Week 4 Flashcards

1
Q

what is Project management maturity?

A

This is the development of project management
capability and expertise within the organisation, those who have it have increased project success rates but no standard way of measuring project management maturity

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2
Q

what is Dinsmore (1998) project management maturity meausre?

A
  1. initial: where firms have no process for managing projects
  2. repeatable: have info on planning and scheduling but info isnt shared with whole firm
  3. defined: have systems to manage projects but only used by specific people
  4. managed: firms have the project systems and everyone uses them
  5. optimised: firms have data on past projects and use for future improvements
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3
Q

what is Remy’s (1997) PM3 model for project management maturity?

A
  1. Ad-Hoc: firms here are unorganised and have accidental successes but more failures
  2. abbreviated: firms here have some type of system but still suffer from poor management = poor results
  3. organised: more standardised procedures and better results here
  4. managed: firms have controlled systems and results and are in line with project plan
  5. adaptive: firms here always try to improve their practices and so better results
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4
Q

what is Ibbs and Kwak (2000) project management maturity meausre?

A
  1. ad-hoc
  2. planned
  3. managed
  4. integrated
  5. sustained
    - similar to previous measures, models aid in showing where they are in PM maturity and how to improve therefore
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5
Q

how are projects selected?

A

the process of evaluating potential projects before choosing the best one as projects are chosen based on the firms strategic goals
- PM’s arent part of this process
- firms can use models to help decide based on resources and whether it increases profits/market position

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6
Q

what is the 6 criteria for selecting a model?

A
  1. Relevance - model should reflect firms current objectives
  2. Capability - model should include external and internal factors eg strikes
  3. Flexibility - model should be easy to modify eg tax changes
  4. Ease of use - results should be easy to understand
  5. Cost - should be low
  6. Ease of computerisation- easy to collect, store and manipulate data
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7
Q

what is the first project selection model?

A

SWOT which lists projects strengths, weaknesses, opportunities and threats,
- there are two types: numeric and non-numeric but models dont make the decisions as they dont fully describe the situation as it only works on the inputs provided by PM

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8
Q

what are the first 3 non-numeric selection models?

A

Non-numeric Selection Models
1. Sacred Cow
- Project is suggested by a senior (and powerful) official in the organisation eg new product, but this model means PM can’t say NO to snr person
2. Operating Necessity
- The project is required to keep a particular system operational, eg. saving lives and / or property
3. Competitive Necessity
- Project is necessary to sustain a competitive position, eg universities revamping their degree programmes

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9
Q

what are the last 2 non-numeric selection models?

A
  1. Product Line Extension
    – Projects are judged on how they fit with the current product line, fill a gap, strengthen a weakness, or extend the product line in a new desirable way
  2. Comparable Benefit Model
    – Several projects are considered and those with the most benefit to the firm are selected. follows this process:
  3. form selection committee
  4. divide projects into good, fair and poor
  5. order all projects from best to worst based on potential firm benefit
  6. select best project
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10
Q

what are numeric selection models?

A

Advantage of these models is that they create a numeric value for each project that can then be compared with other projects to aid in the selection process
* Most popular types of numeric models include:
1. Profitability models
2. Weighted Scoring models

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11
Q

what are profitability models?

A

Evaluate projects based on profitability they will potentially give to the organisation
- Include:
1. Payback Period
2. Net Present Value
3. Profitability Index

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12
Q

how do you calculate payback period?

A

fixed investment (cost) of project divided by estimated annual cash inflow from project
- good at highlighting risk of a project eg longer return means more risk, model doesn’t consider time value of money eg interest and inflation, also uses an average value which isn’t good for long term projects

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13
Q

how do you calculate net present value?

A

also known as discounted cash flow
- Calculates the value (in present day terms) of the project cash inflows and outflows expected to arise at different periods in the future
- Sum of the equivalent cash flows gives the NPV
- If NPV is positive = the project is acceptable
- If NPV is negative = the project is not acceptable
- see EQUATION SHEET

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14
Q

how do you calculate profitability index?

A

also known as cost-benefit ratio
- NPV of all future expected cash flows is divided by initial cash investment
- if ratio is greater than 1, project is good, but some projects might be good in some models and bad in others so PMs have to decide ultimately

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15
Q

what are the ADV and DISADV of profitability selection models?

A
  1. Advantages:
    -Simple and easy to use / understand
    - Data is easy to collect
    - Gives decision makers a clear recommendation
    - Can be amended to take risk factors into consideration
    * Disadvantages:
    - Only look at monetary factors
    - Short-sighted, payback period ignores time value
    of money, and cashflows beyond
    payback period
    - Heavily reliant on quality input data
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16
Q

what is weighted scoring models?

A
  • use multiple criteria to ‘score’ a project eg chance of success, profit, where each criteria is then given a ‘weight’ based on its relative importance. more important criteria are given higher ‘weights’ but a;; ‘weights’ have to = 1.
  • selection committee score the project on each criteria and choose one with highest score
17
Q

what are ADV and DISADV of weighted scoring selection model?

A
  1. Advantages:
    - Easy to use and understand
    - Easily tailorable / amended
    - Multiple criteria are included in the evaluation
    - Allow Project Manager to make some criteria more important than others
  2. Disadvantages:
    - Results can be rather subjective, as decision still down to PM
    - Criteria can be seen as independent
    - Can end up with large numbers of criteria
18
Q

what is a risk? and uncertainty?

A

Risk: when the decision maker knows the probability of each and every outcome, this is never normally the case
Uncertainty: when the decision maker has information that is not complete and
therefore cannot determine the expected value of each alternative, this is the normal state of affairs

19
Q

what is a portfolio of projects?

A

Organisations now run multiple projects simultaneously = Portfolio of Projects
- This has led to numerous challenges: smaller projects get limited support, delays in 1 project can result in delays to other projects, resources are not used in the most efficient way, bottlenecks occur

20
Q

what is project portfolio management?

A

used to:
- identify non projects
- reduce number of concurrent projects
- prioritise current projects
- remove risky projects
= so as to ensure firm has enough resources for all projects

21
Q

what is step 1 of project portfolio management?

A
  1. create project council:
    consists of senior managers, experienced PMs, they aid in establishing strategic direction for all projects, allocates funds to selected projects
22
Q

what is step 2 of project portfolio management?

A
  1. Project Council identifies:
  2. Categories of projects: eg R&D projects, New Product projects, .
  3. Criteria within each category: eg alignment to goals / strategy, Riskiness of project, Financial returns, probability of success, impact on customer satisfaction,
    – Each category will have unique criteria where all criteria are given a Scale and a Weighting
23
Q

what is step 3 of project portfolio management?

A
  1. collect data:
    - Project Council collects all data for each project based on criteria previously identified
    - All data is validated with those closest to it and any assumptions made based on the data must be
    documented
24
Q

what is step 4 of project portfolio management?

A
  • Project Council evaluate all resources available to the organisation in which people availability is especially important
  • Must also evaluate how the resources interrelate across the multiple projects
25
Q

what is step 5 of project portfolio management?

A

Project Council apply criteria to projects in each category and each project is ranked (from best to worst) based on its criteria
- This allows the Council to:
1. Identify (and suggest removal of) underperforming projects
2. Prioritise those new projects that must be conducted due to regulations / laws,
= The results of all the projects are then summarised

26
Q

what is step 6 of project portfolio management?

A

Based on summary, Project Council selects the projects to be funded, where projects with the highest “rank” are given funding first
– A mix of projects across the various categories is usually suggested, a list of “reserve” projects is created that will not get funding this
time around, but will be reconsidered in the next PPM cycle

27
Q

what is step 7 of project portfolio management?

A

Project Council disseminates results of PPM to everyone in the organisation
- Senior Management are expected to support the results and ensure that everyone cooperates
* The process is then repeated regularly
* Over time, the process undergoes Continuous
Improvement.

28
Q
A