Project, program and portfolio Selection Flashcards
Selecting project in most organization
Most organizations cannot undertake most of the potential projects identified because of resource limitations and other constraints: there are usually more projects than time and resources available to implement them
Overal business strategy
guide the project selection process and management of those projects (“purpose”)
What went wrong with the project ?
-The project was completed over budget and behind schedule –> caused “collateral damage”
Strategic planning
-long term objectives
-analyzing the strengths and weaknesses of an organization
-opportunities and threats in the business environment
-provides important information to help organizations identify and then select potential projects
-includes the organization’s mission, vision, and goals for the next 3-5 years
Pyramid of a Traditional Project planning process ( 4 steps)
- Strategic Planning: Senior executives develop the strategic plan and tie it to the mission and vision of the organization and identify key business areas.
- Business area analysis: Directors and department managers analyze needs in their areas and document key business processes that are required.
- project planning: Various managers and stakeholders propose potential projects and define their scope, benefits, and constraints
- Resource allocation: Authorized managers allocate resources to selected projects.
voir image page 15
Agile project planning
-more flexible
-allows the team to provide feedback to strategy –> can influence a change of direction
-defines the strategic direction, funds team –> define the best approach and deliver the greatest business value
-less hierarchical, more organized as “tribes”
traditional project planning
-top down planning
-selecting and funding a specific project
-annual strategy meeting
Strategy implementation circle (slide 17)
Interactive approach focusing on value, feedback, and benefits
benefit –> strategy –> objectives –> projects –> products –> value –> feed back (in cercle)
Product roadmap
-for agile planning
- is a tool used to show a high-level visual summary of the vision
and direction of a product or products over time.
-can show one product, or it can show many products
Gantt chart
-is a standard format for displaying project schedule information by listing project activities and their corresponding start and finish dates in a calendar format.
Why company use the road map
helps to define the why behind the project (or program)
Why company use Gantt chart
helps to define the how and when the project should be establish
Product management
is the practice of strategically driving the development, market launch, and continual support and improvement of a company’s products.
Product manager
are responsible not for a specific project or team, but rather for one or more of a company’s products
Methods for selecting Projects
1.Focus on competitive strategy and broad organizational needs
2. Perform net present value analysis or other financial projections
3. Use a weighted scoring model
4. Implement a balanced scorecard
5. Address problems, opportunities and directives
6. Consider project time frame
7. Consider project priority
Focusing on a competitive Strategy
-cost leadership: Attract customer –> product and service are inexpensive
-Develop products and services for a particular market niche
Broad Organizational needs
People agree there is a need for a project, they will make funds available, and there is a strong will to make the project succeed
Financial projection methods
-Net present value analysis
-Return on investement
-Payback analysis
why financial projections are important?
important aspects of the project selection
Net present value (NPV)
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
–> the return from a project exceeds the opportunity cost of capital- the return available by investing the capital elsewhere
Project with a positive NPV
should be considered if financial value is a key criterion
–> Projects with higher NPVs are preferred to projects with lower NPVs if all other factors are equal
NPV consideration
Determine estimate cost and benefits for the life of the project and the produce it produces
Return on investement (ROI)
is calculated by subtracting the project costs from the benefits and then dividing by the costs
ROI calculation
ROI = (total discounted benefits - total discounted costs) / discounted costs
ROI in an organization
have a required rate of return or minimum acceptable rate of return on investment for projects
–> The higher the ROI, the better
internal rate of return (IRR)
can by calculated by finding the discount rate that makes the NPV equal to zero
Payback analysis
determines how much time will lapse before accrued benefits
overtake accrued and continuing costs
Payback period
is the amount of time it will take to recoup, in the form of net
cash inflows, the total dollars invested in a project
–> The shorter the payback period, the better
When payback occurs?
in the year when the cumulative benefits minus costs reach zero
Weighted Scoring Model
is a tool that provides a systematic process for selecting projects based on many criteria
How does it work the Weighted Scoring model?
-Identify criteria important to the project selection process
-Assign weights (percentages) to each criterion so they add up to 100%
-Assign scores to each criterion for each project
-Multiply the scores by the weights and get the total weighted scores
What is better in a Weighted Scoring model?
The higher the weighted score, the better
Balance scorecard
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 and coherent metrics
Problems
are undesirable situations that prevent an organization from achieving its goals - can be current or anticipated
Opportunities
are chances to improve the organization
Directives
are new requirements or regulations imposed by management,
government, or some external influence
Project Time Frame
to select project selection is the time it will take to complete a project or the date by which it must be done
Project priority
Many organizations prioritize projects as being high, medium, or low priority based on the current business environment
–> always focus on high-priority project
Program selection
Recall that a program is a group of related projects, subsidiary programs, and program activities managed in a coordinated manner to obtain benefits not available from managing them individually
After deciding which projects to pursue
organizations need to decide if it is advantageous to manage several projects together as part of a program
Project Portfolio Selection
-to focus on enterprise success when creating project portfolios
-need to cancel or put several projects on hold, reassign resources from one project to another, suggest changes in project leadership, or take other actions that might negatively affect individual projects or programs to help the organization as a whole
Where to play
page 43 (la Croix)
commercial introduction. and probability of success
some projects are either having a (too) low PoS (probability of success) as compared to other similar projects, or are relatively delayed, or offer opportunity to speed up.
Risk vs. opportunity
4 types of innovation projects
-white elephant: high expected risk but low expected value
-Bread and Butter: low expected risk but low expected value
-Pearls: low expected risk and high expected value
-oyster: high expected risk and high expected value
