Systems approach to

Project Management

By

Institute of Public EnterpriseHyderabad

Characteristics of Project

Has ObjectivesHas a ScheduleHas ComplexityHas a Size and Nature of TasksNeeds ResourcesNeeds Organization StructureHas Information and Control SystemsHas Progressive ElaborationFrequently influenced by the EnvironmentMostly some of the stakeholders have vested interests

Challenges being faced in Project Management

• 1.• 2.• 3.• 4.• 5.• 6.• 7.• 8.• 9.• 10.

When do we declare a project Successful

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

Benefits of following Project Management Principles

A clear focus on TASK/Project. Buy in by all the stakeholders. Tight achievable targets by way of Time and Cost. Optimum Resource utilization. Roles and responsibilities of all associated with the task/project, well

defined. Good Communication practices used to accelerate the task/project

and to keep all stakeholders happy. Well established world practices/processes enable formal initiation

and proper closure of the task/project. Close monitoring to avoid deviation from set targets. A good risk management exploits every opportunity and minimizes

the effect of adverse events to get best task/project results.

Projects-Examples

• 1• 2• 3• 4• 5• 6• 7

Project Definition

A Project is a temporary endeavor undertaken to create

a unique product or service And

is Progressively elaborate.

( Discuss Difference between Project and Operation)

Project Management- Definitions • Project Management is the application of knowledge and skills of the Project

team and using required tools and techniques to meet Project Objectives.• Process of Converting a Concept into a Reality-Efficiently within given

Resources and Time.• Project management is a highly demanding and complex task. It requires

organizational skills, the foresight to anticipate the unexpected, and the ability to monitor progress and change course as needed.

• Project management is about managing people so they achieve valued end result.

• If change is becoming routine and is being encountered on a regular basis, project management principles can certainly be employed to meet the challenges of change.

(The better we know the project, the better we can manage it)

What are Project Phases

• The stages in which a Product gets developed from concept are called phases like:- Idea, Conceptualization, Develop Prototype, Project Report, Design, Execution, Commissioning, Operation etc.

• Each phase is associated with one or more deliverables which are Tangible, Verifiable work products.

• Conclusion of a phase is marked by review of key deliverables and project performance to determine if project should continue to next phase.

• The idea is the defects have to be identified and corrected at the end of each Phase, so that the cost of rectification is lower when detected and corrected as early as possible.

Progressive Elaboration• What is Progressive elaboration?

– continuously improving and detailing the plan as more detailed & specific information and more accurate estimates become available

• Why Progressive elaboration? – Potential for change– Iterative nature of the project management plan– Progressive elaboration is throughout the project lifecycle

• Progressive elaboration allows…– The project management team to manage the project to a

greater level of detail as the project evolves.

Product Lifecycle vs

Project Management Lifecycle

• Discuss and Evolve

Common Lifecycle Characteristics

• Cost - month( period ) wise & Cumulative• Level of Uncertainty• Risk in achieving the Project Objectives• Impact if a Risk occurs• Stakeholders ability to influence the final

outcome of the project• Cost of changes

Areas of Expertise needed by the Project Team

PMBOK Guide

Project Management Body of Knowledge

Inter Personal Skills

GM Knowledge and skills

Understanding the project

environment

Application Area Knowledge,

Standards andRegulations

Processes• Process Definition- a series of activities when

performed in a predetermined sequence, brings about the desired results, repetitively.

• Product Oriented Processes– Specify and create the project’s

product( Application based processes-Fabrication, Welding, Erection, Commissioning, Technology based Etc) )

• Project Management Processes– Interact with Product Oriented Processes,

organize and overview them in a manner to achieve the set project objectives.

Interaction of- Product Oriented Process

and Project Management Processes

.

Product Oriented Processes

Project Management Processes

IDEA PRODUCT

InitiatingProcesses-2

PlanningProcesses-20

Monitoring& ControllingProcesses-10

ExecutingProcesses-8

ClosingProcesses-2

Project Management Processes and their communication channels

Project Plans and Updates

Status

Guidance

Changes

Accepted Deliverables

Business Case ORProject SOW

OR Contract

Authorization of Project Charter

Deliverables+ Knowledge

Sponsor

Lessens Learned

Project Management Boundaries

InitiatingProcess

ClosingProcess

Planning Processes

Executing Processes

Monitoring &Controlling Processes

P

D C

A

Deliverables EndUsers

ProcessAssets

Records & LL

Project Input

Initiator/Sponsor

Project Boundaries

Overlap of process groups

Controlling Processes

Executing Processes

PlanningProcesses

Initiating Processes

Time

Leve

l of a

ctivi

ty

Project/Phase start

Project/Phase end

Closing Processes

PMO• Shared resources• Common Processes and Methodologies• Clearinghouse and management of policies, processes,

templates etc• Centralized configuration management, Risk repository • Centralized management of tools and dashboard • Mentoring and coaching for Project Managers• Centralized monitoring of projects, programs and

communication• Coordination of overall project quality standards

Enterprise Environmental Factors

Organizational Culture and Structures and processes Governmental / Industry standards Infrastructure Existing human resources and personnel administration Company Work Authorization systems Commercial data bases Marketplace conditions Project management information system Political climate Organization’s established communication channels

Organizational Process Assets

Processes and Procedures• Organizational Standard Processes• Standardized Guidelines, Work

instructions• Criteria for performance

measurement, proposal evaluation• Templates• Tailoring guidelines• Project Closure guidelines • Procedures on financial control,

change control, issue and defect management

• Risk categorization and control

Corporate Knowledge Base• Process measurement database• Project files• Historical information• Issue / defect management

database• Configuration management

knowledge base • Financial database

Project Management Process Groups …Initiating Process

Group

Planning Process Group

Executing Process Group

Closing Process Group

Customer

Monitoring and

Control ProcessGroup

Project Documents

Sellers

Project Sponsor

Enterprise/Organization

• PSOW • Business case

• Contract

• OPA

•Project Charter•Stakeholder Register •Stakeholder management strategy

• PMP

• PMP• Make or buy

• Approved CR• QC Measurement• Per Reports

• Deliverables• CRs, WPI

• Selected sellers

• Proposal

•Contract

•Requirement

• Final Product

• OPA• EEF

• Accepted Deliverable• Procurement documents

Project Initiation• Project Initiation is the process of understanding the inputs given

by the sponsor in the form of a Business Case, OR Project

Statement of work, OR Contract received from a customer.

• Collecting all the data relating to this input from the stakeholders

involved in identifying that project to arrive at High level budget,

schedule and arrive at Project Objectives through Stakeholder

Management.

• The Charter which is the output of the Initiation Process should

contain all the inputs necessary for creating a good project

management plan.

Project Charter• The Project Charter Documents business needs, current

understanding of customer’s needs, and the new product, service, or result that is intended to satisfy, such as:– Project purpose or Justification– Measurable Objectives and related success criteria– High level requirements – High level project description– High level risks– Summary milestone schedule– Summary budget– Project approval requirements– Assigned Project manager-responsibility and authority

level.– Name and authority of sponsor or other persons

authorizing charter.

Project Objectives• The quantifiable criteria that must be met, for the project

to be considered successful

• Each objective should have a measurable attribute

• Each attribute shall have a yardstick (units)– E.g. in Rs for cost, defects in % etc.

• An absolute or relative value to be attached to each attribute.

• Key Project Objectives are:- Scope, Quality, Time and Cost.

Project Stakeholders

Project stakeholders are individuals and/or organizations who are actively involved in the project, and/or whose interests may be positively or negatively affected as a result of project execution/ successful project completion and who can influence the project Positively/Negatively.

Other stakeholders Owners and investors Suppliers and Contractors. family members. of team Govt./statutory agencies Temporary and permanent

lobbying organizations. Media, general public and

society at large .

Key stakeholders on every project include the following

Project manager Customer/User Performing organization, Project Team members Project Management Team Sponsor Influencers PMO ( if it exists )

Develop Stakeholder Management Strategy

• Categorize the stakeholders• Identify as many stakeholders as possible• Discuss their interest in the project• Prioritize• Evolve Stakeholder Management strategy• Recommend to the management if the project can

be successfully managed

Stakeholder Management Strategy

Keep satisfied Manage Closely

Monitor

(minimum effort)Keep informed

Power /Influence

Interest / Impact

High

LowLow

High

Managing a project typically includes…• Identify Stakeholders• Gather through appropriate method Their-Needs, wants,

concerns, and expectations related to Project’s Product and Project Execution and any related issue.

• Convert these into REQUIREMENTS through Discussion.( Requirements define the Features, Functions, Characteristics of the Product and related issues)

• Balancing the competing project constraints that includes but not limited to :

Scope , Quality, Schedule, Budget, Resources, and Risk

Requirements documentation and Traceability Matrix

Req. Documentation describe how individual requirements meet the business need for the project.• Business Need or Opportunity to be seized• Project Objectives• Functional Requirements• Non- functional Requirements• Quality Requirements• Acceptance Criteria• Impact to Organizational Sub systems• Support & Training requirements• Requirements Assumptions• Requirements Constraints

Req. Traceability Matrix links the requirements to their origin and traces throughout the project life cycle. It also provides a structure for managing changes to the product scope. Reqts are traced to; Business needs, opportunities, goals, and objectives.Project scope/WBSProduct design.Product developmentTest strategy and scenariosHigh-level requirements.

Plan Project Scope

• Product scope:– The features and functions that

characterize a product service or result

– Completion of product scope is measured against the product requirements

• Project scope:– The work that needs to be

accomplished to deliver a product, service or result with the specified features and functions.

– Completion of a project is measured against the project management plan, scope statement and WBS

Includes processes required to ensure that the project includes- “All the work” and “ Only the work” required, to complete the

project successfully.

Product scope description

Product acceptance criteria Project deliverables

Description of the work Project Exclusions Project constraints

and Assumptions

Project Scope Statement – Key elements

Assumptions and Constraints

• Assumptions are factors that, for planning purpose, are considered to be true, real, or certain without proof or demonstration. Assumptions affect all aspects of project planning, and are part of the progressive elaboration of the project. Project teams need frequently identify, document, and validate the assumptions. Assumptions generally involve a degree of risk.

• Constraints are defined as the state, quality, or sense of being, that will effect the performance of the project or a process. Mostly constraints are imposed by the Customers, Sponsor or Senior management OR by the nature of Project itself. Constraints can also be understood as the boundaries imposed upon the project within which it has to be planned.

Create WBS

Scope definition involves subdividing the major project

deliverables in to smaller, more manageable components (Work

Packages ) which provide common framework from which:-• Planning can be performed.• Cost and Budgets can be established.• Time, cost and performance can be tracked.• Objectives can be linked to company resources in a logical

manner.• Schedules and status reporting procedures can be established.• Network construction and control planning can be initiated.• The responsibility assignment for each element can be

established. Organisation Structure will be defined to suit the specific Project.

WBS -DecompositionInvolves subdividing the deliverables and sub-

deliverables into smaller and more manageable components until these are defined in sufficient detail in following steps:--

• Identify the major deliverable incl. Project Management.The phases of the project can be used as first level decomposition.

• Decide if adequate (cost and duration estimate can be developed)• Identify constituent components which will produce tangible and verifiable

results.• Verify the correctness of the decomposition-if lower level items necessary or

sufficient ; is it clearly and completely defined; if each item can be appropriately- Scheduled? Budgeted ? Responsibility assigned?

( The decomposition can be done on the basis of Phases, Skill set, Deliverables, Raw Materials etc )

WBS Decomposition

Level12345

DescriptionProject Phases

Sub division Work Package Level of effort

These work packages have to be properly numbered for better project monitoring and control.

Work Package/ WBS Dictionary• Represents units of work at the level where the work is managed by the

Project Team.• A good work breakdown structure ensures minimum scope creep and better

clarity and understanding of work among the team members. • WBS Dictionary details all features of a Work Package:-

Code of account identifier,

Statement of work,

Responsible organization,

Schedule milestones,

Contract information,

Quality requirements,

Technical references.

( Depending on the clarity on the project scope, the immediate phases can be drilled down to

lower WBS and the future phases can be left at high level till the clarity is achieved.)

Project summary

990 HLeve

l 1

SAI-700

Design

310 HLeve

l 2700.02

Development

350 H 700.03

Implement

250 H 700.04

Prototype.

10 HLeve

l 3

700.02.01

Components

50 HLeve

l 3

700.02.02

Civil/Structural

180 HLeve

l 4

700.02.03.01

Mechanical

30 HLeve

l 4

700.02.03.02

Electrical/Control

40 HLeve

l 4

700.02.03..03

Leve

l 2

Leve

l 2

Work Breakdown StructureLe

vel 2 Proj. Mngment

80 H 700.01

Drawings

250 HLeve

l 3

700.02.03

Waste Water Treatment Plant

In s tru m en ta tion D rg

E lec trica l D rg

M ech an ica l D rg

S tru c tu ra l D rg

A rch itec tu ra l D rg

C ivil D raw in g s

D es ig n

C on tro l R oom

S lu d g e B u ild in d

A era tion B as in

Tan ks

C on s tru c tion

W ater R u n

M ach in es

W ater S ys tem

E lec tric S ys tem

C om m iss ion

M as ter P lan

Proj. Mngt

Schedule Development

Define Activities

Sequence Activities

Activity Resource Estimation

Activity Duration Estimation

Develop Schedule

Identifying and Documenting specific activities that must be performed to produce deliverables and sub-deliverables identified in WBS.

USING as INPUTS:-

Activity Definition

Work Breakdown Structure, Scope statement, Historical Information, Constraints, Assumptions and Expert judgments where-ever necessary.Activity Attributes— Include activity identifier, activity codes, activity description, predecessor activity, successor activity, logical relationship, leads and lags, resource requirements, imposed dates, constraints and assumptions.

Activity Sequencing

•Identifying and documenting interactive logical relationship including dependencies like:-.

• Mandatory dependencies (Hard logics)• Discretionary dependencies (Soft logics)• External dependencies

•Sequenced accurately to support development of realistic and achievable schedule.•Modify/update the Activity List where-ever necessary during sequencing process.

There are 2 methods for sequensing :-• Precedence diagramming method PDM• Arrow diagramming method ADM

Dependencies- Mandatory

A B C D

The successor activity is totally dependant on the completion of predecessor activity therefore activity B is dependant on completion of activity A

Examples• Foundation work can be started only after the excavation is

completed and the pit is inspected and approved.

Dependencies- Discretionary

A B D

Examples• The living room can be painted before painting the dining room, although

it could be done other way round, too – with out constrain• It is logically possible to paint four walls in a room simultaneously but

there is only one painter – with constrain

C

E

Dependencies - External

APipe Welding

DCommission

CObtain Approval Inspection / Certification

BHydro Test

When there is an external inspection mandatory before starting the next activity.

Arrow Diagramming Method ( Activity-On-Arrow AOA, Critical Path Method CPM)

Finish

A H

G

B

E

FC

Start

F

D

Uses only Finish to Start dependencies

Activity

Nodes

Dummy

Network – Precedence Diagramming Method

Start

A

B

C

D

E

F

Finish

activitiesdependencies

Types of Dependencies.• Finish to Start• Finish to Finish• Start to Start• Start to Finish

Dependencies

Finish-to-Start (FS) Task (B) cannot be started until task (A) finishes. Task A “Reaction” and Task B “Analysis”• “ Concreting” can't be started until

“Shuttering” finishes.

A

B

Dependencies

Finish-to-Finish (FF) Task (B) cannot finish until task (A) finishes. Task A “Wiring” and Task B “Inspection”• “Inspection” can't finish until “Wiring” finishes.

A

B

Dependencies

Start-to-start (SS) Task (B) cannot start until task (A) starts. • Task A "Pour foundation" and Task B "Level

concrete," "Level concrete" can't begin until "Pour foundation" begins.

A

B

Dependencies

Start-to-Finish (SF) Task (B) cannot finish until task (A) Starts.

A

B

2

3

4

1 65 875 4

9

44

6

87

3 4

Path 1-2-3-6-7-8 = 5+7+6+3+4 = 25 unitsPath 1-2-4-5-6-7-8 = 5+4+4+4+3+4 = 24 unitsPath 1-2-3-5-6-7-8 = 5+7+8+4+3+4 = 31 units.Path 1-2-4-7-8 = 5+4+9+4 = 22 units

Critical path

Critical path – Longest path, float less than or equal to specified value – mostly Zero.

Diagrammatic representation of PERT

A BA (8,10)

2 (15,17)

Activity identification

Activity Time

Earliest StartEarliest Finish

Latest StartLatest Finish

A,5 E,4

H,4

F,4

C,6

D,3B,7 I, 8

G,3

Calculate Slack/Float time

TE= 28TE= 24TE= 21

TE= 20TE= 12

TE= 12

TE= 5TE= 0

TE= 18

TE= 9

A,5 E,4

H,4

F,4

C,6

D,3B,7 I, 8

G,3

Step-1- Calculate Earliest Start time TE

Step-2-Calculate Latest Start time TL

TL= 28TL= 24

TL= 20

TL= 12TL= 15

TL= 5TL= 13

TL= 0

TL= 21

TL= 17

A,5 E,4

H,4

F,4

C,6

D,3B,7 I, 8

G,3

Slack or Float timeEarliest Start- (TE )--- The earliest possible time the said activity can begin, which means that all the predecessor jobs on which this activity is dependant, have been completed.( When the Tortoise reaches the node)( Highest of the times at a node when analyzing in the Forward pass )

Latest Start – ( T L )-- How late a particular activity can be started without effecting the overall project schedule.( Till when the Heir can wait )( Lowest of the times at a node when analyzing in the Backward pass )

Slack or Float time----

Latest Start TL – Earliest Start TE

Critical path – Longest path, float less than or equal to specified value – mostly Zero.

A,5 E,4

H,4

F,4

C,6

D,3B,7 I, 8

G,3

TL= 28TL= 24

TL= 20

TL= 12

TL= 5TL= 0

TL= 21

TL= 17

TE= 28TE= 24

TE= 20

TE= 12

TE= 5TE= 0

TE= 18

TE= 9

Float / Slack time = Longest time – Earliest time

Critical path – Longest path, float less than or equal to specified value – mostly Zero.

A,5 E,4

H,4

F,4

C,6

D,3B,7 I, 8

G,3

TL= 28TL= 24

TL= 20

TL= 12

TL= 5TL= 0

TL= 21

TL= 17

TE= 28TE= 24

TE= 20

TE= 12

TE= 5TE= 0

TE= 18

TE= 9

Activity Resource Estimation

• What resources ( Persons, equipments, tools, tackles or material ) and what quantities of each resource will be used, and when each resource will be available to perform project activities.

• Expert judgment, Alternatives Analysis, Published data, Bottom-up estimate are some of the methods used to estimate the resources requirement.

• These resources can then be structured into categories and types for easy management and control.

• A resource calendar is then prepared showing the quantity of each resource available during each available period.

Activity Duration Estimation• The process of estimating schedule activity duration using information on scope of work, resource types, resource quantities and resource calendars.•The estimates are generated by the person or group in the project team who is most familiar with the nature of work.•The estimate is progressively elaborated to get precise data of better quality.•All data and assumptions that support duration estimating are documented ( Support documents ).•The effect of identified Risks on the schedule development are also considered.•Methods- Analogous, Parametric, 3-Point, Bottom-Up.

Develop Schedule

• Incorporate the Duration estimates on The Network Developed.

• Superimpose calendars on the Network.• Impose any constraints.• Introduce start date to get the project end

date.

Network re-planning1. Resource Leveling

2. Resource allocation

3. Elimination of some parts of project

4. Addition of more resources

5. Substitute with less time consuming components or

activities.

6. Parallelization of activity

7. Shortening longest activities

8. Shortening activities that are least costly to speed up.

9. Shortening activities for which you have more resources.

10. Increasing the working hours.

Resource Histogram

0

50

100

150

200

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Re

so

urc

e U

sa

ge

Week Number

Man …

Latest Techniques in Scheduling

• Critical Chain Methods• Theory of Constraints

Project Cost Estimation

• Estimate Costs is the process of estimating the monetary resources needed to complete project activities. Cost estimates are a prediction that is based on the information known at a given point in time:- Analogous, Parametric, 3-Point Estimate, Bottom-Up.

• Cost estimating is iterative from phase to phase. ROM during initiation phase could be ±50%. Later on the estimates could narrow to a range of ±10%at the end of Planning process.

• Scope Statement as part of the Scope BL is also an input to the Estimate Costs process wherein one basic assumption that needs to be made is whether the estimates will be limited to direct project costs only or whether the estimates will also include indirect costs.

• Indirect costs are those costs that cannot be directly traced to a specific project and therefore will be accumulated and allocated equitably over multiple projects by some approved and documented accounting procedure.

Budgeting Aggregating the individual cost of all project activities over the project life

cycle gives the “S” Curve. The budgets are derived from this through

negotiations with the Sponsor/Finance Department.

Time

Cos

tIn

itial

Fun

ding

2

nd

Fun

ding

F

inal

F

undi

ng

Why Project Funding

customer

Project

Parent Organization

VC

BANKS

Various funding options

Contract

Delivery

Project Funding Repayment

Funding

Final Payment

REPAYMENT+

PROFIT

Project Opportunity/Risk Management

Risk is any potential Threat or occurrence which may prevent the project to achieve its desired objective by affecting--Schedules, cost, quality or benefits.

Risk is a measure of the extent to which a given outcome might deviate from what is expected or desired.

Risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project objective.---PMBOK.

The positive variation can be termed as OPPORTUNITY and the negative as RISK

What is Risk?

Cause- Requirement,

Assumption, Constraint, Condition

Risk- Uncertain Event

OR Condition incl.

Project’s/Organization’s environment

Impact- Cost,

Schedule OR Performance.

Causes

If occurs results

Risk Management

Risk Management is a systematic process of identifying, analyzing, and responding to project risks- maximizing the probability and consequence of positive events( Opportunity) and minimizing the probability and consequence of adverse events( Risk) to Project Objectives.

If you don’t actively attach the risks, they will actively attack you.---Tom Gilb.

Risk Identification

Determining which risks might affect the project and documenting their characteristics by all concerned including subject matter experts.

The risk identification process involves reviewing ---Project Charter, WBS, Product description, Schedule and cost estimates, Resource plan, Procurement plan, Assumptions and constraints

Both Project Risks and Opportunities have to be separately identified and analyzed.

Technical, Quality and Performance risks---Examples

• Reliance on outdated, unproven or Complex Technology.

• Unrealistic Performance Goals/ Gold plated.• Changes to the Technology used.• Changes in the Industry Standards of

Technology.• Is the Technology new to the organisation.

Project Management Risks---Examples

• Poor allocation of Time and Resources.• Technical team under-qualified for the job.• Third party supplied resources.• Inadequate quality of Project Plan-like Bad

Product specification, unclear/undefined milestones, communication systems, etc.

• Crash Projects.• Poor use of Project Management discipline.

Organizational risks---Examples

• Inconsistent objectives of cost, time and scope.• Lack of prioritization of Project.• Inadequate or interruptions in funding.• Unspecified payment/budget.• Resources conflict with other projects.• Improper working environment.• Distributed Project Management.• Over-ambitious Management.• User is unable to and has no authority to clarify

doubts.

External risks---Examples

• Shifting Legal and Regulatory Environment.• Labor issues.• Changing owner priority.• Country Risk.• Force Majeure Risks--requires disaster

recovery actions.

****Add--Fish Bone Diagram

.

Qualitative Risk Analysis

• Prioritization of Risks for subsequent further analysis and action.

• Risk Probability is the likelihood that a risk will occur.

• Risk Impact is the effect on project objectives , if the risk event occurs.

• The product of the Impact and the Probability gives a Value for each risk which can be used for prioritizing the risks.

Project Objective

Very low( 0.05 )

Low( 0.1 )

Moderate( 0.2 )

High( 0.4 )

Very High( 0.8 )

CostInsignificant cost increase

<5% Cost increase

5-10%Cost increase

10-20%Cost increase

>20%Cost increase

Schedule

Insignificant schedule slippage

Schedule slippage<5%

Overall project slippage5-10%

Overall project slippage 10-20%

Overall project slippage>20%

Scope

Scope decrease barely noticeable

Minor areas of scope are affected

Major areas of scope affected

Scope reduction unacceptable to the client

Project end item is effectively useless

Quality

Quality degradation barely noticeable

Only very demanding applications are affected

Quality reduction requires client approval

Quality reduction unacceptable to the client

Project end item is effectively unusable

Risk Evaluation on major Project Objectives

Impacts Rating guidelines for a risk – Qualitative analysis

Qualitative Risk Analysis Probability - Impact Matrix

0.9 0.0450 0.0900 0.1800 0.3600 0.7200 0.7200 0.3600 0.1800 0.0900 0.0450

0.7 0.0350 0.0700 0.1400 0.2800 0.5600 0.5600 0.2800 0.1400 0.0700 0.0350

0.5 0.0250 0.0500 0.1000 0.2000 0.4000 0.4000 0.2000 0.1000 0.0500 0.0250

0.3 0.0150 0.0300 0.0600 0.1200 0.2400 0.2400 0.1200 0.0600 0.0300 0.0150

0.1 0.0050 0.0100 0.0200 0.0400 0.0800 0.0800 0.0400 0.0200 0.0100 0.0050

Impact 0.05 0.1 0.2 0.4 0.8 0.8 0.4 0.2 0.1 0.05

P

Probability and Impact Matrix

OpportunitiesThreats

Impact ( relative scale ) on an objective ( e.g. cost, time. Scope or quality.)

Risk CategoriesPM

ScheduleExpectations

Mismatch

CostUnrealistic

Target

Human Resources

Availability

QualityStringent

Standards

Procurement

PerformanceSupport

Risk Categorization – Example

Strategies for Negative Risks (Threats)

• Avoid– Eliminate a specific threat, usually by eliminating the cause. – Examples: reduce the scope; or extend the schedule in a way such that

the risk is no longer a risk

• Transfer– Shifts the impact of threat along with ownership of the response to 3rd

party. – Does not eliminate it.– Involves payment of premium

• Mitigate – Reduce the expected monetary value of a risk event by reducing the

probability of occurrence or reducing the risk event value (impact of the risk)

– Taking early actions to reduce probability an/or impact– Example: designing redundancy into subsystem may reduce the impact

from a failure of the original component

Strategies for Opportunities

• Exploit– An opportunity can be realized– Making an opportunity definitely happen

• Share– Involves allocating ownership to a third party who can best able to

capture the opportunity for the benefit of the project.

• Enhance– Modifies “size” of the opportunity by increasing probability

and/or positive impacts by identifying and maximizing key drivers of these +ve risks.

– Strengthening the cause of opportunity, proactively targeting and reinforcing trigger conditions might increase probability.

Reserve………. Is a provision in the project plan to mitigate cost and/or schedule risk. Often

used with modifiers

Contingency ReserveA separately planned quantity used to allow for future

situations which may be planned only in part(Known unknowns). Contingency reserves are normally included

in project’s cost and schedule baselines

Management ReserveA separately planned quantity used to allow for future

situations which are impossible to predict( unknown unknowns). Use of management reserve requires a

change to the project’s cost/schedule baseline

Project Quality Management

• The processes which ensure that the project will satisfy the needs for which the project was undertaken. This includes all activities of the overall management function that determine the quality policy, objectives and responsibilities and implements them. This consists of:-

• Quality Planning processes• Perform Quality Assurance processes• Perform Quality Control processes

( Discuss Quality Policy, Quality Metrics, Cost Of Quality)

Human Resource Planning

Human resource Planning involves identifying, documenting project roles and responsibilities, and reporting relationships as well as creating the staffing management plan.. which contain Roles, responsibilities, authority, competency of the human

resources. Project organization chart. Staff acquisition time table. Training needs etc.

Responsibility Assignment matrix

Person

Phase

Feasibility P A R P P

Planning/DPR R S A P

Design R S P I I

Execution S P R P P

Commissioning I S P P

P = Participant A= Accountable R = Review required I = I nput required

S = Sign off required

E

Responsibility Assignment Matrix

A B C D

Project Communication PlanThe information needs and the methods of distribution vary widely from project to project.This determines the information and communication needs of the stake holders

– Who needs – What information– When will they need it– How will it be given to them– By whom (A Communication Matrix will help)

Communication Channels

Lateral CommunicationPeers,

Other functional groupsAnd customers

Lateral communication Friends, Social groups,

Formal and informal org

Upward CommunicationManagement

Downward CommunicationSubordinates,

Project Office Personnel

PM

Performance reporting Collecting the information from project plan, work

results and other project records and disseminating the project performance information to provide stakeholders with information about how resources are being used to achieve project objectives.

• Status reporting• Progress reporting• Forecasting

Performance reporting should primarily cover information on scope, schedule, cost, quality, risk and procurement.

0

200

400

600

800

1000

1200

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

Man

ho

urs

Week Number

Performance Chart

Budgeted Hours Earned value Actual Hours

Earned Value Analysis

Schedule Variance

Cost Variance

M101 P203 C104 H301

M201 P305 C204 H401

Spec OrderInspect Delivery

Erect Trail

Visual Communication Aids

Continuous Process Improvement

Process Improvement Plan – Details the steps for analyzing processes that will facilitate the identification of waste and non-value added activity, thus increasing customer value, such as:Process boundaries: Describes the purpose, start and end of

processes, their inputs and outputs, data required and the owner and stakeholders of processes.

Process configuration: A flowchart of processes to facilitate analysis with interfaces identified.

Process metrics: Maintain control over status of processes.Targets for improved performance: Guides the process

improvement activities.

Lessons Leaned Process

Information GatheringFrom Stakeholders/Team

Brainstorming

LessonsLearned

KnowledgeBase

WENT WRONG WENT RIGHT

PM’s Professional Responsibility

1. Ensure individual Integrity and Professionalism

2. Contribute to the PM Knowledge base

3. Enhance Individual Competence

• by adhering to legal requirements and ethical standards in order to protect the community and all stakeholders.

• by sharing lessons learned, best practices, research etc within appropriate communities in order to improve the quality of project management services, build the capabilities of the colleagues and advance the profession.

• by increasing and applying professional knowledge to improve services.

PM’s Professional Responsibility

4. Balance Stakeholder Interests

5. Interact with team and stakeholders in a Professional and co-operative manner

by recommending approaches that strive for fair resolution in order to satisfy competing needs and objectives.

by respecting personal, ethic and cultural differences in order to ensure a collaborative project management environment.

Total number of Questions : 18

The direction finder for PM

The role of PM

Looking upwardsManaging your sponsor in order

to achieve organization commitments

Looking ForwardsPlanning in order to ensure that the team sets realistic targets,

and obtains appropriate resources to achieve those

targets.

Looking downwardsManaging the team in order to

maximize their performance both as individuals and

collectively.Managing the visible, across disciplines, departments,

countries and cultures

Looking inwardsManaging yourself, by reviewing your performance to ensure that your team leadership is a positive

contribution to the project.

Looking BackwardMonitoring progress with appropriate

control systems, to ensure that the project meets its targets and the team

learn from its mistakes

Looking outwards Managing the client, end user

and external stake holders(including suppliers and

subcontractors) to ensure that the project meets their expectations.