Analysis of Principles of Project Management | Essay

Running head: ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
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ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT1
Analysis of project selection methods:
It is often required for organizations, especially large organizations to identify a project from
a range of available projects. Therefore, it is important to identify a proper selection methods
for selecting a project so that this project is beneficial for that organization (Nas, 2016).
However, which project selection method is best depends not only on project requirements
but also on organizational requirements as well.
In this context some project selection methods are analysed that are considered by
SingularLogic for identifying projects implemented by this organization for its clients. It is of
prime importance for SingularLogic to ensure that any project selection method that they
consider is effective as these projects are not only complex but requires significant
investment as well.
Some of the project selection methods applicable for SingularLogic are the followings:
Benefit/Cost Ratio:
When a project is implemented, there are two type of costs associated with a project. these
two type of costs include present value associated with cash inflow which is also referred to
as cost invested in a project and another type of cost includes present value associated with
cash outflow in project (Marothia, 2017). In this method a ratio is identified between these
two costs in project and it is referred to as cost benefit ratio.
Before, selecting a project, it is required that SingularLogic analyses this cost benefit ratio of
projects that they have access to and then select a particular project that offers best cost
benefit ratio for ensuring profit in project as well.
Economic Model:

ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT2
Economic value added or EVA refers to a performance metrics of a project. In this method
first of all return on capital invested in project is identified and then it is calculated whether
this project is worth implementing or not for organization (Lai, & Shad, 2017). It refers to net
profit that is obtained by organization after taxes and capital expenditure are considered in
this context.
When there are various projects that SingularLogic needs to identify then it is important to
identify which project has the highest economic value added or EVA and chose project in
accordance with that as well.
Payback Period:
When in a project investment is done, then it requires some time to recover that cost of
project. Some projects require more time to recover than others. Therefore, it is important to
ensure that any project selected by SingularLogic requires minimum time to recover original
cost for this project. When a project requires less time for recovering original cost for
investment, then it is beneficial for organization (Nas, 2016). Therefore, this is an effective
project selection method for SingularLogic and it needs to be considered as well.
SingularLogic while considering this method prefers projects with shortest payback period as
it helps to regain original project cost faster and this is something organizations prefer
especially when projects require significant investment for implementation. As a leading
software organization in Greece, they designs software for large scale organizations and
therefore cost is a significant aspect not only for its clients but for SingularLogic as well.
Therefore, recovering original cost for project and ensure benefit requires to select project
that has shortest payback period.
Net Present Value: