Ops 571 - Project Management Recommendation

Project Management Recommendation

Steven Garnes

OPS/571

October 12, 2015

Ashley Carr

Project Management Recommendation

Project Management Recommendation

October 12, 2015

Dear Mr. Gritsch,

After a careful analysis of the three proposed projects, my team has decided to recommend the Stargazer Project as we feel this is in the best interest of Piper Industries. My team has considered the fact that the Stargazer Project has a higher risk of completion than either Juniper or Palomino, however we feel this is the best choice for Piper Industries because of the funds ($450,000) already invested in the project and the fact we feel this project will be generating revenue within twelve months of next week’s PMO Review. We also considered the critical path requirement, cost, effective life cycle, and return on investment (ROI). We selected the Stargazer project after conducting a market feasibility study in which we confirmed that some strategic customers have already shown an interest in the product and the return on investment is very high.

In our feasibility study, the team focused on five areas to determine which project was best suited for Piper. Those five areas were, risk level, project length, ROI, break-even analysis, and the overall benefit to Piper. The results are as follows:

Juniper Project

Project cost: $325,000

Critical Path: Six months

ROI: $250,000 over a 2 to 3 year period or 77%

Break-even analysis: Just under three years if ROI is reached in two years.

Project Length: Uncertain

Risk of on-time completion: Low

Overall benefit to Piper: “This is a standard product line that marketing believes many customers will want to purchase” (UoP, 2012).

Palomino Project

Project cost: $655,000

Critical Path: Nine months

ROI: $450,000 for a five year period or 69%

Break-even analysis: Just under seven years (5% margin of error).

Project Length: Seven years

Risk of on-time completion: Medium

Overall benefit to Piper: “This product will be a custom part for one of your strategic customers. It is a new line of widget products including enhancements using existing technology” (UoP, 2012).

Stargazer Project

Project cost: Estimated at $575,000 with $450,000 already invested.

ROI: $1.6 million for a three year period, 278%.

Project Length: Seven years

Break-even analysis: 1.5 years

Risk of on-time completion: High

Overall benefit to Piper: “By delivering such an innovative product to the market place first, your organization will be seen as a leader in this industry” (UoP, 2012).

Our team considered the research and development costs and the estimated cost to bring the product to market only on the Stargazer Project.

Project management is “the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project” (Project Insight, 2015). Typically, project management consists of five phases although some projects can consists of more or less. The five basic phases of project management are below: