Allen Quiz 2

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To determine NPV, follow these steps:

1. Determine the estimated costs and benefits for the life of the project and the products it creates 2. Determine the discount rate. 3. Calculate the net present value.

Project integration management includes _________ __________

interface management

one of the most important jobs of a project manager is to establish and maintain good communication and relationships across organizational __________

interfaces

Directing and managing project work

involves carrying out the project management plan by performing the activities included in it.

The _______ for a project is often to respond to a problem, an opportunity, or a directive.

impetus

Developing the project management plan

involves coordinating all planning efforts to create a consistent, coherent document—the project management plan.

mind map branches

strengths, weaknesses, opportunities, and threats

Other top criteria for investing in IT projects

supporting implicit business objectives and providing financial incentives, such as a good internal rate of return (IRR) or net present value (NPV).

The discount rate is also called:

the capitalization rate or the opportunity cost of capital

positive NPV

the return from a project exceeds the cost of capital

Another categorization for IT projects is based on ______

timing

broad organizational need examples

to improve safety, increase morale, provide better communications, or improve customer service.

An organization should always complete high-priority projects first, even if a low- or medium-priority project could be finished in less time.

true

An organization should consider only projects with a positive NPV if financial value is a key criterion for project selection.

true

Another method for selecting projects is based on various categorizations, such as the project's impetus, time window, and general priority.

true

As projects progress, the organization must reevaluate the need, funding, and will for each project to determine if it should be continued, redefined, or terminated.

true

Before organizations begin projects, however, they should go through a formal process to decide what projects to pursue.

true

Gartner estimated worldwide IT spending at $3.6 trillion in 2018, an increase of 3.5 percent from 2017

true

Information systems can also support a strategy of selling to a particular market or occupying a specific product niche.

true

Information systems can support a strategy of providing specialized products or services that set a company apart from others in the industry

true

Information systems often are central to business strategy

true

It is often difficult to educate line managers on technology's possibilities and limitations and keep IT professionals in tune with changing business needs

true

It is often easier to get approval and funding for projects that address problems or directives because the organization must respond to these categories to avoid hurting their business

true

Many organizations require an approved business case before pursuing projects, and financial projections are a critical component of the business case

true

Many people consider project integration management the key to overall project success

true

Many problems and directives must be resolved quickly, but managers must also apply systems thinking and seek opportunities for improving the organization through IT projects

true

Microsoft Excel uses: 5npv(discount rate, range of cash flows), where the discount rate is in cell B1 and the range of cash flows for Project 1 are in cells B6 through F6.

true

No company tops Apple (aapl, 20.24%) for demonstrating the strategic power of great design and learning to 'think different.

true

Notice that aligning IT projects with business strategy is at the heart of selecting IT projects

true

Organizations can also categorize IT projects as having high, medium, or low priority based on the current business environment

true

Organizations often rely on experienced project managers to help them make project selection decisions.

true

People come up with many unrelated ideas. By capturing those ideas in a visual mind map format, you can often generate more ideas than by creating lists.

true

Project integration management must occur within the context of the entire organization, not just within a particular project.

true

Project managers must always view their projects in the context of the changing needs of their organizations and respond to requests from top management.

true

Projects that address broad organizational needs are much more likely to be successful because they will be important to the organization.

true

Projects with higher NPVs are preferred to projects with lower NPVs, if all other factors are equal.

true

Some may argue that project managers should not be involved in strategic planning and project selection because top management is usually responsible for these types of business decisions. But successful organizations know that project managers can provide valuable insight into the project selection process.

true

Some projects can be completed very quickly—within a few weeks, days, or even minutes

true

Strategic planning provides important information to help organizations identify and then select potential projects

true

The greater the uncertainty of future cash flows, the higher the discount rate.

true

The number of interfaces can increase exponentially as the number of people involved in a project increases.

true

The project manager must communicate well with all project stakeholders, including customers, the project team, top management, other project managers, and opponents of the project

true

The smart use of technology is always a key component in driving innovation and creating a competitive edge

true

To calculate NPV, you must assume a certain discount rate.

true

To get the most value from technology, an organization's strategic plan should guide the IT project selection process

true

Top managers must focus on meeting their organizations' many needs when deciding what projects to undertake, when to undertake them, and to what level.

true

Using a balanced scorecard approach also helps align projects with business strategy

true

Usually an organization has many more potential IT projects than it can undertake at one time, so it is crucial to work on the most important projects first

true

You can create mind maps by hand, using sticky notes, using presentation software such as Microsoft PowerPoint, or by using mind mapping software.

true

You can use the NPV function in Excel to calculate the NPV quickly.

true

information systems can support an organizational strategy of being a low-cost producer.

true

it is often difficult to provide a strong justification for many IT projects related to broad organizational need

true

project integration management does not mean focusing on the projects technical problems

true

project integration management is about integrating the work of all of the people involved in the project by focusing on good communication and relationship management.

true

project management is applying knowledge, skills, tools, and techniques to meet project requirements, while also meeting or exceeding stakeholder needs and expectations.

true

several mind map branches can end with a project idea, such as Project proposal, Conference promotions, Accountant, Marketing plan, and Website.

true

supporting explicit business objectives is the top reason cited for why organizations invest in IT projects.

true

top management must keep project managers informed of major issues that could affect their projects and strive to make processes consistent throughout their organization.

true

Developing the project charter

working with stakeholders to create the document that formally authorizes a project—the charter

NPV analysis is a method for making equal comparisons between cash flows for multiyear projects.

True

the time value of money

a dollar earned today is worth more than a dollar earned five years from now

Net present value (NPV) analysis

a method of calculating the expected net monetary gain or loss from a project by calculating the value of all expected future cash inflows and outflows at the present time

mind mapping

a technique that uses branches radiating from a core idea to structure thoughts and ideas

Project Management Office (PMO)

acts as the central location for keeping track of all project activities.

Financial considerations

an important aspect of the project selection process, whether economic times are tough or the economy is growing

cash flow

benefits minus costs or income minus expenses

Opportunities

chances to improve the organization

primary tools for interface management

communication and relationships

steering committee

consists of managers from departments throughout the company to ensure that all projects are selected in the best interests of the entire organization

first step in project management

deciding what projects to do in the first place.

In addition to using a SWOT analysis, organizations often follow a ________ process for project selection

detailed

Michael Porter

developed the concepts of the strategic value of competitive advantage and value chain

Many organizations have an ___-____ support function to handle very small projects that can be completed quickly

end-user

cost of capital

- the return available from investing the capital elsewhere - the rate of return that could have been earned by putting the same money into a different investment with equal risk.

Problems

- undesirable situations that prevent an organization from achieving its goals. - can be current or anticipated.

discount rate

- the interest rate used to discount cash flows - takes into account not just the time value of money but also the risk or uncertainty of future cash flows

IT strategy

- a strategy for using IT to define how it will support the organization's objectives. - must align with the organization's strategic plans

IT governance

- an important part of ensuring that IT supports business goals. - helps organizations maximize their investments in IT and address IT-related risks and opportunities.

SWOT analysis

- analyzing Strengths, Weaknesses, Opportunities, and Threats - one tool used in strategic planning.

Project integration management

- involves coordinating all of the other project management knowledge areas throughout a project's life cycle. This integration ensures that all the elements of a project come together at the right times to complete a project successfully. - the project managers chief means of accomplishing all of the tasks for a given project

responsibilities belonging to the project manager:

- take responsibility for coordinating all of the people, plans, and work required to complete a project. - focus on the big picture of the project and steer the project team toward successful completion. - make the final decisions when conflicts occur among project goals or people. - communicate key project information to top management.

main processes are involved in project integration management

Developing the project charter Developing the project management plan Directing and managing project work Managing project knowledge Monitoring and controlling project work Performing integrated change control Closing the project or phase

Dennis Cohen and Robert Graham

Projects are never ends in themselves. Financially they are always a means to an end, cash.

Strategic planning

involves determining long-term objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for new products and services.

Closing the project or phase

involves finalizing all activities to formally close the project or phase

interface management

involves identifying and managing the points of interaction between various elements of a project

Performing integrated change control

involves identifying, evaluating, and managing changes throughout the project life cycle.

Monitoring and controlling project work

involves overseeing activities to meet the performance objectives of the project.

Managing project knowledge

involves using existing knowledge and creating new knowledge to achieve project objectives while also contributing to organizational learning.

on _____ projects, the project manager's main job is project integration management. To perform well in that role, it is important to understand the organization's needs and staff your project with skilled workers capable of making the project a success.

large

Some people like to perform a SWOT analysis by using ____ _______

mind mapping

One method for selecting projects based on broad organizational needs is to determine whether they first meet three important criteria:

need, funding, will

Three primary methods for projecting the financial value of projects

net present value analysis, return on investment, and payback analysis.

Directives

new requirements imposed by management, government, or some external influence.

The project manager must integrate the work of the project with the ongoing operations of the ____________

organization

Following a ________ process for managing projects can help prevent some of the typical problems new and experienced project managers face, including communicating with and managing stakeholders.

standard

project initiation

starts with identifying potential projects, using realistic methods to select which projects to work on, and then formalizing their initiation by issuing some sort of project charter.

Many information systems are classified as _________ because they directly support key business strategies

strategic

Successful leaders look at the big picture or _________ plan of the organization to determine what types of projects will provide the most value.

strategic

techniques used to select projects

• Focusing on broad organizational needs • Categorizing IT projects • Performing net present value or other financial analyses • Using a weighted scoring model • Implementing a balanced scorecard


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