I get many questions at seminars about ROI (return on investment) calculations. Many people utilize this measurement for project selection. There are several variations of the formula. Depending on the information that you have available, the complexity of the calculation can grow. Here are a couple that I use:
Simple: (net profit / total investment) X 100 = ROI
If you are projecting a profit of $25 on an investment of $160, then the calculation is:
(25/150) X 100 = 15.625%
More complex: Net Income + (current value - original value) / original value X 100 = ROI
This formula can be used for ongoing multiple year revenues. For instance, if you purchased $5,000 in stock which is now valued at $5,200 and you have earned $100 in dividends, the calculation is:
((100 + (5,200-5,000) ) / 5,000) X 100 = 6%
Hope this helps!
No day but today,
Rick
Monday, November 9, 2009
Sunday, November 8, 2009
Blogging a Status?
Interesting thought! I was reading an excerpt from Andy Wibbels titled "Blogs and Business: What You Must Know" and he suggested utilizing a Blog for project status.
He stated that "Blogs can provide an instant snapshot of a project's status, an archive of past reports, and an easier way to access deliverables. You won't be annoying your employees by clogging their inbox with an 8 gigabyte PDF."
Clearly he has worked with PM's that have a fondness for charts and graphs! However, it does provide an interesting thought. Many companies are looking for ways to go green and many have not invested in a Project and Portfolio Management type of technology. Some companies utilize Sharepoint for this, but it too can become cumbersome in navigation. Blogging can be a perfect fit for those.
I have seen many organizations still want the ill-fated printed status report. They must have their red/yellow/green! The question is, when is the last time a decision was made off that status report? When is the last time someone in your company stopped a project because it was red, or put more resources on a project when it went yellow? If the answer is "never", then maybe a change to the way it is done is warranted.
In any case, the article did make me think!
Until next time!
Rick
He stated that "Blogs can provide an instant snapshot of a project's status, an archive of past reports, and an easier way to access deliverables. You won't be annoying your employees by clogging their inbox with an 8 gigabyte PDF."
Clearly he has worked with PM's that have a fondness for charts and graphs! However, it does provide an interesting thought. Many companies are looking for ways to go green and many have not invested in a Project and Portfolio Management type of technology. Some companies utilize Sharepoint for this, but it too can become cumbersome in navigation. Blogging can be a perfect fit for those.
I have seen many organizations still want the ill-fated printed status report. They must have their red/yellow/green! The question is, when is the last time a decision was made off that status report? When is the last time someone in your company stopped a project because it was red, or put more resources on a project when it went yellow? If the answer is "never", then maybe a change to the way it is done is warranted.
In any case, the article did make me think!
Until next time!
Rick
Sunday, November 1, 2009
Quick Tip for WBS
There are many people that want to know how to get started doing a Work Breakdown Structure. Some people have never done one and don't want the first one to be at their company. I have two quick tips to assist:
1) Practice with a charity or a church. These organizations desperately look for volunteers and especially volunteers who can help organize and run events. This will give you an awesome opportunity to practice! Call the United Way and introduce yourself. There will always be an opportunity to help your community!
2) Here is a quick way to get started. Send out the scope to the team prior to the meeting and ask them to send back an Excel spreadsheet of the initial tasks that they can think of. From there, do a mail merge onto address labels and put those on sticky notes. Before the first meeting, go ahead and put the sticky notes on the wall. When the attendees come into the meeting, have them start putting the tasks in order before the even sit down. This will cut down the awkward silence that generally starts these types of meetings. In very short order, you will have a great network diagram to use for your project.
Of course, you could always use a technology like Nxt Note as well. Very, very cool technology! Check it out!
1) Practice with a charity or a church. These organizations desperately look for volunteers and especially volunteers who can help organize and run events. This will give you an awesome opportunity to practice! Call the United Way and introduce yourself. There will always be an opportunity to help your community!
2) Here is a quick way to get started. Send out the scope to the team prior to the meeting and ask them to send back an Excel spreadsheet of the initial tasks that they can think of. From there, do a mail merge onto address labels and put those on sticky notes. Before the first meeting, go ahead and put the sticky notes on the wall. When the attendees come into the meeting, have them start putting the tasks in order before the even sit down. This will cut down the awkward silence that generally starts these types of meetings. In very short order, you will have a great network diagram to use for your project.
Of course, you could always use a technology like Nxt Note as well. Very, very cool technology! Check it out!
Friday, October 23, 2009
Time for a PM Revolution (The Value of Project Management)
Is anyone else getting as frustrated as I am about the debate over the value of Project Management? Project Managers are generally not consulted, then asked to do the impossible, and then blamed if it does not go well! For instance:
An Executive picks a pet project to complete. He looks at his staff and figures that anyone can do project management. So he selects Ron from Accounting (because he is generally reliable) and assigns him as the project manager. He then tells Ron, "I need this done by the end of the year. You have $1,000,000 to spend." As soon as Ron accepts the project, it has failed! How can we possibly know how much to spend or how long it will take before we have had a chance to plan? If Ron tries to plan, he is told, "We don't have time to plan, we have to get going to get this done!" When the project runs late or over budget, then the executive feels that there is no value in project management.
Do you think that this same executive would ask anyone who finished high school math to close the books for the quarter? NO! Why? Because accounting is a certified profession that has a clear process. We don't short change that process, it takes what it takes. Does a commercial developer select anyone who can draw to be an architect? NO! Why? Because it is a learned and certified profession! Isn't project management a certified and learned profession? It is time to realize that a PM Revolution is in order! It is time to understand that not everyone can do project management!
The reason that we can't find the value in project management is all that we are doing is executing poor decisions. You already selected a date, budget, and since anyone can do project management, whoever was available got the assignment. Project management will continue to be devalued until we as project managers stand up and educate. At least that is my opinion!
No day but today,
Rick
An Executive picks a pet project to complete. He looks at his staff and figures that anyone can do project management. So he selects Ron from Accounting (because he is generally reliable) and assigns him as the project manager. He then tells Ron, "I need this done by the end of the year. You have $1,000,000 to spend." As soon as Ron accepts the project, it has failed! How can we possibly know how much to spend or how long it will take before we have had a chance to plan? If Ron tries to plan, he is told, "We don't have time to plan, we have to get going to get this done!" When the project runs late or over budget, then the executive feels that there is no value in project management.
Do you think that this same executive would ask anyone who finished high school math to close the books for the quarter? NO! Why? Because accounting is a certified profession that has a clear process. We don't short change that process, it takes what it takes. Does a commercial developer select anyone who can draw to be an architect? NO! Why? Because it is a learned and certified profession! Isn't project management a certified and learned profession? It is time to realize that a PM Revolution is in order! It is time to understand that not everyone can do project management!
The reason that we can't find the value in project management is all that we are doing is executing poor decisions. You already selected a date, budget, and since anyone can do project management, whoever was available got the assignment. Project management will continue to be devalued until we as project managers stand up and educate. At least that is my opinion!
No day but today,
Rick
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