CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği...
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Transcript of CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği...
![Page 1: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/1.jpg)
1CS-413
A Detailed Look to Initiation Phase of Scope Management
(Part 8)
Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009
Dr.Çağatay ÜNDEĞER
InstructorBilkent University, Computer Engineering
Middle East Technical University, Game Technologies
&
General ManagerSimBT Inc.
e-mail : [email protected]
![Page 2: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/2.jpg)
2CS-413
Scope Management
• Project Management Components (knowledge areas)– Project Integration Management– Project Scope Management– Project Time Management– Project Cost Management– Project Human Resource Management– Project Communication Management– Project Quality Management– Project Risk Management– Project Procurement Management
![Page 3: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/3.jpg)
3CS-413
Scope Management Phases
• Initiation• Scope Planning• Scope Definition• Scope Verification• Scope Change Control
![Page 4: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/4.jpg)
4CS-413
A Detailed Look to: Initiation
• The process of identifying and authorizing; – A new project, or – Continuation of an existing project.
![Page 5: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/5.jpg)
5CS-413
A Detailed Look to: Initiation
• Requires the following activities:– Identifying projects– Classifying and ranking projects– Selecting projects– Establishing project charter
![Page 6: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/6.jpg)
6CS-413
Identifying projects
• No single method to use• Some organizations use;
– Very careful planning process;• Some use;
– More ad hoc methods.
![Page 7: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/7.jpg)
7CS-413
Identifying projects
• Who is responsible?– A key member of top management (e.g.
a CEO, a senior executive)– A steering commitee composed of
managers– User departments;
• Head of a requesting unit• A commitee of requesting unit
– A senior IS manager
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8CS-413
Identifying projects
• Although carefully identifying new projects has advantages,
– Many organizations do not use a systematic planning process.
• Projects are resulted from attempts to solve isolated organizational problems.
• Procedures are likely to change, – In time, It will be necessary to modify
existing systems.
![Page 9: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/9.jpg)
9CS-413
Identifying projects
• Use planning based-approachs.• Planning based-approachs ask the following
question to identify new potential projects:– What information requirements will
satisfy;• Decision making needs or • Business process of enterprice today
and well in the future?
![Page 10: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/10.jpg)
10CS-413
Identifying projects
• Advantage of planning-based approach is that;
– An organization’s informational needs are less likely to change than its bussiness process.
• To understand planning-based approach, need to understand;
– Corporate Strategic Planning, and – Information Systems Planning.
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11CS-413
Identifying projects (Corporate Strategic Planning)• To make effective decisions, you need to
gain a clear idea of;– Where an organization is,– Where it wants to be in the future (vision
of organization), and– How to make transitions to that desired
future state.• Planners develop a strategic plan to guide
the transition.
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12CS-413
Identifying projects (Sample Vision Statement)
• Vision statement of SimBT Inc:– To provide national and international
science and technology based original solutions in the area of modeling, simulation and simulators.
– To realize company revolution on the concept of
• “Behaving flexible and simple as a small company,
• But meanwhile having the power of a big scale organization".
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13CS-413
Identifying projects (Corporate Strategic Planning)• All successful organizations hava a mission.• Mission statement of a company states what
business the company is in.
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14CS-413
Identifying projects (Sample Mission Statement)
• Mission statement of Microsoft:– To enable people and businesses
throughout the world to realize their full potential.
• Mission statement of SimBT Inc:– To develop the best M&S prototypes and
turnkey products for Turkish and abroad customers.
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15CS-413
Identifying projects (Corporate Strategic Planning)• Closely linked to their mission,
– Organizations also define several objective statements that refer to broad and timeless goals for the organization
• In order to reach a desired future state.
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16CS-413
Identifying projects (Sample Objective Statement)
• Objective statements of Microsoft:– Broad customer connection: Connecting
with customers, understanding their needs and how they use technology, and providing value through information and support to help them realize their potential.
– A global, inclusive approach: Thinking and acting globally, enabling a diverse workforce that...
– ...
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17CS-413
Identifying projects (Sample Objective Statement)
• Objective statements of SimBT Inc:– To bridge the gap among:
• “Science, technology, turn-key systems“, • “University, research centers” and • “Industry, acquisition agencies" in the area of
modelling, simulation and simulators. – To put ourselves in the position of our
customers in order to understand their requirements.
– To make our customers realize their requirements and utilize the state-of-the-art technology.
![Page 18: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/18.jpg)
18CS-413
Identifying projects(Corporate Strategic Planning)
• A competitive strategy:– The method by which an organization
attempts, to achieve its mission and objective.
– An organization’s game plan for playing in the competitive business world.
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19CS-413
Identifying projects (Corporate Strategic Planning)• A competitive strategy:
– Generic strategies:• Low-cost producer• Product differentiation• Product Focus
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20CS-413
Identifying projects (Corporate Strategic Planning)• Low-cost producer:
– Competing in an industry on the basis of product or service cost to the customer (e.g. very cheap products).
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21CS-413
Identifying projects (Corporate Strategic Planning)
• Product differentiation:– Capitalizing on a key criterion requested
by the market (e.g. high quality, high performance, original style).
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22CS-413
Identifying projects (Corporate Strategic Planning)• Product Focus:
– Similar to both low-cost and differentiation strategies.
– But employs a much narrow market focus (focus on some specific products).
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23CS-413
Identifying projects
• Planning-based approaches:– Corporate strategic planning, and – Information Systems planning.
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24CS-413
Identifying projects(Information Systems Planning)
• A second planning approach that can help identifying projects is information systems planning (ISP).
• An orderly means of;– Assessing information needs of an
organization, and – Defining systems, databases, and
technologies that will best satisfy those needs.
![Page 25: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/25.jpg)
25CS-413
Identifying projects(Information Systems Planning)
• Model current and future organizational information needs.
• Develop strategies and project plans– To migrate current information systems
and technologies to their desired future state.
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26CS-413
Identifying projects(Information Systems Planning)
• A top-down process that takes into account; – Outside forces (industry), – Economy, – Relative size, – Geographic region, etc.
• Key activities are:– Describing current situation– Describing target situation, trends, and
constraints– Developing a transition strategy and plan
![Page 27: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/27.jpg)
27CS-413
Identifying projects(Information Systems Planning)
• Describing current situation:– Define the current organizational
situation using top-down planning.– Top-down planning attempts;
• To gain a broad understanding of informational needs of entire organization.
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28CS-413
Identifying projects(Information Systems Planning)
• Describing current situation:– Top-down planning;
• Begins with analysis of organization’s mission, objectives, and strategy;
• Continues with determination of information requirements needed to meet each objective.
• Requires involvement of top-level management.
![Page 29: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/29.jpg)
29CS-413
Identifying projects(Information Systems Planning)
• Describing target situation, trends, and constraints:
– Define target situation that reflects desired future state of organization.
– Vision consists of desired state of;• Locations,• Units,• Functions,• Processes,• Data,• Information systems.
![Page 30: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/30.jpg)
30CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– When creation of current and target
situation is completed,• A detailed transition strategy and plan
are developed.
![Page 31: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/31.jpg)
31CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Plan should be:
• Very comprehensive,• Reflecting broad and long-range
issues, and • Providing sufficient detail to guide all
levels of management concerning;– What needs to be done,– How and when it needs to be done,– Who in organization will be doing.
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32CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Outline of an information systems plan:
• Organizational mission, objectives & strategy• Information inventory• Mission and objectives of IS• Constraints on IS development• Overall systems needs and long-range IS
strategies• The short-term plan• Conclusions
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33CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Organizational mission, objectives &
strategy:• Briefly describes mission, objectives
and strategy of the organization.• Presents current and future views of
the organization briefly.
![Page 34: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/34.jpg)
34CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Information inventory:
• Provides a summary of various bussiness process, functions, data entities, and information needs of enterprise.
• Will contain both current and future views.
![Page 35: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/35.jpg)
35CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Mission and objectives of IS:
• Describes primary role of IS in transformation from current to future state.
• For example, role may be;– A necessary cost, – an investment, or – a strategic advantage.
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36CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Constraints on IS development:
• Briefly describes limitations imposed by;
– State of the art technology,– Current level of resources within
the organization (financial, technological, personnel).
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37CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Overall systems needs and long-range IS
strategies:• Presents a summary of;
– Overall systems needs within the organization,
– A set of long-range (2-5 years) strategies chosen by IS department to meet the needs.
![Page 38: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/38.jpg)
38CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– The short-term plan:
• Shows;– A detailed inventory of present
projects and systems,– A detailed plan of projects to be
developed or advanced during current year.
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39CS-413
Identifying projects(Information Systems Planning)
• Developing a transition strategy and plan:– Conclusions:
• Contains;– Likely, but not certain events that
may effect the plan,– An inventory of business change
elements as presently known,– A description of their estimated
impact on plan.
![Page 40: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/40.jpg)
40CS-413
A Detailed Look to: Initiation
• Requires the following activities:– Identifying projects– Classifying and ranking projects– Selecting projects– Establishing project charter
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41CS-413
Classifying and Ranking Projects
• Focuses on assessing relative merit of potential projects.
• All projects are feasible given unlimited resources and time,
– But most projects must be developed within tight budgendary and time constraints.
– Therefore, assessing feasibility and value of projects is essential.
![Page 42: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/42.jpg)
42CS-413
Classifying and Ranking Projects
• Factors:– Economical– Technical– Operational– Schedule– Legal and contractual– Political
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43CS-413
Classifying and Ranking Projects
• Economical Feasibility:– A comparison of financial benefits and
costs associated with a development project.
– Often reffered as Cost-Benefit Analysis.– Impossible to preciesly define costs and
benefits,– But an estimation is required in order to
compare rival projects.
![Page 44: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/44.jpg)
44CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Determine project benefits:
• Tangible benefits• Intangible benefits
– Determine project costs:• Tangible costs• Intangible costs
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45CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Tangible benefits;
• Can be measured in money and with certainty.
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46CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Categories of tangible benefits:
• Cost reduction and avoidance,• Error reduction,• Increased flexibility,• Increased speed of activity,• Improvement of management,
planning and control,• Opening new markets and increasing
sales opportunities,• Others.
![Page 47: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/47.jpg)
47CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Intangible benefits;
• Cannot be easily measured in money.– Some tangible benefits may be intangible
in early stages of a project.
![Page 48: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/48.jpg)
48CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Categories of intangible benefits:
• Increased competiveness with other companies,
• Increased organizational flexibility,• Increased employee morale,• Increased organizational learning and
understanding,• More timely information collection,• Others.
![Page 49: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/49.jpg)
49CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Tangible costs;
• Can be measured in money and with certainty.
![Page 50: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/50.jpg)
50CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Categories of tangible costs:
• Hardware costs,• Software costs,• Labor costs,• Operational costs (employee training,
building renovations, etc.)• Others
![Page 51: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/51.jpg)
51CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Intangible costs;
• Cannot be easily measured in money.
![Page 52: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/52.jpg)
52CS-413
Classifying and Ranking Projects
• Economical Feasibility:– One-time cost:
• A cost associated with;– Project start-up and development or – System start-up.
– Recurring costs:• A cost resulting from ongoing evolution
and use of a system.
![Page 53: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/53.jpg)
53CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• The use of a variety of analysis techniques for determining financial feasibility of a project.
![Page 54: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/54.jpg)
54CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• Commonly used analysis techniques:– Net present value (NPV)– Return on Investment (ROI)– Break-even analysis (BEA)
![Page 55: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/55.jpg)
55CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• Development and useful life of a system may span several years.
• Therefore, costs and benefits must be normalized into present day in order to compare.
• Time value of money (TVM) is used, – In order to compare present cash
outlays to future expected returns.
![Page 56: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/56.jpg)
56CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• The rate at which money can be borrowed or invested is called;
– The cost of capital, or– Discount rate.
![Page 57: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/57.jpg)
57CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• Formula to compute present value of a money that will be available in the future:
PVn = Y x 1(1+i)nPresent value
Amount of money that will be available n years from now
Discount rate in a yearNumber of years required
for money become available
![Page 58: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/58.jpg)
58CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis (Example):
• A seller sells a car for 4500 TL;– By 3 instalments.
» 1500 TL in cash,» 1500 TL after 1 year,» 1500 TL after 2 years.
• If seller were able to put money in a bank,
– Would receive 10 percent return in a year for his/her investment.
![Page 59: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/59.jpg)
59CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis (Example):
• 1500 TL in cash:
– PV1 = 1500 TL
• 1500 TL after 1 year,
– PV2 = 1500 x = 1363 TL
• 1500 TL after 2 years.
– PV3 = 1500 x = 1239 TL
1(1+0.10)1
1(1+0.10)2
![Page 60: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/60.jpg)
60CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis (Example):
• Seller will actually benefit;» 4102 TL (Net PV = 1500+1363+1239)
– From 4500 TL sale.
![Page 61: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/61.jpg)
61CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis (Example):
• Seller will actually benefit;» 4102 TL (Net PV = 1500+1363+1239)
– From 4500 TL sale.• Therefore, if buyyer gives equal to or
more than 4102 TL in cash,– Seller will accept (if he/she knows
enough matematics ).
![Page 62: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/62.jpg)
62CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• To perform analysis,– Useful life of project and– Cost of capital must be determined.
Discount rate = 12% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Totals
Benefits V of Benefits 0 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 250.000 TLPV of Benefits 0 TL 44.643 TL 39.860 TL 35.589 TL 31.776 TL 28.371 TL 180.239 TLNPV of all Benefits 0 TL 44.643 TL 84.503 TL 120.092 TL 151.867 TL 180.239 TL 180.239 TL
Costs One-time Costs 42.500 TLRecurring Costs 0 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 142.500 TLPV of Rc.Costs 0 TL 25.446 TL 22.720 TL 20.286 TL 18.112 TL 16.172 TL 102.736 TLNPV of Rc.Costs 0 TL 25.446 TL 48.166 TL 68.452 TL 86.564 TL 102.736 TL 102.736 TLNPV of all Costs 42.500 TL 67.946 TL 90.666 TL 110.952 TL 129.064 TL 145.236 TL 145.236 TL
Overall NPV -42.500 TL -23.304 TL -6.164 TL 9.139 TL 22.803 TL 35.003 TL 35.003 TL
![Page 63: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/63.jpg)
63CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• Overall return on investment (ROI):– A useful value for trade-off analysis
among projects.
Discount rate = 12% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Totals
Benefits V of Benefits 0 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 250.000 TLPV of Benefits 0 TL 44.643 TL 39.860 TL 35.589 TL 31.776 TL 28.371 TL 180.239 TLNPV of all Benefits 0 TL 44.643 TL 84.503 TL 120.092 TL 151.867 TL 180.239 TL 180.239 TL
Costs One-time Costs 42.500 TLRecurring Costs 0 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 142.500 TLPV of Rc.Costs 0 TL 25.446 TL 22.720 TL 20.286 TL 18.112 TL 16.172 TL 102.736 TLNPV of Rc.Costs 0 TL 25.446 TL 48.166 TL 68.452 TL 86.564 TL 102.736 TL 102.736 TLNPV of all Costs 42.500 TL 67.946 TL 90.666 TL 110.952 TL 129.064 TL 145.236 TL 145.236 TL
Overall NPV -42.500 TL -23.304 TL -6.164 TL 9.139 TL 22.803 TL 35.003 TL 35.003 TL
ROI = 35.003 = 0.24 145.236
![Page 64: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/64.jpg)
64CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
• Break-Even Analysis:– Used to discover at what point
benefits will equal to costs.Discount rate = 12% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Totals
Benefits V of Benefits 0 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 250.000 TLPV of Benefits 0 TL 44.643 TL 39.860 TL 35.589 TL 31.776 TL 28.371 TL 180.239 TLNPV of all Benefits 0 TL 44.643 TL 84.503 TL 120.092 TL 151.867 TL 180.239 TL 180.239 TL
Costs One-time Costs 42.500 TLRecurring Costs 0 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 142.500 TLPV of Rc.Costs 0 TL 25.446 TL 22.720 TL 20.286 TL 18.112 TL 16.172 TL 102.736 TLNPV of Rc.Costs 0 TL 25.446 TL 48.166 TL 68.452 TL 86.564 TL 102.736 TL 102.736 TLNPV of all Costs 42.500 TL 67.946 TL 90.666 TL 110.952 TL 129.064 TL 145.236 TL 145.236 TL
Overall NPV -42.500 TL -23.304 TL -6.164 TL 9.139 TL 22.803 TL 35.003 TL 35.003 TL
Break-even occurs between year 2 and 3
![Page 65: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/65.jpg)
65CS-413
Classifying and Ranking Projects
• Economical Feasibility:– Cost-benefit analysis:
Discount rate = 12% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Totals
Benefits V of Benefits 0 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 50.000 TL 250.000 TLPV of Benefits 0 TL 44.643 TL 39.860 TL 35.589 TL 31.776 TL 28.371 TL 180.239 TLNPV of all Benefits 0 TL 44.643 TL 84.503 TL 120.092 TL 151.867 TL 180.239 TL 180.239 TL
Costs One-time Costs 42.500 TLRecurring Costs 0 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 28.500 TL 142.500 TLPV of Rc.Costs 0 TL 25.446 TL 22.720 TL 20.286 TL 18.112 TL 16.172 TL 102.736 TLNPV of Rc.Costs 0 TL 25.446 TL 48.166 TL 68.452 TL 86.564 TL 102.736 TL 102.736 TLNPV of all Costs 42.500 TL 67.946 TL 90.666 TL 110.952 TL 129.064 TL 145.236 TL 145.236 TL
Overall NPV -42.500 TL -23.304 TL -6.164 TL 9.139 TL 22.803 TL 35.003 TL 35.003 TL
Break-Even ratio =Yearly NPV Cash Flow – Overall NPV Cash Flow
Yearly NPV Cash Flow
Break-Even ratio = = 0.403 15.303 – 9.139
15.303
9.139 – (-6.164)Project break-even occurs at 2.403 years.
![Page 66: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/66.jpg)
66CS-413
Classifying and Ranking Projects
• Factors:– Economical– Technical– Operational– Schedule– Legal and contractual– Political
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67CS-413
Classifying and Ranking Projects
• Technical Feasibility:– An assesment of the developer
organization’s ability to construct a proposed system.
– Should include understanding of;• Target hardwares,• Target softwares,• Target operating systems,• Size and complexity of project,• Experience of groups involved.
![Page 68: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/68.jpg)
68CS-413
Classifying and Ranking Projects
• Technical Feasibility:– All projects have risks.– Risk is not necessarily something to
avoid.– Organizations typically expect a greater
return on their investments for riskier projects.
– Important thing is;• To understand risks and • To manage them in order to minimize.
![Page 69: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/69.jpg)
69CS-413
Classifying and Ranking Projects
• Technical Feasibility:– Primary factors for risk:
• Project size,• Project structure,• Developer group’s experience with
application and technology area,• User group’s experience with systems
development projects and application areas.
![Page 70: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/70.jpg)
70CS-413
Classifying and Ranking Projects
• Technical Feasibility:– Project size:
• Larger projects are harder to manage, so are more riskier most of the time.
• Size of project is relative to the size which development group is familiar with.
![Page 71: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/71.jpg)
71CS-413
Classifying and Ranking Projects
• Technical Feasibility:– Project structure:
• A system in which requirements are;– easily obtained and – highly structured will be less risky.
• One in which requirements are;» messy, » ill-structured, ill-defined, or » subject to individual judgement
will be more risky.
![Page 72: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/72.jpg)
72CS-413
Classifying and Ranking Projects
• Technical Feasibility:– Developer group’s experience with
application and technology area:• Development of a system employing
commonly used or standard technology will be less risky.
• Development of one employing novel and non-standard technology will be more risky.
![Page 73: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/73.jpg)
73CS-413
Classifying and Ranking Projects
• Technical Feasibility:– User group’s experience with systems
development projects and application areas:
• A project is less risky when user group is familiar with systems development.
• Successful projects require;– Active involvement and cooperation
between user and developer groups.
![Page 74: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/74.jpg)
74CS-413
Classifying and Ranking Projects
• Technical Feasibility:– Many organizations look at risk as a
portfolio issue.– It is acceptable to have reasonable
percentage of;• High-risk projects,• Medium-risk projects,• Low-risk projects.
![Page 75: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/75.jpg)
75CS-413
Classifying and Ranking Projects
• Other Feasibility Concerns:– Operational feasibility– Schedule feasibility– Legal and contractual feasibility– Political feasibility
![Page 76: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/76.jpg)
76CS-413
Classifying and Ranking Projects
• Other Feasibility Concerns:– Operational feasibility:
• Examining the degree to which a proposed system will;
– Solve business problems or – Take advantage of business
opportunities.
![Page 77: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/77.jpg)
77CS-413
Classifying and Ranking Projects
• Other Feasibility Concerns:– Schedule feasibility:
• Examining the degree to which;– Completion dates for all major
activities can be met, and– Meeting these dates will be
sufficient for dealing with organization’s needs with respect to timing.
![Page 78: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/78.jpg)
78CS-413
Classifying and Ranking Projects
• Other Feasibility Concerns:– Legal and contractual feasibility:
• Determining any potential legal and contractual ramifications (results) due to construction of a system.
• For instance, licence, ownership, source code, ...
![Page 79: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/79.jpg)
79CS-413
Classifying and Ranking Projects
• Other Feasibility Concerns:– Political feasibility:
• Evaluating how key stakeholders within the organization view the proposed system.
• An information system will effect distribution of information (and power) within the organization,
– Therefore have political results.
![Page 80: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/80.jpg)
80CS-413
A Detailed Look to: Initiation
• Requires the following activities:– Identifying projects– Classifying and ranking projects– Selecting projects– Establishing project charter
![Page 81: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/81.jpg)
81CS-413
Selecting Projects
• A process of considering both short and long term projects, and
• Selecting those most likely to achieve business objectives.
![Page 82: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/82.jpg)
82CS-413
Selecting Projects
• Factors for selecting projects:– List of potential and ongoing projects,– Existing and available resources,– Current organizational environment,– Evaluation criteria,– Perceived and real needs.
![Page 83: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/83.jpg)
83CS-413
Selecting Projects
• Some project evaluation methods:– Value chain analysis– Multi-criteria analysis
![Page 84: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/84.jpg)
84CS-413
Selecting Projects
• Value chain analysis:– The process of analyzing an
organization’s activities;• To determine where value is added to
product and services and their costs,• So to understand value chain of
organization.– IS projects providing greatest benefits to
value chain will be given higher priority over those with fewer benefits.
![Page 85: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/85.jpg)
85CS-413
Selecting Projects
• Multi-criteria analysis:– A project selection method that uses;
• Weighted scoring for a variety of criteria
– To compare alternative projects or system features.
![Page 86: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/86.jpg)
86CS-413
Selecting Projects
• Multi-criteria analysis:– Assummed that there are 3 alternative
designs for a system.
WeightRating Score Rating Score Rating Score
Requirements Real-time data entry 18 5 90 5 90 5 90Automatic reordering 18 1 18 5 90 5 90Real-time data query 14 1 14 5 70 5 70Total 50 122 250 250
Constraints Developer costs 15 4 60 5 75 3 45Hardware costs 15 4 60 4 60 3 45Operating costs 15 5 75 1 15 5 75Ease of training 5 5 25 3 15 3 15Total 50 220 165 180
Total 100 342 415 430
Criteria Alternative A Alternative B Alternative C
18x5 = 90
![Page 87: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/87.jpg)
87CS-413
A Detailed Look to: Initiation
• Requires the following activities:– Identifying projects– Classifying and ranking projects– Selecting projects– Establishing project charter
![Page 88: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/88.jpg)
88CS-413
Establishing Project Charter
• A short document prepared for customer during project initiation;
• Describes what project will deliver; • Outlines generally at high level all work
required to complete the project.
![Page 89: CS-413 1 A Detailed Look to Initiation Phase of Scope Management (Part 8) Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009 Dr.Çağatay.](https://reader030.fdocuments.net/reader030/viewer/2022032704/56649d7d5503460f94a5fc17/html5/thumbnails/89.jpg)
89CS-413
Establishing Project Charter
• Often includes:– Project title,– Date of authorization,– Project manager name & contact information– Customer name & contact information– Project start and completion dates– Key stakeholders, their roles and responsibilities– Project objectives and description– Key assumptions and approach– Signature section for key stakeholders.