ATEC 2340/4370 Lecture 4

ATECARTS & TECHNOLOGY

ATEC 4370 Project Management for Arts & Technology - I


Agenda• The Project Initiation

Group

• The Project Charter

• Stakeholder Management



Initiating the Project


Understanding the Project Lifecycle

PMP in Depth: Project Management Professional Study Guide for PMP and CAPM Exams

1. Initiating2. Planning3. Executing4. Monitoring and

Controlling5. Closing


Project Management Body of Knowledge (PMBOK)



Initiating the Project

Initiating a project means defining the project, getting approval to start it, and identifying and analyzing project stakeholders. During this stage:

• Initial Scope of the project is defined.

• Initial resources are determined and allocated.

• A project manager with an appropriate authority level is assigned.

• Project Stakeholders are identified.


Initiating the Project: The Big Picture

Business Need

Statement of Work

Business Case

Develop Project Charter

Identify Stakeholders

Organization’s Business Strategy



Initiating the Project: The Big Picture• The Business need to be met by the project emerges from the organizations

business strategy.

• Based on the business needs, somebody writes the statement of work (SOW) and makes the business case

• The business case and SOW are starting points to develop the initial project scope and thereby determine the initial resources.

• All this information becomes an input to developing the project charter, which, in turn is an input to the process of identifying stakeholders.



Business Needs and Project OriginsA project may originate as a result of one or more of the following categories of reasons:• Business Requirements: includes projects based on a business need. For

example, perhaps a web design company authorizes a project to automate certain aspects of maintaining websites to increase its efficiency and revenue.

• Legal Requirements: includes projects based on a legal requirements. For example, consider a building owner authorizing a project to make the building accessible to physically disabled persons in order to meet the legal requirements for using the building for a specific business.

• Ecological Impact: For example, a company undertakes a project to lessen the negative impact that its operations or products may have on the environment



Business Needs and Project Origins (Cont.…)• Opportunities: includes needs based on market demands, customer requests,

strategic opportunity and technological advancement. For example, a car manufacturer begins a project to make electric cars based on high oil prices that the customer cannot afford.

• Problems: Projects are also authorized to offer solutions to certain problems in a company or a country or to address social needs in a society. For example, the government might start a project to help victims of a natural disaster, such as a hurricane.

• Social Needs: Governmental or nongovernmental organizations initiate projects to satisfy some social needs, such as a project to provide access to the Internet in an underprivileged community or a project to set up latrines and a sewer system in a remote community.



Project Selection Methods

• Benefit Measurement Methods• Scoring models using weighted criteria• Benefit contributions e.g. cost benefit analysis• Economic models

• Constrained Optimization Methods• Linear, Nonlinear, dynamic, integer, multiple objective programming• Used for complex projects

• Expert Judgment



Scoring Models• A scoring model evaluates projects by using a set of criteria with a weight

(score) assigned to each criterion. You can assign different weights to different criteria to represent the varied degree of importance given to various criteria.

• All projects are evaluated (scored) against this set of criteria, and the project with the maximum score is selected.

• The set of criteria can include both objective and subjective criteria, such as financial data, organizational expertise, market value, innovation, and fit with the corporate culture.

• The advantage of a scoring model is that you have the freedom to assign different weights to different criteria in order to select projects consistent with the goals, mission, and vision of your corporation.



Scoring Models• This freedom, however, is also a disadvantage because your selection is only

as good as the criteria with larger weights.

• Furthermore, developing a good scoring model is a difficult task that requires unbiased cross departmental feedback from different levels of the organization.



Scoring Models



Benefit Contributions

• These methods are based on comparing the benefit contributions from different projects.

• These contributions can be estimated by performing a cost-benefit analysis, which typically calculates the projected cost, revenue, and savings of a project.

• This method favors the projects that create profit in the shortest time and ignores the long-term benefits of projects that might not be tangible at the current time, such as innovation and strategic values.



Economic Models• Return on Investment (ROI)

• Ignoring the time value of money, the percentage of profit from the project• ROI = (Benefits – Costs) / Costs

• Internal Rate of Return (IRR)• Translates yearly cost/benefit amounts to an interest rate over the life of the

project • Excel IRR function

• Net Present Value (NPV)• The present value of future cash inflows (benefits) minus the present value of

future cash outflows (costs)• Excel NPV Function



ROI Analysis Exercise

Your company has 2 game proposals. Game A would cost you $200,000 to develop and the benefit from first year is estimated to be $250,000. Game B would cost you $150,000 to develop and the benefit from first year is estimated to be $175,000. Based on ROI Analysis, which project would your company be most likely to pursue?



Expert JudgementIt refers to making a decision by relying on expert advice from one or more of the following sources:• Senior management • An appropriate unit within the organization • The project stakeholders, including customers and sponsors• Consultants• Professional and technical associations• Industry groups • Subject matter experts from within or outside of the performing organization • Project management office (PMO)



Developing the Project Charter


What is a Project Charter?• The project charter is a document that states the initial requirements to

satisfy the stakeholders’ needs and expectations, and it also formally authorizes the project.

• In simple words, it officially authorizes the project and identifies a project manager.

Input

• Business Case• Statement of Work• Contract• Enterprise

Environmental Factors• Organizational Process

Assets

Tools and Techniques

• Expert Judgment

Output

• Project Charter


Project Charter Inputs• Business Case: Business need and justification. Typically includes a cost

benefit analysis.• Statement of Work (SOW): The statement of work is a document that

describes the products, services, or results that will be delivered by the project.

• Contract: A project for a customer who is external to the performing organization is usually done based on a contract.

• Organizational Process Assets: items such as templates, standard policies and procedures, knowledge about the organization.

• Enterprise Environmental Factors: It consists of the following – • Government and industry standards, such as legal requirements, product

standards, and quality standards relevant to the project.• Performing organization’s infrastructure, such as facilities and equipment

to do the project • Marketplace conditions relevant to the project


Output of developing the Project Charter

• Project purpose or justification• Measurable project objectives and related success criteria• High-level requirements• High-level project description• High-level risks• Summary milestone schedule• Summary budget• Project approval requirements• Assigned project manager• Name and authority of the sponsor


Project Charter Template



Identifying the Project Stakeholder


Identifying the Project Stakeholders

• Identify individuals and organizations that will influence the project and will be impacted by the project.

• Document relevant information about the individuals and organizations and about their interests and involvement in the project.

• Document how these individuals and organizations can influence the project and how they can be impacted by the project.

• Determine their levels of importance.



Input

• Project Charter• Procurement

Documents• Enterprise

Environmental Factors• Organizational Process

Assets

Tools and Techniques

• Stakeholder Analysis• Expert Judgment

Output

• Stakeholder register• Stakeholder

management strategy



• Project Manager• Project Management Office• Project Management Team• Project Team Members• Performing Organizations• Customer/user• Project Sponsor• Influencers


Stakeholder Register

• Document used to store information about stakeholders• Identification – name, location, title, project role, contact information• Assessment – list of how the stakeholder will react to different scenarios• Classification – power/interest grid, power involvement/grid,

involvement/impact grid, salience model


Stakeholder Management

• The approach developed to deal with the stakeholders in the best interests of the project

• How will individual stakeholders be managed?• How ill groups of stakeholders be managed?


Power/Interest GridMonitor Closely Manage with maximum effort

Monitor with Keep informed

Interest Level

Auth

ority

Lev

el

Stakeholder 9

Stakeholder 11

Stakeholder 10

Stakeholder 6

Stakeholder 4

Stakeholder 2

Stakeholder 8

Stakeholder 7

Stakeholder 3

Stakeholder 1

Stakeholder 5



Stakeholder Register Exercise

ATEC 2340/4370 Lecture 4

Technology

Transcript of ATEC 2340/4370 Lecture 4