Analysis of Principles of Project Management: Methods and Documents

This report analyzes various project selection methods, including Benefit/Cost Ratio, Economic Value Added (EVA), Payback Period, and Net Present Value (NPV), considering their applicability for organizations like SingularLogic. It delves into the processes for applying these methods, emphasizing the importance of choosing the right approach based on project and organizational requirements. Furthermore, the report examines the initiation process group, focusing on the design of project charters and the identification of stakeholders. It highlights the significance of project charters in providing project overviews, details, scope, benefits, and deliverables, enabling stakeholders to assess project viability. The analysis underscores the need for a strategic approach to project selection, ensuring that chosen projects align with organizational goals and deliver beneficial outcomes.

Running head: ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
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1ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
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:

2ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
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:

3ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
As already identified that a project has two type of costs and this costs are cash inflow and
cash outflow. In project it is often of interest to identify difference between these two type of
costs and this needs to be higher for any provided project (Liang et al., 2019). In some
projects SingularLogic prefers NPV over Payback period. For example, in some projects it
becomes important to consider future value of money invested in a project along with
considering present value of money and in those projects SingularLogic considers NPV
method for selecting project. However, while applying this method it is also important to
identify that there are some drawbacks associated with this method for project selection. NPV
does not provides a comprehensive idea regarding profit or loss associated with a particular
project. Therefore, in projects where identification of profit and loss is prime importance,
NPV is a not an effective project selection method in that context. Therefore, it is important
for SingularLogic to consider this aspect while considering NPV as project selection method
as well.
Analysis of the process for project selection methods:
It is not enough to identify a project selection method, it is required to identify proper
strategies and process for applying these project selection methods for ensuring that proper
project is chosen by organization (Tonchia, 2018). In this context, process for applying each
project selection method is described in details to provide comprehensive idea regarding how
to apply these project selection method and what are some important aspects that need to be
considered for ensuing that application of project selection method is effective and efficient
as well.
In order to apply Benefit/Cost Ratio as project selection method it is important to first
identify present value for cash input along with cash output, then a ratio is to be identified

4ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
between these two values to identify return from project in accordance to project investment
(Nas, 2016).
To apply Economic Value Added or EVA to select a project, it is required to calculate worth
creation for organization while considering return on capital investment in project (Marothia,
2017). After taxes and capital expenditure is deducted, net profit is calculated for each project
to identify which project provides highest net profit value.
In order to apply Payback Period for selecting project, it is required to identify time frame
within which it is possible to obtain cost of investment in project and therefore, it provides
idea regarding how easily and quickly it is possible to regain cost of implementing project. In
this process, a ratio is identified between cost for project and annual average cash flow to
identify how much time is required to obtain original project cost.
In order to apply NPV for selecting project, it is first required to identify present value of
cash inflow in project and also present value of cash outflow in project and then a net present
value is obtained from these two type of project cost as well.
Analysis of the initiation process group and project documents:
In initiation process group two of the most important aspects are designing project charter
and identifying stakeholders for project.
SingularLogic emphasis on designing project charter as it provides ideas regarding whether a
project will be beneficial for organizations and its stakeholders (Nicholas & Steyn, 2017).
Therefore, it helps stakeholders to determine whether they should invest in this project or not.
In large projects it is required to identify whether a project is worth considering or not as a
large amount of capital is associated with such projects that are implemented by
SingularLogic.

5ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
For designing project charter, first of all, an overview of project is provided in project charter
document and it includes information like name of project, date of creating charter document
along with project start and end date and these are some important information that
stakeholders need to identify regarding project.
Along with overview of project, in charter document project details are provided as well. in
this context, SingularLogic provides information regarding project which includes main
project activities that are to be considered for effective implementation of project in
accordance with stakeholder requirements. Every project that SingularLogic implement has
different scope and purpose of implementing that project. Therefore, in this project charter
purpose of project implementation is provided for helping stakeholders to analyse importance
of project and why they need to consider this project as well.
Project scope is also provided along with project purpose. Scope helps project team of
SingularLogic to obtain idea regarding what features are to be provided with a software
product that is to be designed in that particular project (Mandal, 2018). In order to ensure
success in project, defining project scope is an important requirement for SingularLogic.
Therefore, SingularLogic in its project charter document defines project scope in details. in
large projects, especially in software design projects, where client requirement changes
significantly, it is always effective to define project deliverables in details so that client gets a
proper idea regarding what products and documents will be provided after project is
completed.
In order to invest large amount in project stakeholder requires to identify whether project is
beneficial for them or not. Therefore, in project charter benefits of project are described in
details.

6ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
Along with project charter identification of project stakeholders is also required. When
stakeholders are properly identified in project, it is easier for organization to analyse their
impact on project. It helps in defining project in accordance with stakeholder requirements
(Sanghera, 2019). In software design projects, it is required to consider client requirements
into design so that features of software are in accordance with client requirements. Therefore,
in initial process group, identification of stakeholders is an important aspect.
In initial process group, the most important document for SingularLogic and its stakeholders
is project charter which contains project overview, details of project including important
activities in project, project scope, benefits and project deliverables as well.

7ANALYSIS OF PRINCIPLES OF PROJECT MANAGEMENT
References:
Lai, F. W., & Shad, M. K. (2017). Economic Value Added Analysis for Enterprise Risk
Management. Global Business & Management Research, 9.
Liang, Y., Cui, N., Wang, T., & Demeulemeester, E. (2019). Robust resource-constrained
max-NPV project scheduling with stochastic activity duration. OR Spectrum, 41(1),
219-254.
Mandal, N. K. (2018). Individual student assessment in team projects: a team charter
approach. In 29th Australasian Association for Engineering Education Conference
2018 (AAEE 2018) (p. 468). Engineers Australia.
Marothia, D. K. (2017). Unit-9 Project Cost Benefit Analysis Methods. IGNOU.
Nas, T. F. (2016). Cost-benefit analysis: Theory and application. Lexington Books.
Nicholas, J. M., & Steyn, H. (2017). Project management for engineering, business and
technology. Taylor & Francis.
Sanghera, P. (2019). Planning Project and Scope. In PMP® in Depth (pp. 115-153). Apress,
Berkeley, CA.
Tonchia, S. (2018). Project Cost Management and Finance. In Industrial Project
Management (pp. 153-170). Springer, Berlin, Heidelberg.