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What is Project Crashing?

It is the process by which duration of project is reduced by INCREASING the amount of


RESOURCES allocated. It is important to note that crashing is done only to CRITICAL
activities. This can be achieved by any of the following approaches:
1) Addressing productivity issues of the current resources and making them more efficient. This
can be done by taking better care of resources available and cutting cost and time wherever
possible.
2) Bringing in new additional resources to speed up the processes.
3) By evaluating alternatives available and analysing them in order to find which one will help
in compressing the duration with lowest cost.
While allocating resources to CRITICAL activities, one needs to take into consideration the
slack available in non-critical activities. This will help to make sure that crashing is not affecting
the other activities of the project nor the project's scope. Crash cost also needs to be taken into
consideration and it shouldnt be more than the penalty cost.
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Scope of Feasibility Analysis:
In general terms, the elements of a feasibility analysis for a project should cover the following:
1.
Need Analysis:
This indicates recognition of a need for the project. The need may affect the
organization itself, another organization, the public, or the government. A preliminary
study is then conducted to confirm and evaluate the need. A proposal of how the need
may be satisfied is then made. Pertinent questions that should be asked include:

Is the need significant enough to justify the proposed project?

Will the need still exist by the time the project is completed?

What are the alternate means of satisfying the need?

What are the economic, social, environmental, and political impacts of the need?
2.
Process Work:
This is the preliminary analysis done to determine what will be required to satisfy the
need. The work may be performed by a consultant who is an expert in the project field.
75The preliminary study often involves system models or prototypes. For technology
oriented projects, artist's conception and scaled-down models may be used for
illustrating the general characteristics of a process. A simulation of the proposed
system can be carried out to predict the outcome before the actual project starts.
3.
Engineering and Design:
This involves a detailed technical study of the proposed project. Written quotations are
obtained from suppliers and subcontractors as needed. Technology capabilities are
evaluated as needed. Product design, if needed, should be done at this time.
4.
Cost Estimate:
This involves estimating project cost to an acceptable level of accuracy. Levels of
around -5% to +15% are common at this level of a project plan. Both the initial and

operating costs are included in the cost estimation. Estimates of capital investment and
of recurring and nonrecurring costs should also be contained in the cost estimate
document. Sensitivity analysis can be carried out on the estimated cost values to see
how sensitive the project plan is to the estimated cost values.
5.
Financial Analysis:
This involves an analysis of the cash flow profile of the project. The analysis should
consider rates of return, inflation, sources of capital, payback periods, breakeven point,
residual values, and sensitivity. This is a critical analysis since it determines whether or
not and when funds will be available to the project. The project cash flow profile helps
to support the economic and financial feasibility of the project.
6.
Project Impacts:
This portion of the feasibility study provides an assessment of the impact of the
proposed project. Environmental, social, cultural, political, and economic impacts may
be some of the factors that will determine how a project is perceived by the public. The
value added potential of the project should also be assessed. A value added tax may be
assessed based on the price of a product and the cost of the raw material used in making
the product. The tax so collected may be viewed as a contribution to government
coffers.
7.
Conclusions and Recommendations:
The feasibility study should end with the overall outcome of the project analysis. This
may indicate an endorsement or disapproval of the project. Recommendations on what
should be done should be included in this section of the feasibility report.

Flash Reports
The Flash Report or financial dashboard report is defined as a periodic snapshot of key
financial and operational data. Its a one-page report that helps management assess the key
performance indicators of the company. There is an art to creating a flash report or dashboard
report! The flash report should cover the shortest time period that is feasible, usually a weekly
basis. The whole process should be based on the KISS principle (Keep It Simple Stupid) and
should not take any longer than 30 minutes to prepare and get ready. If it takes any longer than
that, then the flash report is too detailed and will be too difficult to maintain!
There are 3 sections to the flash report: Liquidity, Productivity and Profitability.
Flash Reports are a rough measure of change. They are not meant to be 100% accurate. If the
data is 80-90% accurate, it will be enough to manage the business. For complete accuracy, the
firm can defer to its monthly financial statements, which come out 2-4 weeks after the month
closes. For management purposes, it is timeliness and mostly accurate is good enough. If one
were to wait for complete accuracy, the competitive landscape may have change so completely
that the accurate financial statements may not be of any use.
Flash reports should be done on a weekly basis. However, some companies elect to do it every
two weeks in order to more naturally capture the payroll cycle in terms of monitoring cash flow.
The CFO/Controller should get together with the Owner(s)/Management to arrive at a set of
metrics for the Productivity Section. This is the hardest part to arrive at and will require the input

of both operations as well as finance/accounting.