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Discussion Question: Describe project selection and what are the pitfalls?

A general rule of thumb for project identification is that a company should come up with about twice as many projects than they actually have time and resources to do. Project ideas should come from all areas of the company, from the operations staff to senior executives. Ideas can come from everywhere - industry magazines or communication with existing and potential clients is a good starting point.

We have to create a list of potential projects with brief description so the decision maker has a good understanding of the potential project. Then the hard part starts, the project selection - a prioritization of the projects and decisions what project should we move forward with and which project should we drop.

When evaluating projects, some aspects that must be considered are value for the company, availability of resources, support from internal champions and external potential clients and how it fits into the goal plan of the company.

For the actual selection, there are three different approaches, using financial and non-financial factors:

  1. Financial analysis of the potential project and only few non-financial aspects (p. 34)
  2. Initial financial screening of potential projects followed by a scoring process
  3. Multi-factor scoring process where financial aspects are just one of many equally important factors

For the financial approach (1) we usually have four different models (NPV, BCR, IRR, PP) and each is bearing its own set of risks and benefits. In general, the main problem with the financial models is that they do not consider how the projects align with the company’s strategic goal. A project that looks good financially but does not align with the general company idea can pull it into the wrong direction and make it a bad choice even if it is fiscally sound.

Approach (2) is a process that first applies approach (1) and then uses a scoring process like (3).
In approach (3) we use a scoring model, different potential criteria for example risk, timing, resource requirements, cost and orientation with company goals are identified [if this follows (1) then cost is not a factor here since that has been the initial sort criteria]. Those criteria have to be categorized by importance and mandatory criteria have to be identified. Next, the criteria are weighted in a selection and prioritization matrix that assigns ratings and weights. With this matrix, we can identify the priority of the projects and also run through a few “what if” scenarios.

The risks for (2) and (3) are minor if the analysis has been done properly. It can be a lengthy process and take up a lot of time and energy. While evaluating the different criteria, we have to make sure that our assumptions are accurate and that the rating and weighting factors are properly set.

Monday, Monday

Happy week start! I have no idea what is going on but today is one of those days where you simply cannot wake up. I got up, rode my exercise bike for 30 minutes half asleep, got ready half asleep, drove to work half asleep and am now sitting here since almost 8 hours and am still not able to wake up. I had coffee and Vault and instant espresso, but nothing helps. The fact that my day is still a little slow doesn’t help much.

I had such a nice weekend, the first weekend that was so nice and warm that we even had breakfast on the patio watching our cats who put on a nice circus act. If you think people are happy about spring, you should see a bunch of cats who have been cooped up in the house all winter long - it’s not like we make them, but during winter the little pussies just stare out the door expecting the snow to melt in front of their eyes. I also got to sleep at a reasonable time and still, I feel like I have been partying all night.

I mentioned it before, I have two classes this session, Global Project Management and Applied Mathematics and so far I have been able to coast, but that ends now. For GPMT we are using a tool called SimProject, where we are working on a simulated construction project. We have to hire resources, we have a budget and apparently the instructor can throw roadblocks into our way like a budget cut or a strike - very interesting. Unfortunately, we are having problems getting our group of 4 together. We tried yesterday at 6pm but only two people were “there” (in the project chat area) so I sent out an email telling them all to be there tonight at 7pm - not sure what to do if they aren’t because we have to make our first group decisions.

Unfortunately, I cannot even be too mad. If I look back at my own time at university, I am pretty sure a returning adult student would have been just as impatient. Well, we’ll see what happens tonight.

Back to the desk

Boohoo, poor me. All of last week I had been home with a really nasty sinus infection - one of those you just get when you are a kid. At least in my case, I feel that as a kid the flu hit me much harder. I don’t really get “stay in bed” sick too much anymore. On the other hand, when you are a kid the last thing you want is stay in bed - BORING. Anyway, I am back at work and chopping away on the pile of stuff that has accumulated over the last week.

The only good thing about being sick is that you get to catch up on a lot of TV watching, even if you are falling constantly. Yesterday, I actually got to watch The Linguist and it was a light-hearted, interesting documentation. Try to catch a re-run if you are interested in languages!

And on a different note, a new semester session has begun (I am taking accelerated 7 week courses), out with Server Side Scripting, in with GMPT350 Global Project Management and MATH200 Applied Mathematics.