Guide to Earned Value Management
Staying within budget and schedule is one of the project manager's most important jobs. It is not an understatement to say that if you master this one thing, most other things will fall into place. The secret to doing this well is called earned value management. It is one of....
How to Perform a Cost Benefit Analysis
A cost benefit analysis is a project selection method in which a common metric is used to compare a project's costs and the benefits it provides. It is used in public projects (like road building) or projects where the end product is not purely monetary. The cost benefit analysis is....
Valuation Using Discounted Cash Flow
Discounted cash flow is an project investment valuation method whereby future cash flows are discounted by a rate that accounts for the time value of money. It is used to make decisions between various available projects, or to determine the economic feasibility of a project. For example, when a business....
What is the Internal Rate of Return?
The internal rate of return (IRR) of a project is the expected growth rate of a project investment. It can be compared to the rate of return obtained by investing the money in the stock market or in other projects. Organizations typically calculate IRR to make decisions between several investment....
How to Use the Payback Period
Payback period is the length of time required for an investment to recover its capital. It is the amount of time required until the investment is in a break even position. It is generally used for investments that involve a large up front capital outlay, such as the construction of....
PRINCE2’s Project Initiation Document
The Project Initiation Document (PID) is the most important document in the PRINCE2 project management method. It defines the project scope and identifies how the project will achieve its objectives. It puts the project on a solid foundation, a baseline that provides a place from which the project manager and....
How to Write a Powerful Terms of Reference
The Terms of Reference (TOR) is a description of the technical work involved in a project, or part of a project. Specifically, it is used to specify the work required by an external consultant, contractor, or supplier. It is the technical part of the bidding documents. Typically, a project manager....
The 6 Parts of a Statement of Work
A Statement of Work (SOW) is a project management document which describes the work that is required of an external contractor, vendor, or supplier. It can either be included within the contract documents or simply be a reference for the project management team. Also called Terms of Reference, the more....
The PRINCE2 Project Brief
The purpose of the project brief is to provide the foundation upon which the project rests. It establishes the parameters under which the project is initiated, as well as the stakeholder inputs into the initiation phase. It is prepared by the project manager, reviewed by the senior users and suppliers,....
The 4 Parts of a Strong Procurement Strategy
Many projects and organizations purchase external goods, services, consultants, contractors and suppliers in a process called procurement. Although it's a very efficient and capable way to deliver project work, it has its own limitations that must be recognized in order for the procurements to go smoothly. A procurement strategy establishes....
