City University of Seattle Msc in Project Management Cohort 2005
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Transcript of City University of Seattle Msc in Project Management Cohort 2005
City University of SeattleMsc in Project Management
Cohort 2005
Master Thesis Presentation
Master Thesis Title:
“The Significance of Implementing a Well Organized Project Selection Methodology Using Multi-Criteria Analysis"
Personal Information
Last Name: Siskos
First Name: Dimitrios
Middle Name: Vasilios
ID number: 20063511
Advisor’s Name: Dr Athanasios Spyridakos
Problem Statement
Results in:
1. Failure to successfully control and complete projects
2. Failure to accomplish stakeholders’ expectations
and finally:
3. Withdrawal from the projects’ implementation
4. Compensation penalties
Lack of a systematic project selection methology
Literature Review
1. The importance of a capable project selection methodology
Project Management Books IJPM Articles
2. Identification of the variables affecting projects selection
Project Management Books
3. Recommended solution through project management strategies
Project Management Books Software Manuals
The research is oriented to the concept:
not ‘‘doing projects right’’
but
‘‘doing the right projects’’
Reyck et al (2005)
Methodologies and Procedures
1. Confirmation of the problem statement– The Questionnaire
2. Multicriteria Analysis– The steps in MCA– Connection to the problem statement
3. Solution of the problem– Application of the MCA steps– Risk incorporation into processes– Simulation using Crystal Ball– Selection of the Optimum Solution using OptQuest
Confirmation of the problem statement
• The Questionnaire– Remarkable Managers– Directors– Academic Professors
• The Results
Most significant reasons that influence organizations in order to select projects
0%
10%
20%
30%
40%
50%
60%
70%
80%
Criteria
Profitability
Perspectives
Resource availability
Know How
Company strategy
Added value
Relativity
Labor skills
Added value
Scientific research attitudes
1
See the Questionnaire
2
Type of specification Business Area
Constructing Services Developmental-co Financed(EU)
Academic
Cost 22,50% 51% 10% 20%
Schedule 22,50% 2,5% 10% 45%
Performance 16,25% 6,5% 0% 20%
Projects per year that getting failed to meet specifications
3
0%
10%
20%
30%
40%
50%
Constructing Services Developmental Academic
Types of software that organizations use in order to optimize project selection ability
Excel
Ms Project
Other
Nothing
4
Type of answer Business Area
Constructing Services Developmental-co Financed(EU)
Academic
Yes 50% 50% 50%
No 25% 20% 40% 100%
Not sure 25% 30% 10%
Satisfaction about the existing project selection methodologies used among organizations
5
Type of answer Business Area
Constructing Services Developmental-co Financed(EU)
Academic
Yes 75% 100% 50% 100%
No 25% 50%
Intention to reject a profitable project if that considered to be very risky for the organization
Multicriteria Analysis
• MCA technique:– Makes recommendations on the process of budgeting– Selects the best practice – Provides feedback on project selection methods– Enhances the project selection process
• The steps in MCA:– Identify the problem to be addressed– Identify the targets to be judged– Identify the criteria– Weight the criteria in relevance to decision– Score the criteria in relevance to targets– Incorporate risk analysis– Produce multiple combinations– Select the appropriate solution– View the results– Evaluation and recommendations
MCA Connection to the problem statement
Identify the
criteria
Weight the criteria in relevance to decision
Score the criteria in relevance to targets
the criteria
Incorporate risk analysis
Produce multiple
combinations
View the results
Select the appropriate
solution
Evaluation and recommendations
Identify the problem to be
addressed
All thecandidate projects
Parameters which
influence projects success
Weight the criteria according to how much each one influences the
decision
Score the criteria per project according to the extent each one
satisfies decision percentage
Which projects to
select
Runcontinuous simulations
Select the “right”
projects
View the generated reports and evaluate the
situation in a most realistic view
Compare the results before and after applying the
MCA process
Incorporate appropriate
risk distribution
MCA Steps MCA impact to problem statement
1 2 3 4 5
6 7 8 9 10
Identify the targets to be
judged
MCA Step – 1 What is the problem?
• Business Area: Constructing
• Eight possible projects
• Existing Data– (1) the expected revenue for each project if it is successful– (2) the multiple and different criteria which theirs scores impact success– (3) the estimated weighted project score for each project– (4) the initial investment required for each project– (5) the expected return and the expected profit for each project
• One Constraint– Available budget only $2.0 million (selecting all projects would require a total
initial investment of $2.8 million)
• Target– Determine which projects to select to maximize the total expected profit
while staying within the budget limitation
See the table
MCA / Step 2 – How many are the candidate projects to execute and how will the manager decide?
• 8 Constructing Projects
MCA / Step 3 – Identifying the criteria
• Profitability Resource availability Labor skills Perspectives Know how
MCA / Step 4 – Weight the criteria in relevance to decision
Criteria Weighting factorProfitability 40%
Resource availability 10%Labor skills 20%
Perspectives 20%Know how 10%
MCA / Step 5 – Score the criteria in relevance to projects
• Each criterion is computed depending on the percentage that fulfills decision
MCA / STEP 6 – Incorporate risk analysis
Resource Availability
Minimum Extreme Distribution
Labor skills
Uniform Distribution
Perspectives
Pareto Distribution
Know How
Yes-No Distribution
Allocate risk distributions into cells that represent criteria percentages values
Profitability
Normal Distribution
MCA / Step 7 – Produce multiple combinationsSimulate using Crystal Ball software
Select Project Portfolio using OptQuest tool
$690.000<TP<$2.050.000
Selected Projects: 1,2,3,4,6,8Rejected Projects: 5,7
Maximum TP=$1.148.000
MCA / Step 8 – Select the appropriate solution
MCA / Step 9 – View the results
$250.000 $230.000 1
$650.000 $370.000 1
$250.000 $146.000 1
$500.000 $553.000 1
$700.000 $0 0
$30.000 $69.750 1
$350.000 $0 0
$70.000 $101.250 1
Total profit $1.470.000
• Results coming out without incorporating risk into process
• Rejecting 5,7
• TP=$1.470.000
• Results coming out after incorporating risk into process
• Rejecting 5,7
• TP=$1.148.000
MCA / Step 10 – Evaluation and Recommendations
TYPE OF RESULT Selected Projects Rejected Projects Estimated Total Profit(supposing the selected projects are 1,2,3,4,6,8)CATEGORIES
Results coming out after applying MCA but without incorporating risk into process
Not Known-Based on excel values
Not Known-Based on excel values
$1.470.000
The organization takes the “wrong” decision
TYPE OF RESULT Selected Projects Rejected Projects Estimated Total Profit
CATEGORIES
Results coming out after applying MCA and incorporating risk into process
1,2,3,4,6,8
-MCA technique
-Risk analysis
5,7
-MCA technique
-Risk analysis
$1.148.000
The organization takes the “right” decision
There is an accounting balance of $322.000 between the two last decisions
TYPE OF RESULT Selected Projects Rejected Projects Estimated Total Profit
CATEGORIES
Before applying MCA technique -Empirical-Randomly
-Empirical-Randomly
Unknown
The organization takes a rough decision
I.
II.
III.
Recommendations for Action
• Staffing a Project Portfolio Decision Team (PPDT)
Recommendations for Dissemination
• Deliver a handbook– PPDT– Upper level management – Project members
Recommendations for Additional Research and Study
• Survey that exacts results in relation to the Work Packages of the WBS Outcome: Better control of the portfolio per project
Cost and schedule controlling will be applied in a higher level
Thank you!