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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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Functional Organization
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
Functional Organization
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Light colored boxes:
involved in projects
Project Coordination
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
Projectized Organization
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Director
Project
Manager
Staff
Project
Manager
Project
Manager
Staff Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project Coordination
Light coloredboxes: involved inprojects
Projectized Organization
Projectized Organization
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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
Projectized Organization
Balanced Matrix
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Director
Functional
Manager
Staff
Functional
Manager
Functional
Manager
Staff Staff
Staff
Staff
Staff
Staff
Staff
Project Manager
Project Coordination
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
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
Uncertain Activity Times
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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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Crashing Sample Network
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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Crashing Sample Network
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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Crashing Sample Network
1 2
3
4
5
6
770
80
160
70
Crashed Project Total Cost = 70+ 80 + 160 + 70 +60 + 50 + 40 =
530
Critical Path = 23 Days
2
66
6
60
50 40
10
11 5
CrashedPath = 20 Days
C hi S l k
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Crashing Sample Network
1 2
3
4
5
6
770
160
160
70
Crashed Project Total Cost = 70+ 160 + 160 + 70 +60 + 50 + 40 =
610
Critical Path = 23 Days
2
46
6
60
50 40
10
11 5
CrashedPath = 18 Days
Crashing Sample Network
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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.
Earned Value Chart 2
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Time
Now
Rup
ees
BCWSbaseline
ACWP
BCWP=EV
PerformanceCostSched.
Earned Value Chart 3
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Time
Now
Rup
ees
BCWSbaseline
ACWP
BCWP = EV
PerformanceCostSched.
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
T