How to Start a Project?
Project Initiation may apply on a new project, or as a next phase of an existing project. It includes that how should begin, and resources should be committed to the project. A project may be due to a demand, opportunity, problem or need. Once those demands or needs are identified, the next step may include performing a feasibility study, to find the viability of that project.
Project Initiation – An Overview:
The business might drive the need for a project, customers might demand changes to products, or legal requirements might create the need for a new project. According to the PMBOK® Guide, projects come about as a result of one of seven needs or demands. Once those needs and demands are identified, the next logical step might include performing a feasibility study to determine the viability of the project.
Needs and Demands for Project Initiation:
Before understanding that how to start a project, it is important to know the needs and demands required for project initiation. Needs and demands represent opportunities, business requirements, or problems that need to be solved. Management must decide how to respond to these needs and demands, which will more often than not initiate new projects. According to the PMBOK® Guide, projects come about as a result of one of the following seven needs or demands:
- Market Demand.
- Strategic Opportunity/Business Need.
- Customer Request.
- Technological Advance.
- Legal Requirement.
- Ecological Impact.
- Social Need.
The demands of the marketplace can drive the need for a project. For example, project initiation in a bank to offer customers the ability to apply for mortgage loans over the Internet because of a drop in interest rates and an increase in demand for refinancing and new home loans.
Strategic opportunity/Business Need:
An organization may respond to an internal need that could eventually affect the bottom line. For example, this may include addressing company growth, or even the need to downsize.
Customer requests run the gamut. Generally speaking, most companies have customers, and their requests can drive new projects. Customers can be internal or external to the organization.
New technology often requires companies to revamp their products as a way of taking advantage of the latest technology. The introduction of satellite communications is an example of a technological advance. Because of this introduction, cell phone manufacturers revamped their products to take advantage of this new technology.
Both private industry and government agencies generate new projects as a result of laws passed during every legislative season.
Many organizations today are undergoing a “greening” effort to reduce energy consumption, save fuel, reduce their carbon footprint, and so on. These are examples of ecological impacts that result in projects.
The last need is a result of social demands. For example, manufacturing or processing plants that voluntarily remove their waste products from water prior to putting the water back into a local river or stream to prevent contamination.
All of these needs and demands represent opportunities, business requirements, or problems that need to be solved. Management must decide how to respond to these needs and demands, which will more often than not new project initiation.
How to Start a Project? – Feasibility Study:
Some organizations require that a feasibility study take place prior to making a final decision about starting a project. Feasibility studies may be conducted as separate projects, subprojects, or as the first phase of a project.
Feasibility studies might be conducted as separate projects, as subprojects, or as the first phase of a project. When you don’t know the outcome of the study, it’s best to treat it as a separate project. The group of people conducting the feasibility study should not be the same people who will work on the project. Project team members might have built-in biases toward the project and will tend to influence the feasibility outcome toward those biases.
Project Selection Methods:
There are a variety of selection methods an organization may choose to utilize. Selection methods help organizations decide among alternative projects and determine the tangible benefits to the company of choosing or not choosing a project. Project selection methods are also used to evaluate and choose between alternative ways to implement the project.
There are generally two categories of selection methods:
- Mathematical Models (also known as constrained optimization methods).
- Benefit Measurement Methods (also known as decision models).
Decision models examine different criteria used in making decisions regarding project selection, while calculation methods provide a way to calculate the value of the project, which is then used in project selection decision making.
Mathematical models, also known as constrained optimization methods uses linear, dynamic, integer, nonlinear, and/or multi-objective programming in the form of algorithms—or in other words, a specific set of steps to solve a particular problem. These are complicated mathematical formulas and algorithms that are beyond the scope of this course and require an engineering, statistical, or mathematical background to fully understand. Organizations considering undertaking projects of enormous complexity might use mathematical modeling techniques to make decisions regarding these projects. The vast majority of project selection techniques will use the benefit measurement methods to make project selection decisions.
Benefit Measurement Methods:
Benefit measurement methods employ various forms of analysis and comparative approaches to make project decisions. These methods include comparative approaches such as cost-benefit analysis, scoring models, and benefit contribution methods that include various cash flow techniques and economic models.
One common benefit measurement method is the cost-benefit analysis. The name of this method implies what it does—it compares the cost to produce the product, service, or result of the project to the benefit (usually financial in the form of savings or revenue generation) that the organization will receive as a result of executing the project. Obviously, a sound project choice is one where the costs to implement or produce the product of the project are less than the financial benefits. How much less is the organization’s decision? Some companies are comfortable with a small margin, while others are comfortable with a much larger margin between the two figures.
Another project selection technique in the benefit measurement category is a scoring model, or weighted scoring model. Many organization uses weighted scoring models not only to choose between projects but also as a method to choose between competing bids on outsourced projects.
Weighted scoring models are quite simple. The project selection committee decides on the criteria that will be used on the scoring model—for example, profit potential, marketability of the product or service, ability of the company to quickly and easily produce the product or service, and so on. Each of these criteria is assigned a weight depending on its importance to the project committee. More important criteria should carry a higher weight than less important criteria.
Then each project is rated on a scale from 1 to 5 (or some such assignment), with the higher number being the more desirable outcome to the company and the lower number having the opposite effect. This rating is then multiplied by the weight of the criteria factor and added to other weighted criteria scores for a total weighted score. The project with the highest overall weighted score is the best choice.
Noted: This lectures is designed by AIMS, and it is a part of online project management certification and mba project management online programs.