Project Management

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Topics: Business Case, Construction, Scope Management
Investment analysis for Project Managers - your experience
I have extensive experience of Investment Analysis and as a Project Manager being involved in investment decisions as part of Front End Planning. I have found that understanding the importance of assumptions made as part of an investment case can make a big difference to the project economics; whether to cost, schedule or scope. I am interested in other Project Managers view of Investment Analysis and what assumptions have made the biggest difference to thier project case. For me it was he logistic costs and alternatives of supplying raw materials to a petrochemical plant.
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Investment analysis is not needed to perform project management or to be a project manager. It is an activity performed by portfolio and sometimes program managers. Project manager must manage costs, not be aware for the investment. In fact, the investment calculations are needed before a project exists (I know it must be controlled along the project) mainly to create the business case. In some places the project manager is requested to perform the activities that you stated but it is not a project manager duty.
I agree with Sergio, but in order to monitor the success of the project the 3 parameters are Cost, Time and Scope which does mean that a project manager should be aware of the cost analysis which is done for the project he/she handles. As the progress of the project does impact the economics of the project. Unless this is clear how can the project manager monitor the business case of the project.
On the front end risk analysis, including opportunities to enhance/exploit, or the potential pitfalls of a risk (cost/schedule/scope and can these be transferred or mitigated) are an important part of a project assessment and drive a go-no go decision. Throughout the project, it is important to continuously control or exploit the risk to improve project outcomes.
Thank you for all your responses. I agree that a project manager would not normally be expected to do the investment analysis. I think it is helpful if the project manager has access to the investment analysis; can understand its calculation and the underlying assumptions (costs, timing and benefits) - as result they will be aware of the drivers of value. The drivers of project value should be created in the scoping and shaping of the project which the project manager can influence. The drivers of value need also to be protected during the delivery of the project - and there may also be options to enhance value.

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