PM Chapter 2 - Project Management and Information Technology Context Flashcards
A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria.
True
Organizations should only pursue projects that have the best financial value.
False
Low- or medium-priority projects that can be finished in less time than high-priority projects should always be completed first.
False
You can determine minimum scores or ____________________ for specific criteria in a weighted scoring model.
Thresholds
From the viewpoint of NPV only, if Project 2 has a higher NPV than Project 1, Project 1 should be chosen.
False
A program for IT ____________________ projects might include purchasing new hardware, software, and networking equipment, or determining standards for IT.
infrastructure
The main goal of programs is to obtain benefits and control not available from managing projects separately.
True
When using the hierarchical four-stage planning process for selecting projects, you must start at the bottom of the pyramid.
False
Grouping related ____________________ into programs helps improve coordination through better communications, planning, management, and control.
Projects
___________________ analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.
Net Present Value
A(n) ____________________ rate is the rate used in discounting future cash flows.
Discount
An organization should consider only projects with a negative NPV if financial value is a key criterion for project selection
True
___________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing costs.
Payback
Project portfolio management focuses on ____________________ issues while individual projects often focus on tactical issues.
Strategic
____________________ planning involves determining long-term objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for new products and services
Strategic
NPV analysis is a method for making equal ____________________ between cash flow for multiyear projects. Comparison
Comparison
Organizations—both large and small—cannot undertake most of the potential projects identified because of resource limitations and other constraints.
True
The required rate of return is the minimum acceptable rate of return on an investment.
True
A construction firm using ____________________ of scale can purchase materials, obtain services, and hire workers for less money if it is managing the construction of 100 houses instead of just one house.
Economies
With respect to NPV, all organizations start discounting in Year 0 (immediately).
False
A SWOT analysis involves the examination of Strengths, Weaknesses, Opportunities, and ____________________.
Threats
Just as projects are unique, so are project portfolios.
True
A balanced ____________________ is a methodology that converts an organization’s value drivers—such as customer service, innovation, operational efficiency, and financial performance—to a series of defined metrics.
Scorecard
Organizations have no choice in whether to fund projects that use __________ costs.
nondiscretionary
It is important for organizations to develop a fair, consistent, and logical process for selecting projects, programs, and ____________________.
Portfolios
Core projects are those that are required to run the business.
True
____________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing costs.
Payback
Projects with higher NPVs are preferred to projects with lower NPVs if all other factors are equal.
True
Most crucial projects, such as drug development or major transportation projects, will achieve payback in less than a year.
False
A(n) ____________________ is a group of projects managed in a coordinated way to obtain benefits and control not available from managing them individually
Program
Organizations need to narrow down the list of potential projects to those projects that will be most beneficial.
True
Payback occurs in the year when the cumulative benefits minus costs reach zero.
True
If you assign weights to criteria based on percentage, the sum of all the criteria’s weights must total 100 percent.
True
The annual discount ____________________ is a multiplier for each year that is based on the discount rate and year.
Factor
___________________ is the result of subtracting the project costs from the benefits and then dividing by the costs.
ROI
You can determine a project’s ____________________ by finding what discount rate results in an NPV of zero for the project.
internal rate of return
The core category of projects labeled as ____________________ costs must be funded for a company to stay in business.
Nondiscretionary
____________________ considerations are often an important aspect of the project selection process, especially during tough economic times.
Financial
In practice, organizations usually use a single approach to select projects.
False
An organization’s overall BUSINESS STRATEGY should guide the project selection process and management of those projects
Aligning Projects w/ Business Strategy
Determining LONG-TERM objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for new products and services
Strategic Planning
It is very important to start at the TOP of the pyramid to select projects that support the organization’s business strategy
Top-Strategic Planning
Business Area Analysis
Project Planning
Resource Allocation
Top-Strategic Planning
Business Area Analysis
Project Planning
Resource Allocation
NPV (Net present value) analysis
Is the rate used in discounting future cash flows.
Discount Rate
Is a multiplier for each year based on the discount rate and year (calculated as 1/(1+r)t, where r is the discount rate, and t is the year).
Discount Factor
is a multiplier for each year based on the discount rate and year (calculated as 1/(1+r)t, where r is the discount rate, and t is the year).
Return on Investment (ROI)
By finding what discount rate results in an NPV of zero for the project
Internal Rate of Return (IRR)
Is the amount of time it will take to recoup—in the form of net cash inflows—the total dollars invested in a project
Payback occurs in the year when the cumulative benefits minus costs reach ZERO. The shorter the payback period, the better
Payback period
Is a tool that provides a systematic process for selecting projects based on many criteria
Calculate the weighted scores by MUTIPLY the weight for each criterion by its score and adding the resulting values
weighted scoring model
Is a methodology that converts an organization’s value drivers—such as customer service, innovation, operational efficiency, and financial performance—to a series of defined METRIX
Balance Scorecard
Are chances to improve the organization
Opportunity
Are new requirements imposed by management, government, or some external influence
Directives
Which of the following is not part of the three-sphere model for systems management?
a) Business
b) Information
c) Technology
d) Organization
Information
Which of the four frames of organizations addresses how meetings are run, employee dress codes, and expected work hours?
a) Structural
b) Human resources
c) Political
d) Symbolic
Symbolic
Personnel in a ______ organizational structure often report to two or more bosses.
a) Functional
b) Project
c) Matrix
d) Hybrid
Matrix
Project work is most successful in an organization culture where all of the following characteristics are important except_____.
a) Member Identity
b) Group emphasis
c) Risk tolerance
d) Control
Control
A _________ is a product or service, such as a technical report, a training session, or hardware, produced or provided as part of a project.
a) Deliverable
b) Product
c) Work Package
d) Tangible Goal
Deliverable
Which of the following statements are false
a) An analysis project life cycle is a collection of project phases.
b) a Product life cycle is the same as a project life cycle.
c) The waterfall approach is an example of a predictive life cycle model.
d) Agile is an example of an adaptive life cycle model.
A product life cycle is the same as a project life cycle.
Which of the following terms describes a framework in phases involved in developing information systems?
a) Systems development life cycle
b) Rapid application development
c) Predictive life cycle
d) Extreme programming
Systems development life cycle
The nature of IT projects is different from the nature of projects in many other industries because they are very_______.
a) Expensive
b) Technical
c) Diverse
d) Challenging
Diverse
What term describes an organization’s acquisition of goods and services from an outside source in another country.
a) Globalization
b) Offshoring
c) Exporting
d) Global sourcing
Offshoring
__________ Is the leading agile development method.
a) Extreme programming
b) Sprint
c) Kanban
d) Scrum
Scrum
