Manage and track the project

Question 1

What are the components of the Earned Value Analysis?

Answer 1

• ATWP is the actual time for work performed.
• STWP is the scheduled time for work performed.

► The time variance is the difference between STWP and ATWP (positive means we are ahead), it informs on how late/early the project is compared to the plan.

• ACWP is the actual cost of work performed
• BCWP is the budgeted cost of work performed.

► The cost variance is the difference between the BCWP and the ACWP, it informs on how much more did I spend until now ?

• BCWS is the budgeted cost of work scheduled

► The schedule variance is the difference between BCSP and BCWS, it informs on what resource do I need.

Question 2

How to set the right conditions for feedback ?

Answer 2

The brain automatically goes either to the protection zone, if the stimuli reveiced are negative, or to the learning zone, if it was positive and constructive.

A good feedback shouldn’t include closed question, pushing the respondent to give the answer expected by the feedback giver → THREATENING QUESTION

Question 3

How to create a learning environment ?

Question 4

MBTI on how to give more effective feedback ?

Answer 4

• Rational NT: like conceptual and big picture discussion, will accept feedback only if well-articulated and documented, regular and planned feedback.
• Idealist NF: value relationship over content/task, tend to take negative feedback quite personally, will accept feedback if clearly targeting their skills or experience not them as individuals.
• Guardian SJ: like organized and formalized feedback, like details and concrete examples, regular and planned feedback.
• Artisan: like to be informal and don’t like procedure, will listen to feedback only if needed.

Question 5

What are the key concepts of Portfolio Management ?

Answer 5

The objective is to develop and maintain a coherent project portfolio by selecting , prioritizing and postponing. Key concepts are:

1. project council
2. what should be done ?
3. what can be done ?
4. decision and implementation
5. barriers and enablers ?

Question 6

What is the methodology for Portfolio Management?

Answer 6

1. Where: where the organization wants to go, it is based on their mission, strategic objectives and values.
2. What

Question 7

How to calculate project value ?

Answer 7

Net Present Value (NPV)

• Calulates the net present value of an investment by using a discount rate and a series of future paymens (negative values) and income (positive values)*
• NPV(rate, value1, value2, …)*
• rate is the rate of dicount over the length of one period
• value1, value2, … are 1 to 29 arguments representing the payments and incomes.

Question 8

Is the net present value reliable?

Answer 8

NPV depends on:

• The discount rate (r)
• The number of periods to consider
• The quality of the forecast revenues / expenses

NPV does not take into account the cash flow efforts NPV assumes re-investment at capital rate

Question 9

What is the IRR ?

Answer 9

It’s the internal rate of return, the interest rate received for an investment consisting of payments (negative values) and income (positive values) that occur at regular periods.

The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Question 10

Is the IRR reliable ?

Answer 10

It depends on

• the number of periods to consider
• the quality of the forecast revenues / expenses

► IRR does not provide an answer in case of different initial efforts IRR assumes re-investment at “IRR” rate.

Question 11

What is the Payback Period (PP) ?

Answer 11

The payback period is when your cumulated benefits paid back your initial investment.

It could be computed simply as:

PP (in years) = Initial investment / Yearly benefits

(-) Negative aspects are that there is no actualization, it cannot be used for project with different lengths !

(+)Positive is that it is simple and it provides confidence.

Question 12

Now we all those tools how do we decide ?

Answer 12

• Reject the project if IRR(project) < MAIRR (minimum acceptable internal rate of return
• Select the lowest possible investment with acceptable IRR
• Increase initial investment if the additional investment increase has an IRR >= MAIRR
• Select the largest investment above which an increase is not acceptable
• Capital Rationing: Select the best mix of projects, that is the mix witht the largest NPV

Question 13

A more general mulicriteria approach

Answer 13

First, evaluate each candidate with respect to the criteria, independently, on a same scale. Then, define the weights of the criteria. After, with the weights, compute the final score.
The Analytic Hierarchy Process (AHP) builds pairwise ratio/comparison and derive weights.

Question 14

What is the analytic hierarchy process (AHP) ?

Answer 14

The analytic hierarchy process (AHP) is a structured technique for organizing and analyzing complex decisions, based on mathematics and psychology.

It was developed by Thomas L. Saaty in the 1970s and has been extensively studied and refined since then. It represents the most accurate approach for quantifying the weights of criteria. Individual experts’ experiences are utilized to estimate the relative magnitudes of factors through pair-wise comparisons. Each of the respondents has to compare the relative importance between the two items under special designed questionnaire (note that while most of the surveys adopted the five point likert scale, AHP’s questionnaire is 9 to 1 to 9