Introduction
Project selection methods and initial documents are critical, as these components can set the foundation for the whole project. In the contemporaneous era, trends in selecting the project and process methods have been changed. The project manager carries predictive validity to forecast the project’s needs and outcomes. Subsequently, the project selection method is to be streamlined. Apart from it, initial documents are also to be formed to start the project. The main components of the study are suitable project selection methods, processes to conduct the project selection methods, the Initiation process group, and project documents through PMBOK.
Identification and justification of suitable project selection methods
Identification and justification of appropriate project selection methods are imperative. The project which has been selected is One Vanderbilt in New York City. The suitable project selection method is the “benefit measurement method.” It is an effective method, which compels the project managers and other responsible stakeholders to derive possible cost benefits. Benefit measurement contains multiple techniques.
One of the most prominent techniques is the benefit/cost ratio method. This method has been adopted in project selection, as the project manager navigated the present value of inflow to the outflow value. The project manager has to predict or anticipate the project return, as a return must exceed inflows or cost. One Vanderbilt project carried a higher benefit-cost ratio, and hence, this method was selected (Senapathy, 2017).
Another suitable measurement method, technique is the economic model. It is an incredible method to select a project like One Vanderbilt. For Instance, the selection of this method can be justified through the calculation of worth creation. When choosing the project, project management has to define or anticipate an adequate return on capital. Of course, the company management knew that it could get a reasonable profit after tax deduction and capital expenditure. Project management had multiple options in terms of project selection. Nevertheless, this method was used to know or understand which project contains high economic value. Fortunately, one Vanderbilt was linked with high economic value, and therefore, it has been selected (Senapathy, 2017).
The best way to select this project like One Vanderbilt is to navigate the opportunity cost. In this particular project selection, project management had chosen this project due to its low opportunity cost. The project exhibited the scope and growth in the future, as it was one of the tallest buildings in the city. It was a single opportunity at that time, which was utilized well by project management. In short, the company or project team did not lose other alternatives due to low opportunity cost, and it justified the suitability of this project selection method. Consequently, these are three suitable project selection methods, and due to benefits and possible returns, these methods have been justified. One Vanderbilt is a potential project, and the need for using the appropriate selection method was in the limelight (Wuttke & Zandhuis, 2015).
Processes to conduct the project selection methods
As discussed earlier, the striking way of project selection is the cost-benefit and benefit ratio. The process of cost/benefit ratio is simple. Nonetheless, each step or phase in the process must be implemented or executed. The first step in this project selection method is the identification of goals and objectives. The most important thing is to streamline the worth and idea of the project. The second phase of the cost/benefit is the navigation of multiple alternatives. The project management has to compare this project with other projects to find the best path. For Instance, when intending to select One Vanderbilt in New York City, the project management has to review other project opportunities in the city (Landau, 2018).
Of course, this project was worthy in terms of cost and benefits, and therefore, it has been chosen. The third phase of this project selection method is the identification of stakeholders. The project manager has to make a list of all key stakeholders, including labor, engineers, supervisors, and many others. The cost or expenses of these stakeholders are also to be streamlined. These are inputs, which are to be optimized. In the fourth step, there is a need to come up with a metric, which will be used to measure benefits and costs. In the next step in this process, there is a need to derive outcomes of cost and benefits. One of the most critical steps is the identification of the net present value of the project. Subtracting the present value of outflows from the current value is the right approach to get insight. Now, the company or project management can conduct sensitivity analysis. It seems a critical phase, as uncertainties must be identified to make mitigation strategies or mitigation plans. Finally, in the last step, the company has to make a choice (Landau, 2018).
Some primary considerations also trigger the present economic value model for project selection. For Instance, the first step is to calculate the current value of the future cash flow of the One Vanderbilt project. In this calculation, the project manager does not deduct from the value. Nonetheless, when intending to calculate the net present value of the project, costs are to be deducted. It is a simple and effective method or process to predict or anticipate the rate of return. The best way to calculate the present value of the project is to calculate the current value of revenue. The projected revenue and project cost value is to be calculated, which is to be used to deduct the project’s present value (Testingbrain.com, 2019).
Another project selection method is the opportunity cost. The simple way to calculate the opportunity cost is to use a simple process. First, the project team has to identify several alternatives or choices regarding project selection. In the second phase, the project management can choose the project. The total revenue is to be subtracted with economic profitability. The project manager has to know what he can gain and sacrifice. It seems a simple way to calculate the opportunity cost, and finally, the project selection can be rationalized (Fichtner, 2016).
Initiation process group and project documents through PMBOK
The project management body of knowledge has standardized project initiation and documentation. In terms of One Vanderbilt, the initiation process is linked with several steps. These steps are developing the project charter and identifying stakeholders. When intending to develop a project charter, the project management has to streamline the vision of the project along with a proper business case. It sets the foundation for the planning phase. In the project initiation, scope statement, millstones, business case, funding amount, funding status, success criteria, and stakeholders are critical considerations. In the scope statement, the project manager will identify its vision to rationalize what it wants to achieve (Hartney, 2018).
Project millstones are similar to deliverables. The description of millstones is necessary to foster communication, which has been envisioned by the organization. In the project initiation document, the return on investment must be presented, as it shows the appropriate business case. The document must present the funding amount, which is approved by the corporation. One Vanderbilt project is viable or feasible, and it must be documented in terms of funding and other critical financial implications. The funding status is always in the spotlight. Different conditions, which are associated with the funding amount, should be stated on the project initiation document (Hartney, 2018).
The project manager must ensure that there are no funding contingencies in case of an escalation of the funding or cost of the project. The success criteria of the project must be highlighted in the project initiation document. For Instance, in the project initiation process, there is a need to create some key success measures, and these are to be communicated to all key stakeholders as well. Finally, the project initiation document must highlight multiple stakeholders. Identification of all stakeholders can make the project initiation document more complex. Therefore, the document must state integral stakeholders in the One Vanderbilt project (Hartney, 2018).
It can be said that the project management body of knowledge has differentiated project initiation. When initiating this mega project in New York City, it looks compelling for the management to carry out all these considerations. Project initiation is a critical phase of the project process, and implementation must be evaluated or monitored to come up with some improvements with the passage of time. Project selection methods, procedures, and initiation are critical components in the whole project management process, and the project manager has to depict the traits or competencies to integrate accordingly (Wuttke & Zandhuis, 2015).
Conclusion
In the end, it is to presume that the project manager is responsible for selecting the project, executing processes of selection methods, and aligning with the project management body of knowledge. One Vanderbilt is a big project, and this comprehensive content is a roadmap for the project management to achieve success. Achieving project objectives is necessary, and project selection, processes, and initiation phase can set the foundation to make the difference. The role of the project manager is always decisive, as he must streamline his responsibility to carry these considerations.
References
Fichtner, C. (2016, January 26). Retrieved from https://www.mpug.com/articles/project-opportunity-cost-and-why-you-need-to-understand-it/
Hartney, J. (2018, April 13). Project Initiation. Retrieved from https://www.projectengineer.net/project-initiation-pmbok/
Landau, P. (2018, June 27). Cost Benefit Analysis for Projects – A Step-by-Step Guide. Retrieved from https://www.projectmanager.com/blog/cost-benefit-analysis-for-projects-a-step-by-step-guide
Senapathy, Y. (2017, December 18). 13 Project Selection Methods. Retrieved from https://www.4pmti.com/blog/project-selection-methods/
Testingbrain.com. (2019, January 1). Economic Model of Project Selection Overview. Retrieved from https://www.testingbrain.com/project-management/economic-model-of-project-selection-overview.html
Wuttke, T., & Zandhuis, A. (2015). A pocket companion to PMI’s PMBOK Guide Fifth edition. Van Haren.
