Organisation Strategic and Project Selection Flashcards
Why project manager need to understand the strategic management process?
- understand the organisation’s Mission and Strategy, because signify organisation own unique identity or value of future goal.
- to generate/make Appropriate change request, Decision and Adjustment according to the future goal of the organisation.
- [For example,] whether for project manager decision to align it product focus on, great value to the finest or freshness and made to order, that links to company Mission?
- Therefore, the proposal that implement strategic management plan will receive Effective Support from stakeholder and senior management.
Reason:
in order to deliver a successful project also require project manager to understand the organisation’s Mission and Strategy, because it signify organisation own unique identity or value of future goal.
This should help project manager to generate/make Appropriate change request, Decision, and Adjustment according to the future goal of the organisation. For example, whether for project manager should align it product focus on great value to the finest or freshness and made to order. Therefore, the proposal of the strategic management plan will receive Effective Support from stakeholder and senior management.
The Strategic Management Process
- It is necessary to clearly link all portfolio to an organisation Strategy, Goal, and Mission, these Provide creation of Ideas and Focus point of the organisation Future direction.
- Implement a set of the strategic plan, involve accessing the changes in the external environment and evaluate the firm competitive position,
- Therefore, it encourages an integrative approach to a common strategy.
It is necessary to clearly link all portfolio to an organisation Strategy, Goal and Mission, these Provide the creation of Ideas and Focus point of the organisation Future direction.
Implement a set of the strategic plan, involve accessing the changes in the external environment and evaluate the firm competitive position. Therefore, it encourages an integrative approach to a common strategy.
Activities of Strategic Management Process
1) Review or revise Mission statement and
Define strength and weaknesses Internally and Externally.
2) Set-long range goals and
achievable objective
3) Analyse portfolio of strategic choice and Formulate strategies implementation
4) Implement Selection strategies through projects
Activities of Strategic Management Process:
1) Review or revise Mission statement and
Define strength and weaknesses Internally and Externally.
2) Set-long range goals and
achievable objective
3) Analyse portfolio of strategic choice and Formulate strategies implementation
4) Implement Selection strategies through projects
A Portfolio Management System
- align with Strategic goals and Prioritised in a suitable manner.
- provides measurable information for selecting a project to implement, in a logical and define manner.
Process of a portfolio system should include:
1) Categorization of project
2) Selection criteria depending upon classification
3) Source of proposal
4) Evaluate proposal
5) Prioritization the portfolio of the project
aim to ensure each portfolio align with strategic goals and prioritised in a suitable manner. Portfolio management provides measurable information for selecting a project to implement, in a logical and define manner.
The process of a portfolio system should include:
1) Classification of project
2) Selection criteria depending upon classification
3) Source of proposal
4) Evaluation proposal
5) Managing the portfolio of the project
Portfolio of Projects By Type
Compliance and Emergency (must do)
-project that definitely make profit or emergency internal and external project.
Operational
-project that support a company current operations.
Strategic Project
-project support company overall strategies traget for the future
Compliance and Emergency (must do)
-project that definitely make profit or emergency internal and external project.
ie implementation of employment law, industry standard of health and safety regulation, report statutory tax and audit.
Innovate new product different from other industry for higher profit.
Operational
- project that support a company current operations.
ie. changing student desk, replace damaged shelf, a replacement for an automated counter cash pay system,
Strategic Project
- project support company overall strategies traget for the future
ie. purchasing new company to meet sales traget, joint venture with other bigger organisation to secure funds and support. Create a webpage.
Project Portfolio Management- Selection Models
consolidate and analyse a large set of project proposal with the used of various processes, methods, and technologies for better reporting by the project manager and project management office (PMO) to select the key features or elements.
For Project Portfolio Management to determine the key features one must cope with uncertainties whether in finances, availability of resources, schedule activities to achieve project goals while the constraints of environment factor and strategic objectives.
Check List:
List of questions to review potential projects to determine their acceptance or rejection.
Simple Scoring:
A score that weights sum of the criteria
Financial:
Payback, Net Present Value (NPV), Internal Rate of Return (IRR)
Non- Financial:
Projects of strategic importance to the firm
Multi-Weighted Scoring:
Used Several weighted criteria selection to evaluate project proposals.
Checklist Model
the simplest method of screening and selecting the project. Basically making a listing of criteria that are of concern the organisation choice of project. Review and select the potential list. This method helps to map out the important criteria.
Simple scoring method
scoring model used to analyse the benefit and risk of the project by weighting them in score points. It is useful for project with several criteria, score finalized for each criteria.
Financial Model
- Payback
is to calculate the duration it takes to recover the amount invested on the project from its net cash flow. Shorter payback is the most desirable. It eliminates long term risky project, as a result, it ignore time value for money (TVM), omit consider for profit (IRR), assume cash inflow for investment period (NPV)
payback(Yrs) = estimate investment cost / Net cash flow
Financial Models
- Net Present Value (NPV) model
calculate the net present value of all cash flow benefit from the project. Net present value exceed investment cost equal Positive NPV, means the project is acceptable. If investment cost exceeds net present value of cash flow equal Negative NPV, means it cost us more to invest in the project.
Present value / discounting = 1 * (1 + r)n
r means cost of capital
n means period
cash flow - 1* (1 + r)n = present value
Invested project - ( +all present value) = Net Present Value
