3. MEM 612 Project Management
Why the emphasis on project
management?
• Many tasks do not fit neatly into business-
as-usual.
• Need to assign responsibility and authority
for achievement of organizational goals.
4. MEM 612 Project Management
Characteristics of Projects
• Unique
• Specific Deliverable
• Specific Due Date
5. MEM 612 Project Management
Other Common Characteristics of
Projects
• Multidisciplinary
• Complex
• Conflict
• Part of Programs
6. MEM 612 Project Management
PMI Definition
“A temporary endeavor undertaken to create
a unique product or service”
Project Management Institute, 2000
7. MEM 612 Project Management
PROJECT MANAGEMENT VS.
GENERAL MANAGEMENT
8. MEM 612 Project Management
Skill Requirements for Effective
Project Management
• Conflict Resolution
• Creativity and Flexibility
• Ability to Adjust to Change
• Good Planning
• Negotiation
– win-win versus win-lose
9. MEM 612 Project Management
WHAT IS MANAGED? THE
THREE GOALS OF A PROJECT
10. MEM 612 Project Management
Figure 1-1: Performance, Cost,
and Time Project Targets
18. MEM 612 Project Management
Payback Period
Inflows
Cash
Net
Annual
Investment
Fixed
Initial
19. MEM 612 Project Management
Discounted Cash Flow
n
t
t
t
k
F
1
0
)
1
(
I
-
(project)
NPV
where
I0 = the initial investment
Ft = the net cash flow in period t
k = the required rate of return or hurdle rate
20. MEM 612 Project Management
The Weighted Scoring Model
n
j
j
ij
i w
s
S
1
where
Si = the total score of the ith project
sij = the score of the ith project on the jth criterion
wj = the weight or importance of the jth criterion
21. MEM 612 Project Management
Confronting Uncertainty – The
Management of Risk
22. MEM 612 Project Management
What uncertainties are encountered
in project management?
• Time required to complete a project
• Availability of key resources
• Cost of resources
• Timing of solutions to technological
problems
• Actions taken by competitors
23. MEM 612 Project Management
Can uncertainty surrounding
projects ever be eliminated?
• No, but it can be managed
24. MEM 612 Project Management
Risk Analysis
• Estimate probabilities or distributions
associated with key parameters
• Develop analytic or simulation model
• Analyze distribution of outcomes
generated by model
25. MEM 612 Project Management
Risk Analysis with Crystal Ball
• Assumption Cells
• Distribution Gallery
• Forecast Cells
27. MEM 612 Project Management
The Project Portfolio Process
• Step 1: Establish a Project Council
• Step 2: Identify Project Categories and Criteria
• Step 3: Collect Project Data
• Step 4: Assess Resource Availability
• Step 5: Reduce the Project and Criteria Set
• Step 6: Prioritize the Projects within Categories
• Step 7: Select the Projects to be Funded and
Held in Reserve
• Step 8: Implement the Process
29. MEM 612 Project Management
Figure 1-12 An Example
Aggregate Project Plan
30. MEM 612 Project Management
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Copyright 2005 John Wiley & Sons, Inc.
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