Management of a Project

What is the effect of excessive and exclusive reliance and other methods of screening as discussed in the chapter to lead to a similar problem? Excessive reliance of some of the methods of screening such as creating and accepting projects that tend to be profit oriented would lead to problems. Some of these projects may imply that the sole aim of the organisation developing a project is for profit making and not on the basis of the relationship the project would have with the existing projects established by the company (De Reyck et al 2005). If the company has plans of manufacturing products that are closely related, then it will be cheaper and easier to develop. This is as a result of the related products in certain ways share in materials when developing and also make it easier to market them together. Some screening methods may be well intentioned but they may lead to wrong conclusions depending on how the customers view it (Walls, 2004). A good example is if the company produced papers for their aesthetic appeal and used that in marketing in order to boost the image of the company in the industry. If people promoting the development of the product focussed on the beauty of the product but didn’t critically asses’ things like how developing the product would lead to new materials and achiness for manufacturing and the overall cost of the product both financially and to the environment then the company may have selected a project that would lead to the damage of the reputation of the business (Pinto, 2007). The product may also lead to the failure of the business as a whole. The company’s management should always analyse the weaknesses and the strengths of a projects when screening (Bredillet, 2007).

Key criteria for the development of new projects before they are added to the company’s portfolio

The criteria to use in evaluations when trying to develop new projects for the company should focus on things like how the project is related to the other projects, the potential it has to penetrate the market and maybe the overall cost it will require in order to appropriately develop it. Here are some of the criteria:

1. Development cost

When developing a new project considering the cost is vital to the success of the projects. It is important to consider the cost of the projects from development up to marketing. This will make it easy to put together the funds and also be able to know the financial effects of developing the new project to the company. Through careful analysis if the projects development would have damaging effects to the company then there would be no need of developing the projects or in other cases it would be easier to find alternatives or ways in which the project can be developed but at a reduced cost (Walls, 2004).

2. Feasibility of Technology

The projects will require the use f technology to develop it and thus it would be critical to consider if the company is in possession of the technology and if it doesn’t that how will accessing the technology affect the company (Cooper, Edgett and Kleinschmidt, 2006).

3. Penetration Potential to the New Market

A very critical criterion to consider when the company wants to develop a new project is the potential that the project has of making it into the new market. It is important to consider this because if the product has a low potential of development then there would be no need of developing it. If the product has a high potential of penetrating the market then it would be easy to develop it as soon as possible. The potential of penetrating the market can be measured by how similar products have performed in the market or the need of the product by the customers (De Reyck et al 2005).

4. The relationship between the new project and the other projects in the company

In order to easily develop the product by the company it has to have a relationship with the other projects either in marketing, cost, technology or consumer appeal or need. This would make it easier for the company to develop it (Bredillet, 2007).

What does this case demonstrate about the effects of poor project screening methods on a firm’s ability to manage its projects effectively?

The case can be used to learn various issues on the effects of some of the poor screening strategies used by the company to develop projects. The screening projects used by the company or any other company may be important especially when selecting a project to develop and managing it. If a company uses poor method for screening then management of the projects will be wrong and hence may lead to serious consequences for the company. The poor screening strategy that the company used was taking on various projects that were not link to the overall business plan and thus very difficult to manage as it required the formulation of new management methods (Cooper, Edgett and Kleinschmidt, 2006). The projects selection by the company was conducted using a cash flow design. If the company developed a way to get information on the products then it would be easy for the company to manage the project and understand all that is required for the success of the product. The company did not consider the changes n the organization that would be made in order to ensure the success of the project thus the company did not effectively mange some of the issues such as recruiting staff, required training, business process changes, new management practices or structure and authority changes. All the issues inclusively led to the ineffective management of the projects (Pinto, 2007).

Part 2

1. In regards to both opinions and the analysis itself there are various issues to consider and it is important to look at both the strengths and weaknesses. In most cases it is very common for different screening methods to yield different results. The case considers financial and non financial methods of screening and thus the contradicting results. Due to the different results it is crucial to understand that it is not enough to rely on the two results as a basis to choosing one of the two but it would be necessary to develop and use a model of screening that is enhanced for Nova (Cooper, Edgett and Kleinschmidt, 2006). The enhanced method should consider that the factors considers in the analysis are part of a broader method of assessment and thus incorporate them. A good suggestion would be that the mangers that were familiar with Expert software should be used to put up the information from the case and use the Analytical Hierarchy process to get a final conclusion on which of the two is best (Walls, 2004).

2. Careful analysis should be conducted when choosing between Gemini and the Janus project and a convincing case should be made. The payoff for project Janus is longer by two years than that of project Gemini but the net present value for project Janus that Gemini considering the initial investment. This suggests that if the firm does not want its money tied up for a long time then the reasonable choice would be project Gemini. The other criteria that favours project Gemini is when considering the weighted model of the two projects. It is important to consider the criteria used by Nova for selection of a favourable project (Pinto, 2007).

3. A comprehensive method of screening most of the time is the successful model because it covers all the grounds. Simple models that used for analysis usually give simple results and are not reliable in terms of consistency because when comparing different such methods it is common to get questionable results. The most reliable methods of screening and those that are used by various companies today are the complex ones and they are widely used because they provide consistent and reliable results (Cooper, Edgett and Kleinschmidt, 2006). The complex methods in nature are comprehensive and multi-faceted. A good solution for the case presented would be to use the results from the analysis of the cash flow that was discounted and add them to the scoring model from the weighted results and hence the net present value would be added as a criteria of selection and consider it together with the other factors that were listed in the analysis. It is very beneficial to also consider that whether the scoring model criterion represents products that cannot be compromised in any way. The two projects have the potential profit in common although the duration may differ but according to the DCF model the Janus project is higher in rank but re-evaluation may cause changes in the results (Bredillet, 2007).

Reference

Bredillet, C. N. (2007). Project management: Achieving competitive advantage.

Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (2006). Portfolio Management for New Product Development.

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S. R., Moura, M., & Sloper, A. (2005). The impact of project portfolio management on information technology projects. International Journal of Project Management, 23(7), 524-537.

Pinto, J. K. (2007). Project management: achieving competitive advantage. Upper Saddle River, NJ, USA: Pearson/Prentice Hall.

Walls, M. R. (2004). Combining decision analysis and portfolio management to improve project selection in the exploration and production firm. Journal of Petroleum Science and Engineering, 44(1), 55-65.