Project Management The goal of the Portfolio Project is to develop a project plan to successfully execute a project
Module 5 Portfolio Milestone Subsections
The Sub-Planet Company (SPC) intends to conduct market research and promote its product to international markets, necessitating project management concepts. The purpose of the project is to conduct market research on the factors that influence British customers’ decisions to purchase sports shoes. Unlike the home market, the foreign market is dynamic and has distinct challenges. As a result, SPC demands a complete market analysis before engaging in commercial activity. SPC is concerned with interactions with other parties, including suppliers and customers, and the regulatory framework in which the firm will operate.
The successful completion of the SPC market research requires cost estimation to determine the cost necessary to complete objectives. Since the market research is a service project, most of the funding required is for labor. The project requires personnel who will distribute questionnaires and consult with experts. The other finances necessary are equipment, including computers to capture, store and analyze the information gathered. A cost estimate for purchasing computers is $200,000, while the cost estimate for labor is $300,000. The methodology for deriving the estimates is a vendor bid analysis that compares previous bids submitted by suppliers for similar projects SPC conducted in the past.
The market research project requires a cost-benefit analysis to determine the effectiveness of the decision made regarding labor and equipment by summing the potential reward and subtracting cost. The total cost for the market research is adding $200,000 and $300,000 to arrive at $500,000. Since the market research is a service project, the potential benefits are intangible and consist of faster project delivery and effective information gathering and analysis. The cost of quality methodology is also necessary for SPC to determine the resources required to prevent poor quality. The cost estimates derived for labor and equipment are designed as preventative costs; these avoid quality problems. The equipment that is computers ensures service requirements are met while labor estimates account for training and development activities that will facilitate the completion of objectives.
The next aspect after cost estimation is to determine the budget, which is an aggregation of the cost of project activities. The source of funding for the market research is the Research and Development department in SPC. The department is in charge of creating services or products that expand the company’s product offering. In this case, the market research in the UK is an opportunity for the R&D department to expand SPC’s market range. The cost baseline the R&D department provides for the project is $1.5 million. A management reserve of $500,000 is withheld from the budget for control purposes and to cater to unforeseen events.
The market research will also have a contingency reserve of $500,000 to cater to risks identified in the project. For the market research, the risk may consist of a component essential for the sports shoe industry in the UK. An activity contingency of $250,000 will allow the project manager to handle aspects of the project that contain deficiencies. In total, project funding requirements will consist of $750,000 and cater to the project’s expenditures and liabilities.
Procurement will help the market research obtain the products necessary to complete the project successfully. The SPC market research will first place an advertisement on its website for potential sellers to submit proposals that contain estimates for the equipment required. In addition, the website will also advertise for personnel gaps that are required to fulfill particular roles in the project. A bidder conference will also be conducted to create consensus about the procurement process and promote fairness among potential bidders.
In proposal evaluation, data analysis will be conducted to ensure proposals actively respond to the bid package (PMI, 2017). The proposal evaluation will determine which seller has competitive prices, which will form the basis for seller selection. After selecting a seller, the final stage will involve issuing a contract that contains an agreement that obligates the seller to provide specified project requirements.
The SPC market research will utilize schedule forecasts to monitor and control project work. The schedule forecasts will review, track, and report to ensure the project meets its objectives. The schedule forecast will be aligned with the project milestones to ensure the project is on track (Andrade et al., 2019). The project milestones are derived from the major categories of the work breakdown structure, which contains the significant avenues that require data collection. The milestones include collecting customer preference, competitor information, and identifying relevant market information. These are the primary areas where financial resources are going to be spent. Since the project has a schedule of about 12months, each milestone should be completed every four months. The cost-benefit analysis technique is the measurement that SPC will utilize to ensure the project is on track and that the decisions made are the best alternative for the project.
Rules for Cost and Performance Management
The criterion that specifies the indicators for project performance will use the primary categories of the work breakdown structure. The categories include potential customers, competitors, relevant industry information, and the regulatory environment. Each category is further divided into subcategories and the relevant activities or tasks. The market research will use the earned value measurement to analyze project performance against scope, cost, and schedule. Cost performance will measure cost efficiency by assessing the earned value and the actual cost (PMI, 2017). A cost performance index is used to calculate the value of the work done. The schedule performance index is necessary as a ratio of the initial slotted project duration versus the actual time for project completion. In addition, it is effective in determining the accuracy of schedule estimation.
Earned Value Management
The SPC market research project necessitates a comprehensive framework for assessing project performance and feedback tools for project management. In this case, earned value management (EVM) is useful because it gives the project manager a method for integrating cost, scope, and schedule (Salikuma & Anna Johny, 2016). The three data points in EVM important for the market research are planned value, actual cost, and actual value. The market research’s planned value reflects how the project progresses at a certain time according to the project schedule. If the market research is operating according to schedule, it is on schedule.
In contrast, if project activities lag behind schedule, the project will fail to meet the deadline and exceed the allocated budget. The earned value is the amount of progress accomplished by the project at a certain point in time and is a true representation of the quantity of work that has been performed. On the other hand, the actual cost will represent the resources used to get to the project’s current stage. It will determine if costs have exceeded budget or are on target.
Conclusion and Recommendation
Certain project management features are required to complete the market research effectively. The project should have clear regulations that spell out the criteria for determining whether or not the initiative is a success. In this case, an earned value measurement is used to assess the work completed on a given day and evaluate project success in terms of scope, cost, and schedule. Earned value management should be used in SPC market research since it provides a structure for monitoring numerous areas of a project. A schedule forecast is also needed to assess future circumstances and cost estimations to establish the financial resources necessary to fulfill the goal.
Andrade, P. A. de, Martens, A., & Vanhoucke, M. (2019). Using real project schedule data to compare earned schedule and earned duration management project time forecasting capabilities. Automation in Construction, 99, 68–78. https://doi.org/10.1016/j.autcon.2018.11.030
PMI. (2017). A Guide to the Project Management Body of Knowledge: (PMBOK guide) (6th ed.). Project Management Institute.
Salikuma, S., & Anna Johny, M. (2016). Application of Earned Value Analysis in Analysing Project Performance. International Journal of Engineering Research & Technology (IJERT), 5(9), 459–464.