Nagpur Class- Project Management- Final

8/4/2019 Nagpur Class- Project Management- Final

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FUNDAMENTALS

OFPROJECT MANAGEMENT


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What is a Project?

Temporary with a beginning and end

Creates a unique product, service orresult

Progressive elaboration

Done for a purpose

Has interrelated activities

Temporary ;Unique;Progressive elaboration


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Temporary

Definite beginning and end End is reached when the project objectives

have been achieved

Market window

Ad hoc team

DEFINATION


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Unique Something new

no two projects are the same, some degree of customizationis there

Size does not matter New airliner Bring a new drug to market

Requires progressive elaboration Progressive

Proceeding in steps Continuing steadily in increments

Elaboration Worked out with care and detail Developed thoroughly

Distinguishing characteristics first broadly defined will becomemore explicit and detailed as the team develops a betterunderstanding


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Characteristics of a Project Conflict

Project mgr. full of conflict; projectscompete with functional dept. forresources & people

Project members conflicting forprojects resources & leadership roles insolving problems; deal with clients &

org. Individuals conflict two bosses at the

same time; different objectives &priorities


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Characteristics of a Project

Purpose Project

usually a one-time activity with a set ofdesired end result

can be divided into subtasks, which requiredcoordination & control

Life Cycle Project life cycle

slow beginning progress to a buildup of sizepeak begin decline finally must terminate


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Characteristics of a Project

Interdependencies Projects interact with other project being carried out

simultaneously by parent org., but always interacts withthe parents standard, ongoing operations, etc.

The patterns of interaction between functional dept.may change.

e.g:

Project mgr- keep these interactions clear & maintain

Marketing

Finance

Manufacturing

Finance

Marketing

Beginningofproject

Intermediate of project End ofproject


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Projects Vs Business ProcessTemporary has a

beginning and an

end

Produces a uniqueoutput or

deliverables

Has no pre-definedwork assignment

On going- thesame process isrepeated over andagain

Produces the sameoutput each timethe process is run

Has a predefinedwork assignment


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Projects Vs Operations

Projects Performed by

people

Constrained bylimited resources

Planned,executed and

controlledTemporary

Unique

Operations Performed by

people

Constrained bylimited resources

Planned, executedand controlled

Ongoing Repetitive


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Programmes VsProgrammes Vs

ProjectsProjects

Programme is simply a collection ofseveral inter-related projects, each project

in a programme has its own objectives and

contributes to the objectives of the

programme

Projects are simply manageable

components of a programme so arranged to

meet the objectives of the programme


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PROGRAM

PROJECT2PROJECT1

TASKS1

ORK PACKAGES1

TASKS2 TASKS1 TASKS2

WORK PACKAGES1WORK PACKAGES2

WORK UNITS1 WORK UNITS1WORK UNITS2WORK UNITS3

WORK PACKAGES2

WORK UNITS2

A Project is:

a unique set of coordinated activities, with definite starting and finishing

points undertaken by an individual or organization to meet specific

objectives within defined schedule, cost ad performance parameters


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INTRODUCTION TO PROJECTMANAGEMENT


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Project Management

Application of skills tools and techniquesto meet or exceed

stakeholders expectations while using

resources efficiently &effectively and meeting projectrequirements

Establishing clear and achievableobjectives

Balancing the competing demands for

quality, scope, time andcost.


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Managing a Project

includes: Identifying the requirements

Establishing clear and achievable

objectives Balancing the competing demands for

quality, scoop, time, and cost

Adapting specifications, plans, andconcerns of the stakeholders


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Who is a stakeholder? Project manager

Customer

Performing organization

Sponsor

Team

Internal/external

End user

Society, citizens


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Need of Project

Management Projects worth billions of rupeesundertaken every year. Effectivemanagement has bearing on overall

growth of national economy. Experience with regard to project

management is mixed. Someprojects completed before time andmost others completed with time andcost overrun.

Time, resource, cost management

are sine-qua-non of project


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Advantages of ProjectManagement

Better control & better customer relationsShorter development times, lower costs,

higher quality & reliability, higher profitmargins

Sharper orientation towards results, betterinterdepartmental coordination & higherworker morale


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Disadvantages of Project Management

Increased organizational complexity Increase the likelihood that organizational policy being

violated project mgr being autonomous Higher costs, management difficulties, low personnel

utilization PM is difficult even when everything goes well - whatmore if things go badly

Project organization is the only feasible way toaccomplish certain goals - literally not possible to

design & build a major weapon system in a timely &economically acceptable manner, except throughproject organization i.e. applying PM tools


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Why ProjectsFail

Lack of user involvement

Lack of management system

Lack of well-defined deliverables

Poor communications

Poor change management Incorrect technical architecture

Inadequate planning

Lack of sponsorship & functional

commitment Inability to manage risk and

uncertainty


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Management Processes

Planning

Organising

Leading Controlling

Planning

Organising

Leading

Controlling

The POLC ModelThe POLC Model


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Defined Life Cycles

Concept

Planning

Execution

Termination

Effort

Cost

St f P j t M t


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Stages of Project ManagementMaturity


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Project Initiation


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DeliverablesReview

LessonsLearned

PostImplementation

ProjectCompletion

Manage Cost,Schedule,

Resource Variance

ControlChanges

ManagePerformance toRequirements

ManageRisk

PhaseAssessment

Manage andControl Project

Project Request

Project Start Up

Project Charter

PhaseAssessment

Manage TechnicalPerformance

Control Changes

Manage ProjectTeam

Manage Quality/Performing toRequirements

Manage Risk

PhaseAssessment

Closing

Detailed Project LifeCycle

Review ProjectRequirements

BuildProject Team

Conduct ProjectKickoff Meeting

Baseline ProjectPlan

PhaseAssessment

Develop ProjectPlan

Initiating Planning ControllingExecuting


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Project Initiation

Project Request Scope and objectives

Business case

Preliminary resource estimates

Review & Authorization

Requests prioritized and funded

Project Charter

Developed after requestapproval


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The Project Charter

PurposeRecognizes existence of the

project

Describes the project at a highlevel

Explains the business need forproject

Authorizes use of resources forplanning

Organization and timing

Completed after an approvedro ect re uest


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The Project Charter

Content Project description

Business background

Project scope

Objectives (ROI if notin request)

Deliverables

Constraints Assumptions

Planning budget

Typical Participants Business Area

Manager

Project Manager

Steering Committee

Core Project Team

Others if relevant


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Project Planning

Purpose: to determine

What needs to bedone

Who will be involvedHow objectives will be

met

When it will be

implementedHow much it will cost

Project Plan

Statement of Work

Project Organization

Work BreakdownStructure

Schedule

Resource

requirementsStandards and

Procedures

Communications

Risk Management


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ProjectPlanning

Integration Management Scope Management

Time Management

Cost Management

Quality Management

Resource Management Environment

Participants

Tools

Communications Management

Risk Management

Procurement Management

Planning includes forecast of resource requirements of

people, materials and equipment, forecast of financialrequirements and provision of milestones againstwhich progress can be measured.

All project management expertise areas are needed inplanning:


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Plan should

provide information in a readily understood form.

be realistic.

be flexible.

serve as a basis for progress monitoring thecontrol.

be comprehensive.

PlanningPrinciples


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Whole set of activities to be identified( work break down

structure)

Activities to be arranged in correct order or logicalsequence

Approaches for time estimates based on sound resource

planning-Deterministic where previous experience is available( CPM)

-Probabilistic where no experience available oruncertainty (PERT)

- Time estimates are made for each activity on athree-way basis:

-Optimistic time

-Most Likely time

Work Planning


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Bar Charts also known as Gantt charts. Network analysis by Critical Path Method (CPM) or Programme

Evaluation & Review Technique(PERT)

provides a means to predict time required for completion

identifies activities whose execution is crucial(criticalactivities)

serves as guide for shortening if completion is to beadvanced

provide basis for scheduling of subcontractor&materialdelivery

serve basis for scheduling of manpower,finance &equipment

makes possible rapid evaluation of alternative const.Methods

PlanningTechniques


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Project plan development

Project plan execution

Integrated change management

Processes required to ensure that the various

elements of the project are properlycoordinated:

Integration Management


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Scope Management

Initiation

Scope planning Scope definition

Scope verification

Scope change control

Processes required to ensure that the projectincludes all of the work required, and only the

work required, to complete the projectsuccessfully:


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Time Management

Activity identification

Activity sequencing Activity duration

Estimating

Schedule development

Schedule control

Processes required to ensure timely

completion of the project:


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Cost Management

Financial resourceplanning

Cost estimating

Cost budgeting Cost control

Processes required to ensure that the project is

completed within the approved budget:

Task Hours Rate Cost

Project

Management

200 (1 person @2hrs a wk for 100

wks)

40 8000

Requirements

150 (10 people @1 hrs a wk for 12wks + 1 person for30 hrs)

35 5250

Design 320 (1 person @40 hrs a wk for 8wks)

40 12800

Development

640 (2 people @40 hrs a wk for 8

wks)

30 19200


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Resource Budgeting

Task Hours Rate Cost

Project

Management

200 (1 person @ 2hrs a wkfor 100 wks)

40 8000

Requirements 150 (10 people @ 1 hrs awk for 12 wks + 1 personfor 30 hrs)

35 5250

Design 320 (1 person @ 40 hrs awk for 8 wks)

40 12800

Development 640 (2 people @ 40 hrs awk for 8 wks)

30 19200

Testing 480 (3 people @ 40 hrs awk for 4 wks)

30 14400


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Quality Management

Chartering

Quality planning

Quality assessment

Quality control

Processes required to ensure that the project willsatisfy the needs for which it was undertaken:


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Organizational planningTeam recruitment

Team development

Processes required to make the most effective useof the people involved with the project:

HR Management

Communications


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CommunicationsManagement

Communications planning

Information distribution

Performance reporting Administrative closure

Processes required to ensure timely and appropriategeneration, collection and dissemination, storage and

ultimate disposition of project information:

Audience Who needs toknow?

Message What do theyneed to know?

Intent Why do theyneed to know?

Media How are theygoing to know?

Timeframe When arethey going to know?

Responsibilities Who isdelivering the message?

Goals:

No surprises

Up and down thechain

Repetition,


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Risks and Constraints

Constraints are known in advance budget

schedule

people

the real world

facilities and equipment

Constraints should be well-documented in the SOWas part of the scope statement


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Risk management planning

Risk identification Qualitative Risk Analysis

Quantitative Risk Analysis

Risk response planning

Risk monitoring and control

Processes required to systematically identify,

analyze, and respond to project risks:

Risk Management

Reactive managing surprises,

putting out fires Proactive risk avoidance, buyoff riskRisk management

Identify it

Analyze it Plan for it (mitigation planning)


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Types of Risk

All of the risks in a project are either: known risks

predictable risks

unpredictablerisks

l definitions of risk involve two characteristic1)Uncertainty: an event may or may not happen

2)Loss: an event has unwanted consequences or

losses


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Basics of Risk Management

Identify the risks Analyse probabilityand impact

Determine the

importance Agree high risk list

Documentresponse plan

Accept the riskAvoid the risk

Monitor and develop contingency planTransfer the risk


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Procurement planning

Solicitation planning

Source selection

Contract administration

Contract close-out

Processes required to acquire goods and servicesfrom outside the performing organization:

Procurement Management


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Change Management

A set of formal procedures that provide for the orderly control ofchange in

a dynamic environment:

Addedfunctionality

Incorrectassumption

Imposed delays

New standards /practices

Environmentalterations

Extended approval

times

Change includes:

Change management does not prohibit or inhibitchange!!


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Departure from the estimated project cost is known as variance(not the statistical variance).

Called unfavorable if planned amount exceeded favorable if lesscost incurred than planned

Variance analysis is to be done for each activity in the network,where cost overrun occurs and they are to be done separatelyfor the

(i) Use of resources (such as material & labor)

(ii) Prices of the above resources.

This enables to pinpoint actual cause of cost overrun for takingcorrective action or any further misuse of any resources

Variance Analysis


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CONFLICT RESOLUTION


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Why do Projects Fail?

Hughes (1986) identified three mainreasons for projects failing.a lack of understanding of project

management tools and an over relianceon project management software

communication problemsfailure to adequately adjust to changes

that occur during the course of theproject


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Change and Conflict

Successful Projects bring about ChangeThe forces within an organisation that resist change are:

Personal Many people resist change!

Organisational Structures and System may not suitthe Changes that are beingintroduced

Environmental The culture, values and beliefs may beturned on theirhead.

Complexity and /or


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Project Management

Complexity and /orUnfamiliarity

Complex projects will have a number ofactivities running in parallel.

Some parts of the project will need other

parts of the project to be completedbefore they can begin or progress.

Some projects will require a feasibilitystage before the completion of adetailed plan.

Project Contingency


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Project ContingencyPlanningPlanning for and anticipating the unforeseen, orthe possibility that things may not go as expected,is called 'contingency planning'.

Contingency planning is vital in any task when

results and outcomes cannot be absolutelyguaranteed.

Often a contingency budget needs to be plannedas there are usually costs associated.

Contingency planning is about preparing fall-back actions, and making sure that leeway fortime, activity and resource exists to rectify or

replace first-choice plans.


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Conflict Resolution

Ensure Buy in from core stakeholders

Participation and active support from allstakeholders

Communicate At the end of your successful project hold a review

with the team. Ensure you understand what happened and why. Reflect on any failures and mistakes positively,

objectively, and without allocating personal blame. Reflect on successes gratefully and realistically.


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The Transition Curve


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Work Breakdown Structure


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DefinitionA WBS displays and defines the product, orproducts, to be developed and/or produced. Itrelates the elements of work to be accomplishedto each other and to the end product.

A WBS can be expressed down to any level ofinterest.

However the top three levels are as far as anyprogram or contract need go unless the itemsidentified are high cost or high risk. Then, and onlythen, is it important to take the work breakdownstructure to a lower level of definition.


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What else is a WBS used for Insuring that we didnt forget anything

Matching staff skills to tasks

Assignment of responsibilities

Tracking progress via milestones

We cannot know that coding is 90% complete untilcoding is finished

Communicating the big picture


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Example WBS

E l WBS f I t t


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Example WBS for IntranetProject

C o n c e p

D e s i g n U s e

D e s i g n S e r

D e v e l o p S

S u p p o r t I n f

W e b S i t

D e s i g n

D e v e l o p P

a n d L i n k

D e v e l o p

F u n c t i o n

C o n t e n t

M i g r a t i o n / I

T e s t i n g

W e b S i t

D e v e l o p m

R o l l O u t S u p p o r t

I n t r a n e t P


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WBS Rules Avoid too much detail

break down until a group can do the activity in a week ormonth - a work package

Only specify what you can manage

Limit depth of indention to manageable level

Use regular milestones Helps measure progress

Break it down one level at a time

Clearly describe each detailed level Make it a team effort

Leverage past projects


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Tool & Technique -WBS

Bottom-up approach

This is the most appropriate method for projects involving untested

methods and approaches OR where team members have not performed

similar projects before

Generate all activities you can think of that will have to be done and group

into categories

Identifying Work


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Identifying WorkComponents

SOW

Experience / Other WBSs

Standards Documentssuch as IEEE 1074

Methods for Developing a


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Methods for Developing aWBS

Bottom-up approach (usingBrainstorming)

This is the most appropriate method forprojects involving untested methods andapproaches OR where team membershave not performed similar projects before

Generate all activities you can think ofthat will have to be done and group intocategories


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Gantt Charts

Gantt Charts are extremely useful projectmanagement tools.

You can construct a Gantt Chart using MS/Excel

or a similar spreadsheet.

Every activity has a separate line.

You can colour code the time blocks to denote

type of activity

You can schedule review and break points.

At the end of each line you can show as many

cost columns for the activities as you need.

G h l


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Project Management

Gantt chart example


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Project Team

T k A t


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Task Assessment

Individual components of WBS needs tobe defined clearly

Scope and methodology of Task Lifecycle

critical

Resource allocation a critical component

of the function

N d f T


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Need for a Team Projects rely on effective teamwork and team

members should be selected on the bases oftheir:

Relevant experience

Technical knowledge

Appreciation of project objectives

Creative and innovative ability

Enthusiasm and commitment

Ability to work as a member of a team Ability to communicate

Level of available of resources

Project Organization -


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Project Organization Overview

Functional Organization

Matrix Organization

Projectized Organization

Balanced Matrix Organization

Organic Projectized Organization


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Director

Functional

Manager

Staff

Functional

Manager

Functional

Manager

Staff Staff

Staff

Staff

Staff

Staff

Staff

Staff

Light colored boxes:involved in projects

Project Coordination


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Specialists grouped by function

Difficult to cross functional lines

Barriers exist on horizontalinformation flow

Functional emphasis loyalties may

impede completionFunctional Manager: An individual responsible foractivities in a specializeddepartment or function



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Light colored boxes:

involved in projects


Director

Functional

Manager

Staff

Functional

Manager

Functional

Manager

Staff Staff

Staff

Staff

Staff

Staff

Staff

Staff

Manager of

Project Managers

Project Manager

Project Manager

Project Manager

Matrix Organization

M t i O i ti


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Multiple-command system Individuals from functional areas

assigned on temporary basis to Project

Manager Individuals return to functional

organization

Careful plans and procedures needed tominimize effects of dual reporting

Matrix Organization

Project Manager: An individual responsible formanaging a project

Matrix Organization


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Advantages

Visible objectives Efficient utilization of resources Better co-ordination Better information flow

Retention of home after project

DisadvantagesMore than one boss

Complex structure to controlDiffering priorities of Project Manager and

Functional ManagerDuplication of effort

Conflict

Matrix Organization



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Director

Project

Manager

Staff

Project

Manager

Project

Manager

Staff Staff

Staff

Staff

Staff

Staff

Staff

Staff


Light coloredboxes: involved inprojects




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Emerges from functional when latterimpedes progress

Line of authority is the Project Manager

Uncertainty where to go on completionof project

Tendency to retain assigned personnel

too long

Functional Managers feel threatened aspeople are removed from their areas


Balanced Matrix


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Director

Functional

Manager

Staff

Functional

Manager

Functional

Manager

Staff Staff

Staff

Staff

Staff

Staff

Staff

Project Manager


Balanced MatrixOrganization

Light coloredboxes: involved in

projects

Organization


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PMA

PMB

PMC

FM

A

FMB

FMC

Organization

zOrganization


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Organization Core teams

Strategic alignments

Functional and project managers work as ateam

Department /division boundaries are immaterial

Requires permeating trust up and down


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PROJECT SCHEDULING

TECHNIQUES


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PERT/CPM

PERT Program Evaluation and Review TechniqueDeveloped by U.S. Navy for Polaris missile

projectDeveloped to handle uncertain activity times

CPM Critical Path MethodDeveloped by Du Pont & Remington Rand

Developed for industrial projects for whichactivity times generally were known

Todays project management software packageshave combined the best features of bothapproaches.

PERT/CPM


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PERT/CPM

PERT/CPM is used to plan the scheduling of individualactivities that make up a project. Projects may have as many as several thousand

activities. A complicating factor in carrying out the activities is

that some activities depend on the completion ofother activities before they can be started. Project managers rely on PERT/CPM to help them

answer questions such as: What is the total time to complete the project?

What are the scheduled start and finish dates foreach specific activity?

Which activities are critical and must becompleted exactly as scheduled to keep theproject on schedule?

How long can noncritical activities be delayed


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Project Network

A project network can be constructed to model theprecedence of the activities.

The nodes of the network represent the activities.

The arcs of the network reflect the precedence

relationships of the activities. A critical path for the network is a path consisting

of activities with zero slack.

Slack is the amount of time that noncritical

activities can be delayed without increasing theproject completion time.

Immediate predecessor(s) is (are) activities thatmust be completed immediately before the currentactivity can begin.


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The Critical Path

A path through a network is one of the routesfollowing the arrows (arcs) from the start node tothe finish node.

The length of a path is the sum of the (estimated)durations of the activities on the path.

The (estimated) project duration or projectcompletion time equals the length of the longest

path through the project network.This longest path is called the critical path. (If

more than one path tie for the longest, they all arecritical paths.)


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Project Network Discussion

Project networks are not unique. A projectnetwork is considered valid provided allprecedence relationships are preserved.

Mohawks project network shows that no activitiesprecede activities A and B. For this reason an arcgoes directly from start to these activity nodes.

The immediate predecessors of each node is (are)displayed on the network by arcs leading fromthese immediate predecessors to the node.

Also notice that activity H is the only activity thathas an arc that goes directly to the finish node.ONLY ACTIVITIES THAT ARE NOT IMMEDIATEPREDECESSORS TO ANY OTHER NETWORK

ACTIVITIES MAY HAVE A LINK DIRECTLY TO THE


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Project Network Example

Bridge City Developers is coordinating the construction ofan office complex. As part of the planning process, thecompany generated the following activity list. Draw aproject network that can be used to assist in the scheduling

of the project activities.Activity A B C D E F G H IJ

Immediate

Predecessor --- --- --- A,B A, B D E C CF,G,H,I


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Finish

Start

H

G

FD

EB

C

J

I

A

Overall Procedure for


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Overall Procedure for

solving a Project Network1. Determine the sequence of activities.

1. Construct the network or precedence

diagram.2. Starting from the left, compute the

Early Start (ES) and Early Finish (EF)time for each activity.

3. Starting from the right, compute theLate Finish (LF) and Late Start (LS)time for each activity.

4. Find the slack for each activity.


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Project Network Notations

t Duration of an activity

ES The earliest time an activity canstart

EF The earliest time an activity can

finish (EF= ES + t)

LS The latest time an activity can startand not delay the project

LF The latest time an activity can finish

and not delay the project

Slack The extra time that could be madeavailable to an activity without delayingthe project (Slack= LS ES)

Critical Path The sequence(s) of activities with no

Earliest Start and Finish


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Times Earliest Start Time = the maximum of the

earliest finish times of all activitiesimmediately preceding activity i. (This is 0for an activity with no predecessors.)

Earliest Finish Time = (Earliest Start Time) +(Time to complete activity i ).

The project completion time is the maximum ofthe Earliest Finish Times at the Finish node.

Latest Finish Time


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Latest Finish TimeLatest Finish Time Rule: LF = Smallest LS of the

immediate successors.The immediate successors for a node are all nodesthat immediately follow the current node.

Procedure for obtaining latest times for allactivities:

1. For each of the activities that link directly to thefinish node, set LF equal to project completiontime.

2. For each activity whose LF value has just beenobtained, calculate LS = LF (the time to

complete the current activity)3. For each new activity whose immediate successors

now have LS values, obtain its LF by applying thelatest finish time rule. Apply step 2 to calculate itsLS.

4. Repeat step 3 until LF and LS have been obtained

PERT/CPM WITH UNCERTAIN


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PERT/CPM WITH UNCERTAIN

ACTIVITY TIMES Experience and historical data can be used for projects thathave be completed in the past (such as home andapartment construction) to provide accurate activity timeestimates.

In many cases, however, projects are new or unique andactivity times are uncertain. In these cases estimatingactivity times could be difficult.

When there is uncertainty associated with activity times,they are often best described by a range of possible values

instead of one specific time estimate. Uncertain activity times are treated as random variables

with associated probability distributions. These distributionallows us to form probability statements about thelikelihood of meeting a specific completion date.

Three time estimates are collected for each activity to


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In the three-time estimate approach, the time to complete

an activity is assumed to follow a Beta distribution. An activitys mean completion time is:

t = (a + 4m + b)

6

a = the optimistic completion time estimate b = the pessimistic completion time estimate m = the most likely completion time estimate

Uncertain Activity Times



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An activitys completion time variance is:

a = the optimistic completion time estimate

b = the pessimistic completion time estimate

m = the most likely completion time estimate

( )b a

6

2



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EarthMover is a manufacturer of roadconstruction

equipment including pavers, rollers, andgraders. The

company is faced with a new

project, introducing a new

line of loaders. Management

is concerned that the project might

take longer than 26 weeks to

com lete without crashin some

Example: EarthMover, Inc.


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Immediate

CompletionActivity Description PredecessorsTime (wks)

A Study Feasibility --- 6

B Purchase Building A4

C Hire Project Leader A3

D Select Advertising Staff B6

E Purchase Materials B3

F Hire Manufacturing Staff B,C 10

G Manufacture Protot e E,F 2


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PERT Network

64

310

3

6

2 6

8

C

Start

D

E

I

A

Finish

H

G

B

F


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Earliest/Latest Times

Activity ES EF LS LF SlackA 0 6 0 6 0 *B 6 10 6 10 0 *C 6 9 7 10 1D 10 16 16 22 6E 10 13 17 20 7F 10 20 10 20 0 *

G 20 22 20 22 0 *H 22 28 24 30 2I 22 30 22 30 0 *


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Critical Activities

C

Star t

D

E

I

A

Fin ish

H

G

B

F

6644

331010

33

66

22 66

880 60 6

0 60 6

10 2010 20

10 2010 20

20 2220 22

20 2220 22

10 1610 16

16 2216 22 22 3022 30

22 3022 30

22 2822 28

24 3024 306 96 9

7 107 10

10 1310 13

17 2017 20

6 106 10

6 106 10

Crashing


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Deterministic times are more prone tochanges

Lat minute changes by clients, unforeseensituations make crashing away of life

We need to crash the activities of someproject to ensure timely completion

Crashing

Project Crashing


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Project Crashing

Rules: only crash critical activities

crash the cheapest critical activity first

assume each task can be crashed one dayat a time (simplifying assumption, but notnecessary)

all critical paths must decrease by one

day, in order for the project duration todecrease by one day

Crashing example


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Crashing Sample Network

1 2

3

4

5

6

73

6

10

11

8

5

6

0

ritical Path = 3 + 6 + 8 + 6 = 23 Time Units


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Crashing An Example

Activity NormalTime

NormalCost

CrashTime

CrashCost

Slope Max

Crsh Tm

1-2 3 50 2 70

2-3 6 80 4 1602-4 10 60 9 90

2-5 11 50 7 150

3-6 8 100 6 1605-7 5 40 4 70

6-7 6 70 6 70

Cost/Time Slope


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Cost/Time Slope

Step1 compute a cost /time slope that canbe crashed.

Slope is defined as

Slope = (Crash cost Normal cost)/(CrashTime Normal time)

Slope is the Cost Per day of crashing aproject

Slope is negative which means As timerequired for a project or task is reduced,cost is increased

Cost/Time Slope


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/ p

In the above activity 6-7 can not be

crashed Calculating the slope this way might give

the impression that activities can becrashed in increments of one day

But this is not true Example An activity could be carried out

in eight days or Four days (No

intermediary times are possible)The crash has to be four days in this case


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1 2

3

4

5

6

750

80

100

70

Normal Project Total Cost = $50 + $80 + $100 + $70+

$60 + $50 + $40 =

$450


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Crashing

First task Develop a table or graphof cost of the project as a function of

the projects various completiondates

Starting with the normal schedule,

crash selected activities one at atime, to decrease the projectduration at the minimum additionalcost

Crashing


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g

Two principles1. Focus on critical path when trying to

shorten the duration of the project. (withthe exception that the resource needed

for one activity, not on the critical pathis needed for another project)2. when shortening a project duration,

select the least expensive way to do it.

AOA example is easier to illustratethan AON


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Crashing An Example

Activity NormalTime

NormalCost

CrashTime

CrashCost Slope

Max

Crsh Tm

1-2 3 50 2 70 -20 1

2-3 6 80 4 160 -40 2

2-4 10 60 9 90 -30 1

2-5 11 50 7 150 -25 4

3-6 8 100 6 160 -30 2

5-7 5 40 4 70 -30 1

6-7 6 70 6 70 0 0

C hi S l N t k


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1 2

3

4

5

6

750

80

100

70

Normal Project Total Cost = 50 + 80 + 100 + 70 +60 + 50 + 40 =

450

Critical Path = 23 Days

3

68

6

60

50 40

10

11 5

C hi S l N k


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1 2

3

4

5

6

770

80

160

70

Crashed Project Total Cost = 70+ 80 + 160 + 70 +60 + 50 + 40 =

530


2

66

6

60

50 40

10

11 5

CrashedPath = 20 Days

C hi S l k


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1 2

3

4

5

6

770

160

160

70

Crashed Project Total Cost = 70+ 160 + 160 + 70 +60 + 50 + 40 =

610


2

46

6

60

50 40

10

11 5

CrashedPath = 18 Days



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Further crashing of CP is not possibleas we have used up the complete

(maximum) crash time possible. Crashing other paths will not shorten

the project duration


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RESOURCE ALLOCATION

The Resource Allocation


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Problem

A shortcoming of most schedulingprocedures is that they do not addressthe issues of resource utilization andavailability

Scheduling procedures tend to focuson time rather than physical resources

Time itself is always a critical resourcein project management, one that isunique because it can neither beinventoried nor renewed

The Resource Allocation


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ProblemThe extreme points of the relationship betweentime use and resource use are these: Time Limited: The project must be finished by

a certain time, using as few resources aspossible. But it is time, not resource usage, that

is criticalResource Limited:The project must be finished

as soon as possible, but without exceedingsome specific level of resource usage or some

general resource constraint If all three variables - time, cost, specifications -

are fixed, the system is over determined

Resource Loading


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Resource Loading Resource loading describes the amounts of

individual resources an existing schedule requiresduring specific time periods

The loads (requirements) of each resource type arelisted as a function of time period

Resource loading gives a general understanding ofthe demands a project or set of projects will makeon a firms resources

Is an excellent guide for early, rough project

planning Because the project action plan is the source of

information on activity precedence's, durations,and resources requirements, it is the primary inputfor both the project schedule and its budget

Resource Leveling


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Resource Leveling Resource leveling aims to minimize the period-by-period

variations in resource loading by shifting tasks within theirslack allowances

When resources are leveled, the associated costs also tendto be leveled

The project manager must be aware of the cash flowsassociated with the project and of the means of shiftingthem in ways that are useful to the parent firm

Resource leveling is a procedure that can be used foralmost all projects, whether or not resources are

constrained

The purpose is to create a smoother distribution ofresource usage

Several advantages include: -

Constrained Resource


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SchedulingThere are two fundamental approaches to

constrained allocation problems:

Heuristic Methods

Optimization Models

Heuristic approaches employ rules of thumbthat have been found to work reasonably wellin similar situations

Optimization approaches seek the bestsolutions but are far more limited in theirability to handle complex situations and largeproblems

Heuristic Methods


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Heuristic Methods Heuristic approaches to constrained

resource scheduling problems are in wide,general use for a number of reasons: 1. They are the only feasible methods of

attacking the large, nonlinear, complex

problems that tend to occur in the real world ofproject management

2. While the schedules that heuristics generatemay not be optimal, they are usually quite

good- certainly good enough for most purposes

Heuristic Methods


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Most heuristic solution methods start

with the PERT/CPM schedule and analyzeresource usage period by period,resource by resource

In a period when the available supply of aresource is exceeded, the heuristicexamines the tasks in that period andallocates the scarce resource to them

sequentially, according to some priorityrule

Technological necessities always takeprecedence

Heuristic Methods


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Heuristic Methods Common priority rules:

As soon as possibleAs late as possible

Shortest task first

Most resources firstMinimum slack first

Most critical followers

Most successorsArbitrary

Heuristic Methods


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Most priority rules are simple adaptations of theheuristics used for the traditional job shopscheduling problem of production/operationsmanagement

Most heuristics use a combination of rules: aprimary rule, and a secondary rule to break ties

As the scheduling heuristic operates, one of twoevents will result:

The routine runs out of activities before it runsout of resources

The routine runs out of resources before allactivities have been scheduled

Optimizing Methods


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Optimizing MethodsThe methods to find an optimal solution to

the constrained resource scheduling

problem fall into two categories:

Mathematical programming

Enumeration

Mathematical programming can be thought

of as liner programming (LP) for the most

part Linear programming is usually not feasible for

reasonably large projects where there may be a dozenresources and thousands of activities

Multiproject Scheduling &


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Resource AllocationThe most common approach to scheduling

and allocating resources to multipleprojects is to treat the several projects as ifthey were each elements of a single large

project Another way of attacking the problem is to

consider all projects as completely

independentTo describe such a system properly,

standards are needed by which to measurescheduling effectiveness

Multiproject Scheduling &


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Three important parameters affected by project

scheduling are:

Schedule slippage Resource utilization

In-process inventory

The organization (or the project manager) must select

the criterion most appropriate for its situation

p j gResource Allocation

Multiproject Scheduling and


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Resource Allocation Schedule slippage, often considered the

most important of the criteria, is the timepast a projects due date or delivery datewhen the project is completed

Resource utilization is of particular concernto industrial firms because of the high costof making resources available

The amount of in-process inventoryconcerns the amount of work waiting to beprocessed because there is a shortage ofsome resource


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PROCUREMENTMANAGEMENT

Estimate Resource Costs


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Develop cost estimates for:internal & external labor (hrs,rates)

materials

supplies

contractsspecial costs

refined during thecourse of the project ,

definitive just priorto construction

Estimate

ROM + 100% or -50%

Intermediate +or - 30%

Definitive + or

- 20%

Organize and Acquire


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Staff

K r i s t e n D u u s

O I S O v e r s i g h t

M a u r e e n C a s t e r l i n e

B u s i n e s s S p o n s o r

D e b r a H e r r l i

P r o j e c t M a n a g e r

( 1 0 0 % )

B r y a n N e a l yS y s t e m

A r c h i t e c t u r e T e a m

L e a d ( 5 0 % )

P e t e H a l eA p p l i c a t i o n

D e v e l o p m e n t T e a m

L e a d ( 1 0 0 % )

3 C o n t r a c t

D e v e l o p e r s

4 B u s i n e s sA n a l y s t s

T i n a S e s h a d r iT e c h n i c a l

R e s o u r c e ( a s

n e e d e d )

P o l i c y a n d P r a c t i c e

T e a m ( S t e e r i n g

C o m m i t t e e )

1 C o n t r a c t S y s t e m s

I n t e g r a t i o n /

D a t a b a s e

D e v e l o p e r

Determine What to Procure &When


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WhenProcurement planning

determines:whether, what, and how much,

how and when,

how to manage solicitations,selection, contract administration,and closeout

Procurement documents:SOW - Statement of Work

RFP - Request for Proposal

Evaluation Criteria

Actual solicitationis part of execution

Build Budget & SpendingPlan


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PlanBudgeting involves assigning the costestimates to all the tasks creating a costbaseline.

Jan Feb Mar June So on

Internal Labor 5,000 5,000 5,000 6,000 10,000

External Labor 7,000 15,000 15,000

HW/SW 3,000 20,000 20,000

Contracts 9000 30,000

Training 5,000 5,000 5,000

Total 10,000 10,000 15,000 50,000 80,000

Budget/Spending Plan


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Project Monitoring andControl


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LevelofA

ctivity

Start FinishTime

Initiate

Execute

Close

Monitoringand Control

Plan

Project Monitoring & Control


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Monitor & Control Project Work Integrated Change Management

Scope Verification & Control Prevent scope creep!You didnt budget for it!

Schedule Control & Update Critical path monitoring Reschedule as needed to

optimize resources Cost Control Quality Control Manage Project Team

Make staffing updates arerequired

Performance Reporting Communicate with Stakeholders

& Executives Risk Monitoring & Control

Risk Planning & Risk Mitigation Contract Administration

Project Control


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Project control taking correctiveactions to keep the project on targettoward meeting its performance goals(time, cost, deliverables)

The project manager has finalresponsibility for project control

There are many ways to exert control;the PM must decide which is mostappropriate

Resource allocations, fundingdecisions, personnel assignments,

change in priorities

Project Control 3 Steps


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Project Control 3 Steps

1. Measuring & Monitoring Identifying/tracking key performancemetrics

1. Evaluating

Analyzing causes of problems and potentialcorrective actions

1. Correcting Taking corrective actions to bring project

performance back in line with goals

Measuring & MonitoringSystem


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yMany issues must be decided for a good

measuring and monitoring system What should be measured and monitored? How should it be measured?

Who should monitor it? How should it be monitored? When should it be monitored? Where should info be stored? Who should have access to info?

Project Reports as a ControlTool


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oo Reports are one way to give many

different people a chance to look forpotential problems

They also can keep everyone updatedabout the current project status

Everyone concerned with the projectshould receive reports containing info.relevant to issues under their control

What types of info. should an engineerworking on a project receive, vs. seniormanagement?

When should these reports be provided?

Resource Allocation


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Resource allocation can be used as acontrol mechanism

Allocating more, less, or differentphysical resources can affect theprogress of activities, and can affecttheir cost and/or the quality ofoutputs/deliverables as well

Assigning more, less, or differentemployees also can affect projectperformance

Allocating more or less funds to anactivity is yet another way to affectproject performance

Resource Conflicts


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Sometimes a limited resource is needed(at the same time) by several activitiesin one project or by different activitiesin multiple projects (so some of the

activities must wait) Setting priority rules for which activity

get the constrained resource first canbe a means of project control

In the case of multiple projects, thegoals and importance of all the projectsshould be considered

Resource Conflict Rules


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Example: Suppose two tasks from different

projects need to use the radiation testinglab chamber at the same time. Whichgets it first?

task with the least slack time task that needs the least time in the lab

task that needs the most time in the lab

task with the most following activities task from the more important or profitable

project

arbitraryflip a coin

Project Accelerating/Crashing


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Project crashing (or accelerating aproject) is another way to exert projectcontrol

Crashing a project means shortening

its duration, or speeding it up (doing itquicker)

Unfortunately, this almost always costsmore

Sometimes crashing is done becauseearlier activities were delayed; othertimes it is done because the customer is

willin to trade a hi her cost for a

Resource Loading


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For each resource during each timeperiod, determine the total amount ofresource time required by all activitiescombined

Compare this total time with thecapacity of the resource during eachtime period

Identify resources that are over-utilized(or overloaded) during any time period

What should be done about it?

Resource Leveling


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Re-scheduling some activities toeliminate resource overloading incertain time periods

Try to delay activities that have extraslack time firstthis will not delay theproject

If that doesnt work, then activities mustbe delayed which will delay the projectdue date

Popular project management software

Project Tracking Tools


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Popular project management softwareallows you to easily track cost andschedule performance as the projectprogresses

This provides a useful tool for projectcontrol

The current cost and schedule status mustbe entered routinely (daily or weekly)

For each activity, you must estimate:actual cost so far, and percent complete

Earned Value Analysis is a commontracking tool that provides performance

Earned Value Analysis


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Earned Value Analysis compares thecurrent project status with the original(baseline) plan

It computes several performance

metrics for individual activities and forthe entire project

It focuses on cost and scheduleperformance

Its a useful tool for project control

Popular project management softwarecomputes these metrics

Earned Value


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Earned Value Earned Value for a task = (budgeted

cost of task)*(% completion of task) Its often difficult to estimate %

completion of a task; 4 approaches oncetask is started:assume 50% completion until task is

finishedassume 0% until task is finisheduse % of budgeted cost or time used so

farbest guess of knowledgeable person

(best)

Earned Value for the entire project is

Earned Value Metrics


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BCWSBudgeted Cost of Work Scheduled(PV) baseline cost of scheduled work

ACWPActual Cost of Work Performed

(AC) actual cost of work actually performed so far

BCWPBudgeted Cost of Work Performed(EV) budgeted cost of work actually performed so far

Cost variance (CV) = BCWP ACWP

Schedule variance (SV) = BCWP BCWS

Earned Value Chart


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3 lines on chart:Baselineplanned cost over time

(BCWS)Actual Cost line (ACWP)

Earned Value line (BCWP) Schedule variance (negative is bad) Cost variance (negative is bad) Example chart on next slide

describe project performance in thisexample

Earned Value Chart 1


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Time

Now

Rup

ees

Schedulevariance

Costvariance

Cost schedule plan

(baseline)

ACWP

BCWP

BCWSActual cost

Value completed (Earned Value)

PerformanceCostSched.



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Time

Now

Rup

ees

BCWSbaseline

ACWP

BCWP=EV




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Time

Now

Rup

ees

BCWSbaseline

ACWP

BCWP = EV


Earned Value Metrics


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BCWSBudgeted Cost of Work Scheduled(PV) baseline cost of scheduled work

ACWPActual Cost of Work Performed

(AC) actual cost of work actually performed so far

BCWPBudgeted Cost of Work Performed(EV) budgeted cost of work actually performed so far

Cost variance (CV) = BCWP ACWP

Schedule variance (SV) = BCWP BCWS

CPI and SPI


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CPI and SPI

CPI and SPI give the sameinformation as cost variance andschedule variance, except as aratio instead of as a Rupeedifference

Cost Performance Index (CPI)

CPI = BCWP / ACWP (or EV /AC)

Schedule Performance Index (SPI)

SPI = BCWP / BCWS (or EV /

Example


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pExample: Budgeted cost for finished task =

Rs 850;Actual cost to date = Rs 550; Task is 70%

complete,

but was scheduled to be 80% complete by

nowBCWS = 0.8*(Rs 850) = Rs 680 PV

(baseline)

BCWP = 0.7*(Rs 850) = Rs 595 EV

ACWP = Rs 550 ACCost variance = BCWP ACWP = + Rs 45

(good)

Schedule variance = BCWP BCWS = - Rs 85

bad

ETC and EAC


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Two more cost metrics are ETC and EAC

Estimated (remaining cost) To CompletionETC = (BAC BCWP) / CPI

(note: Microsoft Project does not divide byCPI)

BAC = budgeted cost at completion =Rs 850

ETC = (850 595) / 1.082 = Rs 235.67

Estimated (total cost) At CompletionEAC = ETC + ACWPEAC = 235.67 + 550 = Rs 785.67

Scope Creep


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Scope C eep PM must be cautious of scope creep. Why?

Most common cause is due to the client orproject team wanting to enhance theprojects deliverables

The later that changes are made, the moredifficult and costly they become

Scope creep is welcome if it lowers costs orenhances the firms competitiveness

A change control system allows the PM toassess the impacts and desirability ofpotential changes before deciding toimplement them

Change Control System


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Review suggested changes Assess all impacts to project goals Evaluate advantages and disadvantages Consider alternative changes that are

better Allow responsible parties to make

decision in light of all information Communicate changes to everyone

involved Implement changes Summarize all changes and impacts in

report


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Project Risk

Management

Sample Risk Register/ Risk Analysis


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No. Rank Risk DescriptionCategory RootCause

Triggers PotentialResponses

RiskOwner

Probability Impact Severity Status

R44 1

R21 2

R7 3

Project severity = expectation (1-10) *impact (1-10)

When should risk analysis be formed?

Is not a time activity Periodic update and reviewed

Calculating Severity


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Problem Expectation

Impact Severity

Staff 6 5 30

Late delivery of

hardware

5 8 40

Communication andNetworks problem

5 5 25

Project severity = expectation (1-10) * impact (1-10)

Qualitative Risk Analysis


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Assess the likelihood and impact ofidentified risks to determine theirmagnitude and priority.

Risk quantification tools andtechniques include:Probability/impact matrixes

The Top Ten Risk Item Tracking

Expert judgment

Probability/Impact Matrix


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Aprobability/impact matrix

orchart

lists therelative probability of a risk occurring on one side ofa matrix or axis on a chart and the relative impactof the risk occurring on the other.

List the risks and then label each one as high,medium, or low in terms of its probability ofoccurrence and its impact if it did occur.

Can also calculate risk factors:

Numbers that represent the overall risk of specificevents based on their probability of occurring andthe consequences to the project if they do occur.

Sample Probability/ImpactMatrix


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Matrix

Sample Probability/Impact Matrix forQualitative Risk Assessment


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High-, Medium-, and Low-RiskTechnologies


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g

Top Ten Risk Item Tracking


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Top Ten Risk Item Tracking is aqualitative risk analysis tool that helps toidentify risks and maintain an awarenessof risks throughout the life of a project.

Establish a periodic review of the top tenproject risk items.

List the current ranking, previous ranking,number of times the risk appears on thelist over a period of time, and a summaryof progress made in resolving the riskitem.

Example of Top Ten Risk ItemTracking

Monthly Ranking


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Monthly Ranking

Risk Item This

Month

Last

Month

Number

of Months

Risk Resolution

Progress

Inadequate

planning

1 2 4 Working on revising the

entire project plan

Poor definition

of scope

2 3 3 Holding meetings with

project customer and

sponsor to clarify scope

Absence ofleadership

3 1 2 Just assigned a newproject manager to lead

the project after old onequit

Poor cost

estimates

4 4 3 Revising cost estimates

Poor time

estimates

5 5 3 Revising schedule

estimates

Quantitative Risk Analysis

Of f ll li i i k


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Often follows qualitative riskanalysis, but both can be donetogether.

Large, complex projects involving

leading edge technologies oftenrequire extensive quantitative riskanalysis.

Main techniques include:Decision tree analysisSimulationSensitivity analysis

Decision Trees and ExpectedMonetary Value (EMV)


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Monetary Value (EMV) A decision tree is a diagramming analysis

technique used to help select the bestcourse of action in situations in which future

outcomes are uncertain. Estimated monetary value (EMV) is the

product of a risk event probability and therisk events monetary value.

You can draw a decision tree to help findthe EMV.

Expected Monetary Value(EMV)


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(EMV)

Sensitivity Analysisi i i l i i h i d


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Sensitivity analysis is a technique used to

show the effects of changing one or morevariables on an outcome.

For example, many people use it to

determine what the monthly payments for aloan will be given different interest rates orperiods of the loan, or for determining break-even points based on different assumptions.

Spreadsheet software, such as Excel, is acommon tool for performing sensitivityanalysis.

Sensitivity Analysis for DeterminingBreak-Even Point


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Risk Response Planning


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After identifying and quantifying risks,you must decide how to respond tothem.

Four main response strategies fornegative risks:Risk avoidance

Risk acceptanceRisk transference

Risk mitigation

General Risk Mitigation Strategiesfor Technical, Cost, and ScheduleRisks


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Risks

Response Strategies forPositive Risks


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Risk exploitation Risk sharing

Risk enhancement

Risk acceptance

Residual and SecondaryRisks


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Risks

Its also important to identify residual andsecondary risks.

Residual risks are risks that remain afterall of the response strategies have been

implemented. Secondary risks are a direct result of

implementing a risk response.

Risk Monitoring and Control


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Involves executing the risk management process torespond to risk events.

Workarounds are unplanned responses to riskevents that must be done when there are nocontingency plans.

Main outputs of risk monitoring and control are:

Requested changes.

Recommended corrective and preventive actions.

Updates to the risk register, project managementplan, and organizational process assets.

Resu ts o Goo Pro ect R sManagement


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Unlike crisis management, goodproject risk management often goesunnoticed.

Well-run projects appear to be almosteffortless, but a lot of work goes intorunning a project well.

Project managers should strive tomake their jobs look easy to reflectthe results of well-run projects.


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PROJECT CLOSURE


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LevelofA

ctivity

Start FinishTime

Initiate

Execute

Close

Monitoringand Control

Plan

Project Close Out Successful transition into the


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Successful transition into the

organizations ongoing operation Administrative close-out

Evaluating the project

Compiling lessons learned Contract close-out activities

Project ClosingProject Closing Involves gaining stakeholder and customer


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Involves gaining stakeholder and customer

acceptance of the final products andservices.

Even if projects are not completed, they

should be formally closed in order to reflecton what can be learned to improve futureprojects.

Outputs include project archives and

lessons learned, which are part oforganizational process assets.

Most projects also include a final report and

presentation to the sponsor or senior

Closing a ProjectIs the project ready for close-out and/or


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s e p ojec eady o c ose ou a d/o

transition?Is the Change management plan up-to-date?Are the deliverables / outputs complete and

acceptable based on the quality standards?

Is the documentation (training manuals, userguides, evaluation reports, etc.) ready forhand-over?

Make sure Phase / Milestone reviews are

captured, summarized and maintained in aBody of Knowledge.

Closing a Project Obtain approvals proof of completion


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Ensure user and stakeholder satisfaction Lessons learned

Improve estimates for future projects

Improve project methodologies

Recognize team members and contributions

Evaluate project success according to (1) time, (2) cost(3) quality and (4) scope (deliverables)

Establish transition plan for those providing ongoing

implementation in local context

Assess next steps if any

Project Close-Out Report What is it? The Project Close Out Report formalizes


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What is it? The Project Close Out Report formalizes

closure of the project. This process assures that theAccountable Executives, Business Sponsor andStakeholders have formally accepted the product orservice by verifying that the outcomes met all thedeliverables outlined in the Project Scope of Work.

Summarily, the Project Close Out Report assesses projectsuccesses and areas for growth, and ensures that lessonslearned/deliverable documents have been entered intoappropriate databases.

Why use it? The bookend counterpart to the ProjectCharter & Justification/Project Scope of Work, the ProjectClose Out Report ensures that all protocols necessary forproject completion are followed. Furthermore, it helpsensure that the projects shared learnings are passed onto the Partnershipand future projects.


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PROJECT MANAGEMENT IN

COMPLEX ENVIORNMENT

NEW AVENUES PERT-based models not well suited for the present day multi-

project environment


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project environment.

Complex models of "projects" cause unnecessary costs and lowmaneuverability in several cases.

PM experts try to identify different "lightweight" models, like AgileProject Management methods.

Event Chain Methodology

Event chain methodology is an uncertainty modeling and


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gy y gschedule network analysis technique that is focused on

identifying and managing events and event chains thataffect project schedules.

Event chain methodology helps to mitigate the negativeimpact of psychological heuristics and biases, as well as toallow for easy modeling of uncertainties in the project

schedules. Event chain methodology is based on thefollowing major principles.

Probabilistic moment of risk: An activity (task) in most reallife processes is not a continuous uniform process. Tasksare affected by external events, which can occur at some

point in the middle of the task.

Event chains: Events can cause other events, which willcreate event chains. These event chains can significantlyaffect the course of the project. Quantitative analysis isused to determine a cumulative effect of these event chains

Event Chain Methodology

Critical events or event chains: The single events or the


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Critical events or event chains: The single events or the

event chains that have the most potential to affect theprojects are the critical events or critical chains ofevents. They can be determined by the analysis.

Project tracking with events: If a project is partiallycompleted and data about the project duration, cost, andevents occurred is available, it is possible to refineinformation about future potential events and helps toforecast future project performance.

Event chain visualization: Events and event chains can be

visualized using event chain diagrams on a Gantt chart.


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Project Auditing


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Project Auditing


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A major vehicle for evaluation is theproject audit, a more or less formal inquiryinto any aspect of the project

A project audit is highly flexible and may focuson whatever matters senior managementdesires

The evaluation of a project must have credibility

in the eyes of the management group for whomit is performed and also in the eyes of theproject team on whom it is performed

Evaluation Benefits of ProjectAudit


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A successful project evaluation viaaudit can help an organization: Identify problems earlier

Clarify performance, cost, and timerelationships

Improve project performance

Locate opportunities for future technological

advances Evaluate the quality of project management

Reduce costs

Need for Project Audit


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Organizational Benefits Speed the achievement of results

Identify mistakes, remedy them, and avoid

them in the future Provide information to the client

Reconfirm the organizations interest in, andcommitment to, the project

Purposes of Evaluation - Goals of theSystem


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Evaluation often makesrecommendations that relate toancillary, unplanned, but important

contributions to the project and itsparent: Improve understanding of the ways in which

projects may be of value to the organization

Improve processes for organizing andmanaging projects

Provide a congenial environment in whichproject team members can work creatively

Purposes of Evaluation Other ProjectAudit Outcomes


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Ancillary goals Identify organizational strengths and

weaknesses in project-related personnel,

management, and decision-making techniquesand systems

Identify risk factors in the firms use ofprojects

Improve the way projects contribute to theprofessional growth of project team members

Identify project personnel who have highpotential for managerial leadership

Purposes of Evaluation - Goals ofthe System


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A successful project evaluation canhelp an organization: Identify problems earlier

Clarify performance, cost, and timerelationships

Improve project performance

Locate opportunities for future technological

advances Evaluate the quality of project management

Reduce costs

Purposes of Evaluation - Goals ofthe System


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A successful project evaluation can help anorganization (cont.): Speed the achievement of results Identify mistakes, remedy them, and avoid them in the future Provide information to the client Reconfirm the organizations interest in, and commitment to,

the project

Evaluation often makes recommendations thatrelate to ancillary, unplanned, but importantcontributions to the project and its parent: Improve understanding of the ways in which projects may be

of value to the organization Improve processes for organizing and managing projects Provide a congenial environment in which project team

members can work creatively together

Purposes of Evaluation - Goals ofthe System Ancillary goals


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Ancillary goals Identify organizational strengths and

weaknesses in project-related personnel,management, and decision-making techniquesand systems

Identify risk factors in the firms use ofprojects

Improve the way projects contribute to theprofessional growth of project team members

Identify project personnel who have highpotential for managerial leadership

The Project Audit


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The project audit is a thoroughexamination of the management of aproject, its methodology and

procedures, its records, itsproperties, its budgets andexpenditures and its degree ofcompletion

The formal report may be presentedin various formats, but should, at aminimum contain comments on somespecific points

The Project Audit Six parts of a project audit:


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1. Current status of the project 2. Future status

3. Status of crucial tasks

4. Risk assessment

5. Information pertinent to other projects 6. Limitations of the audit

It is far broader in scope than a financialaudit and may deal with the project as awhole or any component or set ofcomponents of the project

Depth of the Audit


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Time and money are two of the mostcommon limits on depth of investigationand level of detail presented in the audit

report Accumulation, storage, and

maintenance of auditable data areimportant cost elements

Two often overlooked costs are the selfprotective activity of team membersduring an audit, and the potential forproject morale to suffer as a result of a

Depth of the Audit


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There are three distinct and easilyrecognized levels of project auditing:General audit - normally most constrained by

time and resources and is usually a brief review

of the project touching lightly on the six partsof an audit

Detailed audit - usually conducted when afollow-up to the general audit is required

Technical audit - generally carried out by aqualified technician under the direct guidanceof the project auditor

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