Chapter 2 MGT

4 stages of traditional project planning

(can be time consuming, organizations must be able to respond to rapidly changing business environment) 1. Strategic Planning (2st step of project selection is to determine organization's strategy, goals, objectives in strategic plan or meeting) 2. Business Area analysis (next, analyze business processes that are central to achieving goals) 3. Project Planning (next, define potential projects that address identified strategies/business areas) 4. Resource Allocation (last, choose projects and assign resources need for them- amount or resources needed/available will affect project decisions)

implement balanced scorecard

- Balanced score card: methodology that converts an organization's value drivers (such as customer services, innovation, operational efficiency, financial performance) into a series of defined metrics.

time frame

- If a project needs to be done by a certain specific date and it is not possible for the organization to achieve, the project should not be considered.

address problems, opportunities, directives

- Problems: undesirable situations that prevent an organization from achieving its goals - Opportunities: chances to improve organization - Directives: new requirements imposed by management, government, or external influence

5 levels of portfolio management:

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

project priority

- Rate projects as high, medium or low priority based on current business environment. - Always complete higher priority projects first, even if a lower priority project could be finished in less time.

Project Selection Methods:

1. Competitive strategy and broad organizational needs 2. Financial Projections 3. Implement balanced scorecard 4. address problems, opportunities directives 5. time frame 6. project priority

weighted scoring model

A technique that provides a systematic process for selecting projects based on numerous criteria

systems philosophy

An overall model for thinking about things as systems

mind mapping

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

Systems Thinking

describes the holistic view of carrying out projects within the context of the organization

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 - helps organizations to identify and select potential projects - written plan usually includes organization's mission, vision and goals for next 3-5 years.

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; helps organizations to identify and select potential projects

Portfolio Selection:

maximize business value to ensure enterprise success 1. Venture: Projects that transform business 2. Growth: Projects that help company grow in terms of revenue. 3. Core: Projects that must be accomplished to run the business.

Modern Portfolio Theory: ***

maximize portfolio expected returns for a given amount of portfolio risk by carefully choosing proportions of various assets.

- Discretionary costs (venture & growth):

organization can use own discretion to decide which projects to fund.

- Non-Discretionary costs (core):

organization has no choice in whether to fund project - must fund to stay in business.

Program Selection:

organization must decide whether it is beneficial manage several projects together as part of a program, projects fall into existing program, if they should initiate a new program,... 1. Coordination and Benefits: - Potential benefits of grouping projects into programs: save money, save time, increase authority

Agile Project Planning

relating to or denoting a method of project management, used specifically for software development, characterized by division of tasks into short phases of work and frequent reassessment and adaptation of plans. - Allows quick adaptation to constant changes in environment. - More timely.

SWOT analysis:

strengths, weaknesses, opportunities, threats - used to aid in strategic planning

Payback Period

the amount of time required for an investment to generate cash flows sufficient to recover its initial cost