Project Selection Methods and Initiation Documents

This document discusses different methods of project selection that can be used by MAXIMA, a retail trade operator. It also describes the initial process group for conducting these methods and the project documents required for new projects. The aim is to achieve EUR 4 billion in 2012. Subject: Project Management

Project Selection methods and initiation
documents

Table of Contents
INTRODUCTION...........................................................................................................................1
Different methods of selecting projects which can be used by MAXIMA..................................1
Describing initial process group to conduct methods..................................................................2
Projects documents which are creates as a inputs for new projects.............................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Project selection is the process that examine each project idea and also select those
project which are in highest priority. Therefore, through this, project manager may easily
measure the positive outcomes of the project. In the same way, current study is also based upon
the case study of MAXIMA which is largest retail trade operator in Baltics States and now it
wants to grow its business up to 20%. therefore, report will describe different methods of
selecting projects may be used by quoted firm and describe the initial process that helps to
conduct the methods. Further, report will present project documents which are used as a input for
new project.
Different methods of selecting projects which can be used by MAXIMA
There are different methods of project selection which may be used by MAXIMA such
that:
Economic Value added (EVA): It is the performance metric which is calculated the
worth activity of the firm at the time of explaining return on capital. Therefore, it is the estimate
of economic net income, which further project creates over and above the capital investments.
Further, EVA is also calculated by MAXIMA as net profit after deducting cost of investment
(Morton, Keisler and Salo, 2016). This project selection method is used as a measure of its
financial performance with remainder wealth after subtracting cost of investment from the
operating profits. Further, using this model will help to assess the performance of the project and
also identify whether MAXIMA new projects leads towards success or not.
EVA is the only method which evaluate candidate project and also monitor progress of
the project over its life cycle by making best decision for the firm.
Scoring model: It is another of project selection in which company may creates a
committee that describe relevant criteria to select a project and it also weighs list as per the
importance and priorities of each and every project. Finally the committee will selects project
which have highest score. In this scores, the values is describe such that zero means the
requirement is not applicable to the project and it should be removed from list, one means
requirement has low priority, while 3 means medium priority and 5 means highest priority and it
is suitable for project (Scoring Model, 2018). As per the case study, the MAXIMA is planning
for a new service that allow the customers to pay their communication services bill at the time of
check- out counters only.
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Further, through this model the committee of quoted firm will easily scores the values
and then select the highest priority one project.
Pay Back Period: It is another method which may be used by the MAXIMA which is the
ratio of total cash to the average per period cash. Therefore, it is time necessary to recover the
cost which is invested into a new project. Therefore, it is the time frame which is required for
return on investment in order to repay the original cost that is actually investment into a project
(Gür, Hamurcu and Eren, 2016). Further, this method is generally used to to determine risk about
the time period and also determine the rapid returns with respect to initial investment and it is
one of the most simplest method that helps to choose the best project. As per the case study of
MAXIMA, to maximize the growth, company has to develop different customer loyalty
programs that provides advantaged to the customers so that it may leads to increases, customers
loyalty and raise its financial services as well.
Further, MAXIMA goal is to achieve EUR 4 billion in 2012 and for that Economic
Model is best project selection method because it force project manager of MAXIMA to make
sure about assets and expenses of the project at the time of making decisions , and also selects
the best project that has highest economic value added for the firm as well.
Describing initial process group to conduct methods
As per Project Management Body of Knowledge, there are five process groups which are
as mention below:
Initiation: It is the first stage which is used be MAXIMA that involves process, activities
and skills needed to define beginning of the project (Wu, Toussaint and Messer, 2017). In this,
company has to develop team and allocate roles and responsibilities to each and every members
of the team so that they will easily attain the defined goals.
Planning: In this stage,company has to develop scope of the project and its goal is to
achieve EUR 4 billion in 2012 so that its vision is attained. Therefore, company develop
different programs such that customer loyalty programs, provide insurance services, launch
ticket voucher service to provide best services to their customers in single unit. MAXIMA is also
plan to add new services to its existing business so that it will help the firm to reach its aim.
Executing: In this stage, project manager involves managing team that helps to meet
timeline expectations and also reach to benchmark goals as well (Heldman, 2018). Such that they
utilizing different skills and also demonstrate high degree of organization in order to make
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concern and to deal out with complex situations as well. Further, in order to attain the aim and
objectives MAXIMA tie up with different firms so that they will raise its overall financial
performance of the company.
Monitoring and controlling: In this stage, project manager proper tracks and review the
project as well as regulate progress to determine improvement areas that changes to plan. So that
they may take corresponding changes as well. Such that risk should be properly analysed and it
is essential to determine quality policies so that the project may take towards further steps (Liu
and et.al., 2019). After implementing policies and planning by MAXIMA, make sure that
benchmark goals are attained and schedule is also followed.
Closing: It is the last stage in which project manager successfully close on time and meet
with the required criteria as well. Thus, in the same way, after developing team and managing
the work, MAXIMA will easily attain the define aim and objectives, also finalize all activities
across all groups to formally closed the project phase.
Thus, in this way, by using Economic value added as a project selection model and using
this five stages as a process group will help MAXIMA to complete the defined goal and also
project manager uphold the highest standards as well (Silhavy, Silhavy and Prokopova, 2018).
As he firm aim is to earn EUR 4 billion, therefore, it is necessary to follow these five stages and
attain aim so that it will become most valued retail company in Lithuania.
Projects documents which are creates as a inputs for new projects
As MAXIMA wants to attain EUR 4 billion so that it will enhance its financial
performance and that is why, it opted Economic Value added model as a project selection
method but it also requires some project documents as a inputs for a new project and these are as
mention below:
Project Charter: it is the first document which determine the need of a project, grants
authority, project activities, project statement of work, organizational process assets, necessary
agreements so that project manager may easily identify whether the project is worthy or not
(Kaiser, El Arbi and Ahlemann, 2015).
Work breakdown structure: Another important document through which project
manager divide work into smallest unit. Further, in this document, project team of MAXIMA
successfully meet the project goals and then deliver customer product and services.
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Risk Management Plan: This document is consider the most important because through
this project manager may identifies any potential risk to the success of a project. That is why,
they uses project risk management register in which different type of risk are identified such that
financial risk environment factor, human resource issue etc. therefore, it is quite necessary while
developing any new project to make sure about any risk that affect the overall project in adverse
way (Heldman, 2018). Further, project manager should also listed all the necessary mitigation
strategies so that they may take steps immediately to resolve issues.
Progress reports: It is also vital to keep all the stakeholder up to date in order to
determine the progress of a project. Further, the progress is measured through timely submission,
meet with estimated budget, meeting with quality specification and all expected deliverables. So
that it will help to define the planning, monitoring and controlling the entire project so that
MAXIMA will easily attain the defined aim and objectives in effective manner.
CONCLUSION
By summing up above it has been concluded that by selecting Economic Value Added as
a project selection method will help MAXIMA to attain the defined aim and objectives. Further,
as case study defined, company uses different tie up methods in order to comply with its vision
to became world most valued retail company in Lithuania. Lastly, report concluded five step
process group i.e. initiation, planning, evaluating , monitoring and controlling. Lastly, report
concluded projects documents such as risk register, progress reports, project charter and work
down structure that helps to complete the project in better way.
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REFERENCES
Books and Journals
Gür, Ş., Hamurcu, M. and Eren, T., 2016. Using analytic network process and goal programming
methods for project selection in the public institution. Les Cahiers du MECAS. 13. pp.36-
51.
Heldman, K., 2018. PMP: project management professional exam study guide. John Wiley &
Sons.
Heldman, K., 2018. Project management jumpstart. John Wiley & Sons.
Kaiser, M. G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management
beyond project selection techniques: Understanding the role of structural
alignment. International Journal of Project Management.33(1).pp.126-139.
Liu, F. and et.al., 2019. Solving multiple-criteria R&D project selection problems with a data-
driven evidential reasoning rule. International Journal of Project Management.37(1).
pp.87-97.
Morton, A., Keisler, J. M. and Salo, A., 2016. Multicriteria portfolio decision analysis for project
selection. In Multiple Criteria Decision Analysis (pp. 1269-1298). Springer, New York,
NY.
Silhavy, R., Silhavy, P. and Prokopova, Z., 2018. Evaluating subset selection methods for use
case points estimation. Information and Software Technology. 97. pp.1-9.
Wu, S., Toussaint, J. and Messer, K. D., 2017. Maximizing benefits in project selection: a hybrid
approach. Applied Economics.49(40). pp.4071-4082.
Online
Scoring Model. 2018. [Online]. Available through: <https://www.testingbrain.com/project-
management/scoring-model-of-project-selection.html>.
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