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If the business is risk adverse because of product maturity or other strategic reasons, this may not be the best approach. However, if this were also the start of a new business family, the strategy may support going to new technology. In a young business with a good market forecast, this could prove to be the best option. You may be reaching the conclusion that choosing the right project is not a simple exercise. You would be right. The integrated team is charged with locating the technical alternatives to achieve a business goal. These alternatives are analyzed as to economic viability and degree of risk. The selection of what degree of risk is acceptable is NOT the job of the integrated team, alone. This is a corporate decision and the corporation, through the appropriate business manager, is ultimately charged with accepting the risk. The integrated team must participate in this decision. The team must do its job in gathering the right data and assessing the risk potential. Only the amalgam of the knowledge and experience of the integrated team and the business managers can successfully choose which project is best for the business.
Note: In the above analysis, most mature companies with mature product lines would choose option B. It keeps the initial capital low until the product line proves itself, and offers upside potential if the business acts as forecasted.
State the true project objectives early. These should be based on business performance goals. There should be a written statement with three to four short sentences that describes how the project success will be measured. Develop the alternatives. reasonable alternatives. The list should be pared down to a few,
Analyze the alternatives. Look at the major areas and develop an incremental analysis: costs, schedule, operability, and risks. Be prepared to recycle as the analysis uncovers other attractive alternatives. Pick the best. Analyze in detail. If the best meets the project objectives and meets the company’s strategic requirements, this can now become the project. You have selected the right project. You can now concentrate on doing the project right.