Midterm Makeup — Chapter 3 (Slides & Textbook) Flashcards
What Is a Problem?
A problem is a gap between where you are and where you want to be, with obstacles existing that prevent easy movement to close the gap
What Is a Vision?
A vision is an organization’s purpose
What Is a Mission?
A mission clarifies what an organization does.
For whom? How? Why do they do it?
What Is Strategy?
What the organization does to support the vision and mission. The project should support the organization’s strategy.
Project Objectives…
... support the MOV and include: Scope (the project work to be completed) Schedule (time) Budget (money) Quality (conformance or fitness for use)
What does MOV stand for?
Measurable Organizational Value
The MOV must:
be some characteristics that can be objectively measured, to prove the project provided real value to the organization
MOV proves _______ of the project.
success or failure
MOV proves success or failure of the project.
All key stakeholders must _____ on MOV.
agree
All key stakeholders must agree on MOV.
MOV must also support the org’s _____.
strategy
MOV must also support the org’s strategy.
There are six steps to defining MOV:
- Identify desired area of impact
- Identify desired value of the project
- Develop an appropriate metric
- Set a time frame for achieving MOV
5 .Get agreement from stakeholders
6.Summarize MOV in a statement
How-to: Identify desired area of impact
Ask yourself: Where will this project affect the organization?
Strategic: New markets, products & services
•Customer: Better products & services, better
loyalty, higher satisfaction
•Financial: Increased profits, profit margins
•Operational: lower costs, higher efficiency
•Social: Education, health, safety, environment
How-to: Identify desired value of the
project
Ask yourself: Ok, now within each area of impact, what
will the project do to provide value?
Will it help you do something:
•Better? (e.g. quality, effectiveness) •Faster? (speed, efficiency, cycle time) •Cheaper? (reduce cost!) •Or do more in some way? (new markets, products)
How-to: Develop an appropriate metric
Ask yourself: So how will you measure that value?
•$$ - generate $x in new sales
•Percentage - reaching at least a certain number
(customer satisfaction > 95%)
•Numbers – have at least y new customers
Don’t get fancy – simple, clear measures are often
the best and Make it clear how the measure will be
collected
•Might need surveys, competitor data, etc.
How-to: Set a time frame for achieving MOV
Determine how long it’ll take to achieve the MOV
• Could have multiple time objectives – reach x
by 6 months, y by 12 months, etc.
How-to: Get agreement from stakeholders
Yup, easy to say, much harder to achieve
Everyone (project manager, sponsor, etc.) needs to
agree the MOV is realistic
How-to: Summarize the MOV in a clear, concise statement
or table.
This project will be successful if _________________.
MOV: There is an increase in awareness for healthy
living by having 250 new subscribers sign up for a
weekly newsletter within 6 months.
MOV: The web site will provide a 20% return on
investment and 500 new customers within the first
year of its operation
MOV is
the project goal.
What is a Business Case?
An analysis of the organizational
value, feasibility, costs, benefits,
and risks of several proposed
alternatives or options.
A Good Business Case…
Thorough in detailing all possible impacts, costs, and benefits Clear and logical in comparing the cost/benefit impact of each alternative Objective through including all relevant information Systematic in terms of summarizing findings
The Business Case
Step 1:
Define the MOV
Define the MOV involves:
• The project’s goal, the measure ofsuccess
• Must be measurable
• Must provide value to the organization,align
with the organization’sstrategy and goals
• Must be verifiable at the end of the project
• Must be agreed upon
• Guides the project throughout its life cycle
The Business Case
Step 2:
Form Cross-Functional CoreTeam
Form Cross-Functional CoreTeam involves:
- Credibility (quality of being trusted)
- Alignment with organizational goals
- Access to the real costs
- Ownership
- Agreement
- Bridge building
The Business Case
Step 3:
Identify Alternatives
Identify Alternatives involves:
Most problems can be solved more than one
way, so your job is to brainstorm and find
several* plausible ways to address
the problem
•One can be the ‘change-nothing’ answer
•Change processes but keep the existing systems
•Reengineer an existing system
•Buy something off the shelf to replace an existing
system
•Start over, and make a new system
The Business Case
Step 4:
Define Feasibility and Assess Risk
Define Feasibility involves:
- Feasibility (“doable and worth doing?”)
- Economic feasibility
- Technical feasibility
- Organizational feasibility
- Other feasibilities
Assess Risk involves:
• Risk Identification –What can go wrong? What
must go right?
• Assessment –What is the impact of each
risk?
• Response – How can the organization avoid
or minimize the risk?
The Business Case
Step 5:
Define Total Cost of Ownership
Determine the Total Cost of Ownership
(TCO) of each alternative, which is the sum
of…
direct or up-front costs, ongoing costs, and indirect costs
what are direct or up-front costs?
the cost of implementing the project
what are ongoing costs?
the cost of maintaining the
system
what are indirect costs?
the cost of lost productivity
during development, unexpected system down
time, etc.
The Business Case
Step 6:
Define Total Benefits of Ownership
Determine the Total Benefits of Ownership
(TBO); what are the benefits of each
alternative?
- Increasing high-value work
- Improving accuracy and efficiency
- Improving decision-making
- Improving customer service
The Business Case
Step 7:
Analyze the proposed alternatives
Analyze the proposed alternatives involves:
Analyze alternatives to see which has the
most value for the organization
There are five cash flow metrics most
often used to answer that ‘most value’
question:
payback, breakeven, ROI, NPV,
and scoring models
Payback:
• Payback method determines how long it will
take to recover the initial investment
Break Even:
Similar to Payback, it determines the point at which
a project would begin to recoup its original investment.
Return on Investment (ROI):
It describes the percent
Project ROI = (total expected benefits – total expected costs) DIVIDED BY total expected costs
The Business Case
Step 8:
Propose and Support the Recommendation
Propose & Support Recommendation involves:
Once the alternatives are identified and
analyzed, the last step is to recommend one of
the options.
The Business Case is
an investment proposal.
