Planning for Success

Question 1

Describe a business case

Answer 1

The business case provides the justification for undertaking a project or programme. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.

Question 2

List the typical contents of a business case

Answer 2

1. Strategic case - the background and the why
2. Options appraisal - which options are considered (including do nothing) and the preferred one
3. Expected benefits - benefits to come from the work, any unavoidable disbenefits
4. Commercial aspects - the costs, investment appraisal and funding arrangements
5. Risks - the major risks and their impact on the business case
6. Timescales - summary of the delivery of outputs and subsequent realisation of benefits

Question 3

Explain the purpose of a business case and its importance during the project life cycle

Answer 3

BC provides a high level overview of the entire project.

Concept phase: BC is a key project output, documenting the initial idea, as well as providing the information required to scope the project and plan it in detail. Must include sufficient realistic information to make an informed decision about progressing to the Definition phase.

Definition Phase: High level info in the outline business case is re-validated to ensure ongoing project viability. A detailed business case is prepared.

Handover & Closure: BC is used to determine whether PM and team have delivered project to the agreed success criteria.

Benefits realisation: During the Operational phase, project must be reviewed against BC to determine whether it has achieved the desired benefits.

Question 4

Explain the ownership, authorship and approval of a business case

Answer 4

The project sponsor is both owner and approver (or seeker of approval) of the BC.

The PM, their Project Office, SMEs and Finance are typical contributing authors of the BC.

Question 5

List and define the two types of benefits

Answer 5

Tangible (hard) benefits: quantifiable benefits with a tangible value, such as increased profits, reduced costs.

Intangible benefits: qualitative in nature, such as increased staff morale, improved brand awareness.

Whether tangible or intangible, benefits MUST be measurable in order to be managed.

Question 6

List the objectives of benefits management

Answer 6

1. Agreement - early agreement of benefits among stakeholders
2. Link - clear link between benefits and the organisation’s strategic objectives
3. Ownership - assigning ownership of benefits and responsibility for their management
4. Focus - using the benefits to provide a focus for project delivery
5. Mitigation of risks - understanding the threats to benefit realisation and taking steps to mitigate

Question 7

Outline the benefits management process

Answer 7

1. Define plan - plan will define how benefits will be managed by setting out policies for aspects such as measurement, roles and responsibilities, priorities and KPIs
2. Identify benefits - the interrelationship between requirements, outputs and outcomes needs to be understood and is achieved through benefits modelling and mapping. Each benefits must be documented in terms of: priority, interdependencies, value, timescales, assigned ownership
3. Plan realisation - identify, agree and capture baseline measurements with agreed targets. This permits performance reporting and achievement of agreed KPIs.
4. Implement change - (dis)benefits arise from change. Implementing change often results in opportunities for identifying/realising additional benefits.
5. Realise benefits - activities required to realise/monitor benefits must be documents as part of handing project to BAU.

Question 8

Explain the relationship between benefits, success criteria and KPIs

Answer 8

Success criteria are the qualitative or quantitative measures by which the success of project, programme and portfolio management is judged. Success criteria are supported by KPIs.

KPIs are measures of success that can be used throughout the project to ensure that it is progressing towards a successful conclusion.

Question 9

What are success factors

Answer 9

Success factors are management practices that, when implemented, will increase the likelihood of the success of a project, programme or portfolio.

Examples are:

1. Project mission
2. Top management support
3. Project schedule and plan
4. Client consultation
5. Personnel recruitment, training and selection
6. Technical tasks
7. Client acceptance
8. Monitoring and feedback
9. Communication
10. Trouble-shooting

Question 10

Describe a Maturity Model

Answer 10

A maturity model is an organisational model that describes a number of evolutionary stages through which an organisation improves its management processes.

Question 11

What is a disbenefit?

Answer 11

A disbenefit is an unavoidable negative impact as a result of the change.

Provided the negative impact is acceptable in the wider context of the total benefits, this may be deemed to be acceptable. E.g. a project to consolidate many offices into a single building. A disbenefit would be the unavoidable impact that some staff will have a longer journey to work.

Question 12

Define investment appraisal

Answer 12

Investment appraisal is a collection of techniques used to identify the attractiveness of an investment.

The purpose is to assess the viability of project decisions and the value they generate and to place a value on benefits to justify the cost incurred.

Question 13

List the factors that form part of an investment appraisal

Answer 13

1. Financial
2. Legal
3. Environmental
4. Social
5. Operational
6. Risk

Question 14

Explain some of the financial appraisal methods: Payback, Net Present Value, and Internal Rate of Return

Answer 14

1. Payback Period method: calculates the time taken to recover the initial investment. Expresses an investment’s attractiveness in terms of time. Selects the project with the shortest time period.
2. New Present Value: applies Discounted Cash Flow that makes allowances for the reduction in money’s spending power over time.
3. Internal rate of Return: expresses the attractiveness of an investment as a percentage rate of return.

Question 15

Explain some of the financial appraisal methods: Payback, Net Present Value, and Internal Rate of Return

Answer 15

1. Payback Period method: calculates the time taken to recover the initial investment. Expresses an investment’s attractiveness in terms of time. Selects the project with the shortest time period.
2. New Present Value: applies Discounted Cash Flow that makes allowances for the reduction in money’s spending power over time. Selects the project with the highest net present value.
3. Internal rate of Return: expresses the attractiveness of an investment as a percentage rate of return. Measures the Discount Rate when NPV = 0.

Question 16

Summarise the strengths and weaknesses of the Net Present Value financial appraisal method

Answer 16

Strengths:

Weaknesses:

Question 17

Summarise the strengths and weaknesses of the Net Present Value financial appraisal method

Answer 17

Strengths:

1. Takes into account the time value of money
2. Allows for inflation and escalation
3. Looks at the whole project
4. Expresses all future cash flows in today’s values, enabling direct comparison of options in projects or comparison of different projects

Weaknesses:

1. Complex to calculate
2. Sensitive to the Discount rate chosen for the project
3. Assumes a constant rate of interest

Question 18

Summarise the strengths and weaknesses of the Internal rate of Return financial appraisal method

Answer 18

Strengths:

1. Takes into account the time value of money
2. Looks at the sensitivity of an investment and te impact of fluctuations in economic factors
3. Can be directly compared with the cost of capital

Weaknesses:

1. Complex to calculate
2. Heavily dependant on assumptions
3. Can’t be used for comparing projects due to differences in cash flows and timings

Question 19

Describe information management

Answer 19

Information management is the collection, storage, dissemination, archiving and destruction of information. It enables teams and stakeholders to use their time, resource and expertise effectively to make decisions and to fulfil their roles.

Question 20

Outline characteristic of good quality information

Answer 20

1. Accuracy - reliability
2. Relevance - applicable to users’ needs
3. Timeliness - up to date and available when required
4. Completeness - detailed and avoids misrepresentation

Question 21

List the five components of a project’s information management system

Answer 21

1. Collection - the how. Use of templates, roles and responsibilities
2. Storage - how and where stored. Ease of access, security &confidentiality, storage capacity.
3. Dissemination - to right people at the right time
4. Archiving - searchable database
5. Destruction - retention schedules

Question 22

Describe the three methods of distributing information

Answer 22

1. Interactive - meetings, conference calls, etc. Multi-directional exchange of information.
2. Push - emails, letters, etc. Sending info to stakeholders. Allows confirmation of whether info has been received/understood.
3. Pull - intranet, eLearning, etc. Used for large amounts of info. Allows users to access at their own convenience

Question 23

Explain when reports are generated

Answer 23

1. Time-based - created at regular intervals (weekly, monthly). Could include checkpoint reports, status reports, RAG, etc.
2. Event-based - created at agreed points in the project life cycle. Could include deliverable sign-off, stage-gate reports, end-project reports, etc.
3. Ad-hoc - created as and when required on request. Could include unscheduled project audits, exception reports, etc.

Question 24

Summarise the different categories of project reports

Answer 24

1. Variance analysis - a backward look at what caused any difference between the agreed baseline targets and the present actual performance.
2. Forecasting - prediction of future performance based on actual performance to date.

Question 25

Summarise the different type of project reports

Answer 25

1. Progress - Gantt charts, status reports, RAG reports
2. Quality - quality register, checklists
3. Risk - rick register, checklists
4. Finance - Budgetary reports, cost variance spreadsheets
5. Review/audit - checklists, recommendations, process improvements, project evaluation reports

Question 26

Define planning

Answer 26

Planning determines what is to be delivered, how much it will cost, when it will be delivered, how it will be delivered, and who will carry it out.

Question 27

Describe how planning occurs at the policy and delivery level

Answer 27

1. Policy level - a series of plans set out the principles of how each aspect of the work will be managed. These plans include documents such as the risk/quality/benefits management plans.
2. Delivery level - documents answer why, what, how, how much, who, when and where.

Question 28

Explain the purpose, content, and objectives of the project management plan (PMP)

Answer 28

The PMP provides detailed information on the preferred option and answers questions to satisfy the project’s purpose.

1. Why: reasons the project is required and a definition of the need/problem being addressed.
2. What: project objectives/scope/deliverables/acceptance and success criteria/KPIs/constraints/dependencies
3. How: preferred project strategy, reasons for the preferred choice, how the project will be delivered/controlled/managed
4. How much: budgets, cash flows for expenditure, income
5. Who: project organisation, role and responsibilities, Organisation Breakdown Structure/Responsibility Assignment Matrix.
6. When: schedule, including key milestone dates, phasing and detailed timings for project activities.
7. Where: geographical location of the project (where the work will be performed), impact on costs and personnel

Question 29

Describe the roles involved in the PMP

Answer 29

1. PM: creation, accuracy, and maintenance of the PMP
2. Project team: risks, time and cost estimates, success factors, success criteria relating to quality and acceptance criteria of the deliverables
3. Sponsor: formal sign-off of the PMP, agree to any controls and reporting, approve any changes, use PMP to appraise PM’s performance
4. Customer: identification of key constraints, approval of satisfactory acceptance criteria
5. Other stakeholders

Question 30

Explain how the PMP is developed and used during the project life cycle

Answer 30

1. Definition phase: primary input for PMP creation is the BC.
2. Development phase: PMP is the focal point for monitoring/controlling processes, stakeholder comms, managing change
3. Handover & closure: used for agreeing acceptance of deliverables, appraising the PM’s/team’s performance in accomplishing the success criteria

Question 31

Define estimate

Answer 31

An estimate is an approximation of project time and cost targets, refined throughout the project life cycle

Question 32

Explain the estimating funnel

Answer 32

At the concept phase of a project, establishing cost and time estimates is difficult due to lack of detailed information. As the project continues through life cycle phases, estimate accuracy increases due to more information available, increased experience and project maturity. This is known as the Estimating Funnel.

Question 33

Identify the sources of estimating problems

Answer 33

1. Optimising/pessimism
2. Social/political pressure
3. Experience
4. Unclear scope
5. Source data

Question 34

Describe common methods of estimating

Answer 34

1. Comparative
2. Parametric
3. Bottom-up