The Business Savvy Project Manager by Heerkens, Gary;

Short description:

Integrate the business needs and goals of your organization into every project decision you make

A well-managed project is a fundamental building block of business growth, and the project manager is the driver of that growth. The Business-Savvy Project Manager provides you with the concepts, principles, and tools you need to implement and lead projects that will consistently provide shareholders with superior return on investment.

This step-by-step guidebook, filled with examples of project management success and failure, shows you how to become an accomplished project leader who can:

• Identify the most essential initiatives that must be addressed in your firm, helping prevent the cost and waste of pursuing low-priority projects
• Propose, manage, and report on projects based on concerns that matter to your senior executives, from increasing cash flows to minimizing financial risk
• Structure and perform a convincing, project-specific financial analysis that details the amount of wealth generated, or net present value, of the project

The long-term success of an organization is based on the quality and execution of its projects. The Business-Savvy Project Manager walks you through the steps of a successful project, explaining what you must do to make each project successful from a business, as opposed to a technical, perspective.

Achieve full economic and operational success with each project

A project is much more than just a logistical exercise in staying on time and within budget. It is, in fact, a business imperative, a major financial investment with goals that must be successfully achieved if an enterprise is to remain competitively viable.

The Business-Savvy Project Manager is your guide to designing and managing projects that make meaningful, positive economic contributions to your organization. From the big-picture fundamentals of finance, accounting, and organizational management to focused techniques for designing effective projects, keeping them financially sound, and pulling long-term economic value from their results, this bottom line?driven book will supply you with the managerial knowledge and insights you need to:

• Prepare and present a compelling business case that convinces decision makers of the merits of committing company money to a project
• Apply risk management tools and techniques to the entire project life cycle, including incorporating risk analysis as a key component of project selection and oversight
• Create a cash flow chart that identifies and models the relevant cash inflows and outflows to assess your project?s financial strength
• Verify that projects integrate well with your organization?s overall project investment portfolio
• Conduct post-project audits that examine the actual results of projects after completion and indicate ways to improve the overall project process

At root, businesses are meant to produce positive cash flow for their investors, and projects are meant to help businesses achieve that financial objective. The problem is, many organizations lose sight of business goals, judging the success or failure of critical projects more on the technical aspects of staying within budgeted time and cost constraints, rather than on the real-world aspects of economic value provided.

The Business-Savvy Project Manager shows you how to combine the two ideas into a results-driven, innovative, and economically productive approach to managing and measuring each project, based on its success at achieving business goals. Whether you are a practicing project manager or an organizational manager charged with conceiving and designing projects, it will show you how to increase overall cash flow, and gain full economic value, from each project you pursue.

Long description:

Valuable business skills from a leading project management expert

To make the leap from average to superior, you must develop the skills to manage each project like a small business. The Business-Savvy Project Manager thoroughly explains key concepts, principles, and tools for project managers to provide organizations with superior return-oninvestment and top performance. From portfolio management and strategic alignment to calculation of economic metrics and effective use of both financial and nonfinancial criteria in project proposals, it gives you the business savvy for top-level performance and certain career success.

Valuable business skills from a leading project management expert

To make the leap from average to superior, you must develop the skills to manage each project like a small business. The Business-Savvy Project Manager thoroughly explains key concepts, principles, and tools for project managers to provide organizations with superior return-oninvestment and top performance. From portfolio management and strategic alignment to calculation of economic metrics and effective use of both financial and nonfinancial criteria in project proposals, it gives you the business savvy for top-level performance and certain career success.

Table of Contents:

Introduction
Permissions
Part One Building Foundational Knowledge
Chapter 1 Project Management as a Business Function
A Few Revelations as We Begin?
The Landscape of Project Management Is Changing
How Expectations of Projects Are Changing
How Expectations of Project Managers Are Changing
How the Definition of Project Success Is Changing
Some Other Significant Changes
Adopting a Total Asset Life Cycle Focus
So?How Are Projects Connected to the ?Bottom Line,? Anyway?
Chapter 2 The Core of Business Knowledge: Finance and Accounting
Finance: The Basics
What Is Financial Management?
How Are Projects Financed?
The Weighted Average Cost of Capital
The Cash Management Cycle
Accounting: The Basics
What is GAAP?
Measuring Financial Health: The Balance Sheet
Measuring Profit: The Income Statement
Measuring the Way Money Moves: The Cash Flow Statement
Making Sense of Financial Statements by Using Ratio Analysis
Financial Accounting versus Managerial Accounting
Chapter 3 Fundamentals of Organizational Management
What Is Organizational Management?
Historical Perspectives
Sound Organizational Management through Sound Organizational Planning
Elements of Strategic Planning
Primary Competitive Strategy
Situation Analysis
Elements of Tactical Planning
Competitive Advantage
Structural Design
Elements of Operational Planning
Overarching Linkages in Organizational Planning
Information Management Configuration
Business Process Management
The Value Chain of Business Functions
How Organizations Improve their Business Processes
Chapter 4 Cost Management in Organizations
Organizational Budgeting and Control
The Basic Process of Budgeting
The Master Budget
Relating the Master Budget to Projects
The Responsibility Center: Concept and Practice
About Cost Accounting Systems
Fixed Costs, Variable Costs, and Mixed Costs
Costs Related to Management and Operations
Costs Related to Quality Management
Costs Related to Buying and Selling
Costs Related to Project Economics
Part Two Applying Sound Business Practices at the Enterprise Level
Chapter 5 Project Portfolio Management, Phase I: Identifying the ?Right? Business Initiatives
About the Process of Capital Budgeting
Project Portfolio Management: Moving in the Direction of Business
The Benefits of Using a Project Portfolio Management Approach
Guiding Principles of the Project Portfolio Management Approach
The Basic Building Blocks of the Project Portfolio Management Processes
Project Portfolio Management: A Three-Phase Process
Project Portfolio Management: Step by Step
Phase I: Identifying, Quantifying, and Financing the Right Business Initiatives
The Start of Portfolio Development: Identifying Long-Range Goals
Identifying Quantified Business Initiatives (Strategic and Operational)
Establishing a Project Financing Strategy
How Can You Be Sure You Have a Sound Approach to Identifying the ?Right? Initiatives?
The Biggest Challenge in Identifying the ?Right? Initiatives: Knowing When to Stop
Chapter 6 Project Portfolio Management, Phase II: Identifying, Categorizing, and Prioritizing Project Solutions
Identifying Solutions to Address Business Initiatives
Introduction to the Alternative Identification and Analysis Process
Alternative Identification and Analysis: Step by Step
Configuring the Portfolio Categories
Prioritizing Projects within Portfolio Categories: Why and How
An Overview of the Attribute Scoring Methodology
Putting It All Together: The Weighted Factor Scoring Matrix
Chapter 7 Project Portfolio Management, Phase III: Selecting, Launching, and Coordinating Projects
The Project Listing Process: A Review
Selecting the Best Projects and Constructing the Final Portfolio Listing
Understanding the Difference between Justification, Selection, and Authorization
Avoiding the ?Selected, but Not Justified? Syndrome
Applying Project Screening Techniques
Guidelines for Administering an Effective Project Prioritization Process
Knowing Where to ?Draw the Line: It?s All about Limitations
Conducting a Final Portfolio Review
Developing a Project Launch Sequence
Considerations During Project Initiation
Conduct Post-Project (and Portfolio) Audits
Part Three Applying Sound Business Practices at the Project Level
Chapter 8 Project Economics, Part I: Foundational Principles
The Time Value of Money
Future Value and Compounding
Present Value and Discounting
Three Methods for Calculating the Time Value of Money
Rate of Return: The Basics
Discounted Cash Flow Methodology
Chapter 9 Project Economics, Part II: Preparing for a Project Financial Analysis
The Anatomy of Project Cash Flow
The Foundation of Any Financial Analysis: The Cash Flow Chart
The Process of Identifying and Modeling the Cash Flows of a Project
Guidelines for Modeling Cash Flows
Proper Treatment of Special Cash Flow Types
Three Basic Project Cash Flow Models
Chapter 10 Project Economics, Part III: Performing a Project Financial Analysis
Separating Fact from Fiction in the Project Financial Analysis Process
The Four Basic Financial Metrics
Performing a Project Financial Analysis: A Comprehensive Example
Calculating the Four Basic Financial Metrics
Putting the Financial Metrics Together: Evaluating the Investment
Financial Analysis in Reverse: Calculating the Maximum Justifiable Project Cost
Enhancing the Financial Analysis Process by Introducing Risk
Chapter 11 Risk Management, Decision-Making, and Business
The Objectives of Risk Management and Decision-Making
Dealing with Risk and Uncertainty in Business Decisions
Risk and Uncertainty: A Quick Refresher
Sources of Business and Financial Uncertainty in Project Investment Decisions
Reducing Risk by Using Higher-Quality Information
Reducing Risk by Modifying Financial Analysis Process Parameters
Using Sensitivity Analysis as Part of the Financial Analysis Process
Identifying the Appropriate Variables for a Sensitivity Analysis
Performing a One-Dimensional Sensitivity Analysis
Performing a Multidimensional Sensitivity Analysis
Performing Sensitivity Analysis using Monte Carlo Simulation
Using Break Even Analysis for Business Decisions
Using Decision Trees in Financially Based Decision-Making
Part Four Preparing the Business Case
Chapter 12 Business Cases and Business Case Preparation
Why Use a Business Case Approach?
What Is a Business Case?
General Applications of Business Cases
Benefits of Using a Formal Business Case Approach
Conditions that Trigger a Formal Business Case Approach
Who Prepares the Business Case?
The Business Case Development Process
Critical Success Factors in Business Case Development
Qualities of a Well-Prepared Business Case
Recommended Business Case Structure: An Overview
Part Five Appendixes
Appendix A Guidelines for Preparing a Project Business Case
Appendix B Interest Tables
Glossary
Index