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DIAGNOSTICS OF PROJECT COST EFFICIENCY IN PROJECT MANAGEMENT SYSTEM

E. Patrusheva, E. Lifanova, A. Karashova

Abstract

In works on the project management theory and project activity standards, questions of project cost efficiency diagnostics are not included in project works contents and regulations, standing down to providing specific project characteristics. Meanwhile project success and deviations emerging thereat will directly impact on its efficiency level. We propose to carry out assessment of project cost efficiency (for example, their net present value, NPV) in interrelation with the basic project characteristics – the cost, time of execution and project product quality, and also taking into account sensitivity to change of its certain characteristics. In process of project run the fixed deviations of characteristics from the planned level will find reflection in an investment component of NPV calculation, in the size and a timeframe of the expected operating income that in turn will define also an essence of the decisions on changes in the project. We assume that project documents should include procedures of cost efficiency diagnostics and participants of the project responsible for their carrying out should be defined. At the same time it is necessary to consider the following situations. 1. Close project is planned before operating activities start. In this case diagnostics and control of its efficiency are carried out by the customer who makes the decision on changes in the project based on alternative estimates of its efficiency. At the same time the project manager has to have an idea of this project’s efficiency indicator sensitivity. 2. The project (program) has to be closed at an operational stage, when achieving target efficiency level. In this case project’s documents have to establish responsibility of the project manager on efficiency diagnostics and provide the corresponding tools for carrying it out. The proposed additions to the project management system will promote company strategic objectives achievement when using products of project activity.

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DOI resolver: doi.org/10.5593/sgemsocial2018/1.5/S05.034

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