How to Select the Right Projects

Many of today’s technology projects are “dead on arrival.” The primary reason is lack of focus on project selection processes. While we spend enormous time and resources on project planning, execution, and control, little attention is paid to project assessment and selection. Impact of project cost overruns and schedule slippages typically pale in comparison to long-term consequences of selecting “wrong” projects for investment. 21st century organizations must consider projects as investments, not expenditures. When senior and portfolio managers make hasty, irrational decisions leading to a bad project investment, even a project manager extraordinaire cannot breathe life into the project. Ironically, increasing complexity of technology coupled with risk has made decision making even more challenging and critical. This seminar is about making the right investment decisions in the first place. It presents cutting-edge tools, templates, and techniques to evaluate project investment opportunities and build a business case for the “right” projects. The seminar also involves a hands-on case study simulating a real world project wherein the seminar attendees will apply the project selection tools and make go/no go decisions.

Who Should Attend:

• Senior managers
• Decision makers
• Portfolio managers
• Program managers
• Marketing managers
• Project managers

What You Will Learn:

• Employ one simple measure to quickly eliminate any candidate project alternatives from further evaluation.
• Make use of different costs and "must to know" measures of economic effectiveness to evaluate project investment alternatives.
• Apply powerful quantitative techniques that will help you sell your pet projects to your management.
• Account for "intangible" factors in evaluating project alternatives.
• Apply cutting edge techniques that answer today's most important business question: "Is this investment creating or destroying wealth for stockholders?"
• Normalize and quantify "subjective" risks on different projects for "apples vs. apples" comparison.
• Use proven tools that will help you decide among projects with different risks (e.g., a one million dollar investment with 60% risk vs. a two million dollar one with 20% risk.)
• Use decision techniques to help you determine between alternatives (e.g., whether to keep an old machine for a bit longer or replace it with a new one; whether to "lease," "buy" or maintain "status quo" on property, equipment and even services).
• Communicate project risks to senior managers using language they understand.
• Evaluate the impact and sensitivity of a decision on a desired outcome, considering today's constantly changing environment.

Seminar Outline
Building a Business Case
Selecting a new project/investment opportunity
Deciding on the right projects vs. doing them right
Portfolios vs. projects

End-to-End Life Cycle
End-to-end life cycle: Funnels and Filters™ – A new model
Role of finance in project life cycle
Portfolio/project/functional management

Project Selection Methodology
Concept screening
Feasibility analysis
Business case assessment
Risk analysis
Quality assurance
Communication
Project selection tools and techniques

Qualitative and Semi-quantitative Methods
Strategic fit
Operating necessity
Scoring models
Non-weighted models
Weighted models

Financial Fundamentals
Cost concepts
Interest
Inflation
Present worth
Depreciation

Quantitative Methods
Net present value
Discount cash flow analysis
Payback period
Rate of return
Benefit-cost ratio
Opportunity cost
Real options

Building a Business Case under Risk and Uncertainty
Business risks vs. project risks
Risk vs. opportunity assessment
Quantitative and qualitative analysis
Expected monetary values
Decision trees
Best case/worst case/average case evaluation
Monte-Carlo simulation

Project Business Plan
Why a project business plan?
What does the project business plan contain?
Role of project business plan in decision making