Monday, October 29, 2007
Reference:
Schwalbe, K (2006), Information technology project management, 4th edn, Course
Technology/Thompson Learning, Cambridge, MA: Course Technology / Thompson Learning.
ITC 493 Assessment 2: Task 5
Chapter 12, Exercise 3
Suppose your company is trying to decide whether it should buy special equipment to prepare some of its high-quality publications itself or lease the equipment from another company. Suppose leasing the equipment costs $240 per day. If you decide to purchase the equipment, the initial investment is $6,800 and operations will cost $70 per day. After how many days will the lease cost be the same as the purchase cost for the equipment? Assume your company would only use this equipment for 30 days. Should you company buy the equipment or lease it?
Answer:
For Leasing:
Equipment cost/day = $240
Duration of lease = 30 days
So, total cost for leasing equipment = $240 * 30
= $7,200
For Purchase:
Initial Investment = $6,800
Operations cost per day = $70
So, total cost for the purchase = $6,800 + $70 *$30
= $8,900
To calculate number of days after which the lease cost is the same as the purchase cost for the equipment is as follows:
Number of days = Total cost of purchase / per day cost for lease
= $8,900 / $240
= 37.08 days.
From the above calculation we can say that approximately after 37.08 days the lease cost will be the same as the purchase cost for the equipment.
Equipment cost/day = $240
Duration of lease = 30 days
So, total cost for leasing equipment = $240 * 30
= $7,200
For Purchase:
Initial Investment = $6,800
Operations cost per day = $70
So, total cost for the purchase = $6,800 + $70 *$30
= $8,900
To calculate number of days after which the lease cost is the same as the purchase cost for the equipment is as follows:
Number of days = Total cost of purchase / per day cost for lease
= $8,900 / $240
= 37.08 days.
From the above calculation we can say that approximately after 37.08 days the lease cost will be the same as the purchase cost for the equipment.
ITC 493 Assessment 2: Task 4
Chapter 11, Exercise 4:
Suppose your organization is deciding which of four projects to bid on. Information on each is in the table below. Assume that all up-front investments are not recovered, so they are shown as negative profits. Draw a diagram and calculate the EMV for each project. Write a few paragraphs explaining which projects you would bid on. Be sure to use the EMV information and your personal risk tolerance to justify your answer.
Answer:
Figure: Decision Tree
Above figure shows probability and outcomes for Project1, Project 2, Project 3, and Project 4.
There is a 50 percent probability that project_1 will earn $120,000 and 50 percent probability that it will lose $50,000. The EMV for Project 1 is $35,000
.5($120,000) - .5(-$50,000) = $60,000- $25,000 = $35,000
There is a 30 percent probability that project_2 will earn $100,000, 40 percent probability that project_2 will earn $50,000 and 30 percent probability that it will lose $60,000. The EMV for Project 2 is $32,000
.3($100,000) + .4($50,000) - .3(-$60,000) = $30,000 + $20,000- $18,000
= $32,000
There is a 70 percent probability that project_1 will earn $20,000 and 30 percent probability that it will lose $5,000. The EMV for Project 1 is $12,500
.7($20,000) - .3(-$5,000) = $14,000- $1,500 = $12,500
There is a 30 percent probability that project_4 will earn $40,000, 30 percent probability that project_4 will earn $30,000, 20 percent probability that it will earn $20,000 and 20 percent probability that it will lose $50,000. The EMV for Project 4 is $15,000
.3($40,000) + .3($30,000) + .2($20,000) - .2(50,000)
= $12,000 + $9,000 + $4,000 - $10,000
= $15,000
From the above calculation Project 1 has a higher EMV so my organization will decide to big for the Project 1.
Above figure shows probability and outcomes for Project1, Project 2, Project 3, and Project 4.
There is a 50 percent probability that project_1 will earn $120,000 and 50 percent probability that it will lose $50,000. The EMV for Project 1 is $35,000
.5($120,000) - .5(-$50,000) = $60,000- $25,000 = $35,000
There is a 30 percent probability that project_2 will earn $100,000, 40 percent probability that project_2 will earn $50,000 and 30 percent probability that it will lose $60,000. The EMV for Project 2 is $32,000
.3($100,000) + .4($50,000) - .3(-$60,000) = $30,000 + $20,000- $18,000
= $32,000
There is a 70 percent probability that project_1 will earn $20,000 and 30 percent probability that it will lose $5,000. The EMV for Project 1 is $12,500
.7($20,000) - .3(-$5,000) = $14,000- $1,500 = $12,500
There is a 30 percent probability that project_4 will earn $40,000, 30 percent probability that project_4 will earn $30,000, 20 percent probability that it will earn $20,000 and 20 percent probability that it will lose $50,000. The EMV for Project 4 is $15,000
.3($40,000) + .3($30,000) + .2($20,000) - .2(50,000)
= $12,000 + $9,000 + $4,000 - $10,000
= $15,000
From the above calculation Project 1 has a higher EMV so my organization will decide to big for the Project 1.
ITC 493 Assessment 2: Task 3
Chapter 10, Exercise 3:
How many different communications channels does a project team with six people have? How many more communications channels would there be if the team grew to ten people?
Answer:
Given formula for the communications channels is:
Number of communication channels = (n(n-1))/2
Communications channels for a project team with six people have
= (6(6-1))/2
= 15
Project team with six people have 15 communication channels.
Communications channels for a project team with ten people have
= (10(10-1))/2
= 45
Project team with six people have 45 communication channels.
From the above calculation we can say that 30 more communications channels would there be if the team grew to ten people.
How many different communications channels does a project team with six people have? How many more communications channels would there be if the team grew to ten people?
Answer:
Given formula for the communications channels is:
Number of communication channels = (n(n-1))/2
Communications channels for a project team with six people have
= (6(6-1))/2
= 15
Project team with six people have 15 communication channels.
Communications channels for a project team with ten people have
= (10(10-1))/2
= 45
Project team with six people have 45 communication channels.
From the above calculation we can say that 30 more communications channels would there be if the team grew to ten people.
ITC 493 Assessment 2: Task 2
Chapter 9, Exercises 1.
Your company is planning to launch an important new project starting January 1, which will last one year. You estimate that you will need one full-time project manager, two full-time business analyses for the first six months, tow full-time senior programmers for the whole year, four full-time junior programmers for the months of July, August, and September, and one full-time technical writer for the last three months. Use Microsoft Excel to create a stacked column chart showing a resource histogram for this project, similar to the one shown in Figure 9-6. Be sure to include a legend to label the types of resources needed. Use appropriate titles and axis labels.
Answer:
ITC 493 Assessment 2: Task 1
Chapter 8, Exercise 6:
Review the concepts in this chapter related to improving the quality of software. Write a one-pate paper describing how you could apply these concepts to software development projects.
Improving the quality of software requires customer satisfaction, prefers prevention to inspection, and recognizes management responsibility for quality. Some other important issues involved in improving the quality of software are: Strong leadership, understanding the cost of quality, providing a good workplace to enhance quality, and working toward improving the organization’s overall maturity level in software development and project management can all assist in improving quality.
Answer:
Strong Leadership:
Leadership provides an environment conducive to producing quality. Management must publicly declare the company’s philosophy and commitment to quality, implement company-wide training programs in quality concepts and principles, implement measurement programs to establish and track quality levels, and actively demonstrate the importance of quality. When every employee understands and insists on producing high-quality products, then top management has done a good job of promoting the importance of quality.
The cost of Quality:
The cost of quality is the cost of conformance plus the cost of nonconformance. Conformance means delivering products the meet requirements and fitness for use. The cost of nonconformance means taking responsibility for failures or not meeting quality expectations.
The five major cost categories related to quality include:
1. Prevention cost: The cost of planning and executing a project so that it is error-free or within an acceptable error range.
2. Appraisal cost: The cost of evaluating processes and their outputs to ensure that a project is error-free or within an acceptable error range.
3. Internal failure cost: A cost incurred to correct an identified defect before the customer receives the product.
4. External failure cost: A cost that relates to all errors not detected and not corrected before delivery to the customer.
5. Measurement and test equipment costs: The capital cost of equipment used to perform prevention and appraisal activities.
Review the concepts in this chapter related to improving the quality of software. Write a one-pate paper describing how you could apply these concepts to software development projects.
Improving the quality of software requires customer satisfaction, prefers prevention to inspection, and recognizes management responsibility for quality. Some other important issues involved in improving the quality of software are: Strong leadership, understanding the cost of quality, providing a good workplace to enhance quality, and working toward improving the organization’s overall maturity level in software development and project management can all assist in improving quality.
Answer:
Strong Leadership:
Leadership provides an environment conducive to producing quality. Management must publicly declare the company’s philosophy and commitment to quality, implement company-wide training programs in quality concepts and principles, implement measurement programs to establish and track quality levels, and actively demonstrate the importance of quality. When every employee understands and insists on producing high-quality products, then top management has done a good job of promoting the importance of quality.
The cost of Quality:
The cost of quality is the cost of conformance plus the cost of nonconformance. Conformance means delivering products the meet requirements and fitness for use. The cost of nonconformance means taking responsibility for failures or not meeting quality expectations.
The five major cost categories related to quality include:
1. Prevention cost: The cost of planning and executing a project so that it is error-free or within an acceptable error range.
2. Appraisal cost: The cost of evaluating processes and their outputs to ensure that a project is error-free or within an acceptable error range.
3. Internal failure cost: A cost incurred to correct an identified defect before the customer receives the product.
4. External failure cost: A cost that relates to all errors not detected and not corrected before delivery to the customer.
5. Measurement and test equipment costs: The capital cost of equipment used to perform prevention and appraisal activities.
Sunday, September 16, 2007
REFERENCE
Reference:
Schwalbe, K (2006), Information technology project management, 4th edn, Course Technology/Thompson Learning, Cambridge, MA: Course Technology / Thompson Learning.
Schwalbe, K (2006), Information technology project management, 4th edn, Course Technology/Thompson Learning, Cambridge, MA: Course Technology / Thompson Learning.
Assignment 1 / Task 7 / ITC493
Task 7: (Chapter 6, Exercise 1)
Using Figure 6-2, enter the activities, their durations, and their relationships in Project 2003. Use a project start date of June 1, 2005. View the network diagram. Does it look like Figure 6-4? Print the network diagram on one page. Return to Gantt Chart view. Click View on the menu bar, select Table: Entry, and then click Schedule to recreate Table 6-1. You may need to move the split bar to the right to reveal all of the table columns. Write a few paragraphs explaining what the network diagram and schedule table show concerning Project X's schedule.
From the above diagram we can say that due to dependencies Task E and F can not start until task B is completed. Task D can not start until task A is completed. Task H can not start until Task D and E completed. Task J can not start until Task F, H, and I completed.
Using Figure 6-2, enter the activities, their durations, and their relationships in Project 2003. Use a project start date of June 1, 2005. View the network diagram. Does it look like Figure 6-4? Print the network diagram on one page. Return to Gantt Chart view. Click View on the menu bar, select Table: Entry, and then click Schedule to recreate Table 6-1. You may need to move the split bar to the right to reveal all of the table columns. Write a few paragraphs explaining what the network diagram and schedule table show concerning Project X's schedule.
From the above diagram we can say that due to dependencies Task E and F can not start until task B is completed. Task D can not start until task A is completed. Task H can not start until Task D and E completed. Task J can not start until Task F, H, and I completed.
Assignment 1 / Task 6 / ITC 493
Task 6: (Chapter 5, Exercise 1)
Use PowerPoint, Visio, or similar software to create a WBS in chart form (similar to an organizational chart – see the sample in Figure 5-2). Assume the level 1 categories are initiating, planning, executing, controlling, and closing. Under the executing section, include level 2 categories of analysis, design, prototyping, testing, implementation, and support. Assume the support category includes level 3 items called training, documentation, user support, and enhancements.
Use PowerPoint, Visio, or similar software to create a WBS in chart form (similar to an organizational chart – see the sample in Figure 5-2). Assume the level 1 categories are initiating, planning, executing, controlling, and closing. Under the executing section, include level 2 categories of analysis, design, prototyping, testing, implementation, and support. Assume the support category includes level 3 items called training, documentation, user support, and enhancements.
Assignment 1 / Task 5/ ITC493
Task 5: (Chapter 4, Exercise 3)
Perform a financial analysis for a project using the format provided in Figure 4-3. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $100,000 in Year 1 and $25,000 each year in Year 2, 3, and 4. Estimated benefits are $0 in Year 1 and $80,000 each year in Year 2, 3, and 4. Use an 8 percent discount rate. Create a spreadsheet (or use the business case financials template provided on the companion Web site) to calculate and clearly display the NPV, ROI, and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project, based on your financial analysis.
In the above excel worksheet I have calculated NPV, ROI, and year in which payback occurs.
NPV is 41,900 which is calculated by taking the total discounted benefits and subtract the total discounted costs. In this example, the NPV is $206,400 - $164,500 = $41,900.
Return on investment (ROI) is the result of subtracting the project costs from the benefits and then dividing by the cost. In the above example shows an ROI of 25 percent. ROI is calculated by using the formula as shown below:
ROI = (total discounted benefits – total discounted costs)/discounted costs
ROI = (206,400 – 164,500)/164,500 = 25%
Payback period is the amount of time it will take to recoup, in the form of net cost inflows, the total dollars invested in a project. In other words, payback analysis determines how much time will lapse before accrued benefits overtake accrued and continuing cost. Payback occurs when the net discounted cumulative benefits and costs reach Zero. In the above example, the cumulative benefits minus cost for Year 3 are (1,550). Adding that number to the discount benefited benefits minus costs for Year 4 results in $41,900. Since the number is positive, the payback occurs in Year 4.
Since the payback occurs in Year 4 which is a long period to recoup, the total dollars invested in a project. It may be a bit risk to invest the amount in this project. Since ROI of 25 percent which is good. By all this comparison, i recommend to invest in this project, based on financial analysis
Perform a financial analysis for a project using the format provided in Figure 4-3. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $100,000 in Year 1 and $25,000 each year in Year 2, 3, and 4. Estimated benefits are $0 in Year 1 and $80,000 each year in Year 2, 3, and 4. Use an 8 percent discount rate. Create a spreadsheet (or use the business case financials template provided on the companion Web site) to calculate and clearly display the NPV, ROI, and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project, based on your financial analysis.
In the above excel worksheet I have calculated NPV, ROI, and year in which payback occurs.
NPV is 41,900 which is calculated by taking the total discounted benefits and subtract the total discounted costs. In this example, the NPV is $206,400 - $164,500 = $41,900.
Return on investment (ROI) is the result of subtracting the project costs from the benefits and then dividing by the cost. In the above example shows an ROI of 25 percent. ROI is calculated by using the formula as shown below:
ROI = (total discounted benefits – total discounted costs)/discounted costs
ROI = (206,400 – 164,500)/164,500 = 25%
Payback period is the amount of time it will take to recoup, in the form of net cost inflows, the total dollars invested in a project. In other words, payback analysis determines how much time will lapse before accrued benefits overtake accrued and continuing cost. Payback occurs when the net discounted cumulative benefits and costs reach Zero. In the above example, the cumulative benefits minus cost for Year 3 are (1,550). Adding that number to the discount benefited benefits minus costs for Year 4 results in $41,900. Since the number is positive, the payback occurs in Year 4.
Since the payback occurs in Year 4 which is a long period to recoup, the total dollars invested in a project. It may be a bit risk to invest the amount in this project. Since ROI of 25 percent which is good. By all this comparison, i recommend to invest in this project, based on financial analysis
Assignment 1 / Task 4 / ITC493
Task 4: (Chapter 4, Exercise 2)
Use spreadsheet software to create Figures 4-2 through 4-5 in this text. Make sure your formulas work correctly
Use spreadsheet software to create Figures 4-2 through 4-5 in this text. Make sure your formulas work correctly
Assignment 1 / Task 3 / ITC493
Task 3: (Chapter 3, Exercise 1) Study the WBS and Gantt charts provided in Figures 3-3 and 3-4. Enter the WBS into Project 2003, indenting tasks as shown to create the WBS hierarchy. Then enter durations and dependencies to try to reproduce the Gantt chart. Check your work with the files available on the companion Web site for this text.
Assignment 1 / Task 2 / ITC493
Task 2: (Chapter 2, Exercise 5)
Write a one- to two-page summary of an article about the importance of top management support for successful information technology projects.
The term "top management support" implies a framing of the problem. The problem in question is framed in terms of what managers should do in order to contribute to the success of a specific IS implementation effort. This framing implicitly takes from granted that this particular IS implementation effort is worthwhile for the organization (both in itself and in comparison to alternative activities), that it is a feasible and reasonable route to proceed upon, and that if supported, it is likely to have results which are sought after by the supporting executive(s) and or other parties.
“http://books.google.com/books”
Top management commitment is crucial for project success. Since projects often affect many areas in an organization, top management must assist project managers if they are to do a good job of project integration. Organizational commitment to information technology is also important to the success of information technology project. Development standards and guidelines assist most organizations in managing project.
Due to the complexity and importance of many information technology projects and their resulting product, it is important to take time to review the status of a project at each phase. A project should successfully pass through each of the main project or product phases before continuing to the next. Since the organization usually commits more money as a project continues, a management review should occur after each phase to evaluate progress, potential success, and continued compatibility with organizational goals. These management reviews, called phase exits or kill points, are very important for keeping projects on track and determining if they should be continued, redirected, or terminated. Recall that projects are just one part of the entire system of an organization. Changes in other parts of the organization might affect a project’s status, and a project’s status might likewise affect what is happening in other parts of the organization. By breaking points into phases, top management can make sure that the projects are still compatible with the need of the rest of the company.
Project managers need to consider several factors due to the unique context of information technology projects. The diverse nature of these projects and the wide range of business areas and technology involved make information technology projects especially challenging to manage. Leading project team members with a wide variety of specialized skills and understanding rapidly changing technologies are also important considerations.
Write a one- to two-page summary of an article about the importance of top management support for successful information technology projects.
The term "top management support" implies a framing of the problem. The problem in question is framed in terms of what managers should do in order to contribute to the success of a specific IS implementation effort. This framing implicitly takes from granted that this particular IS implementation effort is worthwhile for the organization (both in itself and in comparison to alternative activities), that it is a feasible and reasonable route to proceed upon, and that if supported, it is likely to have results which are sought after by the supporting executive(s) and or other parties.
“http://books.google.com/books”
Top management commitment is crucial for project success. Since projects often affect many areas in an organization, top management must assist project managers if they are to do a good job of project integration. Organizational commitment to information technology is also important to the success of information technology project. Development standards and guidelines assist most organizations in managing project.
Due to the complexity and importance of many information technology projects and their resulting product, it is important to take time to review the status of a project at each phase. A project should successfully pass through each of the main project or product phases before continuing to the next. Since the organization usually commits more money as a project continues, a management review should occur after each phase to evaluate progress, potential success, and continued compatibility with organizational goals. These management reviews, called phase exits or kill points, are very important for keeping projects on track and determining if they should be continued, redirected, or terminated. Recall that projects are just one part of the entire system of an organization. Changes in other parts of the organization might affect a project’s status, and a project’s status might likewise affect what is happening in other parts of the organization. By breaking points into phases, top management can make sure that the projects are still compatible with the need of the rest of the company.
Project managers need to consider several factors due to the unique context of information technology projects. The diverse nature of these projects and the wide range of business areas and technology involved make information technology projects especially challenging to manage. Leading project team members with a wide variety of specialized skills and understanding rapidly changing technologies are also important considerations.
Assignment 1 / Task 1/ ITC 493
Task 1: (Chapter 1, Exercise 2)
Find someone who works as a project manager or is a member of a project team. Prepare several interview questions, and then ask them you question in person, via the phone, or via the Internet. Write a one-to two-page summary of your findings.
After having conversation with my friend Mr. Ankit Jain who is the Quality Management Specialist of SRM Test Competency Center, SAP Labs India Pvt. Ltd. Whitefield, Banglore 560 066 India. I have asked a several questions regarding the duties of the project manager. According to him, “a project manager is a person who works in the team and leads the team member and responsible for the successful completion of project in the time and within the estimated cost with the quality as defined in the appointment letter”.
The key responsibilities for the project manager are as follows:
• Setting up meeting, running meetings, writing and distributing related memo.
• Preparing a project, executing a project in the estimated cost and time.
• Responsible for the reporting requirements of the project as set out in the terms of reference and associated documentation and for setting up internal project reporting process.
• In large or complex project a project manager should identify individual package of work by establishing a work breakdown structure.
• In large or complex project a project manager should identify a team to support him in connection with the project controls and documentation
• Seeking the appointments of key staff to the project who identity and availability will most likely have been established at the proposal stage
• Defining and assigning the contributions required from each function or technical area of the project.
• Assessing the terms and conditions of contracts and their ability to deliver to time, cost and quality
• Discussing the project with each key member of staff who will be significantly affected by the presence of the project
• Ensuring that internal resources are allocated to project staff
• Developing and documenting the project control functions and procedures in terms of:
• Work breakdown structure
• Risk management
• Systems definition
• Project strategy
• Project scheduling including key dates and milestones
• Project cost estimates
• Project quality program
• Safety plan and
• Change control
• Ensuring that the best technical solutions (which advice from function managers) are offered to the project. Where conflict arises over technical issues, the project manager will have the authority to make a final decision
• Ensuring that contractual arrangements with partners and contractors associated with the project are established
• Initiating the arrangements for payment both from the customer to AEA Technology and from AEA Technology to any contractors and ensuring that these payments are received promptly. This may occur at project completion or at agreed stage payment points
• Carrying out, as specified by the supervising manager, a post-project evaluation and/or the customer
• Ensuring the correct storage and retention of all project documentation, with particular reference to its commercial security and its relevance to future projects.
http://www.competition-commission.org.uk/rep_pub/reports/1992/fulltext/319a12.2.pdf
Find someone who works as a project manager or is a member of a project team. Prepare several interview questions, and then ask them you question in person, via the phone, or via the Internet. Write a one-to two-page summary of your findings.
After having conversation with my friend Mr. Ankit Jain who is the Quality Management Specialist of SRM Test Competency Center, SAP Labs India Pvt. Ltd. Whitefield, Banglore 560 066 India. I have asked a several questions regarding the duties of the project manager. According to him, “a project manager is a person who works in the team and leads the team member and responsible for the successful completion of project in the time and within the estimated cost with the quality as defined in the appointment letter”.
The key responsibilities for the project manager are as follows:
• Setting up meeting, running meetings, writing and distributing related memo.
• Preparing a project, executing a project in the estimated cost and time.
• Responsible for the reporting requirements of the project as set out in the terms of reference and associated documentation and for setting up internal project reporting process.
• In large or complex project a project manager should identify individual package of work by establishing a work breakdown structure.
• In large or complex project a project manager should identify a team to support him in connection with the project controls and documentation
• Seeking the appointments of key staff to the project who identity and availability will most likely have been established at the proposal stage
• Defining and assigning the contributions required from each function or technical area of the project.
• Assessing the terms and conditions of contracts and their ability to deliver to time, cost and quality
• Discussing the project with each key member of staff who will be significantly affected by the presence of the project
• Ensuring that internal resources are allocated to project staff
• Developing and documenting the project control functions and procedures in terms of:
• Work breakdown structure
• Risk management
• Systems definition
• Project strategy
• Project scheduling including key dates and milestones
• Project cost estimates
• Project quality program
• Safety plan and
• Change control
• Ensuring that the best technical solutions (which advice from function managers) are offered to the project. Where conflict arises over technical issues, the project manager will have the authority to make a final decision
• Ensuring that contractual arrangements with partners and contractors associated with the project are established
• Initiating the arrangements for payment both from the customer to AEA Technology and from AEA Technology to any contractors and ensuring that these payments are received promptly. This may occur at project completion or at agreed stage payment points
• Carrying out, as specified by the supervising manager, a post-project evaluation and/or the customer
• Ensuring the correct storage and retention of all project documentation, with particular reference to its commercial security and its relevance to future projects.
http://www.competition-commission.org.uk/rep_pub/reports/1992/fulltext/319a12.2.pdf
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