Reference no: EM132270741

Risk - what will happen to safety (employees, customers), the environment, or the business (reputation & financial) if this project is not done?

Capital - is this going to be equity or debt. There are other capital structures but these two are typical. The equity can be from venture capital or capital raised from selling the business' equity position (selling shares based on projected revenue). The debt capital is taking out a loan against projected revenues and or against assets (the cost of capital).

Example, a business must do an IT project to upgrade their IT infrastructure because it is old and antiquated. The project idea began because it appears that the cost to run and maintain the existing system is the same as a new system. There isn't a replacement budget for a project.

1. What are the considerations?

A. R&M is flat and not a consideration unless the R&M can be reduced.

B. What is the justification/winning criteria

Business - this can be a project management business for example, whose core competency is to execute projects. The selection criteria is probably pretty basic - can they do the project and will it turn a profit. However, this is a huge simplification of what really happens.