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Extended Diploma in Strategic Management and Leadership

Unit Details: Unit:17 Unit Code Centre Number Batch Number Student Name Students Number Group Activity title Due Date

: Project Development And Implementation For Strategic Managers : H/602/2425 : 93279 : 114-1110(4)BP : Mohammed Hasif T T : BL34146 : Westford Blended Program EDSML : Assignment (Task -1) : Due on 5 pm, 25 Sep 2012

Date Submitted

: 24/sep/2012

Assessor

: Pradeep Bhatia

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Learning Outcome

Assessment criteria to test outcomes

Feedback

Assessors decision

Attached

Attached

All assessment criterias met

Grade Awarded

Pass / Fail

Assessor Name and Signature

Date

I, _Mohammed Hasif T T_ hereby confirm that this assignment is my own work and not copied or plagiarized. It has not previously been submitted as part of any assessment for this qualification. All the sources, from which information has been obtained for this assignment, have been referenced. (Harvard format) I further confirm that I have read and understood the Westford School of Management rules and regulations about plagiarism and copying and agree to be bound by them.

Students Signature
Date

: _Mohammed Hasif__(signed)
: 24-9-2012

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Learning outcomes
Learning Outcomes Assessment Criteria to Test Outcomes 1.1 Analyze the factors that contribute to the process of project selection 1.2 Develop outline project specifications for the implementation of a new product, service or process 1.3 Produce a specification for an agreed project to implement a new product, service or process 2.1 Produce a project plan for an agreed project 2.2 Match appropriate resources to a project 2.3 Cost all resources required for implementing a project 2.4 Agree timescales for the management and implementation of a project 2.5 Plan an appropriate strategy for the implementation of a project

1 Be able to develop a project specification

2 Be able to plan for the launch of a project to implement a new product, service or process

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Content

Introduction 5 1. As the leader of the Project Team, you need to analyse the factors that lead to the need of project selection. 6 2. After selecting the project, you have to develop the specifications which will serve as a guide for the implementation of the new project. You may use Project evaluation techniques like NPV or PI or ARR for the selection of the project 2 3. The outline specification of the project should now be given a final concrete shape so that the persons concerned in the execution of the project will be able to understand it clearly 10 4. Planning is very essential before launching any project for the success of the project. Produce a plan for the project that is proposed to be launched. .11 5. The next task of the Project Team Leader is to find out appropriate resources required for the implementation of the project. .13 6. Cost is a major constraint in implementing any project. As a Team Leader consider all the cost constraints before the actual implementation of the project using appropriate techniques of cost analysis. ...13 7. Another major constraint is Time. Prepare timescales for the implementation of a project. You may use CP Method to estimate the time needed for the completion of the project. .14 8. As a Team Leader of the project, prepare an appropriate strategy for the implementation of the project. ..15 Conclusion..15 Bibliography..... 15

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Introduction

One of the biggest decisions that Mercedes-Benz would have to make is related to the projects they would undertake. Once a proposal has been received, there are numerous factors that need to be considered before an organization decides to take it up. The most viable option needs to be chosen, keeping in mind the goals and requirements of the organization. How is it then that I decide whether a project is viable? How to I decide if the project at hand is worth approving? The product is Mercedes-Benz H-Class 200. This is where project selection methods come in use. Choosing a project using the right method is therefore of utmost importance. This is what will ultimately define the way the project is to be carried out. But the question then arises as to how I would go about finding the right methodology for our particular organization at this instance; I would need careful guidance in the project selection criteria, as a small mistake could be detrimental to our project as a whole, and in the long run, the organization as well. The main elements needed for this include: Planning (long range and short range) Management control systems Project management Review and evaluation The timescale of operational planning in NGOs varies widely. More effective planning includes the following: - Long Range Plans typically 5-year operating and financial projections, reviewed annually. Short Range Plans Practical plans to implement strategy. Usually covering a two to three year timescale (reviewed annually), but one year for many smaller organizations. Two or three year operational plans tend to include less detail for second and third years

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1. As the leader of the Project Team, you need to analyse the factors that lead to the need of project selection. (Analyze the factors that contribute to the process of project selection - AC 1.1) Project selection is the first important part of project management. The responsibility is with the leadership team of the organization so I can take that job. Mercedes-Benz India launch their MPV targeted H-class which now comes with better design and engineering. This premium compact minivan features an all new front-drive system as well as new engines. The diesel and petrol engines will come available, Both manual and automatic transmissions engines, State-of-the-art technologies for maximum efficiency, Very smooth running, High attractive power right from low revs, Sustainability in terms of compliance with forthcoming emissions standards and low weight. The petrol engines will be 1.6 litre while the diesel units will be 1.8 litre in capacity.

The all new H-class will be on display for us Indians and hopefully the car can live up to our expectations. Typically, they establish a steering committee that overlooks the project selection process including project monitoring, and directly reporting to the CEO if the CEO is not a member of that steering committee already. There are various project selection methods practiced by the modern business organizations. These methods have different features and characteristics. Therefore, each selection method is best for different organizations. Although there are many differences between these project selection methods, usually the underlying concepts and principles are the same. Following is an illustration of two of such methods (Benefit Measurement and Constrained Optimization methods).

Sources: http://www.tutorialspoint.com/management_concepts/project_selection_method.htm

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As the value of one project would need to be compared against the other projects, I could use the benefit measurement methods. This could include various techniques, of which the following are the most common.

My team could come up with certain criteria that I want my ideal project objectives to meet. I could then give each project scores based on how we rate in each of these criteria, and then choose the project with the highest score. When it comes to the Discounted Cash flow method, the future value of a project is ascertained by considering the present value and the interest earned on the money. The higher the present value of the project, the better it would be for your organization. The rate of return received from the money is what is known as the IRR. Here again, you need to be looking for a high rate of return from the project.

The mathematical approach is commonly used for larger projects. The constrained optimization methods require several calculations in order to decide on whether or not a project should be rejected. 2. After selecting the project, you have to develop the specifications which will serve as a guide for the implementation of the new project. You may use Project evaluation techniques like NPV or PI or ARR for the selection of the project. (Develop outline project specifications for the implementation of a new product, service or process AC - 1.2) Benz is the famous car in the world so it is interesting to develop Benz as a model car. In our market the Benz have no hatch back car so I am developing Benz as economy car the pictures of the first Benz and my research model car.

Sources:http://www.google.co.in/imgres?imgurl=http://mercedesbenzblogphotodb.files.wordpress.com/2009/03/innovative
-engines-first-mercedes-knight-developed-in-1909-6.jpg&imgrefurl=http://mercedes-benzblog.blogspot.com/2009/03/mercedes-benz-blog-triviainnovative.html&h=793&w=1280&sz=359&tbnid=_8RLxib3Y_bwAM:&tbnh=76&tbnw=122&prev=/search%3Fq%3Dfirst %2Bmercedes%2Bbenz%26tbm%3Disch%26tbo%3Du&zoom=1&q=first+mercedes+benz&usg=__Zr7kqGdamr1feeaDs6T Adj_95t0=&hl=en-IN&sa=X&ei=BbheUJ25DIuPrgemjIGIDA&ved=0CEkQ9QEwDA

Identification of Project
The first step of this process, identification, requires a clearly defined and communicated strategy. The best option would be to set up a strategy development process that contains project identification and project selection as an integral part. In fact, we observe that most organizations identify investment projects within their strategy development process, but delegate the identification of customer projects to their key account and sales departments.

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Evaluation and Prioritization of Project Central part of the project selection process is evaluation and prioritization of identified projects. There are a couple of methods available: Net Present Value (NPV) Internal Rate of Return (IRR) Benefit / Cost Ratio (BCR) Opportunity Cost (OC) Payback Period (PP) Usually, we do this whole evaluation in definition or early planning phase. Then, we only have estimates of those values and should make sure that the estimation accuracies are comparable. The Net Present Value (NPV) of a project is defined as the difference between present value of cash inflow (revenue, PV in) and present value of cash outflow (cost, PV out) of that project over the project life cycle time. Here is the formula to calculate the present value (PV) for given future value (FV), interest rate (r), and number of accounting periods (n):

PV=FV/ (1+R)n
Project Selection, Part- 1: Investment project "A": development of a new version of product "B ". The cost for development is Rs.100, 000. -- This year. Next year, we will be able to sell the first batch for Rs.70, 000.--, in two years the second batch for Rs.50, 000.--. Given an interest rate of 10%, what is the net present value of that project? year 0 1 2 10% Cash in 0 70000 50000 PV in 0 63636 41322 104959 Cash out 100000 0 0 PV out 100000 0 0 100000

This year Next year In two year Interest rate

NPV=PVin-PVout= 4959 Project Selection, Part-II: Investment project "C": development of a new version of product "D". The cost for development is Rs.150, 000. -- This year. Next year, we will be able to sell the first batch for Rs.90, 000.--, in two years the second batch for Rs.85, 000.--. Given an interest rate of 10%, what is the net present value of that project? year 0 1 2 10% PV=PVin-PVout= Cash in 0 90000 85000 PV in 0 81818 70248 152066 2066 Cash out 150000 0 0 PV out 150000 0 0 150000

This year Next year In two year Interest rate

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If we would have to choose between project "A" and project "C" we would choose the one with the higher NPV, i.e. project "A". Another evaluation method uses the concept of Internal Rate of Return (IRR). The internal rate of return of a project is defined as the interest rate at which the net present value of that project equals zero. Here, we spare you the mathematical details of calculating IRR's, and give you the results for the two examples, projects "A" and "C", obtained by trial and error with a simple MS Excel sheet. A This year Next year In two year Interest rate year 0 1 2 13.899% NPV=PVin-PVout= C This year Next year In two year Interest rate year 0 1 2 11.035% NPV=PVin-PVout= Cash in 0 90000 85000 Cash in 0 70000 50000 PV in 0 61458 38542 100000 0 PV in 0 81056 68944 150000 0 Cash out 100000 0 0 PV out 100000 0 0 100000 13.899% PV out 150000 0 0 150000 11.035%

IRR Cash out 150000 0 0

IRR

Again, we choose project "A", the one with the higher IRR. In project selection, we usually account for an overall view of benefits and costs of proposed projects, trying to express all benefits and all costs in monetary terms of present values at given interest rates. This is the concept of the benefit cost ratio (BCR). Here is the formula:

BCR=PV in/PV out

In my examples, at an interest rate of 10%, we obtain for 1. Project "A": B = 104,959 / 100,000 = 1.050 2. Project "C": D = 152,066 / 150,000 = 1.014 (rounded to 3 decimal digits.) If we only consider cash inflow as benefits and cash outflow as costs we end up with our familiar decision to choose project "A". With the concept of opportunity cost (OC) we consider that choosing one option means to give up other options we might have. In our example, we choose project "A" (because of the higher NPV or IRR or BCR) and give up project "C", at an opportunity cost of NPV = Rs.2,066.--.

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Using the method of payback period (PP) gives us the simplest approach. We have the following formula.

Payback Period = Total cash out /Average per period cash in

In our examples, we obtain as payback period for 1. Project "A": PP = 100,000 / 40,000 = 2.50 (years) 2. Project "C": BCR = 150,000 / 58,333 = 2.57 (years) (rounded to 2 decimal digits.) We decide in favor of the project with the shorter payback period, and our choice would be project "A". Notice that we do not apply present values. In general, we emphasize that the methods using Net Present Value (NPV), Internal Rate of Return (IRR), Benefit / Cost Ratio (BCR), or Opportunity Cost (OC), all are based upon the calculation of present values of estimated future cash inflows and outflows. In a mathematical sense, they usually lead us to the same project selection results. Typically, application of one of these methods is enough. 3. The outline specification of the project should now be given a final concrete shape so that the persons concerned in the execution of the project will be able to understand it clearly. (Produce a specification for an agreed project to implement a new product, service or process AC - 1.3) Phase management Ensure that I adequately satisfy the conditions for completing each phase, and for starting the next one. To do this, make sure that I fully understand the "gates", or deliverables that must be completed and approved by the appropriate stakeholders before I can exit a phase. Deliverables and sign-off requirements are usually identified in the Project Initiation Document, so review this appropriately during the project.

Control It's essential to control scope, cost, and issues; and to manage time, risks, and benefits effectively. Create reports that contain the information I need to create an accurate picture of how things are proceeding. A common way of doing this is to use a Project Dashboard. Team management As project manager, I am responsible for managing the project team. Working on a project is often different from most "business as usual" activities, and project work may require a different approach and set of skills. As such, I'll probably need specific project management training and support. And there are additional complexities in managing team members who have project responsibilities as well as other roles at the same time.

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Communication Make sure that you're clear about who is responsible for communicating to team members, the project board, the different stakeholders within the business and relevant third parties. Inadequate communication is a frequent problem area for projects, and it needs considerable attention to communicate well. Procurement This is a specialist area. Many projects hire third parties to manage purchasing, particularly when it involves IT systems. Managing these third parties is often the role of the project manager. See our articles on Request and Procurement Management for more on this. Integration Many projects do not stand their own within an organization they often impact other areas of the business. Make sure that I consider how this project will interface with other projects or functions

Learning Outcome 2: Be able to plan for the launch of a project to implement a new product, service or process. 4. Planning is very essential before launching any project for the success of the project. Produce a plan for the project that is proposed to be launched. (Produce a project plan for an agreed project AC - 2.1) Planning Carry out high-level planning for the whole project at the start of the project, then do more detailed planning for each phase at the start of each phase. Ensure that I have the right people, resources, methodologies, and supporting tools in place for each planning phase, so that I can deliver the project on time, on budget, and to appropriate quality standards. The project manager lists all activities or tasks, how the tasks are related, how long each task will take, and how each tasks is tied to a specific deadline. This phase also allows the project manager to define relationships between tasks, so that, for example, if one task is x number of days late, the project tasks related to it will also reflect a comparable delay. Likewise, the project manager can set milestones, dates by which important aspects of the project need to be met. Define requirements for completing the project. In this stage, the project manager identifies how many people (often referred to as "resources") and how much expense ("cost") is involved in the project, as well as any other requirements that are necessary for completing the project. The project manager will also need to manage assumptions and risks related to the project. The project manager will also want to identify project constraints. Constraints typically relate to schedule, resources, budget, and scope. A change in one constraint will typically affect the other constraints. For example, a budget constraint may affect the number of people who can work on the project, thereby imposing a resource constraint. Likewise, if additional features are added as part of project scope, that could affect scheduling, resources, and budget.

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Sources:http://www.google.co.in/imgres?q=project+management+planning+cycle+diagram&um=1&hl
=en&biw=1280&bih=677&tbm=isch&tbnid=J5mCDQY5RPfmWM:&imgrefurl=http://www.spottydog. unet.com/guides/start/start_pm_flow.html&docid=v6JEJLsVBfULiBG9DRrQfGtICQDw&zoom=1&iact= hc&vpx=1010&vpy=176&dur=1818&hovh=220&hovw=229&tx=156&ty=142&sig=1030260780971519 98339&page=1&tbnh=153&tbnw=151&start=0&ndsp=16&ved=1t:429,r:5,s:0,i:83

5. The next task of the Project Team Leader is to find out appropriate resources required for the implementation of the project. (Match appropriate resources to a project AC - 2.2) A project is successful when the needs of the stakeholders have been met. A stakeholder is anybody directly or indirectly impacted by the project. As a first step, it is important to identify the stakeholders in our project. It is not always easy to identify the stakeholders of a project, particularly those impacted indirectly. Examples of stakeholders are: The project sponsor. The customer who receives the deliverables.

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The users of the project outputs. The project manager and project team. I understand who the stakeholders are; the next step is to find out their needs. The best way to do this is by conducting stakeholder interviews. Take time during the interviews to draw out the true needs that create real benefits. Often stakeholders will talk about needs that aren't relevant and don't deliver benefits. These can be recorded and set as a low priority. The next step, I have conducted all the interviews, and have a comprehensive list of needs is to prioritize them. From the prioritized list, create a set of goals that can be easily measured. A technique for doing this is to review them against the SMART principle. This way it will be easy to know when a goal has been achieved. I have established a clear set of goals; they should be recorded in the project plan. It can be useful to also include the needs and expectations of our stakeholders. This is the most difficult part of the planning process completed. It's time to move on and look at the project deliverables. 6. Cost is a major constraint in implementing any project. As a Team Leader consider all the cost constraints before the actual implementation of the project using appropriate techniques of cost analysis. (Cost all resources required for implementing a project AC - 2.3) Cost-benefit analysis is used by several organizations to assist them to make their selections. Going by this method, I would have to consider all the positive aspects of the project, which is the benefits, and then deduct the negative aspects (or the costs) from the benefits. Based on the results I receive for different projects, I could choose which option would be the most viable and financially rewarding. These benefits and costs need to be carefully considered and quantified in order to arrive at a proper conclusion. Questions that may want to consider asking are in the selection process are: 1. Would this decision help to increase organizational value in the long run? 2. How long will the equipment last for? 3. Would be able to cut down on costs as go along? In addition to these methods, I could also consider Choosing based on opportunity cost - When choosing any project, I would need to keep in mind the profits that would make if we decide to go ahead with the project. Profit optimization is therefore the ultimate goal. I need to consider the difference between the profits of the project I am primarily interested in, and the next best alternative.

7. Another major constraint is Time. Prepare timescales for the implementation of a project. You may use CP Method to estimate the time needed for the completion of the project. (Agree timescales for the management and implementation of a project AC - 2.4) Critical Path Analysis and PERT are powerful tools that help me to schedule and manage complex projects. They were developed in the 1950s to control large defense projects, and have been used routinely since then. Critical Path Analysis (CPA) or the Critical Path Method (CPM) helps to plan all tasks that must be completed as part of a project. They act as the basis both for

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preparation of a schedule, and of resource planning. During management of a project, they allow to monitor achievement of project goals. They help to see where remedial action needs to be taken to get a project back on course. A further benefit of Critical Path Analysis is that it helps to identify the minimum length of time needed to complete a project. Where I need to run an accelerated project, it helps to identify which project steps should accelerate to complete the project within the available time. Critical Path Analysis (CPA) Earliest start Task
A. High level analysis B. Selection of hardware platform C. Installation and commissioning of hardware D. Detailed analysis of core modules E. Detailed analysis of supporting modules F. Programming of core modules G. Programming of supporting modules H. Quality assurance of core modules I. Quality assurance of supporting modules J. Core module training K. Development and QA of accounting reporting L. Development and QA of management reporting M. Development of Management Information System N. Detailed training Week 0 Week 1 Week 1.2

length
1 week 1 day 2 weeks

Type
Sequential Sequential Parallel

Dependent on
A B

Week 1 Week 3 Week 3 Week 5 Week 5 Week 8 Week 6 Week 5 Week 5 Week 6

2 weeks 2 weeks 2 weeks 3 weeks 1 week 1 week 1 day 1 week 1 week 1 week

Sequential Sequential Sequential Sequential Sequential Sequential Parallel Parallel Parallel Sequential

A D D E F G C,H E E L

Week 9

1 week

Sequential

I, J, K, M

8. As a Team Leader of the project, prepare an appropriate strategy for the implementation of the project. (Plan an appropriate strategy for the implementation of a project AC - 2.5) Development and testing With all of the planning and designing complete, Our project team can now start to develop and build the components of the project output whether it's a piece of software, a bridge, or a business process.

As part of this phase, I need to test these components thoroughly to confirm that they work as they should.

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Training and business readiness This stage is all about preparing for the project launch or "go live." The following things during this phase:

Train users. Put in place ongoing support. Transfer data to new systems. Identify what's required for the project to be effective from the launch date, and ensure that I adequately address this.

Support and benefits realization Make sure I provide transitional support to the business after the project is launched, and consider what's required before our team members are reassigned. Project teams are often assigned to other work too soon after the project has gone "live", meaning that project benefits are often not fully realized.

Conclusion In conclusion, I would need to remember that these methods are time-consuming, but are absolutely essential for efficient business planning. It is always best to have a good plan from the inception, with a list of criteria to be considered and goals to be achieved. This will guide me through the entire selection process, and will also ensure that I do make the right choice.

Bibliography 1. http://www.pmi.org/About-Us/About-Us-What-is-Project-Management.aspx(20/9/2012) 2. http://www.jiscinfonet.ac.uk/infokits/project-management(20/9/2012) 3. http://www.tutorialpoint.co/managementconcepts/projectselectiomethod.htm(20/9/2012) 4. http://www.google.co.in/imgres?imgurl=http://mercedesbenzblogphotodb.files.wordpress .com/2009/03/innovative-engines-first-mercedes-knight-developed-in-19096.jpg&imgrefurl=http://mercedes-benz-blog.blogspot.com/2009/03/mercedes-benz-blogtriviainnovative.html&h=793&w=1280&sz=359&tbnid=_8RLxib3Y_bwAM:&tbnh=76&tbn w=122&prev=/search%3Fq%3Dfirst%2Bmercedes%2Bbenz%26tbm%3Disch%26tbo%3 Du&zoom=1&q=first+mercedes+benz&usg=__Zr7kqGdamr1feeaDs6TAdj_95t0=&hl=e n-IN&sa=X&ei=BbheUJ25DIuPrgemjIGIDA&ved=0CEkQ9QEwDA(20/9/2012)