1

Project Evaluation and Selection

IOM580Hiroshi Ochiumi

2

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?

3

Selection completes before PM is appointed.

PM should know – why the project is picked.– what is expected

4

Non-numeric Selection Methods

The Sacred CowThe Operating/Competitive NecessityComparative Benefits

5

Numeric Selection Methods

Pay Back PeriodDiscounted Cash FlowReal OptionsScoring Methods

6

Projects/Strategy Alignment

Proliferation of projectsComplexity and diversity of projects increase– Duplicated effort– One failed project after another

Why is this alignment so hard?

7

Project Portfolio Process

Identify Project Categories– Derivative– Platform– Breakthrough– R&D

Collect data, Assess Resource, Prioritize and Select

8

Toyota

Rav 4 - DerivativeCorolla - Platform

9

HondaCR-V - Derivative

Civic - Platform

Element - Derivative

10

DaimlerChrysler

SLK - Platform Crossfire - Derivative

11

Aggregate Project Plan

12

The Work Breakdown Structure

IOM580Hiroshi Ochiumi

13

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?

14

A Partial WBS

15

A Linear Responsibility Chart