Stage 2 Build business case
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1 Stage 2 Build business case The critical home work stage the one that makes or breaks the project Establish a project Define resources required Translations to requirements/specs Develop functional tests and performance criteria (e.g. ASTM tests) Evaluate alternative designs Logistic support Present a business plan
2 2 Preliminary Business Case KEY DELIVERABLES: Market Definition Competitive Assessment Customer Linkage Financials Product Specification Proof of Key/High Risk Technology Gate Recommendation Is the Concept Well Developed and How Much Value Can We Generate with this idea? SCRUB IT
3 Business Plan Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity Identification of new consumer needs and resulting product concept to develop a plan Constitutes a document that describes a market opportunity and program required to exploit the opportunity
4 Principles No right way: plans can differ Be creative but set a limit Concise and focused Captures energy and personality of business leader Include negatives and issues Spend some time on it
5 Elements of Business Plan Executive summary Business description and vision Definition of the market Description of products and service Organization and management Marketing and sales strategy Financial management Appendices
6 Logistics Support Dealing with the procurement, transportation, material management, order management, and information management Success of a new product Needs to be in the team
7 Establish a Project
8 What is Project? a problem scheduled for solution (Jim Duran) A sequence of tasks with a beginning and an ending dates Limited resources and time, but with expected results A specific, expected outcome, a deadline and a budget
9 Setting Up a Project Mission statement Objectives Constraints
10 Mission statement The ultimate outcome of the project Defined, clear and specific Recognized by team members Used as a guideline and decision making Interpreted correctly by all the team members To use certain raw material To improve product quality To extend a product line
11 Objectives The goals for different parts of the project To study the whole project and decide the most important objectives to be reached at the different stages To formulate a 50% reduced fat cake To develop a cake using dried blueberry
12 Triple Constraint Risk? Time
13 Constraints The factors limit the area of the project Constraints include: The product The processing The marketing Resources The financial The company The environmental
14 Setting Priorities: consideration of constrains Priority means precedence; superiority in rank, position, privilege, or the like. The main purpose of the priority assignment is to allow R&D to assign its resources according to the needs of the company Contribution the product can make to company s sale and profits both near-and long-term Possibility of successful completion within time limit Investment requirements needed to get the new item produced and into the market
15 Length of projects Rapid: Easy and urgent: 3-6 months Medium: Simple line extension (limited editions): 6-12 months Full: New products/platforms: months
16 Managing a Project
17 Official Definition A Project Management is a temporary endeavor undertaken to create a unique product or service. It implies a specific timeframe a budget unique specifications working across organizational boundaries
18 This is Why we need Project Management Today s complex environments require ongoing implementations Project management is a method and mindset a disciplined approach to managing chaos Project management provides a framework for working amidst persistent change
19 Project Requirements Be S-M-A-R-T about project requirements S M A R T
20 Project Requirements Be S-M-A-R-T about project requirements Specific Measurable Agreed to Reachable Timely
21 Project Management The process of combining systems, techniques, and people to complete a project with a limited resources, time, and expected quality
22 Phases of project management Definition Clarifying the project s goal and specifying the resources needed Planning Scheduling the project and assigning responsibility for completing the activities Implementation Undertaking the project, modifying the plan Evaluation Determining the success
23
24 Project Manager s Role Lead Communicate Define Plan Monitor Complete Communicate Re-Plan
25 Defining the Project Study, discuss and analyze Write the project definition Set an end-results objective List imperative and desirables to be present in the end results General alternative strategies Evaluate alternatives Choose a course of action
26 Planning the project Planning the quality dimension Planning the time dimension Planning the cost dimension
27 Planning for quality dimension Work breakdown structure Subunits 2 or 3 levels of detail Logical subdivisions Identify a unit Project specifications Materials Standards Tests
28 Work Breakdown Structure (WBS) Level Description 1 Project 2 Deliverables 3 Work packages 4 Tasks
29
30 WBS Create a WBS by brainstorming and listing deliverables on post-it-notes Decompose the major deliverables into smaller, manageable components until the deliverables are defined in sufficient detail to support future project activities Code all levels
31 WBS Use colored dots to show ownership of work packages Develop tasks for each work package Estimate duration of each task
32 Work Breakdown Structure Canoe Trip to Boundary Waters Arrange Travel Get Equipment Plan Meals Prepare Budget Plan for Emergencies Plan Activities Schedule Flights to Mpls Contact BW Outfitter Bring cooking gear Assign Budget Person Obtain emerg. # s Bring Cards Rent Van Rent canoes Freeze dry food Get deposits Arrange contact at BW Bring Joke book Arrange Motel Rent Tents Prepare 7 breakfasts Retain Receipts Bring emerg. flares Bring scotch Schedule return flights Bring Sleeping Bags Prepare 7 lunches Pay for supplies Bring two first aid kits Bring Fishing Gear Prepare 6 dinners Close-out trip Bring lights and waterproof matches
33 Work Breakdown Structure Canoe Trip to Boundary Waters Arrange Travel Get Equipment Plan Meals Prepare Budget Plan for Emergencies Plan Activities Schedule Flights to Mpls Contact BW Outfitter Bring cooking gear Assign Budget Person Obtain emerg. # s Bring Cards Rent Van Rent canoes Freeze dry food Get deposits Arrange contact at BW Bring Joke book Arrange Motel Rent Tents Prepare 7 breakfasts Retain Receipts Bring emerg. flares Bring scotch Schedule return flights Bring Sleeping Bags Prepare 7 lunches Pay for supplies Bring two first aid kits Bring Fishing Gear Prepare 6 dinners Close-out trip Bring lights and waterproof matches
34 Work Breakdown Structure Canoe Trip to Boundary Waters Arrange Travel Get Equipment Plan Meals Prepare Budget Plan for Emergencies Plan Activities Schedule Flights to Mpls Contact BW Outfitter Bring cooking gear Assign Budget Person Obtain emerg. # s Bring Cards Rent Van Rent canoes Freeze dry food Get deposits Arrange contact at BW Bring Joke book Arrange Motel Rent Tents Prepare 7 breakfasts Retain Receipts Bring emerg. flares Bring scotch Schedule return flights Bring Sleeping Bags Prepare 7 lunches Pay for supplies Bring two first aid kits Bring Fishing Gear Prepare 6 dinners Close-out trip Bring lights and waterproof matches
35 Work Breakdown Structure Canoe Trip to Boundary Waters Arrange Travel Get Equipment Plan Meals Prepare Budget Plan for Emergencies Plan Activities Schedule Flights to Mpls Contact BW Outfitter Bring cooking gear Assign Budget Person Obtain emerg. # s Bring Cards Rent Van Rent canoes Freeze dry food Get deposits Arrange contact at BW Bring Joke book Arrange Motel Rent Tents Prepare 7 breakfasts Retain Receipts Bring emerg. flares Bring scotch Schedule return flights Bring Sleeping Bags Prepare 7 lunches Pay for supplies Bring two first aid kits Bring Fishing Gear Prepare 6 dinners Close-out trip Bring lights and waterproof matches
36 Planning the time dimension To determine the shortest time necessary to complete the project Work breakdown structure Sequence of subunits Significant time elements: Duration of each step Earliest starting time Latest starting time
37 Traditional Organization President VP Academics VP Student Affairs VP Finance VP Development
38 Matrix Organization R = Responsible I = Input S = Signoff Smith Jones Wang Park requirement R I I functions R S design S I development I R training S R R testing R S
39 Planning the cost dimension Typical costs components: Labor Overhead Materials Supplies Equipment Administrative Profit
40 Implementing the plan Controlling work in progress Providing feedback Negotiating for materials, supplies and service Resolving differences
41 Controlling work in progress Defining specifications, schedule and budget Using standards to measure the performance (a) Establishing standards (b) Monitoring performance (c) Talking corrective action
42 (a) Establishing standards 1. Critical path (Gantt) chart 2. Pert chart 3. Control point identification chart 4. Project control chart 5. Milestone chart 6. Budget chart
43 Project Schedule Tools Many tools available Microsoft Project Many more specialized software Excel Most important Monitor tasks Gantt views of project one page views for executives rollout and more complex views for work teams Critical Paths Inputs from multiple teams that roll up to project manager Dependencies Resources assigned to tasks
44 1. Gantt Chart A horizontal bar chart that graphically display the relationship of the steps in a project Minimum total time Proper sequence of steps Multi-steps undergo the same time Show simple sequence of events
45 Gantt charts (Microsoft Project) Lewis 2005
46 2. Pert Chart Program Evaluation and Review Technique Task, duration, dependency, team [leader]
47
48 10.5 weeks
49 Project Budget Direct Costs Indirect Costs Ongoing costs
50 Project Budget Direct Costs Hardware Software Contractor fees Estimated hours Hourly Rates per contractor Various contractor rates Training Fanfare Other TOTALS Year 1 Year 2 Year 3 Indirect Costs Your people s time and effort Estimated time on project Estimated cost based on hourly rate Other s time and effort Opportunity cost What projects or tasks are NOT going to get done in order to get this project done?
51 Monitoring Performance 1. Inspection 2. Interim progress reviews 3. Testing method 4. Auditing by expert
52 1. Inspection Trained inspectors/ project managers On an unannounced and a random schedule Open and direct talk
53 2. Interim progress reviews On a fixed time schedule Review progress Review problems handled Review proposed plans to handle problems
54 3. Testing methods Testing criteria performing
55 4. Auditing by expert Financial records Purchasing practices Safety practices Screening practices Maintenance procedures
56 Taking corrective action Time delay: self correcting Specification: exceed vs. fall short Budget: narrowing project scope seeking more funding
57
58
59 Communication Plan Type Requested by Frequency content Progress report Sponsor, stakeholder weekly Budget, schedule variance Gantt chart PM weekly Tasks complete PM, sponsor, team As needed Memos, letters PM As needed Changes Updates, changes, announcement Meetings PM, sponsor Weekly Updates, budges, resources
60 Negotiating for materials, supplies and serviced To solve differences Agreement Win-win situation
61
62 Evaluating the project Documentation: Training manuals final report Evaluation review for the future projects
63 Project Plan Document Communication plan Risks/risk matrix Task/WBS Schedule/Gantt Chart Quality/project requirements Cost/budget Resources/skills
64 Why Projects Fail? Failure to align project with organizational objectives Poor scope Unrealistic expectations Lack of executive sponsorship Lack of project management Inability to move beyond individual and personality conflicts Politics
65 Why Projects Succeed? Project Sponsorship at executive level Good project charter Strong project management The right mix of team players Good decision making structure Good communication Team members are working toward common goals
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