Competency 1.4

Payback occurs when: -the net cumulative benefits equal the net cumulative costs. -the net costs are lower than the cumulative benefits. -the net cumulative benefits minus costs equal one. -the cumulative benefits are double the cumulative costs.

the net cumulative benefits equal the net cumulative costs.

A project's internal rate of return can be determined by finding what discount rate results in an NPV of _____ for the project. -fifty percent -zero -one -a hundred percent

zero

What is a project charter? Discuss the inputs that can aid the development of a project charter.

A project charter is a document that formally recognizes the existence of a project and provides direction on the project's objectives and management. It authorizes the project manager to use organizational resources to complete the project. Ideally, the project manager provides a major role in developing the project charter. The following inputs are helpful in developing a project charter: • A project statement of work: A statement of work is a document that describes the products or services to be created by the project team. It usually includes a description of the business need for the project, a summary of the requirements and characteristics of the products or services, and organizational information, such as appropriate parts of the strategic plan, showing the alignment of the project with strategic goals. • A business case: Many projects require a business case to justify their investment. Information in the business case, such as the project objective, high-level requirements, and time and cost goals, is included in the project charter. • Agreements: If you are working on a project under contract for an external customer, the contract or agreement should include much of the information needed for creating a good project charter. Some people might use a contract or agreement in place of a charter; however, many contracts are difficult to read and can often change, so it is still a good idea to create a project charter. • Enterprise environmental factors: These factors include relevant government or industry standards, the organization's infrastructure, and marketplace conditions.Managers should review these factors when developing a project charter. • Organizational process assets: Organizational process assets include formal and informal plans, policies, procedures, guidelines, information systems,financial systems, management systems, lessons learned, and historical information that can influence a project's success.

What is a weighted scoring model? How is it created?

A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria. These criteria can include factors such as meeting broad organizational needs; addressing problems, opportunities, or directives; the amount of time it will take to complete the project; the overall priority of the project; and projected financial performance of the project. The first step in creating a weighted scoring model is to identify criteria important to the project selection process. It often takes time to develop and reach agreement on these criteria. Holding facilitated brainstorming sessions or using groupware to exchange ideas can aid in developing these criteria. Some possible criteria for information technology projects include: • Supports key business objectives • Has strong internal sponsor • Has strong customer support • Uses realistic level of technology • Can be implemented in one year or less • Provides positive NPV • Has low risk in meeting scope, time, and cost goals Next, you assign a weight to each criterion. Once again, determining weights requires consultation and final agreement. These weights indicate how much you value each criterion or how important each criterion is. You can assign weights based on percentages, and the sum of all of the criteria's weights must total 100 percent. You then assign numerical scores to each criterion (for example, 0 to 100) for each project. The scores indicate how much each project meets each criterion. At this point, you can use a spreadsheet application to create a matrix of projects, criteria, weights, and scores. After assigning weights for the criteria and scores for each project, you calculate a weighted score for each project by multiplying the weight for each criterion by its score and adding the resulting values.

_____ involves coordinating all planning efforts to create a consistent, coherent document. -Developing the preliminary project scope statement -Developing the project management plan -Developing the organizational process assets updates -Developing the project charter

Developing the project management plan

A SWOT analysis, being a linear process, cannot be performed using the nonlinear mind mapping technique. -True -False

False

An organization's information technology project selection process should guide the strategic plan. -True -False

False

What are the methods for categorizing information technology projects?

Selecting projects is based on various categorizations, such as the impetus for the project, the time window for the project, and the general priority for the project. The impetus for a project is often the need to respond to a problem, an opportunity, or a directive. Problems are undesirable situations that prevent an organization from achieving its goals. These problems can be current or anticipated. For example, users of an information system may be having trouble logging onto the system or getting information in a timely manner because the system has reached its capacity. In response, the company could initiate a project to enhance the current system by adding more access lines or upgrading the hardware with a faster processor, more memory, or more storage space. Opportunities are chances to improve the organization. For example, the project described in the opening case involves creating a new product that can make or break the entire company. Directives are new requirements imposed by management, government, or some external influence. For example, many projects involving medical technologies must meet rigorous government requirements. Another categorization for information technology projects is based on the time it will take to complete a project or the date by which it must be done. For example, some potential projects must be finished within a specific time window. If they cannot be finished by this set date, they are no longer valid projects. Some projects can be completed very quickly—within a few weeks, days, or even minutes. Many organizations have an end user support function to handle very small projects that can be completed quickly. Even though many information technology projects can be completed quickly, it is still important to prioritize them. Organizations can prioritize information technology projects as being high, medium, or low priority based on the current business environment. For example, if it is crucial to cut operating costs quickly, projects that have the most potential to do so would be given a high priority. The organization should always complete high-priority projects first, even if a low- or medium-priority project could be finished in less time. Usually there are many more potential information technology projects than an organization can undertake at any one time, so it is very important to work on the most important ones first.

Projects that arise as a result of problems and directives must be resolved quickly to avoid hurting an organization's business. -True -False

True

Benefits minus costs is known as the _____. -cash flow -cost of capital -opportunity cost of capital -discount factor

cash flow

In the _____ stage of selecting information technology projects, organizations define project scope, benefits, and constraints. -information technology strategy planning -resource allocation -business area analysis -project planning

project planning

The _____ section of the project management plan describes specific methodologies a project might use and explains how to document information. -project controls -management objectives -technical processes -risk management

technical processes