Before initiating a project it becomes important for the project manager to evaluate the available resources and the capability of the acquired human resource in order to ensure that the selected project fits well the skill set of the human resource and the level of competence of the entire team undertaking the project. PMBOK outlines various project selection methods based on time testing and strong logical reasoning. These methods have the potential to help the project manager identify the projects that be highly successful against the projects that can prove to be non desirable and less efficient for the organization. Therefore, it becomes important for the project manager to undertake the assessment of the available projects with the PMBOK tools for minimizing the risk of failure of a project.
The Facebook undertook a lot of projects every year in order to adopt innovative methods for maintaining its attraction among the users. It becomes important for Facebook to keep adopting projects that helps the organization in adopting innovative methods to prove itself better than the other social networking sites. At one time, there are different projects available with the organization that it can implement for maintaining its position in the market. However, the organization cannot implement all the available projects at one time due to limited resources available with the organization. So, it became important for the organization to select one project out of all the available projects. In this process, the organization will try to identify the project that help the organization most in maximising its profitability.
According to PMBOK set of knowledge, the two project selection methods that can be adopted by the project manager include Benefit Measurement Method and Constrained Optimisation Method. According to the study conducted by Conde et al. (2019), it can become time consuming for a project manager to evaluate the efficiency and profitability of the available projects using these methods. However, it becomes important to investigate the profitability in order to draft an effective business plan for the organization. The two available methods can be adopted by the project manager on the basis of the complexity of the project adopted. If the project is small and the level of the complexity is small, the project manager can assess the profitability of the project using Benefit Measurement Model. If the model to be assessed is big and complex, the method of Constrained Optimization Method can be adopted (Zwikael, 2009).
The two financial indicators that are involved in a project include the estimated cash inflow and cash outflow included in the project. Therefore, the first step that was adopted by Facebook in selection of the project was identifying the estimated cash inflow and cash outflow included in each of the project available to the organization (Macek et al., 2010). Based on the present value of cash inflow and cash outflow included in the project, cash benefits associated to each project could be computed which helped the Facebook in identifying that which project will be most profitable for the organization.
Under this method there are various techniques that can be adopted by the project manager including:
Benefit/Cost ratio: The organization needs to undertake various costs for executing a project in the organization. In return of these costs, the organization receives a return from the project (Morris, 2001). The organization can compare the present value of the costs involved and returns estimated from each project in order to select a project that will prove to be most profitable for the organization.
Economic Value Added: It is important that the project undertaken in an organization should create economic value for the organization. A certain amount of capital expenditure is involved in a project that is considered to be a direct cost for the organization (Chin et al., 2010). Therefore, efficiency of a project can be computed by deducting the capital expenditure and taxes from the net profit that can be earned by the organization from each project.
Scoring method: Another technique that can be used by the organization for evaluating the profitability of a project is scoring method. A criterion can be developed by the organization on the basis of the objectives and requirements of the organization. Based upon the criterion created, the suitability of the project can be assessed.
However, the project options that were available with the Facebook were big and complex therefore, the above methods could not be applied in order to estimate the profitability of the projects. The Facebook adopted the second method ie The Constrained Optimization Method for assessing the suitability of the project (Bayona et al., 2018). The organization gave importance to the non financial considerations for assessing the value of the project for the organization. Each project was assessed on the basis of the organizational goals and objectives. It was analysed that whether a particular project aligned with the goals and objectives of the organization. The project that most aligned with the organizational goals and objectives was selected and initiated in the organization.
According to the PMBOK guide, the task of the project manager does not ends at selecting the appropriate project for the organization, effectively initiating and implementing the project is also an important component of project management (Ghosh et al., 2012). The underlying goals and objectives of the project and the financial resources required to work on those goals need to be identified. The Initiating Process Group defines the steps and the components to be adopted for effectively initiating the project in the organization. The first component of the initiation process group is developing a process charter.
The process charter helps in defining the expectations from the project. The confined boundaries along with the objectives of the project are clearly defined in the process charter. It also needs to be made sure by the project manager that these expectations outlined are clearly communicated to the main stakeholders of the project (Link et al., 2017). Effective communication methods are to be adopted in order to ensure the effective continuation of the project which will eventually have a positive impact on the profitability of the project.
Another important component of the process charter that can be adopted by the project manager can be Gantt chart that with highlight the timeframes within which the tasks will be completed underlying the project undertaken by the organization. Benchmarking method can also be adopted by the project manager in order to ensure that successful completion of every stage highlighted in the Gantt Chart. However, it is also important that before the delivery of the project charter to the project team members the project charter should be approved.
The other Project Initiation Documents required apart from Project Charter include The Business Case, Stakeholder Communication Plan and The Risk Management Procedure to be adopted by the organization (Reich & Wee, 2006). The business case will highlight the project scenario along with the project methodology that will be adopted for completing the project. It will also highlight the areas on which main emphasis will be delivered in order to increase the overall efficiency of the project in order to make the project further more profitable for the organization. The project manager also need to draft a communication plan document that will define the communication strategies that will be adopted for informing the important information about the project to the main stakeholders involved in the project (El Yamami et al., 2018).
The project manager needs to come up with innovative communication strategies for ensuring regular communication with the important stakeholders. A risk register is also to be maintained in order to identify the possible and identified risks that can be witnessed by the organization while undertaking the project. It becomes important to draft possible risk mitigation strategies for preparing the organization for effectively witnessing the possible risks that can be configured by the organization. It is also important to develop both precautionary and preventive measures for each identified risk in order to control the possibility of risk actually taking place (Rehacek, 2014).
Before the initiation of the project, financial documents should also be prepared in order to estimate the cash inflows and outflows that can take place in the process of completing the project. This estimation is important in order to take into account the budgetary constraints if faced by the organization (Globerson & Zwikael, 2002).
It can be concluded from the above discussion that PMBOK guidelines can assist the project managers in the process of project selection and initiation process in the organization. The organization cam adopt the project selection method based upon the complexity of the projects. In the modern world, where the complexity of the projects are high Constrained Optimisation Method has huge applicability in assessing the suitability of the project for the organization. Unlike the other methods, this method help in assessing the alignment between the project and the goals and objectives of the organization.
There are various initiation project documents required by an organization including A Process Charter, Communication Plan, Financial Considerations and a Risk Register. All these documents will help in defining the exact expectations from the project along with the budgetary constrains to be taken of. It will also help in identifying and developing control measures for the risks that can be witnessed by the organization while implementing the project.
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