MG4004 Project Management
Dr. Gillian Barrett
School of Management and Marketing
gillian.barrett@ucc.ie
Week 1
• Introduction
– Project Management
– Module
– Assessment
– Group working
• Homework
– Group formation
– 3 projects – successful and unsuccessful
– ‘A day in the life’ case study
• Questions ?
Project Examples
- successful/unsuccessful
- WHY?
Study conducted to review 650 projects
sponsored by NASA
Factors that led to unsuccessful projects included:
• Starting without a clearly defined need
• Selecting the wrong project manager
• Lack of upper management support
• Inadequately defined tasks
• Ineffective use of a project management process
• Reluctance to end the project
Factors that led to successful projects included:
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The project team’s commitment
Accurate initial cost estimates
Project team’s capabilities (knowledge and skills) (& PM)
Funding availability throughout project duration
Effectiveness of planning control and techniques
Minimal amount of start-up difficulty
Task versus social orientation of the project team
Absence of bureaucratic organisation and controls
Project manager on-site or close to the project
Clearly established criteria for success
Successful Projects
https://www.pmi.org/most-influential-projects-2021
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Why – For fast-tracking coronavirus vaccines
Most vaccines take a decade to develop, test and make their way to market.
Even the fast-tracked 1967 mumps vaccine took four years from start to finish.
Two teams had a secret weapon.
• One team was U.S. biotech firm Moderna.
• The other was a collaboration between pharma giant Pfizer and German biotech company
BioNTech.
Both believed they could deliver COVID-19 vaccines in less than a year by using messenger RNA
(mRNA).
Instead of using the virus or viral proteins—which are expensive to create and difficult to
store—mRNA uses the DNA code of a virus to direct a person’s cells to make specific proteins to
fight infections.
Dr. Mike Ryan, Executive Director, World Health Organisation (WHO), Health
Emergencies Programme
– “Speed trumps perfection. Perfection is the enemy of good when it
comes to emergency responses”
Why – for fast-tracking the long-simmering shift
o more flexible work arrangements
What began as a necessary adaptation to keep employees safe during the height of
the pandemic fast became an incubator for fresh thinking around office work.
A big chunk of employees have settled into their routines or craving time together.
Employers are listening—and adapting, whether it’s by going completely virtual,
welcoming workers back to the office or some combo of the two.
McKinsey estimates 20 percent of the global workforce could effectively do their
jobs from home several days a week and suggests there could be four times as many
doing so than pre-pandemic.
That leaves project leaders translating lessons learned from the great WFH
experiment into spaces and systems that can flex to employees'—and employers'—
needs.
Doing so requires even bolder actions: closing some of those high-profile HQ
ganisational Strategy and PM
mportance of strategy for project management
Strategy is implemented through projects.
Every significant project should have a clear link to the organisation’s strategy
– For example, UCC and the student hub
Strategy is fundamentally deciding how the organisation will compete.
Organisations use projects to convert strategy into new products, services, and
processes needed for success.
Projects and project management play the key role in supporting strategic
goals. It is vital for project managers to think and act strategically
– Project managers who understand the strategy can become advocates of
projects
Aligning projects with the strategic goals of the organisation is crucial for
The Strategic Management Process: An Overview
Strategic Management is the process of assessing ‘what we
are’ and deciding and implementing ‘what we intend to be
and how we are going to get there’
Requires every project to be clearly linked to strategy
Provides theme and focus of firm’s future direction
– Responding to changes in the external environment—
environmental scanning
– Allocating scarce resources of the firm to improve its competitive
position—internal responses to new programs
Requires strong links among mission, goals, objectives, strategy,
Amazon acquisition of PillPack – what’s their
strategy?
Est. $1bn for Pillpack
In 2021, Amazon spent more than $42bn on
R&D (Forbes.com)
“Most retailers don’t even have R&D as a line
item in their budget” Bernie Sanders
Context – Glaxo Smith Kline - £5.3bn R&D –
goal is to cure cancer
7,000 employees working on AI
What happens to organisations if Amazon
targets your industry?
“Amazon is hundreds of small, decentralised,
atomised teams sitting on top of
standardised common internal
systems….Amazon is a machine to make
more Amazon” Benedict Evans
Four Activities of the Strategic Management
Process
. Review and define the
organisational mission
. Set long-range goals and
objectives
. Analyse and formulate strategies
to reach objectives
. Implement strategies through
projects
Organisational Mission
The mission identifies “what we want to become,” or the raison d’être.
Mission statements identify the scope of the organisation in terms of its
product or service.
“Can you say what your strategy is?” Collis and Rukstad (2008)
– Most executives cannot
Mission statements
A mission statement aims to provide employees and stakeholders with
clarity about what the organisation is fundamentally there to do.
It should answer the questions:
‘What business are we in?’
‘What would be lost if we did not exist?’
‘How do we make a difference?’
‘Why do we do this?’
Cork University Business School
“Instead of “going public,” you
could say we’re “going purpose.”
Instead of extracting value from
nature and transforming it into
wealth for investors, we’ll use the
wealth Patagonia creates to
protect the source of all wealth.”
“Here’s how it works: 100% of the
company’s voting stock transfers to
the Patagonia Purpose Trust, created
to protect the company’s values; and
100% of the nonvoting stock had
been given to the Holdfast Collective,
a nonprofit dedicated to fighting the
environmental crisis and defending
nature. The funding will come from
Patagonia: Each year, the money we
make after reinvesting in the
mplement strategies through projects
Implementation answers the question of how strategies will be realised, given
available resources.
Implementation requires action and completing tasks; the latter frequently
means mission-critical projects.
Therefore, implementation must include attention to several key areas:
– First, completing tasks requires allocation of resources.
– Second, implementation requires a formal and informal organisation that
complements and supports strategy and projects.
– Third, planning and control systems must be in place to be certain project
activities necessary to ensure strategies are effectively performed.
– Fourth, motivating project contributors will be a major factor for achieving
project success.
The Need for a Project Priority System
1. The Implementation Gap
– The lack of understanding and consensus on strategy among
top management and middle-level (functional) managers
who independently implement the strategy.
2. Organisation Politics
– Project selection is based on the persuasiveness and power
of people advocating the projects.
3. Resource Conflicts and Multitasking
Portfolio of Projects by Type
Compliance (must do) projects - regulatory in nature
Operational Projects – projects to support current operations (reduce costs,
improve performance)
Strategic Projects (support long run mission – increase revenue/market share)
Exercise – you are the founder of Amazon, Jeff Bezos
How would you classify the following projects in terms of
Compliance, Strategic, and Operational?
New office in Lisbon for the recruitment of 200 new staff
Extend premises in Dublin or re-locate to new premises
Acquisition of PillPack
Partner with software company X
Implement new work from home (WFH) policy
GDPR
R&D investment – retail store of the future
Implement new ERP solution
Recruit new sales and marketing director
Partner with medical device company Y
Recruit new CSR manager to devise new CSR strategy
A Portfolio Management System
Design of a project portfolio system:
– Classification of a project
– Selection criteria depending upon classification
– Sources of proposals
– Evaluating proposals
– Managing the portfolio of projects.
Selection Criteria
– Financial models: payback, net present value (NPV)
– Non-financial models: projects of strategic importance to the firm (C, O, S)
Multi-Criteria Selection Models
Benefits of Project Portfolio Management
Builds discipline into the project selection process
Links project selection to strategic metrics
Prioritises project proposals across a common set of criteria,
rather than on politics or emotion
Allocates resources to projects that align with strategic direction
Balances risk across all projects
Justifies killing projects that do not support strategy
Improves communication and supports agreement on project
goals
Phase Gate Model
Is a series of gates that a project must pass through in order to be completed.
Its purpose is to ensure that the organisation is investing time and resources on
worthwhile projects that contribute to its mission and strategy.
Each gate is associated with a project phase and represents a decision point.
A gate can lead to three possible outcomes: go (proceed), kill (cancel), or
recycle (revise and resubmit).
se Gate Process Diagram
Dr. Robert Cooper
“simple concept”
“breaking a large project into stages
with gates, data, assess the data – do I
continue or not?”
“move to the next phase”
“this can be applied to any project”
“breaking it into bite size chunks with
decision points along the way”
“do I stay in the game, do I still invest?”
“A sensible way”
“mitigate risk”
“Best teams – broke the process into
pieces”
“how to manage your boss”
“Voice of the customer”
Selection Criteria
Financial Criteria
– Payback
– Net present value (NPV) – the financial value to be gained from investing in a
project
Nonfinancial Criteria
– Projects of strategic importance to the firm
Two Multi-Criteria Selection Models
– Checklist Models
– Multi-Weighted Scoring Models
ancial Models
Payback Model
ures the time the project will take
over the project investment.
Limitations of Payback:
Ignores the time value of money.
more desirable shorter paybacks.
Assumes cash inflows for the investment
period (and not beyond).
asises cash flows, a key factor in
ess.
Does not consider profitability.
The Payback formula is
nancial Models
The Net Present Value (NPV) Model
– The financial value to be gained from investing
– Uses management’s minimum desired rate-of-return
(discount rate) to compute the present value of all net cash
inflows.
• Positive NPV: project meets minimum desired rate
of return and is eligible for further consideration.
• Negative NPV: project is rejected.
– NPV is more realistic because it considers the time value of money,
cash flows and profitability.
mple Comparing Two
jects Using Payback Method
Example Comparing Two Projects Using Net
Present Value Method
€1m capital expenditure
Generates €200k additional profit annually
Assumed discount factor of 10%
Net Present Value of €228k
• i.e. favourable project
• If the NPV was negative - it would raise questions about the project's financial return
n-financial Strategic Criteria
Financial return is important but not reflect strategic importance.
Other criteria must be considered beyond direct financial return
Example – a firm may support projects that do not have high
profit margins – why?
– To capture larger market share
– To make it difficult for competitors to enter the market
– To develop an enabler product, which by its introduction will
increase sales in more profitable products
– To develop core technology that will be used in nextgeneration products
– To reduce dependency on unreliable suppliers
– To prevent government intervention and regulation
Multi-Criteria Selection Models
Checklist Model
– Uses a list of questions to review potential projects and to
determine their acceptance or rejection.
– Fails to answer the relative importance or value of a potential
project and doesn’t to allow for comparison with other
potential projects.
Multi-Weighted Scoring Model
– Uses several weighted qualitative and/or quantitative
selection criteria to evaluate project proposals.
€5M – €20M: Multi-Criteria Analysis (MCA)
€20M+ Cost Benefit Analysis (CBA)
mple Selection Questions Used in Practice
Topic
Question
Strategy/alignment
What specific strategy does this project align with?
Driver
What business problem does the project solve?
Success metrics
How will we measure success?
Sponsorship
Who is the project sponsor?
Risk
What is the impact of not doing this project?
Risk
What is the project risk to our organisation?
Risk
Where does the proposed project fit in our risk profile?
Benefits, value, ROI
What is the value of the project to this organisation?
Benefits, value, ROI
When will the project show results?
mple Selection Questions Used in Practice
Topic
Question
rganisation culture
Is our organisation culture right for this type of project?
esources
Will internal resources be available for this project?
pproach
Will we build or buy?
chedule
How long will this project take?
chedule
Is the time line realistic?
raining/resources
Will staff training be required?
inance/portfolio
What is the estimated cost of the project?
ortfolio
Is this a new initiative or part of an existing initiative?
ject Screening Matrix –
eria will depend on the project/organisation
Criteria: Criteria:
Criteria: Criteria:
Criteria: Stay Criteria:
25% of
Reduce
Criteria:
Improve
ROI of Weighted
within core
Strategic
sales
defects
customer
18%
Urgency
Total
competencies
fit
from new to less
loyalty
plus
products than 1%
Weight
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Applying a Selection Model
Project Classification
– Deciding how well a strategic or operations project fits the organisation’s
strategy
Selecting a Model
– Applying a weighted scoring model to align projects closer with the
organisation’s strategic goals
•
Reduces the number of wasteful projects
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Helps identify proper goals for projects
•
Helps everyone involved understand how
and why a project is selected
Applying a Selection Model
Sources and Solicitation of Project Proposals
– Within the organisation
– Request for proposal (RFP) from external sources (contractors and
vendors)
Ranking Proposals and Selection of Projects
– Prioritising requires discipline, accountability, responsibility,
constraints, reduced flexibility and loss of power
Managing the Portfolio
– Senior management input
uest for proposal (RFP) example
Ranking proposals and selection of projects
A structured process required
Data and information are collected to
assess the value of the proposed project
to the organisation and for future
backup.
If the sponsor decides to pursue the
project on the basis of the collected data,
it is forwarded to the project priority
team (or the project office).
Note that the sponsor knows which
criteria will be used to accept or reject
the project.
Given the selection criteria and current
portfolio of projects, the priority team
rejects or accepts the project. If the
project is accepted, the priority team
sets implementation in motion.
Managing the Portfolio System
Managing the portfolio takes the selection system one step higher in that
the merits of a particular project are assessed within the context of existing
projects.
At the same time it involves monitoring and adjusting selection criteria to
reflect the strategic focus of the organisation. This requires constant effort.
Senior Management Input
– Provide guidance in selecting criteria that are aligned with the organisation’s
strategic goals.
– Decide how to balance available resources among current projects.
The Governance Team Responsibilities
– Publish the priority of every project.
– Ensure that the project selection process is open and free of power politics.
Balancing the Portfolio for Risks and Types of
Projects
A major responsibility of the priority team is to balance
projects by type, risk, and resource demand – requires a total
organisation perspective.
Balancing the portfolio of projects is as important as project
election.
Organisations need to evaluate each new project in terms of
what it adds to the project mix.
Short-term needs need to be balanced with long-term
potential.
Resource usage needs to be optimized across all projects, not
ust the most important project.
Bread-and-butter Projects
– Involve evolutionary improvements to current
products and services.
Pearls
– Represent revolutionary commercial opportunities
using proven technical advances.
Oysters
– Involve technological breakthroughs with high
commercial payoffs.
White Elephants
Summary
How does strategy influence day-to-day Project Management?
Why do organisations use a portfolio system for projects?
What factors affect project selection?
Case Study – A day in the Life
Questions
1. How effectively do you think Troi spent her day?
2. What does the case tell you about what it is like to be a project manager?
3. You are Troi, what would you do?
Gather in groups of 3/4 to discuss – 10 mins
– Map a timeline of events
– Answer the questions
– Select leader to represent group
Rules
– Participation
– No wrong answers
Next week
Group Formation
Case Study – ‘Film Prioritisation’
Readings