Personal or leadership Standing up for beliefs, along with interpersonal skills and charisma to inspire/motivate. “I’ll go with you to talk to the sponsor. I’m sure we can get her to approve more resources.” Positional Power that comes from one’s position in the organization — what we mean by “authority.” “For better or worse, I’m the sponsor and this is the budget I’ve approved.” Typical Project Concept Checklist Ideas for projects should be encouraged and such ideas aren’t necessarily in origin. A checklist such as shown here is a useful tool to quickly identify suitable ideas and cull the duds. No pointing in pursuing suggestions for projects that are clearly unsuitable and fail to meet initial acceptance criteria. Prepared By: Date: Version Number: Project idea or request is: ____________________________________________ Acceptance Criteria Response Remarks Is the project idea or request in harmony with our organisations: Our business purpose / mission? Our principles and values? Our strategic Our existing programmes and projects? Our existing policies and protocols? Circle appropriate response: Yes / No / Unsure Yes / No / Unsure Yes / No / Unsure Yes / No / Unsure Yes / No / Unsure Is it a sustainable development? Yes / No / Unsure
approximate time in months to the financial breakeven point (BEP) return on investment (%) after five years (see formula below). Year Benefits (savings / returns) Costs (investment / expenses) Annual Balance (b-c) Running Balance (a) (b) (c) (d) (e) One 1400 x $50 = $70,000 Year One expenses: Two $70,000 Year Two Expenses: Three $70,000 Four $70,000 Five $70,000 Totals $350,000 Document your key assumptions and identify any additional benefits and costs (quantitative and qualitative) that might also be considered. ROI = (Net Return - Investment) x 100 Investment Net Present Value (NPV)
Financial Considerations Net present value Payback period Cost benefit ratio Category weight by project 30% 40% 20% 40% 80 75 20 55 25 30 75 46 75 75 50 65 Market Considerations Competition Penetration Market share New markets Category weight by project 30% 25% 25% 25% 25% 20 65 60 0 36.25 90 80 85 95 87.5 60 10 10 0 20 Qualitative Factors Synergies with projects Future leverage Strong internal support Category weight by project 15% 50% 20% 30% 20 50 35 30.25 0 75 80 39 80 80 80 80 Project Factors Resource skills Resource availability Technology availability Risk level Dependencies other projects Operational support Category weight by project 25% 20% 25% 25% 10% 10% 10% 80 80 80 70 10 65 70.5 15 20 20 20 15 10 17.5 90 60 100 90 90 100 8.6 Summary Financial score Market score Qualitative score Project score Scores 30% 30% 15% 25% 16.5 10.875 4.575 17.625 49.575 13.8 26.25 5.85 4.4 50.3 19.5 6.0 12.0 21.5 59 Project Selection Exercise Complete the following project selection score sheet, which identifies financial selection criteria, shows the relative importance of each criterion by weight, and includes the selection team’s probability distribution for the prospective project’s
Costs 2,500.00 15,850.00 64,620.00 27,400.00 24,250.00 Net -2,500.00 -2,850.00 5,380.00 43,600.00 56,750.00 Cumulative -2,500.00 -5,350.00 30.00 43,630.00 100,380.00 Discount Factor 8% 1.0000 0.9259 0.8573 0.7938 0.7350 Discounted Net -2,500.00 -2,638.82 4,612.27 34,609.68 41,711.25 Net Present -2,500.00 -5,138.82 -526.55 34,083.13 75,794.38 Cost Benefit Analysis Solution Year Benefits (savings/ returns) Costs (investment/ expenses) Annual Balance (b-c) Running Balance (a) (b) (c) (d) (e) One $1400 x 50 = $70,000 $8,000 $58,000 $8,000 $2,000 $6,000 $82,000 ($12,000) ($12,000) Two $70,000 $58,000 $2,000 $6,000 $66,000 $4,000 ($8,000) Three $70,000 $66,000 $4,000 ($4,000)
INSTRUCTION Please circle the number that best describes how you feel about the following statements. Not Applicable Strongly Disagree Disagree Undecided Agree Strongly Agree 2. 3. 4. 5. 6. Strategic Fit/Goal Congruence My organisation has a clearly communicated and compelling vision of its future. My organisation has a clearly communicated target culture and published core values. My organisation has clearly communicated and unambiguous strategic goals. My team's objectives are clearly related to my organisation's strategic direction. My performance objectives are clearly related to my team's objectives. Comments: 0 0 0 0 0 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 7. Performance Objectives My performance objectives meet the following criteria: They are and specific. They are measurable. They possess a target date. They are documented. They are prioritised. Other (specify): 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5 INSTRUCTION Please circle the number that best describes how you feel the Not Applicable Strongly Disagree Disagree Undecided Strongly Agree
following statements. 8. 9. 10. Performance Objectives Cont…. I have significant say in the formulation of my performance objectives. The appropriateness of my performance objectives is regularly reviewed. I have sufficient authority and resources to achieve my performance objectives. Comments: 0 0 0 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 11. 12. 13. 14. 15. Performance Measurement I have significant say in how my performance will be measured. Emphasis is on measurable standards, but not exclusively so. Most factors which influence my performance are within my control. My performance is assessed by: My manager. My peers. My customers/clients. My immediate reports. Other (specify): My organisation's performance management system includes Comments: 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5
INSTRUCTION Please circle the number that best describes how you feel about the following statements. Not Applicable Strongly Disagree Disagree Undecided Agree Strongly 16. 17. 18. Performance Feedback The principle of "no surprises" applies to my organisation's performance management system. The feedback I receive my performance is: Specific. Balanced. Frequent. Clear. Accurate. Timely. Useful. Honest. My manager and I discuss my performance formally at least: Once each year. Twice each year. times each year. More than three times each year. I'm content with this frequency. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5
22. 23. 24. 25. 26. I believe people should be paid according to how well they perform. Improved performance is rewarded in my organisation. is a direct link between my performance and what I am paid. My contribution to my team's objectives is recognised and rewarded. My organisation is trying to improve the way it rewards performance. Comments: 0 0 0 0 0 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 27. 28. 29. 30. Training and Development The person or people who appraise my performance are well trained to do so. People in my organisation are well trained in performance management skills. An important outcome of performance appraisal in my organisation is the identification of training and development needs and opportunities. My career development needs are discussed and catered for. 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 31. Other Matters I have confidence in the way my performance is assessed. 0 1 2 3 4 5
newspaper cuttings trophies and awards personal clothing and footware toothpicks teddy bear Playboy / Playgirl binoculars pen knife Koran cocaine for personal use only Solution – NPV Exercise Year Estimated Cashflow ($K) Discount Factor Net Present Value Positive Negative Net 0 1 2 3 4 5 6 7 8 9 10 11 0 0 0 50 120 115 105 97 90 82 65 35 125 100 90 0 15 0 15 0 15 0 0 0 -125 -100 -90 +50 +105 +115 +90 +97 +75 +82 +65 +35 1.000 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.2875 -125 -89.29 -71.75 35.59 66.73 65.25 45.59 43.87 30.29 29.57 20.93 10.06 Totals 61.84