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Project Life Cycle, NPV, Scope, Risk and Quality Management

   

Added on  2020-09-21

5 Pages1474 Words105 Views
Leadership Management
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IntroductionBuchanan and Body 1992 defines that a project is a unique venture with a starting point and an ending which is done by people to meet the targeted goals within parameters of cost, schedule and quality. A project is a set of people and resources temporarily assembled to reach the targeted goals and objectives under a fixed budget and a fixed period. According to Pinto 2013, projects are one ofthe ways to promote the changes and the methods are a means of achieving the change. The projectsand its successful management are important to the sustainability of the organization. Wilson (2002)described a project is new work if it lasts for a limited period, involves different groups of workers, and has penalties for late completion.Four stages of Project Life Cycle, and importance of the final stageA project life cycle is the framework for dividing the project up into many more manageable phases. Project life cycle can be used to gain understanding and control, for operational planning and for predicting (Kotler and Keller 2012) . A project life cycle is a prototyping life cycle (Field and Keller 2007) . The project life cycle stages can be phased as follows::Concept or Initiation PhaseThis phase defines those processes which require to start a new project. The main purpose of this stage is to determine what the project should accomplish.Design or Development PhaseThis phase defines to design the service or product and develop the schedules and plans for implementing the project. In this phase, the tasks are done which is required to achieve the target goal.Implementation PhaseIn this phase, all the tasks will be needed to implement the project as it is planned and arranged.Commissioning Phase In the last stage of the project life cycle, the project has reach the end point and it will be complete. This phase confirms that the project has completed the tasks and it is closed. The last stage of the life cycle is important and it involves releasing the final product to the consumers. The consumers accepted the final product and the documentation are transferred to the operations team and the resources are reassigned. NPV and it’s benefitsThe formula of NPV is,NPV = Present value of inflows - Present value of outflows NPV helps to know the value of all cash flows which a project generates will exceed the cost of starting that particular project. Basically, NPV is described as the difference between the presence value of the cash inflows and the presence value of the cash outflows (Awomewe and Ogundele 2008) .NPV takes into consideration of every cash flow patterns and it has a good measure of profitability. The NPV method takes account of the time value of money and takes account of risk. This method
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helps to look at the whole life of the project and the discount rates are calculated in NPV so that the financial risks and the operating risk are get factored. Scope ManagementScope management is the function of controlling the project’s goals and objectives throughout the processes of conceptual development, execution and termination. The scope management process consists of different activities which is based on creating a systematic plan for the upcoming project. The processes required to make sure that the project includes everything which it requires and only the work required to complete the project successfully. This management is more concerned with defining and controlling what is included In the project and what is not in the project (Burke 2003) . This management is all about defining what the project will achieve after the project is done. Scope management can be defined into product scope management and project scope management. Scope management is interested in both the quality of the product and the quality of the project which creates the product. In order to control the scope and quality of the product, the actual performance is compared to the scope statement. The project scope management is all about defining what the project will achieve and what it will delivers and what it will produce. Risk ManagementRisk management is about deciding how to take care of the risks and how to control it. Every projects have a certain amount of risk and it can have both positive and negative impact on the business. There are techniques which helps control and reduce risks include risk avoidance, risk reduction, risk transfer and risk acceptance. Wideman 1992 defines risk management as the systematic processes of identifying, analysing and responding to the project risk throughout the project life cycle. There are no risk-free projects because the greater the uncertainty, the greater the risk (Crane, Gantz, Isaacs, Jose, 2013). The major purpose of the risk management process is to findout the potential problems before it has impacts on the business and try to leverage them. A risk management process is carried out to effectively anticipate and mitigate the risks which can have critical impacts on the project. Quality Management Quality management process is about ensuring the project will satisfy the needs for which it is doneby addressing the management of the project and its product. It is the act of overseeing differentactivities and tasks within an organization to make sure that the products and services areconsistent. Quality management consists of four components which include quality planning,quality improvement, quality control and quality assurance. The process of quality managementhelps the firm to achieve greater consistency in activities which are involved in the production ofproducts and services. Moreover, it helps to improve customer satisfaction and enables the businessto gain more market share and exploit new markets. The aim of this process is to ensure that thestakeholders work together to improve the company’s products and services to achieve long-termsuccess. Outline and explain the main aspects of monitoring project quality. (6marks)Question 6
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