Tute 2

Bejal S Brahmbhatt [30098204]

Project Selection and Project Life Cycles

1.
a. Define the term NPV. What is the NPV in this project? Explain
what is indicated by the NPV.

NPV stands for Net Present Value. NPV is used in capital budgeting to
analyze the profitability of an investment or project. NPV is the difference
between the present value of cash inflows and the present value of cash
outflows (Ittelson, 2009)
The NPV in this project is: Discounted Costs Discounted benefits
: 3154,000 2712,000
= 442,000
The NPV in this project represents a negative NPV as discounted benefits
are less than discounted costs.
b. What do we mean by payback period? In which year does
payback occur?

Payback period is the time required to recover the cost of an investment.

In this project the year of Payback is Unknown.

c. Would you recommend investing in this project, based on the

financial analysis? Why?

No, I would not recommend investing in this project because the NPV of
this project is Negative NPV and the financial analysis represents that the
project is going in loss.

2. What are the phases in a traditional project life cycle? How

does a project life cycle differ from a product life cycle? Why
does a project manager need to understand both?

a. Phases in a project life cycle vary by project or industry, but some

general phases in a traditional project life cycle are:

Concept
Development

Implementation

close-out

b. Differences between Project life cycle and Product Life cycle:

Project life cycle applies to all projects, regardless of the product,

whereas product life cycle applies to the product specifically.
Product life cycle models vary considerably based on the nature of the
product, whereas Project life cycle remains same for all the products in
a project.

Most large IT products are developed as a series of projects for e.g. MS

Office is a one complete product which is based upon a series of
projects such as MS Word, MS PowerPoint, and MS Excel etc.

Project management is done in all product life cycle phases.

c. A project manager needs to understand both Project development life

cycle and Product development life cycle because it takes both types of
work to complete a project successfully. The understanding of project
development life cycle is important to define, plan, control, monitor
develop, implement and close a project, whereas, understanding of
product development life cycle is important to successfully build the
project deliverables in the form of a final product.

3. Briefly outline each of the five project management process

groups (initiating, planning, executing, controlling, and
closing).

1. Project Initiation
The initiating process signals the beginning of the project or phase.
Initiating processes include defining and authorising a project or project
phase (Schwalbe, 2010). To initiate a project, someone must define the
business need for the project, someone must sponsor the project, and
someone must take on the role of project manager. Project charter and
business case are the key outputs of project initiating phase

2. Project Planning
The planning process includes creating and maintaining a practical
framework to ensure that the project addresses and organisations needs.
There is normally no single project plan but a series of sub-plans such as
the scope management plan, cost management plan, procurement
management plan etc (Schwalbe, 2010). Key Output of Planning process
includes schedules, budgets, resources required, risks, and staffing (Gray
& Larson, 2008).

3. Project Executing
The executing process group includes coordinating people and other
resources to carry out the project plans and produce the products,
services, or results of the project (Schwalbe, 2010). There are some project
management related outputs and these include developing the project
team, directing and managing the project team, performing quality
assurance, distributing information, selecting sellers, and change requests
(Schwalbe, 2010).

4. Project Controlling
The controlling process group also known as the monitoring and controlling
process group includes regularly measuring and monitoring project
progress to ensure that the project team meets the project objectives
(Schwalbe, 2010). In the controlling stage, project management related
outputs include scope control, change control, schedule control, budget
control, quality control, and communications plan execution.

5. Project Closing
The closing process group includes formalizing acceptance of the project
or project phase and ending it efficiently (Schwalbe, 2001).Closure of a
project should include contract closure or administrative closure. Contract
closure ensures that all of the deliverables and agreed upon terms of the
project have been completed and delivered so the project can end.
Administrative closure involves documenting and archiving all project
documents. In the closing stage, project management related outputs
include closing out contracts, documenting lessons learned, receiving
formal acceptance, final report, and project presentation.

4. Which process should take the project team the most time?
Why?

The execution process takes the most time and resources because in the
executing stage the product or service related deliverables of the project
are produced and the core tasks such as developing the project team,
directing and managing the project team, performing quality assurance,
distributing information, selecting sellers, and change requests are
performed.

5. What are some of the project management deliverables of

each process group?

The deliverables of each process group are as following:

1. Project Initiation

assign project manager

identify key stakeholders

project charter

business case

2. Project Planning

team contract

scope statement

work breakdown structure

project schedule

Gantt charts

3. Project Executing

work results

deliverables

baseline changes

4. Project Controlling
o

work results

change requests

schedule updates

budget updates

risk updates

status reports

5. Project Closing

lessons learned report

project archives

project final report

formal acceptance and closure

6. What are some of the typical challenges project teams face

during each of the five process groups?

Project Initiation

Selection of project manager and team members

Development of project charter

Development of business case

Project Planning

Working according to the team contract

Development of the scope statement

Completing tasks according to the defined work breakdown structure

Project Executing

Achieving the required work results in defined time

Successful development of deliverables

Managing baseline changes and proceeding accordingly

Project Controlling

Coping with the change requests

Working within the defined budget

Identification of risks and risk management

Development of status reports

Project Closing

Within defined time and cost closing

development of project final report

Successful operation of all the defined deliverables.

7. What are the attributes of a good business case? Why is

creating a good business case so important to a project
manager?

A good business case consists of following attributes:

Title Page
Executive Summary

Background

Project Description

Strategic Alignment

Environment Analysis

Alternatives

Business & Operation Impacts

Project Risk Assessment

Cost / Benefit Analysis

Conclusion & Recommendations

Implementation Strategy

Review & Approval Process

The purpose of the business case is to outline the rationale for undertaking
the project, and to define the parameters and management factors involved
in the project itself. It provides the project manager with a tool to guide the
design, management and evaluation of the project. The business case serves
three purposes: it provides the project manager the opportunity to think
through the project in a systematic, step-by-step manner; explains why the
project should be undertaken; and provides a framework for completion of
the project on time and on budget.

8. Outline justification
technology project?.

for

investment

in

this

information

The investment in this project is very much justified because this project
will reduce cost and will increase the profits. This project is providing the
online digital media library through which customers can locate and copy
digital files of scanned images in real-time. For National Geographic
customers, this means better service.
Secondly for National Geographic this project will eliminates almost all rescans and will provide storage for thousands of valuable images that can
be retrieved quickly and at a reduced cost, generating extra revenue that
can then be re-invested back into the technology. The project also
enables the users to search access and analyze thousands of media
assets. The e-commerce software and the servers used for this project are
also fully scalable and self-healing with 24x7 availability. So overall the
investment in this project will be very beneficial.

Bibliography

Baca, C.M. (2007). Project management for mere mortals Sydney,

NSW: Addison-Wesley.
Dobie, C. (2007). A handbook of project management: A complete
guide for beginners to professionals. Sydney: Allen & Unwin.

Matta, N.F., & Ashkenas, R.N. (2003). Why good project fail anyway.
Harvard Business Review, 81(9), 109-114.

Project Management Institute. (2008). A guide to the project

management body of knowledge (PMBOK guide) (4th ed.). Penn., USA:
PMI.

Schwalbe.K (2010). Information Technology Project Management.