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07/16/96
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2. Topics Introduction Project Life Cycle Conceptualisation Stage
Planning Stage
Planning Tools & Techniques
Implementation Stage
Team Dynamics & Management

3. Project Life Cycle

4. Project Life Cycles What is a Project Life Cycle? Some examples
A Project Life Cycle in detail

5. Project Life Cycles Main stages common to all projects
Almost as many different models as there are project management authors
Wide range of conflicting terminology used
It is only a model
does not tell you everything you need to do and when

6. Project Life Cycles Some examples … 3 – Phase Project Life Cycle
Design & Plan
Execute and Deliver
Improve the Process
(e.g. Maylor, 1999)

7. Project Life Cycles Some examples … 5 – Phase Project Life Cycle
Define
Plan
Organise
Execute
Close
(e.g. Weiss & Wysoscki, 1992)

8. Project Life Cycles Some examples … 4 – Phase Project Life Cycle
Conceptualise (Initiate)
Plan
Implement (Execute)
Complete (Close)
(e.g. Burke, 1999)

9. Project Life Cycles Can also have … Phased Life Cycles
Delivery in stages
Prototyping Life Cycles
e.g. Rapid Application Development
(See Field & Keller, 1998)

10. Project Life Cycles
Do not confuse Project Life Cycles with Development Life Cycles:
Project Life Cycles are concerned with overall management and delivery of project
Development Life Cycles are concerned with technical aspects of delivery

11. Project Life Cycles For example:
Project Life Cycles for installing new IT Banking System, building a Bridge or Launching Space Probe could easily be the same...
…but Development Life Cycles would certainly be different

12. A Project Life Cycle In Detail
The 4 – Phase Project Life Cycle
Conceptualisation (Initiation)
Planning
Implementation (Execution)
Completion (Closure)
This will be our ‘default’ Project Life Cycle

13. Project Life Cycle Project Life Cycle What are the different stages?
What happens at each stage?

14. Systems Development Life Cycle
Systems Development Life Cycle (SDLC)
What are the different stages?
How SDLC relate to Project Life Cycle?
Start
Initiation
Feasibility
Analysis
Design
Build
Changeover
Review and Maintenance ?

15. Project Life Cycle & SDLC
Start
Initiation
Feasibility
Analysis
Design
Build
Changeover
Review and Maintenance ?
Conceptualisation
Planning
Implementation
Completion

16. A Project Life Cycle In Detail
Conceptualisation Stage
Define Project Goals and Objectives
Define Environmental Factors (External)
Define Organisational Factors (Internal)
Identify Key Stakeholders & their needs
Define Project Scope
Determine Success Criteria
Prepare Feasibility Document

17. A Project Life Cycle In Detail
Planning Stage
Refine Objectives and Scope
Design Solution
Identify Project Constraints
Identify Work Packages and Activities
Work Breakdown Structure
Identify Resources
Agree Standards and Processes

18. A Project Life Cycle In Detail
Planning Stage (continued)
Schedule Activities and Resources
Agree Budget
Assess Risks
Produce Baseline Plan
Start building Team

19. A Project Life Cycle In Detail
Implementation Stage
Continue building Team
Team Management
Detail Technical Requirements and Design
Refine Plan
Monitor and Control Progress
Report

20. A Project Life Cycle In Detail
Completion Stage
Finalise Documentation
‘Cut-over’ to new system
Re-deploy Staff
Dispose of Assets
Evaluate and Review Project
Hand-over and Sign-off Project

21. A Project Life Cycle In Detail
Evaluation and Review is important throughout the life-cycle, particularly during completion
An opportunity to learn & improve the process
Problems identified may lead to the initiation of a new project
A true Life Cycle

22. A Project Life Cycle In Detail
Do not confuse Planning Stage of the project life cycle with the vital Process of planning
The Process of planning is carried out throughout the project life cycle
The Planning Stage involves designing the initial solution and producing baseline plans

23. A Project Life Cycle In Detail
Accumulated Cost of Project Conceptualisation Plan Implement Completion

24. A Project Life Cycle In Detail
Each stage of the project must be broken down into manageable and well-defined chunks of work
These are called Work Packages
Each Work Package can be broken down into Activities and Tasks as necessary for planning and control

25. Conceptualisation Stage Introduction

26. Conceptualisation Stage
Inputs to Conceptualisation Stage
Influencing Factors
Stakeholder Analysis
Feasibility
Risk
Outputs from Conceptualisation Stage

27. Inputs Strategic Planning Identified Problem or Opportunity
Identifying and meeting the organisation’s Strategic Objectives
SWOT Analysis
Project Manager should have some input to Strategic Decision making
Identified Problem or Opportunity

28. Inputs Produce “Terms of Reference” (ToR) for project
Document describes need for the Project
Defines the Initial Boundaries
Defines Initial Responsibilities
Defines the Scope of the Feasibility Study
The “Project Charter” (Burke, 1999)

29. Conceptualisation Stage
Sign-off the ToR initiates the project
Conceptualisation Stage now begins
Only Conceptualisation Stage is authorised
When Conceptualisation Stage is complete there will be another decision point

30. Influencing Factors S T E P External (Environmental) Factors include
= Social
= Technological
= Economic
= Environmental
= Political

31. Influencing Factors External Factors (Extended) include S T E P L
= Social
= Technological
= Economic
= Environmental
= Political
= Legal
= Ethical

32. Influencing Factors Internal (Organisational) factors include: Mission
Strategy
Policy and Procedures (e.g. Ethical Policy)
Structure and Culture
Internal Politics, Hidden Agendas
Budget / Financial Constraints

33. Influencing Factors … impose limitations on the project
can be considered Indirect Constraints
Project constraints as well as Environmental and Organisational factors
Scope, budget, time, quality, …
can be considered Direct Constraints

34. Stakeholder Analysis
A Stakeholder in a project is a person or organisation who:
is involved with...
is affected by...
can affect the outcome of...
the project

35. Stakeholder Analysis Key Stakeholders include:
Project Sponsor / Client
Project Manager
Project Team
Users / Customers
Senior Management
Suppliers / Contractors

36. Stakeholder Analysis Other Stakeholders can include:
Other Managers within the Project Organisation
Other Managers within the Client Organisation
Colleagues
The General Public
The “Media”

37. Stakeholder Analysis Identify Key Stakeholders Identify their needs
Decision Makers
Those with Political influence
Those affected most by project
Identify their needs
If there are any conflicts – prioritise

38. Stakeholder Analysis Identify other significant Stakeholders
Identify their needs
Prioritise and “trade off” requirements
Compromise if possible
Key stakeholders must take priority
Above all - manage expectations

39. Feasibility
Objective of the Feasibility Study is to prove the practicability of proposed system.
This stage is usually carried out before full funding is approved.
Normally, it is the shortest and least costly of all stages.
It can become longer and more expensive if proposed system is not well supported with financial and need-based justification.

40. Feasibility Based on the Analysis so far, following must be defined:
Major Requirements
Project Constraints
Project Goals and Objectives
Project Scope
Success Criteria

41. Feasibility Feasibility must be considered: This includes an
Technical Feasibility
Operational Feasibility
Economical /
Financial Feasibility
This includes an
initial assessment
of the risk level of
the project

42. Technical Feasibility
A systems request has Technical Feasibility if the organization has the Resources to Develop or Purchase, Install, and Operate the system.
Is the Technology available?
What is the Risk associated with the Technology?
Risk of Failure
Risk of becoming Obsolete
Are the skills available?

43. Operational Feasibility
A system that has Operational Feasibility is one that will be used effectively after it has been developed.
Can solutions be found to meet users’ day to day needs?
Do the users want the new product?
Will the new product be used?
Is the product User Friendly?
What are the knock-on effects?

44. Economical/Financial Feasibility
A systems request has Economic Feasibility if the projected benefits of the proposed system outweigh the estimated costs involved in acquiring, installing, and operating it.
Is the money available?
Cost Benefit Analysis
Breakeven point / Payback period
% Return On Investment
Internal Rate of Return
Net Present Value

45. Credit Crunch Normally expect prices to go over time
Current financial climate - inflation is low
Some prices lower now than last year

46. Cost Benefit Analysis
Cost-Benefits Analysis is the process of comparing the anticipated costs of an information system to the anticipated benefits.
Cost-Benefit Analysis is performed throughout the SDLC to determine the Economic Feasibility of an information system project and to compare alternative solutions.

47. Cost Benefit Analysis Cost Classifications
Costs can be classified as Tangible or Intangible, Direct or Indirect, Fixed or Variable, and Developmental or Operational.
Tangible Costs are costs for which you can assign a specific dollar value.
Intangible Costs are costs whose dollar value cannot be calculated easily.
Direct Costs are costs that can be associated with the development of a specific system.

48. Cost Benefit Analysis
Indirect costs, or overhead expenses, cannot be attributed to the development of a particular information system.
Fixed costs are costs that are relatively constant and do not depend on a level of activity or effort.
Variable costs are costs that vary depending on the level of activity.
Developmental costs are incurred only once at the time the system is developed or acquire.
Operational costs are incurred after the system is implemented and continue while the system is in use.

49. Cost Benefit Analysis Benefit Classifications
Positive Benefits increase revenues, improve services, or otherwise contribute to the organisation as a direct result of the new information system.
Cost-Avoidance Benefits refer to expenses that would be necessary if the new system is not installed.
Cost-Avoidance Benefits are just as important as Positive Benefits, and you must consider both types when performing Cost-Benefits Analysis.

50. Cost Benefit Analysis 3 most common methods: Payback Analysis
Return on Investment Analysis
Present Value Analysis.

51. Payback Analysis
Payback Analysis is the process of determining how long it takes an information system to pay for itself.
The time it takes to recover the system’s cost is called the Payback Period.
Calculates time at which inflow matches investment
The longer the time until Breakeven, the less attractive the project

52. Internal Rate of Return
Considers growth of money as result of project, rather than cash
IRR is amount of profit as % that project will produce
some companies set minimum rate for IRR: “hurdle”
Hurdle may be ignored for projects involving compliance with regulations
MS Excel has built-in function for IRR

53. Internal Rate of Return
Positive – looks at profit, not just investment
Negative – might not be aware of amount at risk

54. Return on Investment
Return on investment (ROI) is a percentage rate that measures profitability by comparing, total net benefits (the return) received from a project to the total costs (the investment) of project.
ROI is calculated as
ROI = (total benefits - total costs) / total costs

55. Return on Investment Percentage return on the project cost
divide net income by investment
evaluate different project options
better to use present value in calculations
Example projects
Project Alpha: 45%
Project Beta: 178%
Project Gamma: 16%

56. Apparent Value
Apparent value calculates the amount of money involved in a project without taking into account how the value of money changes over time. This does not give a good indication for comparing the value of projects, as in general, money in the future is worth less than money today.

57. Net Present Value
Net Present Value (NPV) is an estimate of worth of money in the future expressed in today’s terms. Discounted Cash Flow (DCF) factors are used to estimate the value (purchasing power) in the future, taking inflation into account. The calculations are only as good as the estimate of the future financial environment, and are less likely to be accurate further ahead in the future.

58. Net Present Value
Money today is not worth the same as money in the future (or in the past)
The Present Value of a future dollar is the amount of money that, when invested today at a specified interest rate, grows to exactly one dollar at a certain point in the future.
The specified interest rate is called the discount rate.

59. Net Present Value
In Present Value analysis, a company uses a discount rate that represents rate of return if money is put into relatively risk-free investments, such as bonds, instead of being invested in the project.
If we calculate future cost in today’s terms
evaluate different project options
choose most cost effective option
but interest rate predictions are not reliable…

60. Net Present Value Choice between two projects:
Project A
Purchase Equipment
Annual Maintenance Contract
Insurance
Project B
Rent Equipment
Project A may appear be more attractive

61. Net Present Value Use Discounted Cash Flow (DCF) factors
Project A
Purchase Equipment
Annual Maintenance Contract
Insurance
Project B
Rent Equipment
Is same project still the more attractive?

62. Net Present Value Other options must also be considered
What else would be done with money?
Invest the Money?
Fund another Project?
Acquire new Staff, Equipment, etc?

63. Any Questions?