Midterm Project management

Process

Day to day activities in which organization engages while producing goods and services.

Projects

Organized work toward a predefined goal or objective that requires resources and effort, a unique venture having a budget and schedule.

Project

A complex, one time process. It is limited budget, schedule and resource constraints and it is developed with a set goal. Finally, is focused on customers.

Characteristics of a project

* occur only once (ad hoc)
* Essential components un how organizational strategies are constructed and how they are executed.
* Allow creation of new and improved products, services; and processes
* Guide the management of change
* Entails crossing functional and organizational boundaries
* Traditional management functions also apply
* Outcome base on customer satisfaction
* Once completed no longer exist

Project life cycle

1. Conceptualization
2. Planning
3. Execution
4. Terminantion

Conceptualization

Developments of the initial goal and technical specifications of the project

Components of a project

1. Client interest
2. Project stake
3. Resources
4. Creativity
5. Uncertainty

4 criteria to determine project success

1. Time
2. Budget
3. Performance
4. Client acceptance

Project efficiency

Meeting budget and schedule expectations

Impact on the customer

Meeting technical specifications, addressing curstomer Needs, and creating a project that satisfies the client needs

Business Success

Determining whether the project achieved sufficing comercial sucess

Preparing for the future

Determining whether the project opened new markets or new product lines or helped to develop new technology

Benchmarking

Is destined to systematically manage improvements within a process.

Project management maturity models

Are the models that allow benchmarking to happen within an organization

Chap 2: Strategic management

Defiend as the science of formulating, implementing and evualuating cross-functional decisions that enable an organization to achieve its objectives.

Elements strategic management

* developing vision and mission statement
* Formulating implementing and evaluating
* Making cross functional decisions
* Achieving objectives

Vision statement

A statement that describes the organizational vision of what it desires to become in the future.

Mission statement

A statement that argues the organization’s for existence

Stakeholder analysis

Tool for demonstrating some of the seemingly irresolvable conflicts that occur through the planned creation, and introduction of new projects.

Project stakeholders

Define as all individuals or groups, who have an active stake in the project and can potentially impact either positively or negatively the development

Internal stakeholders

Include internal sources, such as top management, accountants, other functional managers and project team members

External stakeholders

Include external sources such as clients, competitors suppliers, environmental groups.

TOWS Matrix

Refers to the challenges companies face in both their internal environment (within organizations) and their external environment (outside a company.

External factors

* external opportunities (O)
* external threats (T)

Internal factors

* internal strenghts
* internal weaknesses

Maxi-Maxi Strategy (SO)

Develop projects that use strenghts to maximize opportunities.

Maxi-mini strategy (ST)

Developed projects that use strenghts to minize threats

Mini-maxi strategy (WO)

Developed projects that minimize weaknesses by taking advantage of opportunities

Mini-mini strategy

developed projects that minimize weaknesses and avoid threats.

Organizational structure 3 elements

* It designates, formal reporting relationships
* It identifies groupings
* Design of systems

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It designates, formal reporting relationships

Number of levels in the hierarchy - spa of control

Identifying Groupings

Individuals into departments and departments into risk organization

Design of systems to ensures

* effective communication
* Coordination
* Integration across departments

Forms of organzational structure

* functional organizations
* Project organizations
* Matrix organizations

Functional organizations

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Group of people performing similar activities into the apartments

Project organizations

Group of people into project teams on temporary assignments

Matrix organizations

create a dual hierarchy, in which functions and projects have equal prominence

Project management offices

Centralize units that oversee or improve the management of project resources centres

PMO

* Technical details,
* expertise
* repository
* center of excellence

PMO

Is an organizational unit that has the test to over and improve the management of projects have been described as operating under one of three alternative forms and purpose in companies

Wealther station

the PMO is typically used only as a tracking and monitoring device.

Control Tower

This focuses on developing methods to continually improving project management skills by identifying what is working, where the shortcomings exist, and how to resolve ongoing problems

Resource pool

mantain and provide a cadre of trained and skilled project professionals as they are needed. Is responsible for supplying project managers and other skilled professionals to the company´s projects.

Culture

defines as the unwritten rules of behavior or norms that are used to shape and guide behaviour.

Organizational culture

it is held by some subsets of the organization.

it is taught to all new members

Culture development is affected by:

1. technology
2. the environment
3. the geographical environment
4. the reward systems
5. rules and procedures
6. key organizational members
7. Critical incidents

chapter 3: Screening models

help managers pick winners from a pool of projects

are numer or nonnumeric

Screening models characteristics

1. Realism
2. capability
3. flexibility
4. ease of use
5. cost effectiveness
6. comparability

Numeric models

seek to use numbers as inputs for the decision process involved in selecting projects

Screening models characteristic: Realism

an effective model must reflect organizational objectives, incluiding firm’s strategic goals and mission.

Screening models characteristic: Capability

A model should be flexible enough to respond to changes in the conditions under which projects are carried out.

Screening models characteristic: Flexibility

The model should be easily modified if trial applications require changes

Screening models characteristic: Ease of use

a model must be simple enough to be used by people in all areas of the organization, both those in specific project roles and those in related functional positions.

4 types of issues when screening

1. risk
2. commercial
3. internal operating
4. additional

Risk

unpredictability to the firm

Commercial

market potential

International operating

changes in firm operations

4 approaches to project screening

1. Checklist model
2. Simplified scoring models
3. Analytic hierarchy process (AHP)
4. Profile models

Checklist model

list of criteria applied to possible projects.

It requires agreement on these criteria and assumes all criteria are equily important.

Simplified scoring model

each project receives a score that is the weighted sum of its grade on a list of criteria.

Requires agreement on the criteria and their weight and a score to be assigned to each criterion.

Analytic hierarchy process

4 step processs that construct a hierarchy of criteria and sub criteria

AHP

Analytic hierarchy process

Analytic hierarchy process 4 STEPS

1) Allocate weights to criteria

2) Assigns numerical values to evaluations dimmensions

3) Determine score by summing the products of numeric evaluations and weights.

4) Unlike the simple score model this scores can be compared.

Profile models

Allow managers to plot risk/returns options for various alternatives and then select the project that maximizes return while staying within a certain range of minimun acceptable risk.

Pay back period formula

investement/annual cash savings

Payback period

determines how long it takes for a project to reach a breakeven point. The goal is to estimate cash flows both in and out the organization.

Net present value formula

Initial cash investment + Sum of net cash flow for period t / (1+r+inflation rate during the period)^t

Net present value

projects the change in firms value if a project is undertaken. Positive “…” implies that the project will profitable after a set amount of time.

Higher values mean that more revenue is generated in comparison to a lower “…” value projects

Dicounted payback period:

The discounted sum of cash flows by the company’s required rate of return to get a more accurate payback period.

Internal Rate of return (IRR)

a project must meet a minimum rate of return before it is worthy of consideration.

Project portafolio management

is the systematic process of selecting, supporting, and managing the firm’s collection of projects.

Objectives and initiates requires of portafolio management

* Decision making
* Prioritization
* Review
* Realignment
* Reprioritization of a firm’s projects.

Portafolio selection process

Pre-process phase

Process phase

Postprocess phase

Pre-process phase

methodology of selection and strategy

Process phase

pre-screening, individual project analisis, screening, portfolio selection, and portfolio adjustment.

Post-process phase

project development, project evaluation, and portfolio completion.

Project portafolio matrix

Classifies projects into 4 types according to commercial potential (x -axis) and technical feasibility. (y-axis)

Bread and butter

high probability of technical feasibility and a modest comercial profitability.

Pearls

high probability of technical feasibility and a high comercial profitability.

projects that offer strong commercial potential and are technical feasible.

These projects can be used to gain a strategic advantage in the market place.

Oysters

modest probability of technical feasibility and a high comercial profitability.

early-stage project that have the potential to unleash signifcant strategic and commercial advatages for the company that can solve technical challenges.

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Because “...” projects involve unknown revolutionary technolgy they are still at the early stages of possible success

White elephant

low probability of technical feasibility and a low comercial profitability.

Chapter 5: Project scope

is everything about the project - work content as well as expected outcomes

Scope management

is the function of controllling a project in term of its goals and objectives.

6 main activities of scope management

1. Conceptual development
2. Scope statement
3. Work authorization
4. scope reporting
5. control systems
6. project closeout

Conceptual development

the process that addresses project objective by finding the best ways to meet them. Data collection and development of information are crucial in creating conceptual development. We recognize several key steps when it comes down to data collection and information development.

problem/need statement

A statement that entails why there is a need in finding a solution, what the exact underlying problem is, and the implications of the project.

requirement gathering

the demands, needs, and specification for a product as outlined by project stakeholders.

Information gathering

the project manager gathers data as he/she/they/it/moo needs to have a clear understanding of a specific target date, alternative supplier options, the degree of top management support for the project,.

Constraints

what restriction can potentially have an influence on the development of the project.

alternative analysis

first clearly understanding the nature of the problem statement and then working to generate alternative solutions.

Project objectives

a clear statement of the final objectives for the project in terms of output, require resources, timing.

business case

The organization’s justification for committing to the project.

Statement of work (SOW)

detail narrative of the description of the work required for the project

Project charter

A document issued by the project initiator formally sanctioning the existance of the project and autherises the project manager to begin applying organzational resources to project activities.

project charter verifies that

there is a business case for the project

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Elements of the project are understood

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company-specific information for the project has been applied.

scope statement

reflects a project teams best effort at creating the documentation and approval of all important project parameters prior to the development phase.

4 parts of the scope statement

1. establish the project goal criteria
2. develop a mangement plan
3. establish a work breakdown structure
4. create a scope baseline

WBS

A hierachical composition of the total scope of the work to be carried out by the project team to acopmplish the project objective and create the project deliverables.

Work packages

elements of the project that are isolated for assignment to work centres for acomplishment.

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Organize tasks into cost control accounts.

Contractural requirements:

all projects are promised in terms of the specific functionality, or performance criteria, they will meet.

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