Project Management Notes PDF

Project Management  THERE SHOULD ALWAYS BE A BENEFIT FROM A PROJECT, EITHER IN TERMS OF MONEY OR SERVICE, OR BOTH!  2 Chapter 5: BUSINESS CASE  3 BUSINESS CASE a document setting out advantages and parameters of the...

Project Management  THERE SHOULD ALWAYS BE A BENEFIT FROM A PROJECT, EITHER IN TERMS OF MONEY OR SERVICE, OR BOTH!  2 Chapter 5: BUSINESS CASE  3 BUSINESS CASE a document setting out advantages and parameters of the project makes financial case through investment appraisal outlines the ‘why,’ the ‘what’ and any known information of the project produced by either the client or the director of a client organization, not the project manager with a special brief to oversee the project  4 PROJECT SPONSOR, or Project Champion ROLES OF THE PROJECT SPONSOR 1. Monitor the performance of the 5. Assist in smoothing out project manager. difficulties with stakeholders. 2. Constantly ensure that the 6. Support the project by ensuring project’s objectives and criteria sufficient resources. are met. 7. Act as a business leader and 3. Ensure effective and efficient top-level advocate to the operations of the project. company board. 4. Assess the need and viability of 8. Ensure that the perceived variations and agree to their benefits of the project are implementation. realized.  6 REQUIREMENTS MANAGEMENT IN PROJECT MANAGEMENT Understanding and Managing Project Requirements  7 INTRODUCTION TO REQUIREMENTS MANAGEMENT Importance of requirements management in project success. Focus on the 'what' in the business case. Overview of stakeholder expectations.  8 WHAT IS REQUIREMENTS MANAGEMENT? Focuses on identifying, analyzing, and managing what is needed in a project, ensuring alignment with stakeholder expectations. The role of the project manager is to manage and prioritize these requirements.  9 PROJECT MANAGER'S ROLE IN REQUIREMENTS MANAGEMENT Deciding on the viability or desirability of requirements. Agreement with stakeholders on requirements. Balancing cost, time, and performance factors.  10 FROM REQUIREMENTS TO PROJECT OBJECTIVES Incorporating requirements as clear deliverables. Importance of confirming objectives in the business case and project-management plan. Handling changes to requirements before and after project scope finalization.  11 MANAGING CHANGES IN REQUIREMENTS Theimpact of requirement changes on cost, time, and project processes. The project manager's responsibility to communicate changes to stakeholders. Adhering to project-change procedures and configuration management.  12 DOCUMENTING AND TRACKING REQUIREMENTS Importance of a reporting matrix for logging requirements. Key fields: Document number, prepared by, information source, recipients, and issue date.  13 TESTING AND REVIEWING REQUIREMENTS Major characteristics to examine: Feasibility, operability, time constraints Functionality, performance, quality, and reliability Compliance with regulations Buildability, transportability, storage, and security Environmental and sociological impact Labor, staffing, outsourcing, and training needs  14 AVOIDING SCOPE CREEP Risks of agreeing to minor changes without proper procedures. It is important to treat all changes as official. Commercial decisions and political considerations.  15 CONCLUSION Recap of the importance of proper requirements management. Final thoughts on the role of the project manager in ensuring project success. Encouragement to follow procedures strictly to avoid project risks.  THERE SHOULD ALWAYS BE A BENEFIT FROM A PROJECT, EITHER IN TERMS OF MONEY OR SERVICE, OR BOTH!  17 Chapter 5: BUSINESS CASE Business Case The Project Sponsor, or Project Champion Requirements Management in Project Management REFERENCE: Lester A. (2017). Project Management, Planning and Control: Managing Engineering, Construction and Manufacturing Projects to PMI, APM and BSI Standards. Elsevier Ltd. ISBN: 978-0-08-102020-3 THANK YOU Canoy, Vianca A. Cordero, Jonabelle B. Gutierrez, Jean Caryl C. investment appraisal investment appraisal The investment appraisal, an essential component of a business case, enhances decision-making by evaluating the feasibility of a project through a structured analysis. It involves reviewing all realistic options and includes a cost/benefit analysis, considering factors such as: Capital, operating, and overhead costs Expected residual value Support and training costs Potential cost savings Dismantling and disposal costs Non-monetary benefits  return on investment The simplest way to ascertain whether the investment in a project is viable to calculate the Return On Investment (ROI). a financial metric used to evaluate the efficiency or profitability of an investment or project. It compares the net profit or benefit gained from an investment to its cost, expressed as a percentage.  If a project investment is 10,000 and gives a return of 2000 per year over 7 years, (7 x 2000) - 10,000 The average return/year = 7 4000 = 571.4 = 7 Average Return x 100 Return on Investment = investment 571.4 x 100 = = 5.71 10,000 net present value A financial metric used to evaluate the profitability of an investment or project by calculating the present value of its expected future cash flows, discounted back to their value in today's terms.  if 100 were invested in a bank earning an interest of 6% The value of 1 year would be 100 x 1.06 = 106 The value in 2 years would be 100 x 1.06 x 1.06 = 112.36 The value of 3 years would be 100 x 1.06 x 1.06 x 1.06 = 119.10 To obtain 119.10 in 3 years it would cost 100. In another words, the present value (PV) of 119.10 is 100 Another way of finding PV of 119.10 is to divide it by 1.06 x 1.06 x 1.06 or 1.191 119.10 119.10 = = 100 1.06 X 1.06 x 1.06 1.191 Instead of dividing the 119.10 by 1.191, it is multiplied by the inverse of 1.191 119.10 x 1 = 119.10 X 0.840 = 100 1.191 0.840 is the PV factor for 6% return after 3 years. The PV factor for 6% return after 2 years is 0.890 1 1 = = 0.890 1.06 X 1.06 1.1236 The projected annual net cash flow (income minus expenditure) will vary year by year, and to obtain a realistic assessment of the NPV of an investment, the net cash flow must be discounted separately for every year of the projected life. A company decides to invest 12,000 for a project which is expected to give a total return of 24,000 over 6 years. The discount rate is 8%. There are two options of receiving the yearly income. 1. 6000 for year 1 and 2 = 12,000 2. 5000 years 1, 2 , 3 and 4 = 20,000 4000 for years 2 and 3 = 8000 2000 for years 5 and 6 = 4000 2000 for years 5 and 6 - 4000 Total 24,000 Total 24,000 The DCF method will quickly establish the most profitable option to take as will be shown in the following table. After deducting the original investment of 12,00 the net discounted return for A= 7437.00 and B= 7181.50 The mathematical formula for calculating the NPV is as follows: if the annual net benefit is same for each year for n years, the formula becomes  Payback Payback is the amount of time needed to get back the project's expense in capital after all operating and overhead expenses have been included for. Usually, the undiscounted cash flow serves as the basis for this. Understanding payback is especially crucial or short-term projects or those whose final products are less appealing because of shifting trends, competition, or substitute products, which require the capital to be recovered as soon as feasible.  INTERNAL RATE RETURNS It is already established that a project's net present value (NPV) decreases with increasing discount rate (often the cost of borrowing). Consequently, there has to be a moment at which the NPV equals 0 due to the discount rate. The project is no longer feasible at this stage, and the discount rate is the internal rate of return (IRR), or the rate at which the net present value (NPV) is zero. The basic formulae for the financial calculations are given in the following. Investment appraisal definitions NPV = summation of PVs - original investment Net income = incoming moneys - outgoing moneys Payback period = no. of years it takes for net income to equal original investment Profit = total net income - original investment Average return/annum = total net income no. of years Return on Investment (%) = average return x 100 investment = net income x 100 no. of years x investment IRR= discount rate for NVP= 0 Cost/benefit analysis A cost/benefit analysis is a crucial step in determining the viability of a project. It compares the costs of the project with the perceived benefits, usually conducted at the end of every phase of the project. This analysis allows management to proceed with or abort the project if costs increase or benefits decrease due to changes in market conditions. Following is a list of some of the benefits that have to be considered, from which it will be apparent that some will be very difficult to quantify in monetary terms: Financial Statutory Economy Risk reduction Productivity Reliability Staff morale Cost reduction Safety Flexibility Quality Delivery Social Thank you!  Activity: Matching type Directions: Match column A with the corresponding item in column B. Write the letter of your answer for each number. 1.It is the amount of time needed to get back the project's expense in capital A. Net Present Value after all operating and overhead expenses. B. Payback C. Investment Appraisal 2. This analysis allows management to proceed with or abort the project if costs increase or benefits. D. incoming moneys - 3. A financial metric used to evaluate the profitability of an investment or project by outgoing moneys calculating the present value of its expected future cash flows, discounted back to their E. Cost/benefit Analysis value in today's terms. F. summation of PV’s - 4. An essential component of a business case, enhances decision-making original investment by evaluating the feasibility of a project through a structured analysis. 5. A formula for calculating net income  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS CHAPTER 7 CHAPTER 8 STAKEHOLDER PROJECT SUCCESS CRITERIA MANAGEMENT GROUP 4 - CO77 LO Ñ OZ A , LU S TA D O, Q U E Z A D A  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Who Are Stakeholders? About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Almost any person or organization with an interest in a project can be termed a stakeholder. The process of listing, classifying, and assessing the influence of these stakeholders is termed stakeholder analysis. About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Why Are They Important?  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Two Main Groups of Stakeholders Direct (Primary) Indirect (Secondary) About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Direct Stakeholders This group is made up of all those directly associated or involved in the planning, administration, or execution of the project. This group is mainly consist of positive stakeholders as they are the ones concerned with the design and implementation of the project with the object of completing it. About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Indirect Stakeholders This group covers all those indirectly associated with the project. A subsection of indirect stakeholders are those representing the regulatory authorities, such as national and local government, professional bodies, personal interest groups such as stockholders, labor unions, and pressure groups.  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Two Main Groups of Stakeholders Each of these groups can contain: Positive stakeholders who supports the aims and objectives of the project, and Negative stakeholders who do not support Direct (Primary) Indirect the project and do not wish for it to (Secondary) proceed. About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Managing Negative Stakeholders Challeges of Negative Stakeholders Environmental Groups Labor Unions Local Residents About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Stakeholder Groups About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Managing Negative Stakeholders Managing Strategies Diplomacy and Tact Involvement of Experts About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Key Elements of Stakeholders Analysis About CHAPTER 7 CHAPTER 8 QUIZ OTHERS About CHAPTER 7 CHAPTER 8 QUIZ OTHERS CHAPTER 8 PROJECT-SUCCESS CRITERIA SEE MORE  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Without knowing what your project-success criteria are, can you truly say your project is SUCCESSFUL? About CHAPTER 7 CHAPTER 8 QUIZ OTHERS definition project-success criteria Project management success is defined by how efficiently a project manager achieves the project’s goals and objectives. About CHAPTER 7 CHAPTER 8 QUIZ OTHERS definition project-success criteria these are the most important attributes and objectives that must be met to enable the projects to be termed a SUCCESS.  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS SIX KEY METRICS OF PROJECT-SUCCESS SCOPE SCHEDULE BUDGET TEAM CUSTOMER QUALITY SATISFACTION SATISFACTION About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Most Familiar SUCCESS CRITERIA completion on time keeping the project cost within budget meeting the performance and quality requirements set in the specification (scope) Additional CRITERIA safety sustainability reliability legacy (long-term performance) meeting the desired business benefit About CHAPTER 7 CHAPTER 8 QUIZ OTHERS SUCCESS CRITERIA sustainability About CHAPTER 7 CHAPTER 8 QUIZ OTHERS  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS PROJECT PROBLEMS, OBSTACLES  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS THE FOLLOW ING ARE THE success factors that should be meet Clear objectives and project brief agreed Tight financial control with client Comprehensive quality control procedures Good project definition Motivated and well-integrated team Good planning and scheduling methods Competent design Accurate time control and feedback system Good contractual documentation Rigorous performance monitoring and Good internal and external communications control systems Good client relationship Rigorous change control (variations) Well-designed reporting system to procedures management and client Adequate resource availability (finance, Political stability labour, plant, materials) Awareness of environmental issues and Full top-management and sponsor support related legislation Competent project management About CHAPTER 7 CHAPTER 8 QUIZ OTHERS  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS Most important quantifiable measures of progress towards your intended outcome. A major criterion against which a particular part of the project can be measured. KPI can be a milestone that must be met, in any other important stage in a project. KEY PERFORMANCE INDICATORS (KPI) Some KPIs cannot be measured or proven.  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS “What gets measured, gets managed” - Peter F. Drucker  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS KPIs can also be either: Leading Indicators Lagging Indicators  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS THE FOLLOW ING ARE THE characteristics that make for good KPIs SMARTEST 1. Objective evidence Significance 2.Measure the right things Measurable 3.Link to strategic imperatives Attainable / Achievable 4.Track how performance Relevance changes Trackable 5.Track things that matter Ethical 6.SMARTEST Supported Time-bound  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS How do you create good KPIs? About CHAPTER 7 CHAPTER 8 QUIZ OTHERS  About CHAPTER 7 CHAPTER 8 QUIZ OTHERS REFERENCES AIMS Education, UK. (2020, June 25). Successful Project Management & its Examples - What Makes a Project Successful? - AIMS Education [Video]. YouTube. https://www.youtube.com/watch?v=XjA3EhqCw3U Keup, M. (2023, August 25). Understanding project management success criteria. ProjectManager. https://www.projectmanager.com/blog/understanding-project-management-success-criteria Success Criteria. (n.d.). Awork. https://www.awork.com/glossary/success-criteria Willard’s and Stanley GB. (2023, February 16). How to Measure the Success of a Project and What Makes it Successful [Video]. YouTube. https://www.youtube.com/watch?v=M4N1K-0mmWw projectcubicle. (2023, July 15). Types of stakeholders and their roles in project management | Identifying and managing stakeholders [Video]. YouTube. https://www.youtube.com/watch?v=c71rD0oaHO0 Online PM Courses - Mike Clayton. (2022, March 17). What+123-456-7890 is a KPI? What are KPIs? Key Performance Indicators. [Video]. www.reallygreatsite.com YouTube. https://youtu.be/soiChkomKmo?si=dsfAC3juWpaYcZgd Balanced Scorecard Institute. (2022, September 9). What is a Key Performance Indicator (KPI)? [Video]. YouTube. https://youtu.be/jvdPM6RZ3Xc?si=qH0Ye0dxqVWUrJSE About CHAPTER 7 CHAPTER 8 QUIZ OTHERS T H A N K YO U GROUP 4 - CO77 LOÑ OZA,NICO LE KI RSTEN D. LUSTADO,JAYPE E. QUEZADA, AM AN DA L EIGH