PROJECT MANAGEMENT

By: Jonathan Daun Adriana Leon Adam Goplin

WHAT IS PROJECT MANAGEMENT?

Project: Unique, one-time operation designed to accomplish a set of objectives in a limited time frame

Examples: building a bridge, designing a new product, software development, implementing an ERP system

HOW ARE PROJECTS DIFFERENT?

Projects differ from normal operations: One time operation Limited time horizon Limited budget Unique specifications May work across organizational boundaries Less bureaucratic

LIFE CYCLE OF PROJECTS

Project Definition Planning Implementation (Execution of Major

Activities) Project Phaseout

ROLES – PROJECT CHAMPION

Task of promoting and supporting a project Usually a member of upper management

with good communication skills Solicits buy-in from other managers,

particularly those who must concede resources to the project

ROLES – PROJECT TEAM MEMBERS

Posses required knowledge and skill to complete tasks

Responsible for technical design, development, testing, and implementation of project

Must work well in team setting Must have enthusiasm/buy-in to project

ROLES – PROJECT MANAGER

Bears ultimate responsibility for success/failure of project Leadership Organization Communication Finance Technical savvy Team building/HR management

PROJECT MANAGEMENT TRIANGLE

Quality

Cost

Schedule

Performance Objectives

WORK BREAKDOWN STRUCTURE (WBS)

Hierarchical listing of tasks that must be accomplished for a project

Identifies required activities and major elements

Each major element is broken down into supporting activities and so on down

WBS EXAMPLE (DWIGHT FISCHER)

Canoe Trip to Boundary Waters

Arrange Travel Get Equipment Prepare BudgetPlan Meals

Schedule Flights to Mpls

Rent Van

Arrange Motel

Schedule return flights

Contact BW Outfitter Bring cooking gear

Freeze dry food

Assign Budget Person

Get deposits

Retain Receipts

Pay for supplies

Close-out trip

Plan for Emergencies

Plan Activities

Rent canoes

Rent Tents

Bring Sleeping Bags

Bring Fishing Gear

Prepare 7 breakfasts

Prepare 7 lunches

Prepare 6 dinners

Obtain emerg. #’s

Arrange contact at BW

Bring emerg. flares

Bring two first aid kits

Bring Cards

Bring Joke book

Bring scotch

Bring lights and waterproof

matches

SELECTING PROJECTS

Limited resources means not all projects can be undertaken

Factors for selecting projects: Budgets Availability of expertise/skill Cost-benefit analysis Government mandates Safety concerns

GANTT CHARTS

Used to schedule and monitor project activities

Lists project activities, estimates of activity time length, and sequence of activities

PROS/CONS OF WORKING ON PROJECTS

ProsRewards associated with being part of

successful projectThrill of working on different/unusual tasks

and solving new problemsOpportunities to meet new contacts &

increase future job opportunities Cons

Managers don’t want to lose good workers to projects

Disruption of daily routineRisk of being replaced on current jobFear of association with unsuccessful

project

WHY PROJECTS FAIL

Unrealistic expectations Lack of executive sponsorship Lack of project management Failure to align project with organizational

objectives Poor scope Politics/conflicts

WHAT IS PERT?

Project Evaluation and Review Technique Developed in 1958 by Navy Used in the POLARIS missile program Helps forecast project completion date

1) How does the cost of work performed compare to the value of the work performed? 

2) What is the value (in dollars) of work performed so far?

3) How does the amount of money spent so far on a project compare to what should have been spent?

PERT

PERT - a management tool for defining and integrating events; a process which must be accomplished in time to assure completing project objectives on schedule.

3 basic factors influence project progress: a) time b) resources c) technology

PERT

Objectives: To provide, through applying an integrated

management information system (which contains a balanced combination of the basic elements of time, cost, and performance)

coordinate planning and control information at the proper levels so that timely managerial judgments will meet all established project objectives.

PERT NETWORK

Events may be represented in a PERT network by any selected geometric figure (ovals, circles, squares).

The events must follow logically.

The arrows indicate the flow in the PERT network and the numbers identify the events. The arrows and not the #’s indicate the order of events. Events that immediately follow one another are called successor events. Similarly, a predecessor event is one which immediately precedes another event.

PERT NETWORK

Key features of a PERT network are: 1) Events must take place in a logical order. 2) Activities represent the time and the work it takes to get from one event to another.

3) No event can be considered reached until ALL activities leading to the event are completed. 4) No activity may be begun until the event preceding it has been reached.

STEPS:

Step 1: *Define tasks Step 2: *Place tasks in a logical order, find

the critical path Critical path- longest time path through the task

network which dictate finish date Step 3: Generate estimates Step 4: Determine earliest and latest dates Step 5: Determine probability of meeting

expected date

*Don’t require calculations. Use logic.*

EXAMPLE: PLANTING FLOWERS & TREES

Helpful to create a diagram:

CALCULATING PERT: STEPS 1&2

Step 1: *Define tasks Step 2: *Place tasks in a logical order, find

the critical path

*Don’t require calculations. Use logic.*

STEP 3: GENERATE ESTIMATES

Organize your estimates into a table Calculate:

Most Optimistic (TO) – best case scenarioMost Likely (TL) “normal” scenarioMost Pessimistic (TP) Worst case scenario

Use PERT formula to calculate each scenario (TO x 1 + TL x 4 + TP x 1) / 6 = TEsum of (optimistic x 1 + likely x 4 + pessimistic x 1) /

by 6 = expected task duration Group tasks on critical path separately TE is earliest possible completion time

STEP 3A: GET ORGANIZED

STEP 3B: GENERATE ESTIMATES

Calculate standard deviation Standard deviation- average deviation from the

estimated time SD=(TP-T0)/6

higher the SD is the greater amount of uncertainty exists

Calculate variance reflects the spread of a value over a normal

distribution V=SD2

a large variance indicates great uncertainty, a small variance indicates a more accurate estimate

TE: EXPECTED TASK DURATION

1) For each TE cell: (TO*1+ TL*4+ TP*1)/6

Use sum formula to add TE column.

SD: STANDARD DEVIATION Use excel formula:

SD=(TP-T0)/6

V:VARIANCE

Use Excel formulaV=SD2

Use sum formula for V column

Critical Path Tasks (longest duration)Task To TL TP TE SD V

Mark Utilities 1 3 5 =SUM(B3*1+C3*4+D3*1)/6 =(D3-B3)/6 =F3*F3

Dig holes 2 4 7 =SUM(B4*1+C4*4+D4*1)/6 =(D4-B4)/6 =F4*F4

Plant trees 1 3 6 =SUM(B5*1+C5*4+D5*1)/6 =(D5-B5)/6 =F5*F5

Plant flowers 1 3 5 =SUM(B6*1+C6*4+D6*1)/6 =(D6-B6)/6 =F6*F6

Install edging 1 2 4 =SUM(B7*1+C7*4+D7*1)/6 =(D7-B7)/6 =F7*F7TOTAL =SUM(E3:E7) =SUM(G3:G7)

Enter desired time completion date: 15 Probability of completion: =NORMDIST(B10,E8,SQRT(G8),TRUE)

Critical Path Tasks (longest duration)Task To TL TP TE ES EF LS LF SLACK SD V

Mark Utilities 1 3 5 3.00 0 3 0 3 0 0.667 0.444

Dig holes 2 4 7 4.17 3 7 3 7 0 0.833 0.694

Plant trees 1 3 6 3.17 7 10.17 7 10.17 0 0.833 0.694

Plant flowers 1 3 5 3.00 10 13 10 13 0 0.667 0.444

Install edging 1 2 4 2.17 13 15.17 13 15.17 0 0.500 0.250

TOTAL 15.50 2.528

Enter desired time completion date: 15 Probability of completion: 37.66%

Critical Path Tasks (longest duration)Task To TL TP TE ES EF LS LF SLACK SD V

Buy Trees 0.5 1 3 1.25 0 1.25 3 4.25 3 0.125 0.015625

Buy Flowers 0.5 1 3 1.25 0 1.25 3 4.25 3 0.125 0.015625

Buy Edging 0.5 1 3 1.25 1.25 2.5 4.25 5.5 3 0.125 0.015625

TOTAL 3.75 0.047

ES=Earliest Start EF=    Earliest Finish     LS=Latest Start        LF=Latest Finish

STEP 4: DATES For each task, determine the latest allowable time for

moving to the next task Slack- difference between latest time and expected time

Tasks with zero slack time are on the critical path

Critical Path Tasks (longest duration)Task To TL TP TE ES EF LS LF SLACK SD V

Mark Utilities 1 3 5 =SUM(B3*1+C3*4+D3*1)/6 0 3 0 3 =I3-G3 =(D3-B3)/6 =K3*K3Dig holes 2 4 7 =SUM(B4*1+C4*4+D4*1)/6 3 7.17 3 7.17 =I4-G4 =(D4-B4)/6 =K4*K4Plant trees 1 3 6 =SUM(B5*1+C5*4+D5*1)/6 7 10.17 7 10.17 =I5-G5 =(D5-B5)/6 =K5*K5Plant flowers 1 3 5 =SUM(B6*1+C6*4+D6*1)/6 10 13 10 13 =I6-G6 =(D6-B6)/6 =K6*K6Install edging 1 2 4 =SUM(B7*1+C7*4+D7*1)/6 13 15.17 13 15.17 =I7-G7 =(D7-B7)/6 =K7*K7TOTAL =SUM(E3:E7) =SUM(L3:L7)

Enter desired time completion date: 15 Probability of completion:=NORMDIST(B10,E8,SQRT(L8),

TRUE)

Critical Path Tasks (longest duration)Task To TL TP TE ES EF LS LF SLACK SD V

Buy Trees 0.5 1 3 =SUM(B14*1,C14*4+D14*1)/6 0 1.25 3 4.25 =I14-G14 =(E14-B14)/6 =K14*K14Buy Flowers 0.5 1 3 =SUM(B15*1,C15*4+D15*1)/6 0 1.25 3 4.25 =I15-G15 =(E15-B15)/6 =K15*K15Buy Edging 0.5 1 3 =SUM(B16*1,C16*4+D16*1)/6 1.25 2.5 4.25 5.5 =I16-G16 =(E16-B16)/6 =K16*K16TOTAL =SUM(E14:E16) =SUM(L14:L16)

ES=Earliest Start EF=    Earliest Finish     LS=Latest Start        LF=Latest Finish

STEP 5: PROBABILITIES

Use Excel formula =NORMDIST(x, mean, standard_dev, cumulative)

X  is the value for which you want the distribution (desired date)

Mean is the arithmetic mean of the distribution (summed PERT expected durations)

Standard_dev is the standard deviation of the distribution (square root of the summed variances)

Cumulative is a logical value that determines the form of the function. If cumulative is TRUE, NORMDIST returns the cumulative distribution function (probability of completion on the date entered)

PERT IN A NUTSHELL: 1) A management tool for defining and coordinating what must be

done to accomplish a project’s objectives on time. These tasks were affected by our constructing a diagram of the PERT network.

  2) A technique that aids the manager but does not decide for

him. He uses it to calculate variance, slack, probability, and time estimates.

3) A technique that presents statistical knowledge about the uncertainties faced in completing the many activities associated with a project -- with it we calculated the expected task duration, variance, and probability.

  4) A method for attracting a manager’s attention to latent

problems that require decisions and/or solutions. We used it to analyze the PERT network for critical paths and slacks.

  5) A method of attracting a manager’s attention to procedures for

adjusting time, resources, or performance to meet target dates. He does so by analyzing the PERT network for areas of possible resource reallocation.

CPM (CRITICAL PATH METHOD)KEY PM (PROJECT MANAGEMENT) TERMS

Critical Path: The longest path (time) through the task network. The series of tasks (or single task) that dictates

the calculated finish date of the project (in other words, when the last task in the critical path is done the

project is done).

-If shortened, it will decrease overall projectcompletion time.

-Activities outside the CP would not effect overall PC time.

Slack Time: The amount of time a task can be delayed before the project finish date is delayed.

-TS (Total Slack) can be either positive (+) or negative (-).

-If Positive: indicates amount of time that the task can be delayed w/out delaying project finish

date.

-If Negative: indicates amount of time that must be saved so that the project finish date is not

delayed.

- TS = Latest Start – Earliest Start

- A task w/ a TS = 0 is a Critical Task ( Float Time)

CPM (CRITICAL PATH METHOD)KEY PM TERMS (CONT.)

CPM (CRITICAL PATH METHOD)KEY PM TERMS (CONT.)

Constraints: Restrictions set on the start/finish date of a task. You can specify that a task must start

on/finish no later than a particular date. 2 Types:

1- Flexible: As soon as possible (ASAP) / as late as possible (ALAP) do not have specific times

allocated. Setting these times enables you to begin tasks ASAP/ALAP w/ the task ending before the project finish.

-Must take into consideration all other factors.)

2- Inflexible: Must start on (MSO) / must finish on (MFO) require an allocated date, which controls the time completion of a task.

-External factors: -Availability of Eq./Resources

-Deadlines -Contract

Milestones -Start/Finish

Dates *Origin of CPM: introduced by US industry 1958 (DuPont

Corporation/Remington-Rand)

CPM (CRITICAL PATH METHOD)INTRODUCTION

Valuable Management Tool

Unlike PERT, analyzes only the longest likely chain of activities used to complete a project.

- Earliest time a project can be completed when using the longest possible task durations.

Deterministic, not probabilistic (PERT)- Events are determined by preceding events, not by probability.

-Deterministic (Time estimates that are fairly certain.)

-Probabilistic (Estimates of times that allow for variation.)

Derives a “normal” completion time

CPM (CRITICAL PATH METHOD)INTRODUCTION (CONT.)

“Unrealistic estimates = Unrealistic Plans.” - All plans are estimates and are only as

good as the task estimates. Adding tasks = Added Time & Cost.

- If there are any additions/reductions in the overall project, the estimates must adapt to

the change. Expectation Control (Benefits)

- Time estimates (likely) - How long will it take?

- How long will it take if it needs to be done sooner?

- Cost estimates - How much will it cost?

- How much will it cost if it needs to be done sooner.

- Time and Cost if crashed

CPM (CRITICAL PATH METHOD)ANALYSIS FACTORS

Duration: The time it takes for an activity to be completed, given theplanned

amount of material, labor and equipment. Effort:The amount (not time-oriented) of work

required to finish the task. Duration may decrease by adding resources but the overall

effort required will remain constant. Scope: A specific definition of what the project

does and does not entail. This is critical to the ever- changing project environment as well as managing the expectations of not only customers, but workers.

Resources: All available means utilized for the completion of the project. Such as

equipment, employees, finances, etc.

CPM (CRITICAL PATH METHOD)ASSUMPTIONS MADE BY CPM

Key concept used by both CPM/PERT-small set of activities make up the longest

path, controlling the entire project.-these “critical” activities could be identified

and managed with the optimum level of efficiency (personnel, resources, etc.)

-Non-critical activities-Pareto Phenomenon

CPM (CRITICAL PATH METHOD)ASSUMPTIONS MADE BY CPM (CONT.)

Other Assumptions:-Each task possesses a distinct start

and finish point.-Each estimate can be mathematically

calculated.-Tasks must be able to be arranged in a

defined sequences that produces a pre-defined result.

-Resources may be re-allocated as required per needs.

-Cost & time have a direct relationship.-Time has 0 value.

CPM (CRITICAL PATH METHOD)ASSUMPTIONS MADE BY CPM (CONT.)

CPM (CRITICAL PATH METHOD)COMPUTING ALGORITHMS (AOA)

Activity-on-Arrow Diagram

Circles = Events Tail Event = Initial Event

Arrows = Tasks Head Event = Final Event

CPM (CRITICAL PATH METHOD)COMPUTING ALGORITHM (AOA)

Necessary Information:

-ES, the earliest time activity can start, assuming all preceding activities start as early as possible.

-EF, the earliest time the activity can finish.

-LS, the latest time the activity can start and not delay the project.

-LF, the latest time the activity can finish and not delay the project.

Used to Calculate:

-Expected total project duration.

-Slack time. (LS – ES or LF – EF)

-The critical path.

CPM (CRITICAL PATH METHOD)FORWARD AND BACKWARD PASS

Forward Pass:-For each path, start at the left side of the diagram and work toward the right side.

-For each beginning activity: ES = 0.

-For each activity: ES + Activity Time = EF

-For the following activity: ES = EF of preceding activity.

Backward Pass:-For each path, start at the right side of the diagram and work toward the left side.

-Use the largest EF as the LF for all ending activities.

-For each activity: LS = LF – Activity Time.

-For the preceding activity: LF = LS of following activity.

SOURCES:

http://krypton.mnsu.edu/~tony/courses/609/PERT/tech.html

krypton.mnsu.edu/~tony/courses/609/PERT/pert2.ppt