Multiplex Company is in its third year of using a rather complex and comprehensive strategic planning process. Billi Chase. CEO of Multiplex, is very pleased with the output of the planning process. Plans are logical, organized, and pertinent to the firm's business environment. However, implementation of the plans leaves something to be desired. Billi is convinced that her managers do a poor job of estimating the amount of resources and time required to complete the strategic projects associated with the plan.
This fiscal year, eleven new strategic projects were identified. There were six major types of projects: new products, modifications of existing products, research and development, new applications studies, manufacturing process improvements, and reorganization of the sales department. Each project is sponsored by one of the functional department managers, who is required to prepare a simple cost-benefit analysis and a Gantt chart (see Chapter 8, Section 8.3) showing the aggregate time required to finish a project. This sponsor usually, but not always, winds up being assigned as the project manager.
Tomorrow is the final day of the current year's strategic planning session. Ms. Chase plans to make a strong pitch to her managers to prioritize the strategic projects to ensure that those most important to the company get done. In the past it seemed as though all the projects lagged behind when resource problems arose. In the future she wants a consensus from the managers about which projects will go on the back burner and which are to proceed on schedule when problems are encountered.
Question: Ms. Chase is not sure how to go about ranking the projects. Will the managers be able to achieve consensus? Should they use the cost-benefit analysis done by the project sponsor? Perhaps the planning group could use their collective experience to rank the projects subjectively. What method would you recommend to Ms. Chase? Support your recommendation.
In the next two years a large municipal gas and electric company must begin construction on a new electric generating plant to accommodate the increased demand for electricity and to replace one of the existing plants that is fast becoming obsolete. The vice-president in charge of the new project believes there are two options. One is a new coal-fired steam plant and the other is a new nuclear plant. The vice-president has developed a project selection model and will use it in presenting the project to the president. For the models she has gathered the following information:
Steam plant $10,000,000 Nuclear plant 25,000,000
Generating Exp. Salv.
Cost/KW Life Value
Since the vice-president's background is in finance, she believes the best model to use is a financial one, net present value analysis.
Questions: Would you use this model? Why or why not? Base your answer on the five criteria developed by Souder and evaluate this model in terms of the criteria.
Billboard's top management, located in New York, has recently authorized a large number of data processing projects. However, when under pressure, they ask Bruce lohnson, manager of data processing, to reassign programmers to the latest "squeaky wheel." This situation was causing such turmoil that it was becoming impossible to manage the various projects, and staff morale was deteriorating rapidly.
lohnson's immediate project manager in Cincinnati agreed with him that this situation needed to be resolved, so a project evaluation and selection meeting was arranged. The meeting was held off-site to get away from the immediate pressures of business. It was attended by vice-presidents and department managers who had outstanding requests for data pro- ; cessing services or personnel assigned to such pro-.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.