ITM 435 - Project Management Chapter 2

What is the four-stage planning process for project selection?

*Benefits assessment: *LeadQuest implementation: *Values rollout *Performance management

What is an NPV analysis?

Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.

List and briefly describe the four stages.

Strategic planning: Business area analysis Project planning Resource allocation:

Why is it important to align projects with business strategy?

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

What is the discount rate?

The rate used in discounting future cash flows.

What is the opportunity cost of capital?

The return available by investing the capital elsewhere.

What is a balanced scorecard?

a methodology that converts an organization's value drivers— such as customer service, innovation, operational

Be able to define Internal rate of return

by finding what discount rate results in an NPV of zero for the project.

What is 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.

What are some techniques for selecting projects?

*Focusing on competitive strategy and broad organizational needs *Performing net present value analysis or other financial projections *Using a weighted scoring model *Implementing a balanced scorecard *Addressing problems, opportunities, and directives *Considering project time frame Considering project priority

In general, what are the steps in performing a weighted scoring analysis?

*Identify Criteria *Assign a Weight *Assign numerical scores to the criterion

How are problems, opportunities, and directives used to select projects?

*Problems are undesirable situations that prevent an organization from achieving its goals *Opportunities are chances to improve the organization. *Directives are new requirements imposed by management, government, or some external influence.

What are the five levels of project portfolio management?

*Put all of your projects in one list. *Prioritize the projects in your list. *Divide your projects into several categories based on types of investment *Automate the list *Apply modern portfolio theory, including risk-return tools that map project risks

Why is it sometimes advantageous to combine several projects into a program?

*Saving money *Saving time: Increasing authority

What is a SWOT analysis and why would you conduct a SWOT analysis?

*Strengths, Weaknesses, Opportunities, and Threats— which is used to aid in strategic planning. *The SWOT analysis is then used to identify strategic initiatives, which Nemours defines as one-time projects with a defined beginning, tasks, and conclusion, to which resources are allocated.

What is a payback analysis? And what is the payback period?

*determines how much time will lapse before accrued benefits overtake accrued and continuing costs. *Payback period is the amount of time it will take to recoup— in the form of net cash inflows— the total dollars invested in a project.

What is mind mapping?

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

Be able to define Required rate of return

minimum acceptable rate of return on an investment.

What is Return on Investment (ROI)?

the result of subtracting the project costs from the benefits and then dividing by the costs.

What is the primary goal of project portfolio management?

to help maximize business value to ensure enterprise success.

What is a weighted scoring model? And why would you use one?

tool that provides a systematic process for selecting projects based on many criteria.