are being sought.

48

5. The business case, initially derived from the project definition statement is the sponsor’s responsibility, although its development and updating may be delegated to a business analyst or to the project manager. Once the project plan is prepared and costs change or is better understood, the business case needs to be updated.

49

Stakeholder Management Process

Stakeholders are people or groups of people who can affect the project, or may be affected by the project. This flowchart may help with an initial assessment.

50

Classifying Stakeholders

There are a variety of ways in which to classify stakeholders, a humorous approach is shown by the flowchart below.

51

Stakeholder Analysis ExerciseScenario Government is floating the idea of establishing a prison on Somes Island, Wellington.

TaskIdentify and list all likely stakeholder groups, and then select one or two of the key groups for more detailed analysis in terms of:

1. Stakeholder group (name).

2. Nature of their interest, stake, expectation, role.

3. Likely level of interest in project (H, M, L).

4. Likely attitude towards the project (positive, ambivalent, negative).

5. Likely level of influence from two perspectives:

project on group (H, M, L).

group on project (H, M, L).

6. Basic management / communication strategy that might apply (comply, consult, monitor/spy, convert, partner, mitigate, control, inform, ignore, tolerate, nullify etc).

Draw the spreadsheet for this analysis on the whiteboard or on flipchart paper. Exercise should take about 30-40 minutes.

This is a preliminary analysis only and no formal consultation is proposed at this time. However, should the project proposition be explored further, early and on-going stakeholder engagement and involvement will be essential.

52

User Requirements Exercise

The purpose of this exercise is to practise you in the use of a paired-comparisons tool for prioritising user needs. The project is to procure a new photocopier for the office. As future users, brainstorm and record the critical features and functions you require for the new office photocopier and then prioritise them using the paired comparisons matrix. You decide situation / context. Make reasonable assumptions.

Rank Score Features &

Functions

10 9 8 7 6 5 4 3 2 1

1

2

3

4

5

6

7

8

9

10

Once features and functions are prioritised, they can be costed. Insufficient budget or budget cuts may see features progressively removed from the bottom upward.

53

Survey of Requirements – Example Tool

Cultural Facilities

How important is this issue to you?

How satisfied are you with the present situation?

Heritage Preservation



City Safety



Parking Facilities



1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

54

Health Services


Transport Services



Education Services



Leisure Opportunities



Rubbish Collection



City Cleanliness

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High1 2 3 4 5

Low Medium High

1 2 3 4 5


Low Medium High

55



Welfare Services



Shopping Facilities



1 2 3 4 5

Low Medium High

1 2 3 4 5

Low Medium High

1 2 3 4 5


Low Medium High

1 2 3 4 5

Low Medium High

56

LOW

1

2

Could Could Could Could

IMPORTANCE

3 Should Should Should Could

4 Musts Musts Should Could

HIGH

5 Musts Musts Should Could

1

LOW

2 3

SATISFACTION

5

HIGH

57

Statistical Sample Size for +/- 5% Accuracy

Population Sample Size Population Sample Size

10 10 800 260

15 14 900 270

20 19 1000 278

25 24 2000 322

30 28 3000 341

35 32 4000 351

40 36 5000 357

45 40 6000 361

50 44 7000 364

100 80 8000 367

200 132 9000 368

300 169 10 000 370

400 196 20 000 377

500 217 50 000 381

600 234 75 000 384

700 248 100 000 386

58

Performance Management Survey

Name: Appointment: Date:

Project is to improve our organisation's performance management.

The purpose of this questionnaire is to help us assess the appropriateness of our organisation's current system of performance management and identify where it might be improved. Your honest answers will be much appreciated. They will be treated confidentiality and only used for the purposes of this project. Thank you for participating. You will receive a summary of results.

EMPLOYEE INSTRUCTION

Please circle the number that bestdescribes how you feel about the

following statements.

Not

App

licab

le

Stro

ngly

D

isag

ree

Dis

agre

e

Und

ecid

ed

Agr

ee

Stro

ngly

A

gree

1.

Use of Performance Management

My organisation's system of performance management is used effectively for:

Performance feedback.

Pay increase decisions.

Promotion decisions.

Identifying training needs.

Enhancing communications.

Problem Solving.

Other (specify):

Comments:

0

0

0

0

0

0

0

1

1

1

1

1

1

1

2

2

2

2

2

2

2

3

3

3

3

3

3

3

4

4

4

4

4

4

4

5

5

5

5

5

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Strategic Fit/Goal Congruence

My organisation has a clearly communicated and compelling vision of its future.

My organisation has a clearly communicated target culture and published core values.

My organisation has clearly communicated and unambiguous strategic goals.

My team's objectives are clearly related to my organisation's strategic direction.

My performance objectives are clearly related to my team's objectives.

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Performance Objectives

My performance objectives meet the following criteria:

They are clear and specific.

They are measurable.

They possess a target date.

They are documented.

They are prioritised.

Other (specify):

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INSTRUCTIONPlease circle the number that bestdescribes how you feel about the


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Performance Objectives Cont….

I have significant say in the formulation of my performance objectives.

The appropriateness of my performance objectives is regularly reviewed.

I have sufficient authority and resources to achieve my performance objectives.

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Performance Measurement

I have significant say in how my performance will be measured.

Emphasis is on measurable standards, but not exclusively so.

Most factors which influence my performance are within my control.

My performance is assessed by:

My manager.

My peers.

My customers/clients.

My immediate reports.

Other (specify):

My organisation's performance management system includes self-appraisal.

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Performance Feedback

The principle of "no surprises" applies to my organisation's performance management system.

The feedback I receive about my performance is:

Specific.

Balanced.

Frequent.

Clear.

Accurate.

Timely.

Useful.

Honest.

My manager and I discuss my performance formally at least:

Once each year.

Twice each year.

Three times each year.

More than three times each year.

I'm content with this frequency.

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Performance Feedback continued:

My manager regularly invites me to provide feedback on her/his performance.

I am reluctant to provide feedback on my manager's performance because:

My honesty may upset our future working relationships.

A suitable opportunity or process is not available.

My manager's likely defensive reaction to criticism from me.

My lack of knowledge about my manager's objectives.

Personality conflict/prejudice. Other (specify):

The quality of feedback I receive about my current performance is influenced by:

Lack of knowledge about my performance.

Personality conflict/prejudice.

Lack of measurable performance objectives.

My historical performance.

Other (specify):

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Rewarding Performance

I believe people should be paid according to

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how well they perform.

Improved performance is rewarded in my organisation.

There is a direct link between my performance and what I am paid.

My contribution to my team's objectives is recognised and rewarded.

My organisation is trying to improve the way it rewards performance.

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Training and Development

The person or people who appraise my performance are well trained to do so.

People in my organisation are well trained in performance management skills.

An important outcome of performance appraisal in my organisation is the identification of training and development needs and opportunities.

My career development needs are discussed and catered for.

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Other Matters

I have confidence in the way my performance is assessed.

Performance management in my organisation is done well.

My organisation is trying to improve the way it manages people's performance.

Employees have input into the design and development of my organisation's system of performance management.

People are recognised and rewarded for the effectiveness with which they apply the organisation's system of performance management.

The system of performance management in my organisation is clearly understood.

The paperwork needed for my organisation's system of performance management is kept to a practicable minimum.

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Interviews:

To be entirely effective it would be appropriate to interview those of you who complete this questionnaire in order to identify more clearly why you responded in the way you did.

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Stakeholder Consultation Role Play Exercise

Given the shortage of prison space, the prison project is to proceed. One task assigned you is to agree a list of items to be allowed in prisoners’ cells.

To reach some initial agreement within about 40 minutes only about which items from the list are to be allowed in prisoners’ cells, which items are to be banned, and which items will need further research and discussion. This exercise is about achieving consensus among various stakeholders who have very different needs, expectations, levels of emotion, and perceptions.

1. Project Manager – attempt to be unbiased and neutral facilitator, wish to achieve a consensus through a balanced evaluation of expectations, yet recognise that Corrections is the client and ultimately any impasse must be resolved in favour of the client. You have prepared a rather large discussion list compiled from all stakeholders’ requests. Also, keen to establish some ground rules and process for this discussion.

2. Corrections Department Spokesperson - wish to establish a very short list of items that is specific, clear, unambiguous, safe, and uniformly applicable. You want to avoid discretionary items. Either they’re in or out. And you recognise that cells are small and the budget is tight, and some items could be misused.

3. Penal Reformer – likes to see inmates treated with greater civility and respect and see prison primarily as a rehabilitation and personal development opportunity. You advocate a compassionate and humane approach.

4. Victims’ Representative - see imprisonment as a punishment and deterrent. Already unhappy with short sentences, parole, and quality of life enjoyed by prisoners. Reckon their living conditions are generally better than is that of their victim’s. You advocate a tough line.

5. Prisoners’ Representative - elected to represent the prisoners or ‘customers’ as they prefer to be called and wish to make their life more comfortable. Other than the penal reformer, the above stakeholders were not happy about you being included in this discussion, and even the penal reformer has some reservations, but the decision has been made – the wisdom of which will be reviewed after this initial meeting.

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Wish List

Item Yes/No

Maybe Remarks

televisionradioaerosol sprayelectric razorenamel paintphone with camerahairdryerlaptopbooksdicetaiaha for exercise purposesplaying cardseducational study materialmagazinesnewspapersreligious materialsprayer beadscondomscrucifixesstationerywrist watchtoilet kitpersonal photographsashtrayboard gamespadlockLotto ticketsmedicationhearing aidspare batteriestorchpostershobby materialsoccult equipmenttattooing equipmenthaircutting equipmentblue-tac and drawing pins

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electric jugcultural itemspotted plantssmall petsmulti-box power pluggang patchesmoneyelectric blanketstereo systemvideo cameracups and mugscigarettesnewspaper cuttingstrophies and awardspersonal clothing and footwaretoothpicksteddy bearPlayboy / Playgirlbinocularspen knifeKorancocaine for personal use only

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Solution – NPV Exercise

Year Estimated Cashflow ($K) DiscountFactor

NetPresentValuePositive Negative Net

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3

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6

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8

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120

115

105

97

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82

65

35

125

100

90

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-125

-100

-90

+50

+105

+115

+90

+97

+75

+82

+65

+35

1.000

0.8929

0.7972

0.7118

0.6355

0.5674

0.5066

0.4523

0.4039

0.3606

0.3220

0.2875

-125

-89.29

-71.75

35.59

66.73

65.25

45.59

43.87

30.29

29.57

20.93

10.06

Totals 61.84

Investment breaks even during year 8.

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DPM Assignment One: Project Charter

Assignment One requires you prepare a Project Charter for your selected work-based project. This template is provided as a guide. Typically, this charter is some six A4 pages (size 12 font) excluding any attachments. However, it’s relevance, accuracy and clarity that counts.

Item Description

Version Number/Distribution

Project Name Select a relevant, unique and concise title by which the project will be referred.

Background Briefly explain the situation, circumstance, opportunity, or problem that has lead to the need for the project.

Purpose/Benefits/Justification

Explain the rationale for the project – what it is designed to accomplish, what benefits (positive outcomes) will be achieved. Why do the project?

Vision A ‘picture’, image or explanation about the new future circumstance or situation that will result from undertaking the project and producing the deliverables.

Goal Express the project output as a single goal. Consider SMART criteria.

Final Deliverable(s) Describe the features, functions, user-requirements and performance standards (outline specification) required of the final deliverable(s). High-level product description.

Success or Acceptance Criteria

Identify measurable criteria the achievement of which will result in project success from the client’s and key stakeholders’ perspectives.

Scope Prepare a statement of work perhaps in narrative form, which describes the main work that must be undertaken to realise the project goal. Also list any significant exclusions – what is outside scope on this occasion that might otherwise be reasonably assumed to be part of the project.

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Related Projects Identify any other proposed or approved projects that might be related to or impact the project and where coordination might be required. The project might be part of a programme of related projects.

Business Alignment Identify which current business goals the project will contribute towards achieving. Show linkage with the organisation’s business plan.

Business Case Summary Refer to an objective analysis of the proposed project to demonstrate that it will add value. This analysis may briefly address such considerations as:

economic acceptability

technical feasibility

social acceptability

environmental acceptability.

The analysis might consider direct and indirect, short-term and long-term, and tangible and intangible costs and benefits (quantified wherever practicable) and their probabilities as appropriate.

While all investment needs to be justified, some organisations don’t require a formal business case unless the project exceeds a certain threshold cost – perhaps $80,000.

Client, Customer(s) and Sponsor

Identify specifically who will own the final deliverable, who will use it, and who will fund the project.

Project Manager Identify who is to manage the project, their main responsibilities, limits on their authority, and possibly provide a brief profile showing their project experience and expertise.

Other Stakeholders List other individuals or groups who could significantly affect project success or be affected by the project and thus have a stake in the project and its outcome.

Roles and Responsibilities Briefly describe roles and responsibilities for key stakeholders – client (owner), sponsor, and project manager.

Communications Describe the frequency, format and medium for progress

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reporting from the project manager to project sponsor and other key stakeholders.

Assumptions Document key premises on which project planning will be based.

Risk Analysis Identify larger impact risks (including health and safety if applicable) to project success and if possible suggest broad mitigation measures.

Constraints Anything that dictates, restricts or constraints the actions of the project manager other than usual parameters. For example, the availability of a contractor, completion date is fixed, or business-as-usual is not to be disrupted.

Timeframe Identify when the project is to be undertaken, any key interim milestones, and an estimated (or mandated) completion date.

Plan Preparation Estimate the work-effort, duration, completion date and cost to prepare a detailed plan for project implementation should the project charter be approved.

Total Cost Estimate the total order-of-magnitude cost for the entire project and show the estimated level of accuracy (+/- percentage or range) of this estimate. It’s the initial budget.

Other Matters Include under this heading any other relevant matters, not separately identified above.

Approval/Authorisations Contractual sign-offs from appropriate people including the sponsor and project manager.

The project charter is the equivalent of a proposal, terms of reference, project brief, or project initiation document sufficiently detailed to enable the project manager to proceed with the preparation of a detailed plan for the implementation of the project.

Not all above items may be applicable, and in addition the completed charter might include a cover page, contents page, executive summary, with detail relegated to appendices as appropriate. A foreword might be also included - an expression of support written by the CEO, sponsor or client perhaps, emphasising the importance of the project, endorsing the suitability of the project manager, and encouraging stakeholders to support the endeavour. As a minimum the sponsor and project

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manager sign, date and release the charter, which has usually been prepared by the project manager.

Should subsequent variations and changes to estimates occur that exceed the time and costs estimated in the charter, a new charter would need to be agreed and published.

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Example Project Charter

This document is an example project charter for a fictitious company. A charter Cover Page, Contents Page and Record of Amendments Page would usually be included and sometimes a Foreword by the Board Chair or CEO, and also a Summary or Synopsis might be included at the start of the charter document.

Prepared by: Hori Kingi, Project Manager.

Version Number: One.

Date: 30 January 2015.

Distribution: Board Chair, CEO, Sponsor, Project Manager, and Project Team Members.

Project NameABC Annual Conference 2015.

BackgroundABC is a national not-for-profit charity for the prevention and relief of poverty. Every year the organisation holds a two and one-half day (2.5 days) conference for its membership.

PurposeThe purpose of the conference is to discuss matters of importance to the future of the organisation, including a review of the organisation’s constitution, core values, purpose statement, strategic plan, key operational activities, and current and proposed projects to ensure that the organisation remains effective and efficient in today’s ever-changing environment. The conference will also provide an opportunity for productive face-to-face debate among members, will encourage membership, and will further the organisation’s positive profile.

GoalTo hold a successful ABC national conference at Palmerston North during 8 – 10 April 2015.

Success CriteriaKey Performance Indicators (KPIs) for this project are:

• To be undertaken on the specified dates and completed within budget.

• To be attended by at least 200 members.

• To be rated successful by at least 85% of those who attend.

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• To fully address all agenda items and allow for productive exchanges and debates.

• To receive positive press.

• To increase member retention by at least 5% over the next 12 months.

• To increase membership by at least 5% within 12 months.

ScopeThe project work scope will include arranging a suitable venue (hotel with sufficient parking, comfortable chairs, break-out rooms, wifi, security and conference auditorium), marketing and advertising, preparation of mailing lists, obtaining sponsorship, organising registration, preparing the conference agenda, programme, papers, folders, conference packs and handouts, arranging flowers, arranging catering (coffee, tea, drinks, snacks, meals, special diets, conference dinner), managing and coordinating pre-qualified suppliers, organising the opening address speaker and key-note speakers, arranging photography, press releases and publicity, running the conference, obtaining participant evaluations/feedback, and undertaking post-conference administration.

Scope exclusions are arranging transport and accommodation for participants, although ideally accommodation for participants should be available at the venue or within its close vicinity.

Business Case SummaryThe conference, which is to be self-funding, is fully justified given the need:

• To review the organisation’s current situation and develop new strategies where appropriate to ensure the continuing relevance and viability of the organisation in our constantly changing and challenging environment.

• To provide an opportunity for our membership to be updated on matters of current importance and fully participate in the development of ABC strategy.

• To revitalise and grow ABC membership.

Key AppointmentsSponsor: Lois Moran

Project Manager: Hori Kingi

Project Planning Team Members: Kamielle Tauaneai, Aroha Pohatu and Renee Love

Roles and Responsibilities

Sponsor. The sponsor is accountable to the CEO and is to:

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• Ensure that this project is aligned with ASC organisation’s purpose, vision and goals, and does not conflict with ABC core values.

• Keep the project business case updated to ensure that the investment remains valid.

• Organise and chair a conference project steering committee.

• Ensure project funding and the timely availability of resources.

• Provide high-level direction to the project manager.

• Ensure that risks are properly managed.

• Review and approve the project plan.

• Monitor project progress at a strategic level.

• Brief the Board Chair, CEO and senior management about project progress.

• Communicate with senior stakeholders.

• Evaluate and approve where appropriate variations that impact project parameters.

• Resolve issues escalated from the project manager.

• Approve the use of project management reserve funds.

• Ensure the project’s outcomes and benefits are achieved.

• Approve the project final report.

• Hold a post-project review to ensure benefits have been achieved.

Project Manager. The project manager is accountable to the sponsor for project success and is to:

• Define in detail the work scope of the project and manage any variations to this.

• Prepare the project plan as per the guidance provided in this charter.

• Further specify responsibilities and performance targets for each team member.

• Oversee any project procurement contracts.

• Regularly communicate with stakeholders.

• Continuously identify and manage risk.

• Regularly monitor and control project progress.

• Resolve or escalate project issues.

• Manage the project budget.

• Maintain project files including variations, risk, issues and lessons learned logs.

• Deliver the conference on time, to budget, and to agreed quality standards.

• Report project status each week to sponsor and key stakeholders.

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• Manage the closure of the project.

• Prepare a post-project evaluation report that includes lessons learned.

Project Team Members. Team members are accountable to the project manager and are responsible to:

• Complete work packages delegated or contracted to them by the project manager.

• Ensure their deliverables are properly completed on time and within budget.

• Liaise and work cooperatively with other team members.

• Regularly report progress to the project manager.

• Manage the resolution of issues, or escalate these to the project manager.

• Inform the project manager of any variations that require approval.

• Continuously monitor risk (threats and opportunities) associated with their work.

CommunicationsProject manager is to provide the sponsor with a weekly status report.

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AssumptionsIt is assumed that:

• A suitable venue will be available.

• There will be 3% “no shows” at the conference.

RisksRisks will need to be identified, analysed and appropriate responses developed and implemented. Based on previous ABC conference experience, some risks are:

• Venue already booked or becomes unavailable.

• Earthquake or fire.

• Guest speaker(s) unavailable.

• Insufficient sponsorship or sponsorship withdrawn.

• Unhappy sponsor(s).

• Inadequate signage at venue.

• Insufficient parking at venue.

• Too many free tickets handed out.

• Budget overrun / financial loss.

• Food poisoning or other medical emergency.

• Excessive alcohol consumption.

• Power failure.

• Audio-visual equipment malfunction.

• Attendance estimate not achieved.

• Attendance estimate (venue capacity) exceeded.

• Loss of reputation as an effective and efficient organisation.

To deal with all these possibilities will require a clearly thought out risk management procedures to be included in the project plan. Also, the project manager is to select and visit the conference venue and meet with the staff to be certain that everything will be satisfactory.

Health and Safety A health and safety policy statement is to be prepared that describes how we intend to manage safety. A list of venue safety rules is to be prepared and distributed. Copies of contractors’ safety policies and risk assessments will be required as per NZ Health and Safety in Employment Act 1992.

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FinancialsThe conference will be self-funding. Participants are to pay for and arrange their own travel and accommodation. Venue hire, reception arrangements, catering, stationery, name badges and other expenses will be covered by sponsorship, government grants, fund-raising events and conference fees. The project manager is to establish appropriate systems to control and account for all financial transactions to include a list of registered participants detailing the amount paid and when received. Consider too late registration fees, discounts for students, deposits and final payments, and method of payment. Tickets prices are to be set so that the conference will breakeven at 90% of anticipated attendance. Allow a contingency of at least 10% to cover unanticipated expenses. Free tickets are only for the project organising team, speakers and sponsors.

Accurate budgeting and prudent financial management are vital for the success of the conference. Also, the project manager is to ensure the follow-up of outstanding payments and is to produce a detailed financial statement following the conclusion of the conference as part of the post-project report.

Project Plan and Post ConferenceA project plan for the conference is to be prepared for the sponsor’s approval by 2 March 2015. After the conference the project manager is to:

• Resolve any outstanding issues.

• Pay all outstanding accounts.

• Collect and analyse conference evaluations.

• Identify strengths of the conference.

• Identify weaknesses of the conference.

• Assess the extent to which conference benefits have been achieved.

• Prepare and distribute a post-conference report to include lessons learned and recommendations for the 2016 conference.

• Update the ABC conference risk list.

Other MattersThe ABS Board Chair advises: “Sponsorship provides extra income and reduces the financial burden for the conference. We must therefore look after our sponsors and exhibitors with utmost care - making sure their entitlements are fulfilled, they are fully acknowledged, and we build the rapport that ensures they will come back next year. I trust we all cooperate to ensure yet another very successful annual conference.”

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Project Charter Approval and AcceptanceThe signatures below indicate that the undersigned have agreed to this Project Charter and have thus given approval for the project to be planned in detail:

Project Sponsor: Date

Project Manager: Date

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Project Conception: Quiz1. PMBOK is a USA publication, and Prince2 is a UK Government project

methodology. What do the acronyms PMBOK and Prince stand for?

2. Which is the odd-one-out in the following list? terms of reference charter proposal status report project brief

3. Which of the following aren’t projects? relocating the office introducing a bonus scheme managing software support supervising the call centre implementing the triennial OSH audit

4. During which project phase (conceive, develop, execute or finish) is project cost and duration uncertainty greatest?

5. Which one of the following strategies is applied when a project is ‘fast-tracked’? work duration is compressed work is overlapped work is both compressed and overlapped work scope is reduced project functionality is reduced scope creep is eliminated

6. In what sequence would be following activities normally be undertaken? review benefits realised monitor progress check concept schedule work finalise project plan

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7. Link the following items of information with the person who would normally provide them. Some people might provide more than one item.

Information

project purpose

availability of funding

an employee’s availability

historical risk data

estimated finish date

business case

project methodology

Person

Sponsor

Client/owner

Project management office (PMO)

Line manager

Project manager (PM)

Project auditor

Customers/users

8. Which three of the following are the traditional ‘triple constraints’? scope benefits risks business-as-usual quality cost time

9. What is the net present value (NPV) of $10,000 in ten years, discounted at 14%?

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10. Which three of the following are most typically determined by the project manager in the matrix organisation? which employees will be assigned to the project

where the employees assigned will work

when the employees assigned are needed

what the employees assigned will do

how the employees assigned will do the work

why the work is needed

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Documents

Word title: Arial Bold 30pt - SkillPower provides project ... Web viewHe is familiar with most project management methodologies including ... project for assignment purposes and