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Topic1INTRODUCTION PROJECTSELECTION I Introduction 1 EvolutionofanIdea PeoplehavebeenplanningandmanagingProjectssincethedawnoftime Wheneverandwherevercivilizationstookroot therewereprojectstomanage buildingtoerect roadstopave lawstowrite Withouttheadvancedtools techniquesandmethodologieswehavetoday peoplecreatedprojecttimelines locatedmaterialsandresourcesandweighedtheriskinvolved Examples greatwall Overtime peoplerealizedthatthetechniquesforcostcontrol timelinedevelopment resourceprocurementandriskmanagementwereapplicabletoawiderangeofprojects whethererectingbridges rotatingcropsordecidinghowtogovernthemselves Theseearlyideaweretheprecursorstoasetofmanagementtechniqueswenowknowas modernprojectmanagement Modernorganizationsarefindingthatprojectmanagementprovidesmanyadvantages nottheleastofwhichisimprovingthebottomline Savvycustomersdemandmoreandbetterproductsandfasterservices Time to marketpressuresforcesgreaterefficiency Professionalprojectmanagementhasfounditsplaceintoday scompetitive globalbusinessarena ThepastseveraldecadeshavebeenmarkedbyarapidgrowthintheuseofprojectmanagementasameansbywhichOrg achievetheirobjectives PMhasemergedbecausethecharacteristicsofourlate20thsocietydemandthedevelopmentofnewmethodsofmanagement Theexponentialexpansionofhumanknowledge Thegrowingdemandforbroadrangeofcomplex sophisticated customizedgoodsandservices Theevolutionofworldwidecompetitivemarkets All3forcescombinetomandatetheuseofTEAMtosolveproblemsthatusedtobesolvablebyindividuals Knowledgeexpansion TEAM callforhighlevelofcoordinationandcooperationbetweengroupsofpeople IntensiveCompetition maketheircomplex customizedoutputsavailableasquicklyaspossible Time to market iscritical Theprojectsundertakearelargeandgettinglarger Themorewecando themorewetrytodo Projectfailstoooften Systemsprojects 30 45 ofsystemprojectsfailpriortocompletion Overhalfofallsystemprojectsoverruntheirbudgetsandschedulesbyup200 ormore Combinedcostsoffailureandoverrunstotalinthehundredsofbillionsofdollars Computerworld ssurvey failedsystemprojectscostmorethan 100billionperyear oneoftwoprojectsoverrunitsbudgetby180 ormore AsurveyofwhatwasmissinginPMprocessindicated projectoffice 42 integratedmethods 41 trainingandmonitoring 38 policiesandprocedures 35 implementationplans 23 executivesupport 22 Exampleoffailedproject China Restoftheworld 2 WhatisaProject Org Performwork Workgenerallyinvolveseitheroperationsorprojects Operation ongoingandrepetitiveProject temporaryanduniqueprojectisatemporaryendeavorundertakentoachieveaparticularaim Everyprojecthasadefinitebeginningandadefiniteend Examples runningapoliticalcampaign Inthebroadestsense aprojectisaspecific finitetasktobeaccomplished Whetherlarge orsmall scaleorwhetherlong orshort runisnotparticularlyrelevant Whatrelevantisthattheprojectbeseenasaunit Attributes Purpose Lifecycle Interdependencies Uniqueness ConflictM M p 8 9 ProjectstakeholdersandconflictIndividualsororganizationswhoareactivelyinvolvedintheproject orwhoseinterestmaybepositivelyornegativelyaffectedasaresultofprojectexecutionorsuccessfulprojectcompletion Theyinclude projectmanager customers performingorganization sponsor suppliersandcontractors teammembersandtheirfamilies governmentagency lobbyingorganizationsetcthestakeholdersoftenhaveverydifferentobjectivesthatmaycomeintoconflict Examples theownerofrealestatedevelopmentproject localgoverningbody environmentgroup nearbyresidents Theprojectlifecycle ofprojectcompletion Slowstart Quickmomentum Slowfinish Fig 1 2 p 13 100 Projectlifecycle Fig 1 3 ConceptionSelectionPlanning scheduling monitoring controlEvaluationandterminationExamplesofProjectlifecycle seePMBOK1996 p 13 16 Fig 2 2 2 3 2 4 2 5 Levelofeffortpeakeffortlevelconceptionselectionplanning controlevaluationandtermination Uncertaintyoftheprojectcostatspecificpointsintimecostttime 3Whatisprojectmanagement Projectmanagementistheapplicationofknowledge skills toolsandtechniquestoabroadrangeofactivitiesinordertomeetorexceedstakeholderneedsandexpectationsfromaproject Thiswillinvolvebalancingcompetingdemandsamong Scope time cost andquality Stakeholderswithdifferingneedsandexpectations Identifiedrequirementsandunidentifiedrequirements Project sGeneralObjectives performance costandtimeFig 1 1 p 3 Performance cost time andprojecttargetsrequiredperformance budgetlimit duedatetrade offs PERFORMANCE TARGET COST TIME SCHEDULE Projectmanagementfocusescriticalattentionontheinterdependentnatureofcomplextasks anaction orfailuretotakeaction inoneareawillusuallyaffectotherareas Theprojectmanagementknowledgeareas Projectintegrationmanagement projectplandevelopment projectplanexecution overallchangecontrolProjectscopemanagement initiation scopeplanning scopedefinition scopeverification scopechangecontrolProjecttimemanagement activitydefinition activitysequencing activitydurationestimating scheduledevelopment schedulecontrolProjectcostmanagement resourcesplanning costestimating costbudgeting costcontrol Projectqualitymanagement Qualityplanning qualityassurance qualitycontrolProjecthumanresourcemanagement organizationalplanning staffacquisition teamdevelopmentProjectcommunicationmanagement communicationplanning informationdistribution performancereporting administrativeclosureProjectriskmanagement riskidentification riskquantification riskresponsedevelopment riskresponsecontrolProjectProcurementmanagement procurementplanning solicitationplanning solicitation sourceselection contractadministration contractclose out Theprojectmanagerisexpectedtointegrateallaspectsoftheproject ensurethattheproperknowledgeandresourcesareavailablewhenandwhereneeded andaboveall ensurethattheexpectedresultsareproducedinatimely cost effectivemanner Projectmanagerisasuper manager PMI foundedat1969PMBOK 1987 1996 2000http www pmi org Projectmanagementhelpsorganizationsmeettheircustomers needbystandardizingroutinetasksandreducingthenumberoftasksthatcouldpotentiallybeforgotten Projectmanagementensuresthatavailableresourcesareusedinmosteffectiveandefficientmanner Projectmanagementprovidesseniorexecutivesinsightinto whatishappening and wherethingsaregoing withintheirorganization Manyorg AroundtheworldsuchasNASA IBM AT TutilizePMtoenableinnovativeprocess toplan toorganize andcontrolstrategicinitiative tomonitorenterpriseperformance analyzesignificantdeviationsandforecasttheirimpactontheorganizationandprojects TheapplicationofPMprinciplesenablestheseniorexecutiveto EstablishmeasuresofsuccessQuantifyvaluecommensuratewithcoatIncorporatequalityprinciplesEnsurefasttime to marketEnablecustomerfocusandalignmentOptimizetheuseoforganizationalresourcesPutstrategicplanintopracticeREADINGS II ProjectSelection ProjectSelection Projectselectionistheprocessofevaluatingindividualprojectorgroupsofprojects andthenchoosingtoimplementsomesetofthemsothattheobjectivesoftheparentOrg willbeachieved Determiningtherightprojectstopursuewiththerightpeople Mainpoints TypesofprojectselectionmodelsLimitation strengths andweaknessesofprojectselectionmodels 1Criteriaforprojectselectionmodels RealismCapabilityFlexibilityEasetouseCostEasytocomputerization 2Thenatureofprojectselectingmodels Modeldonotmakethedecisions peopledoAllmodels howeversophisticated areonlypartialrepresentationsoftherealitytheyaremeanttoreflect Meetthefirm sobjectives financialgoals non financialgoals Alistoffactorsthatcontributeorg sobjectives goals M M PP 44 46 Productionfactors 18Marketingfactors 10Financialfactors 9Personnelfactors 10Administrativeandmiscellaneousfactors 14 Productionfactorstimeuntilreadytoinstalllengthofdisruptionduringinstallation degreeofdisruptionduringinstallationtimeuntiloperatingasdesired learningcurveeffortsonwasteandrejectsenergyrequirementfacilityandotherequipmentrequirementsafetyofprocessotherapplicationoftechnologyconsistencywithcurrenttechnologicalknow howchangeincosttoproduceaunitoutput changeintimetoproduceaunitoutputchangeinrawmaterials availabilityofrawmaterialsrequireddevelopmenttimeandcostimpactoncurrentsupplierschangeinqualityofoutputchangeinqualitycontrolprocedures Marketingfactorssizeofpotentialmarketforoutputprobablemarketshareofoutputtimeuntilmarketshareisacquiredimpactoncurrentproductlineabilitytocontrolqualityconsumeracceptanceimpactonconsumersafetyestimatedlifeofoutputshapeoflifecyclecurvespin offprojectpossibilities Financialfactorsprofitability netpresentvalueoftheinvestmentimpactoncashflowpayoutperiodcashrequirementtimeuntilbreak evensizeofinvestmentrequiredimpactonseasonalandcyclicalfluctuationscostofgettingsystemuptospeedleveloffinancialrisk Personalfactorstrainingrequirementlaborskillrequirementavailabilityofrequiredlaborskillslevelofresistancefromcurrentworkforceotherworkerreactionschangeinsizeoflaborforcechangeinsex age orracialdistributionoflaborforceinter andintra groupcommunicationreqirementsupportlaborrequirementimpactonworkingconditions Administrativeandmiscellaneousfactorsmeetgovernmentsafetystandardsmeetgovernmentenvironmentstandardsimpactoninformationsystemimpactoncomputerusageneedforconsultinghelp insideandoutsidereactionofstockholdersandsecuritymarketspatentandtradesecretprotectionimpactonimagewithcustomers suppliers andcompetitorscostofmaintainingskillinnewtechnologyvulnerabilitytosinglesupplierdegreetowhichweunderstandnewtechnologyeleganceofnewprocessdegreetowhichnewprocessdiffersfromcurrentprocessmanagerialcapacitytodirectandcontrolnewprocess 3Typeofprojectselectionmodels Non numericmodels thesacredcow theoperatingnecessity thecompetitivenecessity theproductlineextension comparativebenefitmodelNumericmodels Profit profitability singlegoal Scoring multi goals Comparativebenefitmodel AnOrg hasmanyprojectstoconsider ORDERINGtheprojectsIt snotaformalmodel iswidelyadoptedforselectiondecisionsonallsortsofprojects PEERREVIEWtechniques Q Sort figure2 1 p 49 Highlevel Lowlevel Mediumlevel Mediumlevel Originaldeck Lowlevel Highlevel Veryhigh high Verylow low Foreachparticipantintheexercise assembleadeckofcards withthenameanddescriptionofoneprojectoneachcard Instructeachparticipanttodividethedeckinto2piles onerepresentingahighpriority theotheralowprioritylevelInstructeachparticipanttoselectcardfromeachpiletoformathirdpilerepresentingthemedium prioritylevel Instructeachparticipanttoselectcardsfromthehigh levelpiletoyieldanotherpilerepresentingtheveryhighlevelofpriority selectcardsfromlowlevelpilerepresentingtheverylowlevelofpriority Finally instructeachparticipanttosurveytheselectionsandshiftanycardsthatseemoutoftheplaceuntiltheclassificationaresatisfactory Profit profitabilitymodel PaybackperiodAveragerateofreturnInternalrateofreturnDiscountcashflow Strategybehindthemodel Mistakes Profitabilityindex 4DiscountedCashFlow StrategybehindtheDFC Popularmistakes examples Productioncapacity Marketcapacity StrategyProductmarket compete monopolise innovationCapitalmarket opportunitycost 5Otherprofitabilitymodels Pacifico smethodr probabilityofresearchsuccessd probabilityofdevelopmentsuccess givenresearchsuccessp probabilityofprocesssuccess giventhedevelopmentsuccessc probabilityofcommercialsuccess giventheprocesssuccessC totalcostofR DeffortforprojectS estimatedaverageannualsalesvolumeinunitsofproductP estimatedaverageprofitperunitL estimatedlifeoftheproductextensioninyears Commentsonprofit profitabilitymodels seeM MP 53 54Advantagessimpletouseandunderstandaccountingdatamodeloutputisintermsfamiliartobusinessdecisionmakerallow absolute go no godecisions Disadvantagesignoreallnon moneyfactorssomeofthemdonotincludediscountingsensitivetoerrorsintheinputdatafortheearlyyearsoftheproject 6Scoringmodels MultiplecriteriatoevaluatetheprojectUn weighted0 1factormodel Fig 2 2 M Mp 56Un weightedfactorscoringmodelWeightedfactorscori

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