PROJECT SELECTION

REPORTER:
KENT DERILON
KIMBERLY DELAS
ALAS
LORMEJEN MERCADO
JINNY ROSE PORRAS
RALPH LEGAHON
QUEENIE JANCE
Objectives:

Learn and apply the tools and

techniques in intiating a project and
evaluating which project to select
 STRATEGIC
MANAGEMENT AND
PROJECT SELECTION
What is Strategy?

 Strategy is a tactical course of action which

is designed to achieve long term objectives.
It is an art and science of planning and
marshalling resources for their most efficient
and effective use in a changing environment.
What is Strategic
Management?

 Isa set of management decisions and

actions that determines the long-run
performance of a corporation. It includes
environmental scanning, strategy
formulation, strategy implementation and
evaluation and control to achieve the
objectives of an organizations.
LEVELS OF STRATEGIC
MANAGEMENT

Corporate
Strategy

Business Strategy

Functional Strategy
There are four steps in
strategic management
process
What is Project selection?

Refers to the process of selecting a

project. In an organization, many projects
might be running simultaneously, and many
new projects are proposed on a daily basis.
It is one of the stages of the project
lifecycle.
 Criteria for project selection

 Alignment with Business Goals - Every organization strives to

accomplish certain business objectives. A project needs to support
the organization's business in some way in order for it to be in line
with those objectives. The project managers can more effectively
allocate their material and human resources thanks to these
criteria.

 Resource Capability and Availability - The selection team must

take into account the resources required to finish each project
before choosing one. If there are sufficient resources available, the
project may move on to the next evaluation.
Risk Evaluation - There are risks involved in every project. It is
advisable for the project managers to assess the risk level beforehand.
In either scenario, they ought to think of various strategies to reduce
those risks or turn down the project.

Customer Satisfaction and Brand Loyalty

- Customer satisfaction is the next factor to take into account
during the project selection process. The project's effect on customer
satisfaction should be investigated by the company.
Data Availability - Project managers must ensure all necessary data
is available before selecting a project to efficiently utilize resources and
avoid unnecessary time spent on data collection and analysis.

Expected Revenue - Calculating investment and profit after a project

is crucial, as project managers or selection teams should also consider
the organization's revenue post-project completion.
 Project selection process

 Identify Potential Projects

- Have a meeting with your organization's decision-makers and compile a
list of all the upcoming possible projects.

 Compare the Projects

- Compare potential projects using a cost-benefit template, assigning values
for each criteria to compare total scores.
 Analyze Your Findings - Compare project scores to determine the best fit for
your team, using negative numbers for more costly projects and positive
numbers for more beneficial ones.

 Select a Project - Select the project that best suits your team, often the
highest-scoring project, and consider factors like budget figures and total cost,
which may not be included in your model.
 Project
Management
Maturity
What is Project management
maturity?

 It indicates a company's capacity to lead projects to

success. A company's projects are more likely to succeed
if its management is mature. Underdevelopedly mature
companies might not complete projects on schedule or
within budget.
 Six Characteristics of Project Management
Maturity:

1. Projects finish on schedule.

2. Teams mitigate risks and complete projects well.
3. Finished projects reflect original goals.
4. Projects deliver benefits.
5. Projects continue successfully despite project changes.
6. Project management applies good project governance
throughout the organization
 Project Management Maturity
Model

 Models assess a company's project management capabilities and

offer criteria and scoring systems for future process improvements.

 Capability Maturity Model (CMM) by CMMI Institute

- The project management maturity model (CMM) is a tool designed
for software projects, evaluating an organization's standardized
processes. It uses two approaches: staged and continuous, ranking
organizations based on five maturity levels: initial, managed, defined,
quantitatively managed, and optimizing.
 Project Management Maturity Model (PMMMSM)

- PM Solutions' Project Management Maturity Model uses

PMBOK 10 knowledge areas for standardized assessment,
assigning five maturity levels to each knowledge area: initial
process, structured process, organization standards,
managed process, and optimizing process.
 Berkeley Project Management Process Maturity
Model
- The Berkeley project management process maturity model
assesses key processes and organizational characteristics,
ranking them on a five-stage maturity scale, applicable to
any industry.
Gartner Score Diagnostic Family
-The Gartner Score Diagnostic Family is a set of online
maturity tests that was established in 2014. Based on their
company's strategic goals, managers can identify priority
growth areas with the aid of this highly customizable and
adaptable model. The Gartner Score Diagnostic Family offers
a cross-functional overview of the areas crucial to strategic
planning and identifies underdeveloped processes with its
interactive, user-friendly tools.
Kerzner’s Project Management Maturity
Model
-is another incremental method for
improving a company’s maturity. The Kerzner
model defines each of its five maturity levels by
the primary focus of that stage: common
language, common process, singular
methodology, benchmarking, and
continuous improvement.
Project Selection
Models
What is Project Selection
Model?

 areanalytical methods and instruments that

assess, contrast, and select the project that
best aligns with the company's long-term
goals. These models evaluate and rank
projects according to multiple criteria using
both quantitative and qualitative data.
Sacred Cow:

 Even if a project doesn't meet other selection

criteria, it may be given priority based on its
sacred cow status strong support from
important stakeholders. This criterion
assesses the degree of backing a project
receives from significant stakeholders,
including investors or top executives.
Operating Necessity:

 Certain initiatives are required to preserve or

enhance an organization's daily operations.
This criterion assesses projects that deal with
risk management, process optimization, or
system upgrades.
Competitive Necessity:

 Organizations may give priority to projects

that help them keep their competitive
advantage in fiercely competitive markets.
This criterion assesses how a project might
affect an organization's market position,
taking into account factors like pricing,
market share, and customer loyalty.
Comparative Benefit:

 Priorityis given to projects that will benefit

the organization more than others in
comparison. This criterion is based on the
project's possible advantages over other
projects that are available, such as higher
revenue, lower costs, or increased efficiency.
Product Line Extension:

 Projects that expand an organization's

product lines or penetrate new markets may
be given priority. This criterion assesses
initiatives that expand current offerings, enter
new markets, or introduce new goods or
services.
 Project selection methods

 Cost-Benefit Analysis FORMULA:

-is employed to calculate the
advantages and disadvantages of a
specific project. Put differently, it's a
technique for determining the most
economical way to carry out a
project. It entails weighing the
project's monitory benefits against
its expenses. The CBA ratio
calculation formula.
 Scoring Models - are employed when a list of
project criteria is created by the project manager or
project selection committee, and each criteria is
scored based on its relevance, importance, and
priority.
 How to create a weighted scoring
model?

1.Identify and list down all possible options

2. Define criteria relevant to your decision
3. Assign a numeric weighting value to each criterion
4. Score each option and calculate their weighted score
5. Sum up the total score for each option
6. Compare the scores and make a decision.
Payback Period:

 One criterion for a successful project is making back

the money you’ve invested. The project payback
period is a method to see the ratio between the total
cash to the average cash period (payback period =
cost of project / average annual cash inflows)
Value and deficiency Payback
Period
 Net Present Value:

 consistsof the difference

Formula:
between the project's
current cash inflow and
outflow values. It's always in
your best interest to choose
the project with the highest
net present value.
 Constrained Optimization Methods:

 When assessing more complex and larger projects, this

mathematical model of project selection performs best. The
constraint optimization method consists of three main techniques:
dynamic programming, linear programming, and integer
programming.

 Integer Programming - Using this approach, a decision involving

integer values—rather than fractional ones—is examined. This is a
project that is similar to making cars, razor blades, or other things
that are delivered as a whole rather than in smaller parts.
 Linear Programming:

 This approach aims to lower project costs by cutting down

on the amount of time needed to finish the work.

 Dynamic Programming -
Using this technique, difficult issues are divided into a
number of easier ones.
 Internal Rate Of Return:

 When the present value of the

outflow equals the present
value of the flow, or when the
net present value is zero, this
method handles the interest
rate.
 Discounted Cash Flow:

 This approach accounts for

inflation, or the likelihood
that money in the present
will not be worth the same
as money in the future.
 Opportunity Cost:

 Two projects are evaluated

using this methodology. You
make your decision by going
with the project with the
lowest opportunity cost. The
potential loss of a future
return from the second-best
project on your list is known
as the opportunity cost.
Project Portfolio
Management
 What is Project Portfolio
Management?

 isthe centralized administration of every project element,

including technologies, procedures, and methods. Based
on both quantitative and qualitative criteria, projects are
ranked in order of importance, increasing efficiency by
only implementing the most dependable, lucrative, and
low-risk initiatives. It's a management technique that
assesses possible projects and then uses the results to set
priorities and carry out projects.
 Five steps of project portfolio
management
 Define Business Objectives - Prior to considering portfolio
management, it is imperative that you comprehend the business and
strategic objectives of your organization. The idea is that your project
portfolio complements your organization's strategic planning;
therefore, you should determine whether the portfolio's financial goals
and customer value are sufficient for your company.
 Collect Project Ideas for Your Portfolio - To build your portfolio,
gather projects, manage them simultaneously, gather project
management data, and prepare valuation criteria to select the best
option.
 Select the Best Projects for Your Portfolio - You must perform a
cost-benefit analysis using your valuation criteria in order to identify
which of your projects are the best fits for your portfolio. The
amount of value each project adds to the portfolio will be gauged
by these valuation criteria.
 Validate Project Portfolio Feasibility - After determining which
projects best fit your portfolio, it's time to conduct a feasibility study
that accounts for all potential financial risks as well as capacity
planning and resource management issues.
 Execute and Manage Your Project Portfolio
- You will now have to work with project and program managers to
coordinate the concurrent execution of the projects and programs in
your portfolio.
 A BUSINESS
PROPOSAL: THE
TECHNICAL
APPROACH
 The Technical Approach gives a general overview of
how your company plans to accomplish the objectives
of the program. It should also include specifics about
the core activities that the program will carry out, the
people with whom it will collaborate, the dates and
times of each core activity, the location of the program,
and the populations that the program is intended to
serve.
 In writing, remember that
proposal needs to a complex
to explain a complex product
in relatively simple terms.
1. Properties Section: The
properties section typically the
includes the logistical, financial,
and operational details that
support the proposal’s viability.
2. Business Model Revenue Streams: describe how the business will
generate revenue (e.g., subscription model, licensing, one-time sales).
3. Pricing strategy: explain the pricing model, including any tiers or
discounts.
4. Cost Structure: outline the costs associated with producing and
delivering your product or service.
5. Market Analysis Target Market: define your target audience and
market segments.
6. Competitive Analysis: identify competitors and analyze their
strengths and weaknesses.
7. Market Size and Growth Potential: provide data on market
trends and growth opportunities.
8. Legal and Regulatory Considerations Compliance: detail
any regulatory requirements or compliance issues.
9. Intellectual Property: explain how IP is handled, including
patents, trademarks, or copyrights.
10. Contracts and Agreements: mention any contracts or
agreements relevant to the business.
11. Financial Projections, Revenue Projections:
provide a forecast of revenue for the next
3-5 yeas.
12. Profit and Loss Statement: include a detailed profit
and loss statement
13. Break-even Analysis: explain when the business is
expected to break even
THANK YOU AND
GODBLESS!