CSPM1DR/101/03/2018

Tutorial letter 101/03/2018

APPLIED PROJECT MANAGEMENT IN

AN INFORMATION TECHNOLOGY
ENVIRONMENT
CSPM1DR

Semester 1 & 2

SCHOOL OF COMPUTING
CENTRE FOR SOFTWARE ENGINEERING (CENSE)

IMPORTANT INFORMATION
This tutorial letter contains important information
about your module.

BARCODE
 CSPM1DR/101/3/2018
CONTENTS

Contents

1 INTRODUCTION .......................................................................................................................... 3
2 PURPOSE OF AND OUTCOMES FOR THE MODULE............................................................... 3
2.1 Purpose ........................................................................................................................................ 3
2.2 Outcomes ..................................................................................................................................... 5
3 LECTURER(S) AND CONTACT DETAILS................................................................................... 5
3.1 Lecturer(s) .................................................................................................................................... 5
3.2 Department ................................................................................................................................... 6
3.3 University ...................................................................................................................................... 6
4 MODULE-RELATED RESOURCES ............................................................................................. 6
4.1 Prescribed books .......................................................................................................................... 6
4.2 Recommended books ................................................................................................................... 6
4.3 Electronic Reserves (e-Reserves)................................................................................................. 7
5 STUDENT SUPPORT SERVICES FOR THE MODULE ............................................................... 9
6 MODULE-SPECIFIC STUDY PLAN ............................................................................................. 9
6.1 Abbreviated Syllabus .................................................................................................................... 9
6.2 Detailed Syllabus in Schwalbe ...................................................................................................... 9
7 MODULE PRACTICAL WORK AND WORK-INTEGRATED LEARNING .................................. 14
8 ASSESSMENT ........................................................................................................................... 14
8.1 Assessment plan ........................................................................................................................ 15
8.2 General assignment numbers ..................................................................................................... 15
8.2.1 Unique assignment numbers ...................................................................................................... 15
8.2.2 Due dates for assignments ......................................................................................................... 16
8.3 Submission of assignments ........................................................................................................ 16
8.4 Assignments ............................................................................................................................... 18
9 OTHER ASSESSMENT METHODS ........................................................................................... 26
10 EXAMINATION ........................................................................................................................... 26
11 FREQUENTLY ASKED QUESTIONS ........................................................................................ 29
12 SOURCES CONSULTED ........................................................................................................... 29
13 CONCLUSION............................................................................................................................ 29

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1 INTRODUCTION
Dear Student
Welcome to this certificate course in Applied Project Management in an Information Technology
Environment (CSPM1DR). This course deals with the fundamental concepts relating to software
project management with the aim of enabling you to accomplish unique outcomes with limited
resources under critical time constraints. The continued increasing importance that industry
places on this subject makes it an essential part of any information technology (IT) professional’s
repertoire of skills and competencies. We give more information about the module in the following
section.
You will receive a number of tutorial letters during the year. A tutorial letter is our way of
communicating with you about teaching, learning and assessment. Tutorial Letter 101 (this tutorial
letter) contains important information about the scheme of work, resources and assignments for
this module. We urge you to read it carefully and to keep it at hand when working through the
study material, preparing the assignment(s), preparing for the examination and addressing
questions to your lecturers.
In this 101 tutorial letter you will find the assignments and assessment criteria as well as
instructions on the preparation and submission of the assignments. It also provides all the
information you need with regard to the prescribed study material and other resources and how
to obtain it. Please study this information carefully and make sure that you obtain the prescribed
material as soon as possible.
Furthermore we have also included certain administrative information in this tutorial letter. Please
study this letter carefully as it contains information regarding contact with the lecturers,
examination guidelines, as well as all the assignments.
Right from the start we would like to point out that you must read all the tutorial letters you
receive during the semester immediately and carefully, as they always contain important and,
sometimes, urgent information.
We hope that you will find this course stimulating and enjoyable!

Your CSPM1DR lecturers

2 PURPOSE OF AND OUTCOMES FOR THE MODULE

2.1 Purpose
There is renewed interest in this field as the number of projects continues to grow and the
complexity of the environment continues to increase. Although the success rate has improved,
only about a third meets the requirements set by scope, time and cost (Schwalbe, 2011). As the
discipline Software Project Management is continuously evolving while trends such as
globalization, outsourcing and virtual teams continue to affect it.

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Thus, the aim of this course is to equip you, the learner, with the necessary knowledge to
successfully evaluate a prospective project; and with methods to initiate, plan, estimate, schedule,
manage, control and report on projects. After completing this course, you should have a good
understanding of important aspects such as proper planning, resource management, feasibility
analysis, scope and change control, quality assurance and configuration management. The
textbook used in this course makes use of case studies to implement the techniques and concepts
discussed. This course also illustrates the role of the Project Management Institute (PMI) as an
international professional society that provides certification to project management professionals
(PMP) and upholds a code of ethics.

In project management there is no substitute for experience. However, as an aid to the successful
management of an IT project, well-defined outcomes have been introduced in the literature, and
we hope to present these outcomes to you in a structured and systematic manner. This course
therefore has a dual approach: to enhance the theoretical knowledge introduced in the textbook,
and to help you gain experience with project management concepts in line with international
standards. The assignments will guide you through some of the project management techniques
used in the development process by presenting theoretical as well as practical and interpretation
questions.

The specific objectives of the module are given next.

Course objectives
The aim of this course is to:

 Introduce you to the software project management environment to understand what a

project is, listing all project attributes as well as the key elements of the project
management framework.
 Describe the project management profession, including its history, the role of professional
organizations such as the Project Management Institute (PMI), the importance of
certification and ethics.
 Successfully initiate, evaluate, plan, manage and control information technology (IT)
projects.
 Cover all aspects of software project management such as project planning, feasibility
analysis, estimation, quality management, resource management, and scope and change
control.
 Use case studies to illustrate and implement software project management techniques and
concepts.

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2.2 Outcomes
After studying this course you should have attained specific understanding, knowledge and skills
of this field if study. Students should have:

Outcome 1:

 Attained a sound knowledge of the software project management environment to

enable them to initiate, evaluate and compile a realistic estimation for a proposed
information technology project.

Outcome 2:

 A sound knowledge of the project management profession, including its history, the role
of professional organizations such as the Project Management Institute (PMI), the
importance of certification and ethics.

Outcome 3:

 A sound knowledge to successfully plan and manage information technology (IT) projects
using different techniques.

Outcome 4:

 Attained a sound knowledge to monitor and control a project successfully throughout its
development cycle.
Outcome 5:

 Attained a sound knowledge regarding procurements processes regarding IT projects.

3 LECTURER(S) AND CONTACT DETAILS

3.1 Lecturer(s)
Your lecturers and their respective contact details for this module are:
Mrs K Engelbrecht: engelk@unisa.ac.za
Prof E Kritzinger: kritze@unisa.ac.za

Tutorial letters can be downloaded at:

https://my.unisa.ac.za/

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All queries that are of an academic nature, i.e. not of an administrative nature but about the
content of this module should be directed to us. Please have your study material and student
number with you when you contact us.
If you have difficulty getting hold of any of the lecturers for this course, please contact the
Administrative officers of CENSE or the school secretary as she will be able to inform you when
we will be available. Alternatively you can leave a message for us with the Admin officers at
011 670 9189/39.
If you experience problems with your studies during the year, please feel free to write a letter,
send an email, make a telephone call or visit your lecturers personally. We would like to meet you
and assist you where possible, but you must make an appointment beforehand.

3.2 Department
The Centre for Software Engineering (CENSE) resides within the School of Computing (SOC). If
you need to contact the Centre for Software Engineering about matters not related to the content
of this module, i.e. administrative matters, please phone the Chief Administrative Officer of
Cense:
at: +011 670 9189/39.
If you are registered for other Unisa courses (not offered by CENSE) you will have more than one
student number. Changing your address at Unisa’s general administration section will not be
registered on the CENSE records, so you have to contact us directly in this regard.
3.3 University
If you need to contact the University about matters not related to the content of this module, i.e.
other Administrative matters, please use one of the following options:

 For students residing in SA, send an SMS/BBM to 32695

 For all students, send an email request to info@unisa.ac.za, or
 Fax number (RSA) 012 429 4150
 Fax number (international) +27 12 429 4150

4 MODULE-RELATED RESOURCES
4.1 Prescribed books
The prescribed book for this course is included in your study package and it is:
Schwalbe, K. 2011. Managing Information Technology Projects. Revised 7th edition. Course
Technology, Cengage Learning. ISBN-13: 978-0-538-48070-3, ISBN-10: 0-538-48070-X.
4.2 Recommended books
There are no recommended books for this module, but you may want to browse through some of
the following books:

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Additional study material

1. Hughes, B and Cotterel M. Software project Management. Fifth Edition. London: McGraw-
Hill Higher Education. (ISBN-13 978 0 07 712279 9)

2. Meredith, J. & Mantel, S.J. 1995. Project management: a managerial approach. Third
edition. New York: Wiley. (ISBN 0 471 01626 8)

3. Olson, D.L. 2004. Information systems project management. Boston, Mass.: Irwin/McGraw-
Hill. (ISBN 0-07-282402-6)

The above books contain some additional reading material should you wish to pursue a specific
topic in more detail. It is our contention, however, that the prescribed textbook should provide you
with enough information to answer all of the assignment questions.
4.3 Electronic Reserves (e-Reserves)
Electronic copies of tutorial letters will also be available on the myUnisa web-site (see above).
You must have access to the Internet to access this site – it is a requirement to study in CENSE
and the School of Computing. You will therefore be able to download material from myUnisa and
you are expected to do so. Unisa is slowly going green, i.e. moving into the online arena and a
paperless mode. Therefore, you need to check myUnisa at least once a week.

4.4 Tutorial letters

You will receive the following tutorial letters for this module:

Name Content
 Relevant information regarding this module

 Assignment questions
CSPM1DR/101/2018
 Information about the examination paper, such as the format
and the work to be covered (see Section 10).

CSPM1DR/201/2018  Solutions to Assignment 1

CSPM1DR/202/2018  Solutions to Assignment 2

Tutorial letter 101 (this tut letter) and your prescribed book are included in the study material for
this module. The solutions to the assignments (CSPM1DR/201 and 202) will be uploaded onto
the Additional Resources of this module on myUnisa (see below) after the due date for the
assignments.

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4.5 Project management software
A project management package such as Microsoft Project for Windows (or any other project
management package available to you) may be used. The textbook includes an appendix, Guide
to using Microsoft Project 2013 with a trail version of the software. You are free to use this and
experiment with it, but it is not included in the syllabus of this course.
The use of a project management tool is, not compulsory as we guide you through the underlying
theoretical concepts and the understanding and use thereof. You will thus be able to complete
practical questions in the assignments without the use of a project management tool. It is in fact
recommended that you attempt to complete the assignment questions without the assistance of
a software tool. This is the only way to ensure that you understand the underlying fundamental
concepts, and are not just able to use some tool well.
Other packages include CA-SuperProject (works on Unix and Windows), Project Scheduler
(Windows-based), SureTrak Project Manager (Primavera Systems Inc), Time Line (Symantec
Corp) and high-end project management software (for enterprise-wide projects).

Important myUnisa Things to Do

Step 1:

 Go to http://www.unisa.ac.za/.
 Click on the : “Access myLife account”.
 Open a myLife account.

Why: This is a communication method that is used by UNISA and your lecturers to contact you.

Step 2:

 Go to https://my.unisa.ac.za
 Click on “Login to myUnisa”
 Register on my UNISA.
 All information regarding CSPM1DR will be available after you have logged in.

You will receive a password for future use.

Why: Contains study material we may upload during the semester.

 Place to submit assignments

 Use discussion forums
 Announcements
 Lots more

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5 STUDENT SUPPORT SERVICES FOR THE MODULE

Please contact your lecturers for this module.

6 MODULE-SPECIFIC STUDY PLAN

Below is the abbreviated syllabus for this module

6.1 Abbreviated Syllabus

Introduction to Project Management (PM), The PM and Information Technology (IT) Context, The
PM Process Groups – A Case Study, Project Integration Management, Project Scope
Management, Project Time Management, Project Cost Management, Project Quality
Management. Next we give the detailed syllabus as well as the chapters covered for each of the
two assignments for this module:
6.2 Detailed Syllabus in Schwalbe

The syllabus is covered by chapters 1, 2, 4, 5, 6, 8 and 12 of the prescribed book. Additional study
material is provided to supplement chapter 4. Chapter four should be studied from both the
prescribed book and additional study material. Where the prescribed book methods differ from
the additional material, students should use the additional study material. Each topic will be
approached from a specific Information Technology perspective. The prescribed book includes
case studies to implement software project management techniques and concepts in practice.
Throughout the text reference is made to software to assist with project management tasks.

Next, more detail on the syllabus per chapter and the division of chapters per assignment.

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ASSIGNMENT 1

Chapter 1 objectives
The aim of Chapter 1 of the textbook is to introduce the following concepts:

 the growing need for better project management, especially for information technology
projects
 a project and project attributes
 project management and key elements of the project management framework
 the relationship between project, program and portfolio management
 the role of the project manager
 the project management profession, including its history, the role of professional
organizations like the Project Management Institute (PMI)
 certification and ethics

Chapter 1 outcomes
Having studied Chapter 1 of the textbook, you will be able to:

 understand the growing need for better project management, especially for information
technology projects
 explain what a project and project attributes are, including the idea of the triple constraint
 describe project management and discuss key elements of the project management
framework
 discuss the relationship between project, program and portfolio management
 understand the role of the project manager, their skills, and their career field
 describe the project management profession, including its history, the role of
professional organizations like the Project Management Institute (PMI)
 explain certification and ethics.

Chapter 2 objectives
The aim of chapter 2 of the textbook is to introduce the following concepts:

 the systems view of project management in information technology context

 organizations, including the four frames, organizational structure and organizational
culture
 stakeholder management and top management commitment
 project phase and project life cycle
 the unique attributes and diverse nature affecting IT project management, namely,
globalisation, outsourcing and virtual teams

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Chapter 2 outcomes
After studying chapter 2 of the textbook, you will be able to:

 describe the systems view of project management and how it applies to information
technology projects
 understand organizations, including the four frames, organizational structure and
organizational culture
 explain why stakeholder management and top management commitment are critical for
the success of a project
 understand the concepts project phase and project life cycle
 discuss the unique attributes and diverse nature affecting IT project management,
namely globalisation, outsourcing and virtual teams

Chapter 5 objectives
The aim of chapter 5 of the textbook is to introduce the following concepts:

 the importance of good project scope management

 methods for collecting and documenting requirements in order to meet stakeholder
needs and expectations
 the scope definition process and the contents of the project scope statement
 the process of creating a work breakdown structure using the analogy, top-down, bottom-
up, and mind-mapping approaches
 the importance of verifying scope and controlling scope
 software to assist in project scope management

Chapter 5 outcomes
Having studied chapter 5 of the textbook, you will be able to:

 describe the importance of good project scope management

 discuss methods for collecting and documenting requirements in order to meet
stakeholder needs and expectations
 explain the scope definition process and the contents of the project scope statement
 discuss the process of creating a work breakdown structure using the analogy, top-down,
bottom-up, and mind-mapping approaches
 understand the importance of verifying scope and controlling scope
 describe how software can assist in project scope management

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Chapter 6 objectives
The aim of chapter 6 of the textbook is to introduce the following concepts:

 the importance of project schedules and good project time management

 project management activities as basis for developing project schedules
 network diagrams and dependencies
 the relationship between estimating resources and project schedules
 various tools and techniques to assist in activity duration estimation
 schedule information including:
 the formulation of network models
 precedence networks
 critical path
 PERT chart
 Gantt chart
 controlling and managing changes to the schedule
 software to assist in project time management

Chapter 6 outcomes
Having studied chapter 6 of the textbook, you will be able to:

 understand the importance of project schedules and good project time management
 define activities as basis for developing project schedules
 use network diagrams and dependencies in activity scheduling
 understand the relationship between estimating resources and project schedules
 explain how various tools and techniques assist in activity duration estimation
 execute planning and tracking schedule information including:
 the formulation of network models
 precedence networks
 critical path
 PERT chart
 Gantt chart
 control and manage changes to the schedule
 describe how software can assist in project time management

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ASSIGNMENT 2

Chapter 4 objectives
The aim of chapter 4 of the textbook is to introduce the following concepts and to provide methods
on how to calculate the following:
 Net profit
 Net present value
 Return on Investment
 Payback period
 Using financial indicators to choose between projects

Chapter 4 outcomes
Having studied chapter 4 of the textbook and the additional study material, you will be able to:

 define some financial indicators

 discuss methods for calculating financial indicators on a project
 calculate financial indicators on a project
 compare various financial indicators on a project
 choose between projects and make recommendations based on financial indicators

Chapter 8 objectives
The aim of chapter 8 of the textbook is to introduce the following concepts:
 the importance of quality management
 project quality management
 quality planning
 the main outputs of the quality control process
 tools and techniques for quality control
 project management software to assist in project cost management

Chapter 8 outcomes
After studying chapter 8 of the textbook, you will be able to:
 Understand the importance of quality management
 Define project quality management
 Describe quality planning
 Explain the main outputs of the quality control process
 Understand the tools and techniques for quality control

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 Describe how project management software can assist in project quality management

Chapter 12 objectives
The aim of chapter 12 of the textbook is to introduce the following concepts:
 Defining and understanding project procurement management
 Planning of procurements
 Administering procurements
 Closing procurements

Chapter 12 outcomes
After studying chapter 12 of the textbook, you will be able to:
 Understand the importance of project procurement management
 The increasing use of outsourcing for information technology projects
 Describe the work involved in planning procurement for projects
 Discuss what is involved in conducting procurements and strategies for obtaining seller
responses, selecting sellers and awarding contracts
 Describe the process of closing procurements

7 MODULE PRACTICAL WORK AND WORK-INTEGRATED LEARNING

Apart from the 2 written assignments, there are no practicals for this module. Every chapter in the
prescribed book contains a number of case studies.

8 ASSESSMENT
PLEASE NOTE THE FOLLOWING:

It is important that you submit your two assignments on or before their due dates. Assignment
01 is particularly important, since submitting it on time gives you the status of an Active
Student in this module. If you do not obtain active student status in this module, then Unisa
will not grant you examination admission for CSPM1DR.

We furthermore strongly advise that you complete and submit all required assignments in good
time in order to gain a thorough understanding of the concepts, as well as to prepare you for the
final written examination.
Please use the syllabus and assignment due dates to structure your study programme.

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8.2 Assessment plan

CSPM1DR uses a semester-mark system. This means that the mark (in percentage) you get for
the work you do during the semester counts as part of your final mark for this module. Every
assignment has a mark as well as a weight allocated to it. The weight for Assignment 01 is 0.5
(i.e. 50% of your semester mark) and the weight for Assignment is also 0.5 (50%).

Your semester mark (SM) is calculated as follows:

SM = (0.5 * Ass01) + (0.5 * Ass02), where

Ass01 = Percentage obtained for Assignment 01

Ass02 = Percentage obtained for Assignment 02

Your semester mark counts 20% towards your final mark and the examination mark makes up
the other 80%.

8.2 General assignment numbers

There are two assignments, numbered 1 and 2 for each semester. Each assignment must be
submitted by its due date. Late assignments will be accepted under exceptional circumstances
only. Solutions to each assignment will be uploaded onto myUnisa after the due date.

8.2.1 Unique assignment numbers

Unique Assignment Number

Assignments
Semester 1

1 896517

2 776970

Unique Assignment Number

Assignments
Semester 2

1 697771

2 808065

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8.2.2 Due dates for assignments

Please note that the due dates indicated below is the latest date by which students can submit
assignments and still receive feedback before the exam.

Assignment Chapters to study in

Due date for Assignment Mark
number Schwalbe
16 March 2018
01 50 Chapters 1, 2, 5 and 6
22 August 2018
Chapters 4, 8 and 12
9 April 2018
02 50 Plus additional sample
12 September 2018
question

8.3 Submission of assignments

(1) You must answer all the questions for an assignment. It is possible that not all questions will
be marked. We will make the decision beforehand as to which questions will be marked and
students will not be informed of the decision. The same questions will be marked through-out
and only those questions marked will contribute to the percentage you obtain for the particular
assignment.
(2) Please pay attention to the important message about being an Active Student elsewhere in
this tut letter and ensure to submit your assignments on time.
(3) Please ensure that you capture the correct module code (i.e. CSPM1DR) as well as
assignment numbers for each assignment. Failure to comply with this requirement may cause
a considerable delay in the marking of your assignment. Each subsequent page should
contain at least the following information:
(i) Student number
(ii) Module code
(iii) Assignment number, i.e. 01 or 02.

(4) You may submit your assignment either by post or electronically via myUnisa. Assignments
may not be submitted by fax or e-mail. If you submit your assignment through myUnisa then
use PDF as far as possible to avoid possible font problems when your assignment is printed
at Unisa. If you submit by post, we cannot guarantee you’re your assignment feedback will
reach you on time. Other acceptable formats are given on the web-site.

(5) Please Note: To submit an assignment via myUnisa:

 Go to myUnisa: http://www.unisa.ac.za
 Log in with your student number and password.
 Select the module.
 Click on “Assignments” in the menu on the left-hand side of the screen.
 Click on the assignment number you want to submit.
 Follow the instructions on the screen.

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(6) Any queries you have about assignment submission (for example, whether your assignment
was received, or whether it has been mailed back to you) must be directed to Unisa’s
assignment department. You can also track your assignment through myUnisa.

(7) You may submit a specific assignment only once. No duplicates of an assignment will be
accepted.

(8) Post or electronically submit your assignment in good time to reach Unisa before or on the
due date.

(9) You can hand in your assignments electronically through myUnisa. To gain access to myUnisa
you need an internet connection and your student number. You will find myUnisa at the
following web address:
http://my.unisa.ac.za
Alternatively you can start at the main Unisa web-site, namely, http://www.unisa.ac.za, and
then click on the ‘login to myUnisa’ link under the myUnisa heading on the screen. This should
take you to the myUnisa web-site. To become a myUnisa user you must open this web page
and register by clicking on ‘user registration’ and following the instructions (see above
instructions). Instructions pertaining to the submission of your assignments also appear on
this interface. Note that all the answers to your assignment questions must be contained in a
single document before you can submit them through myUnisa.

(10) If instead you submit your assignments as hard copy documents on paper, then address
them to:

The Registrar
PO Box 392
UNISA
0003
(11) All hard copy assignments must be completed on assignment answer sheets or computer
paper (not presented on CD or discs), and must reach the university no later than the
due date. Place your assignment inside an assignment cover with all the particulars filled
in on the outside. Please staple your assignment together only in the space provided for
the staple on the assignment cover (top left corner).

(12) Assignments may not be submitted by fax or e-mail.

(13) Please observe the assignment due dates given in Section 8.2.2 above.

(14) Extension for the submission of assignments will not be given over the phone. If your
assignment is late, please do not phone asking for an extension but write a note stating
the reason for the late submission, attach it to your late assignment, and send it in as soon
as possible so that we can decide whether, or how much it will count towards your year
mark.

The assignments follow below.

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8.4 Assignments

PLEASE NOTE: All assignment must be submitted in PDF format.

ASSIGNMENT 01

16 March 2018
Due Dates
22 August 2018

Study material Schwalbe: Chapters 1, 2, 5, 6

Marks 50

If your assignment is late, please DO NOT PHONE asking for an extension, but write
a note stating the reason for the late submission and we will decide whether (or
how much) it will count towards your year mark.

Questions on Chapter 1: Introduction to Project Management

Question 1 [10]

1.1 What is a project, and what are its main attributes? (5)
1.2 How is a project different from what most people do in their day-to-day jobs? (2)
1.3 What is the triple constraint? (3)

Question on Chapter 2: The Project Management and Information Technology Context

Question 2 [10]
2.1 Discuss the Four Frames of Organizations. (8)
2.2 Discuss the importance of top management commitment and the development of
standards for successful project management. (2)

Question on Chapter 5: Project Scope Management

Question 3 [15]
3.1 Discuss the five main processes involved in project scope management. (10)
3.2 Describe different ways to develop a WBS and why it is often so difficult to do. (5)

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Questions on chapter 6: Project time management

Question 4 [15]

Consider the following table and then draw an AOA (Activity-on-arrow) network diagram
representing the project indicated in the table. Answer questions 4.1 – 4.5 below in the process.

Activity Initial Node Final Node Estimate Duration

A 1 2 2
B 2 3 2
C 3 4 4
D 1 4 4
E 1 5 3
F 4 6 3
G 6 7 6
H 5 7 3

4.1 Draw all relevant nodes and put the node numbers in the node.
4.2 Draw arrows from node to node.
4.3 Label each arrow with the activity letter and estimated time.
4.4 Identify all of the paths on the network diagram and note how long they are.
4.5 What is the critical path for this project and how long is it?
PLEASE NOTE: All assignment must be submitted in PDF format.
*** End of assignment 01 ***

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ASSIGNMENT 02

9 April 2018
Due Dates
12 September 2018

Schwalbe: Chapters 4, 8 and 12

Study material
Plus additional sample question (page 21)

Marks 50

If your assignment is late, please DO NOT PHONE asking for an extension, but write
a note stating the reason for the late submission and we will decide whether (or
how much) it will count towards your year mark.

Question 1 [30]
Use the additional sample question on page 23 to guide you in how
to approach this question.

Assume that you need to choose between two projects for possible development. You are
requested by your manager to use four methods to determine which project to choose:
 Nett profit
 ROI
 NPV
 Shortest Payback Period
The description below represents the estimated benefits and costs for two different projects in
Rand (R). Assume that the outflows and inflows occur at the end of the year unless specified
otherwise.

Project X:
The initial investment on the project is R21 000 000 and a second investment of R7 500 000 is
required at the start of year two. In the middle of year two, the first inflow will occur to the estimated
value of R9 000 000. At the end of year three, there will be a further inflow of R3 060 000 and at
the end of year four a final inflow of R18 750 000.
Project Y:
The initial investment on the project is R34 500 000 and no further investment will occur. The first
inflow will occur at the end of year one to the estimated value of R10 250 000. At the end of year
two, there will be a further inflow of R15 000 000 and at the end of year three a final inflow of
R13 500 000.

The organisation would like to realise a return on investment of 8%.

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NPV Discount Factors

Discount Rate(%)/
Year 8 9 10 11 12
1 0.926 0.917 0.909 0.901 0.893
2 0.857 0.842 0.826 0.812 0.797
3 0.794 0.772 0.751 0.731 0.712
4 0.735 0.708 0.683 0.659 0.636
5 0.681 0.650 0.621 0.593 0.567
6 0.630 0.596 0.564 0.535 0.507
7 0.583 0.547 0.513 0.482 0.452
8 0.540 0.502 0.467 0.434 0.404
9 0.500 0.460 0.424 0.391 0.361
10 0.463 0.422 0.386 0.352 0.322

Required:

Present your analysis in such a way that it is easy for your manager to compare the two projects.
Add your interpretations/ recommendations for each of the methods. When doing calculations,
round the final answers to 3 decimals. Also present a final recommendation in table format for
each of the projects and justify your choice.

1.1 Define the term Net Profit (1)

1.2 Calculate the Nett profit for each project and provide a recommendation. (3)

1.3 Define the term ROI . (1)

1.4 Calculate the Return on Investment (ROI) for each project. Show calculations. Use the
following formula to calculate the ROI: Average annual profit/Total Expenses expressed
as a %. Do NOT consider the time value of money (do NOT discount the inflows and
outflows). Provide a recommendation. (4)

1.5 Define the term, NPV. (1)

1.6 Draw a timeline to indicate the activities on each of the projects. (4)

1.7 Calculate the NPV for each project (use tables) and provide a recommendation. (7)

1.8 Define the term Shortest Payback Period. (1)

1.9 Calculate the payback period for each project. Show calculations and –provide a
recommendation. Do NOT discount the values. (5)

1.10 Taking into consideration your calculations, would you recommend project X or project Y
to develop? Justify your answer. (3)

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Question 2 [10]

Quality assurance in project management also comes at a cost. According to the Gartner group,
there are five major categories of cost associated with quality. Cost is not the only consideration
when it comes to quality

2.1 Contrast the cost of conformance with the cost of non-conformance (2)

2.2 List the stages of the capability maturity model in order and describe the charactersitics
of each stage. (8)

Question 3 [10]

Making the choice between developing inhouse projects vs outsourcing to an external provider or
even country is an important decision and one which is increasingly faced by many organizations.
There are several tools and techniques that can be used for planning procurements.

3.1 Briefly describe the Point of Total Assumption (2)

3.2 Give the formula for calculating the PTA (3)

3.3 Given the values below, calculate the PTA for the scenario. Show all workings.
Ceiling price: R1 350 000
Target price: R1 150 000
Target Cost: R1 250 000
Share: 70% (5)

*** End of assignment 02 ***

PLEASE NOTE: All assignment must be submitted in PDF format.

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Additional Example Question relating to Assignment 2

Use this example to guide you in how to approach assignment 2. Study this example for exam
purposes too.
Sample Question
Assume that you need to choose between two projects for possible development. You are
requested by your manager to use four methods to determine which project to choose:

 Net profit
 ROI
 NPV
 Shortest Payback Period

The description below represents the estimated benefits and costs for two different projects in
Rand (R). Assume that the outflows and inflows occur at the end of the year unless specified
otherwise.
Project 1:
The initial investment on the project is R250 000 and a second investment of R100 000 is required
at the start of year two. At the middle of year two, the first inflow will occur to the estimated value
of R110 000. At the end of year two, there will be a further inflow of R50 000 and at the end of
year three a final inflow of R190 000.
Project 2:
The initial investment on the project is R250 000 and no further investment will occur. The first
inflow will occur at the end of year one to the estimated value of R80 000. At the end of year two,
there will be a further inflow of R40 000 and at the end of year three a final inflow of R120 000.
The organisation would like to realise a return on investment of 9%.
NPV Discount Factors

Discount Rate (%)

Year 8 9 10 11 12
1 0.926 0.917 0.909 0.901 0.893
2 0.857 0.842 0.826 0.812 0.797
3 0.794 0.772 0.751 0.731 0.712
4 0.735 0.708 0.683 0.659 0.636
5 0.681 0.650 0.621 0.593 0.567
6 0.630 0.596 0.564 0.535 0.507
7 0.583 0.547 0.513 0.482 0.452
8 0.540 0.502 0.467 0.434 0.404
9 0.500 0.460 0.424 0.391 0.361
10 0.463 0.422 0.386 0.352 0.322

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Required:
Present your analysis in such a way that it is easy for your manager to compare the two projects.
Add your interpretations / recommendations for each of the methods. Also present a final
recommendation for each of the projects and indicate your choice.
1. Calculate the Net profit for each project and provide a recommendation. (3)
2. Calculate the NPV for each project (use tables) and provide a recommendation. (7)
3. Calculate the Return on Investment (ROI) for each project. Show formulas and calculations.
(13)
4. Calculate the payback period for each project. Show calculations and provide a
recommendation. (5)
5. Taking into consideration your calculations, would you recommend project 1 or project 2 to
develop? Justify your answer. (2)
Answer:

1. Net Profit

Project 1:
Year Investment/Inflow Net Profit
0 -250 000 -250 000
1 -100 000 -350 000
1.5 110 000 -240 000
2 50 000 -190 000
3 190 000 0

Project 2:
Year Investment/Inflow Net Profit
0 -250 000 -250 000
1 80 000 -170 000
2 40 000 -130 000
3 120 000 -10 000

Conclusion: Project 1 has the higher profit.

2. NPV

Project 1:
Year Investment/Inflow Discount Rate NPV
0 -250 000 x 1 -250000
1 -100 000 x 0.917 -91700
1.5 110 000 x 0.880 96745
2 50 000 x 0.842 42100
3 190 000 x 0.772 146680
-56175

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Project 2:
Year Investment/Inflow Discount Rate NPV
0 -250 000 x 1 -250000
1 80 000 x 0.917 73360
2 40 000 x 0.842 33680
3 120 000 x 0.772 92640
-50320

Project 2 should be started, since it has a smaller negative NPV than project 1.

3. ROI

Project 1:
Average annual profit / Total cost * 100
[(0/ 3) / 350 000 ] * 100
[0 /350 000] * 100
0 * 100
0%

Project 2:
Average annual profit / Total cost * 100
[(-10 000/3) / 250 000] * 100
[-3 333 / 250 000] * 100
-0.013 8 100
-1.33%

Comments:
The projects are very similar, but project 1 has a slightly higher ROI than project 2.

4. Payback

Project 1 has a payback of exactly 3 years

Project 2 has a payback of more than 3 years (3.08).

Project 1:
Year Investment/Inflow Net Profit
0 -250 000 -250 000
1 -100 000 -350 000
1.5 110 000 -240 000
2 50 000 -190 000
3 190 000 0

Project 2:
Year Investment/Inflow Net Profit
0 -250 000 -250 000
1 80 000 -170 000
2 40 000 -130 000
3 120 000 -10 000

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5. Recommendation

Project 2 has a better NPV.

Project 1 has a higher Net Profit, ROI and payback period.

9 OTHER ASSESSMENT METHODS

There are no other assessment methods for this module.

10 EXAMINATION
In this section, we provide some information pertaining to the examination at the end of this
module. Once the assignments have been completed, the final hurdle is the examination itself.
We have tried to compile the examination as fairly as possible. If you know your work, you should
do well in the examination. We hope that your revision and examination preparation go well, and
we wish you success. Please note that lecturers do not deal with queries regarding examination
dates, times, aegrotats, venues and results.

10.1 What to study for the examination

The syllabus is covered by chapters 1, 2, 4, 5, 6, 8 and 12 of the prescribed book plus all
information in the tutorial letters.
Additional notes
Please note that you do not need to memorise any tables or cash flow discounting values. All
calculations will be kept as simple as possible, and if required for the answering of a question you
will be supplied with the relevant tables or values to be used in your calculations. You do,
however, need to know the relevant formulae.
Both examination papers (May/June and October/November 2018) attempt to cover as many
topics as possible.
Please note that in addition to a pen (use blue or black, not red) you will need drawing tools for
the various diagrams (CPM, PERT, etc.) such as pencils, a ruler and an eraser.
How to prepare for the examination
Start your examination preparation early so you can avoid cramming in your studies at the last
moment. During the semester you have been able to consult the textbook and other sources when
completing assignments. You cannot do this in the exam, so marks tend to be lower if you do not
prepare sensibly.
Develop a critical approach to your studies and question the concepts being discussed in the
textbook and tutorial letters. Don’t rely on absorbing everything passively and then merely
reproducing it in the exam. After studying a section or activity, put the book or tutorial letter aside
and try to summarise the main points. Do you understand and agree with each point? Can you
relate this work to previous sections? Work through all the assignments and tutorial letters as well
as the exercises in the individual chapters of your prescribed book. You may also attempt the
exercises supplied at the end of each chapter. (Note that there are no general solutions available
to the exercises at the end of each chapter and your lecturers will not be able to provide you with
these solutions.) The web-site of the textbook may be explored for additional exercises.

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Also review all assignments and compare your results with the solutions given. Resolve any
uncertainties you may have, and see whether you left out anything important. Working in this way
helps to make the whole learning process more active and interesting, and improves your
understanding and retention. The exam is not intended merely as a test of one’s memory and
recall abilities, and so you should aim at understanding the work.
Students may complete the previous exam paper, currently available on myUnisa. This exam
paper may be used to familiarise yourself with the format and type of examination questions.

10.2 Writing the examination

Note that the use of a non-programmable calculator is allowed in the examination with the result
that any calculations have been kept as simple as possible (you should in fact be able to perform
the calculations without the use of a calculator).
Note that you need to know and be able to apply all relevant formulae, but need not memorise
the discount factor values, table descriptors, multiplier values, etc. Where such values are
required, they will be provided to you.
The duration of the exam is two (2) hours for a total of 90 marks.
Answer the questions carefully, and keep time constraints in mind. If you are struggling with a
question, leave it and move on to another question. If there is time left at the end, you can come
back to it later.
Take some time to read through and understand the questions carefully and to do some planning
before you actually start answering. Be careful not to stray off the topic, and make sure that you
are answering the question that has been asked. In this way, you can avoid writing down
unnecessary information and can save time overall. Keep your answers brief so as to stay within
the time constraints, while still making sure that you write enough (but not too much) for the marks
allocated. If appropriate, use diagrams as they can convey more information concisely.
The examination paper is in English only. Following Unisa's language policy, you may also give
your answers in Afrikaans.

10.3 Instructions to remember when writing the exam

 Please read through the instructions contained in each question carefully. If a specific
format is required, adhere to it! The answers to certain questions may receive ZERO marks
if they are not in the correct format, e.g. in table or diagram format.
 It is in your best interests to write as legibly and draw as neatly as possible. If markers
cannot read your work, they cannot mark it, and you may be prejudicing yourself. Should
you need to do any rough work or to plan your answer, do this in your exam answer book
and simply give it the heading ‘rough work’. We might take any rough work into account in
cases where the answer to the question is incomplete or confusing.
 If you are told to list a certain number of items (e.g. four items), do not list more, as only
the required number (e.g. the first four) will be marked. Rather make sure that the ones
you list are correct!
 Take note of the mark allocation per question. If you are required to discuss a concept and
it counts for four (4) marks, list the four most relevant aspects within a short paragraph. Do
not write a two-page essay if the question only counts four marks!

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 Identify what is required in a question and match it with your knowledge. And read through
the questions carefully!
 Present only the appropriate information in your answer and do so in the required format.
Do not just write down all you know on paper. Read through the instructions, select what
is appropriate, and present this information.

The following terms have been used in the formulation of exam questions (Afrikaans
terminology given in brackets):

 draw (skets; teken): give CPM or PERT network or other diagrams

 identify (identifiseer): select from lists or memory
 define (definieer): provide a brief description with key terms, and expansion of acronyms,
according to study material and give examples where applicable
 describe (beskryf): write short notes (with examples if applicable) according to the study
material
 discuss (bespreek): write short notes (with examples if applicable) in your own words
 indicate (dui aan): identify in words or with examples or graphics/notation on your drawing
 write (skryf): give a narrative description

In conclusion, prepare your work thoroughly so that you can approach the exam with confidence.

10.4 Administrative issues

For the first semester the exam is in May/June 2018 with the aegrotat paper in October/November
2018. For the second semester the main exam is in October/November 2018
In the Centre for Software Engineering (CENSE) and the School of Computing we deal only with
the academic side of the exam.
So, please remember: Lecturers do not deal with queries relating to examination dates, times,
aegrotats, venues and results. Please contact Ms Havenga at the above phone number or email
address for administrative queries.

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10.5 Exam instructions

Calculators: Only non-programmable pocket calculators are allowed for this subject.
Textbooks: It is a closed-book examination and thus no study material is allowed inside
the examination venue.
Duration: 2 hours
Total mark: 90
Date / time: Please check your official correspondence from the university.

Exam enquiries (for all of the above except results – see below):

 Tel.: +27-12-429-4155
 Email: exams@unisa.ac.za

Exam results
Cell: 0831234

11 FREQUENTLY ASKED QUESTIONS

Please contact the Administrative officer of CENSE or your lecturers should you require further
information.

12 SOURCES CONSULTED
The sources listed in sections 4.1 and 4.2 were consulted in drafting this tutorial letter.

13 CONCLUSION
We hope you enjoy this module and that will be of value to you. We wish you everything of the
best with your studies.

©
UNISA 2018

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