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Project Management Overview and Project Selection MGMT562 Mengshi Lu

This document provides an overview of project management and project selection. It defines a project and project management, describes the project lifecycle and common project paths. It also discusses considerations for project selection and different qualitative and quantitative methods for selecting projects, including sorting, financial, and scoring approaches. The goal of project management is to deliver projects on schedule, under budget and meeting specifications.

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Hasan Tahsin
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
54 views

Project Management Overview and Project Selection MGMT562 Mengshi Lu

This document provides an overview of project management and project selection. It defines a project and project management, describes the project lifecycle and common project paths. It also discusses considerations for project selection and different qualitative and quantitative methods for selecting projects, including sorting, financial, and scoring approaches. The goal of project management is to deliver projects on schedule, under budget and meeting specifications.

Uploaded by

Hasan Tahsin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Project Management Overview

and Project Selection

MGMT562
Mengshi Lu
Agenda
Project Definition and Characteristics

Project Lifecycle

Project Selection

2
Definitions (from PMI)
A project is a temporary endeavor
undertaken to create a unique product or
service.

Project Management is the application of


knowledge, skills, tools, and techniques to a
broad range of activities in order to meet the
requirements of a particular project.
3
Project Hierarchy

Program
Project Project
Task Task Task Task

4
The PM Triangle

5
Project Management Goal
Three objectives
(1) on schedule, (2) under budget, and (3) meet
the specifications
Project Managers role
Manage trade-offs
Manage risk

6
Project Management Trends
PM as a profession
Project Management Office (PMO)
Geographically disparate teams
Agile methodology
Shorter project life cycles

7
The Project Lifecycle

Monitor
Initiate Plan Execute and Close
Control

8
Common Project Paths
S-Curve J-Curve
Work Completed

Work Completed

Time Time

9
Project Selection Considerations
Mandate
Profitability
Strategic fit
Resource availability
Internal expertise
Relationship among projects in portfolio
Risk tolerance
10
Project Selection Methods
CEO or other senior leadership
Qualitative Competitive/Operational Necessity
Methods Sorting Methods
Quicksort
Financial Methods
Payback Period
Quantitative Net Present Value
Methods Scoring Methods
Weighted Factor
Binary Factor
11
Sorting Methods
Quicksort
Divide all projects into high/low priority
Subdivide each category into high/low
Repeat until all projects are ordered

12
Financial Methods
Payback period

=

Net present value


=

(1 + )
=1

13
Financial Methods Example
A project is estimated to cost 3M, and increase
profit by 1M/year for five years.

3
= = 3
1

14
Financial Methods Example
Using a hurdle rate of 10%:
5
1
=
3
(1 + .1)
=1

= 909 + 826 + 651


+683 + 621 3 = 791

In Excel: NPV(.1, 1M, 1M, 1M, 1M, 1M) 3M


15
Scoring Methods
Weighted Factor Method
Choose factors and their relative importance
Score each factor on numerical scale
Compute weighted total
Binary Factor Method
Choose factors
Score each factor yes/no
Count number of yeses
16
Weighted Factor Example
Category Weight Project A Project B Project C
Strategic Fit 20% 2 2 3
Expected 30% 3 2 2
Profitability
Builds New 20% 1 3 1
Capabilities
Utilizes Existing 25% 2 1 2
Expertise
Enables Future 5% 1 3 2
Projects
Total 2.05 2 2
17
Binary Factor Example
Category Project A Project B Project C
Strategic Fit Yes Yes Yes
Expected Yes Yes Yes
Profitability
Builds New No Yes No
Capabilities
Utilizes Existing Yes No Yes
Expertise
Enables Future No Yes Yes
Projects
Total 3 4 4
18
Summary
Project Management has developed into its
own discipline that includes all aspects of
initiating, planning, executing, monitoring and
controlling, and closing the project.

The first step in project management is


selecting the appropriate project using
qualitative or quantitative tools.
19

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