• PROJECT MANAGEMENT and COST BENEFIT

EVALUATION
• SPECIAL TOPICS IN PROJECT DEVELOPMENT
• THE VARIABLES FOR SUCCESS

Lydeal M. Santos
MGT 105
What is a Project?
A project is a unique, transient endeavour, undertaken to achieve planned objectives, which could
be defined in terms of outputs, outcomes or benefits.

When do we use project management?

Used when an organization wants to deliver a solution to set requirements within an agreed
budget and timeframe.

Why do we use project management?

To produce an end product that will effect some change for the benefit of the organization.
What Is a Cost-Benefit Analysis?
is a process that’s used to estimate the costs and benefits of projects or investments to
determine their profitability for an organization.
An effective CBA evaluates the following costs and benefits:
Costs Benefits
Direct costs Direct
Indirect costs Indirect
Intangible costs Total benefits
Opportunity costs Net benefits
Costs of potential risks
Purpose of Cost-Benefit Analysis
The purpose of cost-benefit analysis is to have a systemic approach to figure out the pluses and
minuses of various business or project proposals.
When to Do a Cost-Benefit Analysis
• Considering New Projects or Initiatives
• Making Resource Allocation Decisions
• Evaluating Upgrades or Changes
• Comparing Investment Options
How to Do a Cost-Benefit Analysis?

1. Create a business case for your project and state its goals and objectives.
2. Compare it to similar past projects to see which is the best path forward
3. List all stakeholders in the project.
4. Estimate the future value of your project costs and benefits
5. Look over the costs and benefits of the project, assign them a monetary value and map
them over a relevant time period.
6. The rate of return is used to calculate the present values of your project’s costs and benefits
How to interpret Cost-Benefit Ratio?
If the result is less than 1: The benefit-cost ratio is negative, therefore the project isn’t a good
investment as its expected costs exceed the benefits.

If the result is greater than 1: The cost-benefit ratio is positive, which means the project will
generate financial benefit for the organization and it’s a good investment. The larger the number, the
most benefits it’ll generate.

How to calculate the cost-benefit ratio?

1. Find the present value factor
2. Find the present value of expected benefits
3. Find the present value of expected costs
4. Find the interest rate
EXAMPLE:
A businessman invested in a medium scale business which cost him P100,000.00. The net annual return is
estimated at P30,000 for each of the next 10 years. Compute the benefit ratio if the annual rate of interest is
20%.

Benefit Ratio = 125,774.16/ 100,000.00

= 1.26

Meaning the businessman will potentially earn P1.26 for every

1 peso spend.
PROJECT DEVELOPMENT

Is the process of planning and allocating resources to fully develop a project or product from concept to
go-live. It typically consists of five phases: discovery, allocation, kickoff, quality assurance, review and
report.

Phases of Project Development

1. Discovery Phase
2. Allocate Budgets, Resources, Staff and Time
3. Kickoff
4. Quality Assurance
5. Review and Report
Six Habits of Successful Managers

1. Project managers have outstanding communication skills

Successful project managers are comfortable asking questions, hunting down information, and
providing clear and open communication for everyone involved.

How to improve project communication?

 Create a project communication plan
 Play to everyone's strengths
 Have a dedicated platform
2. Project managers have a firm grasp of processes

Successful project managers have a deep understanding of what process needs to happen
and when.

How to better understand processes?

 Draw from past project experience

 Map out each process
 Remain flexible to changes
3. The best project managers set expectations and say 'no'

Saying “no” is a surprisingly underrated skill. However, it’s absolutely vital for project
managers to say that all-important word.

How to manage expectations and say no.

 Understand your team's limits

 Communicate responsibilities
 Create a clear project outline
4. Project managers make data-driven decisions

Successful project managers tap into the analytics of each task to keep track of delivery
times, determine how long something will take, and eliminate bottlenecks.

How to make data-driven decisions?

 Know your analytics really well

 Back up decisions with data
 Learn from past projects
5. Project managers are proactive

Simply reacting to situations can make a project messy and lead to delays and
bottlenecks. Instead, successful project managers are proactive from the get-
go, mapping out what needs to be done and when.

To be more proactive
Plan well in advance
Identify potential crisis points
Learn from previous situations
6. Project managers prioritize tasks and focus on solutions

Prioritizing tasks is one of the most important parts of being a successful

project manager.

How to prioritize tasks

 Here are some tips to help you prioritize tasks faster

 List tasks in a hierarchy
 Always find the solution first
 Map out procedures
-The End

Thank You