BUS Project management Decision Matrix. Case for class review Wk. 4 - Fred's notes for discussion in class.

Case: Mid sized pharmaceutical company. Gido and Clements. Successful Project management. Thomson Page 39.

Point for discussion in class Week 4. Jennifer childs has to decide how to spend the $200,000. If you are on the Executive Committee to help make the decision you would obviously need more information than provided in the text. Jennifer would need to call a meeting with her managers to give them a few more details. Her informal/verbal R.F.P. (Request for Proposals) does not provide enough information. This is what we know from the information given.

Proposal #1. Julie wants to hire a new scientist and get some new lab equipment. This alone might use up the $200K.

Proposal # 2. Tyler. This might be a good proposal because it updates the factory and gets the employees involved. Might be a good moral booster especially if the employees have been making suggestions that are now implemented as part of the spending. Might also not cost too much if the work is spread over a period of time. However, the proposal might go against Julie's heavily weighted desire not to change things that her father built. Therefore, when Tyler Ripkin suggest that she changes the plant layout, which her father designed, he had better be a good negotiator.

Proposal #3. Jeff. Mgr. of Operations want new computers and controls, account tracking handling complaints, orders and invoicing. This would require buying a premade software or hiring programmers. There might be a lost of disruption to the "legacy" system (the one that was originally installed in the company). Sometime IT solutions are implemented as one huge project. Our text indicates breaking down this type of project into manageable chunks if the better approach.

Informal Proposal (not invited) # 4. Joe the Sales Mgr. opportunist believes 'Sales make the world go around' or 'Sales cover a multitude evils.' He just wants more salespeople and get the company bigger market share. However, if the facilities aren't upgraded how can the factory produce and meet the sales orders? Also if there products are dated because they lack a good scientist and modern equipment does it matter if they have a good sales team? Let's add market share as one of the decision criteria.

Other considerations:

If we as an executive committee think there would be advantage in spreading the money around, say $50K in each department, we could Rank $200K as a 1 weight and $50K for each as a 4 weight. Let's get rid of #5 on the scale. So $200K gets a 1 and $50K each department gets a 4 Therefore the amount of money the manager needs to spend on his/her project can now be given a score.

We know she wants some form of cost benefit analysis provided with the proposals. Therefore each manager would need to provide a projected profit. We could then create a profit range and rank that and evaluate the proposals against it.

Or we could list the number of benefits and score the # e.g. One benefit or value gets a one, two benefits gets a 2 score and so on.

The time it takes to get a return on the investment might be another consideration. We could use this as one of the criteria. and the Range of 6 months to 24 months might help in the decision making and evaluation of the proposals.

What we do know is that she want to honor her father's memory and this might get a heavy weighting on the Matrix.

So what do we have so far. Spreading the money between departments Vs spending it all in one department, Costs and Benefits, Profits, Time to complete project or time for a return on the investment, supporting Fathers memory, and Market Share. Now we have to chose the criteria and weight them. We will finish this off in class..

Remember there is no definitive right or wrong in this process. It is the skills and experience of the decision makers that results in good criteria. Executive Committees are chosen based on their abilities to make good strategic decisions which result is achieving company objectives. We are the Executive Committee. Decision criteria must also meet the components of companies overall strategic plan. Does this company have a strategic plan in place? We would need to look at the plan before making our decisions.

The end.