The business market is today very competitive, and only the organizations that use the appropriate business management approaches can achieve all their goals. In particular, evaluating the feasibility of a given innovation project is highly important for any modern-day organization (Creswell & Creswell, 2017). Even though there are several types of project evaluation methods, not all are necessarily applicable to all businesses. For Company X, the use of both the qualitative and quantitative approaches are highly beneficial towards the success of any given project.
The qualitative methods are beneficial because they allow organizations to forecast financial cash returns for a given project. These methods allow organizations to leverage special mathematical and statistical techniques to evaluate a given innovation project. Some of the common qualitative methods are the real options and discounted cash flow methods.
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"Methods for Evaluating Innovation Projects".
The discounted cash flows involve the use of special cash flow analysis to determine the feasibility of an innovation project. For Company X, the discounted cash flows allow the organization to evaluate whether the projected future benefits are beneficial enough to match the risks.
The real options analysis technique involves the use of special option valuation methods to evaluate the budgeting choices of a given organization. The real option refers to the ability to implement a crucial business decision such as expanding, developing or even canceling a project. For Company X, the real options analysis technique allows the organization to make decisions under challenging circumstances. Besides that, this approach allows Company X to adjust the finances of the communications project to match actual and real choices.
Besides that, the qualitative methods are also crucial towards the success of the business. Several factors in the choice of development projects are often challenging to quantify, which makes it essential to quantify projects (Schilling, 2017).
The screening questions allow the organization to discuss the prospective advantages and drawbacks of the communications project (Koller, Goedhart & Wessels, 2015). In most cases, this approach often involves the use of special screening questions that are used to acquire useful information. This approach is also beneficial for Company X because It allows the organization to use structured questions to gain useful information. The organization can be in a much better position to evaluate various factors that are important in the project development life cycle. That said, the organization might also have to consider that the screening questions are sometimes not able to provide accurate answers in relation to the feasibility of a given project.
The aggregate project planning framework is also another useful approach to consider. Through this approach, Company X can be able to compare their predicted balance of projects against the real balance of projects. Besides that, this approach also allows Company X to determine any project constraints and to experience improved resource management results.
The aggregate planning allows the firm to classify the existing projects in relation to the resources required to complete the project, and how these factors can enhance the performance of the communications project (Schilling, 2017). The organization can then map out the plan conclusively, which allows the project managers to identify any challenges in the development strategy.
The other approach is referred to as the Q Sort approach. Even the Q Sort approach can suit various project ranking and evaluation procedures; it is less effective than the approaches mentioned before. For Company X especially, this approach is not beneficial because it fails to provide an effective and efficient method for project innovation analysis.
Broadly speaking, the recommended combination of project analysis includes the use of the discounted cash flows, the real options, and the aggregate project planning framework. These approaches are beneficial for Company X and can play an essential role in evaluating the feasibility of the satellites communications project.
- Creswell, J., & Creswell, J. (2017). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. Sage Publications.
- Koller, T., Goedhart, M., & Wessels, D. (2015). Valuation: Measuring and Managing the Value of Companies. Hoboken, NJ: Wiley.
- Schilling, M. (2017). Strategic management of technological innovation. New York, NY: McGraw-Hill Education.
