Project Management 1

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Project

Management

Credit Hours : 3Lecturer : Dedi Purwana E.S.

Email: [email protected]

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Students Role

Relax and enjoy yourself 

Participate actively

Feel free to ask questions

Complete exercises

Please switch your hand phones to silentmode

Do on time your individual and groupassignments

Keep maintaining your academic integrityE.g. Don¶t cheat on mid and final exam

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THE PROJEC

T

MANAGEMENT FRAMEWORK

Introduction to ProjectManagement

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 Advantages of Using Formal

Project Management Better control of financial, physical, and human

resources

Improved customer relations

Shorter development times

Lower costs

Higher quality and increased reliability

Higher profit margins Improved productivity

Better internal coordination

Higher worker morale

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What Is a Project?

A project is a temporary endeavor undertaken to accomplish a uniquepurpose

Attributes of projects unique purpose

temporary ± definite beginning and ending require resources, often from various areas

should have a primary sponsor and/or customer 

involve uncertainty

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RELATED ENDEAVORS

 Programs. 

is a group of projects

managed in a

coordinated way to

obtain benefits not

available from

managing them

individually

Subprojects. 

Projects divided into more

manageable components or subprojects. 

Subprojects are oftencontracted out to an external

enterprise or to another functional unit in the performing organization.

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The

Triple Constraint

Every project is constrained in differentways by its

Scope goals: What is the project trying toaccomplish?

Time goals: How long should it take to

complete? Cost goals: What should it cost?

It is the project manager¶s duty to balancethese three often competing goals

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The Triple Constraint of Project

Management

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What is Project

Management?Project management is ³the application of knowledge, skills, tools, and techniques toproject activities in order to meet projectrequirements´ (PMI*, Project ManagementBody of Knowledge (PMBOK Guide), 2000,

p. 6)*The Project Management Institute (PMI) is an international

 professional society ± devoted to the advancement of project

management.  Their web site is www. pmi.org. 

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Project Management Institutewww.pmi.org

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Project Management

Framework

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Project Stakeholders Stakeholders are the people involved in or affected by

project activities Stakeholders include

the project sponsor and project team support staff  customers users suppliers opponents to the project

Interview stakeholder to determine their expectationfor the project

Involves the client as much as possible in the projectactivities

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9 Project Management

Knowledge  Areas Knowledge areas describe the key

competencies that project managers must

develop 4 core knowledge areas lead to specific project

objectives (scope, time, cost, and quality)

4 facilitating knowledge areas are the means through

which the project objectives are achieved (humanresources, communication, risk, and procurementmanagement

1 knowledge area (project integration management)affects and is affected by all of the other knowledgeareas

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Project Management Tools and

Techniques Project management tools and techniques

assist project managers and their teams in

various aspects of project management Some specific ones include

Project Charter and WBS (scope)

Gantt charts, network diagrams, critical pathanalysis, critical chain scheduling (time)

Cost estimates and earned valuemanagement (cost)

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Sample WBS for Intranet

Project in Chart Form

Concept

Design User Interface

Design Server Setup

Develop Server 

Support Infrastructure

Web Site

Design

Develop Pages

and Links

Develop

Functionality

Content

Migration/Integration

Testing

Web Site

Development

Roll Out Support

Intranet Project

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Sample Gantt Chart

The WBS is on the left, and each task¶s start and finish date

are shown on the right using a calendar timescale.

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Sample Network Diagram

Each box is a project task from the WBS.  Arrows show dependencies

 between tasks. The bolded tasks are on the critical path. If any tasks on the

critical path take longer than planned, the whole project will slip

unless something is done.

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Sample Earned Value Chart

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 10 11 12

Month

         $

BCWS or Cumulative Plan

   ACWP or Cumulative  Actual

BCWP or Cumulative EVBCWS

 ACWP

BWCPSchedule Variance

Cost Variance

EAC

BAC

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More  Advantages of Project

Management Bosses, customers, and other stakeholders do not like

surprises

Good project management (PM) provides assuranceand reduces risk

PM provides the tools and environment to plan,monitor, track, and manage schedules, resources,costs, and quality

PM provides a history or metrics base for futureplanning as well as good documentation

Project members learn and grow by working in across-functional team environment

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How Project Management (PM)

Relates to Other Disciplines Much of the knowledge needed to manage

projects is unique to PM

However, project managers must also haveknowledge and experience in general management

the application area of the project

Project managers must focus on meetingspecific project objectives. ³SM ART´ ± specific,measurable, achievable, realistic and time-limited

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Project Management and

Other Disciplines

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PM Knowledge Continues to

Grow and Mature The PMBOK Guide ± 2000 Edition is an  ANSI

standard

PMI¶s certification department earned ISO9000 certification

Hundreds of new books, articles, and

presentations related to project managementhave been written in recent years

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Project Management

Certification PMI provides certification as a Project Management

Professional (PMP)

A PMP has documented sufficient project experience,agreed to follow a code of ethics, and passed the PMPexam

The number of people earning PMP certification isincreasing quickly

PMI and other organizations are offering newcertification programs

Tekmetric / Brainbench Project ManagementCertification.

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Project Management Software By 2005, there were tens of different products

to assist in performing project management.

Microsoft Project 2003 most popular . Project Portal to promote good project

governance ± transparency, participation andaccountability

Project Info is a project document keeper andproject reporting and monitoring onlinesystem.

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Microsoft Project

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Project Portal ± UIN Sunan Kalijaga

www.uin-suka.info/projectportal

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Project Portal UIN Sultan Syarif Kasim

http://www.uin-suska.info/idb

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Project Portal ± Haluoleo University

http://www.idbunhalu.info/projectportal

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The Project

Management Contextand Processes

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Project Phases and the

Project Life Cycle A project life cycle is a collection of 

project phases

Project phases vary by project or industry, but some general phasesinclude

concept development

implementation

support 

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Phases of the Project LifeCycle

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Distinguishing Project Life

Cycles and Product Life Cycles The project life cycle applies to all

projects, regardless of the products being

produced Product life cycle models vary

considerably based on the nature of theproduct

Most large products are developed as aseries of projects

Project management is done in all of the

product life cycle phases 

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Why Have Project Phases and

Management Reviews? A project should successfully pass through

each of the project phases in order to

continue on to the next Management reviews (also called phase

exits or kill points) should occur after each

phase to evaluate the project¶s progress,likely success, and continued compatibilitywith organizational goals

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Many Organizations Focus on

the Structural Frame Most people understand what organizational

charts are

Many new managers try to changeorganizational structure when other changesare needed

3 basic organization structures*

functional

Project

Matrix

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Functional Organization

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Projectized Organization

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Weak Matrix Organization

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Balanced Matrix Organization

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Strong Matrix Organization

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Composite Organization

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Organizational Structure

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Recognize the Importance of 

Project Stakeholders Recall that project stakeholders are the

people involved in or affected by project

activities

Project managers must take time toidentify, understand, and manage

relationships with all project stakeholders Senior executives are very important

stakeholders

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Need for Top Management

Commitment Several studies cite top management

commitment as one of the key factors

associated with project success Top management can help project managers

secure adequate resources, get approval for unique project needs in a timely manner, receive

cooperation from people throughout theorganization, and learn how to be better leaders

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Need for Organizational

Standards Standards and guidelines help project managers

be more effective

Senior management can encourage the use of standard forms and software for project

management

the development and use of guidelines for writing

project plans or providing status information the creation of a project management office or 

center of excellence

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Project Manager R esponsibilities

R eporting to Senior Manager and the SteeringCommittee

Communication with Users

Planning and Scheduling O btaining and allocating resources

Controlling R isk 

Delivering R esults

People Management Coordination

Quality Assurance

Budget Control

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Fifteen Project Management Job

Functions* Evaluate project

requirements

Identify and evaluate risks

Prepare contingency plan Identify interdependencies

Identify and track criticalmilestones

Participate in project phase

review Secure needed resources

Manage the change controlprocess

Report project status

Define scope of project

Identify stakeholders,decision-makers, and

escalation procedures Develop detailed task list

(work breakdownstructures)

Estimate time

requirements Develop initial project

management flow chart

Identify requiredresources and budget

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What do you need, to bea good Project Manager?

A communicator 

A manager 

An Innovator 

Technically competent, respected, and aware

An Administrator 

A Leader 

A ble to work well under pressures

Goal-oriented

Knowledgeable about the company

Senior 

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Suggested Skills for aProject Manager 

y Communication skills: listening, persuading

y Organizational skills: planning, goal-setting, analyzing

y

Team Building skills: empathy, motivation, esprit decorps

y Leadership skills: sets example, energetic, vision (bigpicture), delegates, positive

y Coping skills: flexibility, creativity, patience,persistence

y Technological skills: experience, project knowledge

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Project Management

Process Groups Project management can be viewed as a

number of interlinked processes

The project management process groupsinclude

initiating processes

planning processes

executing processes

controlling processes

closing processes

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Overlap of Process Groups in a Phase

(PMBOK Guide, 2000, p. 31)

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Project Integration Management:  project plan development,

 project plan execution, and

overall change control.

Project Scope Management: initiation,

scope planning, scope definition,

scope verification, and

scope change control.

PM Knowledge Area

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PM Knowledge Area

Project Time Management: activity definition,

activity sequencing,

activity duration estimating, schedule development, and

schedule control.

Project Cost Management: resource planning,

cost estimating,

cost budgeting, and

cost control.

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Project Quality Management:

quality planning,

quality assurance, and quality control.

Project Human R esource Management:

organizational planning, staff acquisition, and

team development.

PM Knowledge Area

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Project Communications Management: Communications planning, information distribution,

 performance reporting, and administrative closure.

Project R isk Management: risk identification, risk quantification, risk response development, and risk response control.

PM Knowledge Area

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Project Procurement Management:

 procurement planning,

solicitation planning, solicitation,

source selection,

contract administration, and

contract close-out.

PM Knowledge Area

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PROCESS GROUPS

Initiating processes

recognizing that a project or phase should begin and committing to do so.

Planning processes

devising and maintaining a workable scheme to accomplish the businessneed that the project was undertaken to address.

Executing processes

coordinating people and other resources to carry out the plan.

Controlling processes

ensuring that project objectives are met by monitoring and measuringprogress and taking corrective action when necessary.

Closing processes

formalizing acceptance of the project or phase and bringing it to an orderlyend.

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PROCESS GROUPS

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PROCESS GROUPS

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PROCESS GROUPS

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PROCESS INTER ACTIONS

Inputs

documents or documentable items that will

be acted upon. Tools and techniques

mechanisms applied to the inputs to createthe outputs.

Outputs

documents or documentable items that area result of the process.

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Project Scope

Management

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What is Project Scope Management

Scope refers to all the work involved increating the products of the project and theprocesses used to create them

Project scope management includes theprocesses involved in defining and controllingwhat is or is not included in the project

The project team and stakeholders must havethe same understanding of what products willbe produces as a result of a project and whatprocesses will be used in producing them

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Project Scope Management Processes

Initiation: beginning a project or continuing to thenext phase

Scope planning: developing documents to providethe basis for future project decisions

Scope definition: subdividing the major projectdeliverables into smaller, more manageablecomponents

Scope verification: formalizing acceptance of theproject scope

Scope change control: controlling changes to

project scope 

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Project Initiation: Strategic Planning

and Project Selection The first step in initiating projects is to look

at the big picture or strategic plan of anorganization

Strategic planning involves determininglong-term business objectives

Projects should support strategic andfinancial business objectives

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Identifying Potential Projects

Many organizations follow a planning

process for selecting projects First develop an strategic plan based on

the organization¶s overall strategic plan

Then perform a business area analysis

Then define potential projects

Then select projects and assign

resources 

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Methods for Selecting Projects

There are usually more projects thanavailable time and resources to implement

them It is important to follow a logical process

for selecting projects to work on

Methods include focusing on broad needs,categorizing projects, financial methods,and weighted scoring models

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Focusing on Broad

Organizational Needs It is often difficult to provide strong

 justification for many projects, but

everyone agrees they have a high value Three important criteria for projects:

There is a need  for the project

There are fu nds available There¶s a strong will  to make the project

succeed

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Categorizing Projects

One categorization is whether the projectaddresses

a problem an opportunity, or 

a directive

Another categorization is how long it willtake to do and when it is needed

Another is the overall priority of the project

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Project Charters

After deciding what project to work on, it is important toformalize projects

A project charter is a document that formally recognizes

the existence of a project and provides direction on theproject¶s objectives and management

Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project

Provides the project manager with authority to applyresources

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Sample Project Charter 

Project Title: Information Technology (IT) Upgrade ProjectProject Start Date: March 4, 200 Projected Finish Date:  December 4, 2002Project Manager: Kim  Nguyen, 691-2784, [email protected] Project Objectives: Upgrade hardware and software for all employees (approximately 2,000) within 9

months based on new corporate standards. See attached sheet describing the new standards. Upgrades mayaffect servers and midrange computers as well as network hardware and software. Budgeted $1,000,000 for hardware and software costs and $500,000 for labor costs. Approach:

y Update the IT inventory database to determine upgrade needs

y Develop detailed cost estimate for project and report to CIO 

y Issue a request for quotes to obtain hardware and software

y Use internal staff as much as possible to do the planning, analysis, and installation

l j h ( i d)

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Sample Project Charter (continued)

Name Role Responsibility

Walter Schmidt, CEO Project S ponsor Monitor project

Mike Zwack CIO Monitor project, providestaff 

Kim  Nguyen Project Manager Plan and execute project

Jeff Johnson Director of IT O perations Mentor Kim

 Nancy R eynolds VP, Human R esources Provide staff, issue memoto all employees about

 project

Steve McCann Director of Purchasing Assist in purchasinghardware and software

Sign-off: (Signatures of all above stakeholders)

Comments: (Handwritten comments from above stakeholders, if applicable)This project must be done within ten months at the absolute latest.   Mik e Zwack, CIO

We are assuming that adequate staff will be available and committed to supporting this project.  Some work must be done after hours to avoid work disruptions, and overtimewill be provided.  Jeff Johnson and K im Ng uyen , Informat ion Technolog  y De partment 

Roles and Responsibilities:

S Pl i d th

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Scope Planning and theScope Statement

A scope statement is a document used todevelop and confirm a common understanding

of the project scope. It should include a project justification

a brief description of the project¶s products

a summary of all project deliverables

a statement of what determines project success

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Scope Definition and the Work

Breakdown Structure After completing scope planning, the next step is

to further define the work by breaking it intomanageable pieces

Good scope definition helps improve the accuracy of time, cost, and

resource estimates

defines a baseline for performance measurement and

project control aids in communicating clear work responsibilities

The Work Breakdown

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The Work BreakdownStructure

A work breakdown structure (WBS) is anoutcome-oriented analysis of the work involved

in a project that defines the total scope of theproject

It is a foundation document in projectmanagement because it provides the basis for 

planning and managing project schedules,costs, and changes

A deliverable-oriented grouping of projectelements which organizes and defines total

sco e of the ro ect. 

S l I t t WBS O i d

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Sample Intranet WBS Organizedby Product

S l I t t WBS O i d

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Sample Intranet WBS Organizedby Phase

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Intranet WBS in Tabular Form1.0 Concept

1.1 Evaluate current systems

1.2 Define R equirements

1.2.1 Define user requirements

1.2.2 Define content requirements

1.

2.3

 D

efine system requirements1.2.4 Define server owner requirements

1.3 Define specific functionality

1.4 Define risks and risk management approach

1.5 Develop project plan

1.6 Brief web development team2.0 Web Site Design

3.0 Web Site Development

4.0 R oll Out

5.0 Support

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Intranet WBS and Gantt Chart in Project

2003

Project 98 file

Intranet WBS and Gantt Chart Organized

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Intranet WBS and Gantt Chart Organizedby Project Management Process Groups

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 Approaches to Developing WBSs

Using guidelines: Some organizations,provide guidelines for preparing WBSs

T

he analogy approach: It often helps toreview WBSs of similar projects The top-down approach: Start with the largest

items of the project and keep breaking themdown

The bottoms-up approach: Start with thedetailed tasks and roll them up

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Basic Principles for Creating WBSs*

*Cleland, David I.  Project  M anagement: S trateg ic Desi gn and Im plementat ion , 1994

1.  A unit of work should appear at only one place in the WBS.

2. The work content of a WBS item is the sum of the WBS items below it.

3.  A WBS item is the responsibility of only one individual, even though manypeople may be working on it.

4. The WBS must be consistent with the way in which work is actually going to beperformed; it should serve the project team first and other purposes only if practical.

5. Project team members should be involved in developing the WBS to ensureconsistency and buy-in.

6. Each WBS item must be documented to ensure accurate understanding of thescope of work included and not included in that item.

7. The WBS must be a flexible tool to accommodate inevitable changes whileproperly maintaining control of the work content in the project according to thescope statement.

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Scope Verification and Scope

Change Control It is very difficult to create a good scope

statement and WBS for a project

It is even more difficult to verify projectscope and minimize scope changes

Scope verification use work results andproduct documentation as input.

Scope controls requires a formal changemanagement process.

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Suggestions for Reducing Incomplete

and Changing Requirements Develop and follow a requirements management

process

Employ techniques such as prototyping, use case

modeling, and Joint  Application Design to thoroughlyunderstand user requirements

Put all requirements in writing and current

Create a requirements management database

Provide adequate testing Use a process for reviewing requested changes from a

systems perspective

Emphasize completion dates

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Project Time

Management

Project Time Management

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Project Time ManagementProcesses

Project time management involves theprocesses required to ensure timely

completion of a project. Processesinclude:

Activity definition

Activity sequencing

Activity duration estimating

Schedule development

Schedule control

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Where Do Schedules Come From?

Defining  Activities Project schedules grow out of the basic

document that initiate a project

Project charter includes start and end dates andbudget information

Scope statement and WBS help define what will bedone

Activity definition involves developing a moredetailed WBS and supporting explanations to

understand all the work to be done

Activity Sequencing

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 Activity Sequencing

Involves reviewing activities and determiningdependencies Mandatory dependencies: inherent in the nature of 

the work; hard logic Discretionary dependencies: defined by the project

team; soft logic

External dependencies: involve relationships

between project and non-project activities You must determine dependencies in order to

use critical path analysis

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Project Network Diagrams

Project network diagrams are the preferredtechnique for showing activity sequencing

A project network diagram is a schematicdisplay of the logical relationships among, or sequencing of, project activities

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Precedence Diagramming

Method (PDM) Activities are represented by boxes

Arrows show relationships between

activities More popular than  ADM method and used

by project management software

Better at showing different types of dependencies

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Task Dependency Types

Sample Precedence Diagramming Method

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Sample Precedence Diagramming Method(PDM) Network Diagram for Project X

A ti it D ti E ti ti

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 Activity Duration Estimating

After defining activities and determiningtheir sequence, the next step in time

management is duration estimating Duration includes the actual amount of 

time worked on an activity  pl us elapsed

time People doing the work should help create

estimates, and an expert should review

them 

Schedule Development

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Schedule Development

Schedule development uses results of theother time management processes todetermine the start and end date of the projectand its activities

Ultimate goal is to create a realistic projectschedule that provides a basis for monitoringproject progress for the time dimension of the

project Important tools and techniques include Gantt

charts, PERT analysis, critical path analysis,and critical chain scheduling

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Gantt Charts

Gantt charts provide a standard format for displaying project schedule information by listingproject activities and their corresponding startand finish dates in a calendar format

Symbols include: A black diamond: milestones or significant events on

a project with zero duration

Thick black bars: summary tasks Lighter horizontal bars: tasks

Arrows: dependencies between tasks

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Gantt Chart for Software Launch Project

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Critical Path Method (CPM)

CPM is a project network analysis techniqueused to predict total project duration

A critical path for a project is the series of activities that determines the ear l i est ti me by

which the project can be completed

The critical path is the l ong est  path through thenetwork diagram and has the least amount of slack or float

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Finding the Critical Path

First develop a good project networkdiagram

Add the durations for all activities on eachpath through the project network diagram

The longest path is the critical path

Simple Example of Determining

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Simple Example of Determiningthe Critical Path

Consider the following project network diagram. Assume all times are in days.

2 3

4

5

A=2 B=5

C=2

D=7

1 6

F=2

E=1

start finish

a. How many paths are on this network diagram?

 b. How long is each path?

c. Which is the critical path?

d. What is the shortest amount of time needed to completethis project?

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Determining the Critical Path for 

Project X

More on the Critical Path

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More on the Critical Path

If one of more activities on the critical pathtakes longer than planned, the whole project

schedule will slipu

nl e

ss corrective action istaken

Misconceptions:

The critical path is not the one with all the critical

activities; it only accounts for time There can be more than one critical path if the

lengths of two or more paths are the same

The critical path can change as the projectprogresses

U i C iti l P th A l i t

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Using Critical Path  Analysis to

Make Schedule Trade-offs Knowing the critical path helps you make

schedule trade-offs

F ree sl ack or  f ree f l oat is the amount of timean activity can be delayed without delayingthe early start of any immediately followingactivities

T ot al sl ack or  tot al  f l oat is the amount of time

an activity may be delayed from its early startwithout delaying the planned project finishdate

Techniques for Shortening a

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Techniques for Shortening aProject Schedule

Shortening durations of critical tasks for adding more resources or changing their 

scope C rashing tasks by obtaining the greatest

amount of schedule compression for the

least incremental cost F ast t rack ing tasks by doing them in

parallel or overlapping them

Importance of Updating

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Importance of UpdatingCritical Path Data

It is important to update project scheduleinformation

The critical path may change as youenter actual start and finish dates

If you know the project completion date

will slip, negotiate with the projectsponsor 

Program Evaluation and

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Program Evaluation andReview Technique (PERT)

PERT is a network analysis technique used toestimate project duration when there is a high

degree of uncertainty about the individualactivity duration estimates

PERT uses probabilistic time estimates basedon using optimistic, most likely, and pessimistic

estimates of activity durations Single and average duration estimates

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PERT Formula and Example

PERT weighted average formula:optimistic time + 4X most likely time + pessimistic time

6

Example:PERT weighted average =8 workdays + 4 X 10 workdays + 24 workdays = 12 days

6where 8 = optimistic time, 10 = most likely time, and 24 =pessimistic time

Controlling Changes to the

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Controlling Changes to the

Project Schedule Perform reality checks on schedules

Allow for contingencies

Don¶t plan for everyone to work at 100%capacity all the time

Hold progress meetings with stakeholders

and be clear and honest in communicatingschedule issues

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Working with People Issues

Strong leadership helps projects succeedmore than good PERT charts

Project managers should use empowerment

incentives

discipline negotiation

Using Software to Assist in

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Using Software to  Assist in

Time Management Software for facilitating communications

helps people exchange schedule-related

information Decision support models help analyze

trade-offs that can be made

Project management software can helpin various time management areas

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Project Cost

Management

What is Cost and Project Cost

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jManagement?

Cost is a resource sacrificed or fore-goneto achieve a specific objective or 

something given up in exchange Costs are usually measured in monetary

units like dollars

Project cost management includes the

processes required to ensure that theproject is completed within an approvedbudget

Project Cost Management

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Processes

Resource planning: determining whatresources and quantities of them should beused

Cost estimating: developing an estimate of thecosts and resources needed to complete aproject

Cost budgeting: allocating the overall costestimate to individual work items to establish abaseline for measuring performance

Cost control: controlling changes to the projectbudget

R Pl i

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Resource Planning

The nature of the project and the organizationwill affect resource planning

Some questions to consider: How difficult will it be to do specific tasks on the

project?

Is there anything unique in this project¶s scopestatement that will affect resources?

What is the organization¶s history in doing similar tasks?

Does the organization have or can they acquire thepeople, equipment, and materials that are capableand available for performing the work?

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Cost Estimating

An important output of project costmanagement is a cost estimate

There are several types of cost estimatesand tools and techniques to help createthem

It is also important to develop a costmanagement plan that describes how costvariances will be managed on the project

Types of Cost Estimates

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Types of Cost Estimates

Type of Estimate When Done Why Done How Accurate

Rough Order of 

Magnitude (ROM)

Very early in the

 project life cycle,

often 3 ±5 years before project

completion

Provides rough

 ballpark of cost for 

selection decisions

 ±25%, +75%

Budgetary Early, 1±2 years out Puts dollars in the

 budget plans

 ±10%, +25%

Definitive Later in the project, <1 year out

Provides details for  purchases, estimate

actual costs

 ±5%, +10%

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Cost Estimation Tools and Techniques

3 basic tools and techniques for costestimates:

analogous or top-down: use the actualcost of a previous, similar project as thebasis for the new estimate

bottom-up: estimate individual work items

and sum them to get a total estimate parametric: use project characteristics in a

mathematical model to estimate costs

Typical Problems with Cost

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yp ca ob e s t CostEstimates

Developing an estimate for a large project is a complextask requiring a significant amount of effort.Remember that estimates are done at various stagesof the project

Many people doing estimates have little experiencedoing them. Try to provide training and mentoring

People have a bias toward underestimation. Reviewestimates and ask important questions to make sure

estimates are not biased Management wants a number for a bid, not a real

estimate. Project managers must negotiate withproject sponsors to create realistic cost estimates

Cost Budgeting

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Cost Budgeting

Cost budget involves allocating theproject cost estimate to individual work

items and providing a cost baseline

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Cost Control

Project cost control includes monitoring cost performance

ensuring that only appropriate projectchanges are included in a revised costbaseline

informing project stakeholders of authorized

changes to the project that will affect costs Earned value management is an

important tool for cost control

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Earned Value Management (EVM)

EVM is a project performance measurementtechnique that integrates scope, time, and costdata

Given a baseline (original plan plus approvedchanges), you can determine how well theproject is meeting its goals

You must enter actual information periodicallyto use EVM. Figure below shows a sampleform for collecting information

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Earned Value Management Terms

The planned value (PV), formerly called the budgetedcost of work scheduled (BCWS), also called the budget,is that portion of the approved total cost estimate planned

to be spent on an activity during a given period Actual cost (AC), formerly called actual cost of work

performed ( ACWP), is the total of direct and indirect costsincurred in accomplishing work on an activity during agiven period

The earned value (EV), formerly called the budgetedcost of work performed (BCWP), is the percentage of work actually completed multiplied by the planned value

Earned Value Formulas

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To estimate what it will cost to complete a project or how

long it will take based on performance to date, divide the

 budgeted cost or time by the appropriate index.

BCWP/ACWP

BCWP/BCWS

BCWP - BCWS

BCWP - ACWP

Earned Value Calculations for One Activity

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Earned Value Calculations for One  Activity After Week One

PV * % Complete

BCWP - ACWP

BCWP - BCWS

BCWP/ACWP

BCWP/BCWS

BCWP

ACWP

BCWS

Rules of Thumb for EV A N b

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Numbers

Negative numbers for cost and schedulevariance indicate problems in those

areas. The project is costing more thanplanned or taking longer than planned

CPI and SPI less than 100% indicate

problems

Earned Value Chart for Project

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Earned Value Chart for Project A

fter Five Months

BCWP

ACWP BCWS

Using Software to Assist in Cost

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Using Software to  Assist in Cost

Management Spreadsheets are a common tool for 

resource planning, cost estimating, cost

budgeting, and cost control Many companies use more sophisticated

and centralized financial applications

software for cost information Project management software has many

cost-related features

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Project Quality

Management

What Is Project Quality

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What Is Project Quality

Management? The International Organization for Standardization (ISO)

defines quality as the totality of characteristics of anentity that bear on its ability to satisfy stated or impliedneeds

Other experts define quality based on conformance to requirements: meeting written specifications

fitness for use: ensuring a product can be used as it wasintended

Grade is a category or rank given to entities having thesame functional use but different requirements for quality.

Project Quality Management

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Project Quality Management

Processes Quality planning: identifying which quality

standards are relevant to the project and how tosatisfy them

Quality assurance: evaluating overall projectperformance to ensure the project will satisfy therelevant quality standards

Quality control: monitoring specific projectresults to ensure that they comply with the

relevant quality standards while identifying waysto improve overall quality

Q

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Modern Quality Management

Modern quality management

requires customer satisfaction

prefers prevention to inspection recognizes management responsibility for 

quality

Noteworthy quality experts includeDeming, Juran, Crosby, Ishikawa,Taguchi, and Feigenbaum

Quality Experts

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y p

Deming was famous for his work in rebuilding Japanand his 14 points

Juran wrote the Quality Control Handbook and 10

steps to quality improvement Crosby wrote Quality is Free and suggested that

organizations strive for zero defects

Ishikawa developed the concept of quality circles andusing fishbone diagrams

Taguchi developed methods for optimizing theprocess of engineering experimentation

Feigenbaum developed the concept of total qualitycontrol

Sample Fishbone or Ishikawa

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Sample Fishbone or Ishikawa

Diagram

Malcolm Baldrige Award and

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Malcolm Baldrige  Award and

ISO9000

The Malcolm Baldrige Quality  Award wasstarted in 1987 to recognize companies with

world-class quality ISO 9000 provides minimum requirements for 

an organization to meet their qualitycertification standards

ISO 9000 is applicable to any product, serviceor process anywhere in the world.

Q lit Pl i

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Quality Planning

It is important to design in quality andcommunicate important factors that directlycontribute to meeting the customer¶srequirements

Design of experiments helps identify whichvariable have the most influence on the overalloutcome of a process

Many scope aspects of IT projects affectquality like functionality, features, systemoutputs, performance, reliability, andmaintainability

Q lit A

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Quality  Assurance

Quality assurance includes all the activitiesrelated to satisfying the relevant qualitystandards for a project

Another goal of quality assurance iscontinuous quality improvement

Benchmarking can be used to generate ideasfor quality improvements

Quality audits help identify lessons learnedthat can improve performance on current or future projects

Q lit C t l

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Quality Control

The main outputs of quality control are

acceptance decisions

rework

process adjustments

Some tools and techniques include

pareto analysis

statistical sampling quality control charts

testing

P t A l i

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Pareto  Analysis

Pareto analysis involves identifying the vital fewcontributors that account for the most quality

problems in a system Also called the 80-20 rule, meaning that 80% of 

problems are often due to 20% of the causes

Pareto diagrams are histograms that help

identify and prioritize problem areas

Sample Pareto Diagram

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p g

St d d D i ti

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Standard Deviation

Standard deviation measures how muchvariation exists in a distribution of data

A small standard deviation means that datacluster closely around the middle of adistribution and there is little variability amongthe data

A normal distribution is a bell-shaped curve thatis symmetrical about the mean or average valueof a population

Normal Distribution and Standard

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Deviation

Sample Quality ControlChart

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Chart

Testing

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g

Many professionals think of testing as astage that comes near the end of product

development Testing should be done during almost

every phase of the product developmentlife cycle

Impro ing Project Q alit

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Improving Project Quality

Several suggestions for improving quality for projects include

Leadership that promotes quality Understanding the cost of quality

Focusing on organizational influences andworkplace factors that affect quality

Following maturity models to improve quality

Leadership

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Leadership

³It is most important that top managementbe quality-minded. In the absence of 

sincere manifestation of interest at the top,little will happen below.´ (Juran, 1945)

A large percentage of quality problems are

associated with management, nottechnical issues

The Cost of Quality

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The Cost of Quality

The cost of quality is

the cost of conformance or delivering

products that meet requirements and fitnessfor use

the cost of nonconformance or takingresponsibility for failures or not meeting

quality expectations

Five Cost Categories Related to Quality

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g y

Prevention cost: the cost of planning and executing aproject so it is error-free or within an acceptable error range

Appraisal cost: the cost of evaluating processes and

their outputs to ensure quality Internal failure cost: cost incurred to correct an

identified defect before the customer receives theproduct

External failure cost: cost that relates to all errors notdetected and corrected after delivery to the customer 

Measurement and test equipment costs: capital costof equipment used to perform prevention andappraisal activities

Project Management Maturity Model

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Project Management Maturity Model

1.  Ad-Hoc: The project management process is described as disorganized,and occasionally even chaotic. The organization has not defined systemsand processes, and project success depends on individual effort. There arechronic cost and schedule problems.

2.  Abbreviated: There are some project management processes and systemsin place to track cost, schedule, and scope. Project success is largely

unpredictable and cost and schedule problems are common.3. Organized: There are standardized, documented project management

processes and systems that are integrated into the rest of the organization.Project success is more predictable, and cost and schedule performance isimproved.

4. Managed: Management collects and uses detailed measures of the

effectiveness of project management. Project success is more uniform, andcost and schedule performance conforms to plan.

5.  Adaptive: Feedback from the project management process and from pilotinginnovative ideas and technologies enables continuous improvement.Project success is the norm, and cost and schedule performance iscontinuously improving.

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Project Human Resource

Management

The Importance of Human

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p

Resource Management People determine the success and failure

of organizations and projects

What is Project Human Resource

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j

Management? Project human resource management

includes the processes required to make

the most effective use of the peopleinvolved with a project. Processes include

Organizational planning

Staff acquisition Team development

Keys to Managing People

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Keys to Managing People

Psychologists and management theoristshave devoted much research and thought

to the field of managing people at work Important areas related to project

management include

motivation

influence and power 

effectiveness

Motivation

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Abraham Maslow developed a hierarchyof needs to illustrate his theory that

people¶s behaviors are guided by asequence of needs

Maslow argued that humans possessunique qualities that enable them tomake independent choices, thus givingthem control of their destiny

Maslow¶s Hierarchy of Needs

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McGregor¶s Theory X and Y

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Douglas McGregor popularized the human relationsapproach to management in the 1960s

Theory X: assumes workers dislike and avoid work, so

managers must use coercion, threats and variouscontrol schemes to get workers to meet objectives

Theory Y: assumes individuals consider work as naturalas play or rest and enjoy the satisfaction of esteem andself-actualization needs

Theory Z: introduced in 1981 by William Ouchi and isbased on the Japanese approach to motivating workers,emphasizing trust, quality, collective decision making,and cultural values

Thamhain and Wilemon¶s Ways to

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y

Have Influence on Projects1.  Authority: the legitimate hierarchical right to issue orders

2.  Assignment: the project manager's perceived ability to influence aworker's later work assignments

3. Budget: the project manager's perceived ability to authorize

others' use of discretionary funds4. Promotion: the ability to improve a worker's position

5. Money: the ability to increase a worker's pay and benefits

6. Penalty: the project manager's ability to cause punishment

7. Work challenge: the ability to assign work that capitalizes on aworker's enjoyment of doing a particular task

8. Expertise: the project manager's perceived special knowledgethat others deem important

9. Friendship: the ability to establish friendly personal relationshipsbetween the project manager and others

Ways to Influence that Help and

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Hurt Projects Projects are more likely to succeed when

project managers influence with expertise

work challenge Projects are more likely to fail when project

managers rely too heavily on authority

money penalty

Power 

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Power is the potential ability to influencebehavior to get people to do things they wouldnot otherwise do

Types of power include

Coercive

Legitimate

Expert Reward

Referent

Improving Effectiveness -Covey¶s 7 Habits

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Covey s 7 Habits

Project managers can apply Covey¶s 7 habitsto improve effectiveness on projects

Be proactive

Begin with the end in mind

Put first things first

Think win/win

Seek first to understand, then to be understood

Synergize

Sharpen the saw

Empathic Listening and Rapport

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Empathic Listening and Rapport

Good project managers are empathiclisteners; they listen with the intent tounderstand

Before you can communicate with others, youhave to have rapport

Mirroring is a technique to help establishrapport

Professionals often need to develop empathiclistening and other people skills to improverelationships with users and other stakeholders

Organizational Planning

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Organizational planning involves identifying,documenting, and assigning project roles,responsibilities, and reporting relationships

Outputs and processes include

project organizational charts

work definition and assignment process

responsibility assignment matrixes resource histograms

Sample Organizational Chart for a

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Large IT Project

Work Definition and  Assignment

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Process

Sample Responsibility  Assignment

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Matrix (R AM)

R AM Showing Stakeholder Roles

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Sample Resource Histogram for a

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Large IT Project

0

2

4

6

8

10

12

Jan Feb Mar   Apr May Jun Jul Aug Sep Oct Nov Dec

Java programmers Business analysts Technical writers

Managers Administrative staff Database analysts

Testing specialists

   N  u  m   b  e  r  o   f   P

  e  o  p   l  e

Staff  Acquisition

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Staffing plans and good hiring proceduresare important in staff acquisition, as areincentives for recruiting and retention

Remote worker ? Internet based solutionfor managing project.

Research shows that people leave their  jobs because they don¶t make a difference,don¶t get proper recognition, aren¶t learninganything new, don¶t like their coworkers,and want to earn more money

Resource Loading and Leveling

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Resource Loading and Leveling

Resource loading refers to the amount of individual resources an existing projectschedule requires during specific time periods

Resource histograms show resource loading

Over-allocation means more resources thanare available are assigned to perform work at a

given time

Sample Resource Histogram for aL IT P j t

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Large IT Project

Sample Histogram Showing anO ll t d I di id l

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Overallocated Individual

Resource Leveling

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Resource leveling is a technique for resolving resource conflicts by delaying

tasks The main purpose of resource leveling is

to create a smoother distribution of resource usage and reduceoverallocation

Resource Leveling Example

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Team Development

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It takes teamwork to successfully completemost projects

Training can help people understandthemselves, each other, and how to workbetter in teams

Team building activities include

physical challenges psychological preference indicator tools

Reward and RecognitionSystems

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Team-based reward and recognition systemscan promote teamwork

Focus on rewarding teams for achievingspecific goals

Allow time for team members to mentor andhelp each other to meet project goals and

develop human resources

General  Advice on Teams

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Focus on meeting project objectives andproducing positive results

Fix the problem instead of blaming people

Establish regular, effective meetings

Nurture team members and encourage them tohelp each other 

Acknowledge individual and groupaccomplishments

Project Resource Management InvolvesMuch More Than Using Software

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Project managers must

Treat people with consideration and respect

Understand what motivates them Communicate carefully with them

Goal is to enable project team members

to deliver their best work

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Project Communications

Management

Importance of GoodCommunications

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Communications

The greatest threat to many projects is a failureto communicate

Our culture does not portray PM professionalsas being good communicators

Research shows that PM professionals mustbe able to communicate effectively to succeed

in their positions Strong verbal skills are a key factor in career 

advancement for PM professionals

Project CommunicationsManagement Processes

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Communications planning: determining theinformation and communications needs of thestakeholders

Information distribution: making neededinformation available in a timely manner  Performance reporting: collecting and

disseminating performance information Administrative closure: generating, gathering,

and disseminating information to formalizephase or project completion

Communications Planning

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Every project should include some type of communications management plan, adocument that guides project communications

Creating a stakeholder analysis for projectcommunications also aids in communicationsplanning

Communications Management PlanContents

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Contents

A description of a collection and filing structure for gathering and storing various types of information

A distribution structure describing what information goes

to whom, when, and how A format for communicating key project information

A project schedule for producing the information

Access methods for obtaining the information

A method for updating the communications managementplans as the project progresses and develops

A stakeholder communications analysis

Sample Stakeholder  Analysis for ProjectCommunications

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CommunicationsStakeholders Document Name Document

Format

Contact Person Due

Customer Management

Monthly StatusR eport

Hard copy Gail Feldman,Tony Silva

First of month

Customer Business Staff 

Monthly StatusR eport

Hard copy Julie Grant,

Jeff Martin

First of month

Customer 

Technical Staff 

Monthly Status

R eport

E-mail Evan Dodge,

 Nancy Michaels

First of month

InternalManagement

Monthly StatusR eport

Hard copy Bob Thomson First of month

InternalBusiness and

Technical Staff 

Monthly StatusR eport

Intranet Angie Liu First of month

TrainingSubcontractor 

Training Plan Hard Copy Jonathan Kraus 11/1/1999

SoftwareSubcontractor 

SoftwareImplementationPlan

E-mail Barbara Gates 6/1/2000

Information Distribution

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Getting the right information to the right peopleat the right time and in a useful format is justas important as developing the information inthe first place

Important considerations include using technology to enhance information

distribution

formal and informal methods for distributinginformation

Media Choice Table

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The Impact of the Number of People onCommunications Channels

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Communications Channels

Performance Reporting

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Performance reporting keeps stakeholdersinformed about how resources are being usedto achieve project objectives

Status reports describe where the project stands at aspecific point in time

Progress reports describe what the project team hasaccomplished during a certain period of time

Project forecasting predicts future project status and

progress based on past information and trends Status review meetings often include performance

reporting

 Administrative Closure

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A project or phase of a project requiresclosure

Administrative closure produces project archives

formal acceptance

lessons learned

Suggestions for Improving ProjectCommunications

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Manage conflicts effectively

Develop better communication skills

Run effective meetings Use templates for project communications

Conflict Handling Modes, in PreferenceOrder 

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Confrontation or problem-solving: directly face aconflict

Compromise: use a give-and-take approach

Smoothing: de-emphasize areas of differencesand emphasize areas of agreement

Forcing: the win-lose approach

Withdrawal: retreat or withdraw from an actual or potential disagreement

Conflict Can Be Good

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Conflict often produces important results, suchas new ideas, better alternatives, andmotivation to work harder and more

collaboratively Groupthink can develop if there are no

conflicting viewpoints

Research by Karen Jehn suggests that task-related conflict often improves teamperformance, but emotional conflict oftendepresses team performance

Developing Better Communication Skills

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As organizations become more global, theyrealize they must invest in ways to improvecommunication with people from different

countries and cultures

Companies and formal degree programs oftenneglect the importance of developingspeaking, writing, and listening skills

It takes leadership to improve communication

Running Effective Meetings

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Determine if a meeting can be avoided

Define the purpose and intended outcome of themeeting

Determine who should attend the meeting Provide an agenda to participants before the

meeting

Prepare handouts, visual aids, and make

logistical arrangements ahead of time Run the meeting professionally

Build relationships

Using Templates for ProjectCommunications

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Many technical people are afraid to ask for help

Providing examples and templates for project communications saves time andmoney

Organizations can develop their owntemplates, use some provided by outsideorganizations, or use samples fromtextbooks

Sample Template for a Project Description

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Sample Template for a Monthly ProgressReport

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Outline for a Final Project Report

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Gantt Chart Template for a Class Project

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Sample Template for a ProjectWeb Site

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Developing a CommunicationsInfrastructure

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A communications infrastructure is a set of tools,techniques, and principles that provide a foundation for the effective transfer of information

Tools include e-mail, website, project management

software, groupware, fax machines, telephones,teleconferencing systems, document managementsystems, and word processors

Techniques include reporting guidelines andtemplates, meeting ground rules and procedures,

decision-making processes, problem-solvingapproaches, and conflict resolution and negotiationtechniques

Principles include using open dialog and an agreedupon work ethic

Using Software to  Assist in ProjectCommunications

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There are many software tools to aid in projectcommunications

Microsoft Project 2003 includes severalfeatures to enhance communications

Project Portal ± Good Project Governance ±transparency, participation and accountability

Project Info ± Project Document OnlineRepository ± secure project document keeper.

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Project Risk Management

Project Risk ManagementProcesses

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Risk Management Planning : deciding how to approach and planthe risk management activities for a project

Risk Identification : determining which risks might effect the projectand documenting their characteristics

Qualitative Risk Analysis : performing a qualitative analysis of risksand condition to prioritize their effect for project objectives

Quantitative Risk Analysis : measuring the probability andconsequences of risks and estimating their implications for projectobjectives

Risk Response Planning : developing procedures and techniquesto enhance opportunities and reduce threats to the project objectives

Risk Monitoring and Control : monitoring residual risks, identifyingnew risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cylce.

Project Risk Management

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R isk management must be done during the

whole life of the project

All risks have a probability > 0 and < 100%

A risk event that has a probability = 100%

is not a risk 

Anyone involved with the project should

have access the project risk management

 plan

Risk Tolerance

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R isks that may not be considered as important to

the project are :

R isks that have very high probabilities and

very low impacts, and R isks that have very low probabilities and

very high impacts

R isks we need to worry about are those that have a

reasonably high probability and high impact

Steps in risk managementPractices

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Risk Management

Risk  Assessment

Risk Control

Risk Identification

Risk  Analysis

Risk Exposure

Risk Reduction

Contingency Planning

Risk Monitoring

Continuous Reassessment

Risk Prioritization

How to Identify Risks

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Start with a typical list of software risks

Review development plan Critical Paths

Critical Staff Members Critical Vendor Deliveries

Critical Milestones

Review Requirements

Review Technical Design Review Past Projects

How to Identify Risks(Continued)

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Conduct Risk Brainstorming Sessions with Staff,Users, Vendors, Customers, and Management

Try to assess the direction of thinking by third parties

as they may give an indication of future requirements,expectations, or vendor changes.

If your dependent on vendors, try to understand their business situation.

Get as much input as possible!

Risks Identification Techniques

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Documentation reviews

Brainstorming

Delphi technique

Nominal group technique

Crawford slip

Expert interviews

Analogy

Documentation review

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R eviewing lessons learned and risk 

management plans from previous projects

R eviewing WBS, contract obligations, project baseline for scope, schedule and

 budget, resource avaibilities, staffing plans,

suppliers

Brainstorming

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Meeting is called to make a comprehensive

list of risks

 participants : 10 to 15

The meeting < 2 hours

Participants can name risks

No discussion

Another participants give new ideas for 

 possible risks

Delphi Technique

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Similar to brainstorming but the participants do not

know one another (anonymous)

useful if the participants are some distance away

(particularly using email) Process :

Facilitator distributes quesionnaire to the

 participants to submit risk ideas

Facilitator catagorize and clarify the responses,

then circulate to the participant for comments or 

addition

Nominal Group Technique

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The facilitator instructs each of the participants to

 privately and silently list his or her idea on a piece of 

 paper 

The facilitator takes each piece of paper and lists theideas on a flip chart or blackboard, then make discussion

Now ranks the ideas in order of importance, again in

secret

This technique is faster and require less effort of the

facilitator than Delphi Tech.

Crawford Slip

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It does not require as strong a facilitator as the other 

techniques

It produces ideas very quickly < 1/2 hour 

Process : The facilitator asks question

The participants write down the answer 

After one minute, the facilitator ask the same

question and the participants have to make differentanswer 

This is repeated 10 times

 Analysis, Exposure, &Prioritization

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For Each Risk: Determine Probability of Occurrence

What is the likelyhood of occurrence?

Determine Impact What is the impact if it occurres?

Determine Exposure What will we lose if the risk occurs?

For  All Risks: Prioritize

Where should we put our limited resources?

 Analysis, Exposure,Prioritization: How?

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Various Techniques  Available But Key isExperience

Individual

Organizational

Don¶t Rely on Just Yourself - Get lots of Inputs

Risk  Assessment:  A SimpleClassification & Tracking Method

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g

Probability of Occurrence vs Impact 1 to 5 Scale

Priorities Red - High

Yellow - Med

Green - Low

Review/Present ChartPeriodically

Risk #1

Risk #4

Risk #2Risk #3

Risk #5

Probability of Occurrance

   I  m  p  a  c   t

Higher ProbabilityLower Probability

   H   i  g   h  e  r   I  m  p  a  c   t

   L  o  w  e  r   I  m  p  a  c   t

Risk  Assessment:Probability Methods

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y Can we quantitize the risk?

For Each Risk: For Each Possible  Action:

Estimate Probability of an Given Outcome P(O)

Estimate $ Loss of an Given Outcome L(O) Multiply the P(O) by L(O) to give $ exposure for the unwanted

outcome

Sum all $ exposures for each Possible  Action

Compare the $ exposures

Calculate Risk Leverage (Risk Exposure Before Reduction - Risk Exposure  After Reduction) /

(Cost of Risk Reduction)

Example Risk  AssessmentUsing Probability Method

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g y

DoRegressionTesting?

NoDon't Find Critical Fault

P(O) = 0.55

Find Critical FaultP(O) = 0.25

No Critical FaultP(O) = 0.20

L(O) = $0.5M

L(O) = $30M

L(O) = $0.5M

$0.125M

$16.50M

$0.10M

$16.75M

Don't Find Critical FaultP(O) = 0.05

Find Critical FaultP(O) = 0.75

No Critical Fault

P(O) = 0.20

L(O) = $0.5M

L(O) = $30M

L(O) = $0.5M

$0.375M

$1.5M

$0.1

0M

$1.975M Yes

RISKEXPOSURE COMBINED

RISKEXPOSURE

RISK LEVERAGE -> $14.775M

Risk Control

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Risk Reduction

Contingency Planning

Monitoring

R isks R esponsePlanning

Risk Reduction

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Avoiding Risk :  Avoid the risk completely

Modifying project requirements

Transferring the Risk : Move the impact of the riskto some other party

By allocation to other systems, Buying Insurance tocover financial loses, Subcontracting

Mitigating the Risk : reduce the probability or impact of the risk

adding additional tests, hiring duplicate suppliers,adding more expert personnel, designing

prototypes

performance bond, guarantees

Contingency Planning

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Some risks cannot be reduced

Plan for risk occurrence

Why? Reduces ³Crisis´ atmosphere

Reduces chance of mistakes

Reduces time to correct

Monitoring

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Periodic Review of Risk Status

Changes in Probabilities or Impacts

Changes in  Avoidance/Mitigation/Contingency Plans

Periodic Review of Project to Identify New Risks Implementation of Risk  Avoidance or Mitigation

Plans

Keep Management and Customers Informed!!! Frequent Risk Reviews

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Project Procurement

Management

Project Procurement ManagementProcesses

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Procurement Planning: determining what to procureand when

Solicitation Planning : documenting productrequirements and identifying potential sources

Solicitation : obtaining quotations, bids, offer, or proposals, as appropriate

Source Selection : choosing from among potentialsellers

ContractA

dministration : managing the relationshipwith the seller 

Contract Closeout : completion and settlement of thecontract, including resolution of any open items.

Risk sharing principles

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Principles for allocating risk among the parties toa project:

which party is the source of the particular risk and

hence best able to control the events that may lead toit happening in the first place?

which party can be best manage the risk, if it occurs?

Is it or is it not preferable for the client to retain an

involvement in the management of the risk inquestions?

Risk sharing principles

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Principles for allocating risk among the parties toa project:

if it cannot be controlled, which party can or should

carry the risk? Will the cost incurred, or premium charged, by the

recipient of the risk be reasonable and cost-effective

will the recipient be capable of sustaining the

consequences of the risk, if it occurs? Or will it lead to the possibility of the risk of a different

nature being transferred back again

Contract strategy considerations

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Procurement strategy will depend upon:

type of project

particular emphasis in terms of scope quality

time & cost

degree of uncertainty

Risk sharing principles

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Scope of workinformation

 Very little Partial Complete

Uncertainty High Moderate Low

Degree of risk High Medium low

Suggested riskallocation

Contract types CPPF CPIF CPFF FPPI FFP

100%

0%

0%

100%

Agency (Buyer)

Seller (Contractor)

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Project Integration

Management

The Key to Overall Project Success:Good Project Integration Management

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Project managers must coordinate all of the other knowledge areas throughout aproject¶s life cycle

Many new project managers have troublelooking at the ³big picture´ and want tofocus on too many details

Project Integration ManagementProcesses

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Project Plan Development: taking theresults of other planning processes andputting them into a consistent, coherent

document²the project plan Project Plan Execution: carrying out the

project plan

Integrated Change Control: coordinatingchanges across the entire project

Framework for Project IntegrationManagement

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Focus on pulling everything to-gether to reach project success!

Project Plan Development

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A project plan is a document used tocoordinate all project planning documents

Its main purpose is to g uid e  pr oj ec t exec ution

Project plans assist the project manager inleading the project team and assessingproject status

Project performance should be measuredagainst a baseline project plan

 Attributes of Project Plans

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Just as projects are unique, so are projectplans

Plans should be dynamic Plans should be flexible

Plans should be updated as changes

occur  Plans should first and foremost guide

project execution

Common Elements of a ProjectPlan

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Introduction or overview of the project

Description of how the project is organized

Management and technical processesused on the project

Work to be done, schedule, and budget

information

Stakeholder  Analysis

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A stakeholder analysis documentsimportant (often sensitive) informationabout stakeholders such as

stakeholders¶ names and organizations

roles on the project

unique facts about stakeholders

level of influence and interest in the project suggestions for managing relationships

Sample Stakeholder  AnalysisKey Stakeholders

Ahmed Susan Erik Mark   David

Organization Internalsenior 

t

Project team Project team Hardwarevendor 

Projectmanager for 

th

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management other internal

 project

R ole on project

S ponsor of  project andone of thecompany'sfounders

DNA

sequencingexpert

Lead programmer 

Suppliessomeinstrumenthardware

Competingfor companyresources

Unique facts Demanding,likes details,

 businessfocus,StanfordMBA

Very smart,Ph.D. in

 biology,easy to work with, has atoddler 

Best programmer 

I know,weird senseof humor 

Start-upcompany, he

knows wecan makehim rich if this works

 Nice guy,one of oldest

 people atcompany,has 3 kids incollege

Level of interest

Very high Very high High Very high Low tomedium

Level of influence

Very high;can call theshots

Subjectmatter expert;critical to

success

High; hardto replace

Low; other vendorsavailable

Low tomedium

Suggestionson managingrelationship

Keepinformed, lethim leadconversations ,do as hesays andquickly

Make sureshe reviewsspecifications and leadstesting; cando somework fromhome

Keep himhappy so hestays;emphasizestock options;likesMexicanfood

Give himenough leadtime todeliver hardware

He knowshis projecttakes a back seat to thisone, but Ican learnfrom him

Project Plan Execution

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Project plan execution involves managingand performing the work described in theproject plan

The majority of time and money is usuallyspent on execution

The application area or the project directly

affects project execution because theproducts of the project are producedduring execution

Important Skills for ProjectExecution

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General management skills likeleadership, communication, and

political skills Product skills and knowledge

Use of specialized tools and

techniques

Tools and Techniques for Project Execution

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Work Authorization System: a method for ensuring that qualified people do work atthe right time and in the proper sequence

Status Review Meetings: regularlyscheduled meetings used to exchangeproject information

ProjectM

anagement Software: specialsoftware to assist in managing projects

Integrated Change Control

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Integrated change control involves identifying,evaluating, and managing changes throughoutthe project life cycle (Note: 1996 PMBOK

called this process ³overall change control´) Three main objectives of change control:

Influence the factors that create changes toensure they are beneficial

Determine that a change has occurred Manage actual changes when and as they

occur 

Change Control on Projects

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Former view: The project team should strive todo exactly what was planned on time and withinbudget

Problem: Stakeholders rarely agreed up-front onthe project scope, and time and cost estimateswere inaccurate

Modern view: Project management is a processof constant communication and negotiation

Solution: Changes are often beneficial, and theproject team should plan for them

Change Control System

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A formal, documented process thatdescribes when and how official projectdocuments and work may be changed

Describes who is authorized to makechanges and how to make them

Often includes a change control board

(CCB), configuration management, and aprocess for communicating changes

Change Control Boards (CCBs)

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A formal group of people responsible for approving or rejecting changes on aproject

Provides guidelines for preparing changerequests, evaluates them, and managesthe implementation of approved changes

Includes stakeholders from the entireorganization

Making Timely Changes

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Some CCBs only meet occasionally, so it maytake too long for changes to occur 

Some organizations have policies in place for 

time-sensitive changes ³48 hour policy´ allowed project team members to

make decisions, then they had 48 hours reverse thedecision pending senior management approval

Delegate changes to the lowest level possible, butkeep everyone informed of changes

Configuration Management

E th t th d t d th i

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Ensures that the products and their descriptions are correct and complete

Concentrates on the management of technology by identifying and controlling thefunctional and physical designcharacteristics of products

Configuration management specialistsidentify and document configuration

requirements, control changes, record andreport changes, and audit the products toverify conformance to requirements

Suggestions for ManagingIntegrated Change Control

Vi j t t f t t

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y View project management as a process of constantcommunications and negotiations

y Plan for change

y Establish a formal change control system, including a

Change Control Board (CCB)y Use good configuration management

y Define procedures for making timely decisions onsmaller changes

y Use written and oral performance reports to helpidentify and manage change

y Use project management and other software to helpmanage and communicate changes

Total ReviewProject Management Process

Project Charter

Output 

Formal Acceptance

and Closure

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Initiation Planning

Execution

Controlling

Closing

PostProjectReview

Post Project Review Report 

and Closure

Supporting Details:

Project Stakeholders List, Project Team List, Statement of Work , Statement of Work Deliverable Review Form ,Scope Management Plan, Scope Change, Communica-

Project Plan &