C

Exam - 231219

EVA Approach

  • SV = EV – PV = 15000 – 20000= -5000 KSEK
  • CV = EV – AC = 15000 – 20000= -5000 KSEK
  • CPI = EV/AC = 15000/20000 = 0.75
  • SPI = EV/PV = 15000/20000 = 0.75
  • Total project costs = AC + ‘Remaining EV’/CPI = AC + (Original budget - EV)/CPI = 20000 + (40000 – 15000)/0.75 = 53 333 KSEK

Analytical Note to Project Sponsor

  • Project is underperforming in time and schedule.
  • Schedule delay started after the second month, cost performance went according to plan until the third month.
  • If no improvements are made, costs will reach 53 333 KSEK instead of 40 000KSEK.

Drawback of EVA as a Schedule Control Tool

  • Does not differentiate between progress on different types of activities (critical vs. non-critical paths).

Payback Method of Project Evaluation

  • Project 1 Payback = (40 MSEK + 5 MSEK + 5 MSEK)/(10MSEK) = 5 years
  • Project 2 Payback = (20 MSEK + 6 MSEK)/(10 MSEK - 3 MSEK - 3 MSEK) = 6.5 years
  • Project 1 should be prioritized due to shorter payback period.

Types of Projects and Budgeting Challenges

  • External Project (“Business Project”): Commissioned by client, who owns the result. Requires clear specifications for budgeting/cost engineering.
  • Internal Project, Type A (“Development Project”): Commissioned by company, which owns the result to be sold. Cost estimation is challenging due to internal negotiations.
  • Internal Project, Type B (“Development/Change Project”): Commissioned by company, which owns the result to improve operations. Difficult to control budget and deliver clear benefits.

Communication Plan

  • Key elements: Target group, Why?, What?, When?, How?, Responsibility of…
  • Examples of target groups: Steering Committee, Project Owner, Project Group, Project Manager, Resource Owner, End Users (Patients), Stakeholder (International health organization).

Sustainability Aspects

  • Social: Regular feedback, fair management practices, transparent communication.
  • Economic: Align project scope with stakeholder needs, sustainable methods where economically viable.
  • Environmental: Minimize waste, optimize energy consumption, proper bio-waste treatment.

Conflict Management Styles (Tonnquist)

  • Competing: Quick, decisive action needed, can damage relationships.
  • Collaborating: Important decisions, win-win solutions, time-consuming.
  • Accommodating: Collaboration more important than the cause, adaptability decreases respect.
  • Compromising: Time pressure, can lead to dissatisfaction.
  • Avoiding: Delays conflict, conflict not resolved.

Conflict Resolution Strategies (Tonnquist)

  • Monitoring: PM ensures parties resolve conflict themselves, yields long-term results.
  • Mediating: PM helps parties resolve conflict, involves relating sides of the story.
  • Arbitrating: PM makes an authoritarian decision.

Negotiation Approaches

  • Distributive (Zero-Sum): Claim as much value as possible, adversarial, concerns few parameters, strong first bid.
  • Integrative: Increase overall value, recognize different priorities, less adversarial, requires disclosure of information.