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What Types of Projects Should Be Pushed Through During a Recession?

4 Replies Last post: Jul 17, 2009 9:56 AM by Bart Perkins  
Bart Perkins   7 posts since
Oct 3, 2008
Reply

Dec 16, 2009 1:45 PM

What Types of Projects Should Be Pushed Through During a Recession?

As I think about justifying a project during a recession, it occurs to me that different type of projects need to be justified differently. I believe there are five types of projects that need to be justified:

  • Regulatory. Failure to comply with government regulation can lead to significant fines and in some case jail for officers. The business case should be fairly simple, and approval should be nearly automatic.
  • Cost/benefit. Most people think of costs and benefits when envisioning a business case. Assuming project size, risk, etc. are equal, projects with the highest return get funded first.
  • Insurance. Projects that reduce risk such as disaster recover planning, business interruption planning, and security services are difficult to justify with a Cost/Benefit business case. Events which will interrupt a business, typically have a low probability and a huge impact if the event occurs. .
  • Mission support. Charitable organizations rank projects based on the degree to which the project supports the organization’s Mission.
  • Leap of faith. These business cases are a break with the past and change the nature of competition. Often disguised as Cost/Benefit business cases, typically they contain too many assumptions to be defensible as a solid Cost/Benefit business case. As a result, few of these are being proposed today.

 

The above leaves me several questions:

  • Are there any other types of project justification?
  • Are some types of justification being used more frequently than others?
  • How much do the economic times determine the type of justification used?
Ralph DeFrangesco   54 posts since
Oct 3, 2008

All of them!!! Keeps us working  :-)

user1329209   1 posts since
Oct 3, 2008

In this down cycle I have never had more work to do as a PM. Everyone in the business is screaming for more revenue. The only problem is that they want to see it without creating a budget. I have been working for a major international company now for the last year and even though my projects have all been driven for the desire to increase profits I have yet to be given a budget. So does this mean I have been doing nothing? The fact is I have been working 55+ hour weeks and have managed and directed projects which have brought in or saved several million in revenues.

 

I'm sure you have heard the old saying it takes money to make money. In today's economy that is not true. What it takes is a desire to achieve a goal and a creative mind to think outside the box to find a way to partner with the people you do business with to make or save money.

 

Patrick I suggests that there is truly only one kind of project and that is a cost benefit project. I know you are saying what about Federally mandated projects and security concerns and business process improvements? They are all really cost benefit projects because there is a cost associated with running or not running the project. The costs could be fines, plant closures, litigation costs, loss of customer base but the benefits are usually always the same and that is how does this affect my company and it's ability to survive and return a profit to it's investors.

 

After 25 years of PM leadership with a business/IT focus I know I sound jaded but a wise man once told me that I would always have a job if I could make or save my company money. So what type of project does that sound like?

 

Comments and flame mail greatfully accepted. pmoeducator@gmail.com

user1652504   1 posts since
Oct 3, 2008

All Projects should continue with cut of lux expenses. we can not stop or delete projects that are to the profit of people, community and country. we only have to re study the cost and timelines.

Souheila Khoury

IT Projects Consultant

souhaila_awad@hotmail.com

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