Allen Quiz 2
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
