1. Agenda  Project Management Overview  Selecting Projects  The Aggregate Project Plan

2. What Is a Project?  A project is “a temporary endeavor undertaken to create a unique product, service, or result.”*  Operations is work done to sustain the business.  A project ends when its objectives have been reached, or the project has been terminated.  Projects can be large or small and take a short or long time to complete. *PMI, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (2004), p. 5.

3. Project Attributes?  Temporary, with unique purpose  Goal-directed  Collaborative  Resources constrained  Endeavor  Uncertainty

4. PM Development Goals  According to specification (Scope)  Schedule (Time)  Within Budget (Cost)

5. Figure 1-1. The Triple Constraint of Project Management

6. What is Project Management? “Project management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.” * * Project Management Institute, PMBOK 2000

7. What is Project Management?  Application of Knowledge/Skills/ and Tools/Techniques to Project Activities  Meet/Exceed Expectations

8. Figure 1-2. Project Management Framework

9. Project Management Tools and Techniques  Project management tools and techniques assist project managers and their teams in various aspects of project management.  Specific tools and techniques include: Project charters, scope statements, and WBS (scope). Gantt charts, network diagrams, critical path analyses, critical chain scheduling (time). Cost estimates and earned value management (cost). See Table 1-1 in the course book for other examples.

10. PM Job Description  5 points Assignment Compare the job description for PM in 3 different industries  Example: IT, Finance (banks etc), Consulting  What is similar  What is different

11. Role of the Project Manager  Leadership and Guidance  Planning  Customer Relations  Technical Leadership  Senior Management Liaison

12. Project Life Cycle  Initiating Processes  Planning Processes  Executing/Implementation Processes  Controlling Processes  Closing Processes

13. Planning Processes  Scope  Estimating Schedule Cost  Staffing  Quality  Communication

14. Executing Processes  Plan Execution  Quality Assurance  Team Development

15. Controlling Processes  Change Control Scope Project  Quality Control  Performance Reporting

16. Closing Processes  Contract Close  Administrative Close

17. Why do projects still fail  Dependencies are missed  Requirements change  Things take longer  Technology fails to live up to expectations  People leave

18. PM and Risk “An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.” * * Project Management Institute, PMBOK 2000

19. Agenda Project Management Overview  Selecting Projects  The Aggregate Project Plan

20. Selecting Projects  Factors Is the project potentially profitable.  What is the return on investment Does the firm has the skill and knowledge to complete the project successfully. Is it in line with the organization strategy Can it be completed within the time limit

21. Selecting Projects  Selection Methods Nonnumeric Numeric

22. Selecting Projects  Nonnumeric Top down or “Scared cow” The Operating/Competitive Necessity

23. Selecting Projects  Numerical Selection Financial Assessment Method  Payback period, average annual rate of return, etc. Payback period Calculation  Project cost = 100,000  Net cash inflow per year = 25,000  Payback period = 4 years

24. Selecting Projects  Numerical Selection Financial Assessment Method  Discounted Cash Flow Considers the time value of money, the inflation rate, and the firm’s return-on-investment hurdle rate for projects. NPV (Net Present Value) = I o + ∑F t ∕(1 + k) t for t=1..n  I o = The initial investment, which will be –ve  F t = The net cash flow in period, t  k = the required rate of return or hurdle rate  100,000 + 25,000 1 / (1+.10) 1

25. Agenda Project Management Overview Selecting Projects  The Aggregate Project Plan

26. Agenda Project Management Overview Selecting Projects  The Aggregate Project Plan

27. Aggregate Project Plan  Project Portfolio IT projects are usually part of a major program that an organization wishes to accomplish. Projects set management  Derivative projects  Breakthrough projects  Platform projects  R & D projects

28. Aggregate Project Plan Minor Process change Extensive Process change Minor Process change Extensive Process change R & D Projects Breakthrough projects Platform Projects Derivative projects

29. Aggregate Project Plan  Usefulness 1.Identification of gaps in types of projects being undertaken in the organization 2.Facilitates evolutions of the resources commitments of the ongoing or proposed projects 3.Model for employee development

30. Agenda Project Management Overview Selecting Projects The Aggregate Project Plan