Unit 2: Project Selection & Definition

Learning Objectives
• Applying selection model to a project.
• Aligning project with organizational strategy.
• Learn how to define a project scope and define its
priorities
2–2
introduction
Strategy is implemented through projects. Every
project should have a clear link to the
organization’s strategy
Hence, we need to select projects among the
given ones
Project selection: A major step in aligning
project with organizational strategy
• Definition:
Strategic management can be defined as the
process of deciding and implementing what an
organization wants to be and how it is going to
get there.
Project selection: A major step in aligning
project with organizational strategy
• Organization strategy:

• Must decide which potential projects they will
  pursue (sometimes among many competing
  projects)
• Requires every project to be clearly linked to strategy
• Available capital is the major constraint
• Profitability is often the major criteria
• Must evaluate approaches when there is more
  than one project that can accomplish a particular
  business goal
  Project Selection Model
  • Project evaluation factors
  -Production factors
  -Marketing factors
  -Financial factors
  -Personnel factors
  -Administrative and Miscellaneous factors
  Project Selection Model
  • Project evaluation models
   Non numeric models
   numeric models:

1. Profit/profitability
2. Scoring
   Project Selection Model
   • The weighting scoring model: definition
   A weighted scoring model is a tool that provides
   a systematic process for selecting projects
   based on many factors/criteria.
   The weights reflect the relative importance of
   each individual factor (in the organization
   strategy)
   Project Selection Model
   • The weighting scoring model:
   Steps in identifying a weighted scoring model:
3. Identify criteria important to the project selection
   process.
4. Assign weights (percentages) to each criterion so they
   add up to 100 percent.
5. Assign scores to each criterion for each project.
6. Multiply the scores by the weights to get the total
   weighted scores.
   The higher the weighted score, the better.

Project Selection Model
• Advantages of the scoring model:
They allow multiple criteria to be used for evaluation
Weighted models recognize that some criteria are
more important than others
Structurally simple and relatively easy to understand
They are a direct reflection of management policy
Easily altered to accommodate change in
management policy or priorities
Project Selection Stages
• Stage 1: Strategic Considerations Phase
– Considering both external and internal business environments
– Matching with business strategies
• Stage 2: Project Evaluation Phase
– Economic returns
– Risk analysis
– … Other criteria
• Stage 3: Project/Portfolio Selection Phase
– Project selection Model (Scoring model)

1. Project planning
2. Project scheduling
3. Project control
4. Project team

• made up of individuals from various areas and departments
  within a company
  Project Management Process

1. Matrix organization
   – a team structure with members from functional
   areas, depending on skills required
2. Project Manager
   – most important member of project team
3. Scope statement
   – a document that provides an understanding,
   justification, and expected result of a project
4. Statement of work
   – written description of objectives of a project
   Project Management Process
5. Organizational Breakdown Structure
   – a chart that shows which organizational units are
   responsible for work items
   10.Responsibility Assignment Matrix
   – shows who is responsible for work in a project
   Project Management Process

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