PROJECT INITIATION

MBA (PM+UID)
SEM II
31 JANUARY, 2017
 Project Management - Modules
2

1 Foundation 2 Project Life 3 Project 4 Stakeholder

Concepts Cycle Initiation Management

5 7 Project 10 Project
6 Project Quality
Organization Scope
Planning Management
Structures Management

8 Project 12 Project
11 Project
Time 9 Project Cost Executing,
Risk
Management Management Monitoring &
Management
Control

13 14 15
16 Project
Procurement Communications Behavioural
Closing
Management Management Competencies

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 The Strategic Questions
3

Which projects meet our strategic objectives?

Which projects to undertake?
What is the broad scope of the project selected?
What determines the success of the project?
How will success be measured?
Who are the stakeholders?
What are the deliverables?
What are the acceptance criteria?

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 Need for Projects?
4

Projects are a means of achieving

organizations goals and objectives:
Market demand

Internal business needs

Customer requests

Technological advances

Legal requirements

Social needs

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 Business Case
5

Once a need for a project has been identified, it has to be

evaluated.

The business case includes:

The Why of the project the business need

The assumptions on the basis of which the project is
evaluated
The financial evaluation
Non-financial evaluation

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 Financial Evaluation
6

Popular techniques of financial appraisal of projects are:

Payback period

Net Present Value (NPV)

Internal Rate of Return (IRR)

NPV and IRR use DCF techniques (discounted cash flows)

in their calculations.
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 Which Project Should Be Selected?
7
Initial Net Cash Flows
Project Invest
ment Year 1 Year 2 Year 3 Year 4 Year 5

Discounti 1/1.15= 1/(1.15)2 1/(1.15)3 1/(1.15)4 1/(1.15)5

ng Factor 0.870 = 0.756 = 0.658 = 0.572 = 0.497

A 5000 3000 2000 1500 1500 1500

B 5000 1500 1500 3000 3000 3000

C 6000 1750 1750 1750 1750 1750
D 6000 1500 2000 2500 4000 4000
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 FINANCIAL ANALYSIS
8

PROJECT PAYBACK PV NPV IRR

A 2 YEARS $7,039.41 $2,039.41 31%

B 2 YEARS, 8 MTHS $7,617.90 $2,617.90 32%

C 3 YEARS, 5 MTHS $5,866.27 ($133.73) 14%

D 3 YEARS $8,736.15 $2,736.15 30%

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 Non-Financial Evaluation
9

The business case includes:

The competitive impact

The organizational impact

The environmental impact

The social impact

Resettlement and Rehabilitation

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 Business Case
10

The business case includes:

The main stakeholders

The success criteria and the key performance indicators (KPIs)

The objectives of the project

The key deliverables

The major resource requirements

The scope of the project and constraints

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 Business Case
11

The business case includes:

The time, cost, technical, safety, quality requirements

The major project risks

The business case is owned by the Sponsor.

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 Who is the Sponsor
12

Sponsor is the person or group who:

Champions the project once it is conceived

Ensure the commitment of funds for the project

Serves as a spokesperson for the project to higher management

Ensures continuous support of top management to the project

Plays a significant role in developing the initial scope statement

and the project charter

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 Key Questions
13

Once the project is selected the key questions to

be answered are:

Who will head the project?

What are the project objectives?
What are the major constraints of the project?
What are the major resource requirements?
What are the major risks?
What are the major milestones?

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 Project Charter 5 Key Elements
14

Formal authorization of the project

Commitment of resources

Identification of the Project Manager

Definition of the PMs authority

Description of the Project

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 Description of the Project
15
Current conditions
Desired conditions
Benefit to be derived
Key assumptions
Measurable project objectives and related success criteria
The deliverables of the project
Constraints of the project and the product
Key Risks
Summary milestone schedule

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 Identifying Requirements
16

Whats required and what's not

Categorize & Prioritize include non functional

requirements

Acceptance criteria

Traceability

Sign offs

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 Managing Stakeholders
17

Identify

Classify

Prioritize

Understand

Manage

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 Balancing
Competing
18

Demands

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 Constraints of Project Management

Quality

Scope

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 Constraints of Project Management

SCOPE

RISK

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