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Topics Introduction Project Life Cycle Conceptualisation Stage Planning Stage Planning Tools & Techniques Implementation Stage Team Dynamics & Management

Project Life Cycle

Project Life Cycles What is a Project Life Cycle? Some examples A Project Life Cycle in detail

Project Life Cycles Main stages common to all projects Almost as many different models as there are project management authors Wide range of conflicting terminology used It is only a model does not tell you everything you need to do and when

Project Life Cycles Some examples … 3 – Phase Project Life Cycle Design & Plan Execute and Deliver Improve the Process (e.g. Maylor, 1999)

Project Life Cycles Some examples … 5 – Phase Project Life Cycle Define Plan Organise Execute Close (e.g. Weiss & Wysoscki, 1992)

Project Life Cycles Some examples … 4 – Phase Project Life Cycle Conceptualise (Initiate) Plan Implement (Execute) Complete (Close) (e.g. Burke, 1999)

Project Life Cycles Can also have … Phased Life Cycles Delivery in stages Prototyping Life Cycles e.g. Rapid Application Development (See Field & Keller, 1998)

Project Life Cycles Do not confuse Project Life Cycles with Development Life Cycles: Project Life Cycles are concerned with overall management and delivery of project Development Life Cycles are concerned with technical aspects of delivery

Project Life Cycles For example: Project Life Cycles for installing new IT Banking System, building a Bridge or Launching Space Probe could easily be the same... …but Development Life Cycles would certainly be different

A Project Life Cycle In Detail The 4 – Phase Project Life Cycle Conceptualisation (Initiation) Planning Implementation (Execution) Completion (Closure) This will be our ‘default’ Project Life Cycle

Project Life Cycle Project Life Cycle What are the different stages? What happens at each stage?

Systems Development Life Cycle Systems Development Life Cycle (SDLC) What are the different stages? How SDLC relate to Project Life Cycle? Start Initiation Feasibility Analysis Design Build Changeover Review and Maintenance ?

Project Life Cycle & SDLC Start Initiation Feasibility Analysis Design Build Changeover Review and Maintenance ? Conceptualisation Planning Implementation Completion

A Project Life Cycle In Detail Conceptualisation Stage Define Project Goals and Objectives Define Environmental Factors (External) Define Organisational Factors (Internal) Identify Key Stakeholders & their needs Define Project Scope Determine Success Criteria Prepare Feasibility Document

A Project Life Cycle In Detail Planning Stage Refine Objectives and Scope Design Solution Identify Project Constraints Identify Work Packages and Activities Work Breakdown Structure Identify Resources Agree Standards and Processes

A Project Life Cycle In Detail Planning Stage (continued) Schedule Activities and Resources Agree Budget Assess Risks Produce Baseline Plan Start building Team

A Project Life Cycle In Detail Implementation Stage Continue building Team Team Management Detail Technical Requirements and Design Refine Plan Monitor and Control Progress Report

A Project Life Cycle In Detail Completion Stage Finalise Documentation ‘Cut-over’ to new system Re-deploy Staff Dispose of Assets Evaluate and Review Project Hand-over and Sign-off Project

A Project Life Cycle In Detail Evaluation and Review is important throughout the life-cycle, particularly during completion An opportunity to learn & improve the process Problems identified may lead to the initiation of a new project A true Life Cycle

A Project Life Cycle In Detail Do not confuse Planning Stage of the project life cycle with the vital Process of planning The Process of planning is carried out throughout the project life cycle The Planning Stage involves designing the initial solution and producing baseline plans

A Project Life Cycle In Detail Accumulated Cost of Project Conceptualisation Plan Implement Completion

A Project Life Cycle In Detail Each stage of the project must be broken down into manageable and well-defined chunks of work These are called Work Packages Each Work Package can be broken down into Activities and Tasks as necessary for planning and control

Conceptualisation Stage Introduction

Conceptualisation Stage Inputs to Conceptualisation Stage Influencing Factors Stakeholder Analysis Feasibility Risk Outputs from Conceptualisation Stage

Inputs Strategic Planning Identified Problem or Opportunity Identifying and meeting the organisation’s Strategic Objectives SWOT Analysis Project Manager should have some input to Strategic Decision making Identified Problem or Opportunity

Inputs Produce “Terms of Reference” (ToR) for project Document describes need for the Project Defines the Initial Boundaries Defines Initial Responsibilities Defines the Scope of the Feasibility Study The “Project Charter” (Burke, 1999)

Conceptualisation Stage Sign-off the ToR initiates the project Conceptualisation Stage now begins Only Conceptualisation Stage is authorised When Conceptualisation Stage is complete there will be another decision point

Influencing Factors S T E P External (Environmental) Factors include = Social = Technological = Economic = Environmental = Political

Influencing Factors External Factors (Extended) include S T E P L = Social = Technological = Economic = Environmental = Political = Legal = Ethical

Influencing Factors Internal (Organisational) factors include: Mission Strategy Policy and Procedures (e.g. Ethical Policy) Structure and Culture Internal Politics, Hidden Agendas Budget / Financial Constraints

Influencing Factors … impose limitations on the project can be considered Indirect Constraints Project constraints as well as Environmental and Organisational factors Scope, budget, time, quality, … can be considered Direct Constraints

Stakeholder Analysis A Stakeholder in a project is a person or organisation who: is involved with... is affected by... can affect the outcome of... the project

Stakeholder Analysis Key Stakeholders include: Project Sponsor / Client Project Manager Project Team Users / Customers Senior Management Suppliers / Contractors

Stakeholder Analysis Other Stakeholders can include: Other Managers within the Project Organisation Other Managers within the Client Organisation Colleagues The General Public The “Media”

Stakeholder Analysis Identify Key Stakeholders Identify their needs Decision Makers Those with Political influence Those affected most by project Identify their needs If there are any conflicts – prioritise

Stakeholder Analysis Identify other significant Stakeholders Identify their needs Prioritise and “trade off” requirements Compromise if possible Key stakeholders must take priority Above all - manage expectations

Feasibility Objective of the Feasibility Study is to prove the practicability of proposed system. This stage is usually carried out before full funding is approved. Normally, it is the shortest and least costly of all stages. It can become longer and more expensive if proposed system is not well supported with financial and need-based justification.

Feasibility Based on the Analysis so far, following must be defined: Major Requirements Project Constraints Project Goals and Objectives Project Scope Success Criteria

Feasibility Feasibility must be considered: This includes an Technical Feasibility Operational Feasibility Economical / Financial Feasibility This includes an initial assessment of the risk level of the project

Technical Feasibility A systems request has Technical Feasibility if the organization has the Resources to Develop or Purchase, Install, and Operate the system. Is the Technology available? What is the Risk associated with the Technology? Risk of Failure Risk of becoming Obsolete Are the skills available?

Operational Feasibility A system that has Operational Feasibility is one that will be used effectively after it has been developed. Can solutions be found to meet users’ day to day needs? Do the users want the new product? Will the new product be used? Is the product User Friendly? What are the knock-on effects?

Economical/Financial Feasibility A systems request has Economic Feasibility if the projected benefits of the proposed system outweigh the estimated costs involved in acquiring, installing, and operating it. Is the money available? Cost Benefit Analysis Breakeven point / Payback period % Return On Investment Internal Rate of Return Net Present Value

Credit Crunch Normally expect prices to go over time Current financial climate - inflation is low Some prices lower now than last year

Cost Benefit Analysis Cost-Benefits Analysis is the process of comparing the anticipated costs of an information system to the anticipated benefits. Cost-Benefit Analysis is performed throughout the SDLC to determine the Economic Feasibility of an information system project and to compare alternative solutions.

Cost Benefit Analysis Cost Classifications Costs can be classified as Tangible or Intangible, Direct or Indirect, Fixed or Variable, and Developmental or Operational. Tangible Costs are costs for which you can assign a specific dollar value. Intangible Costs are costs whose dollar value cannot be calculated easily. Direct Costs are costs that can be associated with the development of a specific system.

Cost Benefit Analysis Indirect costs, or overhead expenses, cannot be attributed to the development of a particular information system. Fixed costs are costs that are relatively constant and do not depend on a level of activity or effort. Variable costs are costs that vary depending on the level of activity. Developmental costs are incurred only once at the time the system is developed or acquire. Operational costs are incurred after the system is implemented and continue while the system is in use.

Cost Benefit Analysis Benefit Classifications Positive Benefits increase revenues, improve services, or otherwise contribute to the organisation as a direct result of the new information system. Cost-Avoidance Benefits refer to expenses that would be necessary if the new system is not installed. Cost-Avoidance Benefits are just as important as Positive Benefits, and you must consider both types when performing Cost-Benefits Analysis.

Cost Benefit Analysis 3 most common methods: Payback Analysis Return on Investment Analysis Present Value Analysis.

Payback Analysis Payback Analysis is the process of determining how long it takes an information system to pay for itself. The time it takes to recover the system’s cost is called the Payback Period. Calculates time at which inflow matches investment The longer the time until Breakeven, the less attractive the project

Internal Rate of Return Considers growth of money as result of project, rather than cash IRR is amount of profit as % that project will produce some companies set minimum rate for IRR: “hurdle” Hurdle may be ignored for projects involving compliance with regulations MS Excel has built-in function for IRR

Internal Rate of Return Positive – looks at profit, not just investment Negative – might not be aware of amount at risk

Return on Investment Return on investment (ROI) is a percentage rate that measures profitability by comparing, total net benefits (the return) received from a project to the total costs (the investment) of project. ROI is calculated as ROI = (total benefits - total costs) / total costs

Return on Investment Percentage return on the project cost divide net income by investment evaluate different project options better to use present value in calculations Example projects Project Alpha: 45% Project Beta: 178% Project Gamma: 16%

Apparent Value Apparent value calculates the amount of money involved in a project without taking into account how the value of money changes over time. This does not give a good indication for comparing the value of projects, as in general, money in the future is worth less than money today.

Net Present Value Net Present Value (NPV) is an estimate of worth of money in the future expressed in today’s terms. Discounted Cash Flow (DCF) factors are used to estimate the value (purchasing power) in the future, taking inflation into account. The calculations are only as good as the estimate of the future financial environment, and are less likely to be accurate further ahead in the future.

Net Present Value Money today is not worth the same as money in the future (or in the past) The Present Value of a future dollar is the amount of money that, when invested today at a specified interest rate, grows to exactly one dollar at a certain point in the future. The specified interest rate is called the discount rate.

Net Present Value In Present Value analysis, a company uses a discount rate that represents rate of return if money is put into relatively risk-free investments, such as bonds, instead of being invested in the project. If we calculate future cost in today’s terms evaluate different project options choose most cost effective option but interest rate predictions are not reliable…

Net Present Value Choice between two projects: Project A Purchase Equipment Annual Maintenance Contract Insurance Project B Rent Equipment Project A may appear be more attractive

Net Present Value Use Discounted Cash Flow (DCF) factors Project A Purchase Equipment Annual Maintenance Contract Insurance Project B Rent Equipment Is same project still the more attractive?

Net Present Value Other options must also be considered What else would be done with money? Invest the Money? Fund another Project? Acquire new Staff, Equipment, etc?

Any Questions?