project management (pmp material)

PMACPMAC Consulting Private Limited

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Global R.E.P. PMI, USA

presentspresentspresentspresents

“ADVANCED PROJECT MANAGEMENT COURSE”

IN CONFORMANCE WITH LATEST PMI STANDARDS

PMBOK® GUIDE-2008, FOURTH EDITION

GOOD MORNING FOLKS!

Welcome to

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the world

of

Project Management

Latest PMI Standards

LATEST PMI STANDARDS!

A guide to the Project Management

Body of Knowledge (PMBOK®

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Body of Knowledge (PMBOK®

Guide) is a recognized standard for

the project management profession

worldwide!


The PMBOK® Guide provides Knowledge, Processes, Skills, Tool and Techniques that are generally recognized good practice.

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generally recognized good practice.

Their application enhances the chances of success over a wide variety of projects.

But, all the processes may not apply uniformly to all projects. Hence, it is the RESPONSIBILITY of your organization and/or the project management team to determine what is appropriate for any given project. This is called TAILORING!


In addition to taking advantage of the

PMBOK® Guide for the success of your

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PMBOK® Guide for the success of your

projects, PMI also requires the practitioners

to demonstrate a commitment to ethical and

professional conduct.

“Project Management Institute Code of

Ethics and Professional Conduct”.

Purpose of this Course

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� To provide a proven, holistic approach to the professional of Project Management. An approach that has been globally recognized to enhance chances of success over a wide range of projects.

Education Agenda

LEARNING OBJECTIVESUpon completion of this course, the students will:

1. Comprehend entire gamut of concepts, tools and

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1. Comprehend entire gamut of concepts, tools and

techniques, and terminology relating to the profession

of Project Management in conformance with per PMI

standards.

2. Master identification of project needs, creation of WBS

and how to plan to avoid scope creep, time and cost

overruns, or quality problems later in the project.

Education Agenda


3. Command the art of estimating project costs and

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3. Command the art of estimating project costs and

schedules using simple and proven techniques.

4. Attain expertise on meeting triple constraints,

assessing and dealing with risks, and establishing a

dependable project control and monitoring system.

Education Agenda


5. Achieve proficiency in vendor management and project

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5. Achieve proficiency in vendor management and project

closure.

6. Acquire knowledge and ability to pass PMP

examination.

Education Agenda

WARMING UP WITH

A PROJECT FORETHOUGHT!

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A PROJECT FORETHOUGHT!

Project forethought

Do you have a vision?

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Do you have a vision?

� Your personal vision

� Your functional area’s vision

� Your organization’s vision

Project forethought

How do you articulate it in the

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How do you articulate it in the

backdrop of today’s

realities?

Project forethought

Backdrop of today’s realities?

� Over capacity of production facilities

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� Over capacity of production facilities

� Sharp increases in the cost of material, energy, and

labor

� Changing customer values and more exacting quality

requirements

� Increased competition among companies in saturated

and dwindling markets

� Environmental problems

Project forethought

Backdrop of today’s realities?

� A need to introduce new products more rapidly

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� A need to introduce new products more rapidly

� A need to lower breakeven point

� Globalization of markets

� Social problems, economic problems, political problems

Project forethought

� How can your organization balance the need for radical

Questions to help you articulate your vision?

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� What will be the new management model for tomorrow,

and how it will be different from today’s?

� How can your organization balance the need for radical

change with strategic continuity?

� What role must managers play in the post hierarchical

organization of future?

Project forethought


� How can strategic thinking about the future be embedded

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� How can strategic thinking about the future be embedded

within the organization?

� Whom should your organization involve in the process of

developing and implementing strategy?

Project forethought


� How can a radically-decentralized organization be

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� How can a radically-decentralized organization be

created and sustained?

� As corporations and their networks become increasingly

complex, how can they be controlled?

Project forethought


� How can organizations shift from spreading

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� How can organizations shift from spreading

information around to building knowledge?

� How to discover better technologies

to increase quality of human life on earth?

Project forethought

Articulating your vision

� You can now choose with an end in mind

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� It should be worthy of pursuance

� Challenging and achievable

� To make it happen, take up its realization as a

“PROJECT”

Project forethought

Articulating your vision

� You can now choose with an end in mind

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� It should be worthy of pursuance

� Challenging and achievable

� To make it happen, take up its realization as a

“PROJECT”

Project forethought

� How to train and ensure competency of people to work


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� How to train and ensure competency of people to work

together to achieve common goals?

� How to make coming generation better equipped to

succeed in life?

Project forethought

Realizing vision

‘Needs and aspirations of people

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‘Needs and aspirations of people

are the reasons for organized effort

in society’.

‘Projects have been taken up since

earliest civilizations to fulfill them’.

Project forethought

Projects make it “possible”Products

Services

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Needs

Aspirations

Visions

Strategies

Projects

Services

Infrastructure

Monuments

Space research

War victories

Entertainment

Media

Earnings

Growth

Etc.

Operations provide us benefits of the

product of the project on ongoing basis

Fundamental

PM Basics

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Fundamental

Concepts

We begin our discussion on fundamental

concepts under three broad headings:

PM Basics: Fundamental Concepts

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1. Project Management Framework

2. Project Life Cycle and Organization

3. Project Management Processes


PROJECT MANAGEMENT FRAMEWORK

� What is a project?

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� Projects vs. Operations!

� Projects and Strategic Planning!

� What is ‘Project Management?

� What is a Program?

� What is a Portfolio?


PROJECT MANAGEMENT FRAMEWORK

� Relationships among Project Management,

Program Management, and Portfolio

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Program Management, and Portfolio

Management!

� What is a PMO?

� Role of a Project Manager!

� PMBOK® Guide!

� Enterprise Environmental Factors!

PM Basics

A Project is A TEMPORARY ENDEAVOR

What is a project?

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A Project is A TEMPORARY ENDEAVOR

undertaken to create A UNIQUE PRODUCT,

SERVICE, OR RESULT!

Let’s understand the definition

PM Basics

- What do we mean by the word

TEMPORARY?

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- What do we mean by the words A UNIQUE

PRODUCT, SERVICE, OR RESULT!

- We would also discuss on a very

important terms called “Progressive

Elaboration”!Let’s understand the definition

Temporary means:

PM Basics: Understanding ‘Project Characteristics’

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Temporary means:

- Definite beginning

- Definite end

- With defined project objectives

(scope, time, cost, and quality)

Project end IS REACHED when:


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Project end IS REACHED when:

1) Its objectives are met, or

2) It becomes clear that the project objectives

will or can not be met, or

3) The need for the project no longer exists.

Temporary does not


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Temporary does not

necessarily meanShort in duration!

Projects can last for several years!!

Government of India’s E-governance project is

A multi-year project.

All that temporary means is that

project duration is finite, not ongoing.

Temporary does not mean


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The product of the project will also be temporary.

Most projects are done to produce products,

service or result that is long lasting.

Examples

a bridge, a dam,

a building, a monument, a park

Temporary nature


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Temporary nature

Some projects produce a product or service for a

particular occasion. Examples: Olympics, Fashion show, Grammy awards

Certain others cater to an opportunity or

market window that is short in durationExamples: Sale Campaigns for Christmas, Diwali, Pongal, IId, etc

PROJECT TEAMS ARE FORMED AS IT BEGINS AND

DISBANDED AS IT COMPLETES

Unique product, service, or result


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Unique product, service, or result

Projects involve creating a product, service,

or result that has not been done exactly the

same way before EVEN IF YOU HAVE BEEN

DOING SAME CATEGORY OF PROJECTS

MANY TIMES OVER!

Different CLIENTS, REQUIREMENTS, LOCATIONS,

etc.

A project can create:

1. A product (component of another item or end

PM Basics: Comprehending Project

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1. A product (component of another item or end

item).

2. A service (a business function to support

production or logistics).

3. A result (an outcome or document, such as

R&D project develops Knowledge,

Market Survey).

Progressive elaboration


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is critical to project success

Progressive means proceeding in steps,

continuing steadily with increment.

Elaboration means worked out with care

and detail, developed thoroughly

WHY Progressive elaboration?


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WHY Progressive elaboration?� Because projects are temporary and unique!

Example: Project scope is high-level in the beginning. It

becomes more detailed as project team

progresses and develops better understanding

of project objectives and deliverables.

Many people confuse it with scope creep that happens

due to poor scope definition, poor WBS formation and

Uncontrolled changes.

Each project’s product is unique.Hence, its characteristics


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Hence, its characteristics

THAT DISTINGUISH ITmust be

“PROGRESSIVELY ELABORATED!”

That’s why so much emphasis on processes called:

- “Identify stakeholders” (during initiation)

- “Collect requirements” (during planning)

Progressive elaboration

is critical to project success!


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The distinguishing characteristics

� “Broadly defined” early in the project

� More explicit and detailed as project

progressesTHEN, PROJECT TEAM BEGINS TO GRASP THEM

BETTER

PRODUCT SCOPE

Product Scope and Project Scope

PROJECT SCOPE

PM Basics: Progressively elaborated

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Functions and

features characterizing

the product or service.

COMPLETION

Measured against

product requirements

The work required to

be performed to deliver

a product bearing

specified functions and

features.

COMPLETION

Measured against

project management

plan


Sample

Progressive

Elaboration

ABC CARGO

LOGON PROJECT

BASIC

DESIGN (H) HARDWARE FABRICATION

SITE

OPERATIONS

Project

Management PURCHASE

SOFTWARE

SPECS (L)

L 0

L 1

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DESIGN (H) OPERATIONS Management

DESIGN

(J)

DRAWINGS

(K)PART B

DRAWINGS

(P)

FINALINSTALLATION

(Y)

TEST

(Z)

SOFTWARE

PART A

DESIGN

(I)

DRAWINGS

(O)

SPECS (L)

ASSEMBLY

(U)

PART A

TEST

(W)

ASSEMBLY

(V)

TEST

(X)

PART B

PURCHASE

(N)

DELIVERY

(S)

PURCHASE

(M)

DELIVERY

(R)

PURCHASE

(Q)

DELIVERY

(T)

WORK

PAKCAGES

(H)

through

(Z)

L 2

L 3

PM Basics

Projects Vs. Operations

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Projects Vs. Operations

What do organizations do?

PM Basics: Projects vs. Operational Work

1.

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ORGANIZATIONS

PERFORM WORK

to accomplish

a set of defined objectives

1.


Work can be categorized as

2.

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Work can be categorized as

either

PROJECTS OPERATIONSor

Sometimes they overlap!


What is common to projects and operations?

3.

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� Performed by people

� Limited by Constraints, including

resource constraint

� Planned, executed, monitored and controlled

� Performed to achieve organizational objectives

Or strategic plans


� Projects are temporary

PROJECTS OPERATIONS

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� Operations are ongoing

and repetitive.

� The purpose of an

ongoing operation is to

sustain the business.

� Operations adopt new

set of objectives and the

work continues.

� Projects are temporary

and unique.

� The purpose of a project

is to attain its objective

and then terminate.

� The project concludes

when its specified

objectives have been

achieved.

PM Basics

Remember:

1. Operations produce same product until the product

becomes obsolete.

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becomes obsolete.

2. Within the life cycle of a product, projects can intersect

with operations at various points:

a) During improving productivity/process,

b) Developing new product or upgrading a product

c) Expanding outputs

d) At each closeout phase or until divestment of the

product, there can be many projects!

PM Basics

Remember:

3. At each point, deliverables and knowledge are

transferred between projects and operations. Why?

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transferred between projects and operations. Why?

Answer: For implementation of the delivered work!

4. How it happens?

Answer: It happens in two way!

a) Transfer of project resources to operations

toward the end of the project.

b) Transfer of operational resources to the project

at the start.

Operation examples

Manufacturing operations

PM Basics: Comprehending ‘Project Examples’

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Manufacturing operations

Production operations

Usage of the product of a project, such as a software application, or using network infrastructure

Accounting operations

Project examples

Developing a new product or service


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Developing a new product or service

Starting a new business, or expansion of the existing one

Installing a new facility/ infrastructure

Increasing productivity

Increasing market share

Increasing profitability

Project examples

Cost reduction (operation and maintenance)


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Cost reduction (operation and maintenance)

R & D projects

Technology up-gradation/ new technology projects

Pharmaceutical projects

Organizational Change management projects (work environment, performance management, organization structure, training, etc.)

Projects and Strategic Planning

PM Basics: Projects and Strategic Planning

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Projects and Strategic Planning

Projects are are a means to achieve “Strategic Plan” of an organization!

PM Basics: ‘Projects implement strategy’

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One or more of the following Strategic Considerations give rise to projects:1) Market demand2) Customer request3) Strategic opportunity/Business Need4) Technological advance5) Legal requirements

PM Basics: ‘Projects implement strategy’

“Hence, Projects (within programs or

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portfolios) are a means by which we

achieve organizational goals and

objectives within the context of strategic

plan!”

Projects are

PM Basics: ‘Projects encompass entire organization’

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are

-Taken up at all organizational levels

- May require few persons to thousands

- May be undertaken within an organization or involve many outside organizations

YET

Worldwide concern

PM Basics: ‘Hey! It’s important’

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YETIt is concerning to note

that

only about 34% of all the projects undertaken globally

SUCCEED!

Worldwide concern

This only means that the concept


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of

“Managing Projects Effectively” is

poorly understood.

Addressing the concern

To master


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To master

the concepts, tools, and techniquesfor

“Managing Projects Successfully”let’s first

understand the genesis of PROJECTS!

What

PM Basics

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What

is

‘Project Management’

PM Basics : Defining ‘Project Management’

What is Project Management?

PROJECT MANAGEMENT IS

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PROJECT MANAGEMENT IS

The application of KNOWLEDGE,

SKILLS, TOOLS AND TECHNIQUES

to project activities to meet the

Project Requirements!

PM Basics

What is Project Management?

The project management is accomplished through

application and integration of the 42 logically grouped

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application and integration of the 42 logically grouped

Project Management Processes comprising 5 Process

Groups

� Initiating

� Planning

� Executing

� Monitoring and Controlling

� Closing

THE GIST

Managing a project consists of 3 main items:

Identifying requirements!

1

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Identifying requirements!

Addressing the various Needs,

Concerns, and Expectations

of the stakeholders-

as the project is planned

and executed!

2

THE GIST

Managing a project consists of 3 main items:

Balancing competing project constraints,

3

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Balancing competing project constraints,

such as:

a) Scope,

b) Schedule,

c) Budget,

d) Quality,

e) Resources, and

f) Risk.

PM Basics: Managing a project REQUIRES

Iteration of many of the processes within

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project management

Progressive elaboration in a project throughout the

Project’s life cycle

The more a project management team learns about a project,

the better the team can manage to greater level of detail

Because of the existence of and necessity for

HOW TO manage the TRIPLE CONSTRAINTS

PM Basics: Triple Constraints

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Q

Time

Scope

Cost

Dimensions of TRIPLE CONSTRAINTS

PM Basics: Triple Constraints

Time

CostScope

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Customer satisfaction

CostScope

Risk Quality

PM Basics: Program, Portfolio

- What is a program?

- What is a portfolio?

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- What is a portfolio?

- Relationships among project

management, program management,

and portfolio management!

PM Basics: Project Management Context

Wider Perspective of Project Management

Project Management exists in a broader canvas:

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Project Management exists in a broader canvas:

Program Management

Portfolio Management

“Project Management exists in

a broader context governed by

PM Basics: Fundamental concepts

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a broader context governed by

Program and Portfolio Management!”

Organizational Strategies and Priorities

are linked and have relationships

- Between portfolios and programs,

- Between programs and individual projects!

Organizational Planning decides prioritization

among the projects, having regard to:


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- Strategic plan

- Funding

- RiskThis means finds and support for component projects

is provided on the basis of risk categories, specific

lines of business, or general type of projects ( internal

process improvement or infrastructure projects).

What is a program?


A program is a group of related projects

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A program is a group of related projects

managed in a coordinated way to obtain

benefits and control not available from

managing them individually!

Programs may include elements of related work

outside the scope of the discrete projects in the

program.


Strategic plan

Generally,

there is a hierarchy of

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Portfolio

Program

Project

Subproject

In this hierarchy, a program

consists of several associated

projects that will contribute to

the accomplishment of

a STRATEGIC PLAN!

� Space program

� Airplane program

� Poverty alleviation


Strategic plan

Portfolio

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� Poverty alleviation

program

Subprojects

OFTEN OUTSOURCED Externally, or Internally (to other

unit) on the basis:

- Single phase, HR Skill requirement, Technology

Program

Project A Project B Project C

Subproject Subproject


A PROGRAM

1) extends over a longer period of time horizon.

2) consists of several parallel or sequential work efforts

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2) consists of several parallel or sequential work efforts

that are coordinated toward program goals.

3) time scale for projects tends to be shorter, and projects

are often the individual work efforts of a program.

Urban Development

Program

Housing rehabJob & Skill

Training

Small business

Consulting

Assistance

Projects

Program


Typical Aircraft

Weapons System

Development

Program

Senior

Management

Integration

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Program

Management

Aerodynamics

project

Aerodynamics

project

Structures

Project

Structures

Project

Propulsion

Project

Propulsion

Project

Avionics

Project

Avionics

Project

Comptroller Comptroller Processing

Data

Processing

Field

Support

Integration

&

Testing

Procurement


Programs also entail

a series of

Cyclical

undertakings

Fund Raising

Program

of Helpage India

Publishing

‘India Today’

Magazine

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Project 1

‘Membership drive’

Project 2

‘Advertising’

Project 3

‘Corporate Appeal’

Project ‘n’

A

series

of

Discrete

Projects

Project 1

Issue January

Project 2

Issue February

Project 3

Issue March

Project ‘n’

Issue every month

A

program

where

general

operations

become

‘MBO’


DYNAMICS OF

Portfolio and

Portfolio

Management

Portfolio Management

1. Maximize the value of portfolio by careful scrutiny of

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1. Maximize the value of portfolio by careful scrutiny of

the Proposed Projects and Programs for being

taken within the Portfolio.

2. Timely exclusion of the projects not meeting

Portfolio’s Strategic Business Objectives.

3. Balance the portfolio AMONG Incremental &

Radical investments AND for efficient utilization of

resources.

Relationships Among Project Management, Program Management and Portfolio Management!

Highest Level Portfolio

Lower Level Portfolios Higher Level Programs Projects

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Higher Level Programs

Projects

Low Level Programs

Projects

Lower Level Programs Projects

Projects

Comparison Project Management, Program Management and Portfolio Management!

Item Projects Programs Portfolios

Scope Defined objectives,

progressively elaborated

Larger scope, more

significant benefits

Scope changes with

strategic goals

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Change Project Managers expect

change, monitor &

control them.

Program Managers

must expect change

from inside & outside

program, and

manage.

Portfolio Managers

continually monitor

changes in broad

environment.

Planning Project Managers

progressively elaborate

hi-level info into detailed

plans throughout project

life cycle

Program Managers

develop overall

program plan, create

hi-level plans for

guiding detailed

planning at

component level

Portfolio Managers

develop and maintain

relevant processes

and communication

at total portfolio level.

Comparison Project Management, Program Management and Portfolio Management!

Item Projects Programs Portfolios

Management Project Managers

manage the project team

for meeting project

Program Managers

manage program

staff and project

Manage portfolio

management staff.

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for meeting project

objectives.

staff and project

managers. Provide

overall leadership

and vision.

Success Success criteria: product

& project quality, time

and cost and degree of

customer satisfaction.

Success criteria:

degree to which

program satisfies

needs.

Success criteria:

aggregate

performance and

value indicators.

MonitoringProject Manager

monitors & controls the

project work

Program Manager

monitors and

controls program

components

Portfolio Manager

monitors aggregate

performance and

value indicators


Project Management Office

An organizational unit to centralize and coordinate

management of projects under its domain.

PMO

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management of projects under its domain.

At minimum, PMO provides Project Management

Support Functions:

1. Training

2. Software

3. Standardized policies & procedures


PMO

Advanced PMOs:

• Can get delegated authority to act as integral

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• Can get delegated authority to act as integral

stakeholder and key decision-maker during initiation

of each project.

• Can have authority to Recommend or Terminate

projects TO KEEP BUSINESS OBJECTIVES

CONSISTENT.

• Be involved in selection, management and

redeployment of shared/dedicated project staff.

PM Basics: Functions of PMO

1) Administer shared and coordinated resources across

all projects.

2) Identify and deploy PM Methodology/Bests Practices/

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2) Identify and deploy PM Methodology/Bests Practices/

Standards.

3) Clearinghouse and management of project policies,

procedures, templates, and other shared documents.

4) Central repository/management for shared & unique

risks for all projects.

5) Central office for operation/management of PM Tools

(enterprise pm software).

6) Mentoring of Project Managers.


7) Central coordination of communication across all

projects.

8) Central coordination of overall project quality standards

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8) Central coordination of overall project quality standards

between PM & other quality staff (internal or external),

or standards organization.

9) Central monitoring: all project timelines and budgets at

enterprise level!

What is the difference between the role of a

Project Manager and a PMO?


Role Differences:

1) Project Mangier focuses on specified project objectives.

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1) Project Mangier focuses on specified project objectives.

PMO manages major program scope changes that

(opportunities to better achieve business objectives).

2) Project manager controls assigned project resources.

PMO optimizes use of shared resources across all

projects.


Role Differences:

3) Project Manager manages constraints of the project.

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3) Project Manager manages constraints of the project.

PMO manages constraints among all projects at the

enterprise level. PMO manages the methodologies,

standards, overall risk/opportunity, and

interdependences among Projects at the enterprise

level!

PM Basic: Role of a Project Manager

Role

The project manager is a person assigned by the

performing organization to achieve project

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performing organization to achieve project

objectives!

Role of project manager is different from the role of a

functional manager or operations manager.

- functional manager is responsible for providing

oversight for and administrative area.

- operations manager is responsible for a facet of core

business.


Reporting- depends on the organizational structure!!

1) May report to functional manager (functional, matrix

organizations).

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organizations).

2) A project manager may one of many other project

managers who report to a program or portfolio manager!


Success

In addition to area-specific skills and general management

proficiencies, a project manager needs to have three

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proficiencies, a project manager needs to have three

Characteristics for effective project management:

1. Knowledge (about project management knowledge).

2. Performance (what he/she is able to accomplish by

using project management knowledge).


Success

For effective project management, the project manager is

supposed to possess following characteristics:

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supposed to possess following characteristics:

3. Personal (personal effectiveness-attitudes, core

personality traits, and leadership-ability to guide the

project team for success while balancing project

constraints

Project Management Body of Knowledge

The PMBOK® is the standard for managing:

1. MOST PROJECT,

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1. MOST PROJECT,

2. MOST OF THE TIMES,

3. ACROSS MANY INDUSTIRES

THIS STANDARD DEFINES:

- The project management processes (42)

- The tools and techniques of each process

Used to manage a project toward a successful

completion!


THIS STANDARD:

- IS unique to the project management

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- IS unique to the project management

- HAS interrelationships to other project management

disciplines such as program management and

portfolio management!

Note: this standard does not address all the details

of every topic! It contains processes generally

recognized as good practice applicable to single

projects!!


THIS STANDARD:



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projects!!

Projects are done in a broader context of program

and portfolio management. Other standards may also

be consulted to gain the broader view:

-The Standard For Program Management

-The Standard For Portfolio Management


THIS STANDARD:



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projects!!

Other standards may also be consulted to gain the

broader view:

- Organizational Project Management Maturity Model

(OPM3) for assess project management process

capabilities.

Enterprise Environmental Factors

We need to consider all the external and internal factors

that surround our project!

WHY?

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WHY?

Answer

They may enhance or constraint project

management options! They may have a positive or

negative influence on the outcome!! Remember this.

You will agree when you see what all are these factors.


factors 1) Organization culture, structure, and processes

2) Market conditions

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2) Market conditions

3) Government or industry standards

4) Stakeholder risk tolerances

5) Infrastructure

6) Existing human resources and their special skills

7) Personnel administration (staffing, retention, training

8) Work authorization system


factors 9) Political climate

10) Organization’s established communication channels

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10) Organization’s established communication channels

11) Commercial databases

12) PMIS (project management information system)

PMIS- an automated tool. Examples:

- scheduling software tool

- a configuration management system

- an information collection and distribution system

- web interfaces to other online automated systems

Project Life Cycle and Organization

1) The Project Life Cycle and Project Phases

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1) The Project Life Cycle and Project Phases

2) Project Stakeholders

3) Organizational Influences


The Project Life Cycle

10

0

The Project Life Cycle

and

Project Phases


What is a project life cycle?

A project life cycle is a collection of generally sequential

10

1

A project life cycle is a collection of generally sequential

and sometimes overleaping project phases!

What leads to deciding their number and names?

Management and control needs of the organization or

Organizations involved in the project determine names

and numbers of the project phases! The industry,

the technology, and unique aspects of the organization!

PM Basics : “Project Life Cycle and Project Phases”

Project � Projects are unique

undertakings.

� Involve a degree of

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2

Phase 1 Phase 2 Phase 3 � Involve a degree of

uncertainty.

� Hence, each project is divided into several phases

for better management control and providing for

links to the ongoing operations.

� Together, the project phases are called the ‘Project

Life Cycle’.

Project phases: Sequential Logic

Project

Deliverable I Deliverable II Deliverable n

Makes sure proper

definition of the

project’s product

10

3

Deliverable I Deliverable II Deliverable n

� Each phase marked by completion of one or more

deliverables.

� Takes its name from the item/items, it has to deliver-the

primary phase deliverable.

� Output of Preceding phase is input to Succeeding phase

Project phases: ‘What is a deliverable?’

DELIVERABLE

is

10

4

is

‘A TANGIBLE, VERIFIABLE WORK PRODUCT’

EXAMPLES

1. A specification,

2. Feasibility report,

3. Detailed design document, or

4. A working prototype

End products or

the components of

Deliverables of the

Project management

Project phases: ‘Types of deliverables’

1.

Product deliverables

2.

Project Management Deliverables

10

5

Deliverables, and therefore phases, are part of a

sequential process designed to ascertain proper control

of the project and to accomplish the intended Product/

Service that is the objective of the project.

the components of

end products

for which the project is

undertaken

Project management

process(charter, scope statement,

plan, baseline, etc.)

PM Basics : “Project Phases and Project Life Cycle”

Phases can be further subdivided into subphases

Project � Size, complexity, level of risk,

and cash flow constraints

10

6

Phase 3 Phase 2 Phase 1

Subphase

Subphase

Subphase

and cash flow constraints

decide further division of

phases into subphases.

� Each subphase is aligned with

defined deliverable (s) for

monitoring and control, and

are related to primary phase

deliverable.

PM Basics : Phase End Review

Project

Requirements Design Deliverable

n

Completion of each phase

marked by review of:

1) Key deliverable,

10

7

Design n

Determine

- Should project continue

into phase.

- Find out errors cost

effectively, and correct

them if necessary.

1) Key deliverable,

2) Project performance to date

R R

Phase end review = R

� phase exits

� stage gates

� kill points

PM Basics : Fast-tracking Phases

Starting activities of next phase without closing the current

phase! Examples abound:

� Often, the management review is conducted to decide

Beware!

10

8

� Often, the management review is conducted to decide

beginning activities of next phase before the current

one is closed.

� Most IT projects use an iterative cycle in which more

than one phase are undertaken at the same time:

� Requirements for a module are collected and analyzed

prior to the design and construction the module.

� Requirements of another module are collected while

analysis of previous module is underway!

PM Basics : Project Phases

Common characteristics of phases

1. When they are sequential

10

9

a) at the close transfer of work product

b) phase end review (called phase exit,

milestones, phase gates, decision gates, or

kill points)

2. The work has distinct focus in each phase and involves

different organizations and skill sets.


Common characteristics of phases

2. The primary deliverable requires an extra degree of

11

0

2. The primary deliverable requires an extra degree of

control for success

3. The repetition of process across all 5 process groups

provides that additional degree of control and defines

boundaries of the phase!


Project phases vital points

• Many projects may have similar phases, few are

11

1

• Many projects may have similar phases, few are

identical.

2. Some projects may have just one phase. Single phase

project.

3. Others may have multiple phases.


Project phases vital points

4. There is no rigid, single way to define ideal structure for

a project. Industry common practices. Some

11

2

a project. Industry common practices. Some

organization’s own way of defining phases.

Example: “Feasibility Study”

- A routine pre-project work OR

- First phase of the project OR

- A separate stand-alone project

Typical Sequence of Phases in a PLC

Phases FINALINITIAL INTERMEDIATE

Inputs Idea Resources

11

3

Project

Deliverable

Project

Management

Outputs

Charter

Scope

Statement

Plan

Baseline

Progress

Acceptance

Approval

Handover

PRODUCT

Each phase is formally initiated to keep focus on project

objectives!

PM Basics: “Project Life Cycle”

Project Life Cycle

Project life cycle (PLC) defines what one needs to do

“ to do the work” on the project

11

4

“ to do the work” on the project

Construction PLC

Feasibility, planning, design, product, turnover, and

startup.

Information systems PLC

Requirements analysis, high-level design, detailed

design, coding, testing, installation, conversion, and

operation.


BSES

Project

Requirements Test Turnover Build Design Project

Management

11

5

Management

Project life cycle

� defines start and finish of the project

� determines transactional actions at the start and finish

of the project

START FINISHPLC Characteristics

� Uncertainty and risk are highest in the beginning.

PM Basics : Project life cycle characteristics

11

6

� The chances of successfully completing the project

are therefore lowest at the start.

� But as we proceed, the uncertainty, risk become

progressively reduced, and our chances of

successfully completing the project become

progressively brighter

Project life cycle characteristics


11

7Life Cycle of Project (Time)

High

LowAmount at Stake

Uncertainty of Success AND RISK

The cardinal principle

� Stakeholders ability to influence the final



11

8

� Stakeholders ability to influence the final characteristics the product of the project is highest only in the beginning .

� As project proceeds, it gets diminished progressively and then the cost of any change, or correction becomes very high.

� This lays stress proper scope definition to avoid later surprises .


Project life cycle characteristicsPLC Characteristics

� opportunity to add High

Opportunity to add value

11

9

� opportunity to add

value highest at the

start and lowest at

the end.

� Cost of change

lowest at the start

and highest at the

end

Low

High

Cost of change

Opportunity to add value

Time

Project life cycle

COST TO CORRECTION



12

0Life Cycle of Project (Time)

High

Low

Requirements / Architecture / Detailed Design / Construction Maintenance.

COST TO CORRECTION


Project life cycle Example:

BSES Project

12

1

BSES

Project

Requirements Test Turnover Build Design Project

Management

Project life cycle

All the project phases of a project together determine

the project life cycle!

EXAMPLE 1: Project life cycle and project phases

CONSTRUCTION PROJECTS

Full

operation

Engineering and

major contracts

let

Percentage complete

Synthetic

Yarn Project

12

2

Life cycle stages

Stage I Stage II Stage III Stage IV

Installation

substantially

complete

let

Project

“GO”

decision

Percentage complete

Yarn Project

Stage handoffs

Operations and

production

Support

EVALUATE IDENTITY

Deploy

TestEvaluation

Unit Requirements


SOFTWARE PROJECTS

12

3 CONSTRUCT DESIGN

Software

Development

Logical Design

Physical

Design

Final Design

First Build

Second Build

Third Build

Proof of

ConceptConceptual

Design

Evaluation

Evaluation

Risk AnalysisBusiness

Requirements

System Requirements

subsystem Requirements

Unit Requirements

A

Pharmaceutical PROJECT

Drug Discovery

Project

Process Development

Formulation Stability


12

4

A

P

P

R

O

V

A

L

Post

Registration

ActivityDrug

Sourcing

Screening

Lead

Identified

Preclinical

IND

Workup

File

IND

Patent Process

File

IND

Metabolism

Toxicology

Phase-I

Clinical

Tests

Phase-II

Clinical

Tests

Phase-III

Clinical

Tests

Ten Plus Years

Preclinical

Discovery Screening DevelopmentRegistration(s)

Workup

Post

Submission

Activity

‘Project Life Cycle’

� Most projects are linked to the ongoing operations

of the performing organization

12

5


� Projects are authorized only after due feasibility

study (or preliminary plan/ equivalent analysis),

which may be taken as a separate project.

� This sometimes requires extra phases to develop

and test a prototype before initiating a project for

developing the final product.

� Certain internal service projects are initiated

informally.

‘Project Life Cycle’: Phase-to-phase relationships

� Sequential relationship

� Overlapping relationship (another phase can start

12

6

� Overlapping relationship (another phase can start

before completion of another one. Fast tracking.

Increases risk and rework. Used for schedule

compression.

� Iterative relationship (only one phase is planned at

any given time and the planning for the next is done

as work progresses on the current phase and

deliverables. Useful in undefined, uncertain, or rapidly

changing environments. Research projects.

PM Basics: ‘Project Life Cycle and Product life Cycle’

Project life cycle defines start and finish of a project with intermediate

phases. Product life cycle is a broader concept. It begins with business

plan, through idea, to product, ongoing operations and ends with product

divestment. Project life cycle is but a phase of product life cycle!

12

7

Feasibility Product development Operations Disposal

Operation and support

Maintenance and supportRequirements

Design

Construct

Test and install

Project Life Cycle

Product life cycle

divestment. Project life cycle is but a phase of product life cycle!

Relationship between Project and Product Life Cycle

We must take care to distinguish project life cycle from the product life

cycle, and understand how fast the product will become obsolete, in

view of the technological advances and stiff competition! The design

should withstand longer stay.

12

8

DIVESTMENTProject

Lifecycle FINALINITIAL INTERMEDIATE

Business

plan

PRODUCT

LIFE

CYCLE I

D

E

A

OPRNS DIV

OPERATIONS

UPGRADE

PRODUCT

should withstand longer stay.

PM Basics : “Project Management Life Cycle”

Project Management Life Cycle

Project management life cycle (PMLC) defines

12

9

Project management life cycle (PMLC) defines what one needs to do “ to manage” the

projectPHASE OF PROJECT MANAGEMENT LIFE CYCLE

Initiating, planning, executing, monitoring and controlling, and closing.

Define Goal Plan

project

Execute

plan

Evaluate

project

Close

project

Project Stakeholders

� Individuals and organizations

PM Basics: Project Stakeholders

13

0

� Actively involved in the project OR

� Whose interests may be positively or negatively

affected by the performance or completion of the

project.

� Stakeholders may exert influence over the project, its

deliverables, and the project team members!

KEY POINT

� The project Manager MUST


13

1

� identify all internal and external stakeholders!

� determine their requirements and expectations!!

� manage the influence of the various stakeholders in

relation to project requirements to ensure successful

outcome!!!

Examples of stakeholders

• Customers/users

• Sponsor


13

2

• Sponsor

• Portfolio managers/portfolio review board

• Program managers

• Project management office

• Project managers

• Project team

• Functional managers

• Operations management

• Sellers/business partners

Key Project Stakeholders

Government SuppliersPerforming

Sponsor

13

3

Government

Customers/

user

Suppliers

Sub Contractors

Performing

organizationTop

Management Boss

Internal Users

Functional department

personnel

Project Staff Team members

Project Manager

PMO

INFUENCERS

in Customer

organization

Influencers

Project

sponsor PROJECT


Relationship between stakeholders and the project

13

4

Project stakeholders

Project team

Project

Management Team

Project

Manager

sponsor PROJECT


Stakeholders responsibility and project outcomes

Stakeholders Responsibility and

authority Project outcomes

13

5

authority

� Varying levels

� Changes over the course of

project life cycle

� Occasional contributions in

surveys to focus groups to full

project sponsorship (financial /

political support)

Project outcomes

“DAMAGING”

Project outcomes

“HIGHLY

POSITIVE”

Stakeholders responsibility and project outcomes

Stakeholders Responsibility


13

6

Stakeholders Responsibility

and authority

Project Managers

who ignore stakeholders“DAMAGING”

Project

outcomes

“DAMAGING”

Positive stakeholders

Positive / Negative Stakeholders

Negative stakeholders


13

7

Positive stakeholders

Those who would benefit

from the project

Community Business leaders gain

from an industrial project as they

find economic benefit for the

community from project’s success

- Rs. 100 million Reliance Power

Project in Dadri, U.P. hailed by Amar

Singh Group of Ruling Party.

Negative stakeholders

Those who see negative

outcomes from project’s

success

Environmental activists may see

project’s success leading to

environmental hazards.

THE CHALLENGE

Stakeholder Management


13

8

THE CHALLENGEStakeholders have differing needs,

perspectives, and expectations to be

managed by the project manager.

Stakeholder expectations: “differing objectives”

MARKETING DEPT.

High features

TECHNICAL DEPT.

State-of-Art MANAGEMENT

13

9

PRODUCT

of

PROJECT

State-of-Art

Technology,

low cost of

operation

CUSTOMER

Cheaper and

Long lasting

SOCIETY

Comfortable and

Eco-friendly

GOVERNMENT

Satisfying

Government

pollution and

safety norms

MANAGEMENT

profitable

FINANCE

Low cost of

procurement


CONCURRENT ENGINEERING


14

0

provides

Solution to the problem of

“differing stakeholder needs, perspectives,

and expectations”.





14

1

It refers to the combined early efforts of


That final

product of

the project

satisfies

everyone

� designers

� developers

� producers

� salesperson, and

� other stakeholders

To ensure

� Identify stakeholders

� Assess their knowledge and skills



14

2

� Assess their knowledge and skills

� Analyze the project to make sure their needs will

be met

� Get and keep them involved through assigning

them work, using them as experts, reporting to

them, involving them in changes and the creation

of lessons learned

� Get them to sign-off and obtain their formal

acceptance

Managing Stakeholders

� Resolving stakeholder conflicts is major task on the

project. You have to continuously find ways to satisfy


14

3

project. You have to continuously find ways to satisfy

their needs.

� In general, differences between and among

stakeholders should be resolved in favor of the

customer!

� But remember, not to disregard needs and expectations

of other stakeholders.

� In fact, it is your major challenge to find appropriate

resolutions to such differences!!

PM Basics: organizational influences

Organizational influences on the project

14

4

PROJECTcorporations

Healthcare

Institutions

Other

Organizations



Maturity of the organization with respect to

14

5

� organizational SYSTEMS

� organizational CULTURE and STYLES

� organizational STRCUTURE

� role of PMO in ORGANIZATIONAL STRUCTURES

� PROJECT MANAGEMENT SYSTEM

Maturity of the organization with respect to

its:




14

6


� Project-based

� Non-project-based




14

7

� derive their revenue from performing projects

� engineering/ consultant/ architectural / construction

companies, government contractors

� Project-based





14

8

� adopted management by projects

� like their financial system account, track, and report on

multiple, simultaneous projects

� try to have project management systems

� generally do not have adequate PM Systems


� Non-project-based


Performance of workOrganizational

Culture

14

9

�organizational CULTURE and STYLES

� Values, norms, beliefs, and expectations

(shared within organization)

� Work ethics and work hours

� Policies and procedures

� View of authority relationships

IMPACT OF ORGANIZATIONAL INFLUENCES on the success of the project

Organization culture can be entrepreneurial, aggressive, participatory, rigid hierarchical, fraught with infighting and politics, friendly and human-

centered, etc.

15

0

centered, etc.

1) Pepsi has a culture that is aggressive, your

high-risk approach is welcome there.

2) Century Cotton Mill has rigid hierarchical culture,

your participatory style will not work there.

3) HCL Corporation has participatory culture, it can not

accommodate anybody’s authoritarian style.

REAL LIFE EXAMPLES



Constraints the availability

15

1

Constraints the availability

of

resourcesresources

Functional to Projectized

Functional

MATRIX�Weak matrix

� Balanced matrix

� Strong matrix

Projectized

Impact of organizational structure

Tell me what type of organizational structure you are working in

and I will tell you how much you will SUCCEED as a Project Manager !

15

2

Organizational structure that has served ongoing

organizations for ages is no longer suitable for

performing projects !!

As Project Manager, you are responsible for managing

the project and if you do not have authority to make

resources available, you will fail miserably !!!

Impact of organizational structure

FORMS OF ORGANIZATIONAL STRUCTURE

WEAK

MATRIX

15

3

Functional

MATRIX

BALANCED

MATRIX

STRONG

MATRIX

PROJECTIZED

COMPOSITE

Functional Structure

MOST COMMON / TRADITIONAL FORM

15

4

Organization is structured by functions:

Marketing, Engineering, Manufacturing, Finance, HR.

Each one works

as separate entity

with managers and subordinates.


� organizational STRCUTURE Functional

CEOProject

coordination

Staff engaged

in project work

15

5

CEO

Functional

Manager A

Functional

Manager C

Functional

Manager B

Staff

Staff

Staff Staff

Staff

Staff Staff

Staff

Staff

coordination

EXAMPLE

A PRODUCT

DEVELOPMENT

PROJECT

� Design phase

called “design

project” by

engineering

department

� Communication

through heads

of departments

only


ADVANTAGES

1) Easier management of

functional specialists.

DISADVANTAGES

1) More emphasis on

functional specialty to

15

6

2) Team members report

to only one supervisor.

3) Similar resources are

centralized to function,

companies are grouped

by functions/specialties.

4) Clearly defined career

path in the functional

area.

2) Project Manager has no

detriment of the project.

2) Project Manager has no

authority.Power with

FMs.

3) Scope of the project

limited to functional

boundary.

4) No career in project

management.

Projectized Structure

PROJECTIZED ORGANIZATIONS ARE

JUST OPPOSITE OF FUNCTIONAL:

15

7

JUST OPPOSITE OF FUNCTIONAL:

All organization is by projects.

The project manager has

total control of projects.

� Team members are collocated

� Most organization’s resources assigned to project work



CEOProject

coordination

Staff engaged

in project work

Projectized

15

8

CEO

Project

Manager A

Project

Manager C

Project

Manager B

Staff

Staff

Staff Staff

Staff

Staff Staff

Staff

Staff

coordination

IDEAL

� Project Manager

Sole Authority

� Departments

report directly to

the Project

Manager or

provide support

services


ADVANTAGES

1) Project manager has

ultimate authority over

DISADVANTAGES

1) No home for project

team members when

15

9

ultimate authority over

the project.

2) Loyalty to the project.

3) More effective

communication than

functional.

4) Team members are

collocated

team members when

project is completed.

2) Less efficient resource

utilization, though efficient

project organization.

3) Lack of professionalism

in disciplines.

4) Duplication of facilities

and job functions.

Matrix Structure

SINCE BOTH FUNTIONAL AND PROJECTIZED HAVE STRENGTHS

AND WEAKNESSES, we need to maximize strengths and

weaknesses.

16

0

weaknesses.

MATRIX: best of both organizational structures.

� Employees in a matrix organization report to

one FM and at least one PM.

� PM and FM together conduct performance

review of the employees.

Matrix Structure

Matrix organizations are of three types:

16

1

WEAK

MATRIX

BALANCED

MATRIX

STRONG

MATRIX

Matrix Structure

� Weak matrix (more like functional)- Here, the balance

of power rests with the FM and PM is merely an

expeditor or coordinator.

WEAK

MATRIX

16

2

expeditor or coordinator.

� Project expeditor acts mainly as a staff assistant and

coordinates communication. Project expeditor can not

make or enforce any decisions.

� Project coordinator has some power to make

decisions and reports to higher level manager than

expeditor.

Matrix Structure


CEO

Staff engaged

in project work

Weak matrix

16

3Staff

Project

coordination

CEO

Functional

Manager A

Functional

Manager C

Functional

Manager B

Staff

Staff

Staff Staff

Staff

Staff Staff Staff

Matrix Structure

BALANCED

MATRIX

� Balanced matrix- The power is balanced between

project manager and functional manager.

16

4

project manager and functional manager.

� Each manager has responsibility for his/her part of the

project or organization, and people get assigned to

projects based on the needs of the project, not

strengths or weakness of the manager’s position.

Most organizations are Balanced Matrix these

days!

Matrix Structure


CEO

Staff engaged

in project work

Balanced matrix

16

5

Project

coordination

CEO

Functional

Manager A

Functional

Manager C

Functional

Manager B

Staff

Project Manager

Staff Staff

Staff

Staff Staff

Staff

Staff

Matrix Structure

STRONG

MATRIX

16

6

Strong matrix is more like projectized.

Here,

The balance of power rests with

The project manager

not

The functional manager.

Matrix Structure

� organizational STRCUTURE Strong matrix

CEO

Staff engaged

in project work

16

7

Project

coordination

CEO

Functional

Manager A

Functional

Manager C

Functional

Manager B

Staff

Staff

Staff Staff

Staff

Staff Staff

Staff

Staff

Manager of

Project Managers

Project

Manager

Project

Manager

Project

Manager

Matrix Structure

RELEVANCE FOR PROJECTS

� Highly visible project � Not cost effective as

ADVANTAGES DISADVANTAGES

16

8

� Highly visible project

objectives.

� Improved PM control

over resources.

� More support from

functions.

� Maximum utilization of

scarce resources.

� Better coordination.

� Not cost effective as

more administrative

personnel are

needed.

� More than one boss for

project team.

� More complex to

monitor and control.

Matrix Structure

� Better information flow

(both horizontal and

� Tougher problems with

resource allocation.

ADVANTAGES DISADVANTAGES

16

9

(both horizontal and

vertical) than functional.

� Team members

maintain a home, they

continue to belong to

their respective

departments unlike

projectized.

resource allocation.

� Requires extensive

policies and procedures.

� FMs may have differing

priorities than PMs.

� Higher potential for

conflicts and duplication

of efforts.

Composite Structure

� organizational STRCUTURE Composite organization

CEO

Staff engaged

in project work

Project Y

17

0

Project X

coordination

CEO

Functional

Manager A

Functional

Manager C

Functional

Manager B

Staff

Staff

Staff Staff

Staff

Staff Staff

Staff

Staff

Manager of

Project Managers

Project

Manager

Project

Manager

Project

Manager

Project Y

Coordination

Staff

Staff

Functional

Matrix

Weak Balanced Strong

Projectized

Structure

Features

Organizational structure influences on project

17

1

Weak Balanced Strong

Project

Manager

Power

Little or none Limited Low to

Moderate Moderate

to High

FULL

AUTHORITY

Resource

Availability

Little or none Limited Moderate Moderate

to High

ALMOST

TOTAL

Budget

Control

Functional

Manager

Functional Mixed Project

Manager Manager

Project

Manager

Role of Project

Manager

Part time Part time Full time Full time

On projects on projects on projects

FULL TIME ON

PROJECTS

Administrative

Staff

Part time on Part time Full time Full time

On projects on projects on projects

FULL TIME ON

PROJECTS

Features

Organization Process Assets

1. Corporate Knowledgebase

OPAs help us throughout the project!

17

2


2. Policies, Processes and Procedures




17

3


- Historical information from previous projects

- Lessons learned from previous projects

Project files, process measurement databases, issue and

defect management databases, configuration

management databases, versioning and rebaselining info,

Financial databases, overruns, etc.


2. Policies and Procedures


- organization's policy and procedures for conducting work

17

4


Organizational standards, policies, standard product and

project lifecycles, quality policy and procedures, work

instructions, performance measurement criteria, proposal

evaluation criteria, Templates (WBS, Network Diagram,

Contract Templates), ethics policy, project management

policy, Guidelines/criteria for tailoring, Project Closure

Guidelines/Requirements..


2. Policies and Procedures



17

5


Issue and defect management procedures,

Procedures for prioritizing, approving and issuing work

instructions, Change Control Procedures, Risk Control

Procedures, Financial Control Procedures,

Organizational Communication Requirements.

PM Basics

17

6

Project Management Processes

PM Basics: Project Management Knowledge Areas

PM Basics: Last Leg!

“The Project Management Processes”

17

7

“The Project Management Processes”

But, before we master its concepts, we

need to know the knowledge areas

which contribute

as building blocks of the

Project Management Process Groups!


Project Management

Knowledge Areas

17

8

Knowledge Areas

Describe Project Management Knowledge and Practice in

terms of THEIR COMPONENT PROCESSES.

9 Knowledge Areas!


o Integration

o Scope WHY

17

9

o Scope

o Time

o Cost

o Quality

o Human Resource

o Communications

o Risk

o Procurement

WHY

NINEKNOWLEDGE

AREAS?

Supports various elements

of project management which

Project Integration Management


� Develop Project Charter

� Develop Project Management Plan

� Direct and Manage project

execution

18

0

of project management which

are identified, defined,

Combined and coordinated

To ensure project includes

all the work required and

Only the Work needed to

complete project

Successfully

Project Scope Management

execution

� Monitor and control project work

� Perform Integrate change control

� Close project or phase

� Collect requirements

� Define scope

� Create WBS

� Verify scope

� Control scope

To ensure timely completion

Project Time Management


� Define Activities

� Sequence Activities

� Estimate Activity Resources

18

1

To ensure timely completion

of the project

Planning, controlling, and

managing costs so

that project is completed

within approved Budget

Project Cost Management

� Estimate Activity Resources

� Estimate Activity Durations

� Develop Schedule

� Control Schedule

� Estimate Costs

� Determine budget

� Control Costs

To ensure project will satisfy

Project Quality Management


� Plan Quality

� Perform Quality Assurance

18

2

To ensure project will satisfy

NEEDS for which it was

undertaken

To make most effective

use of people involved

with the project

Project HR Management

� Perform Quality Assurance

� Perform Quality Control

� Develop Human Resource plan

� Acquire project team

� Develop project team

� Manage project team

To ENSURE TIMELY and

APPROPRIATE generation,

Project Com. Management


� Identify Stakeholders

� Plan Communications

� Distribute Information

18

3

APPROPRIATE generation,

collection, dissemination, Storage

and disposition of the

PROJECT INFORMATION

Concerned with

identifying, analyzing, and

responding to project risks

Project Risk Management

� Distribute Information

� Manage stakeholders expectations

� Report Performance

� Plan Risk Management

� Identify Risks

� Perform Qualitative risk analysis

� Perform Quantitative risk analysis

� Plan Risk responses

� Monitor and control Risks

To acquire material, goods

Project Procurement

Management


� Plan procurements

� Conduct procurements

� Administer procurements

18

4

To acquire material, goods

and services outside

performing organization

To meet project scope

� Administer procurements

� Close procurements

PM Basics

So, here we come!

We will now deal with

18

5

We will now deal with

Project Management Processes

� Project Processes

� Process Groups

� Process Interactions

� Customizing Process Interactions

� Mapping of Project Management Processes

Just a foundation

talk

at the outset!

PM Basics: Project Management Processes

Project Team must:

1) Select right processes within the process groups.

18

6

1) Select right processes within the process groups.

2) Use defined approach to adapt product specs and

plans to fulfill PROJECT and PRODUCT

Requirements.

3) Adhere to the requirements to fulfill the needs,

wants, and expectations of the stakeholders.

4) Balance competing demands of Scope, Time,

Cost, Quality, Resources, and risk to accomplish

a quality product, service, or result.


We will discuss about what is required to:

18

7

We will discuss about what is required to:

1) Initiate

2) Plan

3) Execute

4) Monitor and control, and

5) Close a project.


What is a process?

Project Processes

18

8

A set of

interrelated

actions

&

activities

To accomplish

A

pre-specified

set

of products,

services, or

results

PERFORMED


Project processes are performed by the project team

and consist of two main categories:

1)

18

9

Project

Processes

Project

Management

Processes

Product-oriented

Processes

1)

2)


1) Are common to most projects most of the

time.

19

0

2) Are related with each other by their

performance for an integrated purpose of

initiating, planning, executing, monitoring and

controlling, and closing a project!

3) These processes interact with each other in

complex ways (discussed a little later).

PM Basics: Product-oriented Processes

1) Specify and create project’s product.

2) Are typically defined by the respective

project life cycle.

19

1

project life cycle.

3) Vary by application area!

Both project management processes and product-oriented

processes overlap throughout the project.

Example: You can not define the project scope without

basic knowledge of how to create the concerned product!

PM Basics: Project Processes

Project management

is an integrative effortA change in scope

Always Though, it may or

19

2

Scope, Time,

Cost,

Quality, Risk, etc.

Any action or lack

of it in one area

affects other areas

Project cost

Always

affects

Though, it may or

may not affect

product quality

or morale of the

team

PM Basics: Project Processes SOME TRUTHS!

�Project processes interactions require trade

offs among project objectives (scope, time,

cost, and performance).

19

3

cost, and performance).

�Enhancing performance in one area leads to

scarifying SOMETHING in another area.

�Hence, project objectives are called triple

constraints shown through a triangle with its

sides or corners representing each constraint

(we have already discussed it).

PM Basics: PM Process Groups

Initiating

Process Group

19

4

Process Group

Authorizes the project or phase


Planning

Process Group

19

5

Process Group

1) Establish the scope of the project,

2) Refine the objectives,

3) Define the course of action for attaining the

objectives.


Executing

Process Group

19

6

Complete the work defined in the project

management plan to satisfy the project

specifications! Coordinates people and resources.


Monitoring & Controlling

Process Group

19

7

Process Group

- Track, review, and regulate the progress and

performance of the project.

- Manage changes to the project management

plan


Closing

Process Group

19

8

- Finalize all activities across all Process

Groups to formally close the project or phase.

- Brings it to an orderly end.

PM Basics: Project Management Process Groups

Project Management Process Groups

INTERACTIONS

Initiating

Process

Planning

Process

Charter � PM process groups are

linked by their outputs.

� Output of one is input to

another .

19

9

Executing

Process

Closing

Process

Controlling

Process

Project

Plan Recommended

Corrective

actions

Work results

Implemented

Corrective actions

For Project

Plan updates

Correctly

Produced

deliverables

for formal

acceptance

Project Process Groups Interactions: HIGH LEVEL

SOWCulture, PMIS, HR Pool

Defined work processes, Knowledge base

Organization

Environmental factors

Project Initiator

of SponsorINITIATING

Process GroupCONTRACT

Project Charter

20

0

Organizational

Process assets

Customer

PLANNING

Process Group

EXECUTING

Process Group

MONITORING &

CONTROLLING

Process Group

CLOSING

Process Group

Project PLAN

Deliverables

APPROVED DELIVERABLESFinal product

Administrative & contract closure

Org. process assets updates



overlapping in a phase

Executing

Process

Group

Controlling

Process

Group

Closing

Process

Group

� PM process groups

overlap and occur at

various levels of intensity

throughout each Project

Phase.

Level of activity Initiating

Process

Group

Planning

Process

Group

20

1

Phase.

� They are not one-time,

discrete events!

time

Level of activity

Phase

Start

Phase

Finish

Closing

Process

Initiating

Process

Planning

Process

Executing

process

Controlling

Process

Group Group


Closing one phase offers input to initiating the next phase!


cross phases

Design phase Execution phaseOutput:

20

2

Later

Phases

Execution phase

Prior

Phases

Output:

Design document

requiring customer

acceptance

Output:

Design

document

Serves as

product

description

for

Execution

phase



Why repeat initiation process at the beginning of each phase?

20

3

1) Well, it keeps the project focused on the business

need for which it has been taken up!

2) It helps you halt the project if the project is not likely

to satisfy the business need!

3) It helps you halt the project if the business need

does not exist any more!



PM Process Groups

20

4

PM Process Groups

Controlling

Processes Initiating

Processes

Planning processes

Executing processes

Project boundaries

Project boundaries


20

5

Project boundaries

Controlling

ProcessesInitiating

Processes

Planning processes

Executing processes

Project

Inputs

Project

Initiator

Sponsor

Project

Deliverables

Project

Records

End

User

Process

Assets

INITIATING PROCESSES

20

6

INITIATION PROCESS GROUP

INTEGRATION

COMMUNICATION

Develop

Project Charter

Identify

stakeholders

Planning

process group

Executing

process group

Monitoring &

controlling

process

group

INITIATING PROCESS GROUP

THE PURPOSE

• Facilitates formal authorization to begin a new

20

7

• Facilitates formal authorization to begin a new

project or phase.

• Done outside the project’s scope of control.

• Business needs or requirements are documented.

• Normally the feasibility is established by evaluating

various alternatives and choosing the best one.


WHAT IS DONE HERE?

• Clear descriptions of project objectives are developed,

noting down the reasons for selecting the project to

20

8

noting down the reasons for selecting the project to

best satisfy the requirements� Such decision also gives us basic description of

1) project scope

2) deliverables

3) forecast of resources

4) high-level constraints, assumptions, risks


VERY IMPORTANT

Involving stakeholders during initiation

20

9

Involving stakeholders during initiation

1) develops “Shared Ownership”,

2) enhances “Chances of Deliverable

Acceptance”, And

3) “Customer/other stakeholders’

Satisfaction!”


Simply put, this process group

21

0

1. Authorizes/starts a project or phase

2. Defines project’s purpose

3. Identifies objectives

4. Empowers project manager to

start the project

Please remember this!

PLANNING processes

� Are used to plan and manage a successful project

Purpose of Planning Processes:

21

1

� Are used to plan and manage a successful project

� Help gather information from many sources for

completeness and confidence

� Develop project plan

� Identify, define, and mature:

� Project scope, requirements

� Project cost, and

� Schedule the project activities

PLANNING processes

� As new information is found out, additional


21

2

� As new information is found out, additional

requirements, risks, opportunities, constraints,

assumptions, and dependencies are identified

and resolved!

� As more information is grasped, follow-on

actions are undertaken

� Additional analysis through feedback loops

PLANNING processes


21

3

One/more

Planning

processes

revisited( may be some

initiating

processes too )

Significant

changes

throughout

Project life cycle

PLANNING processes


21

4

Parts of the

project plan

Updates from

Approved changes

Substantially

influence

Costs, schedule, and

resource requirements

to meet

Project Scope

Provide

greater

precision

PLANNING PROCESSES (with interactions)

Define scope- Project scope statement

Create WBS- Scope baseline

Enterprise- OPAs, EEFs

Collect requirements- requirements docs, RMP

Develop Project

Charter- charter

Develop Project

Management

Plan- Proj. Mgt. Plan

Verify scope

Control scope

Control

schedule

21

5

Collect requirements- requirements docs, RMP

Determine budget- cost performance baseline

Develop schedule- schedule baseline

Plan quality- QMP, PIP

Develop HR plan- HR Mgt. Plan

Plan communications- Com Mgt. plan

Plan risk management- Risk Mgt. Plan

Plan procurements- Procurement Mgt. Plan

Plan- Proj. Mgt. Plan

Direct & Manage

Project Execution

Monitor & Control

Project Work

Perform Integrated

CC

Close project or

phase

schedule

Control cost

Perform QC

Report

performance

Monitor &

control

Risks

Administer

procurements

PLANNING PROCESSES

�Scope management plan

�Requirements management plan

�Project baselines

(Scope baseline, Cost baseline,

and Schedule baseline)

Subsidiary plans Components

Project Management Plan

21

6


�Schedule management plan

�Cost management plan

�Quality management plan

�Process improvement plan

�Human resource plan

�Communication management plan

�Risk management plan

�Procurement management plan

and Schedule baseline)

�Project life cycle & phase

processes chosen

�PM processes selected

�Execution methods

�Change management plan

�Configuration mgt. Plan

�Baseline integrity process

�Key mgt. Review to facilitate

open and pending decisions

Understanding Component Processes of

PLANNING PROCESS Group

Before we develop final project plan, take approval, and publish it for execution, we need to conduct

21

7

for execution, we need to conduct many iterations to make sure that our plan meets:

1) project objectives

2) is realistic and

3) achievable.

EXECUTING process group

� Perform activities to accomplish project

requirements

� Create project deliverables

21

8

� Create project deliverables

� Acquire, train, and manage team

members.

� Obtain and manage resources

� Implement planned methods and

standards

� Establish and manage communication

� Generate project data for status and

forecasting

EXECUTING process group

� Issue change request

� Adapt approved changes into project’s

scope, plans and environment

21

9

scope, plans and environment

� Manage risks and execute response

activities

� Manage sellers and suppliers

� Execute approved process

improvement activities

� Collect and record lessons learned

“Project manager and project management team manages

performance of activities and various organizational interfaces”.

EXECUTING processes

Direct and Manage Project Execution

also needs implementation of:

22

0

- Approved corrective action to recover variance.

- Approved preventive action to reduce chancesof negative consequences of associated project risks.

- Approved defect repair to repair or replace a defective component.

EXECUTING PROCESSES

Perform

Quality

Assurance

Monitoring &

Controlling

Process

Group

Initiating

Process

Group

22

1

Acquire

Project

Team

Manage

Project

Team

Conduct

procurements

Distribute

Information

Direct and

Manage

Project

Execution

Closing

Process

Group

Planning

Process

Group

Develop

Project Team

Manage

Stakeholder

Expectations

Monitoring & Controlling process group

Main benefit:

22

2

Main benefit:

PROJECT PERFORMANCE

IS OBSERVED AND MEASUREDREGULARLY

TO

IDENTIFY VARIANCES FROM

THE PROJECT MANAGEMENT PLAN


Consists of processes needed to

Track, review, and regulate progress and

22

3

� Track, review, and regulate progress and performance

� Identify areas where changes to the plan are needed. And initiate such changes.


CONTROL CHANGES AND

RECOMMEND

22

4

RECOMMEND

“PREVENTIVE ACTION”

in

Anticipation of potential problems


� 1. Monitor project activities!

2. Influence the factor that could circumvent integrated

22

5

2. Influence the factor that could circumvent integrated

change control to ensure only approved changes are

executed!

� The project team gets insight into the health of the

project !

� Highlights areas needing additional care !

� Helps monitoring and controlling ENTIRE

PROJECT EFFORT !


SAVES THE PROJECT

22

6

When variances threaten the project

objectives relevant

project management

processes within the

PLANNING PROCESS

GROUP

are

REVISITEDRecommends updates to

the project plan rescue the project


A missed activity completion

Date needs:

SAVES THE PROJECT

22

7

When variances threaten the project

objectives

Date needs:1. Trade-offs between schedule &

budget targets

2. Dependence on over time

3. Adjustments to present staffing

plan

Recommends updates to

the project plan rescue the project

MONITORING AND CONTROLLING PROCESSES

Verify Scope

Control Scope

Initiating

Process

Group

22

8

Control Schedule

Control Costs

Perform quality control

Report Performance

Monitor & Control

Risks

Administer

Procurements

Monitor &

Control

Project work

Perform

Integrated

Change

Control

Planning

Process

Group

Executing

Process

Group

Closing

Process

Group


Monitor and

Provides

� Change requests.

22

9

Monitor and

Control Project

Work

� Change requests.

� Recommended corrective /

preventive action.

� Recommended defect

repair.

� FORECASTS.


Perform

Provides � Approved change requests

23

0

Perform

Integrated

Change Control

� Approved change requests

� Approved preventive action

� Approved corrective action

� Approved defect repair

� Validated defect repair

� Non-approved change requests

� Updates of Project Management Plan

CLOSING processes

Consists of processes to

� Finalize all activities across all PM Process

Groups for formal completion of the project,

23

1

Groups for formal completion of the project,

phase, or contractual obligations.

� Hand off the completed product to others

(customer if on contract)

� Close a cancelled project

CLOSING processes

� Completion of defined processes

23

2

� Completion of defined processes

within all Process Groups is verified

� Accomplishment of a project or

phase is formally established

CLOSING processes

Following occurs during project or phase closure:

� Customer or sponsor acceptance

� Project-end or phase end review

23

3

� Project-end or phase end review

� Impacts of tailoring to any process documented

� Lessons learned recorded

� OPAs updated

� Documents archived as historical information in

project management information system.

� Procurements are closed out.

CLOSING processes

Closing Process GroupPlanning

Process

Group

23

4

CLOSE PROJECT or

Phase

CLOSE

PROCUREMENTS

Executing

Process

Group

Monitoring &

Controlling

Process

Group

Understanding Component Processes of

CLOSING PROCESS Group

Soon as we meet accomplish one project, we tend to move on to the next one without properly

closing the earlier one.

23

5

closing the earlier one.

Result?

We keep on reinventing the wheel!

Project information created in a particular project along with mistakes committed,

corrective actions taken are not documented.

Then, there is no literature to guide us on similar future projects.

RECAP

Project

Process

Monitoring &

Controlling Processes

Planning Processes

Initiating

Process

Group

Pyramid

23

6

Process

Groups

Project Life Cycle

PhasePhasePhase PhasePhase

Executing Processes

Initiating

ProcessesClosing

Processes

Pyramid

A WORD OF CAUTION

ALL OF THE PROCESSES AND INTERACTIONS

DO NOT APPLY TO ALL PROJECTS OR PHASES!

23

7

DO NOT APPLY TO ALL PROJECTS OR PHASES!

� The project manager, along with project team,

is always responsible for determining:

1. What processes are appropriate?

2. What is the appropriate degree of rigor for

each process?

THIS IS CALLED TAILORING!

EXAMPLES: Customizing process interactions

Software development projects dependent on unique

A WORD OF CAUTION

23

8

� Software development projects dependent on unique resources define roles and responsibilities before scope definition.

� A firm whose projects find sizable outsourcing need to describe in their planning where the work is contracted out.

� On smaller projects, involving handful of people, there is no need for communications planning.

EXAMPLES: Customizing process interactions

On larger and complex projects, more detailed and

A WORD OF CAUTION

23

9

On larger and complex projects, more detailed and meticulous planning is required

Risk is a big agenda and risk identification will be more

exhaustive, creating separate risk categories:

a) Quality risks, b) Technical risks,

c) Cost risks, d) Schedule risks, and

e) Managerial risks.

recap ABOUTProject Management Processes

The five process groups we have discussed

24

0

The five process groups we have discussed are not one time processes.

They are iterative and revisited throughout the project life cycle as the project is refined.


Apart from entire project, each phase is also

24

1

initiated, planned, executed, controlled, and closed.

The output of preceding phase becomes input to the succeeding phase.


Completion of each phase allows the project

24

2

Completion of each phase allows the project

manager and Stakeholders to reanalyze the

business needs and determine whether the

project is satisfying those needs or not!

Here is another opportunity to make a go or

no-go decision.

Mapping 5 PM Process Groups to 9 Knowledge Areas Consists of

3 slides

SLIDE 1

Process Groups

Knowledge Areas

INITIATING PLANNING EXECUTING CONTROLLING CLOSING

Project Integration

Management

Develop Project

Management

Plan

Direct and

Manage Project

Execution

Monitor & Control

Project WorkDevelop

Project

Charter

Close

Project or

Phase

24

3

Plan Execution Perform

Integrated Change

Control

-Collect requirements

- Define Scope

- Create WBS

- Verify Scope

- Control Scope

Project Scope

Management

Project Time

Management

- Define Activities

- Sequence

Activities

- Estimate Activity

Resources

- Estimate Activity

Durations

- Develop Schedule

Control

Schedule

CharterPhase


3 slides

SLIDE 2

Process Groups

Knowledge Areas

INITIATING PLANNING EXECUTING CONTROLLING CLOSING

Project Cost

Management

Estimate Costs

Determine budget Cost control

Project Quality Perform

24

4

Project Quality

Management Plan Quality

Perform

Quality

Assurance

Perform

Quality control

Project HR

Management

Develop

Human Resource

Plan

Acquire Project

Team

Develop Project

Team

Manage project

team

Project

Communications

Management

Identify

Stakeholders

Plan

Communications

Information

distribution

Manage

stakeholder

expectations

Report

Performance


3 slides

SLIDE 3

Process Groups

Knowledge Areas

INITIATING PLANNING EXECUTING M and C CLOSING

Project Risk

Management

Monitor

And

Control

- Plan

Risk Management

- Identify Risks

24

5

Control

Risks

- Identify Risks

- Perform Qualitative

Risk analysis

- Perform

Quantitative risk

analysis

- Plan Risk responses

Project

Procurement

Management

Plan procurements Conduct

procurements Close

procurements

Administer

procurements

Mapping 5 PM Process Groups to 9 Knowledge Areas

From this mapping, we understand:

24

6

From this mapping, we understand:

Where the project management processes fit

into both:

1) Nine knowledge areas, and

2) Five project management process groups

Major project documents

We have three major documents on our project

24

7

We have three major documents on our project

1) Project Charter: formally authorizes project.

2) Project Scope Statement: tells what work

needs to be performed and what

deliverables need to be made.

3) Project Management Plan: tells how the

work will be done.

Project Management

INITIATING

24

8

INITIATING

PROCESS GROUPProcesses:

� develop project charter

� identify stakeholders

INTIATING PROCESS GROUP

PROJECT INTEGRATION MANAGEMENT

Processes borrowed from

24

9

1) Develop project charter

PROJECT INTEGRATION MANAGEMENT

PROJECT COMMUNICATIONS MANAGEMENT

2) Identify Stakeholders

Now, project management begins!

Initiating Process Group

25

0


Initiating a Project

Processes:

� develop project charter


Develop Project Charter

1) Developing a document that formally

25

1

1) Developing a document that formally

authorizes a project or a phase.

2) Documenting initial requirements that

that satisfy the stake holders’ needs

and expectations.



ESTABLISHES

25

2

ESTABLISHES

A partnership between the performing

organization and the requesting

organization (or customer in case of

external projects)!



25

3

The real project starts when there

is a chosen solution to the business need,

and the decision to invest has been made.

An approved project charter formally

initiates a project!



Question:

25

4

Question: When a project manager should be

identified and assigned?

Answer: As early as feasible, preferably while

The charter is being developed but always

prior to start of planning!



Question:

25

5

Question: Should the project manager be

involved in the development of project charter?

Answer: It is recommended that the project

manager participate in the development of the

project charter, as it provides him/her authority

to apply resources to project activities.



Question: Who authorizes the projects?

25

6

Question: Who authorizes the projects?

Answer: They are authorized by someone

external to the project! Sponsor, PMO, Portfolio

Steering Committee. They can create it or

delegate that duty to the project manager.

Note: project initiator/sponsor is a position

having funding authority!



25

7

Needs assessment

and feasibility study

in some cases

precedes initiation.

Initiation is always done

Formally.

EXCEPTION:

Internal service projects



The main areas

WHO needs this business

change?

25

8

The main areas

to

be addressed

in

Project Initiation

(clue : Who will be benefited)

WHICH solution is

recommended ?

(clue: Why is it preferred to

the alternative?)

WHAT are the benefits?

(clue: Are they real and

enforceable?)


What are estimated project

Costs and Assumptions?


25

9

The main areas

to

be addressed

in

Project Initiation

Costs and Assumptions?

(clue: high-level estimates at

this point of time).

WHAT are the significant

risks?

(clue: things which may get in

the way of success).


Once your organization recognizes a need

and decides to respond to it, you have a

Project

26

0

Project

It involves

Selecting a project and Committing

organizational resources to it.

Since every phase is also initiated, the initiation also means authorizing the project to continue to the next phase. But it’s not so simple!


The project has to support:

a) Your company's Strategic Plan,

b) Address management concerns.

26

1

b) Address management concerns.

There are many management

concerns!

You need to survive and grow in

a highly competitive market!!

But it’s not

so simple


You want bigger market share!!

You want better (and faster)

26

2

You want better (and faster)

return on investment!!

You want to have a nice public

perception!!

But it’s not

so simple

SO THAT people prefer to buy your

products, subscribe to your stocks,

consider you a market leader !

Providing best value for money!


Your organization is already

doing something:

26

3

� providing certain products and services through its ongoing operations.

INITIATION of

a project , therefore, provides links

with your organization’s

ongoing work.

But it’s not

so simple


Develop Project Charter process overview

INPUTSTOOLS & OUTPUTS

26

4

� Project statement of

work

� Business case

� Contract (if applicable)

� Enterprise

environmental factors

� Organizational

process assets

INPUTSTOOLS &

TECHNIQUES

OUTPUTS

� Expert Judgment� PROJECT CHARTER


Project SOW

Develop project charter

26

5

Project SOW

� Describes product or services to be

provided by the project.

� For internal projects, it is given by

project initiator or sponsor.

� For external projects, it is given by

external customer as part of RFP.


HERE, Project SOW indicates:

1) Business need

2) Product scope description: Product requirements

26

6

2) Product scope description: Product requirements that project will create. Less details during initiation, more during later processes as product characteristics are progressively elaborated. Product requirements must show the relation of the product with the business need. These requirements should be detailed enough to support later planning.

3) Strategic plan: all projects must support organization’sstrategic goals!


Strategic plan

Projects are the means by which

performing organization implements its

Project SOW indicates a:

� Strategic plan:

all projects must

26

7

performing organization implements its

strategic plan.

Hence, each project you select must support your organizations strategic plan.

ABC Industries had taken up a TV Project because Marketing VP had wanted it.

It was neither core competence of the company nor FITTED into its strategic plan.

The project did not get enough attention later on and fell through.

all projects must

support the

organization’s

strategic goals!


Business Case

� Describes justification for investment from business standpoint.

26

8

business standpoint.

� Business need and cost-benefit analysis contained.

� Requesting organization or customer (in external

projects) write the business case.

� Reviewed periodically in multi-phase projects for

benefits.


Business Case emerges from one or more of the

following:

a) Market demand

26

9

a) Market demand

b) Organizational need

c) Customer request

d) Technological advance

e) Legal requirement

f) Ecological impacts

g) Social need


Contract (if applicable)

- Contract becomes input here if the project is

27

0

- Contract becomes input here if the project is being undertaken for an external customer.

Project Integration Management: initiation

Enterprise environmental

factors

Develop

project charter

27

1

INPUTSfactors

We must consider the influence of all such factors and systems on Project’s Success:

� Government/ Industry standards

� Infrastructure



Develop

project charter

27

2

INPUTS factors

� Existing Human Resources

� Personnel administration (guidelines to hiring, performance

reviews, training history)

� Company’s work

authorization system


Enterprise environmental factors

Develop

project charter

27

3

INPUTS environmental factors

� Market conditions

� Stakeholder tolerances

� Commercial databases(standardized cost estimating data, industry risk study information/ risk databases)



Develop

project charter

27

4

INPUTS environmental factors

� PMIS (automated tool suite like scheduling s/w, configuration management system, information collection and distribution system, or web interfaces to other online systems)


Organizational process assets

Develop

project charter

27

5

INPUTSassetsWe must consider the influence of all the org. process assets on Project’s Success:

1) Organization’s Formal/ informal policies,

- procedures, plans, and

- guidelines


Organizational process

assets

Develop

project charter

27

6

INPUTS assets

We must consider the

influence of all the org.

process assets on Project’s

Success:

2) Organization’s learning and

knowledge from earlier

projects


Organizational

Develop

project charter

27

7

INPUTS

Organizational

process assets- Organization’s learning and

knowledge from earlier

projects like:

� Completed schedules

� Risk data

� Earned Value data



1) organization’s processes & procedures for

27

8


conducting work

� organizational standard processes- safety & health policy

- project management policy

� standard product and project life cycles

� quality policies and procedures- process audits

- improvement targets

- checklists and standardized process definitions




27

9


conducting work (continued)

� standardized guidelines, work instructions,

proposal evaluation criteria and performance

measurement criteria

� Templates - risk templates

- WBS templates

- project schedule network diagram templates




28

0



� guidelines and criteria for framing organization’s

set of standard processes to meet specific needs

of the project

� organization communication requirements- specific technology available

- permitted communication media

- record retention

- security requirements




28

1



� project closure guidelines/ requirements- final project audits

- project evaluations

- acceptance criteria

� financial control procedures- time reporting

- required expenditure and disbursement reviews

- accounting codes and standard contract provisions




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2



� Issue and defect management procedures- Issue and defect controls

- Issue and defect identification and resolution

- Action item tracking

� Change control procedures plus steps - Steps for modifying official company standards,

policies, plans, and procedures, or any project

documents. And how changes will be approved/ validated.




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3



� Risk control procedures plus risk categories

probability definition and impact, and

probability and impact matrix

� Procedures for approving and issuing work

authorizations



2) organizational corporate knowledge base for

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4


storing and retrieving information:

� Process measurement database- for collecting and making available data on processes

and products

� Project files (information from earlier projects)- info on scope, schedule, cost, and quality baselines,

performance measurement baselines, project calendars,

project schedule, network diagrams, risk registers,

planned response actions, and defined risk impact




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5


storing and retrieving information (continued):

� Historical information and lessons learned

knowledge base- Project records and documents

- All project closure information and documentation

- Information on the previous projects performance

- Information on the previous projects results

- Information on risk management efforts




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� Issue and defect management database- Issue and defects status

- Control information

- Issue and defects resolution and Action item results

� Configuration management knowledge base

consisting of versions and baselines of - All official company standards, policies, procedures, and

- Project documents




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7



� Financial database - Information on labor hours,

- Incurred costs

- Budgets

- Project cost overruns, if any

Develop Project Charter Process TOOLS AND TECHNIQUES

Expert Judgment

1) Help assess inputs required to develop the charter

2) Applied to any technical and management details

Develop

project charter

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8

2) Applied to any technical and management details

3) Comprises special expertise from any group or individual

Sources:

- other units within performing organization

- consultants

- stakeholders (also customers/sponsors)

- professional/technical associations

- industry groups

Discussion on OUTPUTS

Project Charter

DOCUMENT that formally authorizes a

project

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project

ISSUED by a project initiator or

sponsor, external to project

organization, at a level appropriate to

project funding

EMPOWERS the project manager to

apply resources to project activities

� PROJECT

CHARTER

OUTPUTS


Project Charter

AUTHORITY of project manager

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AUTHORITY of project manager

is particularly important when

project team comes from various

functional areas.

He/she has to deal with many

issues relating to cooperation

and performance of the team

members working on the project.

� PROJECT

CHARTER

OUTPUTS


Project Charter

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1

Documents Business Needs, Current

understanding of customer’s needs, or the new

product, service or result that is intended to meet!


Information in the Project Charter

OUTPUTS1. Project purpose and justification,

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2

OUTPUTS

� PROJECT

CHARTER

1. Project purpose and justification,

2. Measurable project objectives and related

success criteria,

3. High-level requirements,

4. Assigned project manager and empowerment,

5. High-level project description

6. High-level risks

7. Summary level milestone schedule


Information in the Project Charter

8. Summary level budget, OUTPUTS

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8. Summary level budget,

9. Project approval requirements:

a) What constitutes project success

b) Who decides project is successful

c) Who will sing off on the project

Name and authority of the sponsor or other

persons authoring the project charter.

OUTPUTS

Discussion on INITIATION

ConstraintsFactor that limit project management team’s

options

Examples:

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4

Examples:

1. an imposed date,

2. a predefined budget,

3. scope

4. staffing

5. specified quality

6. contractual terms

7. Project’ product to be socially, economically,and environmentally sustainable (puts further constraint on in terms of scope, time, staffing , and cost).

� PROJECT

CHARTER


Assumptions

Things assumed to be real, true and

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5

certain for the purpose of planning.

If they do not come true?

THEY BECOME RISK

� PROJECT

CHARTER


EXAMPLES OF Assumptions

While planning, you assume: 1. vendor delivery date will be

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6

1. vendor delivery date will be

honored,

2. help from other functional areas

will come on date as planned.

3. certain team members or

specialists required on your

project will be there.

� PROJECT

CHARTER


EXAMPLES OF AssumptionsYou assume so many things.

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7

Must document these assumptions.

They impact all areas of planning

Are progressively elaborated as

project progresses.

� PROJECT

CHARTER


EXAMPLES OF Assumptions

During initiation, high-level

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8

assumptions are discovered and

documented.

Assumptions are monitored

throughout the project.

OUTPUTS

� PROJECT

CHARTER


Sample project charter

PROJECT TITLE AND DESCRIPTION“ABC Customer Satisfaction Project”

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“ABC Customer Satisfaction Project”

Recent Customer satisfaction survey has found that many of our customers’ orders for mobile sets has taken the customer 8 times

longer to place order on our network than the competitors’ network.

The goal of this project is to examine the root causes and offer solution. Implementation of solution will be separate project.

PROJECT MANAGER ASSIGNED AND AUTHORITY LEVELVikas Chopra shall be the project manager for this project and have the authority to select his team and determine final project budget.

Continued

Discussion on INITIATION OUTPUTS

OBJECTIVESComplete the project no later than February 1, 2009. Spend no more than


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Complete the project no later than February 1, 2009. Spend no more than

INR 200,000, result in a tested plan to reduce the order time by at least

90%.

BUSINESS CASE (Business need)This project is being undertaken to prevent further dissatisfaction of customers with LG’s offerings on net. We expect that increased

customer satisfaction will improve revenues. Developing new ideas to satisfy customers will be an additional advantage arising from this project.

Continued

Discussion on INITIATION OUTPUTS

PRODUCT DESCRIPTION

The project should result in specific deliverables like:


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The project should result in specific deliverables like:1. The solution describing what should be changed, how much time and cost each change will take ,and how much order placement time each change will ensure. The proposed solution must be consented by related departmental managers (Marketing, Quality Assurance, Customer Care, and Support Services).

2. The document describing names of customers with whom necessary interactions are advised for implementing the solution.

3. The Work Breakdown Structure that details the plan for completing

the project and the list of risks involved in the project.

SIGNED AND APPROVED:

Manas Banerjee, President


CASE STUDY

ABC LTD. manufactures valves for filling

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and controlling water level in industrial tanks. The company

ABC LTD. manufactures valves for filling

and controlling water level in industrial tanks. The company

envisioned a new valve, THE TURBO VALVE, to garner

bigger market share. The objective was to design, and

produce the new valve with higher quality and lower cost

than the competition.

ABC decided to outsource the development and

design. The RFP included:


CASE STUDY

ABC sent RFP to six companies and selected XYZ

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ABC sent RFP to six companies and selected XYZ

Designs based on lowest bid. XYZ’s proposal was

written by its Sales & Marketing departments, revised by

senior management but no input from industrial

designers, engineers, or anyone else who would work

on the project. XYZ had no prior experience in such

valves but quoted to grab the opportunity and expand

client base.


CASE STUDY

ABC assigned Mr. Bamish Kumar, a seasoned

design engineer, to head the project with four engineers.

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4

The team could not assemble until 5 months because of

prior project commitments. Then, industry research was

conducted. Bamish divided project into phases

and work packages and prepared a Gantt chart.

He found that the proposal had missed several critical

steps and processes and funding was underestimated.

He rewrote the proposal, cost, and schedule estimates.


CASE STUDY

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5

The design concept, work tasks, and schedules had to be

changed throughout the project!

The woes of the XYZ design team were augmented by

constant pressure from ABC on ‘functional superiority

and low cost’.


CASE STUDY

It was realized during the project that designing such a

valve needed more resources than budgeted! All the

changes led to overshooting budget 5 times and

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6

changes led to overshooting budget 5 times and

requesting ABC for additional funds!

Another blunder: XYZ sent a Prototype to ABC.

ABC considered Prototype to be virtually finished

product with replicable components.XYZ visualized it

to be a simple working model to display design and

functionality. Proposal didn’t mention clearly what

prototype would be, and ABC expected much more.


CASE STUDY

To resolve the issue in of favor ABC, extra money

and time was spent by EICHER! FINISHED PROTOTYPE

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and time was spent by EICHER! FINISHED PROTOTYPE

SAW EVEN MORE TIME AND COST OVERRUNS.

SHORT-CUT APPROACH: To makeup for delay, XYZ

chose to cram project stages and executed them without

sequence. XYZ began making production-ready models

but the finished ones showed they could not be

produced.


CASE STUDY

ULTIMATELY, XYZ did make a real innovative valve!

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ULTIMATELY, XYZ did make a real innovative valve!

But? But, the design necessitated good deal of fresh

tooling to really produce it at ABC FACTORY!

It meant ABC would have to incur about 40% more to

manufacture than had been expressed.


CASE STUDY

ABC cancelled the contract. Work was 90%

completed. ABC is now trying to finish balance 10%

but that will be great challenge because:

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9

but that will be great challenge because:

1. Thus far, ABC has already spent twice as much

time and money on development as expected, and

still does not have a product to produce

2. Even though the development completes, the high

tooling cost will not the product to be priced low

enough to be competitive.

Lessons learned from the case study:

� Project objectives should be clear and agreeable

early in advance.

� Project objectives in RFP should not be too rigid to

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0

� Project objectives in RFP should not be too rigid to

accommodate changing priorities.

� Sufficient time should be spent by the performing

organization to define objectives.

� Objectives should be adequately quantified.

� Objectives should be documented enough.

� Efforts of client and project team should be

coordinated properly to ensure ‘common

understanding’.



� Ensure that Project has a complete and sound basis

before major commitment to the project or phase.

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1

before major commitment to the project or phase.

� An adequately made project charter (contract) to act

as a base document against which the project can

assess progress, change management issues, and

ongoing viability questions.



� As a minimum, it must answer following questions

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� As a minimum, it must answer following questions

about the product of the project:

1. What the project is aiming to accomplish?

2. Why is it important to achieve?

3. Who will be involved in managing the process,

their responsibilities?

4. How and when the project will be undertaken?

Project Communications Management


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3


Initiating a Project

Processes:



the process of


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4

the process of

1) Identifying all people or organizations

impacted by the project.

2) Documenting their interests,

involvement,a and impact on project

success!


It is critical for project success to identify

� please remember

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5

It is critical for project success to identify

the stakeholders early in the project!

AND

Analyze their levels of interest,

expectations, importance and influence!!


For approaching each stakeholder and

� please develop a strategy

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6

For approaching each stakeholder and

determining the level and timing of

stakeholders’ involvement to

maximize positive influences and

minimize potential negative impacts!

Please keep reviewing this strategy during project

execution!


Due to large number of stakeholders and

� please classify the stakeholders

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Due to large number of stakeholders and

limited time with the project manager,it

helps to classify according to:

1) Interest

2) Influence

3) Involvement


Identify stakeholders

data flow diagram

Develop

project charter

• Project charter


Identify

stakeholders

Collect

Requirements Stakeholder

Stakeholder

Register

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8

• Project charter

• Procurement

documents

Plan

procurements

Enterprise/

organization

• Enterprise environmental

factors

• OPAs

stakeholders

Plan

Communications

Requirements

Plan

Quality

Identify

risks

Stakeholder

Management

Strategy

Register

Manage

Stakeholder

expectations

Identify Stakeholders process overview

INPUTSTOOLS &

TECHNIQUESOUTPUTS

� Stakeholder Register


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9

� Project Charter.

� Procurement Documents

� Enterprise Environmental

Factors

� Organizational Process

Assets

INPUTS� Stakeholder

Analysis

� Expert Judgment


� Stakeholder

Management Strategy

Identify Stakeholders: Discussion on inputs


Project Charter

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0

provide information about internal and

external parties involved in and affected by

the project.Example

Sponsor (s), customers, team members, groups and

departments,and other organizations involved in the

project, and affected by the project.


Procurement Documents


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If the project is the result of the procurement

activity, or based on established contract, the

parties involved in that contract are key project

stakeholders.

Note: Suppliers are also project stakeholders!

Remember this!




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2

- Organizational or company culture.

- Government or industry standards.

OPAs do help, you can’t deny. See

- Stakeholder Register Templates.

- Lessons Learned from previous projects.

- Stakeholders registers from previous projects.

Do you

maintain such

OPAs ?


There are two ways to identify stakeholders

Identify Stakeholders: Discussion on techniques

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3

1. Stakeholder analysis

2. Expert judgment


Stakeholder analysis


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4

the process of

systematically gathering and analyzing

quantitative and qualitative information

TO DETERMINE WHOSE INTERESTS

should be taken into account throughout

the project!




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5

identifies

1) Interests,

2) Expectations, and

3) Influence of the stakeholders

Relates them to the purpose of the project!




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6

identifies

stakeholder relationships that can be

leveraged to build “COALITIONS AND

POLITICAL PARTNERSHIPS” to

enhance the project’s chance of

success!



THE STEPS


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THE STEPS

Step 1: Identify “all” Potential Stakeholders.

Step 2: Identify Potential impact or support

each stakeholder could generate.

Step 3: Assess how key stakeholders are

likely to react.


ARE YOU TRAINED INTO Stakeholder Analysis?


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ARE YOU TRAINED INTO Stakeholder Analysis?

IF NOT, THEN THIS PROCESS WILL NOT YIELD

YOU MUCH?

MANY ARE NOT TRAINED ENOUGH ON THIS

ASPECT!!


HOW DO YOU HANDLE STEP 1?

Well, please:


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Well, please:

1. Identify all project stakeholders

2. Their roles, departments, interests, expectations,

and last but not the least- their influence levels!

Note: key stakeholders are easy to identify. Anyone in a

decision-making or management role. Sponsor, project

Manager, primary customer. But you must find more, not

stop at only them! Please remember!



Other stakeholders, you can identify:


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Other stakeholders, you can identify:

- BY interviewing identified stakeholders

- EXAPANDING the list until all potential

stakeholders are identified!!!



Well, please:

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Well, please:

1. Identify the potential impact or SUPPORT each

stakeholder can generate.

2. Classify them them to decide an APPROACH

STARTEGY!


In large stakeholder communities,

it is very important to

PRIORITIZE THE KEY STAKEHOLDERS!

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PRIORITIZE THE KEY STAKEHOLDERS!

WHY?

To communicate and manage

their expectations!!




Classify them

33

3

Classify them

1) Power grid/interest grid

Grouping the stakeholders based on their level of

authority (“POWER”) and their level or concern

(“INTERST”) regarding project outcomes!




Classify them

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4

Classify them

2) Power influence grid

Grouping the stakeholders based on their level of

authority (“POWER”) and their active involvement

(“INFLURNCE”) in the project!




Classify the

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5

Classify the

3) Influence/impact grid

Grouping the stakeholders based on their active

involvement (“INFLURNCE and their ability to

effect changes to the project’s planning or

execution (“IMPACT”).




Classify them

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6

Classify them

4. Salience Model

Describing classes of the stakeholders based on

their power (“ABILITY TO IMPOSE THEIR WILL”),

urgency (“NEED FOR IMMEDIATE ACTION”), and

legitimacy (THEIR INVOLVEMENT IS

APPROPRIATE).

EXAMPLE: POWER/INTEREST GRID

High

A-H = Stakeholders

Keep Manage

• B

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Power

Low

Low

Interest High

Keep

Satisfied

Manage

Closely

Keep

Informed

Monitor

(minimum effort)

• A

• C

• D • E

• H

• F




Assess how key stakeholders are likely to react

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Assess how key stakeholders are likely to react

or respond in various situations. Then, plan

how to influence them 1) to enhance their

support, and 2) minimize potential negative

impacts!

Make Stakeholder Register and place all the info!



EXPERT JUDGMENT

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Used to ensure Comprehensive Identification and

Listing of Stakeholders!

Expert judgment can be taken through individual

consultations or panel format (focus group,

survey).

Identify Stakeholders: OUTPUTS


1) Stakeholder Register

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1) Stakeholder Register

2) Stakeholder Management Strategy

Identify Stakeholders: OUTPUTS


Stakeholder Register

1. Identification 2. Assessment 3. Stakeholder

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1

Information Information Classification

Name, position,

location, role in

project, contact

info.

Major

requirements,

main

expectations,

potential

influence, phase

of most interest.

Internal/external,

Supporter/neutral/

resistor, etc.


Defines approach to increase the support and

Stakeholder Management Strategy

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2

Defines approach to increase the support and

minimize negative impacts of stakeholders

Elements included:

1) Key stakeholders who can significantly impact,

2) Level of participation in the project desired,

3) Stakeholder groups and their management.

Stakeholder Analysis Matrix

Common way to represent Stakeholder Management

Strategy.

Stakeholder Interests in Assessment Potential

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Stakeholder Interests in

the project

Assessment

of impact

Potential

strategies

1) For

gaining

support

2) For

reducing

obstacles

PROJECT MANAGEMENT Progresses

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4

PLANNING PROCESS GROUP


Consists of PROCESSES performed to:

1) establish TOTAL SCOPE OF THE EFFORT,

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5

1) establish TOTAL SCOPE OF THE EFFORT,

2) Define and refine the objectives,

3) develop the course of action required to attain

those objectives!

4) Project Management Plan and Project

documents are developed to carry out the

project.


Question: Is planning on time affair?

Answer: No, planning and documentation

are iterative and ongoing processes!

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6


WHY?

Because,

1) as more information or characteristics are

gathered and understood, additional planning

may be required.


Question: Is planning one time affair?



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7


WHY?

Because,

2) plus significant changes during the project may

trigger a need to revisit one or more planning

processes, and some of the initiating

processes.


Question: Is planning one time affair?



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WHY?

This progressive detailing of the project

Management plan is called “Rolling Wave

Planning”. This proves that planning and

documentation are iterative and ongoing

processes.


Example

For some projects, there might be little or no

identifiable risk until after significant planning

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identifiable risk until after significant planning

has been done. This would mean that time and

cost targets are overly aggressive, thus

involving considerably more risk than earlier

understood. So, additional time and cost need

to be added in the schedule and budget.

Planning

Planning Process Group

Planning a Project

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Planning a ProjectProcesses:

� Collect requirements

� Define scope

� Create WBS

� Define activities

� Sequence activities

� Estimate activity resources

� Estimate activity durations

� Develop schedule

� Estimate costs

� Determine budget

Processes:

� Plan quality

� Develop HR plan

� Plan communications

� Plan risk management

� Identify risks

� Perform qualitative risk analysis

� Perform quantitative risk analysis

� Plan risk responses

� Plan procurements

Processes:

� develop project

management plan

Planning Process group

� Project Management Plan and Project

Documents explore all aspects of scope, time,

cost, quality, human resource, communication,

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cost, quality, human resource, communication,

risk, and procurement.

� Updates arising from approved changes revise

them.

� Consequently, these updates provide greater

precision in schedule, costs, and resource

requirements!


� Project Team should involve all appropriate

stakeholders.

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� Updates arising from approved changes revise

them.

� Consequently, these updates provide greater

precision in schedule, costs, and resource

requirements!


Since planning process group borrows processes from

all nine knowledge areas, we will showcase in brief

THE CONCERNED KNOWLEDGE AREA, and then

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THE CONCERNED KNOWLEDGE AREA, and then

discuss about the ones contributing in the planning

process group.

For example, planning begins with “Collect Requirements”

Process from Scope Management Knowledge Area. So,

we will briefly describe concept of Scope Management

and all its processes and then take up the ones coming in

Planning Process Group.


The Concept

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The processes required to ensure that

the project includes

ALL THE WORK REQUIRED

(and only the work required)

To

“complete the project successfully!”


The Concept

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5

It is primarily concerned with

DEFINING AND CONTROLLING

“WHAT IS AND IS NOT INCLUDED

IN THE PROJECT!”


processes

1) Collect requirements

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1) Collect requirements

2) Define scope

3) Create WBS

4) Verify Scope

5) Control scope


Monitoring and Controlling

Process group


Please note

A separate process has not been shown for

making Scope Management Plan but this plan is

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making Scope Management Plan but this plan is

absolutely necessary!

We need it to guide us on how project scope will

be defined, documented, verified, managed,

controlled.

So, we will make it just as we enter planning in

the area of scope management!


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8

Collect Requirements

Knowledge Area: Scope Management


Process

Collect requirements

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9

Collect requirements

the process by which we define and record

stakeholders’ needs for meeting project

objectives.


Project’s success is directly influenced

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Project’s success is directly influenced

by the care taken in capturing

project and product requirements!

Project Scope Management: Collect requirements

Requirements mean

1) Quantified and documented needs and

expectations of the sponsor, customer, and

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expectations of the sponsor, customer, and

other stakeholders.

2) These requirements need to be elicited,

analyzed, and documented in enough details

to be measured as project execution begins!

3) Requirements become foundation of WBS!

Project Scope Management: Collect requirements

Requirements means

4) Schedule, cost, quality planning are all built

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4) Schedule, cost, quality planning are all built

upon these requirements only!

5) Requirements may be known as:

a) Project requirements (business requirements,

project management requirements, delivery

requirements, etc.).

b) Product requirements (information on technical

requirements, security requirements, performance

requirements, etc.).



Collect requirements process

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� Project charter

� Stakeholder register

INPUTSTOOLS &

TECHNIQUES

OUTPUTS

� Interviews

� Focused groups

� Facilitated workshops

� Group creativity

techniques

� Group decision making

techniques

� Questionnaires and

surveys

� Observations

� Prototypes

� Requirements

documentation

� Requirements

management plan

� Requirements

traceability matrix

Project Scope Management: Collect Requirements

Discussion on Inputs

1. Project charter provides high-level project

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requirements and high-level product

description for developing detailed level

product requirements!

2. Stakeholder Register is used to identify

stakeholders who will provide details level

project and product requirements!


Discussion on Tools & Techniques

1. Interviewing experienced project

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1. Interviewing experienced project

participants, stakeholders and subject matter

experts through prepared and spontaneous

questions to gain understanding of features

and functions of project deliverables!

Conducted on one-on-one basis but may involve

Multiple interviewers and interviewees.



2. Focus groups

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2. Focus groups

a) trainer-moderated,brings together pre-qualified

stakeholders, subject matter experts.

b) Interactive session, more conversational than

interviews.

c) PURPOSE: to learn about their expectations

and attitudes about a proposed product or

service or result!



3. Facilitated workshops

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a) Focused sessions to bring together key “Cross-

Functional Stakeholders” to define product

requirements!

b) Primary technique to quickly define “Cross-Functional

Requirements and reconcile stakeholders differences!

c) Builds trust, fosters relationships and improves

communications.

d) Issues discovered and resolved more quickly than in

individual sessions.


JAD (Joint Application Development/Design) Sessions:

Users and software developers brought together for

improving software development process.

Facilitated workshops: Examples

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8

improving software development process.

QFD (Quality Function Deployment): in manufacturing

industry. Helps determine critical characteristics for new

product development.

Procedure: customer needs (VOC) collected, objectively

sorted and prioritized and goals are set for achieving them!



4. Group Creativity Techniques

a) Brainstorming: generate & collect multiple ideas.

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a) Brainstorming: generate & collect multiple ideas.

b) Nominal group technique: voting added to rank most

useful ideas. Enhances brainstorming.

c) Delphi: common opinion of experts anonymously.

d) Idea/mind mapping: ideas from individual brainstorming

build a map showing commonalities and differences.

Helps understand better and generate new ideas.

e) Affinity diagram: large number of ideas sorted in groups

for review and analysis.



4. Group Decision Making Techniques

a) Unanimity: everyone agrees for single course of action.

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a) Unanimity: everyone agrees for single course of action.

b) Majority: more than 50% support the idea.

useful ideas. Enhances brainstorming.

c) Plurality: even if majority not achieved, largest block

in the group decides.

d) Dictatorship: one individual forces decision on the

group.



5. Questionnaires & surveys: appropriate when broad

audience and statistical analysis needed.

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audience and statistical analysis needed.

6. Observations: seeing people in their environment.

Particularly useful for ‘detailed processes’ (when people

who use the product have difficulty or are unwilling to

articulate their requirements!!

Also called ‘Job Shadowing’- external observer watches

user performing the job.

To uncover hidden requirements, a ‘participant observer



6. Observations:

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Also called ‘Job Shadowing’- external observer watches

user performing the job.

To uncover hidden requirements, a ‘participant observer

(who actually performs the process) can also

experience how it done!



7. Prototypes:

- Method of obtaining early feedback on requirements by

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- Method of obtaining early feedback on requirements by

providing a ‘working model’ of the expected product.

- Allows stakeholders to experiment with a model of their

Final product. Removes abstractions as it is tangible.

“Sufficient Requirements gathered through many feedback

cycles.” Example: iterative cycles of mockup creation, user

Experimentation, feedback generation and prototype

revision.


Discussion on Outputs

1. Requirements documentation:

- describes how individual requirements meet the

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4

- describes how individual requirements meet the

business need for the project.

- Before baselining, the requirements must be fully

detailed, complete, clear, measurable, traceable and

agreeable to all stakeholders!!!

- Formats may be simple or elaborate with attachments!

sample


Requirements documentation: sample entries

1) Business need or opportunity to be seized, limitations

2) Business and project objectives for traceability

Sample

template

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3) Functional requirements (detailing business processes,

Information, and interaction with the product).

4) Non-functional requirements (level of service,

performance, compliance, security, safety, etc.).

5) Quality requirements

6) Acceptance criteria

7) Business rules (guiding principles of the organization).


Requirements documentation: sample entries

8) Impacts to other organizational areas

Sample

template

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9) Impacts to other entities inside or outside performing

organization

10) Support or training requirements

11) Requirements assumptions and constraints



2. Requirements management plan:

a) describes how requirements will be analyzed,

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7

a) describes how requirements will be analyzed,

documented and managed throughout the project!

b) Project manager must decide approach how

how phase to phase requirements relationship will be

maintained!

c) Entries in requirements management plan largely

depend on such relationship!


Requirements management plan: sample entries

a) How requirements activities will be planned, monitored,

Sample

template

37

8

a) How requirements activities will be planned, monitored,

and reported!

b) How configuration management activities will be

initiated, how impacts will be evaluated, how changes

will be traced, tracked and informed!

c) Authorization levels to approve changes!


Requirements management plan: sample entries

d) Requirements prioritization process

Sample

template

37

9

d) Requirements prioritization process

e) Product metrics to be used and its rationale

f) Traceability structure (which requirements attributes

will be captured on traceability matrix and to which

project documents requirements will be traced).



3. Requirements traceability matrix:

a) A table that links requirements to their origin and traces

38

0

a) A table that links requirements to their origin and traces

them throughout the project.

b) Ensures each requirement adds to business value (by

linking it to the business and project objectives).

c) Ensures requirements approved in the requirement doc

are delivered at the completion of project.



RTM traces requirements to

a) Business need, opportunities objectives, and

goals!

38

1

goals!

b) Project objectives

c) Project scope/WBS deliverables

d) Product design

e) Product development

f) Test strategies and test scenarios

g) High level requirements to detailed level ones



RTM contains requirements attributes:

a) Unique identifier!

b) Textual description

38

2

b) Textual description

c) Rationale

d) Owner

e) Source

f) Version

g) Current status (added, deleted, approved, etc)

h) Date of completion

i) Additional (stability, complexity, acceptance criteria).

Define Scope


38

3

Define Scope


Define Scope

Process to prepare a detailed description of

project and product!

38

4

project and product!

Note: preparation of a detailed Project Scope

Statement is critical to project success

� The project scope statement builds upon the

major deliverables, assumptions, and

constraints that are are documented during

Project Initiation!

Define Scope

Please note

During planning, the project scope statement is

38

5

During planning, the project scope statement is

defined with greater specificity as we come to

know more information about the project.

Example: existing risks, assumptions, and

constraints are analyzed for completeness.

additional risks, assumptions, and constraints

are added as necessary!

Define Scope

Importance of Scope statement!

1) describes in details project deliverables and

38

6

1) describes in details project deliverables and

the work needed to produce these deliverables!

2) develops common understanding among

stakeholders!

3) helps team conduct more detailed planning

4) guides team’s work during execution!

Inputs-Tools-Outputs

Inputs outputs

Define Scope

38

7

Inputs outputs Tools and Techniques

1. Product Analysis

2. Alternative Identification

3. Expert Judgment


1. Project scope

statement

2. Project document

UPDATES

1. Project charter

2. Requirements

documentation

3. Organizational

process assets

1) Project charter

High-level project description and

Define Scope process: Inputs

38

8

High-level project description and product

characteristics and project approval

requirements mentioned in the charter, are used to develop scope statement.

2) Requirements documentation

Helps development of scope statement.

3) Organizational process assets

Define Scope process: Inputs

38

9

3) Organizational process assets

- Provides policies, templates

procedures

- Historical information

- Lessons learned

1) Product analysis

� Helps translate high-level product

Define Scope: Tools & Techniques

39

0

� Helps translate high-level product

descriptions into tangible deliverables.

� Includes techniques like product breakdown,

systems analysis, systems engineering, value

analysis, and function analysis.

2) Alternative identification

techniques to find out alternative, better


39

1

techniques to find out alternative, better

approaches for executing and performing the

work of the project! General management

techniques:

� Brainstorming

� Lateral thinking

� Pair-wise comparison, etc.

3) Expert judgment

Used in developing scope statement


39

2


4) Facilitated workshops


Project scope statement

1) Describes, in detail, the project’s

Define Scope: Outputs

1. Project scope

statement

2. Project document

UPDATES

39

3

1) Describes, in detail, the project’s

deliverables,

2) Develops common understanding of the

project scope among stakeholders,

3) Contains explicit SCOPE EXCLUSIONS

that can help in managing stakeholder

expectations,


4) Enables team to perform more detailed


39

4

4) Enables team to perform more detailed

planning,

5) Guides the project team during

execution, and

6) Acts as baseline for EVALUATING

changes or additional work contained or

outside the project boundaries!

Project scope statement contains: 6 items

� product scope description


template

39

5

� product scope description

progressively elaborates characteristics of the

product/service/result described in the charter and

requirements documentation.

� product acceptance criteria

defines the process and criteria for accepting

completed product.


template


� product deliverables

39

6

� product deliverables

product deliverables include product of the project

and ancillary results, such as project management

reports and documentation.

� project exclusions

explicitly stating what is out of scope for the project

for properly managing stakeholder expectations.


template


� project constraints

39

7

� project constraints

specified, such as a predetermined budget, imposed

dates, schedule milestones, contractual provisions

(if project being done under contract). Note:

Constraints may also be listed in a separate log.

� project assumptions

assumptions for project scope and potential impact.

May also be noted in a separate log.

Project document updates

Following documents may be updated:

1. Project scope

statement

2. Project document

UPDATESDefine Scope: Outputs

39

8

� stakeholder register

� requirements documentation

� requirements traceability matrix


CREATE WBS

39

9

CREATE WBS

Knowledge Area: Project Scope Management


CREATE WBS

Process of subdividing project deliverables and

40

0

Process of subdividing project deliverables and

project work into more manageable components.

What is WBS?

A deliverable-oriented hierarchical decomposition

of work to be executed by the project team to:

- create required deliverables

- accomplish project objectives


WBS

WBS organizes and defines the total scope and

40

1

WBS organizes and defines the total scope and

represents specified in the current approved

Scope Statement!

What is a work package?

Lowest level of WBS. A work package can be

scheduled, cost estimated, monitored, and

controlled.


Create WBS Creating WBS

WBS

40

2

WBS

A deliverable-oriented

hierarchical decomposition

of project work:to achieve

1. PROJECT OBJECTIVES

2. PRODUCE NEEDED

DELIVERABLES

to organize and define

TOTAL PROJECT SCOPEWork outside WBS is outside

the scope of the project


Create WBS Creating WBS

WBS

Each descending level provides

40

3

Each descending level provides

increasingly detailed definition

of project work

Planned work at lowest level

WBS Components (work package)

is:

- Scheduled

- Cost estimated

- Monitored

- Controlled

Helps stakeholders view

Project Deliverables


Create WBS

40

4

PROCESS OF SUBDIVIDING

MAJOR PROJECT DELIVERABLES(AS IDENTIFIED IN SCOPE STATEMENT)

into

SMALLER, MORE MANAGEABLE

COMPONENTS UPTO

WORK PACKAGE LEVEL


Create WBS

40

5

PURPOSE

1. IMPROVES accuracy of time, cost, and

resource estimation

2. DEFINES a baseline for measuring and

controlling performance!

3. FACILITATES unambiguous responsibility

assignments!


Create WBS

40

6

DELIVERABLES

FINAL DELIVERABLE (external deliverable)To be delivered to the customer

Subject to customer/ sponsor approval

BASED ON PREDEFINED ACCEPTANCE CRITERIA


Create WBS

40

7

DELIVERABLES

ORGANIZATIONAL DELIVERABLEEXPECTED BY SPONSOR/ PERFORMING ORGANIZATION

By product of performing project

(example: trained engineers, etc.)


Create WBS

40

8

DELIVERABLES

PROJECT MANAGEMENT DELIVERABLEFOR SUCCESSFUL MANAGEMENT OF THE PROJECT

(PROJECT CHARTER, SCOPE STATEMENT,

WBS, SCHEDULE,

BUDGET, STATUS REPORTS, ETC.)


Create WBS

40

9

DELIVERABLES

INTERIM DELIVERABLECREATED AS PART OF PRODUCT DEVELOPMENT LIFE CYCLE/

PROJECT MANAGEMENT LIFE CYCLE

( TO ENABLE DEVELOPMENT OF FINAL DELIVERABLES)


Create WBS Sample deliverable chain

41

0

Project

Start

Project management deliverable

Interim

deliverable

Interim

deliverable

Interim

deliverable

Interim

deliverable

Organizational

deliverable

FINAL

deliverable

FINAL

deliverable

CUSTOMER


Create WBS

DELIVERABLES ARE COMPLETE ONLY WHEN ACCEPTED

HANDS HANDSACCEPTED

41

1

Interim

deliverable

Interim

deliverable

FINAL

deliverable

HANDS

OFF

HANDS

OFFINSPECTED INSPECTED

ACCEPTED

IF

NOT OK?

IF

NOT OK?

REWORK REWORK


Create WBS

Increases Causes

41

2

Increases final project cost due to inevitable changes that spoil project rhythm

Increases

Project Time

IMPACT OF

POOR WBS

Causes

Rework

Lowers

productivity

Lowers

Moraleof

workforce


Create WBS process overview

41

3

� Organizational

process assets

� Scope Statement

� Requirements

documentation

INPUTS TOOLS &

TECHNIQUES

� Decomposition

OUTPUTS

�Work Breakdown

Structure

�WBS dictionary

� Scope baseline

� Project document

updates

ILLUSTRATIVE WBS Template (for Defense Material Items) Aircraft

System

Project Test &Training Data

Air Support Facilities


41

4

Project

Management

Test &

Evaluation Training Data

Air

Vehicle

Support

Equipment Facilities

Systems

Engineering

Management

Supporting

PM Activities

Technical

Orders

Equipment

Training

Facilities

Training

Services

Training

Engineering

Data

Management

Data

Intermediate

Level

SE

Organizational

Level

SE

Depot

Level SE

Base

Buildings

Maintenance

Facility

Mock-ups

Operational

Test

Developmental

Test

Test

Airframe Engine Communication

system

Navigation

system

Fire control

system

Decompositionprocess of breaking down major project deliverables or sub-deliverables into smaller, manageable components


Create WBS

41

5

into smaller, manageable components until the they are defined to the work package level.

WORK PACKAGE LEVEL is the point at which cost, duration, and resources can be reliably estimated, and supports later development project of management activities.


Performing decompositionKEY POINTS

Create WBS

41

6

1. Different deliverables may require different levels of decomposition to arrive at a work package stage:

a) SOME deliverables require decomposition

to the next level only.

b) OTHERS require decomposition to more

levels.



Create WBS

41

7

2. Decomposition of work to lower levels of details ENHANCES the ability:

- to plan

- to manage

- to control THE WORK



Create WBS

41

8

TOOLS &

TECHNIQUES

�Decomposition

Beware of excessive decomposition

Nonproductive

management

effort

Inefficient

Use of

Resources

Decreased

Work

Efficiency

Balance between too little and too much



Create WBS

41

9

3. The level of detail for work packages varies with:

project size

project complexity

4. Decomposition is difficult for a deliverable or subproject that will be produced FAR INTO THE FUTURE!

TOOLS &

TECHNIQUES

�Decomposition


Performing decomposition

KEY POINTS

Create WBS

42

0

5. Before developing details of the

WBS, the project management team

must wait until the deliverable or

subproject is CLARIFIED!

THIS IS CALLED ‘ROLLING WAVE

PLANNING’

TOOLS &

TECHNIQUES

�Decomposition



Create WBS

42

1

6. While performing decomposition, think through entire project.

Think deliverables.

Think with the end in mind.

Think through the production of deliverables.

Have A VISION OF FINAL PRODUCT formulated in your mind.

TOOLS &

TECHNIQUES

�Decomposition


PERFORMING DECOMPOSITIONCreate WBS

42

2

TOOLS &

TECHNIQUES

�Decomposition

“Mastering it is critical to

Proper Scope Definition"



THE STEPS

Create WBS

42

3

THE STEPS

STEP ONE

Identify major deliverables (including

project management deliverables)

and associated work by analyzing

detailed project statement.

TOOLS &

TECHNIQUES

�Decomposition

Expert

Judgment

Helps

identify

ALL THE WORK

(including Project

Management Deliverables,

Contracted Deliverables)



THE STEPSSTEP TWO

Structure and organize WBS.

Create WBS

42

4

Structure and organize WBS.

Major deliverables must correspond the

way project will be organized in reality.

It may take various forms:

- Using major deliverables and subprojects as level 1

- Using subprojects (external to project team)

- Using phases of the project life cycle as level 1

- Using different approaches within each branch of WBS

TOOLS &

TECHNIQUES

�Decomposition

PERFORMING DECOMPOSITION: slide AUsing major deliverables and subprojects as level 1 Using subprojects (external to project team)

Project

Phase 1 Phase 2 Deliverable 3 Subproject n Subproject 4

42

5

Deliverable 2.2Deliverable 2.1 Deliverable 2.3

Deliverable 2.2.2Deliverable 2.2.1

Work Package

2.2.1.1

Work Package

2.2.1.2

Work Package

2.2.1.3

Subproject 2.2.2.1

Subproject 2.2.2.2

Work Package

2.2.2.2.1

Work Package

2.2.2.2.2

Work Package

3.1

Work Package

3.2

Work Package

3.3

Work Package

3.4

Deliverable 4.1 Deliverable 4.m

Deliverable 4.1.1 Deliverable 4.1.2 Deliverable 4.1.x

Work Package

4.1.2.1

Work Package

4.1.2.2

Work Package

4.1.2.3

PERFORMING DECOMPOSITION: slide BUsing phases of the project life cycle as level 1

Software Product

Release 5.0

Product

Requirements

Detail

DesignConstruct

INTEGRATION &

TEST

Project

Management

42

6

Requirements DesignConstruct

TESTManagement

PLANNING

MEETINGS

ADMINISTRATION

SOFTWARE

USER

Documentation

Training Program

Materials

SOFTWARESOFTWARE

USER

Documentation

Training Program

Materials

Training Program

Materials

USER

Documentation

SOFTWARE

USER

Documentation

Training Program

Materials

Aircraft

System

Project Test &Training Data

Air Support Facilities

PERFORMING DECOMPOSITION: slide CUsing different approaches within each branch of WBS

42

7

Project

Management

Test &

Evaluation Training Data

Air

Vehicle

Support

Equipment Facilities

Systems

Engineering

Management

Supporting

PM Activities

Technical

Orders

Equipment

Training

Facilities

Training

Services

Training

Engineering

Data

Management

Data

Intermediate

Level

SE

Organizational

Level

SE

Depot

Level SE

Base

Buildings

Maintenance

Facility

Mock-ups

Operational

Test

Developmental

Test

Test

Airframe Engine Communication

system

Navigation

system

Fire control

system



THE STEPS

STEP THREE

Create WBS

42

8

STEP THREE

Decompose each upper WBS level

deliverable into its fundamental

components.

These components are defined in terms

of “how the work of the project will

actually be accomplished, performed,

and managed”.

The components of WBS represent verifiable, products, results, or

services.

TOOLS &

TECHNIQUES

�Decomposition



THE STEPSSTEP THREE (CONTINUED)

Create WBS

42

9

STEP THREE (CONTINUED)

Now, the project team should judge if it is possible to adequately estimate time and cost if at this level of decomposition (different deliverables may require different levels of decomposition).

If yes, then decomposition is complete, but before treating it final, you must put it to pass test for correctness of decomposition as detailed in step FIVE.

TOOLS &

TECHNIQUES

�Decomposition



THE STEPSSTEP FOUR

Develop and assign identification codes to

Create WBS

43

0

Develop and assign identification codes to each component of WBS (a unique identifier):

1) generally a number associated with the

organization’s financial system.

2) help hierarchical summation of costs

and resources, and also help tracking

them.

3) known as code of accounts or chart of

accounts.

TOOLS &

TECHNIQUES

�Decomposition



THE STEPS

Create WBS

43

1

STEP FIVE

CORRECTNESS OF DECOMPOSITION

This is a very important step!

TOOLS &

TECHNIQUES

�Decomposition



THE STEPS

STEP FIVE

43

2

please check:

1. Whether each component (work package) can be accurately budgeted, scheduled, and assigned to the concerned person, team, or department responsible for its successful

completion?

If no, then you need to make necessary revisions to ensure proper management

control.

TOOLS &

TECHNIQUES

�Decomposition



THE STEPS

STEP FIVE

43

3

STEP FIVE

TESTING CORRECTNESS

OF DECOMPOSITION

2. Whether decomposition of each

deliverable is sufficient for its

successful completion?

If no, then you should add, delete, or

refine the components.

TOOLS &

TECHNIQUES

�Decomposition


WBS

Congratulations!

You have done great job!

OUTPUTS

43

4

You have done great job!

You have mastered the art of making WBS.

WORK BREAKDOWN STRCUTURE

a deliverable-oriented grouping of project

components that organizes and defines the

total scope of the project.

�Work Breakdown

Structure�WBS dictionary

� Scope baseline


updates


WBS

IS THE FOUNDATION uponOUTPUTS

43

5

which project is built.

ALL planning and controlling

depends on WBS

�Work Breakdown


� Scope baseline


updates


CHARACTERISTICS OF WBS

OUTPUTS

43

6

GRAPHICAL PICTURE of the

hierarchy of the project.

VISUALIZES the entire

project.

�Work Breakdown


� Scope baseline


updates



- Each descending level progressively elaborates the OUTPUTS

43

7

progressively elaborates the deliverables into their detailed components.

- Serves as scope baseline. Identifies all work to be performed. Work not in WBS is outside the project scope.

�Work Breakdown


� Scope baseline


updates


CHARACTERISTICS OF WBS( CONTINUED)

- Creates a common understanding OUTPUTS

43

8

- Creates a common understanding of project scope among the stakeholders.

- Unstructured list of activities doesnot form WBS.

- Can be used as template for otherprojects.

�Work Breakdown


� Scope baseline


updates


CHARACTERISTICS OF WBS(continued)

BREAKS DOWN the project work

into work packages that

OUTPUTS

43

9

into work packages that

1) Can be realistically estimated

2) Can be completed quickly

3) Have no logic for further

division

4) Can be completed without

interruption

5) Have meaningful conclusion

and deliverable.

�Work Breakdown


� Scope baseline


updates



(continued)OUTPUTS

44

0

- CREATED with help of the

team

- HELPS prevent changes and

work slipping through the

cracks

�Work Breakdown


� Scope baseline


updates



- Gets team buy-in and builds the OUTPUTS

44

1

- Gets team buy-in and builds the team

- Determines proof of need for staff, cost and time

- Facilitates communication and cooperation between and

among the stakeholders

�Work Breakdown


� Scope baseline


updates



- Each element at each level of the WBS is assigned a unique identifier.

OUTPUTS

44

2

assigned a unique identifier.

- This unique identifier is generally a number associated with the organization’s financial system.

- These identifiers help hierarchical summation of costs and resources, and also help tracking them.

- These identifiers are known as code of accounts or chart of accounts.

�Work Breakdown


� Scope baseline


updates



Some project managers choose

to note milestones on their WBS. OUTPUTS

44

3

to note milestones on their WBS.

A milestone is a major

accomplishment in a project.

EXAMPLE: Completion of a deliverable

Milestones serve as check points to

determine progress.

IN MOST CASES, higher levels of

WBS can be flagged as milestones.

�Work Breakdown


� Scope baseline


updates



The items at the lowest level of OUTPUTS

44

4

The items at the lowest level of

WBS are called Work Packages.

Work packages can be easily

assigned to individuals, with clear

accountability and reasonability

for completing the assignment.

�Work Breakdown


� Scope baseline


updates



Work packages may be

44

5

Work packages may be

subdivided in a subproject

work breakdown structure

when some scope of work

is assigned to another

organization


COST ACTIVITY

Create WBS

44

6

WBS

COST

ESTIMATING

COST

BUDGETING

ACTIVITY

DEFINITION

RESOURCE

PLANNING

Risk management planning


WBS dictionary

OUTPUTS

44

7

WBS DICTIONARY(COMPANION DOCUMENT TO WBS)

DETAILED CONTENTS OF WBS components,

including work packages and control accounts.

For each component:

1. A code of account identifier

2. SOW

3. Responsible organization

4. List of schedule milestones

5. Contract information

�Work Breakdown

Structure

�WBS dictionary� Scope baseline


updates


WBS dictionary(continued)

WBS DICTIONARYOUTPUTS

44

8


For each component:

6. Quality requirements

7. Technical references ( facilitate work performance)

8. List of schedule milestones

9. Charge number for a control account

�Work Breakdown

Structure



updates



WBS DICTIONARY

Create WBS

OUTPUTS

44

9


For a work package:

10. List of schedule activities

11. Needed resources

12. Cost estimate

�Work Breakdown

Structure



updates



OUTPUTS

45

0


EACH WBS COMPONENT

CROSS-REFERENCED

TO

OTHER WBS COMPONENTS

�Work Breakdown

Structure



updates


SAMPLE

WBS

SAMPLE

WBSGLASS PLANT

PROJECT

45

1

EARLIER

PHASES

DESIGN

PHASE

CONSTRUCTION

PHASE

LATER

PHASES

PROJECT

MANAGEMENT

CIVIL

DRAWINGS

Architectural

Drawings

Structural

Drawings

Mechanical l

Drawings

Electrical

Drawings

Instrumentation

Drawings

CIVIL

CONSTRUCTION

STRCUTURAL

CONSTRUCTION

MECHANICAL

WORK

ELECTRICAL

WORK

INSTRUMENTATION

WORK

PROCESS

COMPUTERS/EQPTS.

PLANNING

MEETING

ADMINISTRATION


SAMPLE

WBS

SAMPLE

WBSToy project

45

2

REQUIREMENTS

DEFINITION

DESIGN

SPECIFICATIONS

PROGRAM

MODULES

PROJECT

MANAGEMENT

GAME

REQUIREMENTS

SOFTWARE

REQUIREMENTS

DEFINE

CHARACTERS

DETERMINE

LANGUAGE

DEFINE

SYSTEMS

SOFTWARE

DESIGN

HARDWARE

DESIGN

DESIGN

SCREENS

DESIGN

USE CASES

DESIGN

SPEAKERS

DESIGN

CASE

DEFINE

INSTRUMENTS

CODE

REQUIREMENTS

TESTING

REQUIREMENTS

DESIGN

MODULE 1

PROGRAM

MODULE 1

DESIGN

UNIT TEST

DESIGN

SYSTEM TEST


SAMPLE

WBS

SAMPLE

WBSOS ROLLOUT

45

3

TRAINING TESTING ROLL OUTPROJECT

MANAGEMENT

DEVELPOMENT

COURSEWARE

WBT

HANDOUTS

TUTORIALS

PLANNING

SCENARIO

SIMULATIONS

PILOTS

LAB

PLANNING

MEETING

ADMINISTRATION

DOCUMENTATION

IT

DEPARTMENT

SALES

AA’s

EDUCATION

HUMAN

RESOURCE

ACCOUNTING

COURSEWARE

ISSUES

KNOWLEDGE

MANAGEMENT

VERSIONING

OPERATIONS


SAMPLE

WBS

SAMPLE

WBSABC CARGO

LOGON PROJECT

BASIC

DESIGN (H) HARDWARE FABRICATION

SITE

OPERATIONS

Project

Management PURCHASE

SOFTWARE

SPECS (L)

45

4

DESIGN (H) OPERATIONS Management

DESIGN

(J)

DRAWINGS

(K)PART B

DRAWINGS

(P)

FINALINSTALLATION

(Y)

TEST

(Z)

SOFTWARE

PART A

DESIGN

(I)

DRAWINGS

(O)

SPECS (L)

ASSEMBLY

(U)

PART A

TEST

(W)

ASSEMBLY

(V)

TEST

(X)

PART B

PURCHASE

(N)

DELIVERY

(S)

PURCHASE

(M)

DELIVERY

(R)

PURCHASE

(Q)

DELIVERY

(T)

WORK

PAKCAGES

(H)

through

(Z)


Scope baseline

Scope baseline consists of three

Documents:OUTPUTS

45

5

Documents:

1) Scope statement

2) WBS

3) WBS dictionary

�Work Breakdown

Structure

�WBS dictionary

� Scope baseline� Project document

updates

This baseline will be used to

measure our scope performance!



If approved change requests result

from this process, then theOUTPUTS

45

6

from this process, then the

requirements document is updated

to reflect these approved changes.

�Work Breakdown

Structure

�WBS dictionary

� Scope baseline


updates


After planning in the area of scope, we talk

about planning in the area of time.

45

7

about planning in the area of time.

The result of planning in the area of time gives us schedule baseline.

First we will have a brief on time

management and then we will see all the

processes helping us to make a realistic and

dependable schedule!

processes

1) Define activities


45

8

1) Define activities

2) Sequence activities

3) Estimate activity resources

4) Estimate activity durations

5) Develop schedule

6) Control schedule

Planning

Process

Group


Process group

Purpose?


45

9

Purpose?

Timely completion

of the project.

Please note

Some practitioners distinguish the printed project


46

0

schedule from the schedule data and calculations

to make schedule- by referring to the scheduling

engine populated with project data as schedule

model!

But in general practice both are referred as

Schedule! So, we will use the term schedule

Please note

On some projects, smaller in scope, all schedule


46

1

On some projects, smaller in scope, all schedule

planning activities are so tightly linked that they

are taken to be one single process- so that

These can be done by a person in short time!

Please note

No process has been mentioned for making


46

2

No process has been mentioned for making

schedule management plan but it is necessary.

So, we will presume that as we enter time

management, we make a schedule management

plan that:

a) Selects a scheduling methodology, a tool

scheduling tool (generally PM Software).

Please note

A scheduling methodology defines the rules


46

3

A scheduling methodology defines the rules

and approaches for the scheduling process.

Examples: 1) critical path method

2) critical chain method.

b) Sets a criteria for developing and controlling

the schedule.

It is a subsidiary plan of project management plan

Please note

Schedule Management Plan is a subsidiary plan


46

4

Schedule Management Plan is a subsidiary plan

of project management plan, includes control

thresholds.

It may be formal or informal, highly detailed or

broadly framed, based on the needs of the

project.

Please note

The finalized and schedule is called schedule


46

5

The finalized and schedule is called schedule

baseline that will be used to start and finish

activities and also used to monitor schedule

performance to ensure timely completion of the

project!

What produces schedule?

Answer:


46

6

Answer:

1) Outputs of time management planning

processes,

2) Scheduling methodology,

3) Scheduling tool


Process of

Define Activities

46

7

Process of

�Identifying the specific actions to be performed

to produce project deliverables at the lowest

level in WBS (work packages).

�Therefore we decompose work packages into

activities needed to complete them!


Activities

46

8

� Provide a basis for estimating, scheduling,

executing, and monitoring and controlling the

project work.

� We should define and plan activities in order to

achieve project objectives.


IMPACT OF ACTIVITIES ON

Activities

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9

IMPACT OF ACTIVITIES ON

PROJECT OBJECTIVES

profound impact because:

Activities consume resources, time, produce

Deliverables,

and determine quality


Define Activities process overview

47

0

� Scope baseline

� Enterprise


� Organizational process

assets

INPUTS TOOLS &

TECHNIQUES

� Decomposition

� Templates

� Rolling wave planning

� Expert judgment

OUTPUTS

� Activity list

� Activity attributes

� Milestone list


1) Scope baseline (Scope Statement WBS and

WBS dictionary)

Define Activities-Inputs

47

1


Provides us information on

- Project deliverables

- Constraints (schedule milestones with imposed

completion dates).

- Assumptions (work hour per week, time of the

year that the construction work will be done)


WBS: MAIN INPUT

The work packages from WBS are decomposed


47

2

The work packages from WBS are decomposed

to arrive at the required activities to be performed

on the project.

WBS dictionary

Provide work package descriptions that guide

development of activities for each work package


2) Enterprise Environmental Factors That can be

considered here include:

- Project Management Information System (PMIS)


47

3

- Project Management Information System (PMIS)

3) Organizational Process Assets

- formal/informal activity-related policies,

procedures and guidelines

- historical information on activity list used by

similar previous projects.


DECOMPOSITION

The work packages are subdivided

into smaller and more manageable TOOLS &

Define Activities

47

4

into smaller and more manageable

components (schedule activities).

The process of decomposition is the

same as we discussed during create

WBS, except that the output in this

case is activities instead of

deliverables.

TOOLS &

TECHNIQUES

� Decomposition� Templates

� Rolling wave planning

� Expert judgment


The WBS, WBS dictionary, and activity list

can be developed either sequentially or

47

5

concurrently.

Involving team members can lead to better

and more accurate results!


TEMPLATES

� an activity list or a portion of an activity list

“Define Activities”

47

6

� an activity list or a portion of an activity list

from a previous project. Related activity

attributes info in the templates also helps.

� Templates can help identify typical

schedule milestones!


Rolling wave planningSchedule activities exist at various

levels of detail in the project lifeTOOLS &

Define Activities

47

7

levels of detail in the project life

cycle. More detailed for work

packages to be accomplished in the

near term. They are less detailed for

the ones to be performed far in the

future. This leads to progressive

detailing.During strategic planning,

activities kept a at milestone level due

to little information.

TOOLS &

TECHNIQUES

� Decomposition

� Templates

� Rolling wave

planning� Expert judgment

� Planning component


Rolling wave planning

TOOLS &Rolling wave planning is

“progressive elaboration

Define Activities

47

8

TOOLS &

TECHNIQUES

� Decomposition

� Templates

� Rolling wave

planning� Expert judgment

� Planning component

“progressive elaboration

planning.” Work to be done in

near term is planned in details

at lower level of WBS. And the

one that is to be done far in

future is planned at higher

levels in WBS.


Expert judgment

Project team members/other

Experts (experienced and skilledTOOLS &

Define Activities

47

9

Experts (experienced and skilled

in developing detailed scope

statements, WBS and

schedules) provide expertise in

defining activities.

TOOLS &

TECHNIQUES

� Decomposition

� Templates

� Rolling wave

planning

� Expert judgment� Planning component

Define Activities process: Outputs

ACTIVITY LIST

Consists of all the schedule activities to be

48

0

Consists of all the schedule activities to be performed to complete the project.

Includes the activity identifier and a scope of work description for each activity in sufficient detail to help team members understand what work is required to be accomplished!


Activity attributes

Extend the description of each activity by

identifying multiple components associated with

48

1

identifying multiple components associated with

each activity.

Please note: components for each activity evolve

over time. During initial stages of the project they

include: activity ID, WBS ID, and activity name.


Activity attributes

When completed they may include:

48

2

1) activity codes, activity descriptions,

2) predecessor, successor, logical relationships,

3) leads and lags,

4) resource requirements,

5) imposed dates,

6) Constraints, and assumptions.


Question: What is the use of activity attributes?

Answer:

1) Used to identify the person responsible,

48

3

1) Used to identify the person responsible,

geographical area, and activity type such as level of effort (LOE), discrete effort, and apportioned effort.

2) Used for schedule development.

3) Used for selecting, sorting, ordering in various ways within reports.


Activity attributesIdentify attributes associated with each schedule activity:

1) Activity identifier

template

48

4

1) Activity identifier

2) Activity codes

3) Activity description

4) Predecessor/successor activities

5) Logical relationships

6) Leads and lags

7) Resource requirements

8) Imposed dates, constraints, assumptions


Activity attributesActivity attributes also include:

8) Person responsible for the workOUTPUTS

Define Activities

template

48

5

8) Person responsible for the work

9) Geographical area/place of work

10) Schedule activity type like level of

effort (LOE), discrete effort, and

apportioned effort.

� Activity list

� Activity attributes� Milestone list


Milestone listIdentifies all milestones and indicates:

- Mandatory milestones (in contract)OUTPUTS

Define Activities

48

6

- Mandatory milestones (in contract)

- Optional milestones (as per

project requirements/historical

information)

� Milestones list is a component of

project management plan

� Activity list


�Milestone list

Milestones are used in

schedule model.


Sequence Activities

48

7

IDENTIFYING AND DOCUMENTING

INTERACTIVITY LOGICAL RELATIONSHIPSAmong schedule activities

FOR DEVELOPMENT OF

A REALISTIC AND ATTAINABLE SCHEDULE

LATER


Sequence Activities

48

8

The schedule activities can be

logically sequenced with proper

precedence relationships

and leads and lags

for developing an achievable

and realistic schedule later.


Sequence Activities

48

9

Feeling uneasy about sequencing the whole host ofproject activities?

Don’t worry, you don’t have to do it all manually!

You can choose to:

Use Project management software

Do it by manual method

Or use combination of both


Sequence Activities process overview

INPUTS TOOLS & OUTPUTS

49

0

� Project scope statement

� Activity list


� Milestone list


assets

INPUTS TOOLS &

TECHNIQUES

� Precedence

diagramming

method (PDM)

� schedule network

templates

� Dependency

determination

� Applying leads and

lags

OUTPUTS

� Project Schedule

Network Diagrams


updates



provides product scope description that

“Sequence

Activities”

process:

INPUTS

49

1

provides product scope description that

contains:

Product characteristics that have direct

impact on activity sequencing.

Examples:

1) Physical layout of the facility to be built.

2) Subsystem interfaces on a software project.



no doubt these effects are

“Sequence

Activities”

process:

49

2

no doubt these effects are

apparent in the activity

list, but product scope

description is reviewed for

ensuring accuracy.

process:

INPUTS


Activity list is obviously the main input.

Activity attributes may describe a necessary

“Sequence

Activities”

process:

INPUTS

49

3

Activity attributes may describe a necessary

sequence of activities or defined predecessor or

successor relationships.

Milestone list helps sequence with regard to meeting

milestones.

Organizational process assets provide scheduling methodology data from project files.


Precedence diagramming method (PDM)

1) Used in Critical Path Methodology (CPM).

49

4

1) Used in Critical Path Methodology (CPM).

2) Shows activities in rectangle boxes linked by

arrows showing dependencies.

3) These boxes are called nodes.

4) Therefore, this technique is also termed as

activity-on-node (AON).

5) Most software programs use it these days.


Precedence diagramming method (PDM)

49

5

START

D E

B

G H C

FA

END

ACTIVITY DEPENDENCY

Start

D Start

A Start

F D, A

E D

G F, E

B F

H G

C H

End C, B


PDM is defined by four typesof precedence relationships:

FS network (AOA) Precludes those activities which

49

6

of precedence relationships:

� Finish to start (FS)

� Finish to finish (FF)

� Start to start (SS)

� Start to finish (SF)

Precludes those activities which

can be started when their

predecessors are partially complete.

PDM Allows for various situations of

interactivity relationships.

It also allows for TIME LAGS in

these relationships:

- Lag between two starts

- Lag between two finishes, or

- Lag between a start and a finish


PDM precedence relationships

Finish to Start

49

7

� Finish to start

The successor activity can begin only when predecessor activity completes.

This is the most commonly used relationship.

A B

Finish to Start

Furniture

move-inEmployee

move-in


PDMprecedence relationshipsFinish to Finish

49

8


� Finish to finish

The successor activity can

complete only when

predecessor completes.

A B

Finish to Finish

Lay asphalt Paint

parking

lines


PDMStart to Start

49

9

PDM


� Start to start

The successor can start

only when predecessor

starts.

A B

Start to Start

Furniture

move-in

Employee

move-in


PDMprecedence relationshipsStart to Finish

50

0


� Start to finish

The successor can finish only when predecessor starts.

This relationship is rarely used.

A B

Start to Finish

Test new

System

Phase-out

Old system


PDM

dependencies such as Start

50

1

dependencies such as Start to start, finish to finish, and start to finish have not been implemented consistently.

Therefore, if you use them on your project management software, they can result in unexpected outcomes.


Schedule Network templatesSIMILAR networks from your past

TOOLS &

TECHNIQUES

50

2

SIMILAR networks from your past projects can be used to expedite preparing current project’s network

MAY use it for the entire project or for a portion of it. The companies doing same type of projects over the years have standardized the networks based on their experience.

Portions of the such schedule

network diagrams are called

FRAGMENT NETWORK or

SUBNETWORK.

TECHNIQUES

� Precedence

diagramming

method (PDM)

� Schedule network

templates� Dependency

determination

� Applying leads and

lags


Schedule Network templates

50

3

Schedule Network templatesWhen are Subnetwork templates especially useful?

Answer: When a project includes identical nearly identical

deliverables.EXAMPLES

1) Coding program modules on a software project

2) Clinical trials on pharmaceutical project

3) Start-up phase of a development project

4) Floors on a high-rise building


1) Mandatory dependencies(hard logic)

determined by the type of work being

TOOLS &

TECHNIQUES

50

4

determined by the type of work being performed.

offer physical limitations as the nature of work itself dictates the order of activities.

In the Century Cotton Mills example, you can’t prime the walls until scraping is done before.

In ECE Industries example, you can not make control board until printed circuit boards are populated and wave-soldered.

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency

determination� Applying leads and

lags


2) Discretionary dependencies (soft logic, preferred logic, preferential logic)

TOOLS &

TECHNIQUES

50

5

logic, preferred logic, preferential logic)

DETERMINED by the project management team.

THESE dependencies allow the activities to happen in a preferred order because of best practices in the application area.

SOMETIMES, specific sequence is desired due some unusual aspect of the project, besides alternative sequences being available.

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency


lags


3) External dependencies

are external to the project and depend on relationship between

TOOLS &

TECHNIQUES

50

6

depend on relationship between project activities and non-project activities.

Examples

1) Testing schedule activity on a

software project may depend

on delivery of hardware from

an outside source

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency


lags


3) External dependencies

are external to the project and depend on relationship between

TOOLS &

TECHNIQUES

50

7

depend on relationship between project activities and non-project activities.

Examples

2) Governmental environmental

forecasts may need to be

held before site preparation

on a construction project.

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency


lags


Leads and lags

LEADTOOLS &

TECHNIQUES

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8

LEAD

an overlap in the relationship

allowing the successor activity to be

scheduled earlier than the

predecessor will generally allow.

A

B

Lead subtracts time

Example

In a FS relationship with 5-

day lead, the successor

activity begins 5 days

before the predecessor has

finished

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency

determination

� Applying leads

and lags


Leads and lagsLEAD

ExampleTOOLS &

TECHNIQUES

50

9

A

B

Lead subtracts time

Example

A technical writing team can

begin writing the second

draft of a large document

(successor activity) 15 days

before they complete

writing the entire first draft

(predecessor activity).

TECHNIQUES

� Precedence

diagramming

method (PDM)


templates

� Dependency

determination

� Applying leads

and lags

This can be done by finish to

start relationship with 15 days

lead time!

Leads and lagsLAG

a gap in the relationship causes


51

0

a gap in the relationship causes

the successor activity to be scheduled

later than the predecessor will

generally allow.Example

In Century Mills, there is a 3-day delay

between Priming and Painting. The

painting activity begins 3 days after

the predecessor has finished, for primer

to dry up.

A

B

Lag adds time


PROJECT Schedule NETWORK DIAGRAMSSchematically show project

OUTPUTS

51

1

� Schematically show project activities along with their dependencies

� May be drawn manually or on computer, using PDM or ADM

� May incorporate full project details ,or just one or more summary details- called Hammocks.

OUTPUTS

� Project Network

Diagrams� Project documents

updates


PROJECT NETWORK DIAGRAMS� A summary description of

Sequence Activities

OUTPUTS

51

2

� A summary description of sequencing approach accompanies them

� Unusual sequences, if any, are properly narrated

� A network diagram is traditionally known as PERT Chart, however PERT (program evaluation and review technique was a particular type of network diagram using weighted average.

OUTPUTS

� Project Network

Diagrams� Project documents

updates


ACTIVITY LIST UPDATESWhile preparing network diagrams,

Sequence Activities

Project document

updated:

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3

While preparing network diagrams,

we may discover some instances

where certain activities must be

divided or refined in order to show

correct logical dependencies.

This leads to activity list updates to

include approved changes.

updated:1) Activity list updates

2) Activity attributes

updates

3) Risk register

updates


ACTIVITY attributes updates

activity attributes are updated toProject document

updated:

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4

Include:

1) Defined logical relationships

2) Associated leads and lags

If approved change requests resulting from

activity sequencing affect the activity list,

then the related items in activity attributes

are also updated to include these approved

changes!



updates

3) Risk register

updates


Risk register updates

to document critical areas in the

schedule like path of

Project document

updated:

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5

schedule like path of

convergence or divergence or

there may be more than one

critical paths!



updates

3) Risk register

updates


FOR EACH ELEMENT AT LOWEST LEVEL OF WBSWHAT TYPE

OF PHYSICAL

RESOURCES

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6

Estimate Activity Resources

TO PERFORM PROJECT ACTIVITIES

RESOURCES

ARE

REQUIRED?

IN WHAT

QUANTITIES?

WHEN

ARE THEY

REQUIRED?

Closely coordinated with cost estimating!



51

7

Resources are a project’s most important assets.

The project managers are often

faced with the issue of limited resources

Management of resources is as

important as managing

time, cost, quality and scope



51

8

Ability of the project manager to effectively organize

resources can make difference between project

success or failure!

Resources must be planned and coordinated to avoid

common problems of resources non-availability or their

being taken away from the project



51

9

Resource Planning must

be well coordinated with cost estimating.

The quality of resource, their knowledge

of latest techniques of performing

work in their application area,

and their skills will immensely impact the cost



52

0

THE PROCESS OF DETERMINING

1. WHAT PHYSICAL RESOURCES (PEOPLE, EQUIPMENT, MATERIALS)

2. WHAT QUANTITY OF EACH RESOURCE (SHOULD BE USED)

3. WHEN THEY WOULD BE REQUIRED

TO COMPLETE PROJECT ACTIVITIES



process overview

52

1

� Enterprise



assets

� Activity list


� Resource calendars

INPUTS TOOLS &

TECHNIQUES� Expert judgment

� Alternatives

analysis

� Published

estimating data

� Project

management

software

� Bottom-up

estimating

OUTPUTS

� Activity Resource

requirements

� Project Document

Updates

updates

� Resource breakdown

structure

Estimate Activity Resources process: INPUTS

Enterprise environmental factors provide

information on availability and skills of resources.

52

2

information on availability and skills of resources.

Organizational process assets provide

1) policies and procedures regarding staffing,

2) Policies and procedures for rental and

purchases

3) Historical information on resources used in

similar projects.


Activity list identifies activities for which

resources are to be estimated.

52

3

resources are to be estimated.

Activity Attributes developed during “Define

Activities” and “Sequence Activities” processes

provide PRIMARY DATA input for estimating

resources for each activity.


Resource Calendars

Helps us know what resources are potentially

52

4

available (people, equipment, and material)

during planned activity period. Resource

calendars are developed during

Expert judgment helps youAssess inputs to resource planning.

Alternative analysis makes you

Estimate Activity

Resources


52

5

Alternative analysis makes you

identify alternative methods of

accomplishing schedule activities,

Each one needing:1) Different levels of resource

capability/skills

2) Different size/types of machines

3) Different tools (manual or automated)

4) Make or buy decisions


Published estimating datahelps you in estimating resources

for schedule activities.

Estimate Activity

Resources

52

6

for schedule activities.

Many companies trading in

these resources routinely

publish extensive array of:

� Labor trades

� Material

� Equipment

For different countries and different

locations within countries


Project management softwareHelps plan, organize, and manage resource pools and

Estimate Activity

Resources

52

7

Helps plan, organize, and manage resource pools and develop resource estimates.

Sophisticated ones can define:

� Resource breakdown structures

� Resource availabilities

� Resource rates

� Various resource calendars


Bottom-up estimating Involves breaking up the work within a schedule activity into more detail.

52

8

more detail.

Used when a schedule activity can’t be estimated for resource with confidence.

Resource needs of each smaller piece are estimated and then added up to find total resource need for the particular schedule activity as a whole.


Bottom-up estimating The pattern of resource usage may be influenced

Estimate

Activity

Resource

52

9

usage may be influenced by dependencies between activities.

Wherever this applies, we reflect it in the resource requirements of the concerned schedule activities.


Activity resource requirements Identify and describe the types and quantities of resources

Estimate

Activity

53

0

Identify and describe the types and quantities of resources required for EACH SCHEDULE ACTIVITY IN A WORK PACKAGE.

We can find resource requirements for each work package by adding up resource requirements of all its schedule activities.Level of specificity and detail varies

by application area!

Activity

Resources


Activity resource requirements please don’t forget to document:

Estimate

Activity

Resources

53

1

please don’t forget to document:

1) Basis of estimate and

2) Assumptions

made while determining which type of resources are applied, their availability, and what quantities are used!

SCHEDULE DEVELOPMENT PROCESS

DETERMINES WHEN RESOURCES

WOULD BE REQUIRED!

Resources


Project Document updates resource types and quantities for each schedule activity is mentioned in the concerned

Estimate Activity

Resources

53

2

mentioned in the concerned activity attributes.

If approved requested changes result from this process, then activity list and activity attributes are updated to reflect these approved changes!


RBS

Hierarchical structure of the identified resources by

Estimate

Activity Resources

53

3

identified resources by resource category and resource type.


ESTIMATING FUNDAMENTALS?

Estimate Activity Durations

53

4


You should have properly defined scope (WBS).

Many people do not take time to freeze complete

scope of work in the beginning and the scope keeps

getting defined till delivery of the product of the project!

You should have reliable Network Diagram

showing how project will flow from start to finish.



53

5


You should have information on what were estimates

on similar past projects, with errors and omissions.

Additionally, you should also have access to

commercially available estimating databases.


Estimate Activity

Durations

53

6


You should have full understanding of the capabilities of

both human and material resources you are going to use

for performing project activities.



53

7


You must be aware of all the potential risks that may

have negative or positive impact on your estimates. This

is a grey area in many organizations.

We seem to have enough time to do rework than to do it

right the first time. Risks are not fully identified in the

beginning. They are taken to be a way of life.



53

8


Project management software

does the estimating to the extent

it has data with it.

It can never replace your objective

of doing a better job of estimating each time.




53

9


Who should provide inputs for estimates of

duration? In many organizations everybody seem to

offer them!

It is highly risky to accept them from just anybody.

They should be provided only by those people or the

group who are well conversant with the nature of the

concerned schedule activity.



54

0


ONLY the person or group (on the project team) who

is most knowledgeable about the particular activity

should develop or at least approve the estimate.



54

1


Can estimate be accurate and of good quality

(achievable) if done just once?

No, estimate evolves progressively CONSIDERING

THE AVAILABILTY AND RELIABILITY OF DATA, and

it becomes more accurate and reliable only after

due progressive elaboration.



DURATION is the time required for completing an

54

2

DURATION is the time required for completing an

activity. Estimating this duration is actually

approximating how many work periods (hours, days,

weeks, months), it will take.

In real life, while performing an activity, you have non-

work periods also, like Sundays and other holidays.

Your estimation should not ignore them. You need to

use both Project calendar and Schedule activity

resource calendar!



54

3

Using alternative work period calendar, almost all

scheduling software take care of this.

Total activity duration = work periods + non-work

periods.



Total project duration is properly arrived at only

54

4

Total project duration is properly arrived at only

after schedule development. However, schedule activity

duration estimating gives a preliminary idea of total

project duration and serves as an important input to

creating schedule.The project team is free to choose to estimate project

duration:

1. As a probability distribution by using probabilistic methods

2. As a single point estimate using deterministic methods


PROCESS OF


54

5

PROCESS OF

Estimating schedule activity durationsFor inputs to schedules

Using information:

a) Schedule activity scope of work

b) Required resource types

c) Estimated resource quantities

d) Resource calendars

e) Resource capabilities

Please

remember

this!


Estimate Activity Durations process overview


54

6

� Enterprise



assets


� Activity list



requirements

� Resource calendar

INPUTS TOOLS &

TECHNIQUES

� Expert judgment

� Analogous

estimating

� Parametric

estimating

� Three point

estimates

� Reserve analysis

OUTPUTS

� Activity duration

estimates


updates



Provide Estimate

54

7

Provide

1) duration estimating databases and other reference data,

2) Productivity metrics

3) Published commercial information!

Estimate

Activity

Durations



Provide Estimate

54

8

Provide

1) Historical duration information,

2) Project calendars,

3) Scheduling methodology, and

4) Lessons Learned.

Estimate

Activity

Durations

Estimate Activity Duration INPUTS

Project scope statementProvides constraints and assumptions that we do

consider while estimating durations.

54

9

consider while estimating durations.Examples

1) Constraint:

- Available skilled resource

- Contract terms and conditions

2) Assumptions:

- existing conditions

- Availability of information, and

- Length of the reporting periods.


Activity list and activity attributes

Estimate

55

0

Serve as primary inputs. Estimate

Activity

Durations


Estimate

Activity resource requirements

resources assigned to the

55

1

Estimate

Activity

Durations

resources assigned to the schedule activity and their availability significantly influences duration

Example: If a schedule activity needs two engineers to work together to complete it, and we get only one, then its duration will double.


Activity resource requirements

What happens if additional

Estimate

Activity

Durations

55

2

What happens if additional resources (than required) are added or lower skilled one are applied to the schedule activity?

Answer: Efficiency reduces! Work production increase becomes less than the equivalent increase in percentage of resources!!


Resource calendar

composite resource calendar details:Estimate

55

3

details:

- Availability

- Capability

- Skills of HR RESOURCES

- Type,quantity, availability and capability of material and equipment resources

They can greatly influence

duration and hence considered.

Estimate

Activity

Durations


Expert judgmentteam members rely on their knowledge and experience, but these estimates can be very

Estimate

Activity

Durations

55

4

experience, but these estimates can be very risky:

1) Many factors influence activity durations,

such as resource capability, resource

levels required/assigned, etc., that need to

be carefully considered.

2) May be subject to bias, not based on

scientific means.

3) Not based on documented data but simply

on recall.

“Estimate Activity Durations” TOOLS & TECHNIQUES

Expert judgment

Therefore, expert judgment must be combined

with historical information and use as many

55

5

with historical information and use as many

experts as possible.

Expert judgment, guided by historical information,

can provide:

1) Duration estimate or recommended maximum activity durations from similar past projects.

2) Knowledge whether to combine methods of estimating and how to reconcile differences.


Analogous estimating

THE actual duration of a similar activity completed on a previous project to determine the duration of same

55

6

a previous project to determine the duration of same type of activity on the current project.

USED only in early phases of the project (initiation) when we don not have detailed information about the project. Uses historical info and expert judgment!

When analogous estimating is most reliable?

• When previous projects activities are really similar, not just apparently similar

• The people making this kind of estimate have necessary expertise


Analogous estimating

It is a gross value estimation approach,

sometimes adjusted for known differences in

55

7

sometimes adjusted for known differences in

project complexity.

Less costly and time consuming, less accurate

too.

May be applied to total project or its segment

and may be combined with other estimating

methods.


parametric estimatingUses a statistical relationship between historical

data and other variables (square footage in

55

8

data and other variables (square footage in

construction) to calculate an estimate for activity

parameters like cost, budget, and duration.

on a Design Project:

1) number of drawings X labor

hours per drawing

2) cable installation in meters X

labor hours per meter


parametric estimatingUses a statistical relationship between historical data and other variables (square footage in

55

9

data and other variables (square footage in construction) to calculate an estimate for activity parameters like cost, budget, and duration. It

Can provide higher levels of accuracy depending upon sophistication and underlying data built into the model. Parametric estimate can be applied to entire project or its segment and can be used in combination with other techniques.

EXAMPLE


parametric estimating EXAMPLE

Total resource quantities are multiplied by labor hours

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0

Total resource quantities are multiplied by labor hours

per unit of work.

Say, on a design project:

Number of drawings X Number of labor hours per

Drawing

On cable installation project:

Meters of cable X Number of labor hours per meter


Three-point estimatesJust consider how risky are your original single point estimates?

Estimate Activity

56

1

original single point estimates? We can improve the accuracy by finding three-point estimates and then take their average:

1) Most likely tM

2) Optimistic tO

3) Pessimistic tP

Estimate Activity

Durations

TOOLS &

TECHNIQUES


Three-point estimates1) Most likely: duration considering

all resources with their Estimate Activity

56

2

all resources with their

productivity, availability,

dependencies on their

participants, and interruptions.

2) Optimistic: best case of most

likely.

3) Pessimistic: worst case of most

likely.

Estimate Activity

Durations

TOOLS &

TECHNIQUES


Three-point estimatesThe concept originated with the Program Evaluation and Review technique (PERT). PERT uses three

56

3

and Review technique (PERT). PERT uses three estimates to define an approximate range for activity duration: Most Likely, Optimistic, and Pessimistic.

Then, calculates an EXPECTED (tE) activity duration using a weighted average of three estimates:

tE = tO + 4 tM + tP

6


Reserve analysisan additional time (known as time

buffer, reserve, or contingency) Estimate Activity

56

4

buffer, reserve, or contingency)

added to the activity duration or

elsewhere in the schedule as

recognition of schedule risk:

1. A percentage of estimated activity

duration, a fixed number of work

periods, or

2. As developed by quantitative

schedule risk analysis (good)

Estimate Activity

Durations

TOOLS &

TECHNIQUES


Reserve analysisPlease remember!

Estimate

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5

A contingency reserve can be used

completely or PARTIALLY , OR

LATER REDUCED OR

ELIMINATED as you progress and

get more precise information

about the project. Contingency

reserve is also documented with

other related data and

assumptions!!!

Estimate

Activity

Durations


USING Reserve time (contingency)

TWO things prevail:

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6

TWO things prevail:

1. Parkinson's law

Work expends to the available time.

2. Student syndrome

Work is attended only when the deadline

dangles like Damocles’ sword over our

head.


USING Reserve time (contingency)

Estimate

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7

HOW should the time buffers be used?

� Use them too freely and too early and you have nothing left for later when reserves might be critical.

� Be too stingy and you stifle progress, increase risk, and end up with left over reserves that might have to be put to better use.

Estimate

Activity

Durations

TOOLS &

TECNIQUES


USING Reserve time

(contingency)Estimate

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8

HOW should the time buffers be used?

ANSWER

A guideline that must be adopted for allocation of time reserves is to set hard limits as to how much to release in each period of the project.

Estimate

Activity

Durations

TOOLS &

TECNIQUES


Activity duration estimatesActivity duration estimates are

quantitative assessments of the

Estimate

Activity

Durations

OUTPUTS

56

9

quantitative assessments of the

likely number of work periods that

will be required to complete an

activity.

Please note:

Duration estimates do not include

any lags!

OUTPUTS


Activity duration estimatesActivity duration estimates may

include some range of possible results:

Estimate

Activity

Durations

OUTPUTS

57

0

include some range of possible results:

� 2 weeks +/- 2 days to indicate that the activity will take at least eight days and no more than twelve days (assuming 5 day week).

� 15 % probability of exceeding three weeks to indicate a high probability, 85%, that the activity will take three weeks or less.

OUTPUTS




Estimate

Activity

Durations

OUTPUTS

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1


� Assumptions made in developing the

activity duration estimates (skill levels

and availability)

OUTPUTS


ONE OF THE MOST CRUCIAL AREAS

Develop Schedule

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ONE OF THE MOST CRUCIAL AREAS

of

THE PROJECT MANAGEMENT !

It is the basis for

1. Allocating resources,

2. Estimating costs, and

3. Tracking project performance. APPROVED SCHEDULE SERVES AS SCHEDULE BASELINE


“THE KEY WORDS ARE START AND

FINISH DATES!”

Develop Schedule

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3

FINISH DATES!”

Schedules show the timing for work elements

start and finish dates – and denote when events

and milestones take place.

Therefore, schedule development is the process

of determining start and finish dates for project

activities.


Schedule development is an iterative process� Requires that duration estimation and resource

Develop Schedule Please remember this!

57

4

� Requires that duration estimation and resource estimates are reviewed and revised to create an approved schedule

� Continues throughout as:

1) project progresses,

2) project management plan changes, and

3) anticipated risk events occur or disappear as

new risks are identified Please remember this!


Schedule Development

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5

But what if our start and end dates are unrealistic?

Well then, we will never finish

our project as scheduled

and

this by far is

the most common experience!


FREQUENT CAUSES OF PROJECT FAILURE

Develop Schedule

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6


1. Scheduling and allocation of resources

are incorrect.

2. Assignments are not anticipated.

3. Resource skills and capabilities are

unknown.

4. Resources for back up are not available.

Project Time Management:


The problem emerges during planning and continues

through out the project:

Schedule Development

57

7

through out the project:

� Project staff are reassigned and turned over without

readjusting the schedule to allow for the lost time or

the learning curve.

� Resource requirements are not anticipated and

scheduled, and resource issues are addressed only

as they occur.

� There is generally no skill inventory indicating who

is available for the project.


Develop Schedule process overview


assets

INPUTSTOOLS &

TECHNIQUES


OUTPUTS� Project schedule

� Schedule data

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8

assets


� Activity list


� Project schedule

network diagrams

� Activity resource

requirements

� Resource Calendars


estimates

� Enterprise Environmental

Factors


analysis

� Critical path method

� Schedule compression

�What-if scenario

analysis

� Resource leveling

� Critical chain method

� Adjusting leads & lags

� Schedule Tool

� Schedule data

� Schedule baseline

� Schedule Data


Updates

Develop Schedule - INPUTS


Provide project calendar:

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9

A Calendar of working

days/shifts that establish

the dates on which

1) Schedule activities are

worked

2) Schedule activities are idle



Provides constraints and

Assumptions that impact

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Assumptions that impact

development of project schedule.

Constraints FACTORS THAT LIMIT project

Management team’s options when

performing schedule network analysis. Two

major categories of constraints used:

1) Imposed dates

2) Key events or major milestones


Develop Schedule Project scope statement

1) Imposed dates on activity start or

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1

finish dates to occur no earlier than

a specified date or no later than a

specified date.

Most commonly used:

A) Start No Earlier Than (SNET):

B) B) Finish No Later Than (FNLT):

CAN YOU THINK WHY SUCH

CONSTRAINTS ?


Develop Schedule These time constraints

are in response to:� Agreed-upon contract dates

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2

� Agreed-upon contract dates

� a market window on a technology project

� weather conditions for outdoor work

� compliance to government requirements (safety requirements for hazardous projects, or pollution control requirements, etc.)

� supplies form the outside agencies not shown in the project schedule, etc.


Develop Schedule 2. Key events or major milestones:

Project sponsor, customer, or other stakeholders often dictate key

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3

stakeholders often dictate key events and major milestones affecting the completion of certain deliverables.

Once scheduled, these dates become expected. They can be moved only through approved changes!

Milestones are also used to indicate work outside (not shown project database).


develop ScheduleAssumptionsare the factors we have documented so far and taken them true or certain

58

4

so far and taken them true or certain for planning purpose.

We examine them for their impact while developing project schedule.

All endeavors are to be made to ensure that they do not turn out

false and become risks!


We have already discussed and use them for

developing schedule:

- Activity list

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5

- Activity list

- Activity attributes

- Project schedule network diagrams

- Activity resource requirements

- Resource Calendars

- Activity duration estimates


Develop Schedule

TOOLS &

TECHNIQUES

Schedule network analysis

A technique to generate project

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6

TECHNIQUES A technique to generate project

schedule.

Uses a schedule model and various

analytical techniques (CPM, CCM,

what-if-analysis, resource leveling) to

calculate early start and finish

dates, and scheduled start and

finish dates for uncompleted

portions of schedule activities.


Schedule network analysis

Loops and open ends in the

Develop Schedule

TOOLS &

TECHNIQUES

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7

Loops and open ends in the

network diagram are adjusted

before any analytical technique is

applied.

Path convergence/divergence

points are identified and used in

schedule compression or other

analysis.

TECHNIQUES


CPMCalculating theoretical early and late start and finish dates

Develop Schedule

TOOLS &

TECHNIQUES

58

8

and late start and finish dates for project activities (without considering resource limitations).

Indicate the time periods within which the activity could be scheduled (given activity durations, logical relationships, leads and lags and other known constraints ).

TECHNIQUES


CPMCalculated ES and EF and LS and LF dates may not be the

Develop Schedule

TOOLS &

TECHNIQUES

58

9

and LF dates may not be the same on any network diagram. WHY?

Because total float (which gives scheduling flexibility) may be:

1) Positive

2) Negative

3) zero

TECHNIQUES

“Develop Schedule”- TOOLS & TECHNIQUES

CPM

Finding scheduling flexibility on any network path

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Finding scheduling flexibility on any network path

Find positive value of LF-EF or LS-ES

This positive value is called TOTAL FLOAT

TOTAL FLOAT is the amount of time that a schedule

activity can be delayed from its ES date without

delaying the project finish date or violating a schedule

constraint.


Develop Schedule CPM

Critical paths

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1

Critical paths

Have either a ZERO or Negative total float!

Schedule activities on critical path are called “critical

Adjustments to activity durations, logical relationships,

leads and lags, or other schedule constraints are

necessary to make network paths with zero or positive

total float.



Finding FREE FLOAT

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2

Finding FREE FLOAT

When the total float for a network path is zero or

positive, then the free float can be found!

Free float is the amount of time that a schedule activity

can be delayed without delaying the early start date of

any immediately successor activity!



The Critical Path (CP)

In any project is the longest full path of activities

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3

In any project is the longest full path of activities

Any activity on critical path normally has zero float.

Start

D CHE G

A F B

End

4 8 5 7 8

6 7 5

Paths

D, E, G, H, C = 32 Weeks

A, F, B = 18 Weeks

D, F, B = 16 Weeks

D, F, G, H, C = 31 Weeks

A, F, G, H, C = 33 Weeks



Floats (slacks)

Free float

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4

Free float

the amount of time an activity can be delayed without delaying

the early start date of its any successor activities.

Total float

the amount of time an activity can be delayed without delaying

the project completion date.

Project float

the amount of time a project can be delayed without delaying

the externally imposed project completion date required by the

customer or management, or previously committed by the

project manager.



CALCULATING FLOAT1. First, calculate early start and earlyES EF

FORWARD PASS

59

5

finish dates: FORWARD PASS

START

A, 3

END

B, 5 C, 2 D, 7

E, 9 F, 2 G, 4

1 3

ES EF

4 8 12 13 14 20

1 9 10 11 12 15

WE HAVE NOT MARKED THE CRITICAL PATH SO FAR



CALCULATING FLOAT2. Second, calculate late start and late

finish dates: BACKWARD PASS ES EF

BACKWARD PASS

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6

finish dates: BACKWARD PASS

START

A, 3

END

B, 5 C, 2 D, 7

E, 9 F, 2 G, 4

1 3

ES EF

4 84 6

12 13 14 20

1 9 10 11 12 15

LS LF

7 11 12 13 14 20

1 9 10 11 17 20

WE HAVE NOT MARKED THE CRITICAL PATH SO FAR



CALCULATING FLOAT3. Now, calculate the float

ES EF

BACKWARD PASS

FLOAT (F) = LS - ES

59

7WE HAVE MARKED THE CRITICAL PATH HERE

START

A, 3

END

B, 5 C, 2 D, 7

E, 9 F, 2 G, 4

1 3

ES EF

4 84 6

12 13 14 20

1 9 10 11 12 15

LS LF

7 11 12 13 14 20

1 9 10 11 17 20

F = 3 F = 3 F = 0 F = 0

F = 0F = 0 F = 5

FLOAT (F) = LS - ES

OR = LF - EF


CPM

Use of float (slack)

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8

Use of float (slack)

Float is extremely useful for you:

1. It allows better allocation of resources

2. It helps team members juggle multiple projects by

telling them how much time flexibility they have on

each activity they are working on.


PERT just need to know

Program Evaluation and Review

Technique (PERT)

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9

Technique (PERT)PERT was developed for application in projects where there was uncertainty in the nature and duration of the activities. It originated in late 1950s during U.S. Navy’s Polaris Missile System program.

In complex Research and Development projects, there are questions about the kind of research to be done, how long it will take, what stages of development are necessary, and how fast they can be completed- largely because the nature of THE UNCERTAINITY about the exact nature of the final outcomes.


PERT just need to know

PERT

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PERTSuch projects are contracted as new developments unfold and before problems in technology, materials, and processes are identified and resolved.

Hence, the duration of the project is uncertain along with the risk of overrun of target completion date.

So, PERT was developed as a solution to handling uncertainties in estimating activity durations.

BY using three time estimates: Optimistic, Most likely, and Pessimistic.

Pert weighted average =

Optimistic + 4 x Most Likely + Pessimistic

6


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Understanding meaning of three time estimates:

OPTIMISTIC

is the minimum time an activity could take. It is a situation when everything goes well. There is some hope of finishing earlier.

60

2

everything goes well. There is some hope of finishing earlier.

MOST LIKELY

is the normal time to complete the activity, and would occur most frequently if the activity could be repeated.

PESSIMISTIC

is the maximum time an activity could take. The situation where bad luck is encountered at every step.

The pessimistic time includes likely internal problems in

development or fabrication, but not environmental snags such as

fire, power shortages, bankruptcy, strikes, or natural disasters.


PERT: THREE TIME ESTIMATESWHO GIVES THREE TMES ESTIMTES?

You get them from:

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3

You get them from:

1. THE most knowledgeable people who know the difficulties likely to occur and the potential variability in time.

2. THE expert estimators

3. THOSE who will actually perform or manage the activity.

PERT: THREE TIME ESTIMATES

Three time estimates are used to calculate the “expected time”


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4

Three time estimates are used to calculate the “expected time”

for each activity.

FORMULAS

1. EXPECTED TIME

= O + 4M + P / 6

2. STANDARD DEVIATION of an activity duration (SD)

= P – O / 6

3. VARIABILITY IN THE ACTIVITY COMPLETION TIME (Activity Variance, V)

V = (P – O / 6 )2

OPTIMISTIC = O

MOST LIKELY = M

PESSIMISTIC = P


PERT: THREE TIME ESTIMATESKEY:

(0, M, P)

Exp. Time, V

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5

ESTIMATING ACTIVITY DURATION

0 3 5 6 13

PESIMISTIC

AVERAGE

OPTIMISTIC MOST LIKEY

PROBABILITY

ACTIVITY DURATION TIME IN DAYS

( 4, 11, 12 )

10, 1.78

( 3, 4, 5 )

4, 0.11

( 3, 12, 21)

12, 9.00

1 7 8

2 6

1 4 5

( 1, 4, 7 )

4, 1.00

( 6, 15, 30 )

16, 16.00

PERT: calculating expected time( expected duration, expected value, weighted average)


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6

Then the expected duration

= 3+4(5)+13 /6

= 36 / 6 = 6 days.

For an activity:

O = 3 days

M = 5 days

P = 13 days

Formula

O+4M+P/ 6


PERT: calculating standard deviation, SDFor an activity:

O = 3 days

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7

In present case, SD = 13 – 3 / 6 or

= 10 / 6

= 1.67 days

O = 3 days

M = 5 days

P = 13 days

FORMULAS

Expected value:

O+4M+P/ 6

Standard deviation:

P – O / 6

Hence

Expected value

= 6 days

Standard deviation

= 1.67 days

The range between estimates

provides a measure of variability,

which allows statistical conclusions

regarding probability of project

activities completing at particular

times.


PERT: calculations

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Completion probability for this activity:

1. There is a 68.26% chance that this activity will

be completed between 4.33 days and 7.67 days:

We get it by once deducting the value of one SD

from value of expected duration ( 6 – 1.67 = 4.33 )

and then adding the value of one SD to the value

of expected duration (6+1.67 = 7.67).


PERT: calculations

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9

Completion probability for this activity:2. There is a 95.44% chance that this activity will

be completed between 2.66 days and 9.34 days.

We get it by once deducting the value of two SD

from the value of expected duration ( 6 – 3.34 =

2.66 ) and then adding the value of one SD to the

value of expected duration (6+ 3.34 = 9.34).


PERT: points to remember

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1. The higher the standard deviation for an activity,

the higher the risk.

2. Standard deviation measures the difference

between the pessimistic and optimistic times.

3. A greater spread between the two results in higher

standard deviation and therefore higher risk.

4. Hence, lower the standard deviation, lower the risk.


REAL LIFE

SCENARIO

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1

Bank Gold Coin Project

S. Vaijayanthi is the project manager for this project where the bank has desired the sale of Gold Coins on Web. She is required to devise a software system. There are 9 activities to complete the project. With her team, she has made network diagram, performed activity duration estimation, and found critical path. She has also found out values of optimistic, pessimistic, and most likely estimates.

How can she calculate the project duration

using PERT method?

Project Time Management REAL LIFE

SCENARIO

ICICI Bank Gold Coin Project

Solving the riddle:

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2

Solving the riddle:1. First calculate the expected value for each activity on critical path and

total all values to get total expected value.

2. Second, find out Standard deviation for each activity and square it to

get “SD Squared” (called Activity Variance) for each activity, and total

SD Squared.

3. Third, find out square root of the sum of SD Squared, which gives us

value of standard deviation.

4. Now everything is easy, we can comfortably tell probability of project

completing at 1 standard deviation or 2 standard deviation.

Let's apply it to ” ICICI Bank Gold Coin Project”. Examine the data Ms

Vaijayanthi has worked out so far as shown in the next slide

REAL LIFE

SCENARIO


Develop Schedule

ICICI Bank Gold Coin Project- PERT Data worked out by Ms Vaijayanthi’s team

A B C D E F G H IACTIVITIESPERT

CALCULATIONS

Optimistic 10

On CP On CP On CP On CP On CP On CP On CP

8 38 20 5 3 1- -

non

CP

non

CP

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3

Optimistic

Pessimistic

Most likely

Expected Value

Standard Deviation

Standard Deviation

Squared (SD) 2

TOTAL SD Squared

TOTAL Expected Value

14

10

12

12.00

0.67

0.45

8

14

10

10.33

1.00

1.0

38

57

45

45.83

3.17

10.05

20

32

22

23

1.67

2.79

5

10

8

7.83

0.83

0.69

3

3

3

3.00

0

0

1.00

0

0

1

1

1

102.99 or Say 103

14.98 CONCLUSIONS

-

-

-

-

-

-

-

-

-

-

-

-


Develop Schedule REAL LIFE

SCENARIO

Project duration of ICICI Bank Gold Coin Project

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4

Project duration of ICICI Bank Gold Coin Project

Total of expected value = 103 days

Total of SD squared = 14.98

Square root of SD squared = 3.87

Therefore the standard deviation is 3.87

Conclusions about ICICI Gold Coin Project:

1. 68.26% probability, it will complete between 99.13 days and 106.87 days.

2. 95.44% probability, it will complete between 95.26 days and 110.74 days.


Schedule compressionshorten project schedule without changing the project scope, to meet

Develop Schedule

TOOLS &

TECHNIQUES

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5

changing the project scope, to meet schedule constraints, imposed dates, or other schedule objectives.

The techniques:

1. Crashing

2. Fast tracking

TECHNIQUES


Schedule compression1. Crashing

analysis of cost and schedule

Develop Schedule

TOOLS &

TECHNIQUES

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6

analysis of cost and schedule tradeoffs to obtain greatest schedule compression for least increase in cost.

Crashing leads to adding more resources to critical path activities while maintaining scope.

It generally results in increased cost and can not always promise a viable alternative.

TECHNIQUES


Schedule compression2. Fast tracking

performing critical path activities in

Develop Schedule

TOOLS &

TECHNIQUES

61

7

performing critical path activities in

parallel that are planned to be performed

in series.

Fast tracking trades of cost for time and

increases the risk of achieving the

shortened schedule. Often results in in

rework, increases risk, and needs

more attention to communications.

TECHNIQUES

HANDS-ON EXERCISE FOR STUDENTSFrom data on two slides, please find out how much it will cost to crash the


Duration compression example

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From data on two slides, please find out how much it will cost to crash the

schedule by 3 weeks!

Activities Dependencies Duration normal

A - 4

B A 6

C A 2

D B 2

E C,B 7

F D,E 6

Slide 1

THIS IS TO HELP

YOU TO DRAW

THE NETWORK

AND FIND CP

HANDS-ON EXERCISE FOR STUDENTS

Data continues ( duration is in weeks, cost in rupees)

Duration compression example


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Data continues ( duration is in weeks, cost in rupees)

Activity Duration normal Crash duration Normal cost Crash cost Crash cost per week

A 4 2 10,000 14,000 2,000

B 6 5 30,000 42,500 12,500

C 2 1 8,000 9,500 1,500

D 2 1 12,000 18,000 6,000

E 7 5 40,000 52,000 6,000

F 6 3 20,000 29,000 3,000

Slide 2

“Develop Schedule”- Tools & Techniques

What-if scenario analysis

Calculating multiple project durations with different set of activity assumptions with the use

62

0

different set of activity assumptions with the use of simulation techniques: Monte Carlo Analysis (most common).

USES three time estimates like PERT but does not use PERT formula.

Thus distribution of probable results is determined for each activity and then utilized in arriving at a distribution of probable results for the whole project.


What-if scenario analysisWhat-if Analysis

primarily used to understand the feasibility of

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1

primarily used to understand the feasibility of

schedule under unfavorable conditions.

This method also helps in making contingency,

or response plans to tackle or lessen the effect

of adverse situations.

Here, different scenarios are made using

network logic, assuming instances like delay in

supply from an external source, new regulation,

etc.


Resource levelingWE have a schedule of activities. Now, it’s time to plug in resources

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Now, it’s time to plug in resources because :

� Techniques like CPM and PERT did not consider resource availability and produced a preliminary early-start schedule that needs more resources during certain times than available, or needs unmanageable alterations in resource levels.


Resource levelingWE have a schedule of activities. Now, it’s time to plug in resources

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3

Now, it’s time to plug in resources because :

� We will also have to adjust our schedule if we find any resource constraints to our schedule of activities made so far using mathematical analysis techniques.


Resource levelingprocess of adjusting resource utilization on your project to match

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4

utilization on your project to match with real resource availability.

OFTEN INVOLVES:

� Allocate scarce resources to critical path activities first.

� Move an activity in time to take advantage of a period of under-allocation elsewhere in the project.


Resource levelingprocess of adjusting resource utilization on your project to match

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utilization on your project to match with real resource availability.

OFTEN INVOLVES:

� Replace the resources that are not over-allocated during the same timeframe.

� Increase the duration of an activity while applying the same total effort.

Resource leveling generally extends schedule. It can change CP.


Resource leveling

Other techniques in an event of

critical or limited resource

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critical or limited resource

availability:

� Utilization of extended hours

� Productivity increase of resources

� Fast tracking

� Reverse resource allocation

� Critical chain method modifies project schedule to account for limited resources.


Resource leveling

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7

Some projects have can have a finite and critical

resource. In such cases, the resource is scheduled in

reverse from the project ending date. It is called

REVERSE RESOURCE ALLOCATION

SCHEDULING!

It may not result in an optimal project schedule.


Resource leveling

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Resource leveling produces a

RESOURCE-LIMITED SCHEDULE, or

RESOURCE-CONSTRAINED SCHEDULE!


Critical chain method

Another network analysis technique that modifies project schedule to

62

9

that modifies project schedule to account for LIMITED RESOURCES.

Combines deterministic and probabilistic approaches.

This method adds time buffers to focus on planned activity durations.

How do we do it?

A) We find out CP making network diagram with non-conservative estimates (taking required dependencies and defined constraints as inputs).

THE STEPS: CRITICAL CHAIN METHOD


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0

defined constraints as inputs).

B) Then, we enter resource availability and determine resource-limited schedule. Resulting schedule often has an changed CP.

C) Now we determine duration buffers and schedule the planned activities TO THEIR LATEST POSSIBLE START AND FINISH DATES.

D) Consequently, in lieu of managing the total float of network paths, we focus on managing 1) the time buffers, 2) the resources for schedule activities.


Applying leads and lags

Leads and lags are adjusted during schedule network analysis to

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schedule network analysis to develop a viable schedule.

This is particularly important as improper use of leads and lags distorts the schedule.


Scheduling Tool

Schedule data and information is compiled into the schedule model

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compiled into the schedule model for the project.

We may use the schedule model tool and its supporting data along with manual methods or project management software:

to perform schedule network analysis for generating the project schedule.

“Develop Schedule”- OUTPUTS

Project schedule MAY be displayed in summary form for the whole project,

or in detailed form for various levels of WBS.

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3

or in detailed form for various levels of WBS.

SCHEDULE FORMATS

1. Project network diagrams (display project

logic and critical path activities).

2. Bar charts or Gantt charts (depict activity

start and finish dates, estimated durations,

and occasionally dependencies).

3. Milestone charts (show start or finish of

major deliverables or key external interfaces).


Project network diagram WITH DATES

CODE UNIT

30 Jun15 Jun 16 Jun16 May

Project Schedule FORMAT:

63

4WRITE

MANUAL

1 May

DESIGN

CODE

QUERY

CODE

ENTRIES

CODE

UPDATE

UNIT

TEST

UNIT

TEST

UNIT

TEST

SYSTEM

TEST

15 May16 May 1 Jul 15 Jul30 May 1 Jun 15 Jun

30 May24 May16 May 23 May

15 Jun16 May

Activity

identifierActivity Description

1.1. MB Provide new product

Period 1

Project Schedule Time Frame Calendar

Units

DETAILED SCHEDULE WITH LOGICAL RELATIONSHIPS

Period 2 Period 3 Period 4 Period 5


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Z deliverable- BEGIN 0

1.1.1 Work package 1- Develop comp 1 67

1.1.1.D Design component 1 20

1.1.1. B Build Component 1 33

1.1.1.T TEST COMPONENT 1 14

1.1.1. M1 Component 1 – COMPLTED 0

1.1.2 Work package 2 – develop comp 2 53

1.1.2.D Design component 2 14

1.1.2.B Build component 2 28

1.1.2.T TEST COMPONENT 2 11

1.1.2M1 Component 2 – COMPLETED 0

1.1.3 Work package 3 – Integrate Comps 53

1.1.3.G Integrate component 1 & 2 14

1.1.3.T TEST INTEGRATED PRODUCT Z 32

1.1.3.P DELIVER PRODUCT Z 7

1.1.MF Provide New Product Z 0

deliverable- FINISHED

ss

DATA DATE

Project Schedule FORMAT: Bar charts or Gantt charts


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6

Jan Feb Mar Apr May Jun

Activity A

Activity B

Activity C

Activity D

Project Schedule FORMAT: Bar charts or Gantt charts

ActivityActivity Description

Project Schedule Time FrameCalendar


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7

Activity


Period 1Units


1.1 Provide New Product Z

deliverable 120

1.1.1 Work Package 1 –

develop component 1 67

1.1.2 Work Package 2 –

develop component 2 53

1.1.3 Work Package 3 -

Integrate Components 53

Data date

Project Schedule FORMATS: Milestone charts

ActivityActivity Description

Project Schedule Time FrameCalendar


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8

Activity


Period 1Units


1.1. MB Provide New Product Z

deliverable - BEGUN 0

1.1.1. M1 Component 1 - completed 0

1.1.2. M1 Component 2 - completed 0

1.1. MF Provide New Product Z

Deliverable - FINISHED 0

Data date

Schedule dataSupporting data for the project

schedule


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9

schedule

Includes (at least)� Schedule milestones

� Schedule activities


� All constraints and assumptions

Amount of additional data varies by application area.

Schedule dataSupporting data for the project

schedule


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schedule

Frequently supplied supporting

details:

� Resource requirements by time period as “Resource Histogram”

� Alternative schedules (best case, worst case, resource not leveled, resource leveled, with/without imposed dates)

� Schedule contingency reserves


Project Document Updates

1) Activity resource requirements


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3) Calendar

4) Risk register

Discussion

Activity resource requirements: Resource leveling

Can have a significant effect on preliminary

estimates of the type and quantities of

resources required.



Discussion

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2

Activity resource requirements: if the resource leveling

analysis changes the project resource requirements,

then the resource requirements are updated.

Activity attributes: activity attributes are updated to

include any revised resource requirements and any

other revisions generated by Develop Schedule

process.



Discussion

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3

Calendar: the calendar for each project may use

different units as the basis for scheduling the

project.

Risk Register: is updated to reflect opportunities or

threats perceived through scheduling assumptions.


Processes involved in planning, estimating,

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4

Processes involved in planning, estimating,

budgeting and controlling costs to complete

the project WITHIN APPROVED BUDGET


Primarily concerned with the cost of resources

needed to complete the schedule activities

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5

needed to complete the schedule activities

But, project cost management should also

consider the effect of project decisions on the

the cost of:

1) Using

2) Maintaining and

3) Supporting the product of the project.

Less design reviews can reduce

project cost at the expense of

increase in customer’s operating costs!


This broader view of cost management is

called Life Cycle Costing.

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6

called Life Cycle Costing.

Life cycle costing together with value

engineering techniques can:

1) Improve decision-making

2) Reduce cost and execution time

3) Improve quality and performance of

project deliverable


Generally,predicting and analyzing prospective

financial performance of the product of the

project is done outside the the project.

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7

project is done outside the the project.

If it is done within the project, then we include

additional processes and general management

techniques: ROI, Discounted Cash Flow and

Investment payback analysis.


Please remember!Project cost management is preceded by a planning effort

by the project management team. This planning effort is

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8

by the project management team. This planning effort is

part of the ‘Develop Project Management Plan process.

We develop a cost management plan, setting out the

format and establishing the criteria for planning,

structuring, estimating, budgeting and controlling project

costs. The cost management plan processes, tools and

techniques are selected during project life cycle definition.


Please remember!The cost management can establish:

1) Precision level: cost estimates will rounded off to a

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9

1) Precision level: cost estimates will rounded off to a prescribed precision (Rs. 100, Rs. 1000) based on scope of

activities and magnitude of the project, including amount for

contingencies.

2) Units of measure: staff hours, staff days, week, lump sum, etc. for each of the resources.

3) Organizational procedures links: each control account (WBS component used for project accounting) is assigned a code

or account number linked to performing organization’s accounting

system. May also include planning package.


Please remember!The cost management can establish:

4) Control thresholds: agreed-upon amount of variation allowed

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4) Control thresholds: agreed-upon amount of variation allowed at designated time periods during project.

5) EV Rules: a) EVM computation formula for determining estimate to complete are defined, b) EV credit criteria (50-50, 0-100), c)

define WBS level at which EV analysis will be done.

6) Reporting formats: for various reports

7) Process descriptions: descriptions of each of the three cost management processes are documented.


Please remember!

So the cost management plan sets the framework

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So the cost management plan sets the framework

for each of the cost management processes.

WHY?

So that performance of the processes will be

efficient and coordinated.

Processes:

1. Cost estimating

2. Cost budgeting

3. Cost control

Estimate Costs process overview

� Enterprise

INPUTS TOOLS &

TECHNIQUES

� Analogous estimating

OUTPUTS

� Activity Cost

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2

� Enterprise



assets

� Risk Register

� Human Resource Plan


� Scope Baseline

� Analogous estimating

� Bottom-up estimating

� Parametric estimating

� Project management

estimating software

� Vendor bid analysis


� Cost of quality

� Three Point Estimates

� Expert Judgment.

� Activity Cost

estimates

� Basis Of Estimates


Updates.

1) Enterprise environmental factors

- Market conditions: what

Estimate Costs - Inputs

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3

products/services are available, from whom,

under what terms and conditions.

- Commercial databases: resource cost rates that track skills and human resource

cost, provide standard cost of material and

equipment. Another source: seller price

lists. helps organizing cost estimates

2) Organizational environmental factorsProvide:

1) Cost estimating policies

Estimate Costs - INPUTS

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4

1) Cost estimating policies

2) Cost estimating templates

3) Historical information (from various sources within organization)

4) Project files: records of previous project performance help in developing cost estimates.

5) Project team knowledge

6) Lessons learned

3) Human Resource Plan

Project staffing attributes and personal rates, and related rewards/recognition are necessary


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5

and related rewards/recognition are necessary components for developing cost estimates.

4) Risk Registershould be reviewed to consider risk mitigation costs. Risks, either threat or opportunities, have impact on both activity and overall project costs.

Risk RegisterPlease remember: As a general rule, when project experiences a negative


65

6

when project experiences a negative risk event, the near-term costs of the project will usually increase, and sometimes delay project schedule.

5) Project Schedule

The type and quantity of resources and the amount of time they are used ARE major factors in


65

7

of time they are used ARE major factors in estimating costs. Schedule activity resources and their respective durations are key inputs.

Please remember: Impact of “Estimate Activity Resources process” and “Estimate Activity Durations” process on the Estimate Costs process!

Estimate Activity Resources determines quantities

of resources and is closely coordinated with cost

estimating!

5) Project SchedulePlease remember:

Activity duration estimates will effect cost estimates:


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8

Activity duration estimates will effect cost estimates:

a) Where project budget includes an allowance for

the cost of financing (including interest charges),

b) Where resources are applied per unit of time for

the duration of activity,

c) Where we have time-sensitive costs (materials

with seasonal cost variations, union labor with

regularly expiring collective bargaining

agreements).

6) Scope Baseline A) Scope Statement: provides product description, acceptance criteria, key


65

9

description, acceptance criteria, key deliverables, project boundaries, assumptions and constraints about the project.

IMPORTANT: Clarify whether you will include only direct costs or indirect costs too.

Indirect cost are those which can be directly traced to a specified project. Your accounting procedure will decide how to apportion them among various projects.

6) Scope Baseline � Most common constraints for projects is a LIMTED

Project Budget.


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0

Project Budget.

� Other constraints: required delivery dates, available skilled resources, organizational policies.

B) Work Breakdown Structure: provides relationships among all the components of the project and the project deliverables.

C) WBS Dictionary: WBS dictionary and related documents provide identification of the deliverables and description of work required to produce each deliverable.

Expert Judgment

Cost estimates are

Estimate Costs – Tools & Techniques

Expert judgment, guided by

historical information,

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1

Cost estimates are

influence by numerous

variables:

1) Labor rates

2) Material costs

3) Inflation

4) Risk factors, and

5) Other factors.

historical information,

1) provides valuable insight

about environment and info

from past projects,

2) can help determine

combination of estimating

methods, and reconcile

difference between them.

Analogous estimating is top-down estimating that uses actual costs of similar, past


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2

actual costs of similar, past project as ground for cost estimation on present project.

It is a form of expert judgment and used only in early phases when detailed information about the project is not there.

Most reliable when when previous project are similar in fact not just in appearance, and when estimators have needed experience.

L 1

L 2

L 3

L 4

TOP-DOWN TOTAL PROJECT COST

COST FLOW

Bottom-up estimating

estimating cost of individual


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3

work packages or schedule

activities and then rolling

them up to higher levels for

reporting and tracking

purposes. find project cost

Parametric modelingHere, we use project characteristics

(parameters) in a mathematical model to


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4

estimate project costs.

Example: lines of code in s/w development, required labor hours, square footage in construction.

This method is reliable only when:

a) Historical information used to develop

model is correct,

b) The parameters are quantifiable, and

c) the model is scalable.

Computerized toolsWidely used to facilitate the process of cost estimation. There are many project management


66

5

are many project management spread sheets and simulation and statistical tools- some of them you must already be using.

vendor bid analysis (Other cost estimating methods)

For example, you are able to estimate costs of procurement items during vendor bid analysis.

Reserve analysisMost cost estimates include contingency

for “known-unknowns” (identified risk).


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6

This overstates the estimate (pessimistic) and needs to be tackled.

Solution 1: add up contingencies for related schedule activities and put this total contingency in a non-schedule activity with zero duration. Place it across the network path. Like at work package level assign it to work package subnet to a zero-duration activity that runs from start to end.




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7


Solution 1: the contingency reserve, as measured by the resource consumption by performing the work package activities, can be adjusted. Thus cost variances will be more accurate and not based on pessimistic estimate of contingency reserve.




66

8


Solution 2: put the contingency reserve at the end of CP. The contingency reserve, as measured by the resource consumption by performing the work package activities, can be adjusted. Thus cost variances will be more accurate and not based on pessimistic estimate of contingency reserve.


Please remember!

Contingency reserves must be used at the

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9

Contingency reserves must be used at the

discretion of the project manager to deal with

“known unknowns”,

anticipated but uncertain events.

What about management reserves?

Cost of qualityConsidered while developing cost estimates.


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0

1) Cost of prevention

2) Cost of appraisal

if not provided, then incur cost of failure, that is many times of above two.


Three-point estimatesJust consider how risky are your

original single point estimates?

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1

original single point estimates?

We can improve the accuracy by

finding three-point estimates and

then take their average:

1) Most likely

2) Optimistic

3) pessimistic


Three-point estimates1) Most likely: duration considering


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2


productivity, availability,

dependencies on their

participants, and interruptions.

2) Optimistic: best case of most

likely.

3) Pessimistic: worst case of most

likely.

1) Activity cost estimates

Quantitative approximation of costs

to be incurred on the resources to

Estimate Costs – OUTPUTS

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3

to be incurred on the resources to

complete project activities. It

includes inflation allowance and

cost reserve. We can present them

in summary form or detailed form

as per the requirement.

2) Basis Of Estimates

Document contains:


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4

• Description of the scope of work estimated by

reference to WBS

• Basis for estimation

• Assumptions made

• An indication of possible results

• Any other application area specific information

3) Project Document Updates

may include


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5

The Risk register

Determine Budget


Issue

Solution

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6

How to have a cost baseline

for measuring and

monitoring cost performance?

Aggregate cost estimates

of activities or work

packages to establish a

COST BASELINE!

Issue

Determine Budget


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7

Please remember!

COST BASELINE includes all authorized budgets,

but EXCLUDES management reserves!!!

Please don’t forget it!

Project budgets constitutes the funds allowed to

execute the project. Cost performance is measured

against the authorized budget!

Determine Budget


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Planning Core Processes

REAL LIFE SCENARIO

In real life, the cost estimates are made after the budgetary approval has been given, but we should try to make estimates before we present request for budget!

WE should prepare cost estimates before budget requests and work authorization!


TOOLS &

Determine Budget process overview

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9

�Activity cost estimates

� Basis Of Estimates



� Contracts

� Scope Baseline

� OPA’s

INPUTSTOOLS &

TECHNIQUES

� Cost aggregation


� Expert Judgment

� Historical

Relationships

� Funding limit

reconciliation

OUTPUTS

� Cost Performance

Baseline

� Project funding

requirements


Updates

Activity cost estimates

Project Cost Management - Inputs

Determine Budget

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0

Activity cost estimates provide estimates of schedule activities within a work package which are added up to get cost baseline for each work package.

Basis Of Estimates


Determine Budget

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1

Basis Of Estimatesguides cost budgeting as any basic assumptions dealing with the inclusion or exclusion of indirect costs in the project budget is specified in the basis of estimates.

Project schedule


Determine Budget

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2

Project scheduleprovides start and finish dates of the activities, schedule milestones, work packages, planning packages, and control accounts.

This information helps to aggregate costs to the calendar periods when the costs are planned to be incurred.

Resource calendars

provide information on which resources


Determine

Budget

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3

provide information on which resources

are assigned to the project and when

They are assigned. This in formation is

used to indicate resource rates over the

Duration of the project.

ContractsApplicable contract info and costs

are included while determining the

budget.


- existing cost budgeting-related policies, procedures, and guidelines,


Determine

Budget

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4

policies, procedures, and guidelines,

- Cost budgeting tools,

- Reporting formats.

Scope Baseline

a) Scope statement: provides formal limitations by period for expenditure of project funds can be mandated by the organization, by contract or by the other entities, such as government agencies.

Scope Baselineb) Work breakdown structure: provides

relationships among all the project


Determine

Budget

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5

relationships among all the project deliverables and their various complements.

c) WBS dictionary (and related detailed statements) : provide an identification of the deliverables and a description of work in each WBS component needed to produce each deliverable.

1. Cost aggregation

Activity estimates are added up

by work packages. Work

Project Cost Management- Tools & Techniques

Determine Budget

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by work packages. Work

package estimates are added

up for higher component levels

of WBS (control accounts) and

finally for the entire project.

2. Reserve analysis Reserve analysis establishes contingency reserves. Here, we


Determine Budget

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contingency reserves. Here, we establish management contingency reserves: budgets for reserved for “unknown unknowns”. These budgets are not part of cost baseline and are not considered in EV calculations. Project manager has to obtain management approval before spending them.

3. Expert JudgmentJudgment provided based upon expertise in an application area,


Determine Budget

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expertise in an application area, knowledge area, discipline, industry, etc., as appropriate for the activity being performed should be used in determining budget.

4. Historical relationshipsAny historical relationships that result in parametric estimates or analogous estimates

Project Cost ManagementFunding limit reconciliation

“Large expenditure of funds is

undesirable for organizational

operations.”

Hence, expenditure of funds is

reconciled with funding

disbursement limits set by the

customer or performing organization.

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parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs.

Such models may be simple (construction based on cost per square foot) or complex (model of software development costing multiple separate adjustment factors, each of which has numerous points in it- Function Point Analysis).

4. Historical relationshipsBoth the cost and accuracy of analogous and parametric models varies widely. They are helpful

Project Cost ManagementFunding limit reconciliation

“Large expenditure of funds is

undesirable for organizational

operations.”

Hence, expenditure of funds is

reconciled with funding

disbursement limits set by the

customer or performing organization.

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parametric models varies widely. They are helpful only when:

� Historical information used to develop is accurate

� Parameters used are readily quantifiable

� Models are scalable.

5. Funding limit reconciliation

Expenditure of funds should be reconciled with any funding limits on the commitment of funds for

Determine Budget- Tools & Techniques

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any funding limits on the commitment of funds for the project.

A variance between funding limits and planned expenditure leads to the rescheduling of work.

Cost Performance baselineIT IS A TIME-PHASED BUDGET

Determine Budget - Outputs

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2

IT IS A TIME-PHASED BUDGET

ONLY.

Used for measuring and

monitoring the cost performance-

actual cost versus allocated cost.

Displayed in the form of S-curve

Cost baseline, Cash Flow and Funding

COST BASELINE FUNDING REQUIREMENTS


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3

MANAGEMENT RESERVE

Difference between

the maximum funding

And the end of the cost

Baseline.

TIME

CUMMULATIVE VALUES


Project funding

requirements

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4

requirements Total or periodic are derived

from cost baseline.

May include an additional

margin to allow for either early

progress or cost overruns.


Project funding

requirements

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Total funds required= cost baseline

+ management contingency

reserve. Each funding may include

some part of management

contingency or it may be given only

when needed (depends on organization's

policies).



include

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6

include

- risk register

- cost estimates

- project schedule


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Processes include all activities of the

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8

Processes include all activities of the

performing organization that determine:

Quality policy, objectives, and

responsibilities to ensure project satisfies

the needs for which it has been

undertaken


Implements the quality management system

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Implements the quality management system

through:

Quality policy, procedures and processes of Plan

Quality, Perform Quality Assurance, and

Perform Quality Control- WITH CONTINUOUS

PROCESS IMPROVEMENT ACTIVITIES

performed throughout!


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Quality is delivering to satisfy the customer.

A quality-oriented project has two aims:

1) To produce the correct end-item

2) To produce it in the correct way


1) To produce the correct end-item:

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1) To produce the correct end-item:

� Concerns the product of the project

� Addressed through good definition of user

requirements and project objectives� If the requirements and objectives specification

(from the relevant phase) are clear, accurate, and

complete, the project will be headed toward

producing the correct end-item.


2) To produce it in the correct way:

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2) To produce it in the correct way:

� Concerns the process of conducting the

the project and ensures it actually

produces the end-item according to the

requirements� Addressed by a good project quality plan which ensures that

the work performed will result in an end-item that conforms to

prescribed user and project requirements and continues to do

so after the end-item is put to operation (QUALITY OF CONFORMANCE)


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Attention to quality requires:� Continuous review of project progress

� Checking that the product of the project is meeting

user requirements

� Checking that the user requirements and project

objectives are satisfying changing customer needs� The quality plan specifies the measures and procedures for:

1) monitoring and comparing work output with requirements

2) comparing requirements with current needs and realities


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Attention to quality continues even after the

project is completed:� by monitoring the end-item for how well it

continues to perform and meet customer

needs

� This monitoring ( done by the customer or contractor)

provides information to suggest FUTURE

DESIGNS or SOLUTIONS which are:

Project Quality ManagementAttention to quality continues even after the

project is completed:

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5

project is completed:

� 1) completely new, or

� 2) improvements upon existing products

and systemsQUALITY PLAN MUST SPECIFY THE MEASURES AND

PROCEDURES FOR MONITORING OPERATIONAL

PERFORMANCE!

Project Quality ManagementTHE CONCEPT

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THE CONCEPTQuality is “the totality of characteristics of an entity

that bear on its ability to satisfy stated or implied

needs”.

IN OTHER WORDS, it is the degree to which a set

of inherent characteristics fulfill requirements.

Stated or implied needs, therefore, needs guide us

in developing project requirements.

Project Quality ManagementTHE CONCEPT

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THE CONCEPTIn project context, the key issue is converting

IMPLIED NEEDS INTO REQUIREMENTS- through

project scope management.

Quality therefore is conformance to requirements and

fitness for use.

This means you must produce what you promised to

produce and the product must be fit for use for which it

is meant.


THE CONCEPT

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8

THE CONCEPT

Quality must be planned in,

not inspected in.


THE CONCEPT

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9

THE CONCEPT

No GOLD PLATING. No customer extras,

no extra functionality, no higher quality

components, no extra scope of work or

better performance.


THE CONCEPT

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THE CONCEPT

Low quality is a problem,

low grade is not.


THE CONCEPT

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1

THE CONCEPT

GRADE (a category assigned to product/services)

- same functional use

- different technical characteristics

Example: a software product

HIGH QUALITY: readable manual, no defects

LOW GRADE : limited features


THE CONCEPT

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2

THE CONCEPT

Example: a software product

LOW QUALITY : poorly organized manual, many defects

HIGH GRADE : numerous features

THE PROJECT MANAGEMENMT TEAM MUST

DETERMINE AND DELIVER THE REQUIRED

LEVELS OF BOTH: QUALITY, and GRADE.


THE CONCEPT

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3

THE CONCEPT

Precision and accuracy: two different things

1) PRECISION IS CONSISTENCY ( the value of repeated measurements are clustered and have little scatter).

2) ACCURACY IS CORRECTNESS ( the measured value is very close to true value).


THE CONCEPT

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THE CONCEPT

A PRECISE MEASUREMENT IS NOT NECESSARILY

AN ACCURATE MEASUREMENT!

A VERY ACCURATE MEASUREMENT IS NOT

NECESSARILY PRECISE!


THE CONCEPT

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5

THE CONCEPT

� IT IS PRIME RESPONSIBILITY OF THE PROJECT

MANAGEMENT TEAM TO DECIDE:

“ how much precision or accuracy or both are

needed”


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THE CONCEPT� PROJECT QUALITY MANAGEMENT IS COMPATIBLE WITH:

� ISO 9000 and 10000 series

� Proprietary quality management approaches (Deming, Juran, Crosby, and others)

� Nonproprietary approaches (TQM, Six Sigma, FMEA, Design Reviews, Voice of Customer, COQ,

and Kaizen (continuous improvement)


THE CONCEPT

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THE CONCEPT

� Hence, Modern quality management complements

Project Quality Management. Both advocate the same

tenets:

� Customer satisfaction

� Prevention over inspection

� Management responsibility

� Continuous improvement


THE CONCEPT

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8

THE CONCEPT

� CUSTOMER SATISFACTION

understanding, evaluating, defining, and managing

expectations to fulfill customer requirements

THIS NECESSITATES A COMBINATION OF

1) Conformance to requirements

the project MUST produce what it said it would


THE CONCEPT

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9

THE CONCEPT

� CUSTOMER SATISFACTION

2) Fitness for use

the product/service MUST satisfy the REAL NEEDS


THE CONCEPT

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THE CONCEPT

� PREVENTION OVER INSPECTION

THE COST OF PREVENTING MISTAKES IS

NORMALLY “MUCH LESS” THAN THE COST

OF CORRECTING THEM (DEMONSTRATED BY INSPECTION)


THE CONCEPT

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1

THE CONCEPT

� MANAGEMENT RESPONSIBILITY

success needs participation of all team members, but

it stays with the management to provide resources

required to succeed.

Deming suggested: as much as 85% of the cost of

quality is management problem


THE CONCEPT

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2

THE CONCEPT


Deming suggested: once the quality issue has hit the

floor, or the worker level, the workers have little control


THE CONCEPT

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3

THE CONCEPT


A company had bid on the an Express Highway Project

and won it.

To earn more profits, management decided to use

inferior-grade asphalt. The workers laying the asphalt

have little control over its quality.

REAL LIFE SCENARIO


THE CONCEPT

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4

THE CONCEPT

� CONTINUOUS IMPROVEMENT

PDCA (plan-do-check-act) Cycle, defined by Shewhart

and modified by Deming, forms the basis for quality

improvement


THE CONCEPT

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5

THE CONCEPT

� CONTINUOUS IMPROVEMENT

Quality improvement initiatives (TQM, SIX SIGMA)

can contribute in improving the quality of both:

1) Project management, and

2) The project’s product

Process improvement models (Malcolm Baldrige,

CMM, CMMI) also provide useful guidance.


THE CONCEPT

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6

Key difference project team MUST know:

Projects are too temporary to reap the rewards of

investments in product quality improvement (mainly

defection prevention, appraisal), hence performing

organization must bear these investments!

THE CONCEPT

THE CONCEPT


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THE CONCEPT� Project quality management addresses both:

� Management of the project

� Management of project’s product

� We MUST succeed in meeting quality requirements for both:

� a) Project

� b) Product of the project


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THE CONCEPT�Our inability to meet quality

requirements either of the project or product of the product leads to

SERIOUS NEGATIVE IMPACT FOR STAKEHOLDRES.


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THE CONCEPT� Satisfying customer requirements by over-stretching project team leads often to their quitting the organization subsequently.

� Accomplishing project schedule by hurrying planned quality inspections generally leads to negative impact when defects go unchecked.


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Processes consist of all the activities of theperforming organization that determine quality

policies, objectives, and responsibilities to

ensure:

“PROJECT WILL SATISFY THE NEEDS FOR WHICH IT WAS UNDERTAKEN”


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IMPLEMENTS the quality management system

Through:

a) The policy

b) Procedures

c) Processes

Quality Planning

Quality Assurance

Quality Control

OF

CONTINUOUS PROCESS IMPROVEMENT ACTIVITIES THROUGHOUT

Plan Quality Quality management plan

Quality metrics

Project

management

plan

A

Standards &

Regulations

Quality policy


Project plan updates

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2

Perform Quality

Assurance

Perform Quality

Assurance

Perform Quality

Control

Quality metrics

Checklists

Quality baseline

Integrated

Change

control

Quality control measurements

Recommended corrective/

preventive actions/defect repair

OK deliverables

Change requests

Corrective action

Change requests


A

P

P

R

O

V

A

L

S

Scope statement

Product

description

Other planning

outputs

Other

Planning

Processes

I

N

P

U

T

S

t

o


Approved

Change requests


Plan Quality

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The process of

Identifying quality requirements and standards for the project and the product and documenting how the project will demonstrate compliance.


Plan Quality IMPORTANCE

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4

IMPORTANCE

One of the key processes while performing

Planning Process Group and developing the Project

Management Plan

Must be performed in parallel with other planning

processes.WHY?


Plan Quality

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5

BECAUSE1) The required changes in the product to meet quality

standards MAY REQUIRE SCHEDULE AND COST

ADJUSTMENTS! OR

2) The desired product quality MAY NEED DETAILED RISK ANALYSIS OF AN IDENTIFIED PROBLEM!

Plan Quality process overview

� Enterprise

Environmental

factors

INPUTS TOOLS &

TECHNIQUES

� Cost-benefit

Analysis

OUTPUTS

� Quality Management

Plan

� Quality metrics

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6

factors


assets

� Scope Baseline

� Stakeholder Register.

� Cost Performance Baseline.

� Schedule Baseline

� Risk Register

Analysis

� Benchmarking

� Design of

Experiments

� Cost of quality

(COQ)

� Additional quality

planning tools

� Control Charts

� Statistical sampling

� Flowcharting

� Proprietary Quality

Management

Methodologies

� Quality metrics

� Quality Checklists

� Process improvement

plan


updates

1. Enterprise environmental Factors provide:

- Standards and regulations

Plan Quality - INPUTS

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7

- Standards and regulations

- Rules, standards, and guidelines specific to the application area, and

- Working/ operating conditions of the project/ product which may affect quality.


2. Organizational process assets

provide:

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8

provide:

a) Quality policy, procedures and guidelines,

b) historical database, and

c) lessons learned.



Quality policy sets the intended direction of a

performing organization with regard to quality.

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9

performing organization with regard to quality.

Quality policy of the performing organization for

their products can be adopted “as is” for use on

the project. BUT if there is no quality policy or

multiple organizations are involved, then the

project management team should develop a

quality policy for the project with knowledge of the

stakeholders.

3. Scope Baseline.- A. Scope statement: contains the product

description, major project deliverables, and acceptance criteria. The product description contains


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description, major project deliverables, and acceptance criteria. The product description contains details of technical issues and other concerns that can affect quality planning. The definition of acceptance criteria can significantly increase or decrease project costs and quality costs. Satisfying acceptance criteria means the needs of the customer have been met.

- B. WBS: identifies the deliverables, the work packages and the control accounts used to measure project performance.

Scope Baseline.- C. WBS dictionary: defines technical information for

WBS elements and must be considered during quality planning.


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WBS elements and must be considered during quality planning.

4. Cost Performance baselinedocuments the accepted time phase used to measure cost performance. Quality must be achieved within this time-phased budget.

5. Risk Registerprovides threats and opportunities that may impact quality requirements

6. Schedule Baselineaccepted schedule within which quality parameters should be achieved.


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should be achieved.

7. Stakeholder Registeridentifies stakeholders with a particular interest , or impact on quality.

Plan Quality – Tools & Techniques

1. Cost/Benefit analysisanalyze cost-benefits tradeoffs

Primary benefit of meeting Quality

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3

Primary benefit of meeting Quality

Requirements:

BENEFITS1. LESS REWORK

2. HIGHER PRODUCTIVITY

3. LOWER COSTS

4. INCREASED STAKEHOLDER

SATISFACTION


1. Cost/ Benefit analysisPRIMARY COST OF PROJECT

QUALITY MANAGEMENT ACTIVITIES

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4

QUALITY MANAGEMENT ACTIVITIES

COSTS� TRAINING

� SURVEYS

� STUDIES

� APPRAISAL

� DESIGN REVIEW

2. Benchmarking

Purpose: To generate ideas for improvements and

offer standards to measure performance.


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5

offer standards to measure performance.

Method: We compare the actual or planned project’s

practices to those of other projects.

Sources: These projects can be:

a) within performing organization or outside

b) Within same application area or in another

Application area


3. Design of experiments (DOE)An analytical technique that identifies the elements,

or variables, that will have impact on overall project

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6

or variables, that will have impact on overall project

outcomes.

Generally, this method is used concerning the product

of the project but can also be applied to project

management processes.

This process designs and sets up experiments to

determine the ideal solution for a problem utilizing a

Limited number of sample cases.


4. Cost of quality

Consists of all our costs on efforts to:

Achieve product / service quality

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7

� Achieve product / service quality

� Ensure conformance to requirements

� Work resulting from nonconformance to requirements

Plan Quality – Tools & TechniquesPlan Quality

Cost of quality

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THREE TYPES OF COSTS

ARE INCURRED:

1. Prevention costs

2. Appraisal costs

3. Failure costs


Cost of quality

Prevention costsPrevention means keeping defects

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Prevention means keeping defects

out of the hands of the customer.

These costs are associated with

producing a product/service without

defects in order to satisfy Customer

Requirements.Example: quality planning, training,

design review, contractor and

supplier costs


Cost of quality

Appraisal costs

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Appraisal costsExpended to examine the product or

process and make certain that the

Requirements are being met.

Examples: inspection, testing


Cost of quality

Failure costs

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1

Failure costsAre the costs incurred when things

don’t happen according to the plan:

1) Internal failure costs

result when customer requirements

are not satisfied and the product

is still in the control of the

performing organization

Example: corrective action, rework,

scraping, and downtime


Cost of qualityFailure costsFailure costsAre the costs incurred when things

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2

Are the costs incurred when things

don’t happen according to the plan:

2) External failure costs

result when the product has

reached the customer and they

determine that their requirements

have not been met.

Example: inspections at customer’s site

returns, and customer service

costs

COST OF POOR QUALITY: FAILURE COSTS!

5. Flow chartingIt is any diagram that shows logical steps that must be


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performed to accomplish an objective.

It displays how individual elements of a System

interrelate.

In the case of quality management,two types of flow

charts are used:

� Cause-and-effect diagrams (Ishikawa diagrams, fishbone diagrams) show relationship between various

factors (causes) to potential problems/effects.

5. Flow charting

� Cause-and-effect diagrams (Ishikawa


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4

� Cause-and-effect diagrams (Ishikawa diagrams, fishbone diagrams) show

relationship between various factors (causes)

to potential problems/effects.

� Process flow diagram

PROCESS

EXAMPLE:CAUSE-AND-EFFECT DIAGRAM

MATERIALMACHINE TIME


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5

ENVIRONMENT PROJECT

TEAM

MAJOR

DEFECT

ENERGY MEASUREMENT

System or process flow

chartsShow the logical steps needed to


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6

Show the logical steps needed to

accomplish an objective and

interrelation of individual elements

of a system.

These charts assist project team

to assess the type and area where

quality problems may appear.


EXAMPLE: Process Flowchart

1. Project Request

2. Compliance Copy

N = No

Y = Yes

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7

N

N

N

Y

Y

Y9. QA Review /

Approval

8. Package development

Review / Approval

4. Artwork Approved3. Develop Artwork

5. Change Control for Specs

6. Artwork out for Proofs

12. ORDER MATERIAL

7. Vendors make Proofs

11. SPSECS SIGNED

(PACKAGE AND QA)

2. Compliance Copy

10. Approved Proofs back to Vendor

6. Control ChartsUsed to determine whether or not process is stable

or has predictable performance.


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8

or has predictable performance.

Upper and lower specification i are set based on the

requirements, reflecting minimum and maximum

values allowed.

There may be penalties for crossing these limits.

For repeatable processes are generally +/- 3 sigma!

6. Control ChartsA process is out of control when data points cross

the limits or seven consecutive points are above or


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9

the limits or seven consecutive points are above or

below the mean, although inside the control limits.

Control charts are used to monitor various types of

variable outputs.

6. Control Charts

Generally, control charts are used to track


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0

Generally, control charts are used to track repetitive activities for producing manufactured lots, but may also be used to monitor schedule and cost variances, volume and frequency of scope changes, other management results to determine if management processes are in control!

7. Statistical Sampling:-

It involves choosing part of a population of


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It involves choosing part of a population of

interest for inspection.

Sample frequency and sizes should be

determined during the plan quality process

so the cost of quality will include the no. of

tests, expected scrap, etc.

8. Additional quality planning tools:

• Brainstorming


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2

• Brainstorming

• Flowcharting

• Force field analysis

• Matrix diagrams

• Nominal group techniques

• Affinity diagrams

• Prioritization techniques

9. Proprietary Quality Management

Methodologies- Six Sigma


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3

- Six Sigma

- Lean Six Sigma

- Quality Function Deployment.

- CMMI, etc

WOW!

Plan Quality – OUTPUTS

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4

WOW!

We have done so much!

Let’s examine our outputs.

Quality management plandescribes how the project management

team will implement its quality policy


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5

team will implement its quality policy

Details the project quality system that

Includes:

� Organization structure

� Responsibilities

� Procedures

� Processes, and

� resources

REQUIRED TO IMPLEMENT

PROJECT

QUALITY

MANAGEMENT

Quality management plan

PROVIDES input to overall project plan


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6

PROVIDES input to overall project plan

Addresses QC, QA, and CONTINUOUS

IMPROVEMENT for the project

Quality management plan

MUST include efforts at the front end of

the project to make sure that the earlier


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7

the project to make sure that the earlier

decisions on:

� Concepts, designs, and tests ARE CORRECT

This should be done through independent

Peer Review.

Benefits of the review:

“reduction of schedule and cost overruns

due to rework”

Quality metrics (Operational definitions)

A quality metrics is an operational definition that describes, in very specific terms


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8

1) a project or product attribute and

2) how the quality control will measure it.

Examples:

1) On-time performance,

2) Budget control,

3) Defect frequency,

4) Failure rate,

5) Availability,

6) Reliability, and

7) Test coverage.

Quality metrics (Operational definitions)

A measurement is an actual value. The tolerance defines the allowable variations on the metrics


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defines the allowable variations on the metricsExample:

A metric related to the quality objective of staying within the within the approved budget by +/- 10% could be to measure the cost of every deliverable and determine the percent variance from the approved budget for that deliverable.

Quality metrics are used in Quality Assurance and Quality Control.

Quality Checklists

It is a component specific, structured tool used to verify a set of required steps has been performed.

Plan Quality - OUTPUTS

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verify a set of required steps has been performed. A ‘do this’ list, or ‘have you done this’ monitor!

These lists ascertain consistency in frequently

performed tasks.

Most organizations have it, or you can get one from

commercial service providers or professional

associations.

Process improvement plandetails steps for analyzing processes to identify activities which enhance their value.

Process boundaries defining purpose, start and


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1

1) Process boundaries defining purpose, start and end of processes, inputs, outputs, data required, process owner, and process stakeholder.

2) Process configuration, a flowchart of process to help analysis with identified interfaces.

3) Process metrics to maintain control over status of processes.

4) Targets for improved performance, guides process improvement activities.


- Stakeholder Register.


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2

- Responsibility Assignment

Matrix

Project Human Resource Management

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HR

HR

HR

HR

HR

HR

THE CHALLENGES� Most project managers have considerably more

responsibility than authority, so they need different

HR


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responsibility than authority, so they need different skills and approaches than traditional managers.

� Stakeholders often have different needs and perspectives, but project manager has to balance them, and yet achieve project objectives.

� Generally, project staff comes from various functional areas and do not report to the project manager, but he has to get work done by them.

THE CHALLENGES� Project manger’s role is so central that without it

there would be no such thing as project

HR


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5

there would be no such thing as project management. But he/she has to wear lot of different hats, many at the same time. He/she has to be an integrator, communicator, decision maker, motivator, entrepreneur, and change agent.

� The Project Manager has to make most effective use of all project stakeholders- sponsor, customer, functional managers, individual contributors, etc. Look at his task!

THE CHALLENGES

� Managing people on projects involves:

� Key General Management Skills, like leading,

HR


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� Key General Management Skills, like leading, communicating, negotiating, problem solving, and influencing organization.

� Dealing with individuals- delegating, motivating, coaching, mentoring, etc.

� Dealing with groups- team building, solving conflicts, etc.

� Administering the human resource function. May also have the responsibility of HR redeployment and release (depends on where they belong).

THE CHALLENGES� Further, application of these behavioral and HR

Management skills is different on projects than in

HR


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Management skills is different on projects than in operations because:

� Personal and organizational relations on projects are transient and new (as projects are temporary).

� Often the number and type of stakeholders change as project phase changes leading to the issue of adopting new techniques as old ones may not apply in another phase.

THE CHALLENGES

� The project manager and project team must know

HR


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� The project manager and project team must know administrative requirements to ascertain compliance, even though HR Administration activities are not their responsibility.

All this poses great managing problems for

the project manager and project team, and

they must understand things involved in

advance to address them properly.

Consists of:

processes needed to organize and manage the project

team, the people who are assigned roles and

HR


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team, the people who are assigned roles and

responsibilities for completing the project.

Apart from assigning roles, we must involve the team

members in planning and decision making. WHY?

Early involvement of team members ADDS

EXPERTISE DURING PLANNING PROCESSES

AND ALSO ENSURES COMMITMENENT!

What’s the difference between project team

and project management team ?

HR


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0

Project team: All the project team members, including

project management team, the project manager and,

for some projects, project sponsor.

Project management team: A subset of project team.

The group is called core, executive, or leadership

team and is responsible for project management

activities like planning, controlling and closing.

Develop

Project

management

plan


HR

Develop HR PlanRoles and Responsibilities

Project Organization Charts

Staffing Management Plan

A

EEFs

HR Requirements

Organization

Culture and

Structure

Templates

Checklists

Project managnt.

plan

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1

Integrated

Change

control

Performance reports

Work Performance reports

O P A

Updates

Acquire project team

Develop project team

Project staff assignments

Resource availability

Staffing management plan updates

Project plan management

updates

Requested

Changes

Recommended P

& C actions

Approved Change

requests

Approved corrective/

Preventive actions

A

P

P

R

O

V

A

L

S

Close project

Direct & manage

Project Execution

Report

Performance

Estimate activity

resources

Manage project team

Team Performance

assessment

OPAsChecklists


Determines project roles, responsibilities, and reporting relationships. Project roles can be assigned to persons or groups, inside or outside the organization performing

HR

Develop Human

Resource Plan

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2

or groups, inside or outside the organization performing the project.

The output is staffing management plan that describes:1) How and when team members will be acquired

2) Criteria for releasing them

3) Training needs

4) Recognition & reward plans

5) Compliance considerations

6) Safety issues

7) Effect of staffing management plan on the organization

� Done as part of “earliest phases” of the

project

HR

Project HR ManagementDevelop Human

Resource Plan

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3

project

� Its results are reviewed throughout project

to ascertain continued applicability

� Is closely linked with communications

planning because organization structure

has significant influence on communication

needs of the stakeholders

Develop Human Resource Plan

Is the process of

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4

Is the process of

1) identifying and documenting project roles,

2) Responsibilities and required skills,

3) reporting relationships, and

4) Creating a staffing management plan.


Human Resource Plan documents:

- Project roles and responsibilities

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5

- Project roles and responsibilities

- Project organization charts

- Staffing management plan

(including timetable for staff

acquisition and release, training needs,

team-building strategies).


IMPORTANT

Staffing management plan includes a) Timetable for staff acquisition and release,

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6

a) Timetable for staff acquisition and release,

b) Training needs,

c) Team-building strategies,

d) Plan for recognition and rewards programs,

e) Compliance considerations,

f) Safety issues, and

g) Impact of staffing management plan on the

organization.


IMPORTANT consideration should be given to

The availability of or competition for, scarce

or limited resources.

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or limited resources.

These resources may be inside or outside

the performing organization.

Other projects may be competing for same

skill sets.


IMPORTANT

These factors may significantly affect

project costs, schedules, risks, quality, and

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8

project costs, schedules, risks, quality, and

other areas.

Effective human resource planning must

consider these factors and plan for for them

and develop human resource options!

Develop Human Resource Plan process view

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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9

� Enterprise

environmental

factors

� Organizational

process

assets


Requirements

INPUTSTECHNIQUES

� Organization charts

and position

descriptions

� Networking

� Organizational

Theory

OUTPUTS

� Human Resource Plan


factorsDefinition of roles and responsibilities on the

HR


Develop Human

Resource Plan

INPUTS

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0

Definition of roles and responsibilities on the

project is evolved with an understanding of :

1) The ways that existing organizations will be involved

2) How the technical disciplines will interact with each other

3) How people currently will interact with one another

INPUTS

Commonly occurring enterprise

environmental factors involving

organizational culture and

HR


Develop Human

Resource Plan

INPUTS

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1

organizational culture and

structure

1) Organizational Interfaces

2) Technical Interfaces

3) Interpersonal Interfaces

4) Logistical

5) Political

INPUTS

HR

Organizational interfaces

1) which organizations / departments will participate in


Develop Human

Resource Plan

INPUTS

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2

departments will participate in the project

2) what are present working arrangements among them

3) what formal / informal relationships prevail among them (could be highly complex or quite simple).

INPUTS


HR

Project interfaces

REAL LIFE SCENARIO

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3

• Delhi Metro Project has engaged 38 contractors ( 33 Indian,

5 International) to work over several years. The reporting

relationships are pretty complex. Various technical disciplines

also interface.

• BSNL Voice Clarity Project at Greater Noida site was a simple

in-house project that did not offer such interface complexity.


Technical interfaces

1) What are different technical

HR

Develop Human

Resource Plan

INPUTS

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4

1) What are different technical disciplines and specialties that will be required to accomplish the project

2) Are there various types of:

a) engineering approaches

b) software languages

c) equipments THAT NEED TO BE COORDINATED!

INPUTS


HR

Technical interfaces

3) Whether transitions from one

Develop Human

Resource Plan

INPUTS

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5

3) Whether transitions from one

life cycle phase to another

pose unique challenges

TECHNICAL INTERFACES

EXIST BETWEEN

PHASES AS WELL AS WITHIN

PHASES

INPUTS

HR

Project interfaces

REAL LIFE SCENARIO


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6

� In L & T Cement Project, the site design made by civil

engineers needed to correspond with the superstructure

developed by structural experts.

� In Honda- Siel Project, the fabrication design team passed

work results to construction team to begin plant

construction.

Interpersonal interfaces1) What types of formal and

informal reporting relationships obtain among the prospective

HR


Develop Human

Resource Plan

INPUTS

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7

obtain among the prospective project team members

2) What are their superior-subordinate relationships

3) What are their supplier-customer relationships

4) What cultural and language differences will impact working relationships among them

5) What levels of mutual trust and respect presently exists

INPUTS


HR

Logistical

how much distance separates project

Develop Human

Resource Plan

INPUTS

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8

how much distance separates project

people and units

Are project people located in different:

1) buildings

2) time zones

3) countries

INPUTS


Political

1) What are the individual goals and

HR

Develop Human

Resource Plan

INPUTS

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9

1) What are the individual goals and

agendas of Prospective project stakeholders

2) Which groups and people posses

informal power in the areas significant to the project

3) What informal alliances exist

INPUTS


In addition to these EEFs:

Constraints that limit flexibility of HR

HR

Develop Human

Resource Plan

INPUTS

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0

Constraints that limit flexibility of HR

Planning:

� Organization structure

� Collective bargaining agreements

� Economic conditions

INPUTS


Organization structure

HR

ORGANIZTION STRUCTURE CONSTRAINTS

If you work in a functional organization, you will face lot

Develop Human

Resource Plan

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1

• If you work in a functional organization, you will face lot

of difficulties in acquiring resources from iron walls of

various functional departments.

• Here, the authority over resources lies with functional

managers. You are called project manager, but in fact

you just and an expeditor.

• You are more comfortable in strong matrix because you

have authority to direct resources and deploy for

project work.


Collective bargaining

agreements

HR

Develop Human

Resource Plan

INPUTS

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2

agreementsentered between the organizations and

labor/other employee groups detail

require certain roles and reporting

relationships.

Remember employee groups are

important stakeholders !

INPUTS


Economic conditionsHiring, freezes, reduced training

HR

Develop Human

Resource Plan

INPUTS

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3

Hiring, freezes, reduced training

funds, or lack of travel budget

are examples that can limit

staffing options. entered

between the organizations and

INPUTS


Organizational process assetswith the maturity of project

HR

Develop Human

Resource Plan

INPUTS

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with the maturity of project management methodology, organizations have HR planning experiences as ‘Lessons Learned’ that helps HR planning on our present project. Templates and checklists save time in the beginning and keep us from missing important responsibilities.

INPUTS



1) Templates helps HR planning

HR

Develop Human

Resource Plan

INPUTS

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5

1) Templates helps HR planning and include:

i. Project organization charts

ii. Position descriptions

iii. Project performance appraisals

iv. A standard conflict management approach

INPUTS



2) Checklists helps HR planning

HR

Develop Human

Resource Plan

INPUTS

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6

2) Checklists helps HR planning and include:

i. Common project roles and responsibilities

ii. Typical competencies

iii. Training programs

iv. Team ground rules

v. Compliance & safety issues

vi. Reward ideas

INPUTS


Activity Resource Requirements

Provides activity resource

HR

Develop Human

Resource Plan

INPUTS

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Provides activity resource requirements and description of other activities like quality assurance, risk management and procurement. For all this, we need to do HR planning.

Initial requirements of people and competencies are elaborated and refined in HR planning.

INPUTS


HR

organization charts and position Mostly three types used to

Develop Human

Resource Plan

TOOLS &

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Mostly three types used to document team member roles and responsibilities:

1) Hierarchical

2) Matrix

3) Text-oriented

Objective: Each work package must havean unambiguous owner and all team

member have clear roles and responsibilities!

TOOLS &

TECHNIQUES


HR

Organization chartProject reporting relationships are

graphically displayed.

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graphically displayed.

Depending on the project needs,

you can make it formal or

informal; broadly-detailed or

highly-detailed.

INR 2 billion Reliance Power Dadri

Project, has mind-boggling

organization chart for about 7000

people.


HR

Organization breakdown

Structure (OBS)

OBS

Develop Human

Resource Plan

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Structure (OBS)WBS shows how project deliverables

are broken down into work packages

and becomes one way to depict high-level

areas of responsibility. OBS looks similar

but arranged according to departments,

units, or teams: the project activities or

work packages listed under each

Department. This helps each operational

department to see its portion of OBS.


HR

Develop Human

Resource Plan

Resource breakdown Structure

Another hierarchical chart that breaks

RBS

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Another hierarchical chart that breaks

down project by types of resources

Helps tracking project costs, aligned with

the organization’s accounting system

RBS of Delhi Metro Project shows all welders

(over 600) and welding machines (630) being

used in different areas of this massive even

though they are scattered in different branches

of Project OBS

PERSON

PHASES

Vikas Rajiv Shasi Manas Mona Rahul …….

Excavation

HR

Sample RAM using RACI format

Project HR ManagementDevelop Human

Resource Plan

81

2 R = responsible, A = accountable, C = consult, I = inform

Excavation A I I I I R

Foundation I A R C C C

Frame I C A R I I

Walls and

ceilingsA R C C C C

Interior

systemsR I C I I A


HR

RAMs of larger projects

� RAMs on larger projects are developed at various

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3

RAMs on larger projects are developed at various

levels of WBS.

� High-level RAM describes the group or unit

accountable for each component of WBS.

� Lower-level RAMs assigns roles and responsibilities

for specific activities to concerned persons.

RAM shows connection between work and team

members!


HR

Text-oriented formatTeam member responsibilities that

require detailed descriptions can be

Text-oriented format

Role

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4

require detailed descriptions can be

written here in outline form:

� Responsibilities, authority,

� Competencies, qualifications

This format is also called:

Position Descriptions and Role-

Responsibility-Authority forms.

Make great templates if updated throughout

current project!

Authority

Responsibilities


HR

Other sections of project

management plan

Develop Human

Resource Plan

INPUTS

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We consider team member responsibilities detailed in other sections of the project management plan:

1) Risk register lists risk owners

2) Communication management plan lists people responsible for communication activities

3) Quality plan lists people responsible for quality assurance and quality control activities

INPUTS


HR

Networking For effectiveness of staffing management plan options, we must understand

Develop Human

Resource Plan

INPUTS

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plan options, we must understand political and interpersonal factors that may impact them. So, we need to use networking, such as:

1) Proactive correspondence

2) Luncheon meetings

3) Informal conversations

4) Trade conferences

Networking pays from start of the project till its completion!

INPUTS


HR

Organization theory (OB)Informs us on the ways people, teams and organizations behave.

Develop Human

Resource Plan

INPUTS

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teams and organizations behave.

We must use proven principles to shorten the time needed to arrive at outputs of HR planning.

It makes planning more effective.

1) Goal-setting

2) Group Dynamics

3) TIP

INPUTS

Develop Human Resource Plan- OUTPUTS

HR

Human Resource Plan includes:-

1) Role and responsibility assignments

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1) Role and responsibility assignmentsRole: portion of project for which a

person is accountableExample Project Roles:

business analyst, civil engineer,

testing coordinator

Role clarity is vital for project success:

- authority

- responsibilities

- boundaries

HR

Role and responsibility

assignmentsAuthority:


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Authority:

- right to apply project resources - make decisions

- sign approvals

Clarity about authority is necessary for

project success.

Examples of decisions requiring Clear

Authority:

- quality acceptance

- how to respond to project

variances


HR

Role and responsibility assignments

Responsibility:

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0

the work team member is expected to

perform to complete project activities


HR

Role and responsibility assignmentsCompetency:

� Skill and capacity needed to accomplish project

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� Skill and capacity needed to accomplish project

activities.

� Project performance will be adversely affected if

team members do not have necessary

competencies.

� Must identify mismatches and make up through:

training, hiring, schedule changes, or scope

changes.


HR

2) Project organization chart

Graphic display of project team member

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Graphic display of project team member

and their reporting relationships.

We have already discussed it.


HR

3) Staffing management plan

Describes how and when HR requirements will be met.

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met.

Updated regularly during the project to ONGOING PROJECT TEAM ACQUISITION AND DEVELOPEMNT.

Made as per the project needs:

- may be detailed or broad

- may be formal or informal

Subsidiary part of the project management plan


HR

Staffing management planContents:

1) Staff acquisition: many questions need to be answered

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1) Staff acquisition: many questions need to be answered

when planning acquisition of team members:

� Will they come from within the organization or outside?

� Will they need to work at a central location or distant ones?

� What costs are entailed with each level of expertise required?

� How much help HR depart will extend to project management

team?


HR


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5

2) Timetable: necessary time frames they will be used, plus when recruitment should begin.

One tool: Resource Histogram: bar chart showing number of hours that a person, department, or whole project team will be required each week or month during the project.


HR


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Contents:

Resource Histogram: may include a

horizontal line maximum number of hours

available from a particular resource.

If bars extend beyond the available resource

hours, we need to use resource leveling

(adding more resources or extending

schedule).

70

80

90

HR

Staff hours

Sample Resource Histogram

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7

0

10

20

30

40

50

60

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Staff hours

Resource Usage Staff hours


HR


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8

3) Release criteria: determining method and

timing. Benefits project and team members.Special Attention should be paid to releasing

persons or groups when their work completes.

Benefits of proper reassignment procedures:

1. Lowers costs by reducing the tendency to make work to

fill the time between present and the next assignments

2. Boosts morale by eliminating uncertainty about future

employment


HR


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9

4) Training needs: if training members assigned

are not expected to have necessary

competencies, we need to develop a training

plan as part of the project and also help

them obtain certifications.


HR


5) Recognition & rewards: Clear criteria and

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5) Recognition & rewards: Clear criteria and planned system to encourage and reinforce DESIRED BEHAVIORS. Must be based on activities and performance under one’s control.

Example: If someone is to be rewarded for meeting cost objectives, then he/she must be given authority on matters that affect expenses.


HR


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5) Recognition & rewards: Such a with defined

timeframes ensures that recognition doe take

place and not ignored!

Given as part of the Develop Project Team

process.


HR


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6) Compliance: strategies for complying with

applicable government regulations, union

contracts, and other HR policies.

7) Safety: policies and procedures to protect

team members from hazards. Include in Risk

Register also.


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3

COMMUNICATIONS

THE CONCEPT


Communication

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4

THE CONCEPT1. Proper communication is one of the critical success factors.

2. There should be a structured approach to it.

3. Communication needs of all project stakeholders must be

identified in advance:

� What they need to be communicated

� How they are going to be communicated

� When they will to be communicated

THE CONCEPT


Communication

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5

THE CONCEPT4. This is a very proactive approach and must be adopted on all

projects to ensure smooth working, amicable relations, and

project success.

5. This is particularly more important due the fact that most

project managers do not know what this is, nor do they

realize that individual needs of each stakeholder must be

addressed.

Hence, project communications management employs

Communication


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Hence, project communications management employs

processes needed “to ensure timely and appropriate”:

1) generation

2) collection

3) distribution

4) storage

5) retrieval, and

6) ultimate disposition

OF PROJECT INFORMATION

project communications management provides:

Communication


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project communications management provides:CRITICAL LINKS AMONG PEOPLE AND INFORMATION THAT ARE

REQUIRED FOR SUCCESSFUL COMMUNICATIONS

Project managers spend about 90% time communicating:

1) With the project team

2) With the customer

3) With the functional managers

4) With the sponsor

5) With other stakeholders

Everyone involved in the project must understand:

Communication


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Everyone involved in the project must understand:

HOW COMMUNICATIONS AFFECT THE PROJECT

AS A WHOLE

Communication skills (though not same as project

Communication


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9

Communication skills (though not same as project

communications management) have great significance

during Project Communications Management.

MASTERING THE ART OF COMMUNICATION IS VERY

IMPORTANT

MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT

Communication


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MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT

IT INVOLVES:

1) Sender-receiver models

2) Choice of media

3) Writing style

4) Presentation techniques

5) Meeting management techniques

Communication

Project Communications ManagementSender-receiver model

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1

R

E

C

E

I

V

E

R

DEVELOP

IDEA

ENCODE TRANSMIT RECEIVE DECODE ACCEPT USE

S

E

N

D

E

R

MESSAGE FLOW

1

MESSAGE FLOW

76542 3

BRRIERS

BRIDGE OF MEANING

8 (FEEDBACK)

IT REQUIRES 8 STEPS: WHETHER TWO PARTIES TALK, USE HAND

Communication


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2

IT REQUIRES 8 STEPS: WHETHER TWO PARTIES TALK, USE HAND

SIGNAL, OR EMPLOY SOME OTHER MEANS OF COMMUNICATION

1) Develop an idea

2) Encode

3) Transmit

4) Receive

5) Decode

6) Accept

7) Use

8) Provide feedback

sender end

receiver end

TWO-WAY COMMUNICATION

Communication


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Step 1: Develop an idea

That sender wishes to transmit. It’s key step, because unless

there is a worthwhile message, all other steps are useless.

“Be sure brain is engaged before putting mouth in gear.”

Step 2: Encode

Translate the idea into suitable words, charts, or other

symbols and organize in a fashion that is appropriate to the

type of transmission you choose


Communication


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4


Step 3: Transmit

Send by the method chosen: memo, phone call, email, video

conference, personal visit.

Keep communication channel free of barriers or interference

to ensure message reaches the receivers and hold their

attention.

Step 4: Receive

Receivers tune to receive. If it’s oral, they need to be good

listeners. If receiver does not function, the message is lost.


Communication


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5


Step 5: Decode

Translate the message back into meaningful idea just as it

was sent. If the sender has sent a square and receiver

decodes it as circle, then no understanding has happened.

UNDERSTANDING CAN HAPPEN ONLY IN RECEIVER’S MIND.

A COMMUNICATOR MAY MAKE OTHERS LISTEN, BUT THERE IS NO

WAY TO MAKE THEM UNDERSTAND. THE RECEIVER ALONE

CHOOSES WHETHER TO UNDERSTAND OR NOT. MANY

PROJECT MANAGERS FORGET THIS WHEN GIVING

INSTRCUTIONS OR EXPLANATIONS TO THE STAKEHOLDERS


Communication


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6


Step 5: Decode

THEY THINK TELLING SOMEONE IS SUFFICIENT, BUT

COMMUNICATION CAN NOT PROCEED UNTIL THERE IS

UNDERSTANDING.

THIS IS CALLED, “GETTING THROUGH A PERSON”

STEP 6: Accept

Having received and decoded the message, the receiver have

The opportunity to accept or reject it. Project Managers, of

course, would like receivers to accept their communications


Communication


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7


STEP 6: Accept

In the manner intended so that activities can progress as

planned. Acceptance, however, is a matter of choice and

Degree, such that the receiver has considerable control over

Whether or not to embrace all the message or just its parts.

Some factors affecting acceptance decision:

a) perceptions of the message’s accuracy

b) authority of the sender

c) behavioral implications for the receiver


Communication


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8


STEP 7: Use

The receiver may use the information, discard it , perform the

task as directed, store the information for future, or do

something else.

Step 8: Feedback

When the receiver acknowledges the message and responds

to the sender feedback has occurred. It completes the

communication loop.

COMMUNICATION BARRIERS

Communication


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1) Personal barriers:- human emotions

- values

- poor listening habits

- differences in education, culture, sex,

socioeconomic status

2) Physical barriers:- distance

- noise

- walls

- static that interferes with electronic

messages

Choice of media (depends on situation)

Communication


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Choice of media (depends on situation)

- in writing or orally

- informal memo or formal report

- face-to-face or email / video conference

Writing style:

- active or passive voice

- sentence structure

- word choice

Presentation techniques

Communication


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1

- body language ( non-verbal 55%)

- visual aids

Meeting management techniques:

- set a time limit and keep it

- schedule and agenda in advance

- stick to agenda

- chair and lead with set rules

- assign deliverables and time limits for resulting tasks

- bring right people together

A BREAK DOWN IN COMMUNICATIONS

Communication


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2

A BREAK DOWN IN COMMUNICATIONS

HAS

ADVERSE CONSEQUENCE ON THE PROJECT

THE PROJECT MANAGERS

MUST MASTER

THE ART OF COMMUNICATING

WITH

THE STAKEHOLDRES


Identify Stakeholders

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3

Plan Communications

Distribute Information

Report Performance

Manage Stakeholders Expectations

Communication

Plan Communications

the process of

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4

the process of

Determining the project stakeholders

information needs and defining a communication

approach.

Identifying information needs of stakeholders

and deciding suitable means of meeting them

are key factors for project success!

Communication

Plan Communications

This process responds to the information and

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5

This process responds to the information and

communication needs of the stakeholders.

EXAMPLE:

- Who needs what information

- When they will need it

- How it will be given

- By whom

Communication

Plan Communications

Please remember:Improper communication planning leads to

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6

Improper communication planning leads to

problems as delay in message delivery,

sending sensitive info to wrong audience, or

lack of communication to some required

stakeholders!

Effective communication means that the information

is provided in the right format, at the right time, and

with the right impact!

Communication

Plan Communications

Please remember:On most projects, communication planning is done

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7

On most projects, communication planning is done

very early, such as during project management plan

development.

This allows appropriate resources, time and budget,

for communication activities.

The results of this process should be reviewed

throughout and revised as needed.

Communication

Plan Communications

Please remember:

Plan Communications process is tightly linked

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8

Plan Communications process is tightly linked

with Enterprise Environmental Factors.

WHY?

Because organization’s structure will have a

major effect on the project’s communication

requirements.

Plan Communications process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


Communication

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9


� Stakeholder

management strategy

� Enterprise

Environmental

Factors


Assets

INPUTSTECHNIQUES

� Communication

requirements

Analysis

� Communications

technology

� Communication

Models

� Communication

Methods

OUTPUTS

� Communications

Management

Plan


Updates

Plan Communications - INPUTS

Communication

1. Stakeholder registerprovides information on the list of stakeholders,

their interests, and influence.

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their interests, and influence.

2. Stakeholder management strategyprovides important guidance on planning

communications.

3. Enterprise environmental factorsall enterprise environmental factors are used to

adapt communication to the project environment.

Plan Communications - INPUTS

Communication


All organizational process assets are used as inputs.

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1

Particularly important:

- Lessons Learned and Historical Information,

as they give insights on both the decisions

taken regarding communication issues and the

results of those decisions.

Plan Communications – Tools & Techniques

1.Communications requirements analysis

CAUTION!

Communication

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2

CAUTION!

Please do not waste you resources on unnecessary

communications.

� use them when communicating

contributes to success, OR

� when lack of communication may

cause failure.

Communications Requirements analysisFor establishing project communications requirements, we

normally need to know:

1) Organization charts

Communication


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1) Organization charts

2) Project organization and the stakeholder

responsibility relationships

3) Departments disciplines, specialties

concerned with the project

4) People logistics and locations

5) Internal communication needs

6) External communication needs

7) Stakeholder information


Communication requirements analysisWhom do we need to send Project Information?

• Customer

Sponsor

Communication

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4

• Sponsor

• Senior management

• Functional managers

• Team members

• Other project managers

• Regulatory authorities

• Media

• Society

• Outside specific interest groups, organizations

• Any other stakeholder stakeholders


Communication requirements analysisWhat do we need to communicate on our project?

1) Status

Communication

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5

2) Performance baselines

3) Achievements (major milestones, intermediate milestones, etc.)

4) Problems

5) Changes to scope, schedule, cost, etc.

6) Adherence to standards and regulations

7) New risks uncovered

8) Team members performance

9) Project phase deliverable’s acceptance, project’s product

acceptance, etc.


Communication

THROUGH

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6

� Status reports

� Progress reports

� Trend report

� Forecasting report

� Variance report

� Earned value analysis reports

� Compliance to regulations, and so on


Communication channels

Communication

The project manager needs to consider the number of potential

communication channels to grasp the complexity of a project’s

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communication channels to grasp the complexity of a project’s

Communications:

2 PEOPLE, 1 CHANNEL

3 PEOPLE, 3 CHANNEL

4 PEOPLE, 6 CHANNEL5 PEOPLE, 10 CHANNEL

( 20 PEOPLE, 190 CHANNEL! )

Communication channels = n (n-1) / 2

n = number of stakeholders

2. Communications technologyWhat factors decide your choice of communications

methods?


Communication

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8

methods?

General factors are:

� Urgency for information

� Availability of method

� Expected project staffing

� Length of the project


Communications technology factor

1. Urgency for information

We must examine if the stakeholders

Communication

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9

We must examine if the stakeholders

like customer, senior management, or

functional managers require reports

updates instantaneously, or normal

formal reporting will sufficient.

It depends on nature of project.


Communication

Communications technology factors

2. Availability of method

We examine if our existing communications

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0

technology is competent to meet project

communication requirements or we need to change.

3. Expected project staffing

We analyze whether the project people have

the requisite abilities to use the

communications technology or they need

training.


Communication

Communications technology factors

4. Length of the project

The length of our project may see changes in

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The length of our project may see changes in

communications technology. If it is very long project,

the advances in communications field may offer better

or preferred mode of communication.

Therefore, we need to consider this aspect

also because it will cost time and money to

install new technology.


Communication

Communications technology

5. Project environment

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2

5. Project environment

Does the team operate on a face-to-face basis or in a virtual environment.


Communication

3. Communication Models

A basic model is sender-receiver model. Components are:

Encode:

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3

- Encode: Translate thoughts into a language that is understood by others.

- Message and feedback-message: the output of encoding both by sender and receiver.

- Noise: anything that interferes with the transmission and understanding of the message(distance, unfamiliar technology, lack of background information).

- Decode: to translate the message back into meaningful thoughts or ideas.


Communication

Encode Decode Message

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4

Encode

Decode Encode

Decode

Medium

Noise

NoiseSender Receiver

Feedback-Message

Basic Communication Model


Please remember!

Inherent in this model is an action to

acknowledge a message. Acknowledgement

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5

acknowledge a message. Acknowledgement

means that the receiver signals receipt, but not

necessarily agreement with the message!

Another action is the response, which means

that the receiver has decoded, understands,

and is replying to the message.


Communication

3. Communication Models (duties)

The sender: Make the message clear and complete so that the receiver can receive

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complete so that the receiver can receive it correctly, and for confirming that it is properly understood.

The Receiver: Make sure that the message is received in its entirety, understood correctly, and acknowledged.

A failure in communication negatively impacts the project.


Communication

4. Communication Methods include

Interactive Communication:

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- Interactive Communication: Between two or more parties performing a multidirectional exchange of information. Most effective way to ensure common understanding. Meeting, Phone Calls, Video Conferencing, etc.


Communication

Communication Methods Include

- Push Communication: Sent to specific

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- Push Communication: Sent to specific recipients who need to know the information. This ensures that the information is distributed but does not certify that it has actually reached or was understood by the intended audience. Letter, Memos, Reports, Emails, Faxes, Voice Mails, Press Releases, etc.


Communication

Communication Methodsinclude

Pull Communication

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- Pull Communication:- Used for very large audiences that requires recipients to access the content at their own discretion. Intranet Sites, e-learning, Knowledge Repositories.

Base on the requirements, project manager decides

what, how, and when communication methods are to

be used on the project.

Plan Communications - Outputs

Communications

management plan

Communication

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contains

1) Stakeholder communication requirements

2) Information to be communicated, format, content,

level of detail

3) Person responsible

4) Person/group who will receive

5) Methods

6) Frequency


Communications

management plan

Communication

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contains7) Escalation process: defining timeframes and management chain (names) for escalation of issues that can’t be resolved at lower levels

8) Method for updating and refining this plan as project progresses

9) Glossary of common terminology

(very important)


Communication

Sample communicationsmanagement plan, contents

1. Communications itemCommunications management

plan can have guidelines for

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1. Communications item

2. Purpose (reason for

distribution of info)

3. Frequency

4. Start date/end dates

(time frame for

distribution of info)

5. Format/medium

6. Responsibility

plan can have guidelines for�Project status meetings

�Project team meetings

�E-meetings

�E-mail

This plan is a subsidiary plan of

overall project management plan.


Communication


It may include:-

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It may include:-

1) Project Schedule.

2) Stakeholder Register.

3) Stakeholder Management strategy.

Communication

Please remember!

Communication planning involves creation of additional


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Communication planning involves creation of additional

deliverables (reports, charts,etc).

Time and effort required for this must be reflected in WBS,

schedule, and budget.

Update them accordingly.

Processes concerned with conducting:



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� Identify Risks

� Perform Qualitative risk analysis

� Perform Quantitative risk analysis

� Plan Risk Responses

� Monitor and Control Risks


Project Risks?

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An uncertain

Event or

Condition

if

occurs- ve

+ ve

HASPROJECT

OBJECTIVES

SCOPE

QUALITY

COST

SCHEDULE

RISK

EFFECT


Project risk has its origin in the UNCERTAINTY

THE CONCEPT

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that is present in ALL projects!

� risks could be positive (opportunities):

-an equipment is cheaper than planned, a work package

is accomplished earlier than expected, achieving quality

level on a work package takes lesser time than

expected, work can be done faster as we were able to

acquire a more productive resource!



THE CONCEPT

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that is present in ALL projects!

� risks could be negative (threats)

� risks could be known

� risks could be unknown


What is cost contingency in following analysis of a product

modification project?

�30% probability of delay in components receipt with a cost to the

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�30% probability of delay in components receipt with a cost to the

project of Rs.9,000/-

�20% probability that components will be Rs.10,000 cheaper than

expected.

�25% probability that two parts will pose installation issue

costing extra Rs.3,500/-

�30% probability that production will be simpler than expected,

saving Rs.2,500/-

�5% probability of a design-defect causing Rs.5,000 rework


What is cost contingency in following analysis of a product

modification project?

�30% X Rs.9,000 = Rs.2,700 outflow, add

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�30% X Rs.9,000 = Rs.2,700 outflow, add

�20% X Rs.10,000 = Rs.2,000 saving, subtract

�25% X Rs.3,500 = Rs.875 outflow, add

�30% X Rs.2,500 = Rs. 750 saving, subtract

�5% X Rs.5,000 = Rs.250 outflow, add

OUTFLOW TOTAL Rs.3825, SAVING TOTAL Rs.2750

Contingency amount = 3825 – 2750 = Rs.1075


THE CONCEPT

� Risk is a function of the UNIQUENESS of a

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� Risk is a function of the UNIQUENESS of a project and the EXPERIENCE of the project team.

� When activities are routine, you can anticipate the range of potential outcomes.


THE CONCEPT

� When project activities are non-routine (not

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� When project activities are non-routine (not performed before and your team is inexperienced), the potential outcomes are more uncertain, making it difficult for you to know what may go wrong and how to avoid problems.

� Even in routine projects, the outcomes may be influenced by new factors, or those beyond your control.


THE CONCEPT

� Persons (by extension organizations) have

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� Persons (by extension organizations) have attitudes towards risks that affect both accuracy of the perception of the risk and the way they respond!!

� A consistent approach to risk that meets organization’s requirements) must be developed for EACH PROJECT! And communication about risk must be made open and honest!


THE CONCEPT

� Risk responses reflect an organization’s

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� Risk responses reflect an organization’s perceived balance between risk-taking and risk avoidance!

� TO BE SUCCESSFUL, we must manage risks proactively and consistently throughout the project!

Now, the first process: Risk Management Planning


Why risk management planning?

CAREFUL AND EXPLICIT planning increases the

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CAREFUL AND EXPLICIT planning increases the possibility of SUCCESS of five other risk management processes!

� decide how to approach and conduct risk management activities on the project

� provide sufficient time and resources for risk management activities

� establish an agreed-upon basis for evaluating risks.


When risk management planning?

Should be completed EARLY during project

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Should be completed EARLY during project planning because it is CRUCIAL to performing other risk management activities!


Plan Risk Management process overview

INPUTS TOOLS &

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7

� Enterprise

environmental

factors

� Organizational

process assets

� Project scope

statement

� Cost management plan

� Schedule management

plan

� Communications

management plan

INPUTS TOOLS &

TECHNIQUES

� Planning meetings

and analysis

OUTPUTS

� Risk Management

Plan

Enterprise



Plan Risk Management

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the attitudes toward risk and risk

tolerance of organizations and

people involved in the project will

influence the project

management plan. Risk attitudes

and tolerances can be found in

policy statements or in actions.



assets


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assets

predefined approaches to risk

management, such as:1) Risk categories

2) Common definition of concepts and

terms

3) Standard templates

4) Roles and responsibilities

5) Authority levels for decision-making


Project scope statement- Provides a clear sense of the range of possibilities

related to the project and its deliverables.

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related to the project and its deliverables.

- Establishes the framework for how significant the risk

management effort may ultimately become!

Cost management plan- defines how risk budgets, contingencies, and

management reserves will be informed and availed!


Schedule management plan- defines how schedule contingencies will be informed

and availed!

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and availed!

Communications management plan- defines the interactions that will occur on the project

- Determines who will be available to share information

on various risks and responses at different locations

and times.

Planning meetingThe meetings are held by project


TOOLS &

TECHNIQUES


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The meetings are held by project

teams.

Must ensure participation of:

1. project manager

2. project team leaders

3. people responsible to manage risks and

implement plans

4. Key stakeholders

5. Others as necessary

TECHNIQUES


and analysis

Planning meetingWhat do we do in the meetings:


TOOLS &

TECHNIQUES


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What do we do in the meetings:

1. Define basic plans for risk management activities

2. Develop risk cost elements and schedule activities for including in project budget and schedule

3. Assign risk responsibilities

4. Tailor to the project: templates for risk categories and definitions of terms like ‘Levels of Risk’, ‘Probability by type of Risk’, ‘Impact by type of objectives’, plus probability and impact matrix.

TECHNIQUES


and analysis

Risk management plan


OUTPUTS


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documents how risk identification,

qualitative and quantitative risk

analysis, risk response planning,

risk monitoring and controlling will

be structured and performed during

the project life cycle

(It does not tell you how to manage

individual risks. Management of individual

risks is contained in the risk response

plan).

OUTPUTS

� Risk Management

Plan

Risk management planINCLUDES

� Methodology



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� Methodology

� Roles and responsibilities

� Budgeting

� Timing

� Risk categories

� Definitions of risk probability and impact (Scoring and interpretation)

� Probability and impact matrix set and tailored to the project

� Revised stakeholders’ tolerances as they apply to the specific project

� Reporting formats

� Tracking ( how to record lessons learned)

OUTPUTS

� Risk Management

Plan


� Methodology: defines approaches, tools, and data sources that may be used in risk management on the project.


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that may be used in risk management on the project.

� Roles and responsibilities: defines lead, support, and risk management team membership for each type of activity in the risk management plan.

� Budgeting: assigns resources and estimate costs required for risk management FOR INCLUSION IN THE RISK MANAGEMENT PLAN!

� Timing: defines when and how often the risk management process will be performed throughout the project life cycle. Establishes risk management activities TO BE INCLUDED IN THE SCHEDULE!


� Risk categories: Provides a structure that makes sure a


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� Risk categories: Provides a structure that makes sure a comprehensive process of SYSTEMATICALLY identifying risk to a consistent level of detail. Contributes to the quality and effectiveness of Risk Identification.

Example:

1) A RBS

2) Simple listing various aspects of the project

� Risk categories may be revised during risk identification process!

� GOOD PRACTICE: Review risk categories during risk management

planning process before their use in risk identification process

FOR TAILORING THEM TO SUIT YOUR CURRENT PROJECT!


Project

Organizational External Technical Project

Management

Sample RBSCategorizing risks

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Organizational External Technical Management

Requirements

Technology

Complexity &

Interfaces

Performance &

Reliability

Quality

Subcontractors &

suppliers

Regulatory

Project

dependencies

Market

Customer

Weather

Resources

Funding

Prioritization

Estimating

Planning

Controlling

Communication


Definition impact scales for four on project objectives

Project

Objectives

Very low

.05

Low

.1

Moderate

.2

High

.4

Very high

.8

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COST

Insignificant

Schedule

Slippage

Insignificant

Cost increase 20% cost

Increase

10-20%

Cost

Increase

5-10%

Cost

Increase

5% cost

Increase

Quality

Deterioration

Negligible

Scope decrease

Negligible

QUALITY

SCOPE

SCHEDULE 5-10%

Schedule

Slippage

Affected only

Very demanding

Application

areas

Scope:

Minor areas

affected

20%

Schedule

Slippage

Quality

Reduction

Requires client

Approval

5%

Schedule

Slippage

Scope:

Major areas

affected

Quality

Reduction

Unacceptable

To client

Project’s

Product

Effectively

Not usable

Project’s

Product

Effectively

Useless

Scope

Reduction

Unacceptable

To client

Scope

Reduction

Unacceptable

To client


DETERMINES which risks might affect project

Identify

Risks

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DETERMINES which risks might affect project

objectives! And document their characteristics.

IS it one time job?

No, it’s an iterative job as new risks may appear

just as the project moves ahead in project life

cycle!

Risk identification is not easy job.

Identify

Risks


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1

� I have seen many organizations

taking it casually on their projects,

only to pay heavily later (negative risk),

or miss opportunity (positive risk) that

they would have benefited from.


IDENTIFIES which risks might affect the project

DOCUMENTS their characteristics

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DOCUMENTS

INVOLVES:a) Reviewing every input variable, activity, key material and

resource

b) Identifying threats and opportunities

c) Preparing checklists from others’ experience and ensuring completeness

ADDRESSES:1) Internal risks ( risks within control / influence of project team, such as staff

assignments, cost estimates, etc.)

2) External risks ( risks beyond control / influence of the project team, such

as market shifts or Government actions, etc.)


SHOULD not be done by the project team alone.

MUST INCLUDE :

� your project team (for a sense of ownership/responsibility)

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3

� your project team (for a sense of ownership/responsibility)

� risk management team (can you tell why?)

� subject matter experts (from other parts of your

organization)

� other project managers (can you tell why?)

� outside experts

� customers

� end users (very important)


Risks can not be identified by just conducting the exercise once.

You have to iterate it to bring all risks to your grip.


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Risk identification iterations:

1. First iteration- by a part of your project team.

2. Second iteration- by entire project team and primary stakeholders.

3. Final iteration- by people not involved in your project (to remove the chances of any biased analysis).

Please remember!

� Risks identification process normally leads to qualitative risk analysis.


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5

to qualitative risk analysis.

� May also lead to quantitative risk analysis if done by an EXPERIENCED RISK MANAGER.

� Sometimes, simply conducting risk identification may suggest its response that is for further analysis and implementation in the risk response planning.


Identify Risks process overview

INPUTS TOOLS &

TECHNIQUES

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6

� Risk management plan

� Activity cost estimates


Estimates

� Scope baseline



� Schedule management plan

� Quality management plan

� Project documents

�Enterprise



assets

INPUTSTECHNIQUES

� Documentation

Reviews

� Information

Gathering

Techniques

� Checklist analysis

� Assumptions

Analysis

� Diagramming

Techniques

� SWOT analysis

� Expert judgment

OUTPUTS

� RISK REGISTER



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7


Provides all these used here

1) Assignment of roles and

responsibilities for risk

management activities

2) Provision in budget and

schedule

3) Categories of risks

Risk management planCategories of risks


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8

� First category pertains to

Technical / Quality /

Performance Risks

Examples: dependence on

new, or complex, or unproven

technology, unrealistic

performance objectives, etc.



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9

� Second category relates to

Project Management Risks

Examples: inadequate application

of project management disciplines,

Poor quality of project plan,

Insufficient allocation of resources

and time, etc.



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� Third category pertains to Organizational Risks

Examples: internal inconsistency

with scope, time, and cost

objectives, poor project prioritization,

funding problems,resource conflict

due to multiple projects in the

organization, etc.



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1

� Fourth category belongs to External Risks

Examples: labor unrests, shifting owner

priorities, weather, legal/regulatory

changes, country-related risk.

FORCE MAJEURE RISKS : floods,

earthquakes, civil riots, cyclones, etc.) do

not call for risk management, but they need

disaster recovery actions.


risk identification needs an understanding of:

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an understanding of:1) The schedule,

2) Cost, and

3) Quality management plans

4) Outputs of other knowledge area processes for review to find possible risks across entire project.


Outputs of other knowledge areasmost vital inputs to risk identification as they allow us understand

project’s mission, scope, and objectives of the stakeholders

(including customer, sponsor, etc.)

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(including customer, sponsor, etc.)

These outputs:

� Project charter

� WBS

� Product description

� Schedule and cost estimates

� Resource plan

� Procurement plan

� Assumptions and constraints lists


Stakeholder Register

Used in inviting inputs for identifying risks from

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Used in inviting inputs for identifying risks from

key stakeholders (like customer).

Project documents- assumptions log

- Work performance reports

- EV reports

- Network diagrams

- Baselines

- Other project information of use


factors


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Provide for help in risk

identification:

1) Commercial databases

2) Academic studies

3) Benchmarking

4) Other industry studies

Organization process assets


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6


Provide information from

previous project files,

including actual data and

lessons learned.

Risk identification is a serious job,hence 5 tools and techniques come to

Your Help.


Identify Risks

TOOLS &

TECHNIQUES

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Your Help.

1.Documentation reviewsIs the structured review of

• Project plans

• Assumptions- project level

• Assumptions- detail scope levels

• Prior project files, and

• Any other information

�Documentation

Reviews� Information

Gathering

Techniques

� Checklist analysis

� Assumptions

Analysis

� Diagramming

Techniques

� SWOT analysis

� Expert judgment

2. Information-gathering techniquesThe aim: to obtain a comprehensive list of risks that can be later addressed in risk assessment processes.


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assessment processes.

TECHNIQUES:

� Brainstorming (frequently used)

� Delphi- to reach consensus of experts anonymously

� Interviewing: experienced project participants and subject matter experts

� Root cause identification (for effective response)

� SWOT analysis (project’s strengths, weaknesses, opportunities, threats are analyzed to give a much wider view of the risks under consideration).

2. Information-gathering techniques� Brainstorming (frequently used): project team performs with multidisciplinary set of experts not on project team. Ideas on project risk are gathered with the help of a facilitator.


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project risk are gathered with the help of a facilitator. Categories of risk (like RBS) can be used as a framework. Risk are identified and categorized and their definitions refined.

� Delphi- to reach consensus of experts anonymously . A facilitator sends a questionnaire to gather ideas about important project risks, summarizes responses and sends them again. Consensus is reached in few rounds, but without experts knowing names of participants.

Advantage: helps reduce bias in data and keeps any one person from having undue influence on the outcome!

3. Checklist analysis

Most handy and generally liked by


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people for they are quick and simple.

Checklists are made, based on:

Historical information, knowledge

derived from experience on prior

projects, and other sources.

ITEMIZE all categories of risks

relevant to your project.

3. Checklists

But there is a caution!It is not possible to make an exhaustive


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It is not possible to make an exhaustive

checklist containing all risks on

your project.

There may be some important risks on

current project not listed in your

standard checklist!

IMPROVIZE YOUR CHECKLIST DURING

CLOSING PROCESS FOR USE ON NEXT

PROJECTS!

4. Assumptions analysisRemember so many assumptions you have

made while initiating the project, defining


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2

made while initiating the project, defining

scope, planning resources, estimating time

and cost, etc.?

What if they turn out to be

inaccurate, inconsistent, and incomplete

later?

THEY BECOME RISKS!

Hence, you must analyze their validity to

assess how far they will stand to be

true.

5. Diagramming techniquesHelp you immensely in identifying the risks.

You can use:


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3

You can use:

� Cause-and-effect diagrams (Ishikawa / fishbone diagrams)

� System / Process Flow Charts

� Influence Diagrams

examples

� Cause-and-effect diagrams (Ishikawa / fishbone diagrams)


HARDWARESOFTWARE FUNDS

ChangeHardware

shipment

Revenue from current

Project delayed

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4

Insufficient funds

to pay staff and

suppliers

Project

completion

delay

INSTALLATION STAFF

in user

requirements

Inadequate customer site

preparation

Hardware incompatible with

existing user systems

Hardware

Design incomputable

with software

requirements

shipment

delay

Hardware

supplier

goes bankrupt

Project delayed

Difficulty in teaching user

New Procedures

Software design does not

meet Initial Requirements

Insufficient technical skills

Staff shortage

Inability to hire / train

Additional staff

�System/ process flow charts

depict interrelationship of elements and mechanism

of causation.


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5

of causation.

Develop manufacturing drgs

Develop engineering

Develop detail engineering

Project specification

Proceed manufacturing

Yes

No

� Influence diagrams- show a problem with casual influences, time ordering, and other linkages among variables and results.


S.1 Software

design does

I.1 Hardware

IncompatibleF.1 Hardware

Supplier goesH.1 Hardware

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6

I.2 Inadequate

Customer site

Preparation

design does

not meet initial

requirements

S.2 Change in

User

Requirements

Incompatible

With existing

User systems

T.2 Inability to

Hire / train

Additional staff

T.1 Staff ShortageI.3 Difficulty in

Teaching user

New Procedures

Supplier goes

bankrupt

F.3 Revenues

From Current

Project

Delayed

T.3 Insufficient technical skills

F.2 Insufficient

Funds to pay

Staff and

Suppliers

H.2 Hardware

Design

Incompatible

With Software

Requirements

Shipment delay

ARROWS SHOW INFLUENCE


Expert judgment

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7

Expert judgment Experts with relevant experience help

us identify risks.

We have done great job!

Let’s see the output we have

got!


OUTPUTS

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8

got!

Risksall uncertain events or conditions

that might have positive or negative

effect on project objectives (In Case

They Happen).

But where do we write them?

OUTPUTS

� RISK REGISTER


The risk register is first developed in the

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9

The risk register is first developed in the

Identify Risks process and updated

during rest of the risk management

processes!


Identified

risks

Risks

owners

Q & Q

analysis

Response

plans

Residual

risks

Secondary

risks

Sample Risk Register

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0

�List of identified

Risks

�List of potential

Responses

�Root causes of

Risks

�Updated risk

categories

�A

�B

�C

�D

�E


� List of identified risks: identified risks with root causesunder certain project assumptions. Examples:

1) A few large items with long lead times are on CP

2) IR problem at port may delay delivery and then delay

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2) IR problem at port may delay delivery and then delay

completion of construction phase

3) Plan for a size of ten but only six resources available

� List of potential responses: identified during risk identification.

� Root causes of risk: fundamental conditions/events causing risk.

� Updated risk categories: new risk categories being added to the list of risk categories. RBS may be enhanced.

Perform QUALITATIVE RISK

ANALYSIS


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ANALYSIS

Process of assessing for each risk

1) The probability of occurring and

2) The corresponding impact on project objectivesFOR PRORITIZING RISKS FOR FUTHER ACTION

� Quantitative risk analysis or

� Risk response planning

Perform QUALITATIVE RISK

ANALYSIS


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3

ANALYSIS

Process of also assesses other factors

1) Timeframe

2) Risk tolerance of schedule, cost, scope, and

quality

QUALITATIVE RISK

ANALYSIS


1) Organizations can IMPROVE POJECT’S

PERFORMANCE effectively by focusing on HIGH-

Some principles-A

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PERFORMANCE effectively by focusing on HIGH-

PRIORITY RISKS.

2) A quick and cost-effective method of establishing

priorities for: RISK RESPONSE PLANNING.

� Lays foundation for Quantitative Risk Analysis.

� MUST be revisited during project life cycle to remain

current with the changes in the project risks.

QUALITATIVE RISK

ANALYSIS


4) Definitions of the levels of probability and impact, and

expert interviewing corrects the element of bias present

Some principles-B

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expert interviewing corrects the element of bias present

in the data utilized in this process.

5) Time criticality of risk actions highlight the significance

of A RISK

6) This process can lead to quantitative risk analysis or

directly into risk response planning.

What do we intend to achieve?� Prioritize risks according to their potential effect on project

objectives

Qualitative

Risk

Analysis


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objectives

� Sort out high or moderate risks for more analysis, their

quantification, and management

� Find trends in qualitative risk analysis results to see urgency

and significance for risk response and further analysis.

� Determine overall risk ranking of the project.

� Remove biases in the project plan


Perform Qualitative risk analysis process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS

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7


assets

� Project scope

statement

� Risk management

plan

� Risk register

INPUTSTECHNIQUES

� Risk probability and

impact assessment

� Probability / impact

risk rating matrix

� Risk data quality

assessment

� Risk categorization

� Risk urgency

assessment

� Expert judgment

OUTPUTS

� Risk register

updates


assets


Qualitative

Risk

Analysis

INPUTS

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8

assets

provide data about risks on

the past projects and

lessons learned knowledge

base for use here

�Organizational process

assets� Project scope

statement

� Risk management

plan

� Risk register

INPUTS

Project scope statement Common or recurring type


Qualitative

Risk

Analysis

INPUTS

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9

Common or recurring type

projects have well-understood

Risks. Projects using state-of-the-art, first-of-its-kind technology, or highly complex ones have more certainty.

We can know this from scope statement.


assets

� Project scope

statement� Risk management

plan

� Risk register

INPUTS

Risk management planProvides for this process:


Qualitative

Risk

Analysis

INPUTS

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0

- roles & responsibilities

- Budgets and schedule activities

- Risk categories

- Definition of probability & impact

- P & I matrix

- Revised stakeholders’

tolerances


assets

� Project scope

statement

� Risk management

plan� Risk register

INPUTS

Risk register


Qualitative

Risk

Analysis

INPUTS

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1

Risk registerProvides for this process:

� The KEY input LIST OF

IDENTIFIED RISKS


assets

� Project scope

statement

� Risk management

plan

� Risk register

INPUTS

Risk probability and impact

Describe probability and impact of a risk in

qualitative terms.


Qualitative

Risk

Analysis

TOOLS &

TECHNIQUES

95

2

qualitative terms.

Risk probability

The likelihood that a risk will happen

Risk consequences

Its effect on project objectives, if it happens

� Applied to specific risk events not entire

project

� Helps identify risks that need to be managed

more aggressively.

TECHNIQUES

�Risk probability

and impact

assessment� Probability / impact

risk rating matrix


assessment


� Risk urgency

assessment

� Expert judgment

Probability/impact rating

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

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3

matrix

Now, we build a matrix by combining

probability and impact scales to know

the risk in qualitative terms, such as very

high, high, moderate, low, very low.

These scales improve quality of data and

enable repeatability of process.

TECHNIQUES

� Risk probability

and impact

assessment

� Probability /

impact risk rating

matrix� Risk data quality

assessment


� Risk urgency

assessment

� Expert judgment

Probability/impact rating matrix

probability scale: 0.0 – 1.0

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

95

4

probability scale: 0.0 – 1.0

0.0 means no probability

1.0 means certainty

Ordinal scale defines relative probability from very unlikely to almost certain, can also be used.

Alternatively, specific probabilities could be denoted general scale: .1/.3/.5/.7/.9.

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating


assessment


� Risk urgency

assessment

� Expert judgment


impact scale can be

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

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5

impact scale can be

Cardinal: assigning linear values .1/.3/.5/.7/.9, or non-linear values

.05/.1/.2/.4/.8 showing an organization’s

desire to avoid high impact risks.

Ordinal: simply rank-ordering, such as very low, low, moderate, high, very high.

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating


assessment


� Risk urgency

assessment

� Expert judgment


Qualitative

Risk

Analysis


� each risk is rated on its probability

and impact of happening on a projectTOOLS &

TECHNIQUES

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6

and impact of happening on a project

objective (cost, schedule, scope, and

quality) if it does happen

� an organization’s thresholds for low,

moderate, or high are depicted in PI Matrix

� and determine if the risk is scored low,

moderate, or high for that project objective

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating


assessment


� Risk urgency

assessment

� Expert judgment

Qualitative

Risk

Analysis


Probability and Impact matrix: green = low, yellow = moderate, red = high

Probability Threats Opportunities

Risk Score

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7

0.90

0.70

0.50

0.30

0.10

0.05

0.04

0.03

0.05

0.02

0.03

0.01 0.01 0.02

0.09 0.18

0.07 0.14

0.36

0.10

0.28 0.56

0.40

0.06

0.20

0.12

0.04

0.200.100.05 0.80 0.80 0.40 0.20 0.10 0.05

0.08

0.72

0.40

0.24

0.72

0.56

0.40

0.24

0.08 0.04 0.02 0.01 0.01

0.12 0.06 0.03 0.02

0.20 0.10 0.05 0.03

0.28 0.14 0.07 0.04

0.36 0.18 0.09 0.05

Risk Data quality assessment

We need accurate and unbiased data for our analysis of risks to

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

95

8

data for our analysis of risks to be really useful. So we must test them for their degree of correctness by determining:

� Extent of understanding of the risk

� Data availability on the risk

� Quality of data

� Reliability and integrity of data

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating

matrix


assessment� Risk categorization

� Risk urgency

assessment

� Expert judgment

Risk categorization1) by sources of risk: RBS

2) by area of the project

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

95

9

2) by area of the project

affected: WBS

3) other useful category:

phase

To DETERMINE AREAS OF PROJECT MOST EXPOSED TO THE EFFECTS OF UNCERTAINTY!

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating

matrix


assessment

� Risk

categorization� Risk urgency

assessment� Expert judgment

Group risks by common root causes

for effective risk responses!!!

Risk urgency assessment

Qualitative

Risk

Analysis


TOOLS &

TECHNIQUES

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0

Risk urgency assessmenttells which risks need to be

addressed in near term.

INDICATORS:

1) Time to effect a risk response

2) Symptoms and warning signals

3) Risk rating

TECHNIQUES


and impact

assessment

� Probability /

impact risk rating

matrix


assessment

� Risk

categorization

� Risk urgency

assessment

� Expert judgment

Expert judgmentFrom experts having recent experience of having

Managed such projects.

Qualitative

Risk

Analysis


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Managed such projects.

Used to assess the probability and impact of each risk

To determine its location in the Matrix.

To remove bias this should be obtained by using risk

facilitation workshops or interviews.

Risk register updatesWe had initiated the risk register during risk identification. We fill up the relevant information from this process in it. Thus


Qualitative

Risk

Analysis

OUTPUTS

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information from this process in it. Thus we update it, writing:

1) Relative ranking or priority of list of the project risks

2) Risks grouped by categories

3) List of risks needing near-term response

4) List of risk for additional analysis and response

5) Watch lists of low priority risks

6) Trends in qualitative risk analysis

OUTPUTS

� Risk register

updates


Qualitative

Risk

Analysis

Identified

risks

Risks

owners

Q & Qanalysis

Response

plans

Residual

risks

Secondary

risks

Risk Register updates

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Risks


Responses

�Root causes of

Risks

�Updated risk

categories

-Relative

Ranking or

priority of list

of the project

risks

-Risks grouped

by categories

-List of risks

needing near

term response

�A

�B

�C

�D

�E


Qualitative

Risk

Analysis

Identified

risks

Risks

owners

Q & Qanalysis

Response

plans

Residual

risks

Secondary

risks


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Risks


Responses

�Root causes of

Risks

�Updated risk

categories

-List of risk for

Additional

analysis and

response

-Watch lists of

low priority

risks

-Trends in

qualitative risk

analysis

�A

�B

�C

�D

�E

Relative ranking or priority of list of the project risks

PI matrix classifies risks according to their individual

significance! This helps project manager focus on high-importance items where responses can lead


Qualitative

Risk

Analysis

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significance! high-importance items where responses can lead to better project outcomes!!

� RISKS SHOULD BE LISTED BY PRIORITY SEPARATELY FOR TIME, COST, SCOPE, AND QUALITY. WHY?

� Because organizations may value one objective over another!

� Please don’t forget to write the basis for assessed probability and impact for important risks.

Risks grouped by categoriesVery important!

1) Reveals COMMON ROOT CAUSES of risk or


Qualitative

Risk

Analysis

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1) Reveals COMMON ROOT CAUSES of risk or

project areas needing specific attention!

2) Improves effectiveness of risk response due to our

finding CONCENTRATIONS of risk.

List of risks requiring response in the near-termWe should place separately risks needing urgent attention and risks needing later attention.

List of risks for additional analysis and response

Which risks need further analysis and more


Qualitative

Risk

Analysis

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Which risks need further analysis and more

active management? High or moderate ones.

You go ahead with their Quantitative Risk

Analysis and pay more attention to planning

response for them and their subsequent

management.

Trends in qualitative risk analysis results

You get various trends in results of qualitative


Qualitative

Risk

Analysis

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risk analysis as you repeat it.

These trends may help you decide:

whether risk response and further analysis is

more or less urgent, and important or not.

Perform

QUANTITATIVE RISK


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QUANTITATIVE RISK

ANALYSISProcess of

1) Assessing numerically the probability of each risk

prioritized by Qualitative Risk Analysis and its

consequence on project objectives,

2) Evaluating the extent of overall project risk

Perform QUANTITATIVE RISK

ANALYSIS�


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� Hence, analyzes the prioritized risks showing

potential and substantial impact on project’s

competing demands

� Presents a quantitative approach to “DECISION

MAKING” amidst uncertainty

� Deploys techniques:

- Monte Carlo Simulation

- Decision Tree Analysis

TO: 1) determine realistic and achievable

scope, schedule, cost targets in the


QUANTITATIVE RISK

ANALYSIS

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scope, schedule, cost targets in the

backdrop of identified / quantified risks

2) evaluate possibility of achieving a

specific project objectives

TO: 3) quantify risk exposure for the project

and decide schedule and cost

contingency reserve

TO: 4) determine risks needing most attention

by quantifying their relative contribution


QUANTITATIVE RISK

ANALYSIS

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by quantifying their relative contribution

to overall project risk

5) quantify the probable outcomes for the

project their probabilities

6) arrive at the best project management

amidst some uncertain outcomes

QUANTITATIVE RISK

ANALYSIS


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ANALYSIS� Normally follows qualitative risk analysis, but

Experienced Managers may prefer it immediately

after risk identification

� May not be needed in some cases for developing

effective risk response

QUANTITATIVE RISK

ANALYSIS


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ANALYSIS� requirement of methods on a project is

decided by:

a) availability of time and budget

b) need for qualitative or quantitative

statements about risks and consequences

QUANTITATIVE RISK

ANALYSIS


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ANALYSIS� MUST be repeated after:

a) risk response planning

b) part of risk monitoring and control

TO EVALUATE WHETHER OVERALL PROJECT RISK

HAS BEEN DECREASED TO SATISFACTION

QUANTITATIVE RISK


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QUANTITATIVE RISK

ANALYSIS

� TRENDS CAN HIGHLIGHT THE NECESSITY:

FOR MORE OR LESS RISK MANAGEMENT ACTION


Perform Quantitative risk analysis process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS

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7

� Organizational

process assets

� Risk management

plan

� Risks register

� Schedule management

Plan


INPUTSTECHNIQUES

� Data gathering and

representation

techniques

� Quantitative risk

analysis and

modeling

techniques

� Expert judgment

OUTPUTS

� Risk register

updates


Quantitative

Risk

Analysis


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assetsprovide from industry or proprietary sources:

1. Information on previous similar projects

2. Studies of similar projects

3. Risk databases

Risk management planProvides for this

Quantitative

Risk

Analysis


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Provides for this process:

- roles & responsibilities

- Budgets and schedule activities

- Risk categories, RBS

- Revised stakeholders’ tolerances,

Risk registerProvides key inputs:

Quantitative

Risk

Analysis


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Provides key inputs:

- List of identified risks

- Priority list of project risks

- Risks grouped by

categories

- Schedule management plan,

sets format and establishes

Quantitative

Risk

Analysis


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sets format and establishes

criteria for developing and

controlling project schedule.

- Cost management plan, sets

the format and establishes

criteria for planning,

structuring, estimating,

budgeting, and controlling

project costs.

Data gathering &

representation techniques

Interviewing


Quantitative

Risk

Analysis

TOOLS &

TECHNIQUES

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2

1) Interviewing

2) Probability distributions

3) Expert judgment

�Data gathering &

representation

techniques� Quantitative risk

analysis and

modeling

techniques

� Expert judgment

InterviewingDerive information from stakeholders and

subject matter experts by interviewing them.


Quantitative

Risk

Analysis

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subject matter experts by interviewing them.

Information needed depends on

what type of probability distribution

we are going to use.

Quantifying risks?

What is your first step?

Answer:

“Conduct risk interview with

Project stakeholders and

subject matter experts”.

Probability distributions:

� Triangular distribution/Mean and Standard

deviation for Normal and Log Distributions:Don’t forget to document


Quantitative

Risk

Analysis

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deviation for Normal and Log Distributions:

For these, we gather information on the

optimistic (low), pessimistic (high), and

most likely scenarios, shown in slide

ahead.

� Continuous probability distributions:

show both probability and consequences of

project component.

� Common distribution types: uniform,

normal, triangular, beta, and log normal.

The RATIONALE OF RISK

RANGES!

Why?

Because it will help you make

“Effective Risk Response

Strategies“ during risk

Response planning.

Example of risk interview

Breaks the myth of conventional

estimate (arrived at totaling most

Likely estimates).Project Cost Estimates & Ranges


Quantitative

Risk

Analysis

Identifies three point estimates for each WBS

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5

Likely estimates).

Actually, conventional estimate

Is relatively unlikely.

SEE THE EXAMPLE

Cost estimates and Ranges Risk

Interview. Here, cost is INR. The

conventional estimate summing

up to INR 45 is relatively unlikely.

WBS

element

Low Most

likely

High

Design 3 7 12

Build 17 22 37

Test 9 16 24

Total

Project45


Quantitative

Risk

Analysis

EXAMPLE: COMMONLY USED PROBABILITY DISTRIBUTION

0.10.1

98

6

0.0

0.10.1

0.0

BETA DISTRIBUTION TRINGULAR DISTRIBUTION

PROBABILITY

PROBABILITY

IMPACT IMPACT


Quantitative

Risk

Analysis

EXAMPLE: INTERVIEW DEPLOYING BETA DISTRIBUTION

Mean = O + 4 M + P / 6 , Standard Deviation = P – O / 6, Variance = P – O / 62

98

7

ACTIVITY NAMEMOST

LIKELYHIGH MEAN SIGMA VARIANCELOW

6

M

15

20

X

21.8

2

3.2

1 1

4

A

P

6.3

O

B

C

4

2

16

11

41

15.7

43.8 3.9 15

10

23

35

10

Total estimate


Quantitative

Risk

Analysis

EXAMPLE: INTERVIEW DEPLOYING TRIANGULAR DISTRIBUTION

2Mean = O + M + P / 3 , Variance = P – O / 6 + (M – O) (M – P) / 18

98

8

ACTIVITY NAMEMOST

LIKELYHIGH MEAN SIGMA VARIANCELOW

6

M

15

20

X

23.7

2.5

4.2

1.2 1.5

6.2

A

P

6.7

O

B

C

4

2

16

11

41

16.3

42.4 5 25.1

17.4

23

35

10

Total estimate

Expert judgment

used to validate data and


Quantitative

Risk

Analysis

98

9

techniques.

experts could be internal or

external.

experts needed:

engineering or statistical

experts.

Quantitative risk analysis

and modeling techniques:


Quantitative

Risk

Analysis

99

0

and modeling techniques:

1) Sensitivity analysis

2) Expected monetary value

analysis

3) Decision tree analysis

4) Modeling and simulation

Sensitivity analysisWant to know which risks have the most

potential impact on the project?


Quantitative

Risk

Analysis

99

1

potential impact on the project?

Sensitivity analysis does the same for you.

How?Well, it examines the extent to which the

uncertainty of each project element impacts

the objective you are examining

( caution: keep all other uncertain elements at

their baseline values).

Expected monetary value

analysis


Quantitative

Risk

Analysis

TOOLS &

TECHNIQUES

99

2

analysisA statistical concept, an analysis under

uncertainty. Calculates average outcome

scenarios that may or may not happen.

EMV of opportunity shown as positive values

EMV of threats shown as negative values

EMV =

Value of each possible outcome x Probability,

and add them together

� Data gathering &

representation

techniques

�Quantitative risk

analysis and

modeling

techniques

� Expert judgment

Expected monetary value

analysis


Quantitative

Risk

Analysis

99

3

analysiscommonly used in decision tree

analysis. But modeling and

simulation are more powerful and

can not be misused compared to it.

Decision tree analysisBuild or upgrade an exiting plant? Make or

outsource? Or any other such dilemmas face you!

Don’t worry take the help of Decision Tree.


Quantitative

Risk

Analysis

TOOLS &

TECHNIQUES

99

4

Don’t worry take the help of Decision Tree.

What is decision tree?• It’s a tree-like diagram.

• Begins with the decision to be evaluated, say Build or upgrade.

• Branches are logical path of available alternatives.

• Each branch shows probabilities of risks and associated costs or rewards.

• Solving three shows you which decision provides “greatest expected value” to you (after quantifying all uncertain implications, costs, rewards, and subsequent decisions).


representation

techniques


analysis and

modeling

techniques

� Expert judgment


Quantitative

Risk

Analysis

SAMPLE DECISION

TREE

Decision Definition

65%

Decision Node Chance Node Net Path Value

Decision to be

Made

Input: cost of decision

Output: decision made

(true, false)

Input: scenario probability

Output: expected monetary

Value (EMV)

Computed:

Payoffs – costs

Along path

99

5

EMV of Chance Node

Rs. 49.0 M

EMV of the Decision

Rs. 49.0 M

EMV of Chance Node

Rs. 41.5 M

BUILD OR

UPGRADE

BUILD

NEW PLANT

UPGRADE

EXISTING PLANT

Strong Demand

Strong Demand

Weak Demand

Weak Demand

Rs. 80 M

- Rs. 30 M

Rs. 70 M

Rs. 10 M

- Rs. 120

Rs. 200

False

- Rs. 50

True

65%

35%

35%

65%

Rs. 90

Rs. 120

Rs. 60

SimulationTranslates uncertainties (specified

at a detail level) into potential


Quantitative

Risk

Analysis

TOOLS &

TECHNIQUES

99

6

at a detail level) into potential

impacts on project objectives

expressed at whole project level.

Most popular software: Monte Carlo

• WBS is used for simulation for

cost risk analysis

• PDM schedule is used for

schedule risk analysis


representation

techniques


analysis and

modeling

techniques

� Expert judgment


Quantitative

Risk

Analysis

100%

COST RISK SIMULATION

TOTAL PROJECT COST: CUMULATIVE CHART

Mean = 46.67 PROJECT IS ONLY

99

7 COST30

0

6550

12%

25%

50%

75%

41

Mean = 46.67

PROBABILITY

PROJECT IS ONLY

12% LIKELY TO

MEET Rs. 41 LAC

ESTIMATE.

IF A Conservative

Organization

WANTS 75%

LIKELIHOOD OF

SUCCESS, A

BUDGET OF RS. 50

LAC IS NEEDED:

A CONTINGENCY

OF ALMOST 22% !

( in RUPEES LACS)


Quantitative

Risk

Analysis

OUTPUTS

Risk register updatesWe had initiated the risk register during risk identification. We fill up the relevant information from this

99

8

OUTPUTS

� Risk register

updates

the relevant information from this process in it. Thus we update it further, writing:

1) Probabilistic analysis of the project

2) Probability of achieving cost and time objectives

3) Prioritized List of quantified risks


Identified

risks

Risks

owners

Q & Qanalysis

Response

plans

Residual

risks

Secondary

risks


Quantitative

Risk

Analysis

99

9


Risks


Responses

�Root causes of

Risks

�Updated risk

categories

�A

�B

�C

�D

�E

-Probabilistic

analysis of

the project

-Probability of

achieving cost

and time

objectives

-Prioritized List

of quantified

Risks

-Trends in QRA

PROBALISTIC ANALYSIS OF THE

PROJECT

Provides predictions of potential project


Quantitative

Risk

Analysis

OUTPUTS

10

00

Provides predictions of potential project

schedule and cost results detailing expected

completion dates or project duration and

costs- along with concerned confidence levels

PROBABILITY OF ACHIEVING THE COST

AND TIME OBJECTIVES

Using quantitative risk analysis, we can

estimate the probability of achieving the

project objectives- under the current plan and

given knowledge of the risks.

OUTPUTS

� Risk register

updates

Prioritized list of quantified

Risks (with a measure of their impact)


Quantitative

Risk

Analysis

OUTPUTS

10

01

This list contains the risks that

indicate:

� Major threat, or

� Major opportunity

OUTPUTS

� Risk register

updates

Trends in Quantitative Risk


Quantitative

Risk

Analysis

OUTPUTS

10

02

Trends in Quantitative Risk

AnalysisWith the repetition of the quantitative

risk analysis, a trend in its results

emerges.

OUTPUTS

� Risk register

updates


PLAN RISK RESPONSES

� Developing options and determining

10

03

� Developing options and determining

actions to ENHANCE Opportunities and

REDUCE threats to “the project

objectives”

� Involves selecting BEST RESPONSE

from several options


PLAN RISK RESPONSES

� Follows the processes of qualitative and

10

04

� Follows the processes of qualitative and

quantitative risk analysis

� Involves identification of risk response

owners to carry through the responsibility

of each agreed and funded risk

response

� Deals with risks as per their priority


PLAN RISK RESPONSES

� incorporates needed resources and

10

05

� incorporates needed resources and

activities into:

a) schedule

b) budget

c) project management plan


PLAN RISK RESPONSES

� MUST be appropriate to:

10

06

� MUST be appropriate to:

a) the importance of risk

b) timely

c) cost-effective

d) agreed upon by “ALL PARTIES”

e) owned by a responsible person

KEY PONITS NEED EMPHASIS AGAIN!

Risk response planning:� Should correspond to severity of risk

PLAN

RISK RESPONSES


10

07

� Should correspond to severity of risk

� Should be cost effective

� Should be realistic

� Should be consented by all involved parties

� Should be owned by a responsible person

“MOST OFTEN RISK RESPONSE DOES NOT GIVE US INTENDED RESULTS BECAUSE ONE OR

MORE OF THESE KEY PONITS ARE IGNORED” !


� Risk Management Plan

� Risk register

INPUTSTOOLS &

TECHNIQUES

� Strategies for

negative risk

OUTPUTS

� Risk Register

updates


PLAN RISK

RESPONSES

Process

Overview

10

08

negative risk

(threats)

� Strategies for

positive risks

(opportunities)

� Strategies for both

threats and

opportunities

� Contingent

response strategy

� Expert judgment


plan updates

� Risks-related

contract decisions


updates

Risk management plan provides:


RISK

RESPONSE

PLANNING

� Risk Management Plan� Risk register

INPUTS

10

09

provides:

� Roles & responsibilities

� Risk threshold for L, M, H risks

� Time and budget for project risk

management

� Risk analysis definitions

Risk register Was created in risk identification process,


RISK

RESPONSE

PLANNING


� Risk register

INPUTS

10

10

updated with outputs of qualitative and

quantitative risk analysis. We use these

outputs here:

1) From risk identification

� Identified Risks, their root causes

� List of potential responses

� Risk owners

� Symptoms & warning signs

Risk register We use these outputs here:

2) From qualitative risk analysis


RISK

RESPONSE

PLANNING


� Risk register

INPUTS

10

11

2) From qualitative risk analysis

� Priority list of risks

� Risks needing near-term response

� Risks for additional analysis and response

� Trends in qualitative risk analysis results

� Root causes

� Risks grouped by categories

� Watchlist of low priority risks

Risk register We use these outputs here:


RISK

RESPONSE

PLANNING


� Risk register

INPUTS

10

12

We use these outputs here:

2) From quantitative risk analysis

� Probabilistic analysis of the project

� Probability of achieving cost and time objectives

� Prioritized list of quantified risks

� Trends in quantitative risk analysis results


10

13

RISK OWNERS MUST PARTICIPATE

IN DEVELOPING

RISK RESPONSES

WHICH STRATEGIES WILL YOU CHOOSE?ANSWER:

• First, the MOST EFFECTIVE STRATEGY for each risk


RISK

RESPONSE

PLANNING

10

14

• First, the MOST EFFECTIVE STRATEGY for each risk

• Then, BACKUP STRATEGIES in case the best one fails

• After choosing Primary and Backup Strategies, develop actions to implement them

• A fallback plan if selected strategy not fully effective, or if accepted risk occurs

AvoidEliminate threat by eliminating the cause!

You change project plan to eliminate the

threat, to isolate the project objective from


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

15

threat, to isolate the project objective from

the its impact, or to relax the objective that is

in jeopardy: Examples

� Extending schedule or reducing scope

Some risk that arise early can be avoided by:� Clarifying requirements

� Obtaining information

� Improving communication or

� Acquiring expertise

negative risk

(threats)� Strategies for

positive risks

(opportunities)


threats and

opportunities

� Contingent

response strategy

- Expert judgment

Transfer


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

16

Can you shift the

risk?

Yes, you can.

negative risk


positive risks

(opportunities)


threats and

opportunities

� Contingent

response strategy

- Expert judgment

TransferYou can shift it to third party for its

ownership.


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

17

ownership.

But remember, it is just shifted, the

risk remains. Only its ownership and

management is off-loaded to the third

party for which due premium is paid

by you.

Risk transference is found most

effective in transferring financial

risk exposure.

negative risk


positive risks

(opportunities)


threats and

opportunities

� Contingent

response strategy

- Expert judgment

EXAMPLES

Insurance


Transfer

RISK

RESPONSE

PLANNING

10

18

� Insurance

� performance bonds,

� warranties,

� guarantees

� Contracts ( a fixed-price contract has least with the buyer. A cost reimbursable one leaves more risk with the buyer)

Mitigate

A very important response


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

19

A very important response

technique. We should try to

master it.

Here, we attempt to reduce the

probability and/or consequence

of a negative risk to acceptable

threshold.

negative risk


positive risks

(opportunities)


threats and

opportunities

� Contingent

response strategy

- Expert judgment

Mitigate


RISK

RESPONSE

PLANNING

10

20

CARDINAL PRINCIPLE

Take early action to reduce probability of a risk’s

occurrence or its consequence on the project

objectives.

� It is far better than making whole lot of repairs

after it has taken place.

“A STICH IN TIME SAVES NINE”!

Mitigation costs should be justified in view of the likely risk

probability and its impact.


Mitigate

RISK

RESPONSE

PLANNING

10

21

probability and its impact.

EXAMPLES

� Implementing a new course of action

� Adopting a less complex process

� Conducting more seismic/engineering tests

� Choosing more reliable seller

� Adding resources/time to schedule

� Developing prototypes

� Designing redundancy into a system

Exploit Chosen for risks with positive impacts

to ensure that the opportunity is


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

22

to ensure that the opportunity is

realized. It tries to eliminate the

uncertainty of an upside risk by

making the opportunity surely happen.

Examples:

� Assigning more talented resources to

reduce time to completion

� To provide better quality than

originally planned

negative risk

(threats)

� Strategies for

positive risks

(opportunities)� Strategies for

both threats and

opportunities

� Contingent

response strategy

- Expert judgment

ShareSharing a positive risk involves allocating ownership with a third


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

23

allocating ownership with a third party who is best able to capture the opportunity. Examples:

� Forming risk-sharing partnerships, teams, special purpose companies, JVs for the sole purpose of managing opportunities.

negative risk

(threats)

� Strategies for

positive risks


both threats and

opportunities

� Contingent

response strategy

-Expert judgment

EnhanceThis strategy modifies the size of an

opportunity by:


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

24

opportunity by:

1) Increasing probability and positive

impact

2) Identifying and enhancing key drivers of

these risks.

This means seeking to facilitate/strengthen

the cause of opportunity and reinforcing

its trigger conditions. Impact drivers are

also targeted.

negative risk

(threats)

� Strategies for

positive risks


both threats and

opportunities

� Contingent

response strategy

-Expert judgment

AcceptThis approach shows your


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

25

This approach shows your project team has agreed:

• not to change project plan in order to deal with a risk, or

• is unable to find out any appropriate response strategy

This approach may be adopted both threats and opportunities.

negative risk

(threats)

� Strategies for

positive risks

(opportunities)

� Strategies for

both threats and

opportunities� Contingent

response strategy

-Expert judgment

Accept


ACTIVE ACCEPTANCE

RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

26

ACTIVE ACCEPTANCE

Your acceptance may be active and

you develop a contingency plan.

PASSIVE ACCEPTANCE

It may be passive. Do nothing-

leaving the project team to deal

with the risks as they happen.

negative risk

(threats)

� Strategies for

positive risks

(opportunities)

� Strategies for

both threats and


response strategy

-Expert judgment

Accept


Most common risk acceptance response is FAQ

How much

RISK

RESPONSE

PLANNING

10

27

establishing a contingency plan/reserve

that incorporates amounts of:

� Money

� Time.

� Resources

to address accepted identified risks

Or even sometimes potential

unknown threats and opportunities)

How much

contingency allowance

should be kept?

Answer: It is

determined by the

impacts. Compute it at

an acceptable level of

risk exposure.

Accept


CALCULATING COST RESERVE

IMPACT Expected

RISK

RESPONSE

PLANNING

10

28

Risk Probability IMPACT

COST = - tive

Benefits = + tive

Expected

Monetary

Value (EMV)

A

B

C

D

20%

45%

10%

65%

- Rs. 4000

+ Rs. 3000

+ Rs. 2100

- Rs. 2500

- Rs. 800

- Rs. 210

+ Rs. 1350

- Rs. 1625

BENEFIT : Rs. + 1560, WE WILL SAVE

COST : Rs. - 2425, WE WILL SPEND

CONTINGENCY AMOUNT NEEDED : Rs. 865


CALCULATING COST RESERVE: Hands-on Exercise for StudentsFor a product modification project, we have following data. Please calculate Cost Reserve!

RISK IMPACT

RISK

RESPONSE

PLANNING

10

29

RISK

THREATS

OPPORTUNITIESProbability

IMPACT

COST = - tive

Benefits = + tive

Delay in shipment of parts 30%

25%

20%

30%

- Rs. 9000

+ Rs. 3500

+ Rs.10000

+ Rs. 2500

Parts need extra installation work

Parts will be cheaper than expected

Design defect will cause rework

Production will be simpler than expected

5% - Rs. 5000


CALCULATING COST RESERVE: hands-on Exercise for Students

RISK IMPACT Expected

RISK

RESPONSE

PLANNING

10

30

RISK

THREATS

OPPORTUNITIESProbability

IMPACT

COST = - tive

Benefits = + tive

Expected

Monetary

Value (EMV)

Delay in shipment of parts 30%

25%

20%

30%

- Rs. 9000

+ Rs. 3500

+ Rs.10000

+ Rs. 2500

- Rs. 2700

+ Rs. 2000

- Rs. 875

+ Rs. 750

Parts need extra installation work

Parts will be cheaper than expected

Design defect will cause rework

Production will be simpler than expected

5% - Rs. 5000 - Rs. 250

BENEFIT : Rs. + 2750, WE WILL SAVE

COST : Rs. - 3825, WE WILL SPEND

CONTINGENCY AMOUNT NEEDED : Rs. 1075

Contingent response strategyDesigned for use only when CERTAIN

EVENTS occur. Why? Well, for some


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

31

EVENTS occur. Why? Well, for some

risks, it’s better to make a response plan

that will be used only under certain

predefined conditions (when there will

be sufficient warning to implement the

plan).

Events that trigger contingency response:

1) Missing intermediate milestones

2) Gaining higher priority with a supplier

negative risk

(threats)

� Strategies for

positive risks

(opportunities)

� Strategies for

both threats and


response strategy

-Expert judgment

Expert judgment From knowledgeable parties,


RISK

RESPONSE

PLANNING

TOOLS &

TECHNIQUES

� Strategies for

negative risk

10

32

inputs can be taken regarding

actions for specific and defined

risks.

negative risk

(threats)

� Strategies for

positive risks

(opportunities)

� Strategies for

both threats and


response strategy

-Expert judgment

CONTINGENCY AMOUNT


STRATEGIES FOR RISK RESPONSE

RISK

RESPONSE

PLANNING

10

33

CONTINGENCY AMOUNT

� Can be added to individual

activities or work packages, or to

the project as a whole

Risk register updatesWe fill the outputs in the risk register.At this point, the risk register contains:


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates� Project management

10

34

� Identified risks with descriptions, concerned area of project like WBS element, their causes, and how they may impact project objectives

� outputs from qualitative and quantitative risk analysis

� Risk owners and their assigned responsibilities

� Budget and times for responses


plan updates

� Risks-related

contract decisions

- Project document updates

Risk register updatesWe fill the outputs in the risk register. At this point, the risk register contains:

� Expected level of residual risks


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates


10

35

� Expected level of residual risks

� Consented responses for each risk and specific actions for chosen response strategy

� Symptoms and warning signals of risks occurrence

� Budget and schedule activities for implementing chosen responses

� Contingency reserves of time and cost designed to provide for stakeholders’ risk tolerances

� Contingency plans and trigger that call for their execution


plan updates

� Risks-related

contract decisions

-Project document updates

Risk register updatesWe fill the outputs in the risk register. At this point, the risk register contains:


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates


10

36

register contains:� Fallback plans if primary response

inadequate

� Residual risks expected to remain after planned responses have been taken and those that have been deliberately accepted

� Secondary risks that arise as a direct outcome of of implementing a risk response

� Contingency reserves calculated on the basis of quantitative risk analysis and organization’s risk thresholds


plan updates

� Risks-related

contract decisions

- Project document updates

Project management plan

updatesUpdated as response activities are added


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates

� Project

10

37

Updated as response activities are added to it after review and approval through Integrated Change Control. Integrated change control is applied in the Direct and Manage Project Execution process. Why? To make sure that agreed-upon actions are implemented and monitored as part of the progressing project.

Risk response strategies are fed back into concerned processes in other knowledge areas (WBS, budget, schedule)

� Project

management

plan updates� Risks-related

contract decisons


Risk-related contractual

agreements


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates

� Project

10

38

Contractual agreements are

prepared to specify each party’s

responsibility for specific risks, in

case they occur.

Example:

Agreements for insurance,

services, and other items as found

suitable.

� Project

management

plan updates

� Risks-related

contract decisions


Project document

updates


RISK

RESPONSE

PLANNING

OUTPUTS

� Risk Register

updates

� Project

10

39

updatesExample:

1) Assumptions log updates

2) Technical documentation

updates

� Project

management

plan updates

� Risks-related

contract decisions


Project Planning continues!

Project

10

40

Project

Procurement Management

Project Procurement Management

THE CONCEPT

Consists of processes to purchase or acquire the

products, services, or results needed from outside

10

41

products, services, or results needed from outside

the project team to perform the work.

Procurement has two perspectives:

1) The buyer organization

2) The seller organization


THE CONCEPTThe processes

1) Plan procurements: make or buy decision, preparing

10

42

1) Plan procurements: make or buy decision, preparing

procurement documents, and identifying potential

sellers.

2) Conduct procurements: obtaining proposals, selecting

sellers, and awarding contract.

3) Administer procurements: checking performance and

managing changes.

4) Contract procurements: completing each procurement.

These 4 processes together make the contract life cycle!


THE CONCEPTContract

10

43

CONTRACTING PROCESS

LIFE CYCLE OF THE CONTRACT

Plan

Procurements

Administer

Procurements

Close

Procurements

Conduct

Procurements

1) Plan procurements: Make or buy decision

CONTRACT LIFE CYCLE BRIEF


10

44

1) Plan procurements: Make or buy decision

made, contract type selected, scope of work

drafted. Procurement management plan

developed. Procurement documents

created. Potential buyers identified.

2) Conduct procurements: Proposals requested



10

45

2) Conduct procurements: Proposals requested and received. Sellers selected and Contract

awarded.

5) Administer procurements: Managing



10

46

5) Administer procurements: Managing

procurement relationships, monitoring contract

performance, and making changes and corrections

as required.

6) Close procurements: Seller provides contracted product, buyer accepts and makes final payment,

lessons learned documented, contract file archived.

This is completion of procurement for each item.

Contract: Ushers a legal relationship between Buyer

CONTRACT


10

47

Contract: Ushers a legal relationship between Buyer and seller.

� It obligates the seller to provide the contracted item,

and it obligates the buyer to pay for it.

� Hence, contract is a legal document and must be

prepared by the buyer with due care. It is subject to

remedy in the courts.

� Contract comes into force only after it is accepted

and signed by both the parties.

Contract: Ushers a legal relationship between Buyer

CONTRACT


10

48

Contract: Ushers a legal relationship between Buyer and seller. It includes:

� SOW of the contracted item (CSOW)

� Terms and conditions.

� Seller’s proposal

� Seller’s marketing literature, and

� Any other documentation buyer is relying upon to

establish what the seller is to perform or provide.

Contract: project management team is responsible to

CONTRACT


10

49

Contract: project management team is responsible to

tailor the contract to the specific needs of the

project.

� It is subjected to extensive reviewing process before

approval to ensure THAT THE CONTRACT

LANGUAGE DESCRIBES THE CONTRACTED

PRODUCTS, SERVICES, OR RESULTS THAT

SATISFY THE IDENTIFIED PROJECT NEED!

Contract: project management team should take help

CONTRACT


10

50

Contract: project management team should take help

of specialists in contracting, purchasing and law!

� Most organizations have policies and procedures

defining who can sign and administer such

agreements on behalf of the the organization!

� By actively managing the contract life cycle and

carefully wording the contract, we can avoid or

mitigate some identifiable project risks. Contracting

is one way of transferring the risk to seller.

Contract: is Also called…

CONTRACT


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Contract: is Also called…� An agreement

� Subcontract, or

� Purchase order




Contract: A seller can Also be called…

CONTRACT


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Contract: A seller can Also be called…� Contractor, vendor, service provider, supplier, or

subcontractor,

A buyer can Also be called…

� Client, acquiring organization, customer, acquiring

organization, service requester, purchaser,

government agency, prime contractor, contractor.

Contract: A complex project may involve multiple

CONTRACT


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Contract: A complex project may involve multiple

contracts or subcontracts!

� Each contract life cycle may complete during any

phase of the project life cycle.

� Subcontract, or

� Purchase order




Contract: Except for the purchase of materials, goods,

or common products, A seller will manage the work

CONTRACT


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or common products, A seller will manage the work

as a project:� Buyer becomes customer, and then key stakeholder for

the seller

� Seller’s project management team will follow all

knowledge areas and project management process

groups to mange it as a project

� Inputs will be major deliverables, key milestones, cost

objectives. Plus contract terms and conditions.

Constraints may be buyer approval of staffing decisions,

etc.

CONTRACT


SELLER in contract life cycle

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First Then And thereafter

a bidder the selected source contracted vendor

Fundamental concept of project procurement

management is that The buyer of the items is within

the project team and seller is external to project


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the project team and seller is external to project

team:

1) This relationship true if the performing organization

is the seller a project to the customer.

2) This relationship is also true when the performing

organization is the buyer from other vendors,

suppliers of products, services, results, or

subproject components on a project.

Essence is that a formal “Contractual Relationship”

exits between buyer and seller!


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exits between buyer and seller!

If you are procuring items from your others units of the

project team’s organizations also, you may not enter

into a non-contractual formal agreement but most of

our discussion on project procurement management

is relevant for such agreements also.

Example: Tata Motors procured steel sheets from its

Tata Steel for its Indices Project.

Plan Purchases and Acquisitions

Determines

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WHICH project needs WHICH project needsCan be accomplished by the Can be best met by

project team during Project acquiring products/

Execution services outside the

project organization

identified DURING PROJECT DEFINITION EFFORT

Plan Procurements

Considers

Plan Procurements

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Considers

1. “whether to procure?” (make or buy!)

2. “how to procure?” (procurement methods)

3. “what to procure?” (description of products)

4. “how much to procure?” (quantity)

5. “when to procure?” (procurement schedule)

6. potential subcontractors (prospective sellers)

(Consideration of potential sellers gives some degree of

influence/ control to the buyer over contracting decisions)

PLEASE REMEMBER!

While planning purchases and acquisitions, we must

not forget to consider issues like:

Plan Procurements

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not forget to consider issues like:

� Who is responsible for obtaining or holding any applicable

permits and professional licenses required by LEGISLATION,

REGULATION, OR YOUR ORGANIZATION’S PLOICY!

� Project Schedule greatly influences this process.

� Plus your decisions in procurement management plan may also

influence project schedule and therefore must be considered

when developing project schedule and activity resource

estimating, and make-or-buy decisions!

PLEASE REMEMBER!

While planning purchases and acquisitions, we must

not forget to review:

Plan Procurements

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not forget to review:

� the type of contract you plan to use in relation to

MITIGATING RISKS AND TRANSFERRING THEM

TO THE SELLER!

� Enterprise



INPUTS TOOLS &

TECHNIQUES

� Make-or-buy

Analysis

OUTPUTS

� Procurement

Management Plan

� Procurement Statements

Plan Procurements: PROCESS OVERVIEW

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assets

� Scope baseline

� Requirements

documentation

� Teaming agreements

�Risk register

�Risk-related contract

decisions

�Activity Resource

requirements

�Project schedule


�Cost baseline

Analysis

� Expert Judgment

� Contract Types

(Selection)

� Procurement Statements

of work

� Make-or-buy decisions

� Procurement documents

� Source selection criteria

(evaluation criteria)

� Change requests


EEFsprovide information on

1) The marketplace

Plan

Procurements

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1) The marketplace2) What product, services are

available in the market and under what terms and conditions

3) Procurement resources: If you don’t have a purchasing group, then the project team have to supply both resources and expertise for project procurement activities.

INPUTS


OPAsprovide formal/informal procurement policies, procedures, guidelines, and management systems for use in making

Plan

Procurements

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management systems for use in making Procurement Plan and deciding Contract Type. They act as constraints and limit:

1) The ability to make specific make-or-buy decisions.

2) May require specific types or sizes of sellers.

3) Some organizations have multi-tier system of selected and pre-qualified sellers to decrease the number of direct sellers and establish an extended supply chain.

INPUTS


a) Project Scope Statementprovides important information on 1) project needs and strategies

Plan Procurements

INPUTS

Scope baselinea) Scope statement

b) WBS

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1) project needs and strategiesthat we must consider when during what to procure. Also provides 2) list of deliverables, acceptance criteria for the project and its products, plus any technical issues relating to the product of the project.All these factors must be considered and flowed downwithin our contract to sellers!

b) WBS

c) WBS dictionary


Project Scope Statementdescribes project 3) boundaries, requirements, constraints and


b) WBS

Plan Procurements

INPUTS

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requirements, constraints and assumptions concerning project scope. EXAMPLES:

A. Constraints: availability of funds (most common on projects)

B. Assumptions: availability of multiple sellers or sole seller

C. Requirements with legal and contractual obligations: performance, intellectual property rights, insurance, licenses, permits, equal employment opportunities, health, safety, and security.

b) WBS

c) WBS dictionary


b) WBSdescribes relationship among all the components of the project and project deliverables. We will


b) WBS

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project deliverables. We will outsource some portion of it, or we may outsource entire project also.

c) WBS dictionary provides detailed SOWs identifying deliverables plus description of work within each WBS component needed to be done to produce that deliverable.

b) WBS

c) WBS dictionary


Plan procurements

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Difference between Product Description and Statement of Work:

� Product Description describes the ultimate end product of the

project. Statement of work describes the portion of that

product to be provided by seller to the buyer’s project

� The difference no longer exists if the performing organization

decides to procure the entire product.


Requirements documentation provides

• Important information about project requirements

which need to be considered when we plan

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which need to be considered when we plan

procurements

• Requirements with legal and contractual implications:

health, safety, security, performance, IPR, insurance,

environmental, licenses, permits, equal-employment-

opportunity, etc.


Teaming Agreements (legal contractual agreement

between two or more entities to form joint venture or

partnership. Whenever new business opportunity

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partnership. Whenever new business opportunity

ends, this agreement also ends)

• Whenever a Teaming Agreement is in place on a

project, the roles of buyers and sellers are pre-

determined.

• Scope of work, competition requirements and other

critical issues are also predefined.


We consider following too while planning procurements:

- risk register

- Risk related contract decisions

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- Risk related contract decisions

- Activity resource requirements

- Project schedule

- Activity cost estimates

- Cost performance baseline


TOOLS &

Make-or-buy analysis

General management technique

Plan procurements

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TOOLS &

TECHNIQUES

� Make-or-buy

Analysis� Expert Judgment

� Contract Type

Selection

General management technique

used to decide whether a particular

product/service can be produced

(COST EFFECTIVELY) by the project

team or need to be purchased

Budget constraints are factored in

Considers both direct and indirect

costsexample


TOOLS &

TECHNIQUES


example

Plan procurements

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73

TECHNIQUES

� Make-or-buy


� Contract Type

Selection

example

Buy-side of analysis includes actual

1) Direct out-of-pocket costs to

procure the product, and

2) Indirect costs of managing the

purchasing process.


TOOLS &

TECHNIQUES


Reflects

Plan procurements

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74

TECHNIQUES

� Make-or-buy


� Contract Type

Selection

Reflects 1) Perspective of the performing

organization, and

2) Immediate project needs

3) Long range strategy

examples


TOOLS &

TECHNIQUES

Make-or-buy analysisexampleBuying an item (say material

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TECHNIQUES

� Make-or-buy


� Contract Type

Selection

Buying an item (say material

handling equipments or computers)

or leasing it may or may be cost

effective on the current project.

But, if performing organization

Requires it on regular basis and

buys the item, then the part of the

purchase cost apportioned to the

project may be less than the leasing

cost. (Margin Analysis helps allocate such costs)


TOOLS &

TECHNIQUES

Make-or-buy analysisExample of long range strategyCertain items needed for performing the

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TECHNIQUES

� Make-or-buy


� Contract Type

Selection

Certain items needed for performing the

project may not be with the organization

But having regard to future requirements

(for such items) and the business plans,

The organization may decide to purchase

them despite project requirements and

Constraints

If this happens, then the only marginal cost is

charged to the project and difference is

treated as investment for future


Expert judgementWhat expert judgment is needed?

1) Expert technical judgment to access TOOLS &

TECHNIQUES

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1) Expert technical judgment to access

inputs and outputs from this process.

2) Expert purchasing judgment to develop

or modify evaluation criteria.

3) Expert legal judgment to make terms and

conditions for non-standard procurement

items.

4) Such technical, business and legal

judgment can also be applied to other

aspects of procurement management

processes.

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment� Contract Type

Selection


Contract type selectionTOOLS &

TECHNIQUES

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Different contract types suit different

types of purchases

Degree of risk assessed by both buyer

and seller decides the choice of a

Contract Type

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection

Common contract types


Contract type selection

Common Contract Types:TOOLS &

TECHNIQUES

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Common Contract Types:

1) fixed-price or lump-sum

2) Cost-reimbursable

a) cost-plus-fee: CPF, or cost-plus-

percentage of cost: CPPC

b) cost-plus-fixed-fee: CPFF

c) cost-plus-incentive-fee: CPIF

3) time and material ( T & M )

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection



TECHNIQUES

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80

fixed-price or lump-sum1) Fixed total price for a well-defined

product

2) Buyer at least cost risk as seller bears

the risk of cost escalation

3) Seller most concerned about scope

4) Suitable if buyer can fully describe

scope

5) Also incentives for fixed-price

contracts

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection

Simplest form: Purchase Order



TECHNIQUES

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fixed-price or lump-suma) fixed-priceExample Contract INR 5,500,00

Fixed-price-incentive-fee (FPIF)

Example

Contract INR 5,500,000

Incentive INR 50,000 for every month

for finishing contracted work early

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection



TECHNIQUES

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fixed-price or lump-sumFixed-price-economic-price-adjustment

(FPEPA) Example

Contract INR 5,500,000

Buyer agreed for price increase in

in year 2 based on All India Price

Index for year 1 for material price

escalation, or based on increase in

Statutory Variable Dearness

Allowance for labor

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection


Contract type selectionCost-reimbursableTOOLS &

TECHNIQUES

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Cost-reimbursable

1) Buyer reimburses seller’s actual costs

plus a fee as seller’s profit.

2) Buyer at highest cost risk as complete

scope is not clear and total contracted

costs are unknown.

3) Such contracts are awarded when

buyers can only describe what they

need and not what to do.

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection


Contract type selectionCost-reimbursable

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Cost-reimbursableHere, costs are categorized as direct costs or

indirect costs. Indirect cost: a percentage of

direct cost

Direct costs

incurred solely for the benefit of

the project.

Example: salaries of full-time

project staff

Indirect costs (overhead/general/

administrative cost): allocated to

the project as cost of doing

Business.

Example: 1)salary of management

staff indirectly involved in the

Project, 2) office electricity bill



TECHNIQUES

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Cost-reimbursable

include incentive clauses for:

IF THE SELLER MEETS OR EXCEEDS

SELECTED OBJECTIVES (schedule/cost),

THE SELLER GETS

AN INCENTIVE / BONUS

PAYMENT

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection



TECHNIQUES

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Cost-reimbursablea) Cost-plus-fee (CPF) or Cost-plus-percentage

of cost (CPPC)

1) Buyer reimburses all allowable costs plus

an agreed-upon percentage of costs as fee

2) Here, seller is not motivated to control

costs. WHY? Fee varies with the actual

cost. The seller will get fee on every cost

without limit.

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection

Example: contract = cost plus 5% of costs

as fee



TECHNIQUES

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Cost-reimbursable

b) Cost-plus-fixed-fee: CPFF (most common)

1) Buyer reimburses all allowable costs and

paid a fee ( profit) fixed at a specific rupee

amount (as a percentage of estimated

project cost)

2) Fee is fixed: does not vary with cost

3) Advantage: keeps seller’s costs in line.

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection

WHY?



TECHNIQUES

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Cost-reimbursableb) Cost-plus-fixed-fee: CPFF (most common)

because a cost overrun will not get the

seller any extra fee (profit)

Example:

Contract = cost plus INR 500,000 (fixed)

TECHNIQUES

� Make-or-buy

Analysis

� Expert

Judgment

�Contract Type

Selection



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Cost-reimbursablec) cost-plus-incentive-fee: CPIF

1) Buyer reimburses all allowable costs + an

agreed-upon fee + an incentive bonus,

based on achieving certain performance

objective levels

EXAMPLE

Contract = Costs + fee, say INR 500,000 + INR 50,000 (for

every month the project is earlier than agreed)



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Cost-reimbursablec) cost-plus-incentive-fee: CPIF

2) In some cases, if the final costs are less

than expected costs, then both buyer and

seller benefit from the savings, base on

mutually agreed sharing formula

HANDS-ON EXERCISE


HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2

DATA

1) Estimate cost INR 630,000, fee INR 75,000

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1) Estimate cost INR 630,000, fee INR 75,000

2) If seller performs better, savings sharing:

80% buyer, 20% seller

3) Actual costs INR 600,00

4) Find out final fee and final price


HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2

SOLUTION

Step 1

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Step 1

Fee = INR 630,000 – INR 600,000

= INR 30,000 x 20%

= INR 6,000

Final fee = INR 75,000 target fee + INR 6,000

= INR 77,000

Step 2

Final price = INR 600,000 + 77,000

= INR 677,000



Plan purchases &

Acquisitions

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time and material ( T & M )1) Hybrid of cost-reimbursable and fixed-

price

- Cost-reimbursable portion: open ended

- Fixed-price portion : unit rates are

fixed

2) Full value and exact quantity of items to be

delivered are not defined by buyer, but unit

rate of the category of item is are set by

mutual agreement

3) Buyer has medium amount of cost risk



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time and material ( T & M )

Example

Contract = INR 1000 per hour or material at cost

or INR 300 per linear foot of tiles



Moot points

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Moot pointsContract type is also determined by:

• the requirements buyer imposes on seller

Example: standard/custom product version, cost data submittal,

performance reporting

2) Other planning considerations

Example: degree of risk, market competition

Contract pricingwhen high future potential of purchase item is promised by the buyer,

the seller may charge less, but buyer should be honest in promising

such a potential (otherwise it may lead to legal remedy by the seller).


Procurement management

planOUTPUTS

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Describes

how the procurement processes shall

be managed from developing procurement

documents through contract closure

Includes

1) Contract types for use

2) Who will make independent estimates

and if they are required as evaluation

criteria

OUTPUTS� Procurement

Management Plan� Procurement

Statements of work


� Procurement

documents

� Source Selection

Criteria

� Change requests



plan includes

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plan includes3) If the performing organization has a

procurement department, then what

actions project management team is

allowed to take on its own

4) Standard procurement documents

5) Information on managing multiple

contractors

6) Coordinating procurement with project

scheduling, performance reporting, etc.



plan includes

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7) Procurement – related constraints and

assumptions

8) Lead times management and

coordination with schedule

development

9) Managing make-or-buy decisions,

linking well with resource planning and

schedule development



plan includes

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10) Determining scheduled dates for

contract deliverables and coordinating

them with schedule development and

control processes

11) Determining performance bonds /

insurance to mitigate risks

12) Establishing direction for seller to help

develop and maintain contract WBS

13) Establishing format for contract SOW

14) Listing pre-qualified sellers



plan includes

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15) Determining procurement metrics for

managing contracts and evaluating

sellers

Depending on the needs of the project,

this plan may be:

- formal or informal

- highly detailed or broadly

framed

IS A SUBBIDIARY PART OF PROJECT PLAN


Procurement Statement of work

Each contract SOW defines:

the portion of the project scope to be acquired through the

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the portion of the project scope to be acquired through the

respective contract

Developed from:

1) Scope baseline

2) Activity resource requirements


Please remember it!


Procurement Statement of work

Describes the procurement item

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Describes the procurement item

in sufficient detail TO ALLOW THE PROSPECTIVE

SELLERS TO DETERMINE IF THEY ARE

CAPABLE OF PROVIDING THE ITEM!

Please remember it!


Procurement Statement of

work

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work

SUFFICIENT DETAIL depends on:

1) NATURE OF THE ITEM

2) NEEDS OF THE BUYER, OR

3) EXPECTED CONTRACT

FORM

Contract SOW must be CLEAR,

COMPLETE AND CONCISE!


INFORMATION IN CSOW:

a) Specifications

b) Desired quantity

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b) Desired quantity

c) Quality levels

d) Performance data

e) Period of performance

f) Work location

g) Collateral services (performance reporting/ post-project operational

support)

h) Other requirements


INFORMATION IN CSOW:

there are specific content and

format requirements for a contract

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format requirements for a contract

SOW in some application areas

CSOW as it moves the

Procurement process:

is revised and refined until

incorporated into a signed

contract. WHY?


Because a prospective seller

may suggest:

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A MORE EFFICIENT

APPROACH OR LESS

COSTLY PRODUCT (THAN THE ONE ORIGINALLY

SPECIFIED)


Make-or-buy decisions

� Are obvious output.

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� May also include: Decisions to buy

insurance policies, performance

bond contracts! WHY? Answer: To

address some of the identified risks.

� May be simple (short justification)

� May be complex (iterative as subsequent

procurement activities may require a

different approach)


Procurement documentsused to request proposals from

prospective sellers

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prospective sellers

Common names for different types of

procurement documents:

• invitation for bid (IFB), request for bid

(RFB)

• request for proposal (RFP)

• request for quotation (RFQ)

• invitation for negotiation,

• tender notice

• contactor initial response


Procurement documents

Term quotation, bid, tender is often used:

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Term quotation, bid, tender is often used:

When buyer selects seller based on price

Example: purchasing standard or

commercial items

Term proposal is often used:

When other considerations, such as

seller’s technical skills or technical

approach, experience, background, etc.,

are considered important



� Terms may be used interchangeably also.

Hence, please avoid making unwarranted

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Hence, please avoid making unwarranted

assumptions

STRUCTURE OF PROCUREMENT

DOCUMENTS MUST:

1) Facilitate an accurate and

complete response from each

prospective seller

2) Facilitate easy evaluation of the

bids



include:

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include:

1) A description of the desired form of

response

2) Contract SOW

3) Required contractual provisions

(copy of model contract, non-

disclosure provisions)

4) Evaluation criteria



COMPLEXITY AND LEVEL OF DETAIL:

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COMPLEXITY AND LEVEL OF DETAIL:

� Correspond the value of purchase and

the risk involved

� PROCUREMENT DOCUMENTS SHOULD

BE RIGOROUS ENOUGH:

to ensure complete, consistent, and

comparable responses

� FLEXIBLE ENOUGH:

to permit consideration of suggestions

from the sellers regarding better ways to

satisfy requirements


Evaluation criteriaDeveloped and used to rate or

score ProposalsSource

selection

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score Proposals

1) FOR THE ITEMS READILY

AVAILABLE FROM MANY

SELLERS

Evaluation Criteria limited to

purchase price. Purchase Price

means landed cost

( cost of the item and ancillary

expenses, such as freight)

selection

criteria


Source

selection

Evaluation criteriaDeveloped and used to rate or score

Proposals

2) FOR A MORE COMPLEX PRODUCT

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selection

criteria

2) FOR A MORE COMPLEX PRODUCT

OR SERVICE

1) Understanding of need

2) Overall life cycle cost

3) Technical capability

4) Management approach

5) Financial capacity

6) Production capacity and interest

7) Business size and type

8) References

9) Intellectual property rights

10) Proprietary rights


Change Requests

This process may lead to

requested changes to the project

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requested changes to the project

management plan and its

subsidiary plans.

These changes are processed for

approval through Integrated

Change Control process.


Deals with

�Develop project charter (discussed)

�Develop project management plan (We will discuss now)

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�Develop project management plan (We will discuss now)

�Direct and manage project execution

�Monitor and control project work

�Perform Integrated change control

�Close project or phase


Develop Project Management Plan

PROCESS of documenting the actions necessary

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PROCESS of documenting the actions necessary

to define, prepare, integrate, and coordinate all

subsidiary plans.

The project management plan defines how the

project is executed, monitored and controlled,

and closed. It integrates and consolidates all

baselines and subsidiary plans.

PROCESS RESULTS IN


Develop Project Management Plan

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PROCESS RESULTS IN

� A Project Management Plan

� The contents of this plan depend on

complexity of the project and the application

area

The project management plan is developed

� Through a series of integrated processes


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� Through a series of integrated processes

until project closure.

� This process results in a project management

plan that is progressively elaborated by

updates and controlled and approved through

the Perform Integrated Change Control

process.

Develop Project

Management Plan

PROJECT PLAN

PM PLAN UPDATES

OUTPUTS OF ALL OTHER

PM PROCESSES + PLUS

THEIR MANAGEMENT

PLANS, Organizational policies

Constraints, Assumptions

Project Management Overview


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PROJECT PLAN

EXECUTION

INTEGRATED

CHANGE CONTROL

Deliverables

Requested changes

Implemented change requests

Implemented corrective action

Implemented preventive action

Implemented defect repair

Work performance report

Approved change requests

Approved corrective action

Approved preventive action

Validated defect repair

Rejected change requests

Recommended corrective action

Recommended preventive action

Recommended defect repair

Forecasts

Project closeout

Contract closure

Administrative

closure

Constraints, Assumptions

Monitor & Control

Project Work

Close project

deliverables

Project Management Plan Components

�Scope management plan

�Requirements management plan�All baselines

- scope baseline

Subsidiary plans components

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�Schedule management plan

�Cost management plan

�Quality management plan

�Process improvement plan

�Human resource plan

�Communication management plan

�Risk management plan

�Procurement management plan

�Change management plan

�Configuration management plan

- scope baseline

- schedule baseline

- cost baseline

�Life cycle selected

�Results of tailoring

�How work will be executed

�Key management reviews

(for addressing open issues

and pending issues).

Project Documents: List 1

�Activity attributes


�Activity list

�Milestone list

�Performance reports

�Project funding

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�Activity list

�Assumptions log

�Basis of estimates

�Change log

�Charter

�Contracts

�Duration estimates

�Forecasts

�Issue log

�Project funding

requirements

�Proposals

�Procurement documents

�Project organization

structure

�QC measurements

�Quality checklists

�Quality metrics

Project Documents: List 2

�Requirements traceability

matrix

�RBS

�Stakeholder register

�Stakeholder requirements

�Statement of work

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�RBS

�Resource calendars

�Risk register

�Roles and responsibilities

�Sellers list

�Source selection criteria

�Stakeholder analysis

�Stakeholder management

strategy

�Statement of work

�Teaming agreements

�Team performance

assessments

�Work performance

information

�Work performance

measurements


Develop Project Management plan process overview

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� Project charter

� outputs from planning

processes

� Enterprise


� Organizational

process assets

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

� Expert Judgment

� Project Management

Plan

Develop Project Management Plan process: INPUTS

1) Project charter

2) Outputs from planning processes

3) Enterprise environmental factors considered

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3) Enterprise environmental factors considered

here: a) Government or industry standards

b) PMIS

c) Organization structure and culture

d) Infrastructure (existing facilities and capital

equipments)

e) Personnel administration


4) Organizational Process Assets considered

here: a) Standardized guidelines, work instructions,

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a) Standardized guidelines, work instructions,

proposal evaluation criteria, and performance

measurement criteria,

b) Project management plan templates- elements of

the project management plan that may be updated:

� Guidelines for tailoring the organization’s set of

standard processes to satisfy needs of the project,

� Project closure guidelines (product validation and

acceptance criteria)



here:

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c) Change control procedures

d) Project files from past projects:

� Scope, cost, schedule and performance

measurement baselines, project calendars,

network diagrams, risk registers, planned

response actions, and defined risk impact.



here: d) Project files from past projects:

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d) Project files from past projects:

� Historical information and lessons learned,

� Configuration management knowledgebase

(versions and baselines of all official company

standards, policies, procedures, and any other project

document).

Develop Project Management Plan process: TOOLS

EXPERT JUDGMENT Utilized to

� tailor the process to meet project needs,

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� tailor the process to meet project needs,

� Develop technical and management

details to include in project management

plan,

� Determine resources and skills needed to

perform the project work,

Develop Project Management Plan process: TOOLS

EXPERT JUDGMENT Utilized to

� Define the level of configuration

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� Define the level of configuration

management to apply on the project, and

� Determine which project documents will

be subject to formal change control

process.


WBS

EARNED VALUECPM

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PMIS

EARNED VALUECPM

HISTOGRAM

Develop Project Management Plan process: OUTPUTS

Project Management plan

We have already discussed about Project

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We have already discussed about Project

Management Plan. Please get it approved and

then we are ready for Execution!

Did we hear it right?

‘Hold kick-off meeting!’

Develop Project Management Plan process: OUTPUTS

Kick-off meeting

After project plan is developed and

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After project plan is developed and

approved and before we begin

implementation, we hold kick-off meeting!

WHY?

SO THAT EVERYONE IS ON THE SAME

PAGE!!

EXECUTING

Executing ProcessGroup

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EXECUTING

PROCESS

Group

Executing processes

EXECUTING PROCESS GROUPTHE CONCEPT

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THE CONCEPT

Consists of processes:

Deployed to accomplish the work described in

the project management plan in order to

achieve the project’s requirements.

Executing processes


Involves:

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Involves:

1) Coordinating PEOPLE and RESOURCES

2) Integrating and performing the activities according to

the project management plan

3) Addressing the defined scope

4) Implementing approved changes

Executing processes


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Requires some replanning: Due to normal executionvariances

Examples of general variances:

a) Activity duration variances

b) Resource productivity variances

c) Resource availability variances

d) Unanticipated risks (variance from what risks you had

expected)

Executing processes


These variances:

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These variances: May or may not impact the projectmanagement plan. But you must analyze them! WHY?

Because the results of your analysis may:

1) Trigger a change request

2) If the change request is approved, it would modify the

project plan and MAY NEED REBASELINING!!

Executing processes

Direct & Manage Project ExecutionTHE CONCEPT

Utilizes : Majority of budget, as all the resources

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Utilizes : Majority of budget, as all the resources

you had planned are put to maximum

use here.

EXECUTING PROCESS GROUP

processes

1) Direct and Manage Project Execution

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1) Direct and Manage Project Execution

2) Acquire project team

3) Develop project team

4) Manage project team

5) Perform quality assurance

6) Distribute information

7) Manage stakeholders expectations

8) Conduct procurements

Direct & Manage Project Execution

THE CONCEPT

Is Primary Process for Carrying out the project

management plan;

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management plan;

Involves directing and managing various

technical and organizational interfaces

existing in the project to execute the work;

Deliverables are produced as outputs (from

the processes as defined in the project

management plan).


What do we do?

1. Perform activities to accomplish project

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1. Perform activities to accomplish project

requirements,

2. Create project deliverables,

3. Staff, train, and manage the team members,

4. Obtain, manage, and use resources (all

types),

5. Implement the planned standards and

methods,


What do we do?

6. Establish and manage project communication

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6. Establish and manage project communication

channels,

7. Generate project data (status, forecasting),

8. Issue change requests and adapt approved

changes into the project’s scope, plans, and

environment,


What do we do?

9. Manage risks and implement risk response

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9. Manage risks and implement risk response

activities,

10. Manage sellers and suppliers,

11. Collect and document lessons learned,

and implemented approved process

improvement activities.


Project manager, along with project

management team, directs the performance

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management team, directs the performance

of planned activities, and manages various

Technical and Organizational Interfaces that

exist within the project!

Direct and manage project execution is

directly affected by the project application

area!


What do we get?

� Deliverables

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� Deliverables

� Work performance information about

completion status of deliverables, and

what has been accomplished is fed into

the performance reporting process.

� Work performance info used as input to

monitoring and Controlling Process Group.


Here we also implement:

� Approved corrective actions to bring

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� Approved corrective actions to bring

anticipated project performance as per project

plan.

� Approved preventive actions to reduce

probability of negative consequences.

� Approved defect repair with recommendation

to either repair or replace defective

component.


Direct and Manage Project Execution process overview


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Plan

� Approved change

requests:

- Approved Corrective

actions

- Approved Preventive

actions

- Approved change

requests (other types)

- Approved defect

repair

� EEFs

� OPAs

INPUTS TOOLS &

TECHNIQUES

� Expert judgment

� Project

management

information

system

OUTPUTS� Deliverables

�Work performance

information

� Change requests


plan update


updates

Direct and Manage Project Execution process inputs

1. Project Management Plan

We have discussed in detail.

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2. Approved Change Requests

As a part of the Perform Integrated Change

Control process, a change control status

update shows that some changes are

approved and some are not.


Approved Change Requests continued

Approved change requests are scheduled for

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implementation by the project team.

Approved change requests are the documented,

authorized changes to expand or reduce scope.

Approved change requests can also modify,

project management plan, procedures,

costs/budget, or revise schedule.


Approved Change Requests continued

Approved change requests may also require

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implementation of Corrective Action, or

Preventive Action, or Defect Repair or

Replacement of Defective Component.

3. Enterprise environmental factors

Factors that can influence are:

� Organizational, company or customer culture

and structure,




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� Infrastructure (existing facilities and capital

equipments),

� Personnel administration (hiring and firing

guidelines, employee performance review,

and training records),

� Stakeholder risk tolerances




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� Project Management Information System

(PMIS) AN AUTOMATED TOOL:1) a scheduling software,

2) A configuration management system,

3) An information collection and distribution

system,

4) Web interfaces to other online automated

systems).



OPAs that can influence are:

� Standard guidelines and work instructions,

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� Standard guidelines and work instructions,

� Communication requirements (defining

allowed media, record retention, and security

requirements),

� Issue and defect management procedures (defining issue and defect controls, issue and defect

identification and resolution, and action item

tracking).


Organizational process assets continued

OPAs that can influence are:

� Process measurement databases used to

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� Process measurement databases used to

collect and make available measurement

data on processes and products,

� Project files from previous projects,

� Issue and defect databases (having historical

issue and defect status, control info,

resolution, and action item results).

Direct and Manage Project Execution process tools & techniques

EXPERT JUDGMENTUsed to assess inputs

needed for this process.

TOOLS &

TECHNIQUES

� Expert judgment

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needed for this process.

Such judgment and expertise

is applied to all technical and

management details during

this process.

� Expert judgment� Project

management

information

system

Direct and Manage Project Execution process tools & techniques

EXPERT JUDGMENTThis expertise is provided by the

project manager and the project

TOOLS &

TECHNIQUES

� Expert judgment

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project manager and the project

management team.

Additional expertise is available

from many sources:

- other units within organization,

- consultants, stakeholders

- professional/technical associations

� Expert judgment� Project

management

information

system


process tools & techniques

Project Management

Information SystemTOOLS &

TECHNIQUES

� Expert judgment

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Used here. Details already

discussed.

� Expert judgment

� Project

management

information

system

Direct and Manage Project Execution process outputs

Deliverables

An deliverable is any unique

OUTPUTS

�Deliverables�Work performance

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An deliverable is any unique

and verifiable product, result

or capability to perform a

service that must be

produced to complete a

process, phase, or project.

�Work performance

information

� Change requests


plan updates


updates

Direct and Manage Project Execution process OUTPUTS

Information on work results:

To what extent Which

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To what extent

the quality

standards are

being met

What costs have

been incurred or

committed

Which

deliverables

have been

completed

and which

have not

IS COLLECTED HERE AND FED INTO THE PERFORMANCE

REPORTING PROCESS FOR NECESSARY ANALYSIS AND

EVALUATION!

Work Results (DELIVERABLES)

Are mostly tangible but intangible too:

Example


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Example

Tangible Deliverables

1) Buildings

2) Structures

3) Roads

Intangible

Deliverables

1) Training

2) Mentoring

3) Facilitation


Changes Requests

When issues are found while work is being

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When issues are found while work is being

performed, change requests are issued.

Change requests may to expand modify project

policies or procedures, project cost or budget,

project schedule or project quality.


Changes Requests

Other change requests cover required

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Other change requests cover required

preventive or corrective actions to forestall

negative impact later in the project.


Changes Requests

Please note: requests for a change can be direct

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Please note: requests for a change can be direct

or indirect, externally or internally initiated,

and can be optional or legally/contractually

mandated. They can include:

a) Corrective action (to bring expected future

performance in line with the project

management plan).


Changes Requests

They can include:

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They can include:

b) Preventive action (to reduce the probability

of negative consequences associated with

project risks).

c) Defect repair

d) Updates (changes to formally controlled

documentation, plans to reflect modified or

additional ideas or content.


Project Management Plan Updates

Include updates to:

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Include updates to:

1. Requirements management plan

2. Schedule management plan

3. Cost management plan

4. Quality management plan

5. Human resource plan

6. Procurement management plan, and

7. Project baselines



Include updates to:

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Include updates to:

1. Requirements documentation

2. Project logs (issue, assumptions, etc.)

3. Risk register, and

4. Stakeholder register

Executing Process Group

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EXECUTION

PROCESSES


The process of confirming Human Resource

Acquire Project Team

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The process of confirming Human Resource

availability and obtaining the team necessary to

complete project assignments.

Please remember: The project management team

may or may not have control over team members!

WHY? Because of collective bargaining

agreements, use of subcontractor personnel,

matrix organization, internal or external reporting

relationships, or other various reasons!!


Please remember following:


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1) The project manager or project management

team should effectively negotiate with others

who are in a position to project human

resources for the project.

2) Failure to acquire necessary human resources

may affect project schedules, budgets,

customer satisfaction, quality, and risks! It could decrease probability of success and finally lead to

project cancellation.




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3) If human resources are not available due to

constraints, economic factors, or previous

assignments to other projects, the project

manager or project team may be required to

assign alternative resources with lower

competencies, provided there is no violation of

legal, regulatory, mandatory, or other specific

criteria.



All these factor must be considered and planned


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All these factor must be considered and planned

for during planning stages.

BE SURE!

The project manager or project management team

should reflect Impact of any unavailability of

required human resources in the project schedule,

project budget, project risks, project quality, training

plans, and other project management plans!!!

Acquire project team process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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Plan

� Enterprise

environmental

factors

� Organizational

process assets

INPUTSTECHNIQUES

� Preassignment

� Negotiations

� Acquisition

� Virtual teams

OUTPUTS

� Project Staff

Assignments

� Resource

Calendars


plan updates

Acquire Project Team process INPUTS

Project Management Plan provides

Human Resource PlanThat has information on How Project Human

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That has information on How Project Human

Resource should be identified, staffed, managed,

controlled, and eventually released. Defines:

a) Roles and responsibilities describing positions,

skills, and competencies that the project demands.

b) Project organization charts indicating the number

and hierarchy of people needed for the project.

c) Staffing management plan (time periods of usage,

and other necessary information).


Enterprise Environmental FactorsFollowing factors influence this process:

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1) Existing information for human resources (Availability

Competency levels, Experience, Interest in working on

the project, their Cost Rates).

2) Personnel administration policies (that affect

outsourcing).

3) Organizational structure

4) Location or multiple locations


Organizational process assetsFollowing factors influence this process:

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Organization standard policies, processes,

procedures.


Tools & Techniques


Preassignment Happens when project team is

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Happens when project team is

promised as part of competitive

bid, or project depends on some

special expertise, or staff

assignments are defined in the

charter. Please remember it!


Negotiation Happens when project team is drawn

from within:

Acquire

Project Team

Tools &

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from within:

� You negotiate with Functional

Managers for competent staff, to be

provided in needed timeframes,

and stay with until their job is

completed.

� You negotiate with other project

management teams for sharing

scarce or specialized resources.

Tools &

Techniques


Negotiation Here, your ability to influence and

politics of the organizations involved

Acquire

Project Team

Tools &

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politics of the organizations involved

play important part.

� A Functional Manager will provide

his/her exceptional performers only

where he/she sees benefits and

visibility of competing projects

demanding those resources!

Tools &

Techniques


Acquisition Recruit or hire or subcontract work if

Acquire

Project Team

Tools &

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Recruit or hire or subcontract work if

the performing organization lacks

the in-house staff required to

complete the project.

Tools &

Techniques


Virtual teams Creates new possibilities when

Acquire

Project Team

Tools &

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Creates new possibilities when

acquiring project team members!

These teams are groups of people,

though not meeting face to face, but

share common goal and fulfill their

roles. Video-conferencing, emails,

etc. have really helped success of

such teams.

Tools &

Techniques


Virtual teams New possibilities

Acquire

Project Team

Tools &

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New possibilities

� Teams of people from same company

located in different geographical areas

� Add special expertise through remote

� Include employees working from home

offices or people with mobility handicaps

� Teams of people working in different

shifts/hours

� Take up projects ignored due to travel

expenses

Tools &

Techniques


Virtual teams New possibilities caution!

Acquire

Project Team

Tools &

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New possibilities caution!You need to spend extra time to

1) SET CLEAR EXPECTATIONS

2) DEVELOP PROTOCOLS FOR

CONFRONTING CONFLICTS

3) INVOLVE PEOPLE IN DECISION-

MAKING

4) SHARE CREDIT IN SUCCESS

So, communication planning becomes very

important here!! Please remember!!!

Tools &

Techniques


OUTPUTS


Project staff assignments Project is staffed when

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Project is staffed when

necessary people are assigned

to work on it!

Includes documentation:

1) Project team directory

2) Memos to team members

3) Their names written in

organization charts, schedules


OUPUTS


Resource Calendars Documents time periods each team

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Documents time periods each team

member will work on the project.

Please remember: You can develop

a reliable, final schedule only after

considering each person’s

schedule conflicts, including his

commitments to other projects and

his vacations, etc.


OUTPUTS



updates may include

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Human Resource Plan.


D

E

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T

E

A

M

E

V

E

L

O

P

M

E

N

T

Project Human Resource Development

Develop Project TeamConcept

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Consists of

1) Improving the competencies, team interaction,

and overall team environment to enhance

project performance.

2) Project managers should acquire skills to

identify, build, maintain, motivate, lead, and

inspire project teams to achieve high

performance and meet project objectives.

Concept

Teamwork Critical Success Factor for project

success

Develop Project Team

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success

1) Developing effective project team is one of the

primary responsibility of the project manager!

2) Project managers should create an environment

that facilitates teamwork.

3) Project Manager

Concept

Teamwork Critical Success Factor for project

success


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success

3) Project Manager should continually motivate

their team by:

1) Providing challenges and opportunities,

2) Timely feedback,

3) Support as needed, and

4) Recognizing and rewarding good performance.

Concept

HIGH Team Performance can be by


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1) Using open and effective communication,

2) Developing trust among team members,

3) Managing conflict in a constructive manner, and

4) Encouraging collaborative problem-solving and

decision making.

The project manager should request support and influence

stakeholders to get resources for developing effective project

teams!

Challenges

Global environment, cultural diversity


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Team members often have diverse industry

experience, multiple languages, and sometimes

operate in the t”team language”or norm that is a

different language than their native one.

What should be done to tackle this?

Challenges

The project management team should


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a) Capitalize on cultural differences,

b) Focus developing and sustaining the project

team throughout the project life cycle, and

c) Promote working interdependently in a climate of

mutual trust.

Advantage?

Advantage

Developing the project team


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“Improves the people skills and technical

competencies, and overall team environment and

project performance!”

“It requires clear, timely, effective and efficient

communication between team members

throughout the project lifecycle!

Objectives?

Objectives of developing a project team

1) Improve knowledge and skills to increase ability


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1) Improve knowledge and skills to increase ability

to complete project deliverables, while lowering

costs, reducing schedules, and improving

quality.

2) Improve feelings of trust and agreement among

team members to raise morale, lower conflict,

and increase teamwork, and

Objectives of developing a project team


3) Create a dynamic and cohesive team culture

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3) Create a dynamic and cohesive team culture

to improve both individual and team productivity,

team spirit, and cooperation, and allow cross-

training and mentoring to share knowledge and

expertise.


Team development basics

TEAM DEVELOPMENT

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INDIVIDUAL DEVELPOMENT(behavioral and technical)

is the foundation essential

to develop the team

TEAM DEVELOPMENT

is

critical to the project’s ability

to meet its objectives


FORMING STORMING NORMING,

PERFORMING

MOURNING

STAGE 1 STAGE 2 STAGE 3 STAGE 4

Stage of Team Development

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STAGE 1 STAGE 2 STAGE 3 STAGE 4

• Team members

enthusiastic

about new team:

commitment high

• only beginning

to work

together:

competence low

• Experience

temporary lapse

of commitment

to the team as

they struggle to

find a good way

to work together

• team learns:

competence

rises

• Team has found

and agreed a

good way to

work:

commitment and

competence high

• Competence

established at

high level

• Commitment

may surge or dip

depending how

disbanding the

team handled


Team development basics

Organization structure

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Organization structureof the performing organization has great bearing on

team development on projects

Efforts to develop team are complicatedWhen individual team members are accountable to both

a functional manager and the project manager

It’s project manager’s responsibility

to balance this relationship and get the due

contribution and cooperation

of the team members!

Develop Project Team process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


12

00

� Project Staff

assignments


Plan


INPUTSTECHNIQUES

� Interpersonal Skills

� Training

� Team-building

Activities

� Ground rules

� Co-location

� Recognition and

rewards

OUTPUTS

� Team Performance

assessments

� Enterprise

Environmental

Factors Update


INPUTS



12

01

Team development starts with the

list of the project team members,

project staff assignments

documents identify the people who

are on the team.

Develop

project team

INPUTS



Provides human resource plan

12

02

Provides human resource plan

which Identifies training strategies and

plans for developing project team

members.

The project moves on and so do project

team assessments, resulting in addition

of items like rewards, feedback,

additional training, and disciplinary

actions to the plan.


INPUTS


Resource Calendars

Identifies

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03

Identifies times that project team

members can participate in team

development activities.

“Develop Project Team” Tools & Techniques

Interpersonal skills Sometimes known as “soft skills”, play Important

Role in team development.

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04

Role in team development.

The project management team can GREATLY

REDUCE problems and increase cooperation

“By understanding the SENTIMENTS OF

TEAM MEMEBRS, ANTICIPATING THEIR

ACTIONS, ACKNOWLEDGING THEIR

CONCERNS, AND FOLLOWING UP ON THEIR

ISSUES.

“Develop Project Team” Tools & Techniques

Interpersonal skills

Skills that help you managing team

members:

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members:

1) Empathy

2) Influence

3) Creativity

4) Group facilitation

Develop Project Team process Tools & Techniques

Training

All activities designed to enhance competencies

of team members. Can be formal, informal.

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of team members. Can be formal, informal.

� Class room, online, computer-based, on-the-

job assisted by another team member,

mentoring, and coaching.

� Please remember if anyone lacks necessary

managerial or technical skills, these skills

must be developed as part of project work.


Tools & Techniques


Training

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07

Planned Training: scheduled in

staffing management plan.

Unplanned Training: result of

observation, conversations,

performance appraisal conducted

during the process ‘Manage Project

Team in Controlling!


Tools & Techniques


Team-building activitiesVary from:

1. Five-minute agenda item in status

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08

1. Five-minute agenda item in status

review meeting to

2. Off-site, professionally facilitated

TEAMBUILDING WORKSHOP

3. Involving non-management level

team members in the planning

process, also develops team spirit.


Team-building activitiesYou should also:

Encourage informal communication


Tools & Techniques

12

09

Encourage informal communication

and activities as they establish trust

and build good working relationships!

Please remember team building

strategies are quite necessary for

virtual team as they don’t get the

benefit of face-to-face contact!


Team-building activities: discussion

As ongoing process, team building is crucial to project success. Changes in project

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10

project success. Changes in project

environment are inevitable, and to manage them

effectively, a continued or a renewed team

building effort must be applied!!

Project Manager must continually monitor team functioning and performance to determine if any

actions are needed to prevent or correct team

problems!!!


Team-building activities: discussion

Five stages (Tuckman ladder of team development)

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1) Forming

2) Storming

3) Norming

4) Performing

5) Adjourning

These occur in order but a

team may get stuck up at one

stage or slip to an earlier one.

Team Members who have

worked in the past may even

skip a stage!

We have already talked about these stages


Ground rules


Tools & Techniques

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12

Please establish clear expectations of

acceptable behavior by project team

members!

Early commitment to these guidelines

reduces misunderstanding and

increases productivity! Form by joint participation so that team

members share responsibility to follow

them.


Co-locationPlacing all or most of the active team

members at same location increases


Tools & Techniques

12

13

members at same location increases

their ability to work as a team. It may

be: a) temporary, b) at strategically

important times, or c) for entire

project. Co-location strategy includes: “A meeting room, sometimes called war room”,

having electronic devices, place to post

schedules, and other conveniences to

EHNHANCE COMMUNICATION and A

SENSE OF COMMUNITY!


Co-locationWhen co-location is thought to be a

good strategy, the use of virtual team


Tools & Techniques

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14

good strategy, the use of virtual team

members will reduce the frequency

that team members are located

together!


Recognition and RewardsIs part of the team development

process.


Tools & Techniques

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15

process.

Recognize and reward desirable

team behavior.

Please remember:

1) Ways to reward developed during

‘HR Planning’ process.

2) Awards decisions are made during

‘Manage Project Team’ process

through performance appraisals.


Recognition and RewardsCAUTION! Only desirable

behavior should be rewarded!


Tools & Techniques

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16


Please remember:

1) Willingness to work overtime to

meet an aggressive schedule

should be recognized/rewarded.

2) Needing to work overtime due to

poor planning should not be

rewarded.


Recognition and RewardsCAUTION! Only desirable



Tools & Techniques

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17


Please remember:3) Win-lose rewards (that only some team

members can achieve, like …of the

month) destroys cohesiveness.

4) Reward win-win behavior that everyone

can achieve (like progress reports in

time) increases team spirit.

5) Consider cultural differences! Team

rewards in a culture of individualism will

be difficult to work.


OUTPUTS


Team performance

assessment

Effective team development

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Effective team development

strategies and activities increase

Team’s Performance, which in

turns increases chances of

achieving project objectives!

We come to know this by

assessing team performance.

Develop Project Team process OUTPUTS

Team performance assessment

Informal and formal assessments of team’s

effectiveness (resulting from team

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development activities):

1) Improvement in skills (that allow one to

perform more effectively).

2) Improvement in competencies and

sentiments that help the team to perform

better as a group.

3) Less staff turnover



Informal and formal assessments of team’s


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development activities):

4) Increased team cohesiveness where team

members share information and experiences

openly and help each other to improve the

overall project performance!



Please rememberSuch assessments can also identify need for

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Such assessments can also identify need for

Some specific training, coaching, mentoring,

assistance, or changes to improve the team’s

performance.

Please noteThis is especially important if team members are part of

a union, involved in collective bargaining, bound by

contract performance clauses, or other related

situations!


OUTPUTS


Enterprise Environmental

Factors Updates

may include

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may include

Personnel Administration,

including updates for

Employee Training Records

Skill Assessments.


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Manage Project Team


Manage Project Team

Involves:

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24

1) Tracking team member performance

2) Providing feedback

3) Resolving issues

4) Coordinating changes to enhance project

performance


Manage Project Team

HOW? Well, the project management team:

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HOW? Well, the project management team:1) Observes team behavior

2) Manages conflict

3) Resolves issues

4) APPRAISES TEAM MEMBER

PEROFRMANCE


Manage Project Team

RESULT?

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RESULT? 1) Staffing management plan is updated.

2) Change requests are submitted.

3) Issues are resolved.

4) Inputs provided to performance appraisals

5) Lessons learned are added to organization’s

database.


Manage Project Team

CAUTION!

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CAUTION! � Managing team members becomes difficult when they

report to two bosses! Functional Managers and Project

Managers (in matrix organization).

� Project success largely depends on how well this dual

reporting relationship is managed.

� It’s responsibility of Project Manager to manage it

nicely! Remember it!!


Manage Project Team

CAUTION! CAUTION!

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CAUTION! Team Management

requires a combination of

skills with special emphasis

on:

1) Communication

2) Conflict Management

3) Negotiation, and

4) Leadership.

CAUTION! Project Managers should

provide challenging

assignments to the team

members and provide

recognition for high

performance.

Manage Project Team process overview

INPUTSTOOLS &

TECHNIQUESOUTPUTS

� Change Requests


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� Project staff

assignments


Plan

� Team performance

assessment

� Performance Reports

� Organization Process

Assets

INPUTS� Observation and

conversation

� Project

performance

appraisals

� Conflict

management

� Issue log

� Interpersonal Skills

� Change Requests

� Enterprise

Environmental factors

Update

� OPAs updates

� PM Plan updates

Manage Project team process INPUTS


Provide a list of team members to be evaluated.


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Provide human resource plan which gives us

information on:

A) ROLES AND RESPONSIBILITES

B) PROJECT ORGANIZATION

C) STAFFINGMANAGEMENT PLAN a list of R & R

to be used to monitor and evaluate performance.


Team Performance Assessments

(ongoing, formal/informal)

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Helps take actions to resolve

issues, modify communication,

address conflict, and improve team

interactions.

Performance reports

Results from control processes, such as:

1) schedule control, cost control


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1) schedule control, cost control

2) quality control, scope verification

3) procurement audits

Results from performance reports

including forecasts helps decide:

a) recognition & rewards,

b) future HR requirements

c) updates to staffing management plan


That can influence this process:

1) Certifications of appreciation


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1) Certifications of appreciation

2) Newsletters

3) Websites

4) Bonus structures

5) Corporate apparel, and

6) Other organizational perquisites.

Observation & conversation

To be in touch with work and attitudes of

team members. PM team monitors:

Manage Project Team process Tools & Techniques

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team members. PM team monitors:

1) Progress toward project

deliverables.

2) Accomplishments that are

source of pride among team

members.

3) Interpersonal issues

Project performance appraisals(feedback)

Performance Feedback to team


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Performance Feedback to team

members from their supervisors. It can

also be 360-degree (from superior,

peer, and subordinates). Objectives?

1) To re-clarify Roles & responsibilities,

2) To ensure positive feedback is

given through a Structured Time in an

otherwise hectic environment.

Project performance appraisals(feedback)

Objectives?


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Objectives?

3) Discover unknown and unresolved

issues,

4) Develop individual training plans, and

5) Establish specific goals for future time

periods.

Conflict management

Conflict is an inevitable part in a project

environment. “Successful conflict


ANSWER:

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environment. “Successful conflict

management increases productivity and

brings in positive working relationships”.

Sources of conflict?

- scarce resources

- scheduling priorities

- personal work styles

Conflict management

What can help?- Team ground rules


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- Team ground rules

- Solid project management

practices (communication

planning, role definition, etc.)

Benefit? If managed properly.�Differences of opinion are healthy

�Leads to enhanced creativity

�Better decision-making

Conflict management

Please remember that differences become a

negative factor, team members are first responsible


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negative factor, team members are first responsible

to resolve their own conflicts.

If it is not resolved and escalates, then the project manager must facilitate satisfactory

resolution.

Conflict management

Please rememberConflict should be addressed EARLY and usually


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Conflict should be addressed EARLY and usually

IN PRIVATE, using a direct, collaborative

approach!

If disruptive conflict continues, formal

procedures may be used, including

disciplinary actions. it is not resolved and

escalates, then the project manager must facilitate

satisfactory resolution.

MOST VITAL POINTS:1. CONFLICT IS NATURAL AND FORCES A SEARCH

FOR ALTERNATIVES


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FOR ALTERNATIVES

2. CONFLICT IS A TEAM ISSUE

3. OPENESS RESOLVES CONFLICTS

4. CONFLICT RESOLUTION MUST FOCUS ON

ISSUES, not personalities

5. Conflict resolution should focus on present, not

past!

Success in managing project teams depends

largely on the ability to resolve conflict.

Factors that effect conflict resolution methods:


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Factors that effect conflict resolution methods:

1. Relative importance and intensity of conflict

2. Time pressure for resolving conflict

3. Position taken by players involved

4. Motivation to resolve conflict on long-term or

short-term basis.

Conflict resolution techniques:

1. Withdrawal/avoiding


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1. Withdrawal/avoiding

2. Smoothing/accommodating

3. Compromising

4. Forcing

5. Collaborating

6. Confronting/Problem Solving


1. Withdrawal / Avoiding: Retreating from an


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1. Withdrawal / Avoiding: Retreating from an

actual or potential conflict situation.

2. Smoothing / Accommodating: Emphasizing

areas of agreement rather than areas of differences.

3. Compromising: searching for solutions that bring some degree of satisfaction to all parties.

4. Forcing: Pushing one’s point of view at the expense of others. Win-Lose.


5. Collaborating: Incorporating multiple point of

views and insights from differing perspectives. Leads


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views and insights from differing perspectives. Leads

to consensus, commitment.

6. Confronting/Problem Solving: Treating conflict as a problem to be solved. A written log

documents and helps monitor who is responsible for

resolving by a target date. Needs give-and-take

attitude and open dialogue.

Issue log (issues arising during managing

project team)

Helps so much! Documents persons


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Helps so much! Documents persons

responsible to resolve issues by a target

date. Addresses obstacles that may stall

team from achieving goals.

Example of obstacles:

� Differences of opinion

� Situations to be investigated

� Emerging/unanticipated responsibilities (need

to be assigned to someone in project team)

Interpersonal Skills

Project managers use a combination of

technical, human, and conceptual skills to


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technical, human, and conceptual skills to

analyze situations and interact appropriately

with team members.

Please note:

“Using appropriate interpersonal skills aids

project managers in capitalizing on the

strengths of team ALL members!”


1. Leadership

2. Influencing


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2. Influencing

3. Effective decision making

Leadership: Communicate the vision

and inspire the project team to achieve

high performance. Important through all

phases of project life cycle.


1. Leadership

2. Influencing


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2. Influencing

3. Effective decision making

Influencing: Ability to influence

stakeholders on a timely manner,

especially in a matrix environment where

project manager have little or no direct

authority.

Key Influencing skills:

1. Ability to be persuasive and clearly

articulate points and positions.


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articulate points and positions.

2. High levels of active and effective

listening habits

3. Consideration of various perspectives

4. Gathering relevant and critical

information to address important issues

and reach agreements.

Effective decision makingAbility to negotiate and influence the organization

and the project management team. GUIDELINS:


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and the project management team. GUIDELINS:

1. Focus on goals to be served

2. Follow a decision-making process

3. Study environmental factors

4. Develop personal qualities of the team members

5. Stimulate team creativity, and

6. Manage opportunity and risk.

Change Requests

Staffing changes emerging from this process

( whether by choice or by uncontrollable

Manage Project Team process OUTPUTS

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( whether by choice or by uncontrollable

events) can cause schedule to be extended,

budget to be exceeded, etc. Staffing issues

can disrupt project plan.

These change requests are examined by ICC

and then approved with due consideration of

their impact on the project!

Change RequestsStaffing changes can include:

1. Moving people to different assignments


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1. Moving people to different assignments

2. Outsourcing some work

3. Replacing team members who leave

4. Preventive actions to reduce probability and

impact of problems before they occur. Example:

a) Cross-training to reduce problems during team

member absences

b) Additional role clarification to ensure all

responsibilities are fulfilled.

OPAs updates

1) inputs to performance appraisals


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1) inputs to performance appraisals

of team members. Provided by project

staff for team members with whom they

interact significantly.

2) HR-Related “lessons learned” posted

in historical databaseexamples

OPAs updates

HR-Related “lessons learned” posted in

historical database:


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1) Project org. charts, position

descriptions, staffing management plan

(kept as templates).

2) Ground rules, conflict management

techniques, and recognition events that

proved so good. examples

OPAs updates

HR-Related “lessons learned” posted in



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3) Procedures for co-location, virtual

teams, training, negotiation, and team

building that proved so useful.

4) Special competencies or skills of team

members discovered during project.

5) Issues and their solutions from issue

log.

Enterprise Environmental

Factors Updates


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1. Input to organizational

performance appraisals.

2. Personal Skills Updates

Project Management plan

Updates


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1. Staffing management plan


Perform Quality assurance

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The process of

Auditing the quality requirements and

results from quality control measurements

Assurance may be provided to ensure

appropriate quality standards and

operations definitions are used!



Please remember

A quality assurance department, or similar

organization, often oversees quality

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organization, often oversees quality

assurance activities.

Quality assurance support may be provided

to the project team, the management of the

performing organization, the customer or

sponsor, as well as other stakeholders not

actively involved in the project!


Please remember

This process provides and umbrella for

Continuous Process Improvement, that is

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Continuous Process Improvement, that is

an iterative means for improving quality of all

processes.


Quality assurance

CONTINOUS PROCESS IMPORVEMENT

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CONTINOUS PROCESS IMPORVEMENT

� Reduces waste and eliminates activities that do

not add value non-value-added activities,

� Increases efficiency and effectiveness of

processes,

� Reviews and improves organizational business

processes.

Perform Quality Assurance process overview

INPUTSTOOLS &

TECHNIQUESOUTPUTS

� Change Requests


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Plan

� Quality metrics

�Work performance

information

� Quality control

Measurements

� Plan Quality and

perform Quality

Control Tools &

Techniques.

� Quality Audits

� Process analysis

� Change Requests

� Organizational

process assets

updates


plan updates


Updates


Project managementPlan provides

1. Quality Management Plan

Perform Quality

assurance

INPUTS

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1. Quality Management Planprescribes how quality will be performed within the project.

2. Process Improvement Plandetails steps for analyzing processes to identify activities that enhance value and the ones do not add value.


Quality metrics

We have dealt with this also during

quality planning and we use them

Perform Quality

assurance

INPUTS

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quality planning and we use them

as another important input here.


Work performance

informationNeeded for quality audit, reviews,

Perform Quality

assurance

INPUTS

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Needed for quality audit, reviews,

process analyses. Includes:

1) Technical performance measures

2) Project deliverables status

3) Required corrective actions

4) Performance reports


Quality control

measurements

Are results of quality control

Perform Quality

assurance

INPUTS

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Are results of quality control

activities.

Based on the these results, we

reanalyze and reevaluate the

quality standards and processes


during QA process!


Perform Quality

Assurance

Tools &

Recap Plan Quality & Perform Quality Control

tools & techniques: already discussed

� Benefit/Cost analysis

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Techniques

Quality auditscarried out to identify: lessons learnt that can

improve performance of the present project,

and also of other projects in performing

organization

� Benefit/Cost analysis

� Benchmarking

� Flowcharting

� Design of experiments

� Cost of quality


Quality auditsA structured, independent review

Perform Quality

Assurance

Tools &

Techniques

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A structured, independent review

(scheduled or random, in-house or by

outside third party) to determine WHETHER

PROJECT ACTIVITIES COMPLY WITH

ORGANIZATIONAL AND PROJECT

PLOICIES, PROCESSES, AND

PROCEDURES!


Quality auditsOBJECTIVES:

Perform Quality

Assurance

Tools &

Techniques

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OBJECTIVES:

1. Identify all the good /best practices are being

implemented,

2. Identify all gaps,

3. Share the good practices introduced or

implemented in similar projects in the

organization or the industry,

4. Proactively offer assistance in a positive manner

to improve implementation of processes to help

team


Quality auditsOBJECTIVES:

Perform Quality

Assurance

Tools &

Techniques

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OBJECTIVES:

4. Proactively offer assistance in a positive manner

to improve implementation of processes to help

team raise productivity,

5. Highlight contributions of each audit in the

Lessons Learned repository of the organization.

Advantage


Quality auditsADVATAGE: Subsequent efforts to correct these

Perform Quality

Assurance

Tools &

Techniques

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ADVATAGE: Subsequent efforts to correct these

deficiencies will result in:

� Reduced cost of quality

� Increase in the percentage of

acceptance of the product/service by

the customer or sponsor

Quality audits confirm the implementation of

approved change request/corrective/preventive

actions/defect repairs!


Perform Quality

Assurance

TOOLS & Process analysisDone by following steps written in

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TECHNIQUESDone by following steps written in

process improvement plan.

PURPOSE?

� To find out required improvements

from the technical and organizational

point of view!

HOW?


Process analysisWhat do you analyze during process operations?

Perform Quality

Assurance

TOOLS &

TECHNIQUES

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What do you analyze during process operations?

1. Problems experienced

2. Constraints experienced

3. Non-value-added activities identified

We conduct root cause analysis, may use a

specific technique to analyze a problem/situation,

to understand underlying causes. Then, we decide

preventive actions TO AVOID SIMILAR

PROBLEMS.


Change RequestsRequests for actions to be taken for quality

Perform Quality

Assurance

OUTPUTS

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Requests for actions to be taken for quality

improvement for the increasing the

efficiency and effectiveness of policies,

processes, and procedures of the

performing organization.

TO PROVIDE ADDED BENEFITS

TO THE STAKE HOLERDS OF

ALL PROJECTS!



updates

Perform Quality

Assurance

TOOLS &

TECHNIQUES

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updates

1. Quality Management Plan

2. Schedule Management Plan

3. Cost Management Plan.



updates

Perform Quality

Assurance

TOOLS &

TECHNIQUES

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updatesWhat are these changes?

1. Incorporation of processes that have been

through continuous process improvement (and are ready to repeat the cycle).

2. Improvements to processes that have been

identified and measured (and are ready for implementation).


Project management

Plan updates

Perform Quality

Assurance

TOOLS &

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Plan updatesThese changes can lead to:

1. Additions

2. Modifications

3. Deletions

to the Project management Plan

and its Subsidiary Plans, after

they are processed and

approved by ICC process.

TECHNIQUES


OPA Updates may include

Perform Quality

Assurance

TOOLS &

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may include

Quality Standards

Project Document Updatesinclude

1. Quality Audit Reports.

2. Training Plans, and

3. Process Documentation.

TECHNIQUES


DISTRIBUTE

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DISTRIBUTE

INFORMATION

Project Communication Management

DISTRIBUTE INFORMATION

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�Timely communication of needed information

to project stakeholders

� Implementing communications management

plan

� Attending to unexpected requests for

information


DISTRIBUTE INFORMATION

Sample

Project information distributed:

� status

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� progress, success

� forecast

� variance report

� corrective action

� problems, new risks discovered

� updated project plans/ components of project

plan

� team members’ performance

� meeting schedule , etc


DISTRIBUTE INFORMATION - Sample

Project information is distributed to

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� internal to the project

� external to the project

� management

� sponsor

� functional managers

� team

� team member’s managers

� other project managers

� project manager


Distribute Information process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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Plan

� Performance Reports.


Assets

INPUTSTECHNIQUES

� Communications

Methods

� Information

Distribution

Tools

OUTPUTS

� OPAs Updates


The Project Management Plan contains the :-

Communications management plan which

includes:-


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includes:-

• Stakeholder communication requirements

• Information to be sent, format, content, detail

• Persons responsible for communication

• Persons/groups to be communicated

• Methods of communication

• Frequency (weekly, monthly)

• Escalation process-identifying timeframes and

the management chain (names) for escalation

issues that can’t be solved at lower level


Communications management

plan


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plancontains• Method for updating and refining

communications management plan AS PROJECT

PROGRESSES

• GLOSSARY OF COMMON TERMINOLOGY (VERY

IMPORTANT)! WHY?


Performance Reports:-

They are used to distribute project performance


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They are used to distribute project performance

and status information. It should be as precise

and current as possible.


OPA’s include:-

Policies, Procedures, and guidelines regarding


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Policies, Procedures, and guidelines regarding

information distribution.

Templates, and

Historical Information and Lessons Learned.


Communication Methods

includes:-Distribute Information

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includes:-

Individual and group meetings.

Video and Audio Conferences.

Computer Chats

Remote Communication Methods are used to

distribute information.


Information distribution

methods


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methodsUsing various methods to send project

information to the stakeholders as per their

needs.

Examples:

• project meetings

• videoconferencing, web conferencing

• voice mail, fax, telephone

• email, fax, shared networked databases

• hard copy, web publishing

•Web interfaces, virtual office, portals, etc.


OPAs UpdatesConsist of

1) Lessons learned documentation

Distribute

Information

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2) Project records

3) Project reports

4) Project presentations

5) Feedback from stakeholders

6) Stakeholder notifications Lessons


OPAs Updates1. Lessons learned

documentation: OPAs are

Distribute

Information

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documentation: OPAs are updated as new lessons learned are

included in its database!

What is documented?

a) Causes of issues

b) Reasoning behind corrective action

chosen

c) Other types of lessons learned

about information distribution


OPAs Updates2. Project records Are documents

that describe the project. They are

Distribute

Information

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that describe the project. They are

arranged and kept in an organized

manner. Project team can also

maintain records in a project

notebook.

Project record Examples:

• correspondence

• memos

• documents describing the project


OPAs Updates3. Project reportsFormal or informal project reports

Distribute

Information

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Formal or informal project reports

detailing:

� Project status

� Lessons learned

� Issue logs

� Project closure reports

� Outputs from other knowledge areas


OPAs Updates

Distribute

Information

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OPAs Updates4. Project presentationsAre made by the project team to the

stakeholders to satisfy their information

needs by using appropriate formal or

informal methods.


OPAs Updates

Distribute

Information

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OPAs Updates5. Feedback from stakeholdersInformation received from stakeholders

concerning project progress.

Distributed and used to modify or

improve future project performance!.


OPAs Updates


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OPAs Updates6. Stakeholder notificationsInformation provided to stakeholders

about:

1) Approved changes

2) Resolved issues

3) General project status


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Manage Stakeholder

Expectations


Process of communicating and working

Manage Stakeholder Expectations

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Process of communicating and working

with stakeholders to meet their needs and

addressing their issues as they occur.

Involves communication activities directed toward

project stakeholders to influence

their expectations, address concerns, and resolve their


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issues, such as:

1) Actively managing their expectations to increase

chances of project acceptance by negotiating

and influencing their desires to achieve and

maintain project goals.

2) Addressing concerns that have not become

issues yet, often related to anticipation of future

problems.

Involves communication activities directed toward

project stakeholders to influence



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issues, such as:

3) Clarifying and resolving issues identified. This

may result in a change request or may be

addressed outside the project (postponed for

another project or phase or deferred to another

organizational entity).

ADVANTAGE:

Managing stakeholder expectations helps increase the

probability of project success by ensuring that the


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probability of project success by ensuring that the

stakeholders understand the project benefits and risks.

This enables them to be ACTIVE SUPPORTERS of the

project and to help with risk assessment of project

choices!

By anticipating their reaction to the project, we can take

preventive action TO WIN THEIR SUPPORT or

minimize potential negative impacts.

WHOSE DUTY?

Project Manager is responsible. It decreases

the risk that the project will fail to meet its


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the risk that the project will fail to meet its

goals and objectives due to unresolved

stakeholder issues. It limits disruptions during

the project!

Manage Stakeholder Expectations process overview

INPUTSTOOLS &

TECHNIQUESOUTPUTS

� Change Requests


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� Stakeholder Management

Strategy

� Project Management Plan

� Issue Log

� Change Log

� OPA’s

INPUTS� Communication

methods

� Interpersonal

Skills

� Management Skills

� Change Requests


Updates

� OPAs updates

� PM Plan updates

Manage Stakeholder Expectations - INPUTS

1. Stakeholder Register

Provides list of the relevant stakeholders. Used to

ensure all stakeholders are included in the project

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ensure all stakeholders are included in the project

communications!

2. Stakeholder Management Strategy

Gives an understanding of stakeholder goals and

objectives. The strategy documented immensely

helps us here in managing stakeholder

expectations.


3. Project Management Planprovides

a) Communications management plan. The needs

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a) Communications management plan. The needs

and expectations are identified, analyzed, and

documented in the communications management

plan.

b) Stakeholder requirements and expectations

provide an understanding of their goals, objectives,

and level of communication required during the

project.


4. Issue logs (action-item log)A tool used to record and monitor “Resolution of

Issues”! Please note:

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Issues”! Please note:

1) The purpose of issue resolution is to maintain

good, constructive working relationships among

different stakeholders (including team members!).

2) An issue must be stated in such a way that its

resolution becomes feasible.


4. Issue logs (action-item log)Please note:

3) For each issue the responsibility is assigned and a

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3) For each issue the responsibility is assigned and a

target date is fixed for closure!

4) Unresolved issues can become major source of

conflict and may delay project!


5. Change LogUsed to record changes that occur during the

project. These changes and their impact (time, cost,

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project. These changes and their impact (time, cost,

and risk) must be communicated to the concerned

stakeholders.

6. Organizational Process Assets- organization communication requirements

- Issue mismanagement procedures

- Change control procedures

- Historical information

1. Communication Methods

Methods of communication identified for each

stakeholder (in communication management plan)

Manage Stakeholder Expectations – Tools & Techniques

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stakeholder (in communication management plan)

are used during stakeholder management.

2. Interpersonal SkillsProject Manager applies toward:

a) Building Trust,

b) Resolving conflict,

c) Active listening, and

d) Overcoming resistance to change.

3. Management SkillsManaging is the act of directing and controlling

a group of people for coordinating an

Manage Stakeholder Expectations – Tools & Techniques

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a group of people for coordinating an

harmonizing toward achieving a goal that is

beyond the scope of individual effort!

Project Manager uses these management skills:

a) Presentation skills

b) Negotiating

c) Writing skills

d) Public Speaking

Manage Stakeholder Expectations – OUTPUTS

1. Organizational process updatesPosting lessons learned like causes of

issues and logic behind corrective action

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issues and logic behind corrective action

chosen, plus other type of lessons learned

about stakeholder management!

2. Change requestsManaging stakeholder expectations may

result in a change request to the product or

the project. It may also include corrective or

preventive actions.


3. Project Management Plan updatesCommunication Management plan, that is part

of the project management plan, may be

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13

of the project management plan, may be

updated when NEW Communication

Requirements are identified!

EXAMPLE:

- Some communication may no longer be

necessary,

- An ineffective method is replaced,

- A new communication requirement identified.


3. Project Documents updates- Stakeholder Management Strategy: Updated as a result of addressing concerns and

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Updated as a result of addressing concerns and

issues.

- Stakeholder register: Updated as information

on stakeholders change. Example: New

stakeholders identified, if registered

stakeholders are no longer involved in or impacted by

the project, or other updates for any stakeholder.

- Issue Log: Updated as new issues identified andcurrent ones are resolved!


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Conduct Procurements



PROCESS

Consists of

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Consists of

Obtaining responses (bids, proposals) from

prospective sellers, selecting a seller, and awarding a

contract.

The project team receives proposals, applies

previously defined selection criteria to select seller.



On major procurement items, the overall process of

requesting responses may be repeated!

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requesting responses may be repeated!

A short list of qualified sellers made based on

Preliminary proposal. More detailed evaluation is done

on the basis of more detailed requirements document

Obtained from short-listed ones.



Additionally, tools & techniques can be used alone or

combination.

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combination.

Example

A weighting system may be used to:

- select a single seller who will sign a standard

contract.

- Establish a negotiating sequence by ranking all

proposals by weighted evaluation.

Conduct procurements process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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� OPAs


plan

� Procurement

documents

� Source selection

criteria

� Qualified seller list

� Seller proposals



� Teaming agreements

INPUTSTECHNIQUES

� Bidder Conferences

� Advertising

� Proposal

evaluation

techniques

� Independent

estimates

� Expert judgment

� Internet search

� Procurement

negotiations

OUTPUTS

� Selected sellers

� Procurement

contract award


� Change requests

� Procurement

management plan

updates


updates


1. OPAsList or files with information on prospective or previously qualified

Conduct

Procurement

INPUTS

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prospective or previously qualified sellers. We can invite them to bid, propose or quote on work. Provides information on prospective sellers’ past experience and other characteristics.Some companies maintain ‘preferred sellers list’, selected through some qualification method.

INPUTS


2. Project management planprovides procurement management plan for use here.

Conduct

Procurement

INPUTS

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management plan for use here. We have discussed about it during plan procurements.

3. Procurement documentsWe have discussed about procurement documents during plan contracting.

INPUTS


4. Source selection

criteria

Conduct

Procurement

INPUTS

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� We use it as an as key input here.

� Involves examining samples of the

suppliers (previously produced

products) to evaluate their

capabilities and product quality

� Involves reviewing supplier’s past

record with the contracting

organization and other buyers

INPUTS

Project Procurement ManagementProject Procurement Management

5. Qualified sellers list Pre-screened for their qualifications and past experience.

We developed Qualified sellers list using:

Conduct

Procurement

INPUTS

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23

We developed Qualified sellers list using:1) Lists already available (OPA)

2) Internet, library directories, local associations, trade catalogues,

or similar sources

3) Site visits (when more extensive efforts needed)

4) Contact with previous customers

Procurement documents can also be sent to find if

some or all prospective sellers are willing to quote!


6. Proposals (quotations/bids)Seller-prepared documents made in

Conduct

Procurement

INPUTS

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24

accordance with the requirements of

procurement documents.

Describe seller’s ability and willingness to

provide the requested products, as

described in the procurement documents.

Reflect the application of applicable

contract principles.

INPUTS


7. Project documentsWe consider following documents:

Conduct

Procurement

INPUTS

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1. Risk register

2. Risk-related contract decisions

8. Make-or-buy decisionsWe have discussed already


9. Teaming agreementsWhenever such an agreement is in place

consider following documents:

Conduct

Procurement

INPUTS

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consider following documents:

1. Risk register

2. Risk-related contract decisions

Conduct Procurements TOOLS & TECHNIQES

Bidder conferences (pre-bid/vendor/contractor conferences)

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Meetingswith prospective

sellers prior to preparation of a

proposal by sellers in response

to buyer’s RFP.


� Bidder conferences aims at ensuring that

1) Each prospective seller has a common understanding of

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1) Each prospective seller has a common understanding of the procurement (technical requirements, contract requirements, etc.)

2) All potential sellers must remain on equal standing during the process.

Responses to questions may be incorporated into the

Procurement documents as amendments.


Advertising Inviting proposals from

prospective sellers by putting

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prospective sellers by putting

advertisements in newspapers or

professional journals

The purpose of this method is:� to have a wider base than the

existing list of potential sellers.

� for certain government departments,

it is mandatory to advertise in order

to procure the goods or services.

Real life example

Request for Proposal (RPF)For collection, Transportation and Disposal of Hotel Waste

Under “Green Lines Services” Project of JMC1. STATEMENT OF WORK

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1. STATEMENT OF WORK

The “Green Line Services” Project is an ambitious project of

Jaipur Municipal Corporation (JMC) under which a private

Entrepreneur will be issued a license to collect, transport, process

and dispose off the waste generated from hotels, restaurants,

sweets shops, canteens, and other eating joints. Processing may

be by any suitable means like Vermicomposting/ Composting/

Biogas or any other method as per MSW Rules 2000.

The approximate number of hotels under different categories are:

(I) Five Star-9, (II) Other Starred Hotels and A/C Restaurants-70,

(III) Others-900 with overall approximate biodegradable waste

Real life example


Under “Green Lines Services” Project of JMC1. STATEMENT OF WORK (continued)

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1. STATEMENT OF WORK (continued)

quantity as 10 tons per day. However the interested bidders

should ascertain themselves about the quantity and number of

generating units before submission of the bid.

The project has to be operated on Build, Own, Operate (BOO)

basis by the license holder by collecting user charges for initial

period of three years.

2. INVITATION

sealed tenders are invited from interested contractors having

experience of working in the field in the two envelope systems:

Envelope ‘A’ (Technical offer) and Envelope ‘B’ (Financial offer)

Real life example


Under “Green Lines Services” Project of JMC2. INVITATION (continued)

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2. INVITATION (continued)

The tender documents may be obtained on during office-hours

from 28.01.05 to 10.02.05 from:

The Office of Senior Health Officer

Civil Lines Zone, JMC, Jaipur (RAJ)

Tel: xxxx- xxxxxxx

3. A pre-bid meeting is arranged on 5.02.05 at 3:00 P.M. in the

conference hall of JMC Head Office.

4. Completed tender must be submitted up to 11.02.05 till 3:00 P.M.

5. Envelope ‘A’ (Technical offer) shall be opened on 11.02.05 at 4:00

P.M. in the presence of bidders at Conference Hall of JMC.

Real life example


Under “Green Lines Services” Project of JMC

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5. Envelope ‘B’ (Financial offer) shall be opened on suitable date for

which separate intimation shall be sent to the qualified bidders.

6. Interested eligible Bidders may obtain further information from the

office of the Senior Health Officer.

Name: xyz

Designation:


Proposal evaluation techniquesOn complex procurements, source selection is done

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Based on previously defined weighted criteria! Buyer’s

procurement policies define a formal evaluation

process!

The evaluation committee makes their selection for

approval by management prior to the award!

� Evaluates proposals based on

quantifying qualitative data

Weighting system


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quantifying qualitative data

� Minimizes the effect of personal

prejudice on source selection

THE PROCESS

� 1) Assigns a weight to each criterion

� 2) Rates prospective proposals on

each criterion

� 3) Multiplies rates with weight

� 4) Totals the results to arrive at

PROPOSAL-WISE SCORE


Weightage Score TotalEvaluation Criteria

Sample Weighting system

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Weightage

% (W)

Score

(S)

Total

(W x S)Evaluation Criteria

Understanding of need

Life cycle cost

Technical capability

Seller’s management approach

Price

Financial capability

Total of weightage (100) Sum W x S

CASE STUDY: DCA 21 PROJECT

1) EVALUATION CRITERIA using five point scale

Criteria 1 2 3 4 5

Technical solutions Bad Poor Adequate Good Excellent

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Technical solutions

approach

Bad Poor Adequate Good Excellent

Price above

1.8

1.6-1.8 1.4-1.6 1.2-1.4 Below

1.2

Project organization and

management


Likelihood of meeting

schedule / cost targets


Reputation of seller Bad Poor Adequate Good Excellent


2) Simple Rating using five point scale

CRITERIA Proposal

A

Proposal

B

Proposal

C

Provided scores (S)

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Technical solutions approach 4 2 5

Price 5 5 2

Project organization and

management5 3 4

Likelihood of meeting

schedule / cost targets4 3 5

Reputation of seller

SUM SCORES

4

22

4

17

5

21


Criteria Weight

3) Criteria and Weights (W)

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Technical solutions approach 0.25

Price 0.25

Project organization and management 0.20

Likelihood of meeting schedule / cost targets 0.15

Reputation of seller 0.15

1.00


Final evaluation (S x W): Proposal ‘A’ selected and awarded contract !

Proposal A Proposal B Proposal C

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S (S) (W)

4 1.0

CRITERIA

TECHNICAL SOLUTION

APPROACH

PRICE OF CONTRACT

PROJECT ORGANIZATION /

MANAGEMENT

REPUTATION OF SELLER

RISK OF SOLUTION

S (S) (W) S (S) (W)WEIGHT

(W)

O.25

O.25

O.20

O.15

O.15

5 1.25

5 1.0

4 0.6

4 0.6

SUM 4.45

2 0.5

5 1.25

3 0.6

3 0.45

4 0.6

5 1.25

2 0.5

4 0.8

5 0.75

5 0.75

SUM 3.4 SUM 4.05

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Independent estimates Serve as benchmark on proposed responses.

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Buyer can make its own independent estimates (can

also get it prepared by an outside professional

estimator). n complex procurements, source selection

is done

What does it mean if the difference between

independt estimate made by buyer anf the one

submitted by seller?


Independent estimates What does it mean if the difference between

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independent estimate made by buyer and the one

submitted by seller?

Answer:

a) SOW was deficient or ambiguous! Or

b) Prospective seller has misunderstood or

c) Prospective seller failed to respond fully to the

procurement SOW


Expert judgment Used in evaluating proposals.

It may consist of multi-discipline review team in each

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It may consist of multi-discipline review team in each

of the areas covered by procurement documents and

proposed contract.

Expert may come from functional disciplines, such as:

- Contracting, Legal, Finance, Accounting,

Engineering, Design, R&D, Sales, and

manufacturing!


Internet search

Used to locate and expand search for suitable sellers.

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Used to locate and expand search for suitable sellers.

Caution:

Many commodities, and off-the-shelf items can be

quickly located and secured at a fixed price on the net

BUT

The high-risk, highly complex, procurement effort that

needs to be closely monitored can not be

accomplished through net.


Procurement negotiations

1. Clarify structure, requirements and other terms for

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1. Clarify structure, requirements and other terms for

mutual agreement before contract is signed!

2. Final contract language shows all agreements

reached, covering:

Responsibilities, authority to make changes,

applicable terms and governing laws, technical

& business management approaches, propriety

rights, contract financing, technical solutions,

overall schedule, payments, price.

Sample

Contract Negotiation

For

Complex items

N

Contract negotiationsfor complex items is taken

up as an independent

process

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Open items list

Inputs

� Issues

� Open items list Understanding

Outputs

� Memorandum

of

Understanding

N

E

G

O

T

I

A

T

I

O

N

S

process

Conduct Procurements OUTPUTS

Selected sellers

Who are selected sellers?

Answer:

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Answer:

1) Those who are in the competitive

range

2) Who have negotiated a draft

contract (that will the actual contract

when it is awarded)


Procurement contract award

Contract !

(Called a contract, an agreement, a memorandum

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49

(Called a contract, an agreement, a memorandum

of understanding, a subcontract, or a purchase

order)

Once you sign it, it becomes a mutually binding

document with due obligations both sides:

1. obligates the seller to provide the specified

product

2. obligates the buyer to pay for it.


Contract !What is inside a contract?

1) Section headings

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1) Section headings

2) SOW

3) Schedule

4) Period of performance

5) Roles and responsibilities

6) Pricing and payment,

7) Inflation adjustment

8) Acceptance criteria

9) Warranty, product support

10) Limitation of liability, fees, retainage

11) Penalties


Contract !What is inside a contract?

12) Incentives

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12) Incentives

13) Insurance

14) Performance bonds

15) Subcontractor approval

16) Change request handling

17) A termination and dispute resolution

mechanism

Contract can be:

� A complex document, or

� A simple purchase order


Resource calendarsDocuments the quantity and

availability of resources and the

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52

availability of resources and the

dates on which each specific

resource will be ACTIVE OR

IDLE.


Requested changes

This process may result in change requests relating to project

schedule, procurement management plan, etc. These

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53

schedule, procurement management plan, etc. These

requests are reviewed and disposed by Perform Integrated

Change Control process.

Project management plan updatesUpdates to show approved changes to:

� Cost baseline, scope baseline, schedule baseline, and

procurement management plan

Project Documents updates

- requirements documentation


Project Documents updates

- Requirements documentation

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54

- Requirements traceability documentation,

and

- Risk register


MONITORING &

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55

MONITORING &

CONTROLLING

PROCESS GROUP


The concept of Monitoring and

Controlling

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1.Checking performance

2. Managing changes


1.Checking performance against plan oragainst baselines by conducting variance

analysis.

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57

analysis.

Variance analysis means comparing actual

with the plan.

Formula = Plan – Actual

example: if you want to check my scope

performance, please compare the scope

performed and scope planned.


example: if you want to check my schedule

performance, please compare the actual start

and finish dates of a work completed and

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58

and finish dates of a work completed and

actual time taken in doing it with the dates

planned and duration written in schedule

baseline (approved schedule). It will give you

schedule variance, called performance

measurements, that may be:

SV = 0 or SV = + or SV = -


Checking performance

In case of variance:

1) Find causes of variance,

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1) Find causes of variance,

2) Find corrective action to recover,

3) Recommend it to ICC for approval.

ICC will review it and then approve.


Once ICC approves it and returns it to

Monitoring and controlling, then :

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60

1) Give it execution for implementation,

2) Write approved changes in the project plan.

This is called Replanning and done with the

help of configuration management system.

You had original project plan and when you

write approved changes, its version or

configuration changes.


This is called versioning. You must retain

all versions! This will help us understand

evolution of project management plan

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evolution of project management plan

through approved changes during the

project life cycle.

Also update project documents. We will learn

more on it as we proceed. Right now, we are

talking of concept.


Once ICC approves it and returns it to

Monitoring and controlling, then :

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3) Inform concerned stakeholders about

approved changes.

This was about the first part of the concept of

Monitoring and Controlling. Now, the second part:

Managing Changes.


2. Managing Changes: changes to scope,

schedule, cost, and quality. There is a standard

change control procedure.

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change control procedure.

Step one Step two Step three Step fourChange Evaluation, Recommend ICC reviews

Request Impact to ICC for and then

Analysis approval approves or

rejects.


2. Managing Changes:

once ICC approves and returns the change

request to you, then:

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request to you, then:

1) Give it to execution for implementation

2) Write approved changes in project

management plan.

3) Update project documents.

4) Inform concerned stakeholders about

approved changes.

Controlling Concepts

“Prevention is better than cure”

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Take

preventive

action

Anticipate

problems

Monitoring & Controlling Concepts

Purposes of

Project control

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Project control

� Identify problems

� Solve problems

� Get the project back on track as soon

as possible after problem has been

identified!


CONCEPT

THIS process group consists of processes to

� observe project execution,

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� observe project execution,

� identify problems in timely manner,

� recommend corrective action for problems that

have occurred,

� recommend preventive action in anticipation ofpossible problems,

� thus bring the project into compliance with

the project management plan.


CONCEPT

Key benefit

� project performance is observed and

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� project performance is observed and

measured regularly to find variances from

the project management plan

� continuous monitoring provides insight

into the health of the project and suggests

areas that need additional attention


CONCEPT

Key benefit

� Monitors and controls not only the work

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� Monitors and controls not only the work

being done in a process group but the entire

project effort!

�When variances JOEPARDIZE PROJECT

OBJECTIVES, appropriate processes in

planning PM Group are revisited (as a part

of modified PDCA cycle), and pm plan may

get updated from such review! example


CONCEPT

exampleREQUIRES

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70

A MISSED

ACTIVITY FINISH

DATE

REQUIRES � ADJUSTMENTS TO CURRENT

STAFFING PLAN

� RELIANCE ON OVERTIME

� TRADEOFFS BETWEEN

BUDGET AND SCHEDULE

OBJECTIVES


CONCEPT

Key benefit

� Monitoring the ongoing project activities

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� Monitoring the ongoing project activities

against project management plan and the

project management baseline.

� Influencing factors that could circumvent

integrated change control so that only

APPROVED CHANGES ARE

IMPLEMENTED.example


Dynamics of Project Management Process Groups

Initiating Planning

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Initiating Planning

Monitoring

and

Controlling

Executing

Closing

Monitoring and Controlling: process interactions

Verify Scope Initiating

processes

Control Scope

Control Schedule

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73

Perform

Integrated

Change control

Monitor & Control

Project Work Planning

processes

Executing

processes

Closing

processes

Perform quality control

Control Schedule

Control Costs

Report Performance

Monitor & Control Risks

Administer Procurements


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Monitor and Control Project Work


The process of:

Tracking, reviewing, and regulating the

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75

Tracking, reviewing, and regulating the

progress to meet the project objectives

defined in the project management plan.


What is the meaning of Monitoring?

Monitoring means:

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76

1. Collecting, measuring, and distributing

performance information.

2. Assessing measurements and trends

to effect process improvements!


Please remember!

Monitoring:

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77

Monitoring:

3. Is done throughout the project.

4. Continuous monitoring gives the project

management team an insight into the

health of the project, and IDENTIFIES

AREAS THAT MAY REQUIRE SPECIAL

ATTENTION!


What is the meaning of Controlling?

Controlling means:

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Controlling means:

1. Determining corrective or preventive

actions or

2. Replanning, and

3. Following up on action plans

TO DETERMINE IF THE ACTIONS TAKEN

RESOLVED THE PERFORMANCE ISSUE!


How do we do it?

Most basic:

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79

1. Comparing actual project performance against

the project management plan!

2. We assess performance to determine whether

any corrective and preventive actions are

indicated. If so, then we recommend them to

ICC for approval.


How do we do it?

Most basic:

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80

3. We analyze, track, monitor project risks to

ensure the risks are identified, their status is

reported, and appropriate response plans are

executed.

4. We maintain accurate and timely information

base about project’s product and related

documentation through project completion.


How do we do it?

Most basic:

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81

5. We provide information to support STATUS

REPORTING,PROGRESS MEASUREMENT,

FORECASTING!

6. We provide forecasts to update current

schedule and cost information.

7. We monitor implementation of approved

changes.


Monitor and Control Project Work process overview


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82


Plan

� Performance reports

� Enterprise

environmental

factors

� Organizational

process assets

INPUTSTOOLS &

TECHNIQUES

� Expert Judgment

OUTPUTS� Change requests


plan updates


updates

Monitor and Control Project Work process: INPUTS

Project Management Plan provides baselines for

measuring performance.

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83

Performance reports provide actual work

performance information.Reports prepared by the

project team detailing activities, accomplishments,

Milestones, identified issues, and problems.

Example


Performance reports provide key information.

Examples:

- Current status

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84

- Current status

- Significant accomplishments for the period

- Scheduled activities

- Forecasts, and

- Issues.


Enterprise environmental factors that can

influence this process:

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85

1. PMIS used for variance analysis and evaluation

of impact on the project.

2. Stakeholder risk tolerances

3. Company work authorization systems

4. Government or industry standards (regulatory

agency regulations, product standards, quality

standards, and workmanship standards).


Organizational process assets that can


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1. Issue and risk management procedures,

2. Financial control procedures (time reporting,

accounting codes, expenditure and

disbursement reviews, and standard contract

provisions),

3. Organization communication requirements,




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87

4. Risk control procedures (risk categories,

probability definition and impact, and probability

and impact matrix), Issue and risk management

procedures,

5. Process measurement database (used to make

available measurement data on processes and

products, and




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88

5. Process measurement database (used to make

available measurement data on processes and

products, and

6. Lessons learned database.

Monitor and Control Project Work process: Tools and Techniques

Expert judgment

The project management team uses expert

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89

The project management team uses expert

judgment to interpret the information provided by

the monitor and control process.

The project manager, along with the team,

determines the actions required to ensure project

performance matches with the expectations

detailed in the project management plan.

Monitor and Control Project Work process: Tools and Techniques

Please remember

Although not mentioned specifically, we use here

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90

Although not mentioned specifically, we use here

all the performance measurement, forecasting,

And change control tools and techniques,

including PMIS.

Monitor and Control Project Work process: OUTPUTS

1. Change requests

Variance Measurements resulting from this

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91


process may lead to following change requests:

a) Corrective action to bring expected future

performance in line with project management

plan).

b) Preventive action to reduce the probability of

negative consequences associated with project

risks.


1. Change requests


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92


process may lead to following change requests:

c) Defect repair Corrective action to either

repair the defect in a project component or

completely replace it.

Change requests are sent to ICC for review and

approval.


Change requests are sent to ICC for review and

approval. Without review and approval of ICC, no

change request can be implemented.

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93

change request can be implemented.

Change requests, if approved, may:

- Expand, adjust project or product scope,

- Revise project management plan,

- Revise project documents, or

- Revise product deliverables.


2. Project management plan updates

Revision of following may happen:

- Baselines

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- Baselines

(Scope baseline, schedule baseline, cost

performance baseline).

- Subsidiary plans

(such as schedule management plan, cost

management plan, quality management plan).


3. Project document updates


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- Forecasts

- Performance reports

- Issue log


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96

PERFORM INTEGRATED CHANGE CONTROL

Perform Integrated Change Control

Process of

Reviewing all change requests, approving

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97

Reviewing all change requests, approving

changes and managing changes to the

deliverables, project management plan, project

documents and the organizational process

assets.


Please remember

“PERFORM INTEGRATED CHANGE

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98

“PERFORM INTEGRATED CHANGE

CONTROL” PROCESS IS CONDUCTED FROM

PROJECT INCEPTION THROUGH

COMPLETION. During planning also, all updates, refining, maturing of

the project management plan and other project

documents happens only after the information is

reviewed and allowed for inclusion.


Please remember

One of the major job of this process is to

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99

One of the major job of this process is to

carefully and continuously manage changes

and permit only approved changes to revise

a baseline.

This is the only way to maintain the project

management plan, the project scope statement,

and other deliverables!


How do we do it?

1. Reviewing, analyzing, and approving change

request PROMPTLY. A slow decision may

14

00

request PROMPTLY. A slow decision may

negatively affect time, cost or the feasibility of

a change! A quick approval or denial of all

recommended corrective or preventive actions

or any other type of request is necessary.


How do we do it?

2. Maintaining the integrity of baselines by

releasing only approved changes for

14

01

releasing only approved changes for

incorporation into the project management

plan and project documents.

3. Coordinating changes across the entire project.

example: a proposed schedule change will

often affect cost, risk, quality, and staffing.


How do we do it?

4. Documenting the complete impact of change

requests.

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requests.

5. Influencing the factors that circumvent

integrated change control so that only

approved changes are implemented.


Please remember

Changes may be requested by any stakeholder.

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03

Although they may be initiated verbally, but they

must always be recorded in written form and

entered into the change management or

configuration management system!

The cost and time impacts must be understood.


Please remember

Every documented change request must be

either approved or rejected by some authority

14

04

either approved or rejected by some authority

within the project management team or an

external organization.

On some projects, the project manager may be

given authority to approve certain types of

changes! And this would be mentioned in the

roles and responsibilities document.


Please remember

The ‘Perform Change Control’ process may

include a Change Control Board (CCB). Then,

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05

include a Change Control Board (CCB). Then,

CCB will approve or reject change requests.

The roles and responsibilities of CCBs are

defined in Configuration Control and Change

Control Procedures with due consent of

appropriate stakeholders. Large organizations

have multi-tier board structure!


THE NEED FOR A

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06

THE NEED FOR A

CONFIGURATION MANAGEMENT

SYSTEM


A configuration management system with

integrated change control provides

14

07

integrated change control provides

“a standardized, effective, and efficient way

to centrally manage approved changes and

baselines within a project!


QUESTION

What is the difference between configuration

control and change control?

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08

control and change control?

ANSWER

Configuration control is focused on the specification of

both the deliverables and the processes.

Change control is focused on identifying,

documenting and controlling changes to the project

and the product baselines.


Project-wide application of configuration

Objectives accomplished?

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09

Project-wide application of configuration

management systems, including change

control processes, accomplishes three

main objectives


1) Establishes an evolutionary method to

consistently identify and request changes to

14

10

consistently identify and request changes to

established baseline!

2) Provides opportunities to continuously validate

and improve the project by considering impact of

change!

3) Provides the mechanism for the project

management team to consistently communicate

all changes to the stakeholders!


THREE Key configuration management activities:

1. Configuration identification

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11

1. Configuration identification

2. Configuration status accounting

3. Configuration verification and audit


Integrated Change Control

What Configuration Management Activities

are included in Integrated Change Control?

14

12


Provides basis from which

1) the configuration of

products is defined and verified

2) Products and documents are

labeled

3) Changes are managed and

accountability is maintained

Configuration

Identification





14

13


Capturing, storing, and assessing

configuration information required

to manage products and product

information effectively.

Configuration

Status

Accounting





14

14


Establishes that the performance

and functional requirements

defined in the configuration

management have been met.

Configuration

Verification &

Auditing


Perform Integrated Change Control process overview

INPUTSTOOLS &

OUTPUTS

14

15


Plan

�Work Performance

Information

� Change requests

� Enterprise

Environmental

Factors

� Organizational

Process Assets

INPUTSTOOLS &

TECHNIQUES

� Expert judgment

� Change control

Meetings

OUTPUTS

� Change requests

Status Updates


plan UPDATES


UPDATES


Perform Integrated Change Control process inputs


Used in this process. We have talked about it

14

16


in detail.

Work performance information


in detail.


Perform Integrated Change Control process inputs

Change requests

- Recommended corrective action

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17

- Recommended corrective action

- Recommended preventive action

- Recommended defect repair

- Any other type of change request regarding

scope, time, cost, quality addition or

deletion.All monitoring and controlling processes and many of

executing processes produce change requests!


Please remember

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18

CORRECTIVE AND PREVETIVE ACTIONS

DO NOT NORMALLY AFFECT THE

BASELINES, ONLY THE PERFORMNCE

AGAINST THE BASELINES!!


Perform Integrated Change Control inputs

Enterprise environmental factors provide

PMIS

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19

PMIS

An automated system used by the project

management team as an aid for implementing

an Integrated Change

Control Process for the project.

- Also facilitates FEEDBACK for the project

- Controls changes across the project.


Perform Integrated Change Control inputs

Organizational process assets provide

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20

- Change control procedures

- Procedures for approving and issuing change

authorizations

- Process measurement database

(measurement data on processes and products)

- Project files

- Configuration management knowledgebase


Perform Integrated Change Control tools and techniques

Expert judgment

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21

In addition to the project management team’s

expert judgment, stakeholders may be

requested to provide advantage of their

expertise. They may be invited by the CCB.

Such expert judgment is applied to any technical

and management aspect during this process.



Expert judgment

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CCB can use expertise from various sources:

- Subject matter experts

- Project Management Office

- Stakeholders (including customers or sponsors)

- Consultants

- Professional and technical associations

- Industry groups



Change control meetings

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Change control board conducts meetings and

reviews change requests. Then, approves or

rejects the. All CCB decisions are recorded and

communicated to the stakeholders for

information and follow-up actions.

Perform Integrated Change Control process OUTPUTS

Change Requests Status Updates

Change requests are processed according to the

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24

Change requests are processed according to the

change control system by the project manager or

assigned team member.

Approved change requests are implemented by

the Direct and Manage Project Execution

process.

Status of all changes, approved or not, put in the Change

Request Log.


Project Management Plan Updates

- Baselines are updated

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25

- Baselines are updated

- Subsidiary Management Plans updated

Please note: Changes to the baselines must only

show the CHANGES FROM THE CURRENT

TIME FORWARD. Past performance may not be

changed! This protects the integrity of the

baselines and the data of past performance!



- Change Request Log

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- Change Request Log

- Any other project document (as applicable)


Verify SCOPE

PURPOSE:

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PURPOSE:

To obtain stakeholders’ formal acceptance of the

completed project scope and associated deliverables!

HOW IS IT DONE?

By verifying the project scope and reviewing deliverables

to make sure each is completed satisfactorily!


Please remember!

Verify SCOPE

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28

Please remember!

IF PROJECT IS TERMINATED EARLY, SCOPE

VERIFICATION MUST BE DONE TO ESTABLISH THE

LEVEL AND EXTENT OF COMPLETION!


WHAT IS THE DIFFERENCE BETWEEN SCOPE

Verify SCOPE

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WHAT IS THE DIFFERENCE BETWEEN SCOPE

VERIFICATION AND QUALITY CONTROL?

�SCOPE VERIFICATION IS PRIMARILY CONCERNED

WITH ACCEPTANCE OF DELIVERABLES!

�QUALITY CONTROL IS PRIMARILY CONCERNED

WITH QUALITY REQUIREMENTS FOR THESE

DELIVERABLES!


WHEN IS QUALITY CONTROL PERFORMED?

Verify SCOPE

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30

WHEN IS QUALITY CONTROL PERFORMED?

� Generally before SCOPE VERIFICATION.

� But these two can be performed parallel also.

Verify Scope process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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plan

� Requirements

documentation

� Requirements

Traceability Matrix

� Validated Deliverables

INPUTSTECHNIQUES

� Inspection

�Reviews

�Product reviews

�Audits

�Walkthroughs

OUTPUTS

� Accepted deliverables

� Change requests

� Project documentation

updates

Verify Scope


Project management planProvides scope baseline:

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Provides scope baseline:

1. Project scope statement for product

scope description, product

deliverables, product user acceptance

criteria.

2. WBS defines each deliverable and its

decomposition into work packages.

3. WBS dictionary for detailed technical

description for each WBS element.

Verify Scope- Inputs


Requirements documentation Provides:

All the project, product, technical and other types of

requirements that must be present in the deliverables

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requirements that must be present in the deliverables

along with their acceptance criteria.

Requirements traceability matrix Links:

Requirements to their origin and tracks them

throughout the project life cycle.

Validated deliverablesAll those deliverables that are duly checked by QC and

offered for inspection for formal acceptance.

Verify Scope


InspectionIncludes measuring,

TOOLS &

TECHNIQUES

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34

Includes measuring,

examining, and verifying to

determine whether work and

deliverables meets

requirements and product

acceptance criteria!

Termed as reviews, product reviews, audits, and

walkthroughs. Remember this!

TECHNIQUES

� Inspection�Reviews

�Product reviews

�Audits

�Walkthroughs

Verify Scope


Accepted deliverablesThose completed deliverables

OUTPUTS

� Accepted

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Those completed deliverables

that have been accepted!

Completed deliverables that are not accepted are recorded

with reasons for non-

acceptance.

All supporting documents from

customer or sponsor are

maintained.

� Accepted

deliverables� Change Requests


updates


Change RequestsChange requests may result

Verify Scope

OUTPUTS

� Accepted

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Change requests may result

from this process for

deliverables not accepted and

require defect repair!

Processed for review and approval through Perform


process.

� Accepted



updates


Project document

updates

Verify Scope

OUTPUTS

� Accepted

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updatesAny document that define

the product or report status

on product completion may

require updating as a result

of this process!

� Accepted



updates


Control SCOPE

Involves:

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Involves:

1) Influencing factors that create scope changes

2) Control impact of those changes

3) To ensure that only approved changes are

implemented by sending requested changes and

recommended corrective actions to ICC.

4) To manage actual scope changes when they happen

and integrate them with other control processes

Uncontrolled changes are called scope creep!

Control Scope process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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plan

�Work performance

information

� Requirements

documentation

� Requirements

traceability matrix


assets

INPUTSTECHNIQUES

� Variance analysis

OUTPUTS

�Work performance

measurements

� OPAs updates

� Change requests

� PM plan updates


updates

Control Scope- Inputs


Project management planIncludes information that is used:

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Includes information that is used:� Scope baseline: compared to actual results to decide

if a change, corrective action, or preventive action is

required!

� Scope management plan (describes how project scope

will be managed and controlled)

� Change management plan for handling changes



Project management plan� Configuration management plan defines-

1) items that are configurable

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1) items that are configurable

2) items that require formal change control

3) process to control changes to such items

� Requirements management plan includes:

a) how requirements activities will be planned, tracked

and informed

b) how changes to requirements will be initiated

c) how impacts will be analyzed

d) authorization level for approving these changes



Work performance information� Which deliverables have started, their progress

� Which deliverables have finished

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� Which deliverables have finished

Requirements documentation� To check accomplishment of requirements

Requirements traceability matrix� To trace requirements to their origin

OPAs� Scope control policies, procedures

� Monitoring and reporting methods

Control Scope


Variance analysis (comparing

actual with what is planned)

Assesses magnitude of variation

TOOLS &

TECHNIQUES

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Assesses magnitude of variation

Determines cause of variance

from scope baseline.

Decides if corrective or preventive

action is required.

� Variance

analysis

Control Scope


Work performance

measurements

Planned vs. Actual technical

OUTPUTS

�Work performance

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44

Planned vs. Actual technical

performance, or other scope

performance measurements!

Also informed to stakeholders!

�Work performance

measurements� OPAs updates

� PM Plan updates

� Change requests


updates


OPAs updates

Lessons learned are posted in the organization’s ‘Lessons Learned’ database:

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‘Lessons Learned’ database:

1) causes of scope variances,

2) logic behind action chosen, and

3) other types of lessons learned.

This provides help to Current projects as well as Future

projects! One can just access this database from OPAs!


Change Requests

Analysis of scope performance can result in a

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46

change request to scope baseline or other

components of project management plan.

Examples: Corrective action or preventive

action or defect repair.

Change requests are sent to ICC for approval.


Project management plan updates

1. Scope baseline updates

2. Other baseline updates

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2. Other baseline updates

If approved change request have an effect on

project scope, then scope statement, WBS, and

WBS dictionary are revised and reissued to show

the approved changes.Corresponding costbaseline and schedule baseline are also revised and

reissued to reflect the approved changes.


Scope changes result in

corresponding updates to:

Project

Document

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corresponding updates to:


2) Requirements traceability

matrix.

updates


CONTROL SCHEDULE

Involves:

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49

Involves:

1) Influencing factors that create schedule changes

2) Control impact of those changes

3) To ensure that only approved changes are

implemented by sending requested changes and

recommended corrective actions to ICC.

4) To manage actual schedule changes when they

happen and integrate them with other control

processes

Control Schedule process overview

Project

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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� Project

management plan


�Work Performance

information


Assets

TECHNIQUES

� Performance

Reviews

� Resource Leveling

� Schedule

Compression

� Project

management

software


� Schedule Tool

�Work Performance

measurements

� Change requests

� OPAs updates


plan updates


updates

Control Schedule process INPUTS

Project management plan provides

1. Schedule baseline


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* Actual results are compared with schedule

baseline to determine if a change, corrective

or preventive action is necessary.

* Schedule management plan tells how the

schedule will be managed and controlled.


Project schedule provides

the most current version of the project

schedule with notations to show updates,

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schedule with notations to show updates,

completed activities, and started activities as

of indicated data date!


Work Performance Information provides information on project progress

Which activities have started, their progress,

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53

Which activities have started, their progress,

and which activities have finished.

Organizational process assets provide - Schedule control policies, procedures

- Schedule control tools

- Monitoring and reporting methods to be

used.

Control Schedule process TECHNIQUES

• Performance reviews

• Variance analysis

• Project management software

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• Project management software

• Resource leveling

• What-if scenario analysis

• Adjusting leads and lags

• Schedule compression

• Scheduling tool




• Project management

Performance reviewsMeasure, compare, and

analyze schedule performance

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software


• What-if scenario

analysis

• Adjusting leads and

lags


• Scheduling tool

analyze schedule performance

such as actual start and finish

dates, percent complete, and

remaining duration for work in

progress.

If we use EVM, then SV and

SPI provide magnitude of

variance.





Performance reviewsIf we use Critical chain

scheduling method, then we

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software



analysis


lags


• Scheduling tool

scheduling method, then we

compare the amount of buffer

remaining to the amount of

buffer needed to protect the

delivery date.

Buffer variance can decide

whether corrective action

required or not.





Variance analysis

SV and SPI help us to know

magnitude of variance. Total

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software



analysis


lags


• Scheduling tool

magnitude of variance. Total

float variance also gives an

idea of time performance.

We then find causes of

variances and necessary

corrective or preventive action.





PM Software

Provides ability to track planned

dates versus actual dates, and

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58


software



analysis


lags


• Scheduling tool

dates versus actual dates, and

to forecast the effects of

changes to the project

schedule.

Resource leveling

Used to optimize distribution of

work among resources. We

have talked about it.





What-if scenario analysis

Used to review various

scenarios to bring the schedule

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software



analysis


lags


• Scheduling tool

scenarios to bring the schedule

into alignment with the plan.

We have talked about this.

Adjusting leads and lags

Used to find ways to bring

project activities that are behind

into alignment with the plan





Schedule compression

Used to find ways to bring


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software



analysis


lags

• Schedule

compression

• Scheduling tool


into alignment with the plan.

1. Crashing

2. Fast tracking

We have talked about them.





Scheduling tool

Schedule data is updated and

compiled into the schedule

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software



analysis


lags


• Scheduling tool

compiled into the schedule

to reflect actual progress of the

project and remaining work.

Scheduling tool and supporting

data are used (in conjunction

with manual methods or other

PM Software) to perform

network analysis and generate

and updated schedule.

Control Schedule process OUTPUTS

OUTPUTS

• Work

performance

Work performance

measurements

The calculated SV and SPI values

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performance

measurements

• Organizational

process asset

updates

• Change requests

• Project

management

plan updates

• Project document

updates

The calculated SV and SPI values

For WBS components, specially the

Work Packages and Control

Accounts, are documented and

communicated to the stakeholders!


OUTPUTS

• Work

performance


assets updates

With the entry of Lessons Learned:

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performance

measurements

• Organizational

process asset

updates

• Change requests

• Project

management

plan updates


updates

With the entry of Lessons Learned:

1. Causes of variances

2. Corrective action chosen and

reason

3. Other types of lessons learned.

The calculated SV and SPI

values


OUTPUTS

• Work performance

measurements

Change requests

Schedule variance analysis, review

of progress reports, results of

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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

of progress reports, results of

performance measures, and

modifications to the project

schedule can result into change

requests to schedule baseline and

other components of the project

plan!! Recommended to ICC for

approval!


OUTPUTS


measurements


Updates after ICC approves


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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates



3. Cost baseline


OUTPUTS


measurements



Schedule baseline- changes to

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66

measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

Schedule baseline- changes to

the schedule baseline are

incorporated IN RESPONSE TO

Approved Changes related to:

a) Project scope changes

b) Activity durations

c) Activity resources


OUTPUTS


measurements



Schedule management plan-

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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

Schedule management plan-

May be updated to reflect a

change in the way the schedule is

managed!

Cost baseline-

The cost baseline may be

Updated to reflect changes

caused by compression or

Crashing techniques!


OUTPUTS


measurements

Project document Updates

1. Schedule data

2. Project schedule

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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

2. Project schedule

Schedule data update:

New network diagrams may be

developed to display approved

remaining durations and

modifications to the work plan.


OUTPUTS


measurements

Please remember

In some cases, project schedule delays can be so

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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

schedule delays can be so

severe that development of a

new target schedule with

forecasted start and finish

dates is needed to provide

realistic data for directing the

work, and for measuring

performance and progress!!!


OUTPUTS


measurements

Project document Updates

1. Schedule data

2. Project schedule

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measurements

• Organizational

process asset

updates

• Change requests

• Project

management plan

updates


updates

2. Project schedule

Project schedule update:

An updated project schedule

will be generated from the

updated schedule data to

reflect the schedule changes

and manage the project.


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CONTROL COST


CONTROL COST

COST CONTROL

THE CONCEPT

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THE CONCEPT•Cost control tracks expenditures versus budget to detect

variances.

• It seeks to eliminate unauthorized or inappropriate

expenditures, and to minimize or contain cost changes.

• It identifies WHY variances occur, WHERE changes to

cost baselines are necessary, and WHAT cost changes

are reflected in the budgets and cost baselines.


THE CONCEPT

COST CONTROL

CONTROL COST

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THE CONCEPT• Periodically, the project manager reviews actual and

budgeted costs, and compares costs to assessments of

the work completed, and prepares estimates of the

completion cost and completion date of the project.

• It is accomplished both at work package level and the

project level using the cost account structure.


THE CONCEPT

COST CONTROL

CONTROL COSTS

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THE CONCEPT•So, the key to cost control is to:� Detect and understand variances from the plan by

monitoring cost performance

� Prevent inappropriate, unauthorized, and incorrect

modifications from inclusion in the cost baseline


THE CONCEPT

CONTROL COST

CONTROL COST

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THE CONCEPT•So, the key to cost control is to:� Take action to get expected costs within

acceptable range

� Report approved changes to the concerned

stakeholders

� Search out “REASONS” for positive as well as

negative variances


THE CONCEPT

CONTROL COST

CONTROL COST

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THE CONCEPTSo, the key to cost control is to:� Thoroughly integrate cost control with other control

processes as we have discussed during integrated

change control:

� Scope change control

� Schedule control

� Quality control, and

� Others


THE CONCEPT

CONTROL COST

CONTROL COST

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THE CONCEPT

Remember improper responses to

cost variances may lead to

schedule or quality issues


THE CONCEPT

CONTROL COSTS

CONTROL

COSTS

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THE CONCEPTRemember improper responses to cost variances

may lead to:

� Schedule problems or

� Quality problems or

� An unacceptable risk-level in future in the

project


CONTROL COSTS

HENCE, COST CONTROL PROCESS CONSISTS OF:

CONTROL COSTS

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HENCE, COST CONTROL PROCESS CONSISTS OF:

1) Impacting the factors that lead to schedule changes so

that these changes are agreed upon.

2) Ascertaining that the schedule has changed.

3) Dealing with the actual changes as they

happen.

Control Costs process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


CONTROL COSTS

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plan

� Project funding

requirements

�Work performance

information


assets

INPUTSTECHNIQUES

� Earned Value

Management

� Forecasting

� To Complete

Performance Index

(TCPI)

� Performance

reviews


� Project

management

Software

OUTPUTS

�Work Performance

measurements

� Budget Forecasts

� Change Requests

� Recommended

corrective actions

� OPAs Updates

� PM Plan Updates

� Project Document Updates


Project Management Plan - cost baseline

- cost management plan

CONTROL COSTS


plan

� Project funding

INPUTS

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- cost management plan

Cost baseline is Used for

comparing actual expenditure with

planned expenditure as mentioned

in the cost baseline.

Cost management plan tells how

project cost will be managed and

controlled!

� Project funding

requirements

�Work performance

information


assets


Project Funding requirementsAre used as input here.

CONTROL COSTS


plan

� Project funding

INPUTS

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Used for comparing actual

expenditure with planned

expenditure as mentioned in the

cost baseline.

� Project funding

requirements

�Work performance

information


assets


Work performance information

Costs incurred. Also tells which

CONTROL COSTS


plan

� Project funding

INPUTS

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Costs incurred. Also tells which

deliverables completed, work-in

Progress

1) Deliverables completed and yet to

be completed

2) Costs actually spent

3) Estimate to complete balance work

4) Percentage physically complete of

schedule activities.

� Project funding

requirements

�Work performance

information


assets



- Cost-related policies,

CONTROL COSTS


plan

� Project funding

INPUTS

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- Cost-related policies,

procedures, guidelines

- Cost control tools

- Monitoring and reporting

methods to be used.

� Project funding

requirements

�Work performance

information


assets

Sample Change Control System

CONTROL COSTS

FLOW DIAGRAM OF COST CHANGE SYSTEM

(Tracks and Documents Cost Change Issues)

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Cost

Change

Request

Cost

Change

Tracking

system

Has Cost

Change

Already

Taken

place?

DOCUMENTATION

1) Cause

2) Cost

3) Parties involved

4) Decision

Cost

Change

Approved?

YES

NO

YES

NO


Earned Value Management

Integrates scope, time and cost

CONTROL COSTS

TOOLS &

TECHNIQUES

� Earned Value

Management

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Integrates scope, time and cost

measures to help assess and

measure project performance and

progress! Requires formation of

an integrated baseline!

Measures three dimensions for

each work package and control

account.

Management

� Forecasting

� To Complete

Performance Index

(TCPI)

� Performance

reviews


� Project

management

Software


1) Earned value managementEarned Value Concept

Costs are budgeted period-by-period for each work

CONTROL COSTS

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Costs are budgeted period-by-period for each work

package or cost account (time-phased budgeting).

Once project begins, work progress and actual costs

are tracked every period and compared to these

budgeted costs.

We measure and track work progress using the

concept of “earned value”.


Earned Value Concept

The earned value of work completed in a project is

CONTROL COSTS

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The earned value of work completed in a project is

determined by the combined status of all work

packages at a given time.

Computed by taking:

1) The sum of the budgeted costs of all work

packages thus far completed

PLUS

2) The sum of earned value of all open work packages

example


Earned Value Concept

Say as of August 25, work packages A, B, C

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Say as of August 25, work packages A, B, C

had been completed and they were

budgeted to cost Rs. 30 K, Rs. 15 K, and 10

K respectively. Work package D budgeted to

cost Rs. 40 K was only 75% complete.

Then, THE EARNED VALUE for the project

as of August 25:

Rs. 30 K + Rs. 15 K + Rs. 10 K + (0.75) Rs. 40 K =

Rs. 85 K


Earned value management

Do you know the purpose of EVM Control Account

Plans (CAPs)?

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Plans (CAPs)?

Well, all these CAPs continuously measure project

performance.

HOW?

By relating to three independent variables (we have

discussed them and refresh again)

Planned value (PV), Earned value (EV), and Actual

value (AC)



Planned value (PV)

The sum cost of all work, plus apportioned effort,

Control Costs

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The sum cost of all work, plus apportioned effort,

scheduled to be completed within a given time period

as specified in the original budget. Earlier name

BCWS (budgeted cost of work performed)

EXAMPLE: (discussed during Performance Reporting

process)

In Essar Cargo Project in week 20 to date:

Cumulative PV = Rs. 512,000

Weekly PV = Rs. 83,000



Earned value (EV)

Is the budgeted value of the work actually completed

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Is the budgeted value of the work actually completed

as on the date of measurement . Earlier name BCWP

(budgeted cost of work performed)

EXAMPLE

In Essar Cargo Project in week 20:

Cumulative EV is Rs. 429,000



Actual costs (AC)

The total of costs incurred in accomplishing work

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The total of costs incurred in accomplishing work

during a given time period. It is the sum of the costs

for all completed work packages plus all open work

packages and overhead.

Earlier known as ACWP (actual cost of work

performed)

Example

In Essar Cargo Project, as of week 20:

AC is Rs. 530,000


Essar Cargo Project: “Performance Report Week 20” (cumulative to date)

REAL LIFE

EXAMPLE

CPISPISV CVEVACPVACTIVITY

H 100 100 100 0 0 1.00 1.00

Tabular form

(Rs. 1000 s) (Rs. 1000 s)(Rs. 1000 s)

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J

K

L

M

N

O

P

Q

I 64

96

16

36

84

40

20

24

32

512PROJECT

70

97

12

30

110

45

28

22

16

530

64

96

14

18

33

40

24

24

16

429

0

0

- 2

- 18

- 51

0

4

0

- 16

- 83

- 6

- 1

2

- 12

- 77

- 5

- 4

2

0

- 101

1.00

1.00

0.88

0.50

0.39

1.00

1.20

1.00

0.50

0.84

0.91

0.99

1.17

0.60

0.30

0.89

0.86

1.09

1.00

0.81


EVM in action� Schedule Variance (SV)

SV = EV – PV

At project level,

Week 20:

PV = INR 512 K

EV = INR 429 K

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= 429 K – 512 K

= - 83 KWe are behind schedule as of

week 20

� Cost Variance (CV )

CV = EV – AC

= 429 K – 530 K

= - 101 KWe have spent more than

budgeted for the work done

as of week 20

Project

Performance(Essar Cargo Project)

EV = INR 429 K

AC = INR 530 K


EVM in actionFor knowing the status of the project,

we need to have information on theWork package

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we need to have information on the

performance for all work packages and

participating functional areas.

In Essar Cargo Project as of week 20:

1) Work packages H, I, J have been

completed and are closed accounts

2) Work packages K through Q are

open and in progress

Work package

Analysis

and

Performance

Indices


EVM in actionTwo types of indices are used to asses

the schedule and cost performance of Work package

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the schedule and cost performance of

the work packages and the relative size

of the problem areas:

� Schedule Performance Index (SPI)

SPI = EV / PV

� Cost Performance Index (CPI)

CPI = EV / AC

Work package

Analysis

and

Performance

Indices


EVM in actionYARD STICK

Values of SPI and CPIWork package

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Values of SPI and CPI

1) Greater than 1.0 indicate the work is ahead

of schedule and under-budget

2) Lesser than 1.0 shows the work is behind

schedule and over-budget

SPI and CPI highlight trouble spots and their

Relative Magnitude!

Example: Essar Cargo Project, week 20

1) Work packages L, M, and Q have fallen the

most behind schedule (have smallest SPI)

Work package

Analysis

and

Performance

Indices


EVM in action2) L and M had the greatest cost overruns

relative to their size (they have smallest At project level,

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CPI)

The overall project is behind schedule

and over cost:

At project level,

Week 20:

PV = Rs. 512 K

EV = Rs. 429 K

AC = Rs. 530 K Schedule Performance Index (SPI)

SPI = EV / PV = 429 K / 512 K = 0.84

Cost Performance Index (CPI)

CPI = EV / AC = 429 K / 530 K = 0.81

Essar Cargo Project


EVM in action

� Focusing on only the project level or Work package

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only the work package level to

determine project status can be

misleading!

� If the project manager looks only at the

project level, good performance of some

activities will overshadow and hide poor

performance in others!!

� If the project manager focuses only on

individual work packages, the

cumulative effect from slightly

Work package

Analysis

and

Performance

Indices


EVM in action

� poor performance on many activities Work package

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01

can easily be overlooked

� Even small cost overruns on many

individual work packages can add up to

large overruns for the project!!!

LESSON LEARNED?

THE PROJECT MANAGER MUST

SCAN BOTH PROJECT LEVEL AND

WORK PACKAGE LEVEL, BACK

AND FORTH

Work package

Analysis

and

Performance

Indices

example

Project Status as of week 20

500

550

450

SVCV

AV

PV

Cost Rs. 1000 s

15

02Week

50

0

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

450

400

350

300

150

100

250

200

PV

AC

EV

Status Date

Cost Rs. 1000 s

TV

Project level analysis

says that the project is

about 1 week behind

schedule.BUT

Project Status as of week 20

BUT

But work package level analysis tells that one of the

15

03

But work package level analysis tells that one of the

Work packages (M) is behind Schedule. It is on critical

path and appear to be 3 week behind schedule, hence

project should also be 3 weeks behind, not 1 Week as

shown by project level analysis.

Example: Gantt chart

Gantt Chart: Work Status as of week 20

Basic design H

Hardware design A I

Hardware design B J

Drawings B K

Software specs L

M is on critical path,

And behind schedule

15

04Week

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36………….48

Software specs L

Parts purchasing B M

Parts purchasing A N

Drawings A O

Installation drawings P

Software purchasing Q

Delivery B R

Delivery A S

Software delivery T

Assembly A U

Assembly B V

Test A W

Test B X

Final installation Y

Final test Z

Completed workPending work

EVM in action

The greatest problem: How to predict percentage complete?

Solutions:

1) 50/50 Rule (most common)

Half budget of each element is booked at the time the work is

Resolving problems in calculating EV

15

05

Half budget of each element is booked at the time the work is

scheduled to start and other half when it is scheduled to finish.

Advantage: eliminates the necessity for continuous determination

of percentage complete.

2) 100 percent Rule

a) Used when work or materials will be planned and earned

ON RECEIPT than usage, or

b) when the start and finish of the efforts happens in a time span

short enough to justify use of 50/50 rule

3) N percent completion Rule

Used when we can identify meaningful criteria for reporting on

work packages spanning several months


2) ForecastingAs the project progresses, the project team can

develop a forecast for the estimate at completion

15

06

develop a forecast for the estimate at completion

(EAC). This may differ from budget at completion

(BAC).

The project manager develops forecasted EAC if

BAC is no longer viable.


ForecastingEAC is a prediction of conditions and events in

future based on knowledge at the time of

15

07

future based on knowledge at the time of

forecast.

Forecasts are generated, updated, and re-issued

based on work performance information.


Calculating EACActual cost for work completed plus a new estimate to

complete remaining work. EVM work well in

15

08

complete remaining work. EVM work well in

conjunction with manual forecasts of required EAC

costs, most common, Bottom-up summation.

But one has to stop work to do it and there is no

separate budget or time included for this. Additional

costs are incurred if you do so.

Equation, EAC = AC + bottom-up ETC

Forecasting (EVM in action)

ORIGINAL

PLAN BACPV

TODAY

15

09

PLAN BAC

EACETC

PV

AC

BAC = BUDGET AT COMPLETION

(budget for the total project)

ETC = ESTMATE TO COMPLETE

(how much more balance it will

cost to complete balance project

work?)

EAC = ESTMATE AT COMPLETION

(what do we currently expect the

total project to cost ? : A VERY

NATURAL CONCERN OF

STAKEHOLDERS)


1. EAC forecast for ETC work performed at budgeted rate

SCENARIO ONE FORMULA

EAC = AC + BAC - EV

15

10

When we find variances till date

will not recur in future and we

complete remaining work at the

budgeted rate.

In such a scenario, we find EAC

by adding Actual Cost to date

(AC) to balance budget

(BAC – EV).

EAC = AC + BAC - EV

ExampleSay for a project,

AC = Rs. 10 K

BAC = Rs. 150 K,

EV = Rs. 15 K

Then EAC will be

EAC = AC + BAC – EV

= Rs.10 K + Rs.150 K – 15 K

= Rs. 145 K


1. EAC forecast for ETC work performed at budgeted rate

SCENARIO ONE

15

11

CAUTION!

WHEN ACTUAL PERFORMANCE IS

UNFAVOURABLE, THE ASSUMPTION THAT

FUTURE PERFORMNCE WILL IMPROVE

SHOULD BE ACCEPTED ONLY WHEN

SUPPORTED BY PROJECT RISK ANALYSIS!


EAC forecast for ETC work performed at the present CPI

SCENARIO TWO FORMULA

EAC = AC + (BAC –EV) / CPI

15

12

What project has

experienced to date can

be expected to continue

in future! ETC work

assumed to be

performed at the same

cumulative CPI to date!

EAC = BAC/ cumulative CPI

EAC = AC + (BAC –EV) / CPI

ExampleSay for a project,

AC = Rs. 10 K

BAC = Rs. 150 K,

EV = Rs. 15 K, CPI = 0.87

Then EAC will be:

AC + BAC – EV

Rs.10 K + Rs.150 K – 15 K / 0.87

= Rs. 145 K / 0.87

= Rs. 167 K


EAC forecast for ETC work performed at the present CPI

ETC work will be performed at an efficiency rate that

SCENARIO THREE

15

13

ETC work will be performed at an efficiency rate that

considers both CPI and SPI.

Assumes a negative cost performance to date and a

requirement to meet a firm Schedule Commitment!

This helps when schedule impacts ETC effort.

Variances of this method weighs CPI and SPI in

different values: 80/20, 50/50, etc., as per project

manager’s judgment.EAC = AC + [ (BAC-EV) / (cumulative CPI x Cumulative SPI) ]


ETC AND VAC

ESTIMATE TO COMPLETE (ETC)

15

14

HOW MUCH MORE THE PROJECT WILL COST!

CALCULATION FORMULA: ETC = EAC - AC

VARIANCE AT COMPLETION (VAC)

HOW MUCH MORE THE PROJECT WILL COST!

CALCULATION FORMULA: VAC = BAC - EAC

FORECASTS AS OF WEEK 20ESSAR CARGO PROJECT

BAC

1200

1100

1000

COST ( Rs. 1000 s)

Forecast AC EAC

Status Date

ETC = BAC – EV / CPI, EAC = AC + ETC

BAC = Rs. 990 K, EV = Rs. 429 K, CPI = 0.81

AC = Rs. 530,000

ETC

15

15WEEK

BAC

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52

900

800

700

600

500

400

300

200

100

COST ( Rs. 1000 s)

PV

AC

EV

Forecast EV

ETC

Initial

target date

Revised

Completion

date

ETC

990 K – 429 K / 0.81

= Rs. 692,593

EAC

530,000 + 692,593

= Rs. 1,222,593

Control Costs process techniques

3) To complete Performance Index (TCPI)

It is the calculated projection of Cost Performance

that must be achieved on the remaining work to meet

15

16

that must be achieved on the remaining work to meet

the specified management goal.

TCPI = work remaining / fund remaining

TCPI = (BAC- EV) / (BAC – AC)

When BAC no longer viable, the project manager will

make new estimate to complete balance work and

once approved, the project will work to new EAC

value.


4) performance reviewsWhat do they give us:

1) Compare cost performance over

Control Costs

15

17

1) Compare cost performance over

time,

2) Find schedule activities/work

packages overrunning and

underruning budget (PV),

3) Milestones met and due.

These meetings must use one or

more performance-reporting

techniques


performance reviewsperformance-reporting techniques to

use:

Control Costs

15

18

use:

1) Variance analysis: comparing

actual with planned. Cost and

schedule variances are often

analyzed but we must variances in

scope, quality, resources, and risk

are also equally or sometimes

more important.


performance reviewsperformance-reporting techniques to

use:

Control Costs

15

19

use:

2) Trend analysis: examining project

performance over time to see if

performance is improving or

deteriorating!

3) EV technique: compares actual

performance with planned

performance.


5) Variance Analysis

Cost performance measurements (CV, CPI) are

used to assess the magnitude of variation to the

CONTROL COSTS

15

20

used to assess the magnitude of variation to the

original cost baseline! And then decide if any

corrective or preventive action is needed!

Vital part of cost control lies in:

1) Determining the cause of variance

2) Deciding if the variance warrants corrective

action

example

Example: Variance Analysis

Progress Measurement data date: October 1, 2004

Work

package

Planned

Value

Earned

Value Actual cost Work package

Schedule Cost

Status

H COMPLETED 100 100 0100 0

15

21

H

I

J

K

L

M

O

P

COMPLETED

COMPLETED

COMPLETED

Not started

Not started

COMPLETED

Started

Not started

100

50

40

90

70

50

50

0

450 340

0

50

0

90

0

50

50

100 0

360

0

25

0

140

0

40

55

100

0

- 100

0

- 100

0

0

- 55.5

-------

20

-10

0

- 24.4

-----

- 5.9

-------

-------

50

VAIANCE ANALYSIS RESULTS: AS OF OCTOBER, 2004

THE PROJECT IS BEHIND SCHEDLUE AND OVER BUDGET


5) Variance Analysis

please remember

the percentage range of acceptable variances

CONTROL COSTS

15

22

the percentage range of acceptable variances

tend to decrease as more work is

accomplished. The larger percentage

variances permitted at the start of the project

can decrease as the project nears

completion!

example

6) Project Management Software

Used to monitor three EVM dimensions


CONTROL COSTS

15

23

Used to monitor three EVM dimensions

(PV, EV, and AC) to display graphical

trends and forecast a range of possible

final results!

Cost Costs process Outputs

1) Work Performance

measurements Calculated

Control Costs

15

24

Calculated CV, SV, CPI, SPI

values for WBS components

(work packages or control

accounts).

Are recorded and informed to

stakeholders!


2) Budget Forecast

(EAC, ETC)

Calculated

Control Costs

15

25

Calculated or performing

organization-reported EAC value.

Is recorded and informed to

stakeholders!

Calculated or performing

organization-reported ETC value.

Is recorded and informed to

stakeholders!


3) Change Requests To some aspect of the project

resulting from project performance

15

26

resulting from project performance

analysis.

Example: Increasing or decreasing

the budget!

Routed through ICC.


4) OPAs UpdatesLessons learned posted in database.Guide us on our current project as well as

Control Costs

15

27

Guide us on our current project as well as

Future ones. Such knowledge management

leads to project management maturity of

the performing organization and also helps

us reinventing the wheel!

Documents from cost control process:

1. Causes of variances,

2. Logic behind the chosen corrective

action, and

3. Other types of lessons learnt from cost

control


5) PM Plan UpdatesComponents of PM Plan are updated

to reflect changes on account of

Control Costs

15

28

to reflect changes on account of

approved change requests of this

process.

Components that often get updated:

1) Cost estimates of Schedule activity,

Work package or Planning package.

2) Cost baseline


6) PM Document Update

include

1) Cost Estimates

Control Costs

15

29

1) Cost Estimates

2) Basis of Estimates


PERFORM QUALITY

15

30

PERFORM QUALITY

CONTROL


PERFORM QUALITY CONTROL

THE CONCEPT

15

31

THE CONCEPT

• QUALITY IS THE DEGREE TO WHICH A

SET OF INHERENT CHARACTERISTICS

FULFILL REQUIREMENTS

• STATED AND IMPLIED NEEDS ARE THE

INPUTS TO DEVELOPING PROJECT

REQUIREMENTS



THE CONCEPT

15

32

THE CONCEPT

A CRITICAL ELEMENT OF QUALITY MANAGEMENT IN PROJECT CONTEXT ISTO CONVERT STAKEHOLDER NEEDS, WANTS, AND EXPECTATIONS INTO REQUIREMENTS THROUGH

STAKEHOLDER ANALYSIS DURING PROJECT SCOPE MANAGEMENT



THE CONCEPT

15

33

THE CONCEPT

• Quality is synonymous with ability to

conform to the requirements of the end-

item and work processes and procedures.



THE CONCEPT

15

34

THE CONCEPT

• Quality control is managing the work to achieve the desired requirements, specifications, taking preventive measures to keep errors and mistakes out of the work process, and determining and eliminating the sources of errors and mistakes as they occur.


PERFORM QUALITY CONTROLTHE CONCEPT

15

35

THE CONCEPT• Quality management plan plays a vital role as it describes necessary “QUALITY CONDITIONS FOR EVERY WORK PACKAGE”

(prerequisites/stipulations about what must exist before, during, and after the work package to ensure quality).

• It also specifies the measures and procedures (tests, reviews, inspections, etc.)



15

36

THE CONCEPT

• Another important aspect is tracking project performance with respect to technical requirements, and modifying the work or the requirements as necessary.

• Variety of methods are used for testing and inspection to eliminate defects and ensure that end-items satisfy requirements.



15

37

THE CONCEPT

• Tests and inspections must be ongoing so that problems/defects are identified as early as possible.

• It is less costly to remedy the defects and problems if they are known early both in the project management life cycle and product life cycle.



15

38

THE CONCEPT

• FUNDAMENTAL PILLARS OF QUALITY

1) Customer Satisfaction

2) Prevention over inspection

3) Management Responsibility

4) Continuous Improvement


FROM OUR DISCUSSION ON THE CONCEPT,

IT IS EVIDENT

THAT QUALITY CONTROL PROCESS

15

39


requires us to:

1) Monitor specific project results to

determine whether they comply with

relevant quality standards

2) Identify ways to eliminate causes of

unsatisfactory results


FROM OUR DISCUSSION ON THE CONCEPT,

IT IS EVIDENT


15

40


requires us to:

3) Perform it throughout the project specific

project

4) Quality standards consist of project

processes and product goals

5) Project results include both product

results and project management results


EXAMPLES of

product results and

project management results:

15

41

project management results:

1) PRODUCT RESULTS

� Deliverables

2) PROJECT MANAGEMENT RESULTS

� Schedule performance

� Cost performance


PREREQUISITES FOR PROJECT MANAGEMENT TEAM

15

42

PREREQUISITES FOR PROJECT MANAGEMENT TEAM

� In order to evaluate quality control outputs, the project

management team must be aware of a working

knowledge of SQC (statistical quality control), mainly:

� Sampling and

� Probability


PROJECT MANAGEMENT TEAMMUST KNOW

THE DIFFERENCE

between

15

43

between

Prevention

Keeping errors out of process!

Inspection

Keeping errors out of the hands

of the customer!

Attribute Sampling

Implies either result conforms or

it does not conform!

Variable Sampling

Implies the result is rated on a

continuous scale that measures

magnitude of conformity!


PROJECT MANAGEMENT TEAMMUST KNOW

THE DIFFERENCE

between

15

44

between

Special Causes /

Non-random

Mean unusual occurrences!

Common Causes /

Random Causes

Mean normal process variation

Tolerances

Mean the result is acceptable if it

is within specified tolerance

range!

Control Limits

Define variation range of a

process. The process is said to be

in control if the result falls within

this range!

Perform Quality Control process overview

INPUTSTOOLS &

TECHNIQUESOUTPUTS

� Quality control


15

45


Plan

� Quality metrics

� Quality checklists

� OPAs

�Work performance

measurements

� Approved change

requests

� Deliverables

INPUTS� Cause and effect

diagram

� Control Charts

� Flowcharting

� Histogram

� Pareto charts

� Run chart

� Scatter diagram

� Statistical

Sampling

� Inspection

� Approved Change

Requests review

� Quality control

measurements

� Validated Changes

� Change requests

� Recommended defect

repair

� OPAs updates

� Validated deliverables

� PM Plan updates


Updates

Perform Quality

Control process


1) Project management planIt contains quality management

plan which is used to control

15

46

INPUTS plan which is used to control

quality.

Guides us how quality control

should be performed.

2) Quality metrics

Also have been duly deliberated by

us during Plan Quality

We bring them for use here.

Perform Quality Control


3) Quality ChecklistsWe have with us as an output of our

discussion on quality planning. They

15

47

discussion on quality planning. They

come in handy here.

4) OPAs Provide us quality control practices in

use, plus standards we need to

adhere to.


5) Work performance

MeasurementsImportant inputs to QC:


15

48

Important inputs to QC:

� Technical performance measures

� Project deliverables completion

status

� Implementation of required

corrective actions

� Planned results and actual results

� Implemented change requests


6) Approved change requestsTimely implementation of approved

change requests needs to be examined.


15

49

change requests needs to be examined.

These change requests are modifications,

such as:

� Revised work methods

� Revised schedule

7) DeliverablesWe have amply talked about them. We

examine them here if they meet quality

requirements.


1) Cause and effect diagram (Ishikawa or fishbone diagrams)

Show how how various factors could

Perform Quality

Control process

TOOLS &

15

50

Show how how various factors could

be linked to potential problems or

effects!

Help us find the causes of the quality

problems.

TOOLS &

TECHNIQUES

example

SAMPLE CAUSE AND EFFECT DIAGRAM

TIME MATERIAL METHOD MACHINE

15

51

Major

Defect

EFFECT CAUSES

ENVIRONMENT PERSONNEL MEASUREMENT ENERGY


2) Control charts• Help us determine whether process is “in

control”.

Perform Quality

Control process

TOOLS &

15

52

control”.

• They graphically display results, over

time, of a process.

• COMPONENTS OF A CONTROL CHART:

1) Upper and lower control limits-the acceptable range of variation of a

process, often shown as dotted lines.

2) Mean- a line in the middle showing themiddle of the range of acceptable

variation of the process.

TOOLS &

TECHNIQUES


Control charts• COMPONENTS OF A CONTROL CHART:

Perform Quality

Control process

TOOLS &

15

53

3) Data points- random and non-randomdata points. Their appearance and

position determines whether process is

in control or out of control.

4) Out of control- the process is out of astate of statistical control under two

circumstances:

a) A data point falls outside ULC or LCL

b) Non-random data points still within

UCL and LCL

TOOLS &

TECHNIQUES



Perform Quality

Control process

TOOLS &

15

54

5) Rule of seven (heuristic)-nonrandom data points grouping in

series on one side of the mean,

signifying process is out of control.

You must investigate such a situation,

find cause, and take corrective action.

TOOLS &

TECHNIQUES



Perform Quality

Control process

TOOLS &

15

55

6) Assignable cause- a random datapoint outside control limits, or non

random data points (even though

within control limits, such a rule of

seven).

You must determine the cause of the

variation, find solution, and implement

it to bring process back to normal.

TOOLS &

TECHNIQUES

Sample Control Chart

Center line:

average of

process data

Upper line: Upper

Rule of seven

(out of control)

Process out of control or

unstable: 1) points outside UCL

and LCL; 2) inside UCL & LCL

nonrandom points (seven)

15

56Assignable cause

(out of control)

Upper line:

upper range

of

acceptable

data

Lower line:

lower range

of

acceptable

dataX axis consists

of sample

numbers (time of

sample)

Upper

control limit

Lower

control limit

X Mean


Control charts� Please do not adjust the process when it is “in control”.

� However, you may change the process to usher in

15

57

� However, you may change the process to usher in

improvements, but again remember that you will not adjust it

when it’s in control!� Any type of process output can be monitored by using control charts.

� Control charts are mostly used to monitor repetitive activities

like production lots, but they can also be used to track if project

management process is in control:

� Schedule and cost variances

� Frequency and volume scope changes

� Mistakes in project documents

� Any other project management results


3) Flowcharting� Helps to analyze how problems

occur.

Perform Quality

Control process

TOOLS &

15

58

occur.

� Styles are many but all process

flowcharts show:

1) Activities,

2) Decision points, and

3) Order of processing

� Show how various elements of the

process interrelate.

TOOLS &

TECHNIQUES


Flowcharting� Helps the project management

team anticipate:

Perform Quality

Control process

TOOLS &

15

59

team anticipate:

1) What and where quality

problems might occur

2) Hence, help develop

approaches for dealing with

them

Example Flowcharting

TOOLS &

TECHNIQUES

Example: Flowcharting(PROCESS FLOWCHART FOR DESIGN REVIEWS)

1

Project

request

2

Compliance

Copy

3

Develop

Artwork 4NO

15

60

6

Artwork out

For proofs

5

Change control

For specs

7

Vendors make

proofs

10

Approved

Proof back to

Vendor

11

Specs signed

(package & QA)

12

Order

materials

8Package

Development

Review &

approval

9QA review /

approval

4Artwork

Approved

NO

YES

YES

YES

NONO


4) HistogramA bar chart showing distribution of

variables:

Perform Quality

Control process

TOOLS &

15

61

variables:

1) Each column represents an

attribute or characteristic of a

problem or situation.

2) Helps identify the cause of

problems in a process by the shape

and width of the distribution.

3) Height of each column shows

relative frequency of characteristic.

TOOLS &

TECHNIQUES


5) Pareto charts

� Know 80/20 Rule? It says 80%

Perform Quality

Control process

TOOLS &

15

62

� Know 80/20 Rule? It says 80%

problems are due to 20% causes!

� Well, it Pareto’s law which opines

that a relatively small number of

causes create a large majority of

defects/problems. Pareto diagrams

follow this concept.

TOOLS &

TECHNIQUES


Pareto diagrams

� It is a histogram ordered by

Perform Quality

Control process

TOOLS &

15

63

� It is a histogram ordered by

frequency of occurrence. That

means how many results were

produced by category/type of

identified cause.

� Such rank ordering helps project

team take corrective action to

eliminate the problems causing

greatest number of defects first.

TOOLS &

TECHNIQUES

Sample Pareto Diagram (Chart)

10040

Cumulative

Percentage of defective cases

Number of defective cases

CAR PROBLEMS

15

64

00

25

50

75

10

20

30Cumulative

Percentage

Frequency by Cause

Percentage of defective cases

Number of defective cases


6) Run chartShows history or pattern of variation!

Is a line diagram where data points

Perform Quality

Control process

TOOLS &

15

65

Is a line diagram where data points

are plotted in the order of occurrence!!

Depicts TRENDS in a ‘process over

time’, ‘variation over time, ‘declines or

improvements in a process over time’.

What’s the advantage?

Helps forecast future outcomes based

on historical results!!!

TOOLS &

TECHNIQUES


Run chartTrend analysis often used to monitor:

1) Technical Performance: how many

Perform Quality

Control process

TOOLS &

15

66

1) Technical Performance: how many

defects have been identified and

how many remain uncorrected?

2) Cost and Schedule Performance:

How many activities (per period)

were done with significant

variances?

TOOLS &

TECHNIQUES


7) Scatter diagramShows pattern of relationship between

two variables.

Perform Quality

Control process

TOOLS &

15

67

two variables.

Helps quality team examine and find

possible relationship between

changes observed in two variables!

- Dependent variables and

independent variables are plotted

- Closer they are to a diagonal line,

more closely they are related!

TOOLS &

TECHNIQUES


8) Statistical sampling� Inspecting by choosing only a part of

population of interest (SAMPLE).

Perform Quality

Control process

TOOLS &

15

68

population of interest (SAMPLE).

Example: selecting 5 cabins out of 100

cabins built on ‘An Office Building Project’.

� Proper sampling reduces the cost of

quality control. It is best to apply if the

population under study is large and

examining the whole population would

cost a lot, take too long, and be too

destructive.

TOOLS &

TECHNIQUES


8) Inspection� DETERMINE if a work product

complies to requirements or not

Perform Quality

Control process

TOOLS &

15

69

complies to requirements or not

� ACTIVITIES: testing, examining, measuring at any level - single activity

level or final product level.

� KNOWN as: Audits,Walkthroughs, Product Reviews,

Reviews.In certain application areas, these terms

carry a specific or narrow meaning

TOOLS &

TECHNIQUES


Technical performanceWe have sufficiently discussed about schedule and cost

performance. Besides them, project performance

15

70

performance. Besides them, project performance

depends how well the project is meeting technical

requirements!!!

TECHNICAL PERFORMANCE is measured through

tracking the history of a set of technical objectives or

requirements over time. It provides management with the

information about how well the project is progressing with

respect to particular project objectives, targets, and

requirements (Quality).


Technical performanceThe purpose of measuring technical performance is to

monitor progress in performance measures and their

15

71

monitor progress in performance measures and their

relationship TO GOALS AND TARGETS BY

PROVIDING:

1) A best estimate of current technical performance or

progress to date, and

2) An estimate of technical performance at project

completion


Technical performanceBOTH KINDS OF ESTIMATES ARE BASED ON THE

RESULTS OF:

15

72

RESULTS OF:

1) Modeling,

2) Simulation, or

3) Tests, and

4) Demonstrations

TO PERFORM IT, WE NEED TO HAVE CERTAIN

TECHNICAL PERFORMANCE MEASURES AS KEY

INDICATORS OF SUCCESS

THESE MESURES SHOULD BE TIED TO USER NEEDS AND

REPRESENT MAJOR PERFORMANCE DRIVERS!!!

Examples of Technical Performance Measures

Technical performance

� Availability

� Back-up Utility

� Size or space

� Reliability

� Power

15

73

� Safety

� Speed

� Survivability

� Maintainability

� Flexibility

� Cycle Time

� Efficiency

� Output Rate

� Capacity

� Response Time

� Security

� Setup Time

� Durability

� Range

� Variance

� Cost

� Utilization

� Error / Defect Rate

� Power

� Interface

Compatibility

� Interoperability

� Simplicity /

Complexity

� Signal-to-noise

Ratio

� Trip Time

� Idle Time


Technical performanceMEASUREMENT:

STEP 1

STEP 3

Current estimates and the

15

74

STEP 1

Periodically,

current (actual)

Performance

Estimates

are computed

or measured

STEP 2

And then, they

are compared

to objectives

Initially, they are based on results from Modeling and Simulation

Activities, and later on Test and Demonstration results

Using actual Hardware and Software

Current estimates and the

Technical objectives are

Charted on a time-phased TPM

Chart which SIMPLIFIES

determining the extent of

progress made toward

Achieving Objectives


9) Approved Change

Requests reviewDone to ensure that product

Perform Quality

Control process

TOOLS &

15

75

Done to ensure that product

defects are repaired and

brought into compliance with

requirements/specifications!

TOOLS &

TECHNIQUES


1) Quality control

measurementsAre Results of QC.

Perform Quality

Control process

OUPUTS

15

76

Are Results of QC.

“They are fed back to QA to

reevaluate and analyze the

efficiency and effectiveness of

quality standards and processes of

the performing organization”!

Please do remember!!

OUPUTS


2) Validated ChangesRepaired items re inspected

to confirm if they are ok now.

Perform Quality

Control process

OUPUTS

15

77

to confirm if they are ok now.

Rejection again may require

further repair.

Decision is notified after

examination.

OUPUTS


3) PM Plan UpdatesQuality management plan (a

component of PM Plan) needs to be

Perform Quality

Control process

OUPUTS

15

78

component of PM Plan) needs to be

updated to reflect approved changes

resulting from QC.

QC may lead to incorporation of

approved changes in other

components (subsidiary plans) of the

PM Plan also.

All changes are first reviewed by ICC

for approval!

OUPUTS


4) OPA Updates

include

a) Completed Checklists,

Perform Quality

Control process

OUPUTS

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79

a) Completed Checklists,

b) Lessons learned

documentation.

OUPUTS


5) Validated DeliverablesQuality Control is done to

determine the correctness of

Perform Quality

Control process

OUPUTS

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80

determine the correctness of

deliverables.

The results of execution quality

control processes are validated

deliverables.

They are an input to verify

scope for formalized

acceptance.

OUPUTS


6) Change Requests

include

a) defect repair

Perform Quality

Control process

OUPUTS

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81

a) defect repair

b) corrective action

c) preventive action

7) Project Document Updates

may include

- Quality Standards.

OUPUTS

Project communications management

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82

REPORT PERFORMANCE


REPORT PERFORMANCE

The process of

Collecting and distributing performance

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83

Collecting and distributing performance

Information, including status reports, progress

measurements, and forecasts.

INVOLVES

Periodic collection and analysis of baseline

versus actual data to understand and

communicate.

REPORT PERFORMANCE

The process of

Performance reports need to be provide

information at an appropriate level for each

15

84

information at an appropriate level for each

audience. It may be a simple report or an

elaborate one.

A simple status report might show percentage

complete or status dashboards for scope,

schedule, cost, and quality.

REPORT PERFORMANCE

An elaborate report may include:

1) Analysis of past performance

2) Current status of risks and issues

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85

2) Current status of risks and issues

3) Work completed during the period

4) Work to be completed next

5) Summary of changes approved for the period

6) Other relevant information which may be reviewed

and discussed.

A COMPLETE REPORT SHOULD ALSO INCLUDE

“FORECASTED COMPLETION” INCLUDING TIME

AND COST!!


CONSISTS OF

REPORT PERFORMANCE

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86

CONSISTS OFcollecting and disseminating

performance information

to

stakeholders

about

“HOW RESOURCES ARE USED TO ACHIEVE

PROJECT OBJECTIVES”


1. Status reporting

REPORT PERFORMANCE

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87

� Where the project now

stands

� Budget metrics

� Schedule achieved

2. Progress reporting�Work packages complete

�Work packages in

progress,

� Percentage complete

Forecasting schedule and

3. Forecasting� Estimating where it will

land in future

� Forecasting schedule and

cost based on the trends

of current progress


Must provide information on:

Scope

15

88Many projects need information on Risk and Procurement also!

Scope

Schedule

Cost

Quality

Report Performance process overview

TOOLS &

TECHNIQUESINPUTS OUTPUTS


15

89

TECHNIQUES

� Variance Analysis

� Forecasting

Methods

� Communication

Methods

� Reporting

systems


Plan

�Work Performance

measurements

� Budget Forecasts

� Project Management Plan


Assets

INPUTS OUTPUTS


� Change Requests

� OPAs updates

Report Performance - INPUTS

1. Project Management Plan

Provides information on project baselines.

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90

Provides information on project baselines.

Project execution is compared to these baselines

And deviations are measured for management

control.

It typically integrates Scope, Schedule, and Cost

parameters of a project but may also include

Technical and Quality parameters.


2. Work performance information(collected from execution)

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91

1. Deliverables Status

2. Schedule progress

3. Costs incurred


3. Work performance measurements Work performance information is used to generate project activity metrics to evaluate

15

92

generate project activity metrics to evaluate actual progress compared to planned progress. THE METRICS INCLUDE:

1. Planned versus actual schedule performance

2. Planned versus actual cost performance

3. Planned versus actual technical performance


4. Work performance measurements Budget forecast information from Control Cost process give information on additional funds

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93

process give information on additional funds are expected to be be required for the remaining work, and also estimates for the completion of the total project work.


4. Organizational process assets provide:

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94

a) Reporting templates

b) Policies and procedures with measures and indicators for use

c) Defined variance limits

Report Performance – TOOLS & TECHNIQUES

1. Variance Analysis An after-the-fact look at what caused a difference between the baseline and actual

15

95

difference between the baseline and actual performance!

The process varies with application area, the standard used, and and the industry.

COMMON STEPS

a) Verify the quality of the information collected


1. Variance Analysis COMMON STEPS

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96

a) Verify the quality of the informationcollected to ensure it is complete, consistent with past data, and credible.

b) Determine variances, and note all differences both favorable and unfavorable to project outcomes.

c) Determine the impact of variances.


1. Variance Analysis

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97

ANALYZE THE TRENDS OF VARIANCES AND RECORD FINDINGS ABOUT SOURCES OF VARIATIONS AND IMPACT AREA.


2. Forecasting Methods

a) TIME SERIES METHODS:

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98

a) TIME SERIES METHODS:

Use historical data as the basis for estimating

future outcomes.

Examples: Earned Value, Moving Average,

Extrapolation, Linear Prediction, Trend

estimation, and Growth Curve.



b) CASUAL/ ECONOMICAL METHODS:

15

99


Use the assumption that it is possible to identify

the underlying factors that might influence the

variable that is being forecasted. Sales of

Umbrellas might be associated with weather

conditions.




16

00


THE PROCESS: If the causes are understood, projections of the influencing variables can be made and used in the forecast!

Example: Regression Analysis (using linear or non-linear regression), Autoregressive Moving Range (ARMA), and Econometrics.



c) JUDGMENTAL METHODS: Use intuitive

16

01

c) JUDGMENTAL METHODS: Use intuitive

judgments, opinions, and probability estimates.

Composite forecast, Delphi, Scenario Building, Technology Forecasting, and Forecast By Analogy.

d) OTHER MRTHODS: Simulation, Probabilistic Forecasting, and Ensemble Forecasting.


3. Communication Methods

Status Review Meetings used to exchange and

16

02

Status Review Meetings used to exchange and analyze information about the project progress and performance. The project manager generally uses a PUSH COMMUNICATION technique for distributing performance reports. Please remember this!.


4. Reporting Systems

A reporting system provides a standard tool for

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03

A reporting system provides a standard tool for the project manager to:

- capture, store, and distribute schedule, cost,

progress, and performance to the stakeholders.

Software packages help project manager to

consolidate reports from several systems and

facilitate report distribution. Examples ofdistribution formats: Table Reporting, Spreadsheet

Analysis, and Presentations.



Predicting future project performance based on

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04

Predicting future project performance based on actual performance to date! Methods:

a) TIME SERIES METHODS

b) CASUAL/ ECONOMICAL METHODS

c) JUDGMENTAL METHODS

d) OTHER MRTHODS

Report Performance - OUTPUTS

1. Performance reports• You prepare performance reports by organizing

and summarizing the performance information

16

05

and summarizing the performance information

gathered by you and then presenting the results

of the analysis in suitable formats:

1) Bar Charts (Gantt charts)

2) S-curves

3) Histograms

4) Tables

Variance Analysis, Earned Value Analysis, Forecast

Data are included in the report!


1. Performance reports

• Reports must display the type of information

and level of detail needed by various

16

06

and level of detail needed by various

stakeholders (as defined in the

communications management plan).

� Performance reports are issued periodically.

�They may a simple status report or an elaborate

one. Elaborate reports include:


1. Performance reports

� Elaborate reports include:

- Analysis of past performance,

16

07

- Analysis of past performance,

- Current status of risks and issues,

-Work to be completed during the next reporting

period,

- Summary of approved changes for the period,

- Results of variance analysis,

- Forecasts,

- Other information for review and discussion.


Example: Performance Report in bar chart

Unit Projected Actual

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08

Engineering

Design

Facility

And so on

Time

Actual


Example: Performance Report in S-curve

Date of measurement

Cumulative Values in INR

16

09

Planned Value (PV)

Earned Value (EV)

Actual Value (AV)

Cumulative Values in INR

Time


Essar Cargo Project: “Performance Report Week 20” (cumulative to date)

REAL LIFE

EXAMPLE

CPISPISV CVEVACPVACTIVITY

H 100 100 100 0 0 1.00 1.00

Tabular form

16

10

J

K

L

M

N

O

P

Q

I 64

96

16

36

84

40

20

24

32

512PROJECT

70

97

12

30

110

45

28

22

16

530

64

96

14

18

33

40

24

24

16

429

0

0

- 2

- 18

- 51

0

4

0

- 16

- 83

- 6

- 1

2

- 12

- 77

- 5

- 4

2

0

- 101

1.00

1.00

0.88

0.50

0.39

1.00

1.20

1.00

0.50

0.84

0.91

0.99

1.17

0.60

0.30

0.89

0.86

1.09

1.00

0.81


2. Organizational process assets updates1) Report Formats,

2) Lessons Learned Documentation , including

16

11

2) Lessons Learned Documentation , including

the causes of issues, reasoning behind

corrective action,

3) Other type of lessons learned about

performance reporting.


3. Change RequestsAnalysis of performance often generates Change

Requests. They are processed through the

16

12

Requests. They are processed through the

Perform Integrated Change Control process

as:

a) Recommended corrective action

to bring expected future performance in line

with the plan.

a) Recommended preventive action

to reduce the probability of of incurring future

negative performance.


MONITOR

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13

MONITOR

AND

CONTROL

RISKS


Monitor and control RisksTHE CONCEPT

Planned Risk Responses are executed during project

16

14


life cycle, but the Project Work MUST BE CONTINOUSLYMONITORED FOR NEW AND CHANGING RISKS!

FOR THIS, YOU SHOULD:

1. IDENTIFY, ANALYZE, AND PLAN FOR NEWLY

ARISING RISKS

2. KEEP TRACK OF THE IDENTIFIED RISKS AND THE

ONES ON WATCHLIST


Monitor and Control RisksTHE CONCEPT


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15




3. REANALYZE EXISTING RISKS

4. MONITOR TRIGGER CONDITIONS FOR

CONTINGENCY PLANS




16

16




5. MONITOR RESIDUAL RISKS

6. REVIEW EXECUTION OF RISK RESPONSES WHILE

EVALUATING THEIR EFFECTIVENESS



16

17

APPLIES TECHNIQUES (VARIANCE ANALYSIS,

TREND ANALYSIS, ETC) USING THE PERFORMANCE

DATA GENERATED DURING PROJECT EXECUTION

THE RISK MONITORING AND CONTROL(PLUS OTHER RISK MANAGEMENT PROCESSES)

IS AN ONGOING PROCESS

FOR THE LIFE OF THE PROJECT!



• We also document risk metrics linked with

16

18

• We also document risk metrics linked with

executing contingency plans

• New risks develop or anticipated ones no

longer exist with the progress of the project as

it attains maturity by that time



• Making effective decisions before risk occurs is

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19

• Making effective decisions before risk occurs is

the crux of risk monitoring and control processes

• You must periodically ascertain the risk

acceptability level of project stakeholders by

reporting information to them!



HELPS US ENSURE WHETHER

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20


� We have executed the risk responses as

planned.

� Our risk response actions are effective as

envisaged or we need to develop new ones.

� Project assumptions still holding good.

� Risk exposure (from earlier state) is steady or

not.




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21


� A risk trigger has taken place.

� Adequate policies are being observed.

� Any new risks have happened (the ones not

identified by us earlier).

� Updated the risk register and risk identification

checklists.


Monitor and Control RisksTHE CONCEPTREQUIRES YOU TO

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22

REQUIRES YOU TO

1) Choose Alternative Strategies

2) Execute a Contingency Plan or Fallback Plan

3) Take Corrective Action

4) Modify the Project Management plan



RISK RESPONSE OWNERS REPORTS PERIODICALLY

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23

RISK RESPONSE OWNERS REPORTS PERIODICALLY

TO THE PROJECT MANAGER

� The effectiveness of the plan,

� Any unexpected impacts,

� Any corrective action required in the mid-

course for handling the risk appropriately.

Monitor and Control Risks process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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24


Plan

� Risk Register

�Work performance

information


INPUTSTECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and trend

analysis

� Technical

Performance

Measurement


� Status meetings

OUTPUTS

� Risk register updates

� Change Requests

� OPAs updates

� PM Plan updates


updates



Provides RMP that Defines procedure for structuring and performing the response

Monitor and Control

Risks

INPUTS

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25

for structuring and performing the response

planning during the project life cycle.

Risk Register (provides key inputs)Identified risks, risk owners, agreed-

upon risk responses, specific

implementation actions, symptoms,

warning signals, residual and

secondary risks, watchlist, time and

cost contingency reserves.


Plan

� Risk Register�Work performance

information


INPUTS


Work performance

informationIncluding project deliverables status,

INPUTS

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26

Including project deliverables status,

corrective actions, and performance

reports serve as important inputs here!


Plan

� Risk Register

�Work performance

information� Performance Reports

INPUTS


Performance reportsProvide us information on project work

performance.INPUTS

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27

performance.

We need to know if any performance

analysis impacts the risk management

processes!


Plan

� Risk Register

�Work performance

information

� Performance

Reports

INPUTS


Risk reassessmentWe regularly identify new risks

and reassess known ones! TOOLS &

TECHNIQUES

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28

and reassess known ones!

Risk management must be an

agenda in at project team

status meeting!

TECHNIQUES

� Risk

Reassessment� Risk audits


analysis

� Technical

Performance

Measurement


� Status meetings


Risk reassessment

AS PROJECT PERFORMANCE TOOLS &

TECHNIQUES

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29

AS PROJECT PERFORMANCE

MEASURED AND REPORTED

POTENTIAL RISKS

NOT IDENTIFIED EARLIER

CYCLE OF RISK

MANAGEMENT PROCESSES

FOR THESE RISKS

MAY SURFACE

IMPLEMENT

TECHNIQUES

� Risk



analysis

� Technical

Performance

Measurement


� Status meetings


Additional risk response

planning That was

1) Not anticipated in

TOOLS &

TECHNIQUES

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30

A RISK EMERGES

1) Not anticipated in

the Risk response

plan, or

2) Its impact on

objectives IS

GREATER THAN

EXPECTED

ADDITIONAL

RISK RESPONSE PLANNING

Planned

response

not adequate

TO

CONTROL

RISK

TECHNIQUES

� Risk



analysis

� Technical

Performance

Measurement


� Status meetings


Risk auditsConducted during the project life cycle

TOOLS &

TECHNIQUES

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31

Risk

Auditors

EXAMINE AND RECORD

EFFECTIVENESS OF

RISK RESPONSE ACTIONS

� How much they have succeeded

in avoiding, transferring, mitigating

negative risks, and enhancing the

opportunities for positive risks

� Effectiveness of the RM Process!

TECHNIQUES

� Risk

Reassessment

� Risk audits� Variance and trend

analysis

� Technical

Performance

Measurement


� Status meetings


Variance & trend analysisVariance and trend in project

execution is reviewed with the helpTOOLS &

TECHNIQUES

16

32

execution is reviewed with the help

of:

1) Performance data,

2) EV Analysis,

3) Other means of project variance

and trend analysis.

WHY? Answer: Outcomes from theseanalyses may forecast cost and schedule

potential deviations at project

completion!

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and

trend

analysis� Technical

Performance

Measurement


� Status meetings


Variance & trend analysisWHY?

Answer:TOOLS &

TECHNIQUES

16

33

Answer:

• Outcomes from these analyses

may forecast Cost and

Schedule potential deviations at

Project completion!

2) It may indicate potential impact of

threats or opportunities!

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and

trend analysis� Technical

Performance

Measurement


� Status meetings

examples


BEWARE OF SCOPE CHANGES!TOOLS &

TECHNIQUES

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34

SCOPE CHANGES

NEW RISK ANALYSIS

NEW RESPONSE PLANS

WE HAVE ALREADY DISCUSSED

SCOPE CHANGES

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and


Performance

Measurement


� Status meetings


Earned value analysis� EV analysis ( as already discussed )

used for tracking overall projectTOOLS &

TECHNIQUES

16

35

used for tracking overall project

performance against a baseline

plan

� Results tell us about potential

deviation of the project at

completion from schedule and cost

objectives

� If a project deviates substantially from

the baseline, updated risk identification

and analysis must be conducted!

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and


Performance

Measurement


� Status meetings


Technical performance

measurementCompares technical performance

TOOLS &

TECHNIQUES

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36

Compares technical performance

accomplishments during execution

to the project plan’s schedule for

technical achievement.

Example:If a functionality

planned as a milestone

is not demonstrated,

it poses risk

to attaining project’s scope!

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and

trend analysis

� Technical

Performance

Measurement� Reserve analysis

� Status meetings


Reserve analysisCompares the amount of COST AND

SCHEDULE contingency reserve left TOOLS &

TECHNIQUES

16

37

SCHEDULE contingency reserve left

to the amount of risks remaining AT

ANY TIME IN THE PROJECT!

To find out if the remaining

contingency is sufficient for

remaining risks!

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and

trend analysis

� Technical

Performance

Measurement

� Reserve

analysis� Status meetings


Status meetingsVERY IMPORTANT TOOL!

� Risk reviews must be done regularly

� All meetings should have it as a

TOOLS &

TECHNIQUES

16

38

� All meetings should have it as a

necessary agenda!

ALSO, PLEASE REMEMBER:

1) As the project advances, the risk

ratings and prioritizationmay

change.

2) These changes may need

additional qualitative and

quantitative analysis.

TECHNIQUES

� Risk

Reassessment

� Risk audits

� Variance and

trend analysis

� Technical

Performance

Measurement

� Reserve

analysis

� Status meetings


Risk register updatesTwo categories of updates:

� Results of risk reassessments, risk OUTPUTS

16

39

� Results of risk reassessments, risk

audits, and risk views. Examples:

updates to Probability, Impact,

priority, response plans, ownership,

and other items of risk register.

� Risk register

updates� Change Requests

� OPAs updates

� PM Plan updates


updates


Risk register updatesTwo categories of updates:

� Actual outcomes of risks and risk

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40

� Actual outcomes of risks and risk

responses which help us plan for

risk throughout our organization (for

future projects). This concludes the

record of risk management on the

project and serves as input to

Close Project process and included

in project closure documents!


Risk register updatesPerforming Risk

Controls

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41

RISKS

Record

and

Evaluate

Record

and Close

in risk

register

Controls

reduces the

impact or

probability of

identified - tive

Risks and

enhances

opportunity for

+ tive risks

� Reassess Risk

Ratings to properly

control New,

Important Risks


Change RequestsFrequently, the implementation of

contingency or workaround plans

16

42

contingency or workaround plans

necessitates change to PM Plan! ICC

reviews and approves them.

Then, they become input to

1) Direct & Manage Project Execution

process

2) Risk monitoring & control process


Change Requests

Requirement to

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43

Contingency or

Workaround plans

Implemented

Requirement to

Change

the project

Plan

Change

Request

Often

Results

Into

Integrated

Change control

Risk

Monitoring &

Control

Direct &

Manage Project

Execution

Approves the requested change


Include :

� Contingency plans and workaround

Change Requests

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44

plans

� Workaround plans must be properly

recorded. They are included in both


process and Monitor & Control

Project Work process! Remember!!


Workaround plansAre Unplanned Responses to the

emerging risks which were not

Change

Requests

May lead to

16

45

emerging risks which were not

identified or accepted passively.

DOCUMENT WORKAROUNDS

IN PM PLAN

AND RISK RESPONSE PLAN

WORKAROUNDS:

Unplanned

Responses

RISKS

( not identified or accepted passively)

May lead to


Recommended preventive

actionsAre actions taken to bring the project

Change

Requests

May lead to

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46

Are actions taken to bring the project

into compliance with Project

Management Plan.

OPAs updatesAll the six risk management processes

provide information that can help future

projects, and hence must be entered in

OPAs. examples

May lead to


OPAs updatesExamples:

1) Templates for the following can be

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47

1) Templates for the following can be

updated at Project Closure:

� risk management plan template

� P & I Matrix template

� risk register template

2) Risks can be documented and RBS

updated.

3) Risk Lessons Learned can be

entered in OPAs.


OPAs updates Examples:

16

48

OPAs updates Examples:

4) Data on actual costs and durations

can be added to organization’s

database.

5) Final versions of risk register and

risk management plan templates are

included.


Risk database ( a useful repository )

RISK REPOSITORYRISK DATA � Assists risk management

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49

RISK DATA

COLLECTED,

MAINTAINED,

And ANALYSED

RISK

MANAGEMENT

PROCESSES

USED IN

� Assists risk management

throughout the

organization

� Over time, builds

basis of “ A RISK

LESSONS LEARNED

PROGRAM”

ITS USE


Updates to risk identification checklist

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50

1………

2………

3………

4………

5………

6………

7………

8………

9………

Updated checklistORIGINAL

CHECKLIST

1…….

2…….

3…….

4…….

5…….

UPDATED

BY

EXPERIENCE

WILL HELP

RISK

MANAGEMENT

OF

FUTURE

PROJECTS


PM Plan updates When approved changes impact risk management

processes, corresponding component documents of PM

16

51

processes, corresponding component documents of PM

Plan are revised and reissued to reflect those changes.

Project document updates - Assumptions log updates

- Technical documentation updates


ADMINSTER

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52

ADMINSTER

PROCUREMENTS


Administer ProcurementsYou have selected the seller

16

53

You have selected the seller

who begins work as per contract.

Now what is

your prime responsibility

from buyer’s side?



16

54

� Ensure that seller’s performance meets

contractual requirements

� Manage interfaces among various providers if

you are procuring multiple products and services

� Be absolutely clear of the legal implications of

the actions taken while administering the

contract



16

55

But how do you ensure that seller’s

performance meets your project’s

requirements?

� Well, you apply suitable project management

processes and integrate outputs of these

processes into overall management of the

project!



16

56

But how do you ensure that seller’s

performance meets your project’s

requirements?

� You also integrate and coordinate at many

levels if your project involves many sellers

and many products from them


Sample: Application of project management processes to Administer Procurements process

Contract administration PM Process used

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57

Contract administration PM Process used

Authorizing contractor’s work at

appropriate time

Project plan execution

Monitoring contractor’s technical

performance, schedule, and cost

Performance reporting

Inspecting and verifying the adequacy

of contractor’s product

Quality control

Ensuring that changes are properly

approved , and this information is

distributed to the concerned

stakeholders

Change control


Financial aspect


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58

Financial aspect Seller progress has direct linkage with seller payment as duly

defined in the contract.

Please remember this while administering the contract and

Verifying seller’s work!

Otherwise, difference of opinion between you and the seller will

give rise to claims, disputes, and appeals.

Administer Procurements process overview

� Procurement

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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59

� Procurement

documents


Plan

� Contract

� Performance reports

� Approved change

requests

�Work Performance

information

� Contract Change

Control System

� Procurement

Performance reviews

� Inspections & audits

� Performance

reporting

� Payment Systems

� Claims

administration

� Records

management system

� Procurement

documentation

� Change requests

� OPAs updates

� PM Plan updates


Procurement documentsprovide complete supporting records for administration

of procurement process and includes procurement

Administer Procurements process INPUTS

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60

of procurement process and includes procurement

contract awards and SOW.

Procurement management planGuides us on how to administer the contract. We have

discussed it already.


ContractIs the main input. We have


Administer

Procurements

process

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61


Performance reports- Seller-developed technical

documentation and other

deliverables information given as

per contract terms and conditions

- Seller performance reports about

scope, time, cost, and quality.

process

INPUTS


Approved change requestsINCLUDE approved modifications

to contract terms and conditions

Administer

Procurements

process

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62

to contract terms and conditions

(including SOW, Pricing, Product

description of products, services,

or results to be provided by

contractor)

All changes are formally recorded and

approved before implementation! Verbally

discussed or unrecorded changes MUST NOT

be processed or allowed for implementation!

process

INPUTS


Work performance

informationAs contractor begins performing the

Administer

Procurements

process

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63

As contractor begins performing the

work, we start getting the outcomes:1) Which deliverables have been

accomplished, which ones left.

2) Extent to which quality standards have

been met.

3) What costs have been incurred or

committed

4) Whether schedule has been met, etc

Seller should give timely invoices as per contract.

process

INPUTS


Seller invoicesYes, when seller is doing work, the

Administer

Procurements

process

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Yes, when seller is doing work, the

invoices for the completed work, or as

per the terms of the contract also come

and serve as important inputs to contract

administration.

These invoices are accompanied by all

supporting documents to help you

approve payment.

process

INPUTS


Contract change control

systemAdminister

Procurements

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65

systemProcedure for modifying the contract.

Consists

• paper work, tracking system, dispute

resolution procedures, approval levels

necessary for authorizing changes.CAUTION: PLEASE DON’T FORGET TO

INTEGRATE THE CONTRACT CHANGE

CONTROL SYSTEM WITH THE INTEGRATED

CHANGE CONTROL SYSTEM!!!

Procurements

process

Tools &

Techniques


Procurement performance

reviewsConsists

Administer

Procurements

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Consists• Seller’s progress to deliver scope and

quality, within cost and on schedule,

compared to what is mentioned in

contract!

� Includes review of seller

documentation and inspections by

buyer!

� Quality audits during work execution

process

Tools &

Techniques


Procurement performance

reviewsAdminister

Procurements

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reviewsWhat’s the objective? Answer:�To identify performance successes or

failures,

�To judge Seller’s progress as

compared to CSOW,

�Find contract non-compliance to

quantify seller’s demonstrated

ability/inability to do work.

Procurements

process

Tools &

Techniques


TOOLS &

TECHNIQUES

� Contract Change

Control System

Inspection and audits Required by buyer, supported by

seller

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68

Control System

� Procurement

Performance

reviews

� Inspections &

audits� Performance

reporting

� Payment System

� Claims

administration

� Records

management system

seller (as mentioned in contract)

�To identify any weaknesses in seller’s

work processes or deliverables during

execution.

�May include buyer’s procurement

personnel if authorized by contract.


TOOLS &

TECHNIQUES

� Contract Change

Control System

Performance reportingHow effectively seller is achieving

contractual objectives!

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Control System

� Procurement

Performance

reviews

� Inspections &

audits

� Performance

reporting

� Payment System� Claims

administration

� Records

management system

contractual objectives!

�You should not forget to integrate it

into Performance Reporting Process of

your project (buyer side).

Payment systemBuyer account’s payable system

handles payments to the seller. On

large projects, you can have your own

payment system.


TOOLS &

TECHNIQUES

� Contract Change

Control System

Payment systemThe project management team reviews

and approves payment and then the

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Control System

� Procurement

Performance

reviews

� Inspections &

audits

� Performance

reporting

� Payment System

� Claims

administration� Records

management system

and approves payment and then the

payment is made in accordance with

the the contract terms.

Claims administrationClaims are those contested and

constructive change requests for which

buyer refuses to compensate or does

not agree that change has happened. Claims are also called disputes and appeals.


Claims administrationClaims are recorded, processed, and

managed throughout contract life cycle

TOOLS &

TECHNIQUES

� Contract Change

Control System

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managed throughout contract life cycle

as per clauses of the contract.

If parties are not able to resolve, it has

to be then resolved as per Dispute

Resolution Procedures mentioned in

the contract, like:1) Arbitration

2) Litigation

It can happen before or after the contract

closure!

Control System

� Procurement

Performance

reviews

� Inspections &

audits

� Performance

reporting

� Payment System

� Claims

administration� Records

management system


TOOLS &

TECHNIQUES

� Contract Change

Control System

Records management system A set of processes to manage contract

documentation and records (S/W, PMIS).

PURPOSE? Helps maintain an index of

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72

Control System

� Procurement

Performance

reviews

� Inspections &

audits

� Performance

reporting

� Payment System

� Claims

administration

� Records

management system

PURPOSE? Helps maintain an index of

contract documents/correspondence.

Helps their retrieval and archival!

Information Technology Enhances efficiency and effectiveness

of contract administration by automating

portions of: records management system,

payment system, claims administration,

performance reporting, and exchange of data

between parties!


Procurement documentation INCLUDES:

� Contract itself with supporting schedules

� Approved contract change requests

Outputs

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� Approved contract change requests

� Unapproved contract change requests

� Seller-developed technical documentation

� Other work performance information like

Deliverables

� Seller performance reports

� Warranties

� Financial documents (invoices, payment

records)

� Results of inspections


Change RequestsCONTRACT ADMINSTRATION MAY LEAD

TO REQUESTED CHANGES TO PM

PLAN, ITS COMPONENTS, LIKE

Outputs

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PLAN, ITS COMPONENTS, LIKE

PROJECT SCHEDULE. ICC reviews

before their approval.

Examples:

� Can include directions from buyer,

� Actions taken by seller

But the other party must deem it to be a

beneficial change to the contract.Such constructive changes, if disputed,

become claims!


OPAs updates1) Seller performance evaluation

Outputs

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1) Seller performance evaluation

documentation

2) Payment schedules & payments

3) Correspondence


OPAs updatesSeller performance evaluation

documentation records seller’s

Outputs

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documentation records seller’s

ability to continue to perform work

on the contract.

Helps decide if seller should be

given work on future projects and be

included in qualified sellers list for

future.

These documents also help decide contract

termination, penalties, fees, or incentives!


OPAs updatesPayment schedules and requests

are received and disposed by

Outputs

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are received and disposed by

buyer’s Accounts Payable System

(assuming it is external to project).

OPAs updatesCorrespondence is written record of

buyer-seller communication, mainly:

1) warnings of unsatisfactory

performance, requests for changes,

or clarifications.


OPAs updatesCorrespondence is written record of


Outputs

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2) can include reported results of

buyer inspections and audits that

show weaknesses seller needs to

correct.

3) A complete and accurate record

of all written and oral

communications and actions taken

and decisions made.


PM Plan updates� Procurement management plan is

updated to reflect approved change

Outputs

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updated to reflect approved change

requests that impact it and so

require its revision.

� Baseline schedule If there are

slippages that impact overall project

performance, the baseline schedule

may require to be updated to show

current expectations!

CLOSING

Closing Process Group

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CLOSING

PROCESSES


POSITION IN PROJECT MANAGEMENT LIFE CYCLE

PLANNINGINITIATING

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CONTROLLING

& MONITORING

PROCESSES

CLOSING

PROCESSES

EXECUTING

PROCESSES

PLANNING

PROCESSES

INITIATING

PROCESSES

Closing Process GroupProcess Groups’ Interactions (partial)

Executing Process

Group Organizational

Process

Assets

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Closing Process

Group

M & C Process

Group

Customer

Final product,

Service, result

Administrative closure procedure

Contract closure procedure

Approved change requests

Rejected change requests

Approved corrective actions/ preventive actions

Approved defect repair

PM Plan Updates

Scope statement updates

Recommended corrective actions

Recommended preventive actions

Recommended defect repair

Forecasts

Validated defect repair

Approved deliverables

Organizational process updates


THE CONCEPT� Projects are have a definite beginning and a definite end.

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definite end.

� The end is reached� 1. When objectives are accomplished

� 2. When it is concluded that objectives will not be / can’t be

achieved

� 3. When the need for the project no longer exists, or

� 4. The project is terminated before completion ( for various

reasons )


THE CONCEPT� During closing, it is the project manager who ensures that all project-related work has been completed and formally closed out by a specific

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84

completed and formally closed out by a specific date.

� It is his / her responsibility to put an end to the project (sometimes through requirement when there is no follow-up project)!

� By the time the end-item has been delivered and installed, many people in the project will have lost the enthusiasm and be anxious to move on to another project.


THE CONCEPT� As a result, the project closeout gets little attention as managers shift their emphasis to

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85

attention as managers shift their emphasis to upcoming projects OR scan the environments FOR LEADS about potential projects.

� YET, CLOSING A PROJECT PROPERLY IS NO LESS IMPORTANT THAN ANY OTHER PROJECT ACTIVITY!

� The process of project closeout is so critical that it can determine whether ULITIMATELY project was A SUCCCESS OR FAILURE.


THE CONCEPT� UNLESS formally closed, the projects have a tendency to drag on:

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86

tendency to drag on:

� Sometimes unintentionally from neglect or

insufficient resources

� Sometimes intentionally for lack of follow-up

work

� Workers stay on project payroll for months after their obligations have been met, which can turn an otherwise successful project into financial failure


THE CONCEPT

� As long as the project has not been officially

closed, work orders remain open and labor

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87

closed, work orders remain open and labor

charges continue to incur.

� The seeds of successful closeout are sown early

in the project: Since closure requires customer

acceptance, the “Criterion of Acceptance”

SHOULD BE CLEARLY DEFINED, AGREED

UPON, and DOCUMENTED at the beginning of

the project.


THE CONCEPT

� Any subsequent changes to criteria (made

during the project) must be approved both by

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88

during the project) must be approved both by

contractor and customer.

� Throughout all phases of the project, the project

manager must emphasize achievement of

customer’s acceptance criteria!


THE CONCEPT

� The Closing Process Group consists of

THE PROCESSES USED TO FORMALLY

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89

1) THE PROCESSES USED TO FORMALLY

TERMINATE ALL ACTIVITIES OF THE PROJECT

OR A PHASE

2) HAND OFF THE COMPLETED PRODUCT TO

OTHERS, OR

3) CLOSE A CANCELLED PROJECT


THE CONCEPT

� The Closing Process Group (when completed)

verifies

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90

verifies

1) THAT THE DEFINED PROCESSES ARE

COMPLETED WITHIN ALL PROCESS GROUPS

TO CLOSE THE PROJECT OR A PHASE!

2) FORMALLY ESTABLISHES THAT THE

PROJECT OR PHASE IS FINISHED!


THE CONCEPT

� The Closing Process Group processes

Close Procurements CLOSE PROJECT or phase

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1) COMPLETION AND

SETTLEMENT OF THE

CONTRACT,

2) RESOLUTION

OF OPEN ITEMS IF ANY

1) GENERATING, GATHERING,

AND DISSEMINATING

INFORMATION TO

FORMALIZE PROJECT OR

PHASE COMPLETION

2) EVALUATING THE PROJECT

3) COMPILING LESSONS

LEARNED FOR USE IN

FUTURE PROJECTS OR

PHASES

Close Procurements CLOSE PROJECT or phase


CLOSE

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92

CLOSE

PROCUREMENTS


CLOSE PROCUREMENTS

SUPPORTS the administrative closure of the project,

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93

SUPPORTS the administrative closure of the project,

as it involves verification that all work and deliverables

were acceptable (contracted work being part of the total

Project)

ENTAILS administrative activities:

1) Updating of records to reflect final results

2) Archiving this information for future use


ADDRESSES each contract applicable to the project

CLOSE PROCUREMENTS

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ADDRESSES each contract applicable to the projector its phase

In multi-phase projects, the term of a contract may

only be relevant to a concerned phase then this

process closes the contract(s) relevant to the phase

CONTRACT terms and conditions can mention:

Specific Procedure for contract closure


EARLY TERMINATION of a contract is a special

CLOSE PROCUREMENTS

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EARLY TERMINATION of a contract is a special

case of contract closure that may happen from:

1) A mutual agreement between the parties

2) Default of one of the parties

Each contract contains “Termination Clause” (in case

early termination) detailing the rights and responsibilities

of the parties


TERMINATION CLAUSE may give buyer the right to

CLOSE PROCUREMENTS

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96

TERMINATION CLAUSE may give buyer the right to

terminate entire contract or its portion “for Cause or

Convenience” at any time!

BUT, the buyer may have to compensate the seller for:

1) Seller’s preparations, and

2) Any completed and accepted work

UNRESOLVED CLAIMS LEAD TO LITIGATION AFTER CONTRACT CLOSURE!


PROVIDES value to the performing organization and

CLOSE PROCUREMENTS

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PROVIDES value to the performing organization and

the customer and must not be ignored under any

Circumstances

ALL CONTRACTS must be closed out no matter the

circumstances under which they come to an end:

1) Whether completed, or

2) Terminated


CLOSE PROCUREMENTS

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UPDATING

RECORDS

• To reflect final results

• To archive it for future use

• Contract performance

• Financial closure

• Contract file

PRODUCT

VERIFICATION

ADMINISTRATIVE

CLOSURE

�Was the work completed

Correctly and Satisfactorily?

�Was the product of the

project same as what was

requested?

� Does it meet the needs?

Close Procurements process overview

INPUTS TOOLS &

TECHNIQUESOUTPUTS


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99

� Procurement

management plan

� Procurement

documentation

INPUTSTECHNIQUES

� Procurement

Audits

� Negotiated

settlement

� Records

management

system

OUTPUTS

� Closed Procurements

� OPAs updates

Close Procurements


Project management plan� Procurement

INPUTS

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00


Provides directions for closing

procurements!

� Procurement

management plan

� Procurement

documentation


Procurement documentationConsists1. Contract INPUTS

Close Procurements

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01

1. Contract

2. Supporting schedules

3. Requested and approved contract changes

4. Seller-developed technical documentation

5. Seller performance reports

6. Financial documents ( invoices, payment

records )

7. Inspection reports concerning the contract

Contract terms may define procedure

for contract closure

and then such procedure has to be followed

� Procurement

management plan

� Procurement

documentation

INPUTS


Procurement audits

STRUCTURED REVIEW

Of

N

O

T

TOOLS &

TECHNIQUES

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02

Of

the entire

procurement process

from procurement planning

through contract administration

LESSONS LEARNED

Identify success and failures

that

GUIDE US on other

procurement items

or to other projects within

the performing organization

OBJECTIVE

T

A

U

D

I

T

O

F

C

O

S

T

S

� Procurement

Audits

� Negotiated

settlement

� Records

management

system


Procurement audits

OTHER SPECIAL ACTIVITES:TOOLS &

TECHNIQUES

17

03

1) Arranging for storage of contract

records and drawings

2) Creating and delivering legal documents

(release of lien documents and formal

acceptance letters)

3) Return of property used on the contract to

its owner

� Procurement

Audits

� Negotiated

settlement

� Records

management

system


Negotiated Settlements

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04

The final equitable settlement of all outstanding issues,

claims, and disputes by negotiation!

Any matter that can not be settled through direct

negotiation may be resolved by Alternative Dispute

Resolution (ADR), including mediation or arbitration.

Lastly, court of law 9although least desirable option).


Records management TOOLS &

TECHNIQUES

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05

Records management

systemWe have discussed it already.

� Procurement

Audits

� Negotiated

settlement

� Records

management

system


Closed ProcurementsBuyer (through authorized contract

Close Procurements

OUTPUTS

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06

Buyer (through authorized contract

administrator) gives Formal Written

notice to seller that the contract has

been completed.

Requirements for contract closure

are defined in the contract terms and

conditions and also included in the

contract management plan.

� Closed

Procurements� OPAs updates


OPAs updates1) Contract file

Close Procurements

OUTPUTS

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07

1) Contract file

� IS THE COMPLETE SET of

indexed records including closed

contract, and it

� IS MERGED with the final project

records.

� Closed

Procurements� OPAs updates


OPAs updates2) Deliverable acceptance

� Written formal notice from buyer to

Contract Closure

OUTPUTS

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08

� Written formal notice from buyer to

seller about deliverables accepted

or not accepted as per contract

terms.


� Lessons learned analysis and

process improvement

recommendations for future

procurement management.

� Closed Contracts

� OPAs updates


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09

ADMINISTRATIVE

CLOSUREADMINISTRATIVE

CLOSURECLOSE

PROJECT or Phase


Close Project or Phase Process

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10

Performing

Close Project portion

Of the project management plan!



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11

For what?

Finalizing all activities completed across all PM Process Groups

to

“Formally close the project or phase”

And transfer the completed project

(or cancelled one) as appropriate.



How do we do it?

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12

How do we do it?

1) Establish procedures to coordinate activities needed to

verify and document the project deliverables

2) Coordinate and interact to formalize acceptance of

those deliverables by customer/sponsor

3) Investigate and document reasons for actions taken if a

project is terminated before completion


Close Project Process

How do we do it?

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13

How do we do it?

We develop TWO PROCESSES for this purpose:

� Administrative closure procedure

� Close procurements procedure



How do we do it?

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14

How do we do it?

� Administrative closure procedure details

- all activities

- interactions, and

- related roles and responsibilities of the project

management team involved in this process



How do we do it?

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15

How do we do it?

� Administrative closure procedure also includes

all activities needed to

- collect project records

- analyze project success or failure

- gather lessons learned, and

- archive project information for future use



How do we do it?

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16

How do we do it?

� Close procurement procedure includes

all activities and interactions needed to

- settle and close any contract done for the project

- define those related supporting activities the formal

administrative closure of the project



How do we do it?

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How do we do it?

� Close procurements procedure involves both

PRODUCT VERIFICATION

- all work completed correctly and satisfactorily

ADMINSTRATIVE CLOSURE

- updating contract records to reflect final results

and archiving for future use



Please remember!

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Please remember!

Early termination of the contract is a special case

of Close procurements

May involve:

1) Inability to deliver the product

2) A budget overrun

3) Lack of required resources


Close Project or Phase process overview


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Plan

� Organizational

process assets

� Accepted Deliverables

INPUTSTOOLS &

TECHNIQUES

� Expert Judgment

OUTPUTS

� Final product, service

or result transition

� Organizational

process assets

(UPDATES)


Close Project process inputs

INPUTS Project management

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20


Plan� Organizational process assets

� Accepted Deliverables

INPUTS Project management

plan

We have already discussed

about it. We take it as an

important input here.


Close Project or Phase process inputs

OPAs providesINPUTS

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21

Project or phase closure

guidelines or requirements

(project audits, project

evaluations, and transitions

criteria).

Historical information and

lessons learned guides

proper closure.


Plan

�Organizational

process assets� Accepted Deliverables

INPUTS


Close Project or Phase process inputs

Accepted Deliverables INPUTS

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22

Accepted Deliverables

Refers to transition of final

product (or case of phase

closure, then intermediate

product).


Plan

� Organizational

process assets

�Accepted

Deliverables

INPUTS


Close Project process tools & techniques

TOOLS & Expert Judgment

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23

TOOLS &

TECHNIQUES

� Expert

Judgment

Expert Judgment

Applied in developing and

performing Used to both the

administrative closure

procedures.


Administrative closure: Three most important things!

Actions and activities to define the stakeholder “Approval

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24

Actions and activities to define the stakeholder “Approval

Requirements” for changes and all levels of deliverables

Actions and activities that are necessary to confirm this,

Verify that all deliverables have been PROVIDED AND ACCEPTED, and validate that completion and exit criteria are met

Actions and activities necessary to satisfy Completion or

Exit criteria for the project


Close Project process outputs

OUTPUTS Final product, service, or

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OUTPUTS

� Final product,

service

or result� Organizational

process assets

(UPDATES)

Final product, service, or

resultFormal acceptance and handover of

the product, service, or result that the

project was authorized to produce.

Receipt of a statement that the terms

and conditions of the contract have

been met!



OUTPUTS OPAs updates

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OUTPUTS

� Final product,

service

or result

� Organizational

process assets

(UPDATES)

OPAs updatesDevelopment of the index and

location of project documentation (using the configuration management

system)

� Formal acceptance documentation

� Project files

� Project closure documentation

� Historical information



OUTPUTS OPAs updates

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OUTPUTS

� Final product,

service

or result

� Organizational

process assets

(UPDATES)

OPAs updates

� formal acceptance documentation

Formal confirmation from customer

or sponsor that customer

requirements and specifications have

been met.

Indicates official acceptance.



OUTPUTS Organizational process

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OUTPUTS

� Final product,

service

or result

� Organizational

process assets

(UPDATES)


assets updates

� project files

Documents resulting from project

management :Project management plan, scope,

schedule, cost and quality baselines,

project calendars, risk registers, planned

risk response actions, and risk impact.




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OUTPUTS

� Final product,

service

or result

� Organizational

process assets

(UPDATES)


assets updates

� project closure documents

Documents indicating completion of

project and transfer of completed

deliverables to others(operations).




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OUTPUTS

� Final product,

service

or result

� Organizational

process assets

(UPDATES)


assets updates

� historical information

Historical information and lessons

learned information are transferred to

the “LESSONS LEARNED

KNOWLEDGE BASE” for future use!

Professional Responsibility

AS PROJECT MANAGEMENT PROFESSIONAL

We should

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1. ENSURE INTEGRITY

2. CONTRIBUTE TO KNOWLEDGEBASE

3. APPLY PROFESSIONAL KNOWLEDGE /

ENHANCE INDIVIDUAL COMPETENCE

4. BALANCE STAKEHOLDER INTERESTS

5. RESPECT DIVERSITY



We should

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Uphold and Support

the integrity and ethics

of

the profession



OUR ACTIONS must always be

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33

In line with

Legal requirements

and

Ethical standards



We must always

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Uphold the needs of

the Project Stakeholders

and the part of the Society

impacted by our projects


ENSURE INTEGRITY

Of

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The Project Management Process

The Project’s Product

Your own Personal Conduct


ENSURE INTEGRITY

Of

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The Project Management Process

� Follow the right process

� You must have a charter

� You must have a WBS

� Project manager must have clear and adequate authority

� You should not compromise on applying all the concepts,

tools and techniques we have been discussing about during

this course


ENSURE INTEGRITY

Of

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The Project’s Product

A product that has integrity is the one

that is complete and sound, or fit for use.

The correct application of

project management processes

will ensure it.


ENSURE INTEGRITY

Of

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� Do not put personal gain over the needs of the project

� Tell the truth in reports, conversations and other communications

� Follow copyright and other laws

� Do not divulge company data to unauthorized parties

� Value and protect intellectual property


ENSURE INTEGRITY

Of

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� Prevent conflicts of interest or appearance of conflicts of interest

and deal with them as they happen

� Do not give or take inappropriate gifts, favors, or bribes

� Report violations of regulations, laws, ethics, policies, etc.

� Do the right thing and follow the right process


CONTRIBUTE TO KNOWLEDGE BASE

�Share lessons learned from the project with others

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�Share lessons learned from the project with others

� Write articles about project management

� Support education of other project managers and

stakeholders about project management.

� Coach/mentor other project managers.


CONTRIBUTE TO KNOWLEDGE BASE

� Perform research on projects done within your

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organization for the purpose of calculating

performance metrics.

� Perform research to discover best practices for

use of project management and share the findings

with other.


APPLY PROFESSIONAL KNOWLEDGE / ENHANCE, INDIVIDUAL COMPETENCE

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� Professional knowledge means knowledge of project

management practices and the technical knowledge

needed to complete the project (specific to the

application area).

� Train others to use correct techniques.

� Inform stakeholders of correct processes.


APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE

� Constantly look for new information and practices

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43

that will help the organization or its projects.

� Continue to learn about the industry where you

work.

� Stick to the right processes throughout the project.

� Enhance individual competence by increasing and

applying professional knowledge to improve

services


APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE

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44

� Work to understand your personal strengths

and weaknesses.

� Continue to learn.

� Plan your own professional development.


BALANCE STAKEHOLDER INTERESTS

� Determine and understand the needs and objectives of all stakeholders.

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all stakeholders.

� Actively look for competing or conflicting needs and interests.

� Get the team and stakeholders.

� Involved as appropriate and get management involved when team can not resolve conflicting objectives.

� Determine options for fair resolution of conflict.


RESPECT DIVERSITY

� Understand cultural differences

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� Understand cultural differences

� Uncover communication preferences when identifying stakeholders

� Prevent cultural shock by training and advance research


RESPECT DIVERSITY

� Uncover and respect different work ethics and practices

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� Uncover and respect different work ethics and practices of the team members

� Provide training to team members from different cultural backgrounds to help them understand each other

� Follow the practices in other countries as long as they do not violate laws

THE PROJECT MANAGEMENT

WE WISH YOU ALL SUCCESS!

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WE WISH YOU ALL SUCCESS!

AND HOPE

YOU WILL ACHIEVE HIGHER

LANDMARKS!

THE PROJECT MANAGEMENT

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THANK YOU!