Reference no: EM133088238

Project Selection

Objectives:
• Understand and apply different strategic planning approaches.
• Describe different ways of identifying IT projects.
• Understand and apply different project selection methods.
• Describe and be able to prepare a business case.
• Discuss the importance of project portfolio management.

Discussion Questions

Question 3.1 - Strategic Planning *
Explain the role IT projects play in the strategic management process.

Question 3.2 - Leadership and Management
Refer to the websites listed below. For each describe which of the components shown in Components of a Mission Statement (customers, products or services, markets, technology, survival philosophy, self-concept, public image, employees) are evident in the mission statements given on the websites. Compare and contrast the various mission statements indicating similarities and differences. What is your overall evaluation?
• Facebook
• Google
• Microsoft
• another technology company of your choice

Question 3.3 - SWOT Analysis
Read the case study Dog Shelter Appand work in pairs to develop SWOT analysis for the project.

Question 3.4 - Identifying Projects
Nominate an organisation, preferably an IT organisation (it could be one you have worked for or, one that you are interested in e.g. IBM). What process does that organisation follow when identifying potential projects? Evaluate your selected organisation's approach. Are any of Mishras and Soota's (2005) ideas for identifying IT projects incorporated? Discuss.

Question 3.5 - Payback period
Two new software projects are proposed to a young, start-up company.
• The Alpha project outflows (costs) are as follows, $70,000 (Year 0), and 20,000 (Years 1 to 4), a total of $150,000, and is expected to have annual cash inflows (benefits) of $40,000 (Years 0 to 4), a total of $200,000.
• The Beta project outflows (costs) are as follows, $80,000 (Year 0), and 10,000 (Years 1 to 4), a total of $120,000, and is expected to have annual cash inflows (benefits) of $25,000, $20,000, $40,000, $45,000, and $10,000, a total of $140,000. The company is very concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why?

Question 3.6 - NPV Analysis
Assume that you are considering whether or not to invest in Project Hummingbird that will cost $60,000 in initial investment (Year 0), and $5,000 (Years 1 to 4), a total of $80,000. Your company requires a rate of return (discount rate) of 12%. You anticipate a useful life of five years for the project and have projected future inflows (benefits) as follows (Years 0 to 4): $10,000, $10,000, $40,000, $45,000 and $15,000, a total of $120,000.
• Calculate the NPV to determine if the project is worth investment.

Question 3.7 - ROI Analysis
Assume that you are considering whether or not to invest in Project Raven that will cost $250,000 in initial investment (Year 0), $50,000 (Years 1 to 3), a total of $400,000. Your company requires a rate of return of 9%. You have projected future cash inflows (benefits) as follows (Year 0): $0, (Years 1 to 3) $160,000, a total of $480,000.
• Calculate discounted inflows (benefits) and outflows (costs), and the ROI to determine if the project is worth investment.

Question 3.8 - Weighted Scoring Model
Assume the source selection criteria for evaluating procurement proposals are as follows:
• supports business objectives - 20%
• technical approach - 20%
• past performance - 10%
• provides positive NPV - 30%
• low risk in meeting triple constraint - 20%

Draw a table and enter the weighted scoring model criteria and weights as outlined above. Enter scores for each proposal as follows:
• Proposal 1 - 80, 90. 70, 85 and 80
• Proposal 2 - 95, 65, 80, 85 and 95
• Proposal 3 - 75, 70, 70, 90 and 65
Evaluate the total scores, and indicate which proposal would you recommend, and why?

Question 3.9 - Financial Analysis
Use the same techniques as adopted in Questions 3.5, 3.6 and 3.7. Refer to the case study Dog Shelter App and calculate the project's NPV, ROI and payback period.

Question 3.10 - Project Portfolios
Refer to the case study Do the Math. Describe one example which outlines how companies use portfolio management to help align IT projects with business.

Question 3.11 - Project Business Case
Search the Internet for examples of business case templates. Compare and contrast these to Schwalbe's (2020) template provided with Assignment 2. A copy is provided on the next page. Use these to develop your own template for Assignment 2.