project management unit III project and DQ question

MBA 6961, Project Management 1

Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

1. Explain the stages and events of the project life cycle. 1.1 Identify the six criteria for a useful project-selection/screening model. 1.2 Recognize the challenges of successful project selection methods. 1.3 Describe the importance of project evaluations.

2. Develop project management standards to ensure project quality and efficiency.

2.1 Construct a work breakdown structure for a project. 2.2 Develop a responsibility assignment matrix for a project. 2.3 Create a comprehensive statement of work.

Reading Assignment Chapter 3: Project Selection and Portfolio Management Chapter 5: Scope Management

Unit Lesson Introduction In Unit II, we overviewed different forms of leadership and how the type of leadership we choose will influence the performance of a project and the dynamics of individuals within the project team. Frequently, project team interaction in a given endeavor starts at the project selection stage. This unit will cover the importance of project selection, project scope management, and portfolio management. Project selection refers to the process of deciding on a project or set of projects by an organization. As we already know from Unit I, projects generally require investments in terms of money and resources. Organizations select projects that provide good returns on the resources (human and financial) invested. A manager must balance return on investment with an organization’s short- and long-term objectives. A project selection process that guarantees alignment to company strategies is critical to mitigate the high level of uncertainty in the modern business environment. A sound project selection process could mean the difference between organizational success and failure. Project Selection Models Models are concepts attempting to capture specific aspects of the real world. The purpose of models is to test ideas or help explain concepts. The definition varies, depending on the context. For the purpose of this discussion, a model is a simplified representation of the more complex reality in which managers interact. Successful project selection models must capture all aspects of the business decision process. Some projects’ selection processes require more complex models because often a project is a high-stakes project. Other projects have fewer organizational implications. The former may require sophisticated models to capture all organizational, strategic implications.

UNIT III STUDY GUIDE

Project Selection and Scope Management

MBA 6961, Project Management 2

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Often, project decision-making processes encompass risk and uncertainty. These risks and uncertainties require a project manager (PM) to take into account any significant project risks. The proper choice of a project selection model is critical to the long-term sustainability and survival of an organization. Therefore, an organization’s selection model must strike a balance between having enough accurate information about the real world and simplifying and understanding the situation sufficiently. This approach helps to facilitate the decision-making process about a project or set of projects. For the most part, a PM should base a selection project model’s criteria on the components listed below (Souder, 1984; Souder & Sherman, 1994).

1. Realism: A model should reflect the reality of the specific situation, including the objectives of both the firm and its executives.

2. Capability: A PM should select a model sophisticated enough to fit the project’s life cycle. The model should deal with different time periods and simulate numerous conditions both internal and external to the project (e.g., financial fluctuations, disaster situations, strikes).

3. Flexibility: Models should have the ability to be changed or modified easily in response to changes in the environment. They should also provide consistent results within the range of changes that the organization may experience.

4. Ease of use: A PM should use a project selection model that is easy to understand and execute. 5. Cost: A PM should consider modeling cost and information gathering relative to the execution of the

model. 6. Comparability: A PM needs to find a model that is flexible enough to apply to different project

selection processes. The model should support general comparisons across a variety of projects (Pinto, 2016).

The Nature of Project Selection PMs categorize selection models into two basic types: numeric and nonnumeric. Many companies use both models at the same time or use a combination of the two approaches. Numeric or quantitative models use numbers as their input criteria, although they could use either objective or subjective criteria. Numeric models include a payback period, discounted payback, internal rate of return, and discounted cash flow among others. Nonnumeric or qualitative models, as the name implies, do not use numbers. Nonnumeric models include the checklist model, simple scoring model, analytical hierarchy process, and profile models. Chapter 3 of the textbook covers both numeric and nonnumeric project selection models. Project Portfolio Management Managing projects well is not enough. PMs need to manage projects effectively within a project portfolio. Project portfolio management (PPM) is the approach whereby organizations assess current and future projects through a process of ranking and comparing criteria to ensure that all projects align with business strategies. PMs should not manage projects as independent entities. An organization should treat all projects as unified organizational assets by balancing long-term goals with short-term objectives.

CORE CONCEPTS

Models do not make decisions—people do. All models, however sophisticated, are only partial representations of the reality they are meant to reflect.

MBA 6961, Project Management 3

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Project Scope Management Pinto (2016) stated that project scope defines a project’s boundaries. Scope determines completion of specific deliverables during a project life cycle. Project selection processes need to take the scope of the project into consideration. Having a project scope ensures that the PM has planned and can deliver the products and/or services necessary. Scope management is critical to a project as it ensures project completion. Elements of project scope management: A critical element of scope management is the statement of work (SOW); a SOW contains “information on the key objectives for the project, a brief and general description of the work to be performed, expected project outcomes, and any funding or schedule constraints” (Pinto, 2016, p. 150). The scope statement is a separate document that establishes the project’s objectives. The management plan for the project divides the project into sub-components, creates and provides a work breakdown structure (WBS), and formulates a scope baseline. These documents outline needed financial and schedule time frames and details for each activity within the project. A project’s WBS is a critical document when managing the project scope. A companion document to the WBS is the organization breakdown structure, which assigns activities from the various work packages to team members. Scope reporting addresses the issuance of project updates. Scope validation ensures that the work outlined by the WBS matches the scope. Scope validation addresses project changes through the process of configuration management. Scope validation is a critical, complex, and involved process.

References Perry, M. P. (2011). Business driven project portfolio management: Conquering the top 10 risks that threaten

success. Fort Lauderdale, FL: Ross. Pinto, J. K. (2016). Project management: Achieving competitive advantage (4th ed.). Boston, MA: Pearson. Souder, W. E. (1984). Project selection and economic appraisal. New York, NY: Van Nostrand Reinhold. Souder, W. E., & Sherman, J. D. (1994). Managing new technology development. New York, NY: McGraw-

Hill.

CORE CONCEPTS

The purpose of PPM is to decipher the projects that will strategically align with and benefit the organization (Perry, 2011).

CORE CONCEPTS

Scope management ensures that the project includes only the work required to be successful. Scope management is specifically concerned with controlling what is and what is not in the project’s scope.