Project Selection at Nova Western, Inc.

This case presents an example that is common, in which different screening methods may yield different findings. In this case, two projects are competing for funding; Project Janus, championed by the organization$$s Software Development group and Project Gemini, which as the backing of their Business Applications organization. Using a weighted scoring model, it appears that Project Gemini offers the best alternative in terms of the criteria employed. On the other hand, when a Discounted Cash Flow approach is used, the results suggest that Project Janus will earn greater returns on initial investment.

Questions

Phyllis has called you into her office to help her make sense of the contradictions in the two project evaluations. How would you explain the reasons for the divergence of opinion from one technique to the next? What are the strengths and weaknesses of each screening method?

Choose the project that you think, based on the two analyses, Nova Western should select. Defend your choice.

What does this case suggest to you about the use of project selection methods in organizations? How would you resolve the contradictions found in this example?