Questions and Answers
What is a portfolio in the context of project management?
Why is it essential for project organizations to prioritize projects?
What can happen if an organization starts more projects than its capacities allow?
Which component is crucial for the sustained success of a project organization?
Signup and view all the answers
What does project and portfolio management need to do in order to be effective?
Signup and view all the answers
What are the consequences of inadequate project resource estimation?
Signup and view all the answers
What does successful implementation of project management require from organizations?
Signup and view all the answers
How can project organizations improve their profit opportunities?
Signup and view all the answers
What is the key focus of numeric project selection methods?
Signup and view all the answers
When establishing weights for selection criteria, what is the maximum total weight allowed?
Signup and view all the answers
Which project category represents those that require low effort and yield low impact?
Signup and view all the answers
What does the Cost-Benefit Ratio formula primarily assess?
Signup and view all the answers
What does Cost-Value Optimization aim to achieve?
Signup and view all the answers
Which of the following factors is NOT considered a selection criterion in project evaluation?
Signup and view all the answers
What is the function of resource optimization in project portfolios?
Signup and view all the answers
Which project is given the first priority during execution based on the weighted grading system described?
Signup and view all the answers
What does the Analytical Hierarchy Process combine?
Signup and view all the answers
Which of the following project categories provides the greatest benefits but also involves more challenges?
Signup and view all the answers
In establishing a grading scheme, what does a level 1 grade typically indicate?
Signup and view all the answers
What defines a project in the context of management?
Signup and view all the answers
What is the role of portfolio management in an organization?
Signup and view all the answers
How are 'quick wins' characterized in project management?
Signup and view all the answers
Which aspect does Supply and Demand optimization primarily focus on?
Signup and view all the answers
Which of the following should be a criterion for selecting projects in portfolio management?
Signup and view all the answers
What is the primary purpose of portfolio optimization in project management?
Signup and view all the answers
What is an example of operations in project management?
Signup and view all the answers
Which of the following best describes a program in project management?
Signup and view all the answers
During project selection, what is crucial to assess regarding the project’s value?
Signup and view all the answers
How should projects be prioritized according to the principles of project management?
Signup and view all the answers
Why might a project organization need to prioritize project proposals?
Signup and view all the answers
Which of the following is NOT a function of project portfolio management?
Signup and view all the answers
What differentiates a portfolio from a project?
Signup and view all the answers
Which factor is considered a constraint during the project selection process?
Signup and view all the answers
What is the primary objective of a software development program in project management?
Signup and view all the answers
Which of these describes why external projects differ in their objectives compared to internal projects?
Signup and view all the answers
What should happen to projects that do not meet the predetermined threshold value in the selection process?
Signup and view all the answers
What does a Cost Variance (CV) of zero indicate?
Signup and view all the answers
Which equation is used to calculate the Schedule Performance Index (SPI)?
Signup and view all the answers
If the Schedule Variance (SV) is negative, what does this signify?
Signup and view all the answers
What is the purpose of calculating Estimate at Completion (EAC)?
Signup and view all the answers
How are the Cost Performance Index (CPI) and Cost Variance (CV) related?
Signup and view all the answers
Which of the following would indicate that a project is likely to require more budget than initially planned?
Signup and view all the answers
What does an Earned Value (EV) greater than Planned Value (PV) indicate?
Signup and view all the answers
Which of the following components makes up the Budget at Completion (BAC)?
Signup and view all the answers
If a project shows a Cost Performance Index (CPI) less than 1, what should be inferred?
Signup and view all the answers
To calculate the cumulative actual costs (AC) up to a certain point in a project, what should be included?
Signup and view all the answers
What is the primary focus of schedule optimization in project management?
Signup and view all the answers
Which estimation technique involves reaching a consensus among several experts?
Signup and view all the answers
What is considered the largest cost component in IT projects?
Signup and view all the answers
Which of the following techniques uses historical data from previous projects for estimation?
Signup and view all the answers
In the Three-Point Estimating technique, what two distributions can be used for cost estimation?
Signup and view all the answers
Why is cost estimation for IT projects challenging?
Signup and view all the answers
Which method is typically used to measure the size of software in IT projects?
Signup and view all the answers
What does project creep refer to in project management?
Signup and view all the answers
What is a fundamental input needed to estimate software development costs?
Signup and view all the answers
In effort estimation, which of the following techniques is considered moderated expert judgment?
Signup and view all the answers
Which of the following is NOT a step in the estimation process for IT projects?
Signup and view all the answers
What does the term 'effort' typically refer to in the context of IT project management?
Signup and view all the answers
Which of the following best describes 'parametric estimating'?
Signup and view all the answers
What aspect is crucial for accurate effort estimation in software development?
Signup and view all the answers
What is the primary characteristic of scope creep?
Signup and view all the answers
What is the purpose of establishing Key Performance Indicators (KPIs) in project management?
Signup and view all the answers
Which of the following best describes feature creep, also known as Gold Plating?
Signup and view all the answers
What is the role of scope validation in project management?
Signup and view all the answers
What does a Gantt chart typically represent in project management?
Signup and view all the answers
What information does Earned Value Management (EVM) primarily help to monitor?
Signup and view all the answers
What does the term 'Actual Costs (AC)' refer to in project management?
Signup and view all the answers
How are Key Performance Indicators (KPIs) ideally formulated?
Signup and view all the answers
What kind of tool is a project dashboard considered to be?
Signup and view all the answers
What is the significance of milestones in a project schedule?
Signup and view all the answers
Which of the following reflects the scope baseline in Earned Value Management?
Signup and view all the answers
What does a project manager typically assess for controlling project progress?
Signup and view all the answers
In which scenario is scope creep more likely to occur?
Signup and view all the answers
Study Notes
Unit Overview
- Key goals include using tools for IT project selection, estimating resources and effort, developing project budgets, and applying controlling tools.
Portfolio Management
- A portfolio encompasses all projects managed systematically within an organization.
- Portfolio management aids in maximizing profit potential while mitigating risks associated with multiple simultaneous projects.
- Successful project organizations must align project selection and prioritization with company value.
Prioritization in Project Management
- Project and portfolio management are interconnected; portfolio management oversees a collection of projects to achieve strategic objectives.
- Projects must be selected based on their strategic alignment and potential value, informed by rigorous evaluation techniques.
- Selection methods include both numeric (like NPV, IRR) and non-numeric methods (like Qsort Method).
Project Definition
- Portfolio: All ongoing projects in a company.
- Program: Grouped projects focused on a specific criteria or objective.
- Project: A set of interrelated tasks with defined start and end dates aimed at delivering a unique product/service.
- Operations: Routine tasks supporting the organization's strategic goals.
Strategic Alignment
- Projects should support organizational strategies, such as market expansion, regulatory compliance, improved profitability, and enhanced customer satisfaction.
- The selection process involves aligning projects with strategic objectives and assessing their potential impact.
Project Selection Criteria
- Essential criteria for project selection include profitability, risk level, technical complexity, execution duration, and resource requirements.
- Criteria are often weighted according to their importance to the organization, with specific grading schemes used to assess project suitability.
Cost-Benefit Analysis
- Cost-benefit ratio is crucial for prioritizing projects, where higher ratios indicate superior project rankings.
- Projects are typically categorized based on their effort and impact using an action priority matrix, optimizing resource allocation.
Portfolio Optimization
- Portfolio optimization enhances the effectiveness of project execution while considering constraints (financial, human, material).
- Key optimization types include:
- Cost-Value Optimization: Maximizing project value within a budget.
- Work Type Optimization: Defining investment ranges for projects.
- Resource Optimization: Ensuring balanced resource utilization.
- Supply and Demand Optimization: Timing resource availability accurately.
- Schedule Optimization: Managing task dependencies for efficiency.
Effort Estimation Techniques
- Estimation is essential for budgeting and resource planning, particularly in IT projects where human resources drive the majority of costs.
- Common methods include:
- Expert Judgment: Utilizes insights from subject matter experts.
- Analogous Estimating: Relies on historical data from similar past projects.
- Parametric Estimating: Uses algorithms for projects with similar characteristics.
- Three-Point Estimating: Accounts for optimism, pessimism, and likely scenarios to derive estimates.
Cost Estimation Process
- Cost estimation for IT projects can be complex due to uncertainty and evolving project specifications.
- Common costs include hardware, training, and human resources, calculated in man-hours or man-days.
- Effective estimation relies on breakdown structures, project scope, and programming productivity levels.
Project Controlling
- Project creep refers to deviations from the initial project plan, with scope creep being the most prevalent form.
- Effective project controlling includes monitoring project alignment with the original plan and adjusting as necessary.### Scope Creep and Feature Creep
- Scope creep refers to uncontrolled changes in project requirements that exceed initial project boundaries.
- It is frequently cited as a major cause of software project failure.
- Occurs when project management or clients are unaware of changes, lack agreements, or do not review change impacts.
- Feature creep, or Gold Plating, involves adding features without prior customer agreement, potentially leading to customer dissatisfaction.
Project Control Processes
- Essential for a project manager to implement controlling procedures.
- Scope Control: Continuous assessment of actual vs. planned performance.
- Scope Validation: Inspection conducted by customer for formal project acceptance.
- Agile projects conduct regular scope validation.
Project Management Areas and Tools
- Control areas include schedule, costs, quality, risks, and procurements.
- Effective project management relies on a solid management plan established during the planning stage.
Key Performance Indicators (KPIs)
- KPIs are quantifiable measures that help evaluate project success.
- Must be defined using SMART criteria: Specific, Measurable, Achievable, Relevant, Timely.
- Important for measuring outcomes post-project and ensuring alignment between project organization and customer expectations.
Milestones and Dashboards
- Milestones are critical checkpoints in project schedules indicating completion of tasks or events.
- Dashboards provide visual progress updates on multiple KPIs using graphs for easy tracking.
Gantt Charts and Earned Value Management
- Gantt Charts visually represent task schedules and progress, showing deviations at a glance.
- Earned Value Management (EVM) integrates scope, schedule, and cost to monitor project progress.
- Planned Values (PV): Work defined in hours or days to complete tasks.
- Schedule Baseline: Predicted task completion timelines.
- Cost Baseline: Time-phased budget showing estimated spending.
EVM Metrics and Interpretation
- Earned Value (EV): Measures completed project work against the scope baseline.
- Actual Costs (AC): Represents the actual expenditure on the project.
- Variances provide insights into project status:
- Cost Variance (CV) = EV - AC indicates budget performance.
- Schedule Variance (SV) = EV - PV indicates timeline adherence.
- Performance Indices assess overall project health:
- Cost Performance Index (CPI) = EV ÷ AC.
- Schedule Performance Index (SPI) = EV ÷ PV.
Estimate at Completion (EAC)
- EAC forecasts total project costs considering current deviations.
- Calculated as EAC = BAC ÷ CPI where BAC is Budget at Completion.
- EAC helps anticipate budget needs and identifies financial adjustments early.
Portfolio Management
- Managing multiple projects can be challenging; effective portfolio management is crucial.
- Focus on selecting and optimizing projects to benefit the organization and ensure smooth operation.
- Estimation techniques are critical, especially in IT projects due to their complexity.
- Proper controlling processes and tools are vital for achieving project goals and customer satisfaction.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz covers various project selection methods, detailing both financial approaches such as Internal Rate of Return and Net Present Value, as well as non-numeric techniques like the Qsort Method. It emphasizes the categorization proposed by Farahbod & Varzandeh (2021), highlighting the importance of optimizing project portfolios. Test your understanding of these essential concepts in project management.