BA 320 - Chapter 2 and 3: Project Selection & Strategy/...

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Chapter 2 and 3: Organizations Matt Wimble 1-23-2012 wimble@umd.umich.edu
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Agenda Summary of Chapter 1 What is a project? Project v. process Project v. program Triple constraint Importance of integrated view 2
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Where we are 3
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2 4 Why Project Managers Need to Understand the Strategic Management Process Changes in the organization’s mission and strategy Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects. Project managers who understand their organization’s strategy can become effective advocates of projects aligned with the firm’s mission.
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2 5 Projects and Strategy Mistakes caused by not understanding the role of projects in accomplishing strategy: Focusing on problems or solutions with low strategic priority. Focusing on the immediate customer rather than the whole market place and value chain. Overemphasizing technology that results in projects that pursue exotic technology that does not fit the strategy or customer need Trying to solve customer issues with a product or service rather than focusing on the 20% with 80% of the value (Pareto’s Law). Engaging in a never-ending search for perfection only the project team really cares about.
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Objectives S pecific – Be specific about objective M easurable – establish indicators of progress A ssignable – assign of one specific person R ealistic – what can be done T ime Related – state duration 6
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2 7 The Strategic Management Process: An Overview Strategic Management Requires every project to be clearly linked to strategy. Provides theme and 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
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2 8 Project Portfolio Management Problems The Implementation Gap The lack of understanding and consensus on strategy among top management and middle- level (functional) managers who independently implement the strategy. Organization Politics Project selection is based on the persuasiveness and power of people advocating the projects. Resource Conflicts and Multitasking
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2 9 A Portfolio Management System Design of a project portfolio system: Classification of a project Selection criteria depending upon classification Sources of proposals Evaluating proposals Managing the portfolio of projects.
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10 A Portfolio Management System Selection Criteria Financial: payback, net present value (NPV), internal rate of return (IRR) Non-financial: projects of strategic importance to the firm. Multi-Weighted Scoring Models
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This note was uploaded on 02/23/2012 for the course BA 320 taught by Professor Mattwimble during the Winter '10 term at University of Michigan-Dearborn.

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BA 320 - Chapter 2 and 3: Project Selection & Strategy/...

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