1、Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityTopic 1INTRODUCTION+PROJECT SELECTIONNov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityI.IntroductionNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University1.Evolution of an Idea People have been pl
2、anning and managing Projects since the dawn of time.Whenever and wherever civilizations took root,there were projects to manage:building to erect,roads to pave,laws to write.Without the advanced tools,techniques and methodologies we have today,people created project timelines,located materials and r
3、esources and weighed the risk involved.Examples:great wall Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Over time,people realized that the techniques for cost control,timeline development,resource procurement and risk management were applicable to a wide range of projects,wh
4、ether erecting bridges,rotating crops or deciding how to govern themselves.These early idea were the precursors to a set of management techniques we now know as“modern project management”.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Modern organizations are finding that proj
5、ect management provides many advantages-not the least of which is improving the bottom line!Savvy customers demand more and better products and faster services.Time-to-market pressures forces greater efficiency.Professional project management has found its place in todays competitive,global business
6、 arena.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University The past several decades have been marked by a rapid growth in the use of project management as a means by which Org.achieve their objectives.PM has emerged because the characteristics of our late 20th society demand the de
7、velopment of new methods of management.The exponential expansion of human knowledge;The growing demand for broad range of complex,sophisticated,customized goods and services;The evolution of worldwide competitive markets.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University All 3 for
8、ces combine to mandate the use of TEAM to solve problems that used to be solvable by individuals.Knowledge expansion-TEAM:call for high level of coordination and cooperation between groups of people.Intensive Competition-make their complex,customized outputs available as quickly as possible.“Time-to
9、-market”is critical.The projects undertake are large and getting larger.“The more we can do,the more we try to do”.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityProject fails too often Systems projects:30-45%of system projects fail prior to completion.Over half of all system p
10、rojects overrun their budgets and schedules by up 200%or more.Combined costs of failure and overruns total in the hundreds of billions of dollars.Computerworlds survey:failed system projects cost more than$100 billion per year;one of two projects overrun its budget by 180%or more;A survey of what wa
11、s missing in PM process indicated:project office-42%;integrated methods-41%;training and monitoring-38%;policies and procedures-35%;implementation plans-23%;executive support-22%Example of failed projectChina,Rest of the worldNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University2.Wha
12、t is a Project?Org.Perform work.Work generally involves either operations or projects.Operation:ongoing and repetitive Project:temporary and unique project is a temporary endeavor undertaken to achieve a particular aim.Every project has a definite beginning and a definite end.Examples:running a poli
13、tical campaign.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University In the broadest sense,a project is a specific,finite task to be accomplished.Whether large-or small-scale or whether long-or short-run is not particularly relevant.What relevant is that the project be seen as a unit
14、.Attributes:Purpose,Life cycle,Interdependencies,Uniqueness,Conflict M&M,p.8-9Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Project stakeholders and conflict Individuals or organizations who are actively involved in the project,or whose interest may be positively or negativel
15、y affected as a result of project execution or successful project completion.They include:project manager,customers,performing organization,sponsor,suppliers and contractors,team members and their families,government agency,lobbying organizations etc the stakeholders often have very different object
16、ives that may come into conflict.Examples:the owner of real estate development project,local governing body,environment group,nearby residents.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityThe project life cycle%of project completion:Slow start-Quick momentum-Slow finish(Fig.1
17、-2,p.13)100Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Project life cycle(Fig.1-3):Conception Selection Planning,scheduling,monitoring,control Evaluation and termination Examples of Project life cycle:see PMBOK 1996,p.13-16,Fig,2-2,2-3,2-4,2-5.Nov.,2001Wanjun Jiang,Guanghua
18、 School of Management,Peking University Level of effort peak effort level conception selection planning-control evaluation and terminationNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Uncertainty of the project cost at specific points in time cost t timeNov.,2001Wanjun Jiang,
19、Guanghua School of Management,Peking University3 What is project management Project management is the application of knowledge,skills,tools and techniques to a broad range of activities in order to meet or exceed stakeholder needs and expectations from a project.This will involve balancing competing
20、 demands among:Scope,time,cost,and quality;Stakeholders with differing needs and expectations;Identified requirements and unidentified requirements.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Projects General Objectives:performance,cost and time Fig.1-1,p.3:Performance,cost
21、,time,and project targetsrequired performance-budget limit-due datetrade-offsNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University TARGETNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Project management focuses critical attention on the interdependent nature of
22、 complex tasks-an action,or failure to take action,in one area will usually affect other areas.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityThe project management knowledge areas Project integration management:project plan development,project plan execution,overall change con
23、trol Project scope management:initiation,scope planning,scope definition,scope verification,scope change control Project time management:activity definition,activity sequencing,activity duration estimating,schedule development,schedule control Project cost management:resources planning,cost estimati
24、ng,cost budgeting,cost controlNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Project quality management:Quality planning,quality assurance,quality control Project human resource management:organizational planning,staff acquisition,team development Project communication managem
25、ent:communication planning,information distribution,performance reporting,administrative closure Project risk management:risk identification,risk quantification,risk response development,risk response control Project Procurement management:procurement planning,solicitation planning,solicitation,sour
26、ce selection,contract administration,contract close-out.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University The project manager is expected to integrate all aspects of the project,ensure that the proper knowledge and resources are available when and where needed,and above all,ensur
27、e that the expected results are produced in a timely,cost-effective manner.-Project manager is a super-manager.PMI:founded at 1969PMBOK:1987,1996,2000http:/www.pmi.orgNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Project management helps organizations meet their customers nee
28、d by standardizing routine tasks and reducing the number of tasks that could potentially be forgotten.Project management ensures that available resources are used in most effective and efficient manner.Project management provides senior executives insight into“what is happening”and“where things are
29、going”within their organization.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Many org.Around the world such as NASA,IBM,AT&T utilize PM to enable innovative process,to plan,to organize,and control strategic initiative,to monitor enterprise performance,analyze significant dev
30、iations and forecast their impact on the organization and projects.The application of PM principles enables the senior executive to:Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Establish measures of success Quantify value commensurate with coat Incorporate quality principles
31、 Ensure fast time-to-market Enable customer focus and alignment Optimize the use of organizational resources Put strategic plan into practice READINGS.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityII.Project SelectionNov.,2001Wanjun Jiang,Guanghua School of Management,Peking U
32、niversityProject Selection Project selection is the process of evaluating individual project or groups of projects,and then choosing to implement some set of them so that the objectives of the parent Org.will be achieved.“Determining the right projects to pursue with the right people”Nov.,2001Wanjun
33、 Jiang,Guanghua School of Management,Peking UniversityMain points Types of project selection models Limitation,strengths,and weaknesses of project selection models Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University1 Criteria for project selection models Realism Capability Flexibil
34、ity Ease to use Cost Easy to computerizationNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University2 The nature of project selecting models Model do not make the decisions,people do All models,however sophisticated,are only partial representations of the reality they are meant to refle
35、ct.Meet the firms objectives:financial goals/non-financial goalsNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University A list of factors that contribute org.s objectives(goals)(M&M:PP.44-46):Production factors,18 Marketing factors,10 Financial factors,9 Personnel factors,10 Administra
36、tive and miscellaneous factors,14Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Production factorstime until ready to installlength of disruption during installation/degree of disruption during installationtime until operating as desired-learning curveefforts on waste and reje
37、ctsenergy requirementfacility and other equipment requirementsafety of processother application of technologyconsistency with current technological know-howchange in cost to produce a unit output/change in time to produce a unit output change in raw materials/availability of raw materialsrequired de
38、velopment time and costimpact on current supplierschange in quality of outputchange in quality control proceduresNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Marketing factors size of potential market for output probable market share of output time until market share is acqu
39、ired impact on current product line ability to control quality consumer acceptance impact on consumer safety estimated life of output shape of life cycle curve spin-off project possibilitiesNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Financial factors profitability,net pres
40、ent value of the investment impact on cash flow payout period cash requirement time until break-even size of investment required impact on seasonal and cyclical fluctuations cost of getting system up to speed level of financial riskNov.,2001Wanjun Jiang,Guanghua School of Management,Peking Universit
41、y Personal factors training requirement labor skill requirement availability of required labor skills level of resistance from current workforce other worker reactions change in size of labor force change in sex,age,or racial distribution of labor force inter-and intra-group communication reqirement
42、 support labor requirement impact on working conditionsNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University Administrative and miscellaneous factorsmeet government safety standardsmeet government environment standardsimpact on information systemimpact on computer usageneed for consu
43、lting help,inside and outsidereaction of stockholders and security marketspatent and trade secret protectionimpact on image with customers,suppliers,and competitorscost of maintaining skill in new technologyvulnerability to single supplierdegree to which we understand new technologyelegance of new p
44、rocessdegree to which new process differs from current processmanagerial capacity to direct and control new processNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University3 Type of project selection models Non-numeric models:the sacred cow;the operating necessity;the competitive necessi
45、ty;the product line extension;comparative benefit model Numeric models:Profit/profitability-single goal;Scoring-multi-goals;Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityComparative benefit model An Org.has many projects to consider,ORDERING the projects Its not a formal model
46、,is widely adopted for selection decisions on all sorts of projects.PEER REVIEW techniques:Q-Sort,figure 2-1,p.49Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking University HighlevelLowlevelMediumlevelMediumlevelOriginal deckLow levelHighlevelVeryhighhighVerylowlowNov.,2001Wanjun Jiang,Gua
47、nghua School of Management,Peking University For each participant in the exercise,assemble a deck of cards,with the name and description of one project on each card.Instruct each participant to divide the deck into 2 piles,one representing a high priority,the other a low priority level Instruct each
48、 participant to select card from each pile to form a third pile representing the medium-priority level.Instruct each participant to select cards from the high-level pile to yield another pile representing the very high level of priority;select cards from low level pile representing the very low leve
49、l of priority.Finally,instruct each participant to survey the selections and shift any cards that seem out of the place until the classification are satisfactory.Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityProfit/profitability model Payback period Average rate of return Inte
50、rnal rate of return Discount cash flow:Strategy behind the model.Mistakes.Profitability indexNov.,2001Wanjun Jiang,Guanghua School of Management,Peking University4 Discounted Cash FlowNttttotitprCFCFNPV01Nov.,2001Wanjun Jiang,Guanghua School of Management,Peking UniversityStrategy behind the DFC Pop
