Kiribako

An Evan Bittner Site

MGMT404 - Information Technology Project Management

2:36 PM 5/14/2006

Link to Week 4 Reading:

Did Everything Right but Got It Wrong

Link Notes on the project:

8:39 PM 5/6/2006

Somehow I wound up as my team's group leader.

Some notes from the book:

What is a Project?

  • A project has a unique purpose
  • A project is temporary
  • A project is developed using progressive elaboration
  • A project requires resources, often from various areas
  • A project should have a primary customer or sponsor
  • A project involves uncertainty

The Triple Constraint

  • Scope: What work will be done as part of the project?
  • Time: How long should it take to complete?
  • Cost: What should it cost to complete the project? Quality is also included. I've heard it stated a different way in Engineering: You can't have it Fast, Cheap, & Good. At least one will have to be sacrificed. Stating it this way intentionaly ignores scope, which I suspect is a result of scope being fixed from above.

Process Groups

  • Initiating
  • Planning
  • Executing
  • Monitoring & Controlling
  • Closing

Here's what I told my team members...

The real context of this class is this: The Customer has money. The Customer wants to accomplish something.

It might just be you buying a pair of jeans or something. For $50 though, you're not as likely to take months studying the problem.

Corporations use internal accounting all the time - one department can be the Customer while another department is the Supplier. Professor Jackovich talked about explicit and implicit business. Most businesses exist to make a profit. But they SAY they exist to write software, or build bridges, or sell something somebody else makes.

If there is extra money in the budget, a business has to decide what to do with it. Money loses value quickest when it sits still. That money can be used to 1) pay off debt, 2) pay a dividend to stockholders, or our concern: 3) reinvest it. And, reinvest can mean putting the money in the market or growing the business by purchasing capital.

Purchasing capital is where we come in. The business might have an idea for the money, but they love to have department managers or salespeople come up with ideas that they can take credit for. They like to modify the idea to suit their idea of the company's mission. And if they think the idea stinks, they call "Next!"

A project is a good idea when it creates a new revenue stream without costing too much up front. A business might take out a loan - go deeper into debt - if it means a new revenue stream. Their financial position determines how willing they are to make any gamble. When one company passes, that same idea might look very attractive to another company.

We were getting stuck on the Discount Rate the other night. The main thing to remember is that the Customer evaluates an investment against other investments. If ours were the only project, the Customer will still think about whether it is a better idea to put the money somewhere else. When you get money from a bank, the bank is the Customer. The interest rate is an Index of how risky they think you are. The interest rate is the "Cost of Money" - it's determines indirectly how much more you have to pay back. Tuition loans and Mortgage loans are lower interest rates because banks get government subsidy for loaning that money. Government wants to encourage home ownership and college education, and the law creates that incentive. If I go ask for money to build a rocket ship, a bank might even give it to me - but the interest rate will express how likely they think it is that I will pay it back. Maybe the rocket ship will explode. I'll get a lower rate if I already own a company that builds something similar - like airplanes.

last updated 3 years ago #