10. NONNUMERIC MODELS
• The Sacred Cow – detailed scheduling and planning are never critical and
essential.
• The Operating Necessity – Operational Necessity means actions taken by the
Company after careful planning and analysis, and not arbitrarily or capriciously.
• The competitive Necessity - A competitive necessity is required to catch up or
stay up with someone else to compete with them. In a sense, it is the price of
admission one must pay for the privilege to enter and play the game.
11. • The Product Line Extension – In this case, a project to develop and distribute
new products would be judged on the degree to which it fits the firm’s existing
product line.
• Comparative Benefit Model - That subset of the projects that are selected by the
senior management of the organization can provide the most benefits to the
company.
• Sustainability - is an approach to business that balances the environmental,
social, economic aspects of project-based working to meet the current
needs of stakeholders without compromising or overburdening future
generations.
12. NUMERIC MODELS
• Payback Period - is defined as the number of years required to recover the
original cash investment.
• Average Rate of Return - is the average annual amount of cash flow
generated over the life of an investment.
• Discounted Cash Flow - is an project investment valuation method
whereby future cash flows are discounted by a rate that accounts for the
time value of money.
13. • Internal Rate of Return (IRR) - The internal rate of return (IRR) is a metric
used in financial analysis to estimate the profitability of potential
investments.
• Profitability Index - is a measure of a project's or investment's
attractiveness.
15. PMI (2011) – risk management is used significantly more by high-performing
project organizations than low-performing organizations.
High-performing organizations - is a conceptual, scientifically validated structure
that managers can use for deciding what to focus on in order to improve
organizational performance and make it sustainable.
Low-performing organizations - is one that struggles to even meet those goals,
and when they do, the products and behaviors are sub-par at best.
16. During the past several years, increasing attention has been paid to the subject of
managing some of the risks inherent in most projects.
In the real world of project management, it has been common to deal with estimates
of task durations, costs, etc. as if the information were known with certainty.
A best guess is better than no information at all.
17. R & D projects sometimes fall into this general class. But even in the comparative mysteries of R & D
activities, the level of uncertainty about the outcomes of R & D is not beyond analysis.
Three distinct areas of uncertainty
1. Uncertainty about the timing of the project and the cash flows it is expected to generate.
2. Though not as common as generally believed
3. There is uncertainty about the side effects of the project its unforeseen consequences.
18. Pro forma document - essentially like letters of intent, expressing what an invoice or transaction is
anticipated to look like after completion.
Project selection risk are different than project management risk.
THANKYOU !!
20. ● The project managers of major projects
● The head of the Project Management Office, if one exists
● Particularly relevant general managers
● Those who can identify key opportunities and risks facing the
organization
● Anyone who can derail the progress of the PPP later on in the progress
Step 1: Establish a Project Council
21. Step 2: Identify Project Categories and Criteria
01 02
03 04
● Derivative Projects ● Platform Projects
● Breakthrough Projects ● R & D Projects
22. Step 3: Collect Project Data
● Data collection is the process of gathering and measuring
information on variables of interest, in an established systematic
fashion that enables one to answer stated research questions,
test hypotheses, and evaluate outcomes.
23. Step 4: Assess Resource Availability
● Resource availability includes information about what resources you
can use on your project, when they’re available to you, and the
conditions of their availability. Don’t forget that some resources, like
consultants or training rooms, have to be scheduled in advance, and
they might only be available at certain times.
24. Step 5: Reduce the Project and Criteria Set
● How risky the project is
● If the project is dominated by another existing or
proposed project
● If the right resources are available at the right time
25. Step 6: Prioritize the Projects within Categories
● Project prioritization is the process of determining which
potential and existing projects are the most urgent and
important. This process involves evaluating the criteria that
are most relevant to your business and applying them to all of
your projects.
26. Step 7: Select the Projects to Be Funded and Held in
Reserve
● The focus should be on committing to fewer projects but with
sufficient funding to allow project completion. Document why late
projects were delayed and why some, if any, were defunded.
27. • The implementation phase involves putting the project plan into
action. This is where the project manager will coordinate and direct
project resources to meet the objectives of the project plan. As the
project unfolds, it’s the project manager’s job to direct and manage
each activity, every step of the way.
Step 8: Implement the Process
29. PROJECT PROPOSAL
The set of documents submitted
for evaluation is called the project
proposal, whether it is brief (a
page or two) or extensive, and
regardless of the formality with
which it is presented.
30. REQUESTS FOR PROPOSALS
A request for proposal (RFP) is a
project announcement posted
publicly by an organization
indicating that bids for contractors to
complete the project are sought.
31. All proposals should be accompanied by a “cover letter.”
In addition to the Executive Summary and the cover letter,
every proposal should deal with four distinct issues:
(1) the nature of the technical problem and how it is to be
approached;
(2) the plan for implementing the project once it has been
accepted;
(3) the plan for logistic support and administration of the
project; and
(4)a description of the group proposing to do the work,
plus its past experience in similar work.
32. The Technical Approach
The proposal begins with a general description of the problem to be
addressed or project to be undertaken.
The Implementation Plan
The implementation plan for the project contains estimates of the time
required, the cost, and the materials used.
The Plan for Logistic Support and Administration
The proposal includes a description of the ability of the proposer to
supply the routine facilities, equipment, and skills needed during any
project.
Past Experience
All proposals are strengthened by including a section that describes the
past experience of the proposing group.