Modern Project Management

PowerPoint Presentation by Charlie Cook

Copyright © 2014 McGraw-Hill Education. All Rights Reserved.

CHAPTER ONE

1–2

What is a Project?

• Project Defined–Complex, nonroutine, one-time effort limited by time,

budget, resources, and performance specifications designed to meet customer needs.

• Major Characteristics of a Project–Established objective.–Defined life span with a beginning/end.–Cross functional/multidisciplinary participation–Usually involves doing something never done before.–Specific time, cost, and performance requirements.

• Program vs. Project

Project Life Cycle

1–3

FIGURE 1.1

1–4

The Challenge of Project Management

• The Project Manager–Manages temporary, non-repetitive activities and

frequently acts independently of the formal organization.

• Marshals resources for the project.• Is linked directly to the customer interface.• Provides direction, coordination, and integration

to the project team.• Is responsible for performance and success of the

project.

–Must induce the right people at the right time to address the right issues and make the right decisions.

1–5

The Technical and Sociocultural

Dimensionsof the Project

Management Process

The Technical and Sociocultural

Dimensionsof the Project

Management Process

FIGURE 1.3

2–6

The Strategic Management Process: An Overview

• Strategic Management–Requires every project to be clearly linked to strategy.

• Why?

–Provides focus of firm’s future direction.• Responding to changes in the external environment

—environmental scanning• Allocating scarce resources of the firm to improve

its competitive position—internal responses to new programs

–Requires strong links among mission, goals, objectives, strategy, and implementation.

Four Activities of the Strategic Management Process

• Mission/Vision• Internal and external environmental scan

(SWOT)• Set long-range goals and objectives.• Analyze and formulate strategies to reach

objectives. (SMART)• Implement strategies through projects

2–7

Competitive Platforms

Overall Low-Cost Provider

Focused Low-CostFocused

Differentiation

Broad Differentiation

Best-CostProvider

Michael Porter

Lost Cost Provider Strategies: Essential Elements

• Make the achievement of meaningful lower costs the key theme.

• Include features and services in program offerings that are only essential

• Find approaches to achieve a cost advantage in ways difficult for rival institutions to copy or match.

KEYS TO SUCCESS

• Scrutinize each cost-creating activity• Use knowledge about cost drivers to manage costs downward in each expenditure

category• Find ways to restructure “value chain” to eliminate nonessential work steps and low-

value activities and programs• Work diligently to create a cost-conscious culture• Aggressively pursue investments in resources and capabilities that promise to drive

costs out of the “value chain”

Broad Differentiation Strategies: Essential Elements

• Incorporate differentiating features that cause customers to prefer one organization over those of rivals

• Find ways to differentiate that create value that are not easily matched or cheaply copied by rivals

• Keep the cost of achieving differentiation below the higher price that can be charged

KEYS TO SUCCESS

The most appealing approaches to differentiation are thoseThat are hardest for rivals to match or imitateThat customers will find most appealing

Best choices to gain a longer-lasting, more profitable competitive edge InnovationTechnical superioritySuperior Quality and ServiceUnique competitive capabilities

Best Value: Essential Elements

• Combine a strategic emphasis on low-cost with a strategic emphasis on differentiation

Deliver upscale at a lower cost

Give customers more value for the money

• Deliver superior value by meeting or exceeding expectations

• Be the low-cost provider, good-to-excellent attributes, use cost advantage to underprice competitors

KEYS TO SUCCESS

Capability to incorporate attractive program features at a lower cost than rivals

Capability to create good-to-excellent quality at a lower cost than rival

Capability to develop programs that delivers good-to-excellent performance at a lower cost than rivals

Capability to provide attractive services at a lower cost than rivals

Focused or Niche Strategy: Essential Elements

• Involve concentrated attention on a narrow piece of the total student market

• Serve niche buyers better than rival institutions

• Choose a market niche where students have distinctive preferences, special requirements, or unique needs

• Develop unique capabilities to serve needs of target student segment

KEYS TO SUCCESS

Achieve lower costs than rivals in serving a well-defined buyer segment (i.e., a focused low-cost strategy) or

Offerings appealing to the unique preferences of a well-defined segment (i.e., a focused differentiation strategy)

2–13

A Portfolio Management System

5-30%

1-5%

50-75%

2–14

A Portfolio Management System

• RFP Process–Gathering projects for review

• Selection Criteria–Financial models: payback, net present value (NPV)–Non-financial models: projects of strategic

importance to the firm.

• Multi-Weighted Scoring Models–Use several weighted selection criteria to evaluate

project proposals.

2–15

Multi-Criteria Selection Models

• Checklist Model– Uses a list of questions to review potential projects

and to determine their acceptance or rejection.– Fails to answer the relative importance or value of a

potential project and doesn’t to allow for comparison with other potential projects.

• Multi-Weighted Scoring Model– Uses several weighted qualitative and/or quantitative

selection criteria to evaluate project proposals.– Allows for comparison of projects with other potential

projects

2–16

Project Screening Matrix

FIGURE 2.3

Balancing the Portfolio for Risks and Types of Projects

• Bread-and-butter Projects– Involve evolutionary improvements

to current products and services.

• Pearls– Represent revolutionary commercial opportunities

using proven technical advances.

• Oysters– Involve technological breakthroughs

with high commercial payoffs.

• White Elephants– Showed promise at one time

but are no longer viable.

2–17