Chapter 5: Product Conceptualization and Definition

1. Chapter 5: Product Conceptualization and Definition James R. Burns

2. You have been assigned the following HW • Burns EX. 1-7, 1-9, 1-22, p. 28 • Schwalbe Ex 1-8, Ex 1-9 • Burns EX. 2-6, 2-20, pgs. 25-27 • Burns EX 3-3, 3-9, 3-11, pg. 31 • Burns Ch. Five, Ex. 5-6, 5-18, 5-20, pgs. 34-39 • Requirements Scrubbing Spreadsheet • Burns 6-10, 6-12, pgs. 27-28 • Homework Set 1 is due Thursday, February 9

3. Homework: • Done individually • Due February 9, 2017 • One week from today • Turn-in hardcopy in class

4. Plan for Today • Recitation • THE FIVE PHASES OF THE PM LIFECYCLE • Who can name these? • REVIEW: Functions/Tasks/Competencies/ Skills of…the Project Manager • Name three….name three more • Chapter 5—Burns • Strategy & Portfolio Management

5. Recitation • THE FIVE PHASES OF THE PM LIFECYCLE • Who can name these? • REVIEW: Functions/Tasks/Competencies/ Skills of…the Project Manager • Name three….name three more • Name three organizational structure types • Discuss what corporate cultures are most conducive to project management

6. PMBOK’s Five Phases • Initiating • Planning • Part 1: Product Conceptualization and Definition • Part 2: Project Planning and Budgeting • Executing • Monitoring and Controlling • Closing

7. Product Conceptualization and Definition is about… • SCOPE • As determined by.. • The requirements doc • A description of scope • The WBS – Work Breakdown Structure • A delineation of scope

8. Functions, Tasks, Expectations of the IT Project Manager • (coach, mentor, leader, negotiator, assessor, informer, motivator, delegator) • Selects project leader, team leader, subordinates • Works hardest during the initiating and planning stages • Assesses progress during execution and reports on that • Negotiates with line managers for required human resources Texas Tech University -- J. R. Burns

9. Expectations of the IT Project Manager • Interfaces with customer, upper management on behalf of team • Negotiates with upper management and customer • Keeps everybody informed Texas Tech University -- J. R. Burns

10. More Expectations of theIT Project Manager • Is a positive leader, motivator, coach • Knows how to use PM software • Knows the technologies employed well • Must re-plan the remainder of the project after the completion of each deliverable, each phase Texas Tech University -- J. R. Burns

11. Skills, Competencies of the PM • Leadership—articulate the vision and hold everyone accountable to it • Delegation competencies • An ability to develop people • Communication competencies • Interpersonal competencies • Able to handle stress • Problem solving skills • Time management skills • Negotiation skills Texas Tech University -- J. R. Burns

12. Recall the Large Project Hierarchy Project Manager Project Leader Team Leader 1 Team Leader 2 Developer 1 Developer 2 Developer 3 Developer 4 Developer 5 Developer 6 Developer 7 Developer 8 Developer N Texas Tech University -- J. R. Burns

13. Chapter 5 Outline • Project Portfolio Management • The First Part • Using a SOW • Defining Project Boundaries/Scope • Why getting this right is so important • The Use of Surveys and Interviews • Definition of Deliverables and Due Dates • Managing Stakeholder Expectations

14. Benefits of Project Portfolio Management • Builds discipline into the project selection process. • Links project selection to strategic metrics. • Prioritizes project proposals across a common set of criteria, rather than on politics or emotion. • Allocates resources to projects that align with strategic direction. • Balances risk across all projects. • Justifies killing projects that do not support strategy. • Improves communication and supports agreement on project goals. EXHIBIT 2.2

15. A Portfolio Management System • Design of a project portfolio system: • Classification of a project • Selection criteria depending upon classification • Sources of proposals • Evaluating proposals • Managing the portfolio of projects.

16. Portfolio of Projects by Type

17. A Portfolio Management System • Selection Criteria • Financial: payback, net present value (NPV), internal rate of return (IRR) • Non-financial: projects of strategic importance to the firm. • Multi-Weighted Scoring Models • Use several weighted selection criteria to evaluate project proposals.

18. Financial Models • The Payback Model • Measures the time the project will take to recover the project investment. • Uses more desirable shorter paybacks. • Emphasizes cash flows, a key factor in business. • Limitations of Payback: • Ignores the time value of money. • Assumes cash inflows for the investment period (and not beyond). • Does not consider profitability.

19. Financial Models (cont’d) • The Net Present Value (NPV) model • Uses management’s minimum desired rate-of-return (discount rate) to compute the present value of all net cash inflows. • Positive NPV: project meets minimum desired rate of return and is eligible for further consideration. • Negative NPV: project is rejected.

20. Example Comparing Two ProjectsUsing Payback Method

21. Example Comparing Two Projects Using Net Present Value Method

22. Nonfinancial Strategic Criteria • To capture larger market share • To make it difficult for competitors to enter the market • To develop an enabler product, which by its introduction will increase sales in more profitable products • To develop core technology that will be used in next-generation products • To reduce dependency on unreliable suppliers • To prevent government intervention and regulation

23. Multi-Criteria Selection Models • Checklist Model • Uses a list of questions to review potential projects and to determine their acceptance or rejection. • Fails to answer the relative importance or value of a potential project and doesn’t allow for comparison with other potential projects. • Multi-Weighted Scoring Model • Uses several weighted qualitative and/or quantitative selection criteria to evaluate project proposals. • Allows for comparison of projects with other potential projects

24. Sample Selection Questions Used in Practice

25. Sample Selection Questions Used in Practice

26. Project Screening Matrix

27. Applying a Selection Model • Project Classification—compliance, operational, strategic • Deciding how well a strategic or operations project fits the organization’s strategy. • Selecting a Model • Applying a weighted scoring model to bring projects to closer with the organization’s strategic goals. • Reduces the number of wasteful projects • Helps identify proper goals for projects • Helps everyone involved understand how and why a project is selected

28. Project Proposals • Sources and Solicitation of Project Proposals • Within the organization • Request for proposal (RFP) from external sources (contractors and vendors) • Ranking Proposals and Selection of Projects • Prioritizing requires discipline, accountability, responsibility, constraints, reduced flexibility, and loss of power. • Managing the Portfolio • Senior management input • The priority team (project office) responsibilities

29. A Proposal Form for an Automatic vehicular tracking (AVL) PublicTransportation Project

30. The PLANNING Phase • Analogous to a missile or rocket • If the launch is “bad,” the project may have to be killed • Just as a rocket that misfires must be detonated

31. Deliverables • Initiating--Project stakeholders -- • Initiating--Project charter • Other Project deliverablesat this point in time • Planning--Requirements document (the main deliverable) • Planning--Project team members

32. Project Stakeholders • This group must be molded into one in which there is a lot of cohesion • If you can’t get cohesion, then you may have to settle for a plurality or majority rule • If is most important that everyone knows up front what this project is about • Stakeholders who don’t get what they want from the project need to know this up front

33. Cohesion and Consensus • You’ve got to have this prior to execution or you’ll never get it later on

34. Requirements document • What the problem is • What functionality is needed • What outputs • What inputs • What performance • What reliability

35. What kind of meeting is appropriate to begin discussions? • A Joint Requirements Definition Session, also known as a JAD Session • To create a strongly held shared vision of what the project is all about • To hammer out a REQUIREMENTS DOCUMENT

36. JAD and JRD Sessions • They commit top executives to the software planning process • They shorten the requirements-specification phase • They eliminate features of questionable value • They help to get requirements right the first time • They help to get the user interface right the first time • They reduce organizational infighting

37. Project Charter • Template appears in Chapter 5 • Advantage here is that the rules are made explicit from the outset • Helps remind the PM and team what the goals/objectives are • ANNOUNCES THE PROJECT

38. What does the Project Charter announce? • Project • Project manager • Project stakeholders • Project scope (Rough cut) • Project deliverables • Project assumptions • Project rules/processes • Project governance

39. Methodology for Facilitation of a Requirements Planning Session • How to determine requirements • SWOT Analysis/Brainstorming/Brain-writing • Quality Function Deployment • You should have seen this in your ISQS 3344 class. • GoldrattThinking Process

40. 5 Importance Trade-off matrix 3 Design characteristics 1 4 2 Customer requirements Relationship matrix Competitive assessment 6 Target values House of Quality

41. Competitive Assessment Customer Requirements 1 2 3 4 5 Presses quickly 9 B A X Removes wrinkles 8 AB X Doesn’t stick to fabric 6 X BA Provides enough steam 8 AB X Doesn’t spot fabric 6 X AB Doesn’t scorch fabric 9 A XB Heats quickly 6 X B A Automatic shut-off 3 ABX Quick cool-down 3 X A B Doesn’t break when dropped 5 AB X Doesn’t burn when touched 5 AB X Not too heavy 8 X A B Irons well Easy and safe to use House of Quality

42. Energy needed to press Weight of iron Size of soleplate Thickness of soleplate Material used in soleplate Number of holes Size of holes Flow of water from holes Time required to reach 450º F Time to go from 450º to 100º Protective cover for soleplate Automatic shutoff Customer Requirements Presses quickly - - + + + - Removes wrinkles + + + + + Doesn’t stick to fabric - + + + + Provides enough steam + + + + Doesn’t spot fabric + - - - Doesn’t scorch fabric + + + - + Heats quickly - - + - Automatic shut-off + Quick cool-down - - + + Doesn’t break when dropped + + + + Doesn’t burn when touched + + + + Not too heavy + - - - + - Irons well Easy and safe to use House of Quality

43. - - Energy needed to press Weight of iron Size of soleplate Thickness of soleplate Material used in soleplate Number of holes Size of holes Flow of water from holes Time required to reach 450º Time to go from 450º to 100º Protective cover for soleplate Automatic shutoff + + + House of Quality

44. Energy needed to press Weight of iron Size of soleplate Thickness of soleplate Material used in soleplate Number of holes Size of holes Flow of water from holes Time required to reach 450º Time to go from 450º to 100º Protective cover for soleplate Automatic shutoff Units of measure ft-lb lb in. cm ty ea mm oz/s sec sec Y/N Y/N Iron A 3 1.4 8x4 2 SS 27 15 0.5 45 500 N Y Iron B 4 1.2 8x4 1 MG 27 15 0.3 35 350 N Y Our Iron (X) 2 1.7 9x5 4 T 35 15 0.7 50 600 N Y Estimated impact 3 4 4 4 5 4 3 2 5 5 3 0 Estimated cost 3 3 3 3 4 3 3 3 4 4 5 2 Targets 1.2 8x5 3 SS 30 30 500 Design changes * * * * * * * Objective measures House of Quality

45. House of Quality

46. Goldratt Thinking Process—Three steps • What to Change • What to Change to • How to Cause the Change

47. What to Change • Let’s talk about the problems with mainframe/glass house architecture • Data were isolated/non integrated • Corporate visibility was impossible • Centralized MIS shop had long lead times • Like 36 months for maintenance work on legacy apps • MIPS on mainframes were expensive and very much in demand • MIPS in PC were dirt cheap and idle most of the time