Project Evaluation and Selection
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Project Evaluation and Selection
IOM580Hiroshi Ochiumi
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Selecting Projects
Is the project potentially profitable?Can the firm acquire the knowledge to carry out the project successfully?Does the project involve building competencies that are considered consistent with the firm’s strategic plan?Does the firm currently have the capacity to carry out the project?
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Selection completes before PM is appointed.
PM should know – why the project is picked.– what is expected
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Non-numeric Selection Methods
The Sacred CowThe Operating/Competitive NecessityComparative Benefits
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Numeric Selection Methods
Pay Back PeriodDiscounted Cash FlowReal OptionsScoring Methods
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Projects/Strategy Alignment
Proliferation of projectsComplexity and diversity of projects increase– Duplicated effort– One failed project after another
Why is this alignment so hard?
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Project Portfolio Process
Identify Project Categories– Derivative– Platform– Breakthrough– R&D
Collect data, Assess Resource, Prioritize and Select
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Toyota
Rav 4 - DerivativeCorolla - Platform
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HondaCR-V - Derivative
Civic - Platform
Element - Derivative
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DaimlerChrysler
SLK - Platform Crossfire - Derivative
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Aggregate Project Plan
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The Work Breakdown Structure
IOM580Hiroshi Ochiumi
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Simple Approach for Creating WBS
Gather Project TeamProvide Team Members with Pad of Sticky-NotesTeam Members Write Down all Tasks They can Think of.Sticky-Notes Placed and Arranged on Wall
How could we fail to identify all important tasks?
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A Partial WBS
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A Linear Responsibility Chart