PMGT1860 · Project Initiation and Scope
Project Selection & Feasibility Evaluation
Week 2 shows how projects are chosen before a project manager is even hired: the organisation's strategy and mission motivate the project, a business case justifies the investment, and feasibility weighs benefits against costs across technical, operational, financial and market lenses. This is the unit's one numeric lane — payback and NPV screening — and the SWOT/PESTLE scan and business-case logic feed directly into the group initiation plan and appear in the weekly quizzes.
What this chapter covers
- 01Why organisations select and evaluate projects — limited resources, prioritise value, catch doomed proposals early
- 02Project as an investment; the strategic chain Mission → Goals → Objectives → Strategies → Implementation (Gray & Larson Ch 2); portfolio types (compliance, operational, strategic)
- 03Feasibility dimensions — technical, operational, financial, market (also schedule and legal/regulatory)
- 04SWOT — Strengths/Weaknesses (internal) over Opportunities/Threats (external)
- 05PESTLE macro-environment scan — Political, Economic, Social, Technological, Legal, Environmental
- 06Financial screens — payback period and NPV (accept if NPV > 0); limitations of purely financial models
- 07Screening inputs before evaluation — strategic fit, ROI/payback, risk (not detailed WBS/baselines yet)
- 08The business case — output, outcome, benefit(s); SMART where possible
Applied: sort a scan into SWOT and pick the strategic reason
- +1(i) Owning a registered patent is an internal asset the firm can deploy → Strength.
- +1(ii) A rival cutting prices is an external pressure/challenger → Threat. (iii) Rising smartphone adoption is a favourable external trend the firm can exploit → Opportunity.
- +1(iv) Lacking cloud-engineering skills is an internal gap/ability the firm is missing → Weakness. Rule of thumb: Strengths/Weaknesses are internal; Opportunities/Threats are external.
- +1(b) Strategic reasons are long-horizon positioning: capturing market share, building core/next-generation technology, and reducing dependency on unreliable suppliers all strengthen the firm's future position.
- +1'Shorten the payback period' is the odd one out — it is a short-term financial metric about recovering cash faster, not a strategic-positioning reason. So it is NOT a strategic justification.
Key terms
- Business case
- The justification for a project — its output, outcome and benefit(s) for owner and client/user — answering 'why should we do this now, ahead of competing projects?'. Follows SMART (Specific, Measurable, Attainable, Realistic, Time-bounded) as far as possible.
- Feasibility dimensions
- The lenses a proposal is tested against: technical (can we build it?), operational (can we deliver/run it?), financial (is it worth the money?), market (is there demand?), plus schedule and legal/regulatory feasibility.
- SWOT analysis
- A scan of internal factors — Strengths (internal assets) and Weaknesses (internal gaps) — and external factors — Opportunities (favourable trends) and Threats (external pressures).
- PESTLE analysis
- A scan of the macro-environment across six external factor groups: Political, Economic, Social, Technological, Legal and Environmental.
- Payback period
- The time to recover the initial investment from net cash inflows; shorter is more desirable. Simple and liquidity-focused, but it ignores the time value of money and any cash beyond the payback window.
- Net Present Value (NPV)
- The present value of all net cash inflows discounted at the required rate of return, less the initial investment. Decision rule: NPV > 0 → eligible for further consideration; NPV < 0 → reject. Accounts for the time value of money and all cash flows.
Project Selection & Feasibility Evaluation FAQ
Why do organisations bother selecting and evaluating projects at all?
Because resources are limited, so an organisation must prioritise the proposals that create the most value rather than run every idea, and feasibility evaluation is an early check to confirm a proposal is viable before major resources are committed — catching a doomed project before it starts. Not every approved idea becomes a project; selection chooses among competing options.
Is PMGT1860 a maths unit — do I need to be good with numbers for the NPV part?
No. PMGT1860 is a concept- and framework-driven unit, and the only numeric thread is light feasibility screening — payback and NPV with the single rule 'accept if NPV > 0'. If you can divide and add, you can do it. The marks are far more about applying frameworks (SWOT, PESTLE, the business case, strategic fit) than about calculation.
What information is actually needed to screen a proposal early on?
A small decision set: strategic fit (does it align with priorities?), ROI/payback (value relative to the investment) and risk (major uncertainties). Detailed artefacts like the WBS, scope/schedule/cost baselines, the procurement strategy and the stakeholder register are produced after a proposal advances, so they are not screening inputs — a common quiz distractor.
Why isn't NPV enough on its own to select a project?
Because purely financial models exclude projects whose returns are hard to quantify or where non-financial factors are decisive, so they can produce an unbalanced, non-strategic portfolio. A positive NPV makes a project financially eligible, but selection still weighs strategic fit and risk — the number is necessary, not sufficient.
Assessment move
This week carries the unit's only calculation, so nail the two financial rules — payback = years to recover the outlay, accept if NPV > 0 — and practise one discounting example end to end. Then get fluent with the qualitative tools: sort a handful of prompts into SWOT (internal vs external first), run a PESTLE scan on a venture you know, and write a two-line business case that names an output, an outcome and a benefit. Remember the screening trio (strategic fit, ROI/payback, risk) and that detailed planning artefacts come later. Add a journal line on projects-as-investments, and confirm quiz timing on Canvas.
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