Lecture 18 2 Essay

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Part I
Project Initiation
Project Management
A Managerial Approach
By J.R. Meredith and S.J. Mantel, Jr.

© 2012 John Wiley & Sons, Inc.

Project Management

Strategic Management and Project Selection
Chapter 2
Project Management
A Managerial Approach
By J.R. Meredith and S.J. Mantel, Jr.

© 2012 John Wiley & Sons, Inc.

Problems With Multiple Projects
Three basic problems for organization while managing multiple projects: •

Delays in one project delays others

common resource needs or technological dependencies

Inefficient use of resources

Results in peaks and valleys of resource utilization

Bottlenecks in resource availability

Result in project delays that depend in those scare resources or technology

Project Results
• 30% of all projects are canceled midstream
• Over half of completed projects came in up to 190% over budget
• Over half of completed projects came in up to 220% late

• Making sure projects are closely tied to goals and strategy
• How to handle the growing number of projects?
• How to make these projects successful?

Overcome Challenges
• Develop project management expertise within the organization
• Initiate Project Management Office (PMO)
• Using projects to accomplish organizational goals and strategies
• PMO should promote projects that capitalize on the organization’s strengths and offer a competitive advantage
• PMO should avoid projects with resource or technology needs in areas where the organization is weak

• Determine the relationships between
• Projects
• Projects and strategic goals of organization

Project Selection Process
• Creation of Project Management Office (PMO)
• Project selection
• Risk Analysis because of uncertainty
• Strategic selection of best projects via Project Portfolio Process (PPP)
• Securing the deal by writing a project proposal

Project Management Maturity
• Project management maturity refers to the mastery of skills required to manage projects competently
• The answer is NO for many organizations

• Maturity is the standardization of project management techniques which increased project success rates by over 25%.
• Most organizations do not do well

Project Management Maturity
Level Measure
• This scores firms on five successive levels of maturity:
• Initial – there is no formal process for managing projects
• Repeatable- has procedures in place for planning, scheduling, tracking, and estimating. The data are not integrated at this level
• Defined- the firm has integrated systems for tracking and managing projects, but are not routinely understood and used for controlling projects
• Managed- systems are installed and used to manage and control projects
• Optimizing- has integrated databases used to generate information on the senior-management level as well as for managers of single projects or portfolios of several projects

Project Selection and Criteria of Choice
• Project selection…
• Evaluating
• Choosing
• Implementing

• Same process as other business decisions

Types of Companies

Companies considering projects fall into two broad categories:

Companies whose core business is completing projects
Companies whose core business is something else

They can also be broken down as:

Companies looking at projects to do for others
Companies looking at projects to do for themselves

Model Criteria for Project

Realism- organizations limitations, market-risk

Capability- adequately sophisticated

Flexibility- valid results over within the range of conditions

Ease of use- no expert needed to run model

Cost- data gathering and modeling should be less than project benefit •

Easy computerization- use standard software

The Nature of Project Selection Models
• Models turn inputs into outputs
• Managers decide on the values for the inputs and evaluate the outputs • The inputs never fully describe the situation
• The outputs never fully describe the expected results
• Models are tools
• Managers are