Net Present Value (NPV) is the current worth of an income stream in today's currency. It is used to make a decision to proceed with an expenditure, for example: The construction of a new building Proceeding with a new business line Purchase of equipment Net Present value takes into account the time value of money. It uses a discount rate to convert future … [Read more...]
Some projects are considered successes even though they did some things I'd probably lose my career over. And others are considered horrible failures even though I could probably find a way to navigate through their issues. It's almost like there's a certain element of human interaction that all of the project methodologies in the world can't put into neat boxes and … [Read more...]
The project sponsor is a very important part of the project management organizational chart. In fact, every project has a sponsor. The project sponsor is one, and only one, level above the project manager. They do not manage the day to day operations of the project but they ensure the resources are in place, promote the project, and hold overall responsibility for the … [Read more...]
Like many things in life, project management is an art form as well as a science. But fortunately, a strong knowledge of the science helps you practice the art form with more skill. Although some people are naturally good at the art of project management, I believe that anyone can become a great project manager simply by learning and implementing the fundamentals of … [Read more...]
Like termites that build their invisible kingdoms secretly and slowly, projects have a similar parasite that grows under the surface until it suddenly exposes itself with disastrous consequences. It's called scope creep, and it has eaten many projects alive. Scope creep is the unauthorized addition of tasks into a project. If the project manager is not on the lookout, … [Read more...]
Generally speaking, the scope of a project should not change. However, in the real world scope change is difficult to eliminate altogether. Inevitably the presence of many interrelated moving parts means that the initial project estimate and the final project cost (or deadline) are rarely the same. Scope change can be authorized or unauthorized. The latter is often … [Read more...]
In 1986, the NASA Space Shuttle Challenger exploded spectacularly upon take-off in front of one of the largest live TV audiences in history (to that time). The investigation concluded that several tiny O-rings that sealed the rocket booster to the fuel supply failed. These O-rings were about 1 foot in diameter. Just like the tiny O-rings were able to bring down the … [Read more...]
I once experienced a project horror story whereby a piece of equipment was snowed in at a previous project, delaying the project by several weeks until a transport vehicle could get to the stranded machine. Since there are relatively few of these around, the project either had to wait or additional costs had to be incurred to procure another one. Managing these types … [Read more...]
Six Sigma was a powerful quality improvement system developed by Motorola that took the world by storm in the early 2000's with high profile adoptions by General Electric, Honeywell, and others. Lean was a manufacturing methodology originated by Toyota, which turned manufacturing on its head by focusing on minimizing idling products (inventory) rather than minimizing … [Read more...]
If there's one part of project management that's bigger than all the rest, it's project scheduling. Since a project is defined as a temporary endeavor with a distinct beginning and end, defining when that end takes place and making sure it finishes on time are extremely important to any project, large or small. Professional project managers look at the schedule every … [Read more...]
