In a for-profit business, projects must increase stakeholder satisfaction to a level that produces sales, provides positive cash flow and pays back the cost of the project, at least at a rate equal to the cost of capital originally employed in the project. This requires project team members to act as entrepreneurs making decisions as if they owned the project. They must align the project with their business unit s current strategies and they must execute the project according to the approved baseline. Lastly, the project team must transition the project into the next phase. In many projects, this involves sustaining the product or service after the conclusion of the initial project.
Project managers have numerous measurements to track the economic return of a project.
For future periods, we use Present Value the future value of money to calculate the inflows and the outflows resulting in Net Present Value. A simplified definition of EVA is that it measures the return generated, minus the cost of capital used to generate that return. The main issue is to add value to the business unit above the available competing alternatives. All of these musts referenced above are relatively new concepts in project management. It has been said that success is defined in the eye of the stakeholder.