P+ Ch. 1

verickle's version from 2017-03-21 16:09

How Projects Come About

Market demand :The proliferation of handheld devices has created a need for rechargeable batteries that are capable of holding a charge for 12 hours or more.
Question Answer
Strategic opportunity/business needThe organization's accounting system is outdated and no longer able to keep up with current technology. A new system is implemented to help the organization become more efficient and create reports in a timelier manner.
Customer requestThe discussions at a recent customer focus group brought about the idea for a new product offering.
Technological advanceIs it the technology that drives the business to think it needs a new product or service, or does the business need drive the development of the new technology? Both scenarios exist, and both bring about the need for new projects.
Legal requirementA city may pass an ordinance allowing photos of red-light violations at busy intersections. The new equipment must then be procured and installed. Federal regulations requiring the encryption and secure storage of private data may bring about the need for a project to fulfill these requirements.
Ecological impactA new Environmental Protection Agency (EPA) mandate requires extra equipment and processes to be implemented in your production assembly line to minimize pollution output. Therefore, a project is required.
Social needA small developing country may have the need for safe, clean drinking water, so a project is initiated to purchase and install a new filtering system. Another example may include bringing about a project to develop a vaccine for a new flu virus that's predicted to hit the nation.
Business CaseA written document or report that helps executive management and key stakeholders determine the benefits and rewards of the project.
Feasibility studyA formal endeavor that is undertaken to determine whether there is a compelling reason to perform the proposed project. Usually conducted when the proposed project is highly complex, has a high potential for risk, or is a new type of project the organization has never undertaken before.
JustificationDescribes the benefits to the organization for undertaking the project. These benefits can include tangible and intangible benefits and should include the reasons for bringing about the project.
Alignment to the strategic planShould describe how the project and its outcomes will align to the organization's overall strategic plan.
StakeholdersAnyone who has a vested interest in the project. Can include individuals as well as organizations, and both the project sponsor and the project manager.
Project SelectionMethod to decide how you or the project selection committee will choose among competing projects.
Benefit Measurement MethodsProvide a means to compare the benefits obtained from project requests by evaluating them using the same criteria.
Cost-benefit analysisCompares the cost to produce the product or service to the financial gain (or benefit) the organization stands to make as a result of executing the project.
Scoring modelHas a predefined list of criteria against which each project is rated. Each criterion is given both a scoring range and a weighting factor.
Payback periodA cash flow technique that identifies the length of time it takes for the organization to recover all the costs of producing the project.
Economic modelA series of financial calculations, also known as cash flow techniques, which provide data on the overall financials of the project.
Discounted cash flowompares the value of the future worth of the project's expected cash flows to today's dollars.
Net present valueA cash flow technique that calculates the revenues or cash flows the organization expects to receive over the life of the project in today's dollars.
Internal rate of returnThe discount rate when the present value of the cash inflows equals the original investment.
Constrained Optimization ModelsMathematical models, some of which are very complicated. They are typically used in very complex projects and require a detailed understanding of statistics and other mathematical concepts.
Expert JudgmentRelies on the expertise of stakeholders, subject matter experts, or those who have previous experience to help reach a decision regarding project selection.


Question Answer
Define a projectBrings about a unique product, service, or result and has definite beginning and ending dates.
Identify the difference between a project and ongoing operationsA project is a temporary endeavor to create a unique product or service. Operational work is ongoing and repetitive.
Three types of organizational structuresFunctional, matrix, project based.
Define the role of a project managerCore function: project integration. Leads the project team and oversees all the work required to complete the project goals to the satisfaction of the stakeholders.
Identify the most common project selection methodsBenefit measurement methods such as cost-benefit analysis, scoring models, payback period, and economic models (which include discounted cash flows, NPV, and IRR), as well as expert judgment.