Chapter 2
Identifying
and Selecting Projects
Content
How projects are identified and selected
A project charter
Outsourcing projects using a request for proposal
The proposal solicitation process
Leaning Outcomes
Discuss how projects are identified
Explain how projects are prioritized and selected
Identify and describe at least eight elements of a project charter
Prepare a project charter
Prepare a request for proposal
Project identification
4 stages
Initiating, planning, performing, closing phase
We need to clearly identify the need
Start of Initiating phase
Recognize need, problem, or opportunity
Various ways for identification
Organizations
strategic planning
Response
to unexpected events
Group
organized to address a need
Important to clearly identify need to determine if worth pursuing
Use decision making process to prioritize and select project with
greatest need
【• The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.
•
Projects are identified in various ways:
•
During an organization’s strategic planning
•
As part of its normal business operations
•
In response to unexpected events
•
The result of a group of individuals deciding to
organize a project to address a particular need
•
It is important to clearly define the need. This
may require gathering data about the need or opportunity to help determine if
it is worth pursuing.
•
Sometimes organizations identify several or many
needs, but have limited funds and people available to pursue potential projects
to address all of those needs. In such cases, the company must go through a
decision-making process to prioritize and select those projects that will
result in the greatest overall benefit.】
Project
selection
Evaluate needs, cost and benefit
Determine which projects are
Select project
Develop criteria
List assumption
Gather data
Evaluate each opportunity
No one look at ROE, but cost
Combine “gut” feelings and quantitative
information to make decision.
People who own software is the gut.
【•Project selection involves evaluating various needs or opportunities and then deciding which of those should move forward as a project to be implemented.
【•Project selection involves evaluating various needs or opportunities and then deciding which of those should move forward as a project to be implemented.
•The
benefits and consequences, advantages and disadvantages, plusses and minuses of
each opportunity need to be considered and evaluated. They can be quantitative
and qualitative, tangible and intangible. Each person's decision will be a
combination of quantitative evaluation and "gut" feelings based upon
experience.
•The
steps in project selection are:
•Develop a set of criteria against which the opportunity
will be evaluated. For example:
•Alignment with company goals
•Anticipated sales volume
•Increase in market share
•Establishment of new markets
•Anticipated retail price
•Investment required
•Estimated manufacturing cost per unit
•Technology development required
•Return on investment
•Human resources impact
•Public reaction
•Competitors’ reaction
•Expected time frame
•Regulatory approval
•Risks
•List assumptions that will be used as the basis for each
opportunity.
•If an opportunity is to build an on-site day care center
for children and elderly relatives of company employees, one assumption might
be that the company would be able to obtain a bank loan to build such a center.
•Gather data and information for each opportunity to help
ensure an intelligent decision regarding project selection.
•It may be necessary to gather some preliminary financial
estimates associated with each opportunity, such as estimated revenue
projections and implementation and operating costs.
•In addition to gathering hard data, it may also be
necessary to obtain other information, such as opinions and reactions from
various stakeholders who would be affected by the opportunity.
•Evaluate each opportunity against the criteria.
•Once
all the data and information has been collected, analyzed, and summarized for
each opportunity, it should be given to all the individuals responsible for
performing the evaluation. It is
beneficial to have several individuals involved in the evaluation and selection
decision in order to get a variety of viewpoints. These individuals will combine the collected
data with their gut feelings regarding the project when making their decision.】
Project
charter（important）
Have your sponsor support. Whatever “O” is
in your team.
Purpose
Provides sponsor approval
Commits funding for the project
Summarizes key conditions and parameters
Establishes Framework （project plan）to develop
base line plan （when it start, end ,who is involved）
We need purpose first before we get start.
【Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.
【Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.
Possible
responses to student discussion
Examine the project charter and comment on
Completeness of the information
Possible evaluation criteria
Completeness
of information
Describes the project that needs to be
addressed
Lists requirements, constraints,
assumptions, and risks
An RFP could be developed from the charter’s
information
Possible evaluation criteria
Meets the purpose
Cost
Reduces delivery costs by 26% the
first year
Experience
Risks
Appropriate instructional strategies
Preparing
a request for proposal（important）
RFP what is the best you can offer a proposal
based on request
Decision made to outsource to external resource
Comprehensively describe project
requirements
May be communicated informally or formally,
in writing or verbally.
【• If an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, outsourcing the work to an external resource (such as a contractor) is a good choice.
Soliciting proposal (a lot of people bid on it)
【• If an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, outsourcing the work to an external resource (such as a contractor) is a good choice.
•
An RFP helps the organization decide which
contractor to use.
•
The purpose of preparing an RFP is to state,
comprehensively and in detail, what is required, from the customer’s point of
view, to address the identified need.
•
A good RFP allows contractors or a project team to
understand what the customer expects so that they can prepare a thorough
proposal that will satisfy the customer’s requirements at a realistic price.
•
It should be noted that in many situations a formal
RFP might not be prepared; the need is instead communicated informally,
sometimes orally, rather than in writing.
•
This is often the case when the project will be
implemented by a firm's internal staff rather than by an external contractor.】
Soliciting proposal (a lot of people bid on it)
Solicitation
Notify potential contractors
§ Identify selected group in advance
to send copy
Advertise in selected journals, newspapers, or
websites
Maintain competitive situation
§ Provide equal information to all
bidders
§ Hold bidders’ meeting to answer
questions
Conditions
§ Requirements are sometimes
communicated verbally instead of via a formal RFP
§ All RFPs start with identification
of a need, problem, or opportunity
【Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.
【Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.
•
One way for customers to notify potential bidders
is by identifying a selected group of contractors in advance and sending each
of them a copy of the RFP.
•
Another approach is to advertise in business
newspapers and on websites that the RFP is available.
•
For example, federal government organizations
advertise their RFPs in Commerce Business Daily.
•
Business customers and contractors consider the
RFP/proposal process to be competitive.
•
Customers should be careful to provide the same
information to all interested contractors.
•
Business or government customers may hold a
bidders’ meeting to explain the RFP and answer questions from interested
contractors.
•
Not all project life cycles include the preparation
of a written RFP. Some bypass the proposal steps and move right into planning
and performing the project.
•
There are other projects in which requirements are
not written down in a formal RFP, but are communicated verbally to several
providers or suppliers (contractors).
•
Although projects can vary from very formal and
businesslike to highly informal, all RFPs start with the identification of a
need, problem, or opportunity.】