Project Management Good

Practices

"I Praise Loudly.

Blame Softly."
(Catherine The Great, 1729-1796.)
 Attitude in Projects
•“Nothing can stop man with
right mental attitude from
achieving his goals:
•Nothing on earth can help man
with wrong mental attitude”.
- Thomas Jefferson
Importance of Ethics in Projects
• In law, a man is guilty
when he violates the right
of another.
• In Ethics, he is guilty, if
only he thinks of doing so
Immanuel Kant
 Personal Integrity in Projects
• I look for three things in hiring
people. The first is Personal
Integrity, the second is
Intelligence and the third is a
High Energy Level.
• But if you don’t have the first,
the other two will kill you.
Warren Buffett
 Rethinking in Projects
• The complacent company is a
dead company.
• Success today requires the
agility and drive to constantly
rethink, reinvigorate, react,
and reinvent.
Bill Gates
 Project Selection
•Project selection - one of many decisions
associated with Project Management “Use
Decision Aiding Models”.
•Realists cannot solve problems, only idealists
can do that.
•Reality is far Too Complex to Deal in its
Totality.
•“Idealist” Strip away almost all reality from
Problem, leaving Only aspects of “Real”
Situation wishes to deal.
 Modeling the Problem
• Process of carving away unwanted
Reality from Bones of a Problem.
• Idealized version of the problem that
results is called a Model.
 Why Models in Project
– For Initial Selection & Ongoing Evaluation.
– Increased Profits.
– Capital Resources limited so Selection
investments.
– Improve Competitive Position of
Organization.
– Key to Allocation & Re-allocation of
Organizational Resources.
 Model representation - Problem’s structure, its
form.
• Every Problem has a form.
• Models - Graphs, Analogies, Diagrams, Flow
Graph & Network Models to help solve
scheduling problems.
• Models- Simple or extremely complex.
• Reality make it Difficult to Manipulate.

• Input data not known - Probabilistic information

- model stochastic not deterministic.
 Types of Models
• Iconic Model: Physical representation of system.
– Galaxy in High School laboratory.
• Analogue Model: Similar to reality to Some Extent and different in
others.
– Similarity of Water Pressure with Voltage.
– Flow of water & flow of electrical current.
• Verbal Model: Use words to describe system.
– George Orwel’s novel “Animal Farm”
• Diagrammatic Model: Hierarchical command Structure of Army.
• Graphic Model: Explain Equilibrium solution of Problems of Supply
& Demand ( Flow Graph & Network).
• Matrix Model: Aid in Project Evaluation.
• Symbolic: Used for a lot of purposes.
 Criteria for Project Selection Model
• 1. Realism
– Model Reflect Reality of manager’s decisions.
– Consider Realities of Organization’s Limitations on:
• Facilities
• Capital
• Personnel
• Model Risk includes:
– Technical Risks
1. Performance
2. Cost
3. Time
– Market Risks
1. Customer rejection
2. implementation risks
2. Capability
• Sophisticated enough to deal with:
– Multiple Time periods.
– Simulate various situations internal/external to Project
(strikes, interest rate changes).
– Optimize decision.
– Optimizing mode making comparisons:
• Risks & constraints
• Select the best Overall Project.
3. Flexibility
• Ability to Modify
• Self-adjusting in response to changes in environment;
– Tax laws changes.
– New Technological Advancements alter risk levels.
– Organizational Goals Change.
• Give Valid results within Range of Conditions of
Organization.
4. Ease of Use:
– Reasonably Convenient.
– Not take a long time to execute.
– Easy to simulate.
– Easy to use & understand.
– No special interpretation.
– Data is not difficult to acquire.
5. Cost of Data-gathering & Modeling
• Project Costs considered:
– Costs of data management.
– Running the Model.
6. Easy computerization
• Easy & convenient to:
– Transferring information
– Manipulate data
– Gather & store information in a database.
Type of Project Selection Model:
– Numeric
– Nonnumeric
• Nonnumeric-Don’t use numbers as input but
Numeric models do.
• Manager bears responsibility for decision.
• Manager “Delegate” making to Model.
• Yet Responsibility cannot be abdicated.
• Models, only partial representations of Reality.
• Reality is far too complex to capture - fraction in any
model.
• No model can yield an optimal decision.
 Model to Assist Project Selection
1. Model to Possess Characteristics ( flexibility
etc.).
2. Evaluate Potential project up to the Degree to
which it meets organizational objectives.
3. List of Organizational objectives by Top
management.
4. Organizational objectives : Direct expression of
Organizational philosophy / policy.
5. Limited to “survival” & “maximizing profits”.
Objectives Include:
- Improved image.
- Increased Share of specific market.
- After list of objectives - refinement
recommended.
5. Assign Weights to objectives in list
6. Estimate Probable Contribution of Each
Project to Each Goal.
7. Project- selection/rejection, as it is Predicted to have
certain outcomes, if implemented.
8. Estimate level of “Goal Achievement, if Sufficiently
Large” Project selected.
– If not, it is rejected.

•Relationship between “Project Expected Results vs.

Organizational goals”.
•Information required to evaluate a Project can be under:
– Production
– Marketing,
– Finance
– Personnel
– Administration etc.
 Project Evaluation Factors
Production Factors
1. Time until ready to install.
2. Length of disruption during installation.
3. Learning curve—Time until operating as desired.
4. Effects on waste and rejects.
5. Energy requirements.
6. Facility and other equipment requirements.
7. Safety of process.
8. Other applications of technology.
9. Change in cost to produce a unit output.
10. Change in raw material usage.
11. Availability of raw materials.
12. Required development, time and cost.
13. Impact on current suppliers.
14. Change in quality of output.
 Project Evaluation Factors
Marketing Factors
1. Size of potential market for output.
2. Probable market share of output.
3. Time until market share is acquired.
4. Impact on current product line.
5. Consumer acceptance.
6. Impact on consumer safety.
7. Estimated life of output.
8. Spin-off project possibilities.
Financial Factors
1. Profitability, NPV of investment.
2. Impact on cash flows.
3. Payout period.
4. Cash requirements.
5. Time until break-even.
6. Size of investment required.
7. Impact on seasonal & cyclical fluctuations.
 Project Evaluation Factors
Personnel Factors
1. Training requirements.
2. Labor skill requirements.
3. Availability of required labor skills.
4. Level of resistance from current work force.
5. Change in size of labor force.
6. Inter and intra-group communication requirements.
7. Impact on working conditions.
Administrative and Miscellaneous Factors
1. Meet government safety standards.
2. Meet government environmental standards.
3. Impact on information system.
4. Reaction of stockholders and securities markets.
5. Patent and trade secret protection.
6. Impact on image with customers, suppliers, and competitors.
7. Degree to which we understand new technology.
8. Managerial capacity to direct and control new process.
• No single project decision include all factors.
• List incomplete.
• Redundant items.
• Not at same level of Generality.
• “Profitability & impact on organizational
image” affect overall organization.
• “Impact on working conditions” to
“Production Systems”.
 Types of Project Selection Models
• Nonnumeric Models
• The Sacred Cow
– Project suggested by senior & powerful
official in organization.
• Operating Necessity
• Competitive Necessity .
• Product Line Extension: Project to develop
& distribute new products –based on Degree
to which it fits firm’s:
– Existing Production line
– Fills a gap.
– Strengthens a weak link.
– Extends Line in a new desirable direction.
• Comparative Benefit Model.
• Not a formal method of
Selecting Projects.
• Q-Sort is one of Most Straightforward Techniques for
ordering Projects.
• Projects divided into 3 groups:
– Good
– Fair
– Poor
• Rater use “Specific Criteria to Rank each Project”.