Transcript Chapter 1 The World of Project Management MEM 612 Project Management WHAT IS A PROJECT? MEM 612 Project Management.

Chapter 1
The World of Project Management
MEM 612 Project Management
WHAT IS A PROJECT?
MEM 612 Project Management
Why the emphasis on project
management?
• Many tasks do not fit neatly into businessas-usual.
• Need to assign responsibility and authority
for achievement of organizational goals.
MEM 612 Project Management
Characteristics of Projects
• Unique
• Specific Deliverable
• Specific Due Date
MEM 612 Project Management
Other Common Characteristics of
Projects
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Multidisciplinary
Complex
Conflict
Part of Programs
MEM 612 Project Management
PMI Definition
“A temporary endeavor undertaken to create
a unique product or service”
Project Management Institute, 2000
MEM 612 Project Management
PROJECT MANAGEMENT VS.
GENERAL MANAGEMENT
MEM 612 Project Management
Skill Requirements for Effective
Project Management
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Conflict Resolution
Creativity and Flexibility
Ability to Adjust to Change
Good Planning
Negotiation
– win-win versus win-lose
MEM 612 Project Management
WHAT IS MANAGED? THE
THREE GOALS OF A PROJECT
MEM 612 Project Management
Figure 1-1: Performance, Cost,
and Time Project Targets
MEM 612 Project Management
THE LIFE CYCLES OF
PROJECTS
MEM 612 Project Management
Figure 1-2 The Project Life Cycle
MEM 612 Project Management
Figure 1-3 An Alternate Project
Life Cycle
MEM 612 Project Management
SELECTING PROJECTS
MEM 612 Project Management
Nonnumeric Selection Methods
• The Sacred Cow
• The Operating/Competitive Necessity
• Comparative Benefits
MEM 612 Project Management
Figure 1-4 The Q-Sort Method
MEM 612 Project Management
Numeric Selection Methods
• Financial Assessment Methods
– payback period
– discounted cash flow
• Scoring Methods
– unweighted 0-1 factor method
– weighted factor scoring method
MEM 612 Project Management
Payback Period
Initial Fixed Investment
Annual Net Cash Inflows
MEM 612 Project Management
Discounted Cash Flow
n
Ft
NPV (project) - I0  
t
t 1 (1  k )
where
I0 = the initial investment
Ft = the net cash flow in period t
k = the required rate of return or hurdle rate
MEM 612 Project Management
The Weighted Scoring Model
n
Si   sij w j
j 1
where
Si = the total score of the ith project
sij = the score of the ith project on the jth criterion
wj = the weight or importance of the jth criterion
MEM 612 Project Management
Confronting Uncertainty – The
Management of Risk
MEM 612 Project Management
What uncertainties are encountered
in project management?
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Time required to complete a project
Availability of key resources
Cost of resources
Timing of solutions to technological
problems
• Actions taken by competitors
MEM 612 Project Management
Can uncertainty surrounding
projects ever be eliminated?
• No, but it can be managed
MEM 612 Project Management
Risk Analysis
• Estimate probabilities or distributions
associated with key parameters
• Develop analytic or simulation model
• Analyze distribution of outcomes
generated by model
MEM 612 Project Management
Risk Analysis with Crystal Ball
• Assumption Cells
• Distribution Gallery
• Forecast Cells
MEM 612 Project Management
THE PROJECT PORTFOLIO
PROCESS
MEM 612 Project Management
The Project Portfolio Process
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Step 1: Establish a Project Council
Step 2: Identify Project Categories and Criteria
Step 3: Collect Project Data
Step 4: Assess Resource Availability
Step 5: Reduce the Project and Criteria Set
Step 6: Prioritize the Projects within Categories
Step 7: Select the Projects to be Funded and
Held in Reserve
• Step 8: Implement the Process
MEM 612 Project Management
The Aggregate Project Plan
MEM 612 Project Management
Figure 1-12 An Example
Aggregate Project Plan
MEM 612 Project Management
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MEM 612 Project Management