1 © the delos partnership 2004 project initiation controlling the start of the project

1 © The Delos Partnership 2004

Project InitiationProject Initiation

Controlling the start of the project


Project InitiationProject Initiation

At the end of this session you will have an understanding of the following:-

• 4 Stages within Project Initiation

• The Business Filters

• Project Charter(s)


The PMI® Project The PMI® Project Management Life CycleManagement Life Cycle

InitiatingInitiatingProcessesProcessesInitiatingInitiating

ProcessesProcessesPlanningPlanning


ProcessesProcesses

ControllingControllingProcessesProcesses


ClosingClosingProcessesProcessesClosingClosing

ProcessesProcesses

ExecutingExecutingProcessesProcessesExecutingExecutingProcessesProcesses


PMI® Initiating ProcessesPMI® Initiating Processes

5.1 5.1 InitiationInitiation

5.1 5.1 InitiationInitiation

BusinessBusiness CaseCase

BusinessBusiness CaseCase CharterCharterCharterCharterInitial Initial

Invest.Invest.Initial Initial Invest.Invest.IIdeadeaIIdeadea


Ideas - Pick the WinnersIdeas - Pick the Winners

BIs

UIs

GIs

(Business Imperatives)

(Good Ideas)

(Useless Ideas)


Project Choices – the Five Project Choices – the Five DimensionsDimensions

ProjectProject

StrategicFit

StrategicFit

Market Attractiveness

Market Attractiveness

TechnologyFit

TechnologyFit

Business ImpactBusiness Impact

ChangeOrientation

ChangeOrientation


Strategic FitStrategic Fit

Key Factors

1 4 7 10 Rating

Fit to Strategy Peripheral Modest Good Strong

Platform for Growth

Dead-end Opportunity for business extension

Potential for diversification

Opens up new Opportunity

Synergy Single programme

Could be applied to another programme

Could be adapted to several programmes

Could be applied widely across the business

Competency Improvement

Does not enhance skills

Contributes to strategic plan

Builds on current skills to grow

Significantly enhances skills

Geographic Scope

Local customers

Supports country customer base

Supports Regional customer base

Potential for Globalisation


Market AttractivenessMarket Attractiveness

Key Factors 1 4 7 10 Rating

Market Need Little apparent need

Need must be highlighted.

‘me too’ Ahead of market

Market Maturity Declining Mature or Embryonic

Modest growth

High Growth expected

Competitive intensity

High Moderate/High Moderate/Low Low

Sales and Distribution

Skills needed, in new channel

Existing skills in new channel

Existing sales operations

Uses existing sales & distribution

Target market opportunity

Small margins; small market

Small margins; large market

Large margins; small market

Large margins; large market

Community Relations

Negative Neutral Favourable Positive impact


Technology FitTechnology Fit


Technical Gap

Large gap Major step change

Step change Incremental Improvement

Project Complexity

Difficult to define

Easy to define Challenge, but do-able

Straight Forward

Technology Skill Base

Technology new to business

Some experience

Selectively practised in the company

Widely practised in the company

Availability of People

No appropriate people

Shortage in key areas

People available

People immediately available

Availability of Systems/

Facilities

No appropriate systems/

facilities

Current systems require modifications

Available, need advance planning

Available and ready


Business ImpactBusiness Impact


Availability of Availability of FundingFunding

Not Available Partially Available

Could be made available

Burning Burning platformplatform

Benefits to the Benefits to the CompanyCompany

Cannot be substantiated

Difficult to substantiate

Quantifiable in specific areas

Quantifiable Attractive Benefits

Stakeholder Stakeholder Commitment & Commitment & Buy-InBuy-In

Detached from Programme

Lukewarm. Little Business Commitment

Functional commitment.

Clear Focused Commitment

Availability of Availability of PeoplePeople

No Resource Some resource available

Could be rescheduled

Resouces immediately available

Effect on Other Effect on Other Company Company ProgrammesProgrammes

Major disruption

Disruption.

Inconvenient

Rescheduling required

No detrimental effect


Change OrientationChange Orientation


Dissatisfaction Dissatisfaction with presentwith present

It aint broke don’t fix it

Partial recognition of problem

Recognition of need to change

Burning Platform

Attractiveness Attractiveness of Futureof Future

No fit with values of company

Uncertainty about final outcome

Benefits agreed but not measurable

Both Top Down and Bottom up desire

Effort of Effort of TransitionTransition

Mission impossible

Difficult to predict

Can do but resource conflicts not dealt with

Aligned approach

Sponsorship Sponsorship CommitmentCommitment

No resources available

Partial Team in place but skills need to be developed

Competent team up and running

Cultural FitCultural Fit Not available Partial From Compliance to Commitment

Self Sustaining


First Cut Priority CheckFirst Cut Priority Check

Project Strategic Market Technology Business Impact

Change orientation

Overall Average

1 10 10 10 10 10 10.0

2 10 8 7 10 5 8.0

3 9 8 5 8 8 7.6

4 7 6 7 7 9 7.2

5 4 7 8 9 5 6.6

6 3 8 9 6 5 6.2

7 7 4 4 5 8 5.6

8 6 5 5 5 4 5.0

9 2 3 2 3 7 3.4


The PMI Project The PMI Project Management Life CycleManagement Life Cycle

InitiatingInitiatingProcessesProcessesInitiatingInitiating



ProcessesProcesses



ClosingClosingProcessesProcessesClosingClosing

ProcessesProcesses

ExecutingExecutingProcessesProcessesExecutingExecutingProcessesProcesses

BusinessBusiness CaseCase

BusinessBusiness CaseCase CharterCharterCharterCharterInitial Initial

InvestigationInvestigationInitial Initial

InvestigationInvestigationIIdeadeaIIdeadea


Technical Feasibility StudyTechnical Feasibility Study

Refine Scope of Activity– Prepare Statement of Work.

Make or Buy– Rationale and Options– Do we have or can we acquire the skills?

Do we have a solution?– Technical Issues & Risks– Commercial Issues & Risks– Rough Cut Costs

Background & Experience


Business AttractivenessBusiness Attractiveness

Factor Weight Rating Score

Market Size 20 1 20

Competition 10 0.5 5

Route to Market 15 0.5 7.5

Growth 30 1 30

Positioning 25 1 25

Total 100 87.5


Operational CapabilityOperational Capability

Factor Weight Rating Score

Capacity 30 0.2 6

Capability 20 0.3 6

Systems 15 0.3 4.5

Infrastructure 15 0.5 7.5

Marketing 20 0.3 6

Total 100 30


Resource allocationResource allocation

Programme Overall

Average

Business Attraction

Operational Capability

Critical

Resource

Accumulated Resource

Commit

1 10 87 30 0.5 0.5 Yes

2 8 70 80 0.3 0.8 Yes

3 7.6 66 42 0.1 0.9 Yes

5 6.6 58 80 0.1 1.0 Yes

9 3.4 18 80 nil 1.0 Yes

6 6.2 20 20 0,2 1.2 No

7 5.6 40 50 0.4 1.6 No

8 5 45 20 0.2 1.8 No

4 7.2 15 20 0.4 2.2 No


Prog.Portfolio Mgmt

Weak

Average

Strong

Op

erat

ion

al C

apab

ilit

y

High Medium Low

Business Attractiveness

P1

P3

P8

P2

P4P6

P7

P5 P9



InitiatingProcesses

InitiatingProcesses

PlanningProcesses

PlanningProcesses

ControllingProcesses


ClosingProcesses

ClosingProcesses

ExecutingProcesses

ExecutingProcesses

Business Case

Business Case CharterCharterInitial

Invest.

Initial Invest.IdeaIdea


Technical Feasibility StudyTechnical Feasibility Study

Refine Scope of Activity– Prepare Statement of Work.

Make or Buy– Need for control, Intellectual Property– Do we have or can we/do we want to acquire the skills?

Do we have a solution?– Technical Issues & Risks– Commercial Issues & Risks– Rough Cut Costs

Background & Experience


Developing the Business CaseDeveloping the Business Case

BenefitsBenefits

ObjectivesObjectives

Critical Success Critical Success FactorsFactors

DeliverableDeliverable

CostsCosts

•What will be the Business Benefit?

• Benefits Mgmt Process

•What must be achieved?

•Strategic / Tactical / Operational

•What must go right? •Pertaining to Overall Success

•What must we do at Deliverable Level ? •High Level Work plan

•What will it cost? •Cost +/- 10% / Risks/ Assumptions

What ? ? How ?


Benefit Analysis TypesBenefit Analysis Types

Discounted Cash Flow Types

• Net Present Value (NPV)

• Return on Investment (ROI)

Non Discounted Case Flow Types

• Benefit Cost Analysis (BCA)

• Payback Period



InitiatingProcesses

InitiatingProcesses

PlanningProcesses

PlanningProcesses



ClosingProcesses

ClosingProcesses

ExecutingProcesses

ExecutingProcesses

Business Case

Business Case CharterCharterInitial

Invest.

Initial Invest.IdeaIdea

24 © The Delos Partnership 200420/04/23

Initiating the ProjectInitiating the Project

Develop goals and objectives Define project deliverables Define high level scope Identify high-level activities Document project assumptions Secure project sponsorship Obtain approval to proceed

Input OutputProcess

InitialProjectCharter

Initial Project Charter Major Constraints Identified Major Assumptions Listed Project Manager Assigned Authority to Proceed

BusinessCase


What is a Project Charter?What is a Project Charter?

The Project Charter provides authority for the project to proceed.

The Charter documents the agreement between the Sponsor, the Programme Manager (if appropriate) and the Project Manager and provides a blueprint for the project

Makes the project visible from “start”


The Charter Should The Charter Should ContainContain• A clear statement of the project’s objectives, • High Level Scope and deliverables;• The rationale for the project (headlines from

the business case)• Definition of the project roles &

responsibilities• Outline of the High Level Plan• Document of related projects• Roles and Responsibilities


• Define Project Objectives & Major Deliverables

• Define Project Structure & Resource Plan;

• Prepare High Level Project Budget;

• Prepare Business Case

• Compile Project Charter;

Initiating the Project - Key Initiating the Project - Key Project Manager ActivitiesProject Manager Activities


What is an Objective?What is an Objective?

Specific (What is it we are trying to do?)

Measurable (How will we know we have achieved it?)

Achievable (Can we do it?)

Relevant (Is it the right thing to do?)

Time-related (When will we do it?)

A statement of a particular desired outcome supporting the Goal that is:


Case StudyCase Study

Breakout Session 1


The PMI® Project The PMI® Project Management Life CycleManagement Life Cycle

InitiatingProcesses

InitiatingProcesses

PlanningProcesses

PlanningProcesses



ClosingProcesses

ClosingProcesses

ExecutingProcesses

ExecutingProcesses

1 © the delos partnership 2004 project initiation controlling the start of the project

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