Approaches to Project Selection
Project selection methods include a range of proven and tested techniques developed based on logical explanation to choose a project and filter out any that are undesirable or have higher chances of succeeding. The current project focused on expanding the rental holdings of MSG Incorporated from one property to four. The project’s success relied on the developer’s capacity to increase its outreach and influence while also providing families in need with housing, which means that the benefits are twofold. Among the methods of project selection, benefit measurement methods, the benefit/cost ratio, the scoring model in project management, payback period, and opportunity cost were analyzed.
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Benefit measurement methods are techniques based on the present value of the estimated outflow and inflow of cash. This means that the cost benefits are calculated and later analyzed in comparison to other projects to decide on which will be implemented (Hayes, 2021). It is advantageous to use because of the possibility to combine various techniques, ranging from the internal rate of return to discounted cash flow. The pitfall of using the method is the mere focus on the measurement for the sake of measurement without considering the possibilities of undesirable behaviors and occurrences that may occur in the future.
The benefit/cost ratio represents the ratio between the present value of inflow or the project’s costs to the present value of outflow. Projects showing a higher benefit-cost percentage or those with a low cost-benefit ratio are the ones that will be selected (Hayes, 2020). The method is advantageous to use because it offers project managers an increased level of clarity and provides a look at the current affordability of a project. However, its limitation is the possibility of false confidence and, in some cases, the risk of adding more value to variables that are biased.
Scoring models are objective and are carried out by ranking relevant criteria according to their priorities and potential value. On the bright side, beneficial to use because of their structural simplicity and a reflection of managerial policies. On the downside, the model is linear while its elements are independent even though all criteria cannot be of equal importance before being scored. Payback periods represent the total cash ratio to the average cash per period. The approach can be helpful because it is simple to implement and does not involve the need to analyze project reliability. However, it does not consider the fact that money has a time value and does not allow to develop a complete picture. Finally, opportunity cost is the cost given up when selecting a different project, which entails choosing the lower-opportunity-cost projects. On the one hand, it brings awareness of lost opportunity; on the other hand, it lacks accounting because of the connection to future events.
Among the methods mentioned above of project selection, the payback period approach was implemented. Using a reasonable budget, it was expected to renovate and obtain twelve-month rental contracts for three properties. The payback period method provided a straightforward formula that includes the initial investment and the near-term information on money flow: Payback Period = (Initial Investment / Net Annual Cash Inflow) (Kagan, 2021). In addition, it helped to implement quick project evaluation by offering data on the expected annual cash flow as compared to investment. The money invested in the development and construction had to get paid back for the project to be successful.
Skills Required of Project Managers
Project management skills allow individuals to successfully take a specific project from its very inception to the end result reliably and efficiently. Regardless of one’s role on the project management team, improving one’s skills in this area is likely to directly influence the team’s ability to reach its goals and complete assignments. Reflecting on personal project management skills allows analyzing one’s strengths and weaknesses and discovering how to improve in the future or capitalize on positive qualities during project planning and implementation.
Communication is among the main personal strengths that can facilitate the increased effectiveness of an individual within the context of project management. By being a good communicator, one is effective at conveying important messages to clients and team members (“The role of the project manager,” 2020). Besides, communication is crucial for sharing the vision and mission of the project, as well as negotiating ideas and discussing issues that should be resolved quickly. Thus, another strength is negotiation, which implies consistent and effective discussions with relevant stakeholders to get everyone on the same page with strategic goals. Effective negotiators are also effective at team management because they can efficiently delegate and assign responsibilities, deal with conflicts, as well as provide feedback on team members’ performance.
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As to the negative skills or weaknesses that can hinder project management, the inability to time manage stands out the most. Effective time management is an important skill because of the need to meet project deadlines and juggle numerous assignments to be accomplished at the same time. Budget management skills are also lacking; they entail creating a viable budget and adhering to it throughout the lifecycle of a project. Finally, there are sometimes struggles in the area of motivation because the pressure of project management is severe, and it is often hard to stay happy and motivated all the time, especially when failures occur.
To improve time management skills, it is important to work on creating a schedule or timeline with clearly defined goals so that they are easily accessible and visible. One can also learn about personal patterns of productivity and structure work accordingly so that the most critical tasks are done at times of peak performance (Mejia, 2018). To enhance one’s cost management skills, it is crucial to learn from the professionals in project management whose experience will help understand how estimates are done, how to create contingency and management reserves or perform change controls.
On the positive side, all of the mentioned areas for improvement can benefit from one’s communication skills. Much of experience in project management comes from a collaboration between stakeholders and a manager’s ability to ask the right questions to strengthen their practice and capacities. Being a good negotiator will especially be helpful in the improvement of cost management skills due to the need to learn from the best in the field. Experienced professionals will give advice on how to effectively manage schedules or budgets and stay within the established deadlines, and their knowledge is precious because it is based on first-hand experience. Overall, project management is a diverse field that unites a multi-disciplinary team, and their ongoing collaboration and the exchange of experiences represents a fruitful area of exploration.
Hayes, A. (2020). Benefit-cost ratio (BCR). Web.
Hayes, A. (2021). Cost-benefit analysis. Web.
Kagan, J. (2021). Payback period. Web.
Mejia, Z. (2018). Daniel Pink: How to time your day for peak performance. CNBC. Web.
The role of the project manager: Communication is key. (2020). Web.