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Project Management Overview and Project Selection MGMT562 Mengshi Lu
Project Management Overview and Project Selection MGMT562 Mengshi Lu
Project Management Overview and Project Selection MGMT562 Mengshi Lu
MGMT562
Mengshi Lu
Agenda
Project Definition and Characteristics
Project Lifecycle
Project Selection
2
Definitions (from PMI)
A project is a temporary endeavor
undertaken to create a unique product or
service.
Program
Project Project
Task Task Task Task
4
The PM Triangle
5
Project Management Goal
Three objectives
(1) on schedule, (2) under budget, and (3) meet
the specifications
Project Managers role
Manage trade-offs
Manage risk
6
Project Management Trends
PM as a profession
Project Management Office (PMO)
Geographically disparate teams
Agile methodology
Shorter project life cycles
7
The Project Lifecycle
Monitor
Initiate Plan Execute and Close
Control
8
Common Project Paths
S-Curve J-Curve
Work Completed
Work Completed
Time Time
9
Project Selection Considerations
Mandate
Profitability
Strategic fit
Resource availability
Internal expertise
Relationship among projects in portfolio
Risk tolerance
10
Project Selection Methods
CEO or other senior leadership
Qualitative Competitive/Operational Necessity
Methods Sorting Methods
Quicksort
Financial Methods
Payback Period
Quantitative Net Present Value
Methods Scoring Methods
Weighted Factor
Binary Factor
11
Sorting Methods
Quicksort
Divide all projects into high/low priority
Subdivide each category into high/low
Repeat until all projects are ordered
12
Financial Methods
Payback period
=
Net present value
=
(1 + )
=1
13
Financial Methods Example
A project is estimated to cost 3M, and increase
profit by 1M/year for five years.
3
= = 3
1
14
Financial Methods Example
Using a hurdle rate of 10%:
5
1
=
3
(1 + .1)
=1