Course Book

PMAC
PMAC Consulting Private Limited

Global R.E.P. PMI, USA
presents
ADVANCED PROJECT MANAGEMENT COURSE
IN CONFORMANCE WITH LATEST PMI STANDARDS PMBOK GUIDE-2008, FOURTH EDITION
GOOD MORNING FOLKS!
Welcome
to
the world
of
Project Management
Latest PMI Standards
2
LATEST PMI STANDARDS!
A guide to the Project Management Body of Knowledge (PMBOK Guide) is a recognized standard for the project management profession worldwide!
3
LATEST PMI STANDARDS! The PMBOK Guide provides Knowledge,

Processes, Skills, Tool and Techniques that are 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!
LATEST PMI STANDARDS!
In addition to taking advantage of the 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.
5
Purpose of this Course

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 OBJECTIVES

Upon completion of this course, the students will: 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.

Upon completion of this course, the students will: 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.

Upon completion of this course, the students will: 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!
10
Project forethought
Do you have a vision?

Your personal vision Your functional areas vision Your organizations vision
11
Project forethought
How do you articulate it in the backdrop of todays realities?
12
Project forethought
Backdrop of todays realities?

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
13
Project forethought
Backdrop of todays realities?

A need to introduce new products more rapidly Globalization of markets Social problems, economic problems, political problems A need to lower breakeven point
14
Project forethought Questions to help you articulate your vision?

How can your organization balance the need for radical change with strategic continuity? What will be the new management model for tomorrow, and how it will be different from todays? What role must managers play in the post hierarchical organization of future?
15

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?
16

How can a radically-decentralized organization be created and sustained? As corporations and their networks become increasingly complex, how can they be controlled?
17

How can organizations shift from spreading information around to building knowledge? How to discover better technologies to increase quality of human life on earth?
18
Project forethought Articulating your vision

You can now choose with an end in mind It should be worthy of pursuance Challenging and achievable To make it happen, take up its realization as a PROJECT
19
Project forethought Articulating your vision

You can now choose with an end in mind It should be worthy of pursuance Challenging and achievable To make it happen, take up its realization as a PROJECT
20

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?
21
Project forethought Realizing vision
Needs and aspirations of people are the reasons for organized effort in society. Projects have been taken up since earliest civilizations to fulfill them.
22
Project forethought Projects make it possible

Products Services Infrastructure Monuments Space research War victories Entertainment Media Earnings Growth Etc.
Needs Aspirations Visions Strategies
Projects
Operations provide us benefits of the 23 product of the project on ongoing basis
PM Basics
Fundamental Concepts
24
PM Basics: Fundamental Concepts

We begin our discussion on fundamental concepts under three broad headings: 1. Project Management Framework 2. Project Life Cycle and Organization 3. Project Management Processes
25

PROJECT MANAGEMENT FRAMEWORK What is a project? Projects vs. Operations! Projects and Strategic Planning! What is Project Management? What is a Program? What is a Portfolio?
26

PROJECT MANAGEMENT FRAMEWORK Relationships among Project Management, Program Management, and Portfolio Management! What is a PMO? Role of a Project Manager! PMBOK Guide! Enterprise Environmental Factors!
27
PM Basics
What is a project?
A Project is A TEMPORARY ENDEAVOR undertaken to create A UNIQUE PRODUCT, SERVICE, OR RESULT! Lets understand the definition
28
PM Basics
- What do we mean by the word TEMPORARY? - 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!
29
Lets understand the definition
PM Basics: Understanding Project Characteristics
Temporary means:
- Definite beginning - Definite end - With defined project objectives (scope, time, cost, and quality)
30
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.
31
Temporary does not necessarily mean

Short in duration! Projects can last for several years!! Government of Indias E-governance project is A multi-year project. All that temporary means is that project duration is finite, not ongoing.
32
Temporary does not mean

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
33
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 duration
34
Examples: 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

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.
35
PM Basics: Comprehending Project A project can create: 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).
36
Progressive elaboration is critical to project success

Progressive means proceeding in steps, continuing steadily with increment. Elaboration means worked out with care and detail, developed thoroughly
37
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.
38
Each projects product is unique.

Hence, its characteristics
THAT DISTINGUISH IT
must be
PROGRESSIVELY ELABORATED!
Thats why so much emphasis on processes called: - Identify stakeholders (during initiation) - Collect requirements (during planning)
39

Progressive elaboration is critical to project success!
The distinguishing characteristics
Broadly defined early in the project More explicit and detailed as project progresses
THEN, PROJECT TEAM BEGINS TO GRASP THEM BETTER
40
PM Basics: Progressively elaborated

Product Scope and Project Scope PRODUCT SCOPE
Functions and features characterizing the product or service. COMPLETION Measured against product requirements
PROJECT SCOPE
The work required to be performed to deliver a product bearing specified functions and features. COMPLETION Measured against project management plan
41
Sample Progressive Elaboration

L0 L1
BASIC DESIGN (H) HARDWARE
ABC CARGO LOGON PROJECT

SOFTWARE SPECS (L) FABRICATION SITE OPERATIONS PURCHASE Project Management
L2
DESIGN (I) DRAWINGS (O)
DESIGN (J) DRAWINGS (K)
PART A
DRAWINGS (P) TEST (Z) FINAL
SOFTWARE
PART B
PART A
L3
42
WORK PAKCAGES (H) through (Z)
INSTALLATION (Y)
PART B
ASSEMBLY (V) TEST (X)
ASSEMBLY (U) TEST (W)
PURCHASE (N) DELIVERY (S)
PURCHASE (M) DELIVERY (R)
PURCHASE (Q) DELIVERY (T)
PM Basics
Projects Vs. Operations
43
PM Basics: Projects vs. Operational Work What do organizations do?

1.
ORGANIZATIONS PERFORM WORK to accomplish a set of defined objectives

44
PM Basics: Projects vs. Operational Work
2.
Work can be categorized as either

PROJECTS or OPERATIONS
Sometimes they overlap!
45

What is common to projects and operations?
3.
Performed by people Limited by Constraints, including resource constraint Planned, executed, monitored and controlled Performed to achieve organizational objectives Or strategic plans
46

PROJECTS 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. OPERATIONS
47
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.
PM Basics
Remember: 1. Operations produce same product until the product 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!
48
PM Basics
Remember: 3. At each point, deliverables and knowledge are 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.
49
PM Basics: Comprehending Project Examples
Operation examples
Manufacturing operations Production operations Usage of the product of a project, such as a software application, or using network infrastructure Accounting operations
50
Project examples
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
51
Project examples
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.)
52
PM Basics: Projects and Strategic Planning
Projects and Strategic Planning
53
PM Basics: Projects implement strategy
Projects are are a means to achieve Strategic Plan of an organization!

One or more of the following Strategic Considerations give rise to projects: 1) Market demand 2) Customer request 3) Strategic opportunity/Business Need 4) Technological advance 5) Legal requirements
54
PM Basics: Projects implement strategy
Hence, Projects (within programs or portfolios) are a means by which we achieve organizational goals and objectives within the context of strategic plan!
55
PM Basics: Projects encompass entire organization
Projects
are
-Taken up at all organizational levels - May require few persons to thousands May be undertaken within an organization or involve many outside organizations
56
PM Basics: Hey! Its important

Worldwide concern
YET It is concerning to note

that
only about 34% of all the projects

undertaken globally
SUCCEED!
57

Worldwide concern
This only means that the concept

of
Managing Projects Effectively

is
poorly understood.
58

Addressing the concern
To master the concepts, tools, and techniques

for
Managing Projects Successfully

lets first understand the genesis of PROJECTS!
59
PM Basics
What is Project Management

60
PM Basics : Defining Project Management What is Project Management?
PROJECT MANAGEMENT IS
The application of KNOWLEDGE,
SKILLS, TOOLS AND TECHNIQUES to project activities to meet the Project Requirements!
61
PM Basics
What is Project Management? The project management is accomplished through application and integration of the 42 logically grouped Project Management Processes comprising 5 Process Groups Initiating Planning Executing Monitoring and Controlling Closing
62
THE GIST
Managing a project consists of 3 main items: 1 Identifying requirements! 2 Addressing the various Needs, Concerns, and Expectations of the stakeholdersas the project is planned and executed!
63
THE GIST
Managing a project consists of 3 main items: 3 Balancing competing project constraints, such as: a) Scope, b) Schedule, c) Budget, d) Quality, e) Resources, and f) Risk.
64
PM Basics: Managing a project REQUIRES
Iteration of many of the processes within project management

Because of the existence of and necessity for
Progressive elaboration in a project throughout the Projects life cycle

The more a project management team learns about a project, the better the team can manage to greater level of detail
65
PM Basics: Triple Constraints HOW TO manage the TRIPLE CONSTRAINTS
Time Q Scope
Cost
66
PM Basics: Triple Constraints

Dimensions of TRIPLE CONSTRAINTS
Time Scope Cost
Risk
Quality Customer satisfaction
67
PM Basics: Program, Portfolio

- What is a program? - What is a portfolio? - Relationships among project management, program management, and portfolio management!
68
PM Basics: Project Management Context Wider Perspective of Project Management Project Management exists in a broader canvas: Program Management Portfolio Management
69
PM Basics: Fundamental concepts Project Management exists in 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!
70

Organizational Planning decides prioritization among the projects, having regard to: - Strategic plan - Funding - Risk
This 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).
71

What is a program?
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.
72
PM Basics: Project Management Context Generally, there is a hierarchy of
Strategic plan Portfolio Program Project Subproject
In this hierarchy, a program consists of several associated projects that will contribute to the accomplishment of a STRATEGIC PLAN!
73
PM Basics: Project Management Context Strategic plan Space program Airplane program Portfolio Poverty alleviation program
Program Project A Project B Project C
Subproject
Subproject
Subprojects OFTEN OUTSOURCED Externally, or Internally (to other unit) on the basis: - Single phase, HR Skill requirement, Technology
74
PM Basics: Project Management Context
A PROGRAM 1) extends over a longer period of time horizon. 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.
Program Urban Development Program
Job & Skill Training Small business Consulting Assistance
Projects
75
Housing rehab
Typical Aircraft Weapons System Development Program
Senior Management
Program Management
Comptroller
Data Processing
Field Support
Integration & Testing
Procurement
Aerodynamics project Propulsion Project Structures Project
76
Avionics Project
Programs also entail a series of Cyclical undertakings
Fund Raising Program of Helpage India
Publishing India Today Magazine
A series of Discrete Projects
Project 1 Membership drive Project 2 Advertising Project 3 Corporate Appeal Project n
A program where general operations become MBO
Project 1 Issue January Project 2 Issue February Project 3 Issue March Project n Issue every month
77
DYNAMICS OF Portfolio and Portfolio Management
Portfolio Management
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 Portfolios Strategic Business Objectives. 3. Balance the portfolio AMONG Incremental & Radical investments AND for efficient utilization of resources.
78
Relationships Among Project Management, Program Management and Portfolio Management!

Highest Level Portfolio Lower Level Portfolios Higher Level Programs Higher Level Programs Projects Projects
Lower Level Programs Projects
Projects Low Level Programs Projects
79
Comparison Project Management, Program Management and Portfolio Management! Item

Scope Change
Projects
Defined objectives, progressively elaborated Project Managers expect change, monitor & control them.
Programs
Larger scope, more significant benefits Program Managers must expect change from inside & outside program, and manage. Program Managers develop overall program plan, create hi-level plans for guiding detailed planning at component level
Portfolios
Scope changes with strategic goals Portfolio Managers continually monitor changes in broad environment. Portfolio Managers develop and maintain relevant processes and communication at total portfolio level.
Planning
Project Managers progressively elaborate hi-level info into detailed plans throughout project life cycle
80
Comparison Project Management, Program Management and Portfolio Management! Item

Management
Projects
Project Managers manage the project team for meeting project objectives.
Programs
Program Managers manage program staff and project managers. Provide overall leadership and vision. Success criteria: degree to which program satisfies needs. Program Manager monitors and controls program components
Portfolios
Manage portfolio management staff.
Success
Success criteria: product & project quality, time and cost and degree of customer satisfaction. Project Manager monitors & controls the project work
Success criteria: aggregate performance and value indicators. Portfolio Manager monitors aggregate performance and value indicators
Monitoring
81
PMO
PM Basics: Project Management Context Project Management Office An organizational unit to centralize and coordinate management of projects under its domain. At minimum, PMO provides Project Management Support Functions: 1. Training 2. Software 3. Standardized policies & procedures
82
PMO
Advanced PMOs: 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.
83
PM Basics: Functions of PMO 1) Administer shared and coordinated resources across all projects. 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.
84
PM Basics: Functions of PMO 7) Central coordination of communication across all projects. 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?
85
PM Basics: Functions of PMO
Role Differences:
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.
86
PM Basics: Functions of PMO
Role Differences:
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!
87
PM Basic: Role of a Project Manager

Role The project manager is a person assigned by the 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.
88

Reporting- depends on the organizational structure!! 1) May report to functional manager (functional, matrix organizations). 2) A project manager may one of many other project managers who report to a program or portfolio manager!
89

Success
In addition to area-specific skills and general management 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).
90

Success
For effective project management, the project manager is 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
91
Project Management Body of Knowledge

The PMBOK is the standard for managing: 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!
92

THIS STANDARD: - 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!!
93

THIS STANDARD: Note: this standard does not address all the details of every topic! It contains processes generally recognized as good practice applicable to single 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
94

THIS STANDARD: Note: this standard does not address all the details of every topic! It contains processes generally recognized as good practice applicable to single projects!! Other standards may also be consulted to gain the broader view: - Organizational Project Management Maturity Model (OPM3) for assess project management process capabilities.
95
Enterprise Environmental Factors

We need to consider all the external and internal factors that surround our project! 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.
96

factors
1) 2) 3) 4) 5) 6) 7) 8) Organization culture, structure, and processes Market conditions Government or industry standards Stakeholder risk tolerances Infrastructure Existing human resources and their special skills Personnel administration (staffing, retention, training Work authorization system
97

factors
9) Political climate 10) Organizations 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
98
Project Life Cycle and Organization
1) The Project Life Cycle and Project Phases 2) Project Stakeholders 3) Organizational Influences
99
The Project Life Cycle and Project Phases

10 0
What is a project life cycle?

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!
10 1
PM Basics : Project Life Cycle and Project Phases

Projects are unique undertakings. Involve a degree of uncertainty.
Phase 1
Project
Phase 2
Phase 3
Hence, each project is divided into several phases for better management control and providing for links to the ongoing operations.
10 2
Together, the project phases are called the Project Life Cycle.
Makes sure proper definition of the projects product
Project phases: Sequential Logic

Project Deliverable I Deliverable II Deliverable n
Output of Preceding phase is input to Succeeding phase 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.
10 3
Project phases: What is a deliverable?
DELIVERABLE is A TANGIBLE, VERIFIABLE WORK PRODUCT EXAMPLES 1. A specification, 2. Feasibility report, 3. Detailed design document, or 4. A working prototype
10 4
Project phases: Types of deliverables

1. Product deliverables 2. Project Management Deliverables
End products or the components of end products for which the project is undertaken
Deliverables of the Project management process

(charter, scope statement, plan, baseline, etc.)
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.
PM Basics : Project Phases and Project Life Cycle Phases can be further subdivided into subphases Size, complexity, level of risk, Project and cash flow constraints decide further division of Phase 1 Phase 2 Phase 3 phases into subphases.
Subphase Subphase Subphase
10 6
Each subphase is aligned with defined deliverable (s) for monitoring and control, and are related to primary phase deliverable.
PM Basics : Phase End Review

Completion of each phase marked by review of: 1) Key deliverable, 2) Project performance to date Determine - Should project continue into phase. - Find out errors cost effectively, and correct them if necessary.
Project Deliverable n
Requirements
Design
10 7
Phase end review = R phase exits stage gates kill points
Beware!
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 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!
10 8
PM Basics : Project Phases

Common characteristics of phases
1. When they are sequential 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.
10 9

Common characteristics of phases
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!
11 0

Project phases vital points
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.
11 1

Project phases vital points
4. There is no rigid, single way to define ideal structure for a project. Industry common practices. Some organizations 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
11 2
Typical Sequence of Phases in a PLC

Inputs Phases
Idea Resources
INITIAL
INTERMEDIATE
FINAL
Project Management Outputs
Charter Scope Statement
Plan Baseline
Acceptance Approval Handover
Progress
Project Deliverable
PRODUCT
11 3
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 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.
11 4
PM Basics : Project Phases and Project Life Cycle

BSES Project Project Management
Requirements
Design
Build
Test
Turnover
Project life cycle

START
PLC Characteristics
FINISH
11 5
defines start and finish of the project determines transactional actions at the start and finish of the project
PM Basics : Project life cycle characteristics
Uncertainty and risk are highest in the beginning. 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
11 6

Project life cycle characteristics
Uncertainty of Success AND RISK High
Low
Amount at Stake
11 7
Life Cycle of Project (Time)

Project life cycle characteristics The cardinal principle 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.
11 8
This lays stress proper scope definition to avoid later surprises .

Project life cycle characteristics
High Opportunity to add value
PLC Characteristics 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
Cost of change
Time
11 9
Project life cycle

Project life cycle characteristics COST TO CORRECTION
High
Low
12 0
Requirements / Architecture / Detailed Design / Construction Maintenance.
Life Cycle of Project (Time)

Project life cycle Example: BSES Project
BSES Project Project Management
Requirements
Design
Build
Test
Turnover
Project life cycle All the project phases of a project together determine the project life cycle!
12 1
EXAMPLE 1: Project life cycle and project phases
Percentage complete
CONSTRUCTION PROJECTS
Engineering and major contracts let Project GO decision Full operation
Synthetic Yarn Project
Installation substantially complete
Stage I Stage II
Stage III
Stage IV
Life cycle stages
Stage handoffs
12 2
SOFTWARE PROJECTS EXAMPLE 2: Project life cycle and project phases

Deploy
Operations and production Support
EVALUATE
Test Evaluation Evaluation
IDENTITY
Unit Requirements subsystem Requirements System Requirements
Software Development
Risk Analysis
Business Proof of Requirements Concept Conceptual Design First Build
Second Build Third Build
Logical Design Physical Design Final Design
12 3
CONSTRUCT
DESIGN
Pharmaceutical PROJECT
Drug Discovery Project
EXAMPLE 2: Project life cycle and project phases

Process Development Formulation Stability
Drug Sourcing
Screening Lead Identified
Preclinical IND Workup
File IND
Phase-I Phase-II Clinical Clinical Tests Tests
Phase-III Clinical File Tests IND
Metabolism Patent Process Toxicology Preclinical Discovery Screening Development Ten Plus Years Registration(s) Workup
A P Post Registration P Activity R O V A L

Post Submission Activity
12 4
Project Life Cycle
12 5
Most projects are linked to the ongoing operations of the performing organization 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
12 6
Sequential relationship 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!
Product life cycle

Feasibility Product development Operations
Operation and support
Disposal
12 7
Test and install
Requirements
Construct
Design
Maintenance and support
Project 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.
UPGRADE PRODUCT LIFE CYCLE OPERATIONS
Business plan I D E A
OPRNS PRODUCT
DIV
12 8
Project Lifecycle
INITIAL
INTERMEDIATE
FINAL
DIVESTMENT
PM Basics : Project Management Life Cycle
Project Management Life Cycle Project management life cycle (PMLC) defines what one needs to do to manage the project
PHASE OF PROJECT MANAGEMENT LIFE CYCLE
Initiating, planning, executing, monitoring and controlling, and closing.
12 9
Define Goal
Plan project
Execute plan
Evaluate project
Close project
PM Basics: Project Stakeholders
Project Stakeholders
Individuals and organizations
Actively involved in the project OR Whose interests may be positively or negatively affected by the performance or completion of the project.
13 0
Stakeholders may exert influence over the project, its deliverables, and the project team members!
KEY POINT
The project Manager MUST
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!!!
13 1
Examples of stakeholders
Customers/users Sponsor Portfolio managers/portfolio review board Program managers Project management office Project managers Project team Functional managers Operations management Sellers/business partners
13 2
Key Project Stakeholders
Sponsor
Government Performing organization
Influencers
Top Management
Suppliers Sub Contractors Boss
Project Manager
Project Staff Customers/ user Team members
INFUENCERS in Customer organization
13 3
PMO
Functional department personnel Internal Users

Relationship between stakeholders and the project
Project sponsor
Project Manager
PROJECT
Project Management Team Project team
13 4
Project stakeholders

Stakeholders responsibility and project outcomes
Stakeholders Responsibility and 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
13 5
Project outcomes HIGHLY POSITIVE

Stakeholders responsibility and project outcomes Stakeholders Responsibility and authority
Project Managers who ignore stakeholders

13 6
Project outcomes DAMAGING

Positive / Negative Stakeholders
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 projects 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 projects success
Environmental activists may see projects success leading to environmental hazards.
13 7
Stakeholder Management
THE CHALLENGE
Stakeholders have differing needs, perspectives, and expectations to be managed by the project manager.
13 8
Stakeholder expectations: differing objectives

MARKETING DEPT. High features MANAGEMENT profitable GOVERNMENT Satisfying Government pollution and safety norms TECHNICAL DEPT. State-of-Art Technology, low cost of operation CUSTOMER Cheaper and Long lasting
PRODUCT of PROJECT
13 9
SOCIETY Comfortable and Eco-friendly
FINANCE Low cost of procurement
PM Basics: Project Stakeholders Stakeholder Management

CONCURRENT ENGINEERING
provides
Solution to the problem
of
14 0
differing stakeholder needs, perspectives, and expectations.
PM Basics: Project Stakeholders Stakeholder Management CONCURRENT ENGINEERING

It refers to the combined early efforts of
14 1
designers developers producers salesperson, and other stakeholders
To ensure
That final product of the project satisfies everyone
PM Basics: Project Stakeholders Stakeholder Management

Identify stakeholders 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
14 2
PM Basics: Project Stakeholders Managing Stakeholders

Resolving stakeholder conflicts is major task on the 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!!
14 3
PM Basics: organizational influences Organizational influences on the project
corporations
PROJECT
Healthcare Institutions
14 4
Other Organizations

Maturity of the organization with respect to its: organizational SYSTEMS organizational CULTURE and STYLES organizational STRCUTURE role of PMO in ORGANIZATIONAL STRUCTURES PROJECT MANAGEMENT SYSTEM
14 5
organizational SYSTEMS
Project-based Non-project-based
14 6
Project-based derive their revenue from performing projects engineering/ consultant/ architectural / construction companies, government contractors
14 7
Non-project-based 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
14 8
PM Basics: organizational influences
Performance of work
Organizational Culture
organizational CULTURE and STYLES

Values, norms, beliefs, and expectations (shared within organization) Work ethics and work hours Policies and procedures View of authority relationships
14 9
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 humancentered, etc.
REAL LIFE EXAMPLES
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.
15 0
3) HCL Corporation has participatory culture, it can not accommodate anybodys authoritarian style.
PM Basics: organizational influences organizational STRCUTURE

Constraints the availability of
resources
Functional to Projectized
MATRIX
Functional
15 1
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 !
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 !!!
15 2
Impact of organizational structure FORMS OF ORGANIZATIONAL STRUCTURE

WEAK MATRIX Functional BALANCED MATRIX STRONG MATRIX PROJECTIZED
15 3
COMPOSITE
Functional Structure
MOST COMMON / TRADITIONAL FORM Organization is structured by functions: Marketing, Engineering, Manufacturing, Finance, HR. Each one works as separate entity with managers and subordinates.
15 4
organizational STRCUTURE
Project coordination Functional Manager A
Functional
Staff engaged in project work
CEO
Functional Manager B
EXAMPLE
A PRODUCT DEVELOPMENT PROJECT Design phase called design project by engineering department Communication through heads of departments only
Functional Manager C
Staff Staff Staff
Staff Staff Staff
Staff Staff Staff
15 5
ADVANTAGES DISADVANTAGES
15 6
1) Easier management of functional specialists. 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.
1) More emphasis on functional specialty to 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: All organization is by projects. The project manager has total control of projects. Team members are collocated Most organizations resources assigned to project work
15 7
Project coordination Project Manager A
Projectized
CEO
Project Manager B
IDEAL
Project Manager Sole Authority Departments report directly to the Project Manager or provide support services
Project Manager C
Staff Staff Staff
Staff Staff Staff
Staff Staff Staff
15 8
ADVANTAGES
DISADVANTAGES
15 9
1) Project manager has ultimate authority over the project. 2) Loyalty to the project. 3) More effective communication than functional. 4) Team members are collocated
1) No home for project 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. MATRIX: best of both organizational structures.
16 0
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:
WEAK MATRIX
BALANCED MATRIX
STRONG MATRIX
16 1
WEAK 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. 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.
16 2
Matrix Structure
organizational STRCUTURE CEO
Functional Manager A Functional Manager B
Weak matrix
Staff
Project coordination
Staff Staff Staff
Staff Staff Staff
Staff Staff
16 3
BALANCED MATRIX
Matrix Structure
Balanced matrix- The power is balanced between 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 managers position.
16 4
Most organizations are Balanced Matrix these days!
Matrix Structure
Functional Manager A Functional Manager B
Balanced matrix
Staff
Staff Staff Staff
Staff Staff Staff
Staff
Project Manager
16 5
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
Manager of Project Managers Project Manager Project Manager Project Manager Functional Manager A Functional Manager B
Strong matrix
Staff Staff Staff
Staff Staff Staff
Staff Staff Staff
16 7
ADVANTAGES
DISADVANTAGES
Matrix Structure
RELEVANCE FOR PROJECTS 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.
16 8
ADVANTAGES
DISADVANTAGES
Matrix Structure
16 9
Better information flow (both horizontal and vertical) than functional. Team members maintain a home, they continue to belong to their respective departments unlike projectized.
Tougher problems with resource allocation. Requires extensive policies and procedures. FMs may have differing priorities than PMs. Higher potential for conflicts and duplication of efforts.
Composite Structure
Composite organization
Project Y Coordination
CEO
Manager of Project Managers Project Manager Project Manager Project Manager Functional Manager A Functional Manager B
Staff Staff Staff
Staff Staff Staff
Staff Staff Staff Staff
Project X coordination
17 0
Organizational structure influences on project

Structure
Matrix Functional Projectized

Weak
Little or none Limited
Features Project Manager Power Resource Availability Budget Control Role of Project Manager Administrative Staff
Balanced
Low to Moderate Moderate Mixed Full time on projects Full time on projects
Strong
Moderate to High Moderate to High Project Manager Full time on projects Full time on projects FULL AUTHORITY ALMOST TOTAL Project Manager FULL TIME ON PROJECTS FULL TIME ON PROJECTS
Little or none Functional Manager Part time Part time on
Limited Functional Manager Part time On projects Part time On projects
17 1
Organization Process Assets

OPAs help us throughout the project!
1. Corporate Knowledgebase 2. Policies, Processes and Procedures
17 2

1. Corporate Knowledgebase
- 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.
17 3

2. Policies and Procedures
- organization's policy and procedures for conducting work 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..
17 4

2. Policies and Procedures
- organization's policy and procedures for conducting work 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.
17 5
PM Basics
Project Management Processes
17 6
PM Basics: Project Management Knowledge Areas
PM Basics: Last Leg! 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!
17 7
Project Management Knowledge Areas

Describe Project Management Knowledge and Practice in terms of THEIR COMPONENT PROCESSES.
9 Knowledge Areas!
17 8
17 9
o Integration o Scope o Time o Cost o Quality o Human Resource o Communications o Risk o Procurement
WHY
NINE
KNOWLEDGE AREAS?

Project Integration Management Develop Project Charter Develop Project Management Plan Direct and Manage project execution Monitor and control project work Perform Integrate change control Close project or phase Collect requirements Define scope Create WBS Verify scope Control scope
Supports various elements of project management which are identified, defined, Combined and coordinated
Project Scope Management
18 0
To ensure project includes all the work required and Only the Work needed to complete project Successfully

Project Time Management
To ensure timely completion of the project
Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Control Schedule
Project Cost Management
18 1
Planning, controlling, and managing costs so that project is completed within approved Budget
Estimate Costs Determine budget Control Costs

Project Quality Management
To ensure project will satisfy NEEDS for which it was undertaken

Project HR Management
Plan Quality Perform Quality Assurance Perform Quality Control
18 2
To make most effective use of people involved with the project
Develop Human Resource plan Acquire project team Develop project team Manage project team

Project Com. Management
To ENSURE TIMELY and APPROPRIATE generation, collection, dissemination, Storage and disposition of the PROJECT INFORMATION
Identify Stakeholders Plan Communications Distribute Information Manage stakeholders expectations Report Performance
Project Risk Management
18 3
Concerned with identifying, analyzing, and responding to project risks
Plan Risk Management Identify Risks Perform Qualitative risk analysis Perform Quantitative risk analysis Plan Risk responses Monitor and control Risks

Project Procurement Management
To acquire material, goods and services outside performing organization To meet project scope
Plan procurements Conduct procurements Administer procurements Close procurements
18 4
PM Basics
So, here we come! We will now deal with Project Management Processes
Just a foundation Project Processes talk Process Groups at the outset! Process Interactions Customizing Process Interactions Mapping of Project Management Processes
18 5
PM Basics: Project Management Processes
1) 2)
3) 4)
18 6
Project Team must: Select right processes within the process groups. Use defined approach to adapt product specs and plans to fulfill PROJECT and PRODUCT Requirements. Adhere to the requirements to fulfill the needs, wants, and expectations of the stakeholders. 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: 1) Initiate 2) Plan 3) Execute 4) Monitor and control, and 5) Close a project.
18 7
PM Basics: Project Management Processes Project Processes What is a process?

A set of interrelated actions & activities PERFORMED To accomplish A pre-specified set of products, services, or results
18 8

Project processes are performed by the project team and consist of two main categories:
1)
Project Processes
Project Management Processes
18 9
2)
Product-oriented Processes
PM Basics: Project Management Processes 1) Are common to most projects most of the time. 2) Are related with each other by their performance for an integrated purpose of initiating, planning, executing, monitoring and controlling, and closing a project!
19 0
3) These processes interact with each other in complex ways (discussed a little later).
PM Basics: Product-oriented Processes 1) Specify and create projects product. 2) Are typically defined by the respective project life cycle. 3) Vary by application area!
Both project management processes and product-oriented processes overlap throughout the project.
19 1
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 effort Any action or lack of it in one area affects other areas Scope, Time, Cost, Quality, Risk, etc. A change in scope Always Though, it may or affects may not affect product quality or morale of the team Project cost
19 2
PM Basics: Project Processes SOME TRUTHS! Project processes interactions require trade offs among project objectives (scope, time,
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
19 3
(we have already discussed it).
PM Basics: PM Process Groups
Initiating Process Group Authorizes the project or phase
19 4
Planning Process Group 1) Establish the scope of the project, 2) Refine the objectives, 3) Define the course of action for attaining the objectives.
19 5
PM Basics: PM Process Groups Executing Process Group Complete the work defined in the project management plan to satisfy the project specifications! Coordinates people and resources.
19 6
Monitoring & Controlling Process Group - Track, review, and regulate the progress and performance of the project. - Manage changes to the project management plan
19 7
PM Basics: PM Process Groups Closing Process Group - Finalize all activities across all Process Groups to formally close the project or phase. - Brings it to an orderly end.
19 8
Project Management Process Groups INTERACTIONS
PM Basics: Project Management Process Groups

Charter Initiating Process For Project Plan updates Controlling Process Correctly Produced deliverables for formal acceptance Work results Implemented Corrective actions Closing Process Planning Process PM process groups are linked by their outputs. Output of one is input to another . Project Plan
Recommended Corrective actions
Executing Process
19 9
Project Process Groups Interactions: HIGH LEVEL

Culture, PMIS, HR Pool
SOW
INITIATING Process Group
Organization Environmental factors

Defined work processes, Knowledge base
CONTRACT
Project Charter
Project Initiator of Sponsor
Organizational Process assets
PLANNING Process Group Project PLAN EXECUTING Process Group Deliverables MONITORING & CONTROLLING Process Group APPROVED DELIVERABLES Final product
Org. process assets updates
20 0
Customer
CLOSING Process Group
Administrative & contract closure
Project Management Process Groups overlapping in a phase

ExecutingControlling Closing Process Process Process Initiating Process Group Planning Process Group Group Group Group
Level of activity
Executing Planning process Process Initiating Process Controlling Process
Closing Process
PM process groups overlap and occur at various levels of intensity throughout each Project Phase. They are not one-time, discrete events!
20 1
Phase Start
time
Phase Finish
Project Management Process Groups cross phases

Closing one phase offers input to initiating the next phase!
Design phase Output: Design document Serves as product description for Execution phase Execution phase
Later Phases
Prior Phases
20 2
Output: Design document requiring customer acceptance

Project Management Process Groups
Why repeat initiation process at the beginning of each phase?
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!
20 3

Project Management Process Groups PM Process Groups
Planning processes
Initiating Processes
Controlling Processes
20 4
Executing processes

Project boundaries
Project boundaries
Planning processes
Project
Project Project Initiator Inputs Sponsor Controlling Initiating Processes Processes
Deliverables
End User
20 5
Project Records
Executing processes
Process Assets
INITIATING PROCESSES
INITIATION PROCESS GROUP

INTEGRATION Planning process group Executing process group Monitoring & controlling process group
Develop Project Charter
COMMUNICATION
20 6
Identify stakeholders
INITIATING PROCESS GROUP THE PURPOSE Facilitates formal authorization to begin a new project or phase. Done outside the projects scope of control. Business needs or requirements are documented. Normally the feasibility is established by evaluating various alternatives and choosing the best one.
20 7
INITIATING PROCESS GROUP WHAT IS DONE HERE? Clear descriptions of project objectives are developed, 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
20 8
3) forecast of resources 4) high-level constraints, assumptions, risks
INITIATING PROCESS GROUP
VERY IMPORTANT Involving stakeholders during initiation
20 9
1) develops Shared Ownership, 2) enhances Chances of Deliverable Acceptance, And 3) Customer/other stakeholders Satisfaction!
Simply put, this process group 1. 2. 3. 4.

21 0
Authorizes/starts a project or phase Defines projects purpose Identifies objectives Empowers project manager to start the project
Please remember this!
PLANNING processes
Purpose of Planning Processes:
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
21 1
PLANNING processes
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
21 2
PLANNING processes
One/more Planning processes revisited
( may be some initiating processes too )
Significant changes throughout Project life cycle
21 3
PLANNING processes
Substantially influence
Parts of the project plan
Updates
from
Approved changes
Provide greater precision
21 4
Costs, schedule, and resource requirements to meet Project Scope
PLANNING PROCESSES (with interactions)

Define scope- Project scope statement Create WBS- Scope baseline Enterprise- OPAs, EEFs 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 Develop Project Management Plan- Proj. Mgt. Plan Direct & Manage Project Execution Monitor & Control Project Work Perform Integrated CC Close project or phase Develop Project Charter- charter Verify scope Control scope Control schedule Control cost Perform QC Report performance Monitor & control Risks Administer procurements
21 5
Project Management Plan
PLANNING PROCESSES
Subsidiary plans
Scope management plan Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communication management plan Risk management plan Procurement management plan
Components
Project baselines
(Scope baseline, Cost baseline, and Schedule baseline)
21 6
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 many iterations to make sure that our plan meets: 1) project objectives 2) is realistic and 3) achievable.
21 7
EXECUTING process group

Perform activities to accomplish project requirements 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
21 8
EXECUTING process group

Issue change request Adapt approved changes into projects scope, plans and environment Manage risks and execute response activities Manage sellers and suppliers Execute approved process improvement activities Collect and record lessons learned
21 9
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: - Approved corrective action to recover variance. - Approved preventive action to reduce chances
of negative consequences of associated project risks.
- Approved defect repair to repair or replace a

22 0
defective component.
EXECUTING PROCESSES
Initiating Process Group
Perform Quality Assurance Acquire Project Team Develop Project Team Manage Project Team
Monitoring & Controlling Process Group
Direct Planning Process Group

and
Manage Project Execution
Distribute Information
Closing Process Group
22 1
Manage Stakeholder Expectations
Conduct procurements
Monitoring & Controlling process group
Main benefit: PROJECT PERFORMANCE IS OBSERVED AND MEASURED

REGULARLY
22 2
TO IDENTIFY VARIANCES FROM THE PROJECT MANAGEMENT PLAN
Monitoring & Controlling process group Consists of processes needed to Track, review, and regulate progress and performance Identify areas where changes to the plan are needed. And initiate such changes.
22 3
CONTROL CHANGES AND RECOMMEND PREVENTIVE ACTION in Anticipation of potential problems
22 4

1. Monitor project activities! 2. Influence the factor that could circumvent integrated change control to ensure only approved changes are executed!
22 5
The project team gets insight into the health of the project ! Highlights areas needing additional care ! Helps monitoring and controlling ENTIRE PROJECT EFFORT !
Monitoring & Controlling process group SAVES THE PROJECT
When variances threaten the project objectives
relevant project management processes within the PLANNING PROCESS GROUP are
REVISITED
22 6
Recommends updates to the project plan rescue the project
Monitoring & Controlling process group SAVES THE PROJECT

A missed activity completion Date needs:
1. Trade-offs between schedule & budget targets 2. Dependence on over time 3. Adjustments to present staffing plan
When variances threaten the project objectives
22 7
Recommends updates to the project plan rescue the project
MONITORING AND CONTROLLING PROCESSES

Initiating Process Group
Verify Scope Control Scope Monitor & Control Project work Control Schedule Control Costs Perform quality control Perform Integrated Change Control Report Performance Monitor & Control Risks Administer Procurements
Planning Process Group
Executing Process Group
22 8
Provides Monitor and Control Project Work
Change requests. Recommended corrective / preventive action. Recommended defect repair.
22 9
FORECASTS.
Provides
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
23 0
CLOSING processes
Consists of processes to Finalize all activities across all PM Process 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
23 1
CLOSING processes
Completion of defined processes within all Process Groups is verified Accomplishment of a project or phase is formally established
23 2
CLOSING processes
Following occurs during project or phase closure: Customer or sponsor acceptance 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.
23 3
CLOSING processes

CLOSE PROJECT or Phase
Monitoring & Controlling Process Group
CLOSE PROCUREMENTS
23 4
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. 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.
23 5
RECAP
Process Group Pyramid
Monitoring & Controlling Processes Planning Processes
Project Process Groups
Initiating Processes
Closing Processes
Project Life Cycle
Executing Processes
Phase
Phase
Phase
Phase
23 6
A WORD OF CAUTION
ALL OF THE PROCESSES AND INTERACTIONS DO NOT APPLY TO ALL PROJECTS OR PHASES! The project manager, along with project team, is always responsible for determining:
23 7
1. What processes are appropriate? 2. What is the appropriate degree of rigor for each process? THIS IS CALLED TAILORING!
A WORD OF CAUTION
EXAMPLES: Customizing process interactions
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.
23 8
A WORD OF CAUTION
EXAMPLES: Customizing process interactions
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.
23 9
recap ABOUT Project Management Processes
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.
24 0
Apart from entire project, each phase is also initiated, planned, executed, controlled, and closed. The output of preceding phase becomes input to the succeeding phase.
24 1
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.
24 2
Mapping 5 PM Process Groups to 9 Knowledge Areas

Process Groups Knowledge Areas
Consists of 3 slides SLIDE 1
INITIATING Develop Project Charter
PLANNING Develop Project Management Plan
EXECUTING
CONTROLLING
CLOSING Close Project or Phase
Project Integration Management
Monitor & Control Direct and Manage Project Project Work Execution Perform Integrated Change Control - Verify Scope - Control Scope
-Collect requirements - Define Scope - Create WBS - Define Activities - Sequence Activities - Estimate Activity Resources - Estimate Activity Durations - Develop Schedule
Control Schedule
24 3

INITIATING
PLANNING Estimate Costs Determine budget Plan Quality
EXECUTING
CONTROLLING Cost control
CLOSING
Project Cost Management Project Quality Management Project HR Management
Perform Quality Assurance
Perform Quality control
Develop Acquire Project Human Resource Team Plan Develop Project Team Manage project team Report Performance
Project Communications Management
Identify Stakeholders Plan Communications
Information distribution Manage stakeholder expectations
24 4

INITIATING
PLANNING - Plan Risk Management - Identify Risks - Perform Qualitative Risk analysis - Perform Quantitative risk analysis - Plan Risk responses Plan procurements
EXECUTING
M and C Monitor And Control Risks
CLOSING
Conduct procurements
Administer Close procurements procurements
24 5
From this mapping, we understand: Where the project management processes fit into both: 1) Nine knowledge areas, and
24 6
2) Five project management process groups
Major project documents
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.
24 7
Project Management

Processes: develop project charter identify stakeholders
24 8
INTIATING PROCESS GROUP

Processes borrowed from PROJECT INTEGRATION MANAGEMENT 1) Develop project charter PROJECT COMMUNICATIONS MANAGEMENT 2) Identify Stakeholders
24 9
Now, project management begins!
Initiating Process Group Initiating a Project

Processes: develop project charter
25 0

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.
25 1

ESTABLISHES A partnership between the performing organization and the requesting organization (or customer in case of external projects)!
25 2

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!

25 3

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!
25 4

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.
25 5

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 6

Needs assessment and feasibility study in some cases precedes initiation.
Initiation is always done Formally. EXCEPTION: Internal service projects
25 7

Develop Project Charter WHO needs this business change? (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?)
The main areas to be addressed in Project Initiation

25 8

Develop Project Charter What are estimated project 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).
The main areas to be addressed in Project Initiation

25 9

Once your organization recognizes a need and decides to respond to it, you have a
Project It involves Selecting a project and Committing organizational resources to it.

26 0
Since every phase is also initiated, the initiation also means authorizing the project to continue to the next phase. But its not so simple!

The project has to support:
a) Your company's Strategic Plan, b) Address management concerns.
But its not so simple
There are many management concerns!

You need to survive and grow in a highly competitive market!!
26 1
You want bigger market share!! You want better (and faster) return on investment!! You want to have a nice public perception!! SO THAT people prefer to buy your products, subscribe to your stocks, consider you a market leader ! Providing best value for money!
26 2

Your organization is already doing something: providing certain products and services through its ongoing operations.
26 3
INITIATION of a project , therefore, provides links with your organizations ongoing work.

Develop Project Charter process overview
INPUTS
Project statement of work Business case Contract (if applicable) Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Expert Judgment
OUTPUTS
PROJECT CHARTER
26 4
Project Integration Management Develop project charter 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.
26 5

HERE, Project SOW indicates: 1) Business need 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 organizations
strategic goals!
26 6

Project SOW indicates a: Strategic plan: all projects must support the organizations strategic goals!
Strategic plan
Projects are the means by which 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.
26 7

Business Case
Describes justification for investment from 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.
26 8

Business Case emerges from one or more of the
following:
a) b) c) d) e) f) g)
26 9
Market demand Organizational need Customer request Technological advance Legal requirement Ecological impacts Social need
Project Integration Management Contract (if applicable)

- Contract becomes input here if the project is
being undertaken for an external customer.
27 0
Project Integration Management: initiation Develop project charter

INPUTS
Enterprise environmental factors

We must consider the influence of all such factors and systems on Projects Success: Government/ Industry standards Infrastructure
27 1

INPUTS

Existing Human Resources Personnel administration
(guidelines to hiring, performance reviews, training history)
27 2
Companys work authorization system

INPUTS

Market conditions Stakeholder tolerances Commercial databases
27 3
(standardized cost estimating data, industry risk study information/ risk databases)

INPUTS

PMIS (automated tool suite like scheduling s/w, configuration management system, information collection and distribution system, or web interfaces to other online systems)
27 4

INPUTS
Organizational process assets

We must consider the influence of all the org. process assets on Projects Success: Organizations Formal/ informal policies, procedures, plans, and guidelines
1)
27 5

INPUTS

We must consider the influence of all the org. process assets on Projects Success: Organizations learning and knowledge from earlier projects
2)
27 6

INPUTS
-

Organizations learning and knowledge from earlier projects like:
Completed schedules Risk data Earned Value data
27 7
Project Integration Management: initiation

1) organizations processes & procedures for conducting work organizational standard processes
safety & health policy project management policy
standard product and project life cycles quality policies and procedures
27 8
process audits improvement targets checklists and standardized process definitions

1) organizations processes & procedures for conducting work (continued) standardized guidelines, work instructions, proposal evaluation criteria and performance measurement criteria Templates
27 9
risk templates WBS templates project schedule network diagram templates

1) organizations processes & procedures for conducting work (continued) guidelines and criteria for framing organizations set of standard processes to meet specific needs of the project organization communication requirements
28 0
specific technology available permitted communication media record retention security requirements

1) organizations processes & procedures for conducting work (continued) project closure guidelines/ requirements
final project audits project evaluations acceptance criteria
financial control procedures
28 1
time reporting required expenditure and disbursement reviews accounting codes and standard contract provisions

1) organizations processes & procedures for conducting work (continued) Issue and defect management procedures
Issue and defect controls Issue and defect identification and resolution Action item tracking
Change control procedures plus steps
28 2
Steps for modifying official company standards, policies, plans, and procedures, or any project documents. And how changes will be approved/ validated.

1) organizations processes & procedures for conducting work (continued) Risk control procedures plus risk categories probability definition and impact, and probability and impact matrix Procedures for approving and issuing work authorizations
28 3

2) organizational corporate knowledge base for 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
28 4

2) organizational corporate knowledge base for 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
28 5

2) organizational corporate knowledge base for storing and retrieving information (continued): 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
28 6
All official company standards, policies, procedures, and Project documents

2) organizational corporate knowledge base for storing and retrieving information (continued): Financial database
Information on labor hours, Incurred costs Budgets Project cost overruns, if any
28 7
Develop Project Charter Process TOOLS AND TECHNIQUES
Develop project charter
Expert Judgment
1) Help assess inputs required to develop the charter 2) Applied to any technical and management details 3) Comprises special expertise from any group or individual
28 8
Sources: - other units within performing organization - consultants - stakeholders (also customers/sponsors) - professional/technical associations - industry groups
Discussion on OUTPUTS Project Charter

OUTPUTS
PROJECT CHARTER
DOCUMENT that formally authorizes a 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
28 9

OUTPUTS
PROJECT CHARTER
29 0
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.
Documents Business Needs, Current understanding of customers needs, or the new product, service or result that is intended to meet!
29 1
Discussion on OUTPUTS
Information in the Project Charter
OUTPUTS
PROJECT CHARTER
1. Project purpose and justification, Measurable project objectives and related success criteria, 3. High-level requirements,
2. 4.
Assigned project manager and empowerment,
5. High-level project description 6. High-level risks
29 2
7. Summary level milestone schedule
Information in the Project Charter
OUTPUTS 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.
29 3
Discussion on INITIATION Constraints

Factor that limit project management teams options 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
29 4
Discussion on INITIATION
Assumptions
Things assumed to be real, true and certain for the purpose of planning.
PROJECT CHARTER
If they do not come true? THEY BECOME RISK
29 5
Discussion on INITIATION EXAMPLES OF Assumptions While planning, you assume:

PROJECT CHARTER
29 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.
Discussion on INITIATION EXAMPLES OF Assumptions

You assume so many things.
PROJECT CHARTER
Must document these assumptions. They impact all areas of planning Are progressively elaborated as project progresses.
29 7
Discussion on INITIATION EXAMPLES OF Assumptions

OUTPUTS
PROJECT CHARTER
During initiation, high-level assumptions are discovered and documented. Assumptions are monitored throughout the project.
29 8
Sample project charter PROJECT TITLE AND DESCRIPTION
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 LEVEL

Vikas Chopra shall be the project manager for this project and have the authority to select his team and determine final project budget.
29 9
Continued
Discussion on INITIATION OUTPUTS

Sample project charter
OBJECTIVES
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 LGs 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.
30 0
Continued
Discussion on INITIATION OUTPUTS

Sample project charter
PRODUCT DESCRIPTION
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.
30 1
SIGNED AND APPROVED: Manas Banerjee, President
CASE STUDY 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:
30 2
CASE STUDY ABC sent RFP to six companies and selected XYZ Designs based on lowest bid. XYZs 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.
30 3
CASE STUDY
30 4
ABC assigned Mr. Bamish Kumar, a seasoned design engineer, to head the project with four engineers. 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
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.
30 5
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 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 didnt mention clearly what prototype would be, and ABC expected much more.
30 6
CASE STUDY
To resolve the issue in of favor ABC, extra money 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.
30 7
CASE STUDY 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.
30 8
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: 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.
30 9
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 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.
31 0
Discussion on INITIATION Lessons learned from the case study:

Ensure that Project has a complete and sound basis 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.
31 1
Discussion on INITIATION Lessons learned from the case study:

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?
31 2
Initiating Process Group Initiating a Project

Processes: identify stakeholders
31 3
identify stakeholders
the process of 1) Identifying all people or organizations impacted by the project. 2) Documenting their interests, involvement,a and impact on project success!
31 4
please remember
It is critical for project success to identify the stakeholders early in the project! AND Analyze their levels of interest, expectations, importance and influence!!
31 5
please develop a strategy

For approaching each stakeholder and determining the level and timing of stakeholders involvement to maximize positive influences and minimize potential negative impacts!
31 6
Please keep reviewing this strategy during project execution!
please classify the stakeholders

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
31 7
Identify stakeholders data flow diagram

Develop project charter

Identify stakeholders Stakeholder Register Collect Requirements
Project charter Procurement Stakeholder Management documents Strategy Plan procurements Enterprise/ organization Enterprise environmental factors OPAs
Plan Communications
Plan Quality
Manage Stakeholder expectations
Identify risks
31 8
Project Communications Management Identify Stakeholders process overview

INPUTS
Project Charter. Procurement Documents Enterprise Environmental Factors Organizational Process Assets
TOOLS & TECHNIQUES

Stakeholder Analysis Expert Judgment
OUTPUTS
Stakeholder Register Stakeholder Management Strategy
31 9

Identify Stakeholders: Discussion on inputs
Project Charter 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.
32 0

Identify Stakeholders: Discussion on inputs
Procurement Documents
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.
32 1
Note: Suppliers are also project stakeholders! Remember this!

Identify Stakeholders: Discussion on inputs Enterprise Environmental Factors - Organizational or company culture. - Government or industry standards.
Do you maintain such OPAs ?
32 2
OPAs do help, you cant deny. See - Stakeholder Register Templates. - Lessons Learned from previous projects. - Stakeholders registers from previous projects.

Identify Stakeholders: Discussion on techniques
There are two ways to identify stakeholders 1. Stakeholder analysis 2. Expert judgment
32 3

Stakeholder analysis the process of systematically gathering and analyzing quantitative and qualitative information TO DETERMINE WHOSE INTERESTS should be taken into account throughout the project!
32 4

Stakeholder analysis identifies 1) Interests, 2) Expectations, and 3) Influence of the stakeholders

32 5
Relates them to the purpose of the project!

Stakeholder analysis identifies stakeholder relationships that can be leveraged to build COALITIONS AND POLITICAL PARTNERSHIPS to enhance the projects chance of success!
32 6

Stakeholder analysis
THE STEPS
Step 1: Identify all Potential Stakeholders. Step 2: Identify Potential impact or support each stakeholder could generate.
32 7
Step 3: Assess how key stakeholders are likely to react.

Identify Stakeholders: Discussion on techniques ARE YOU TRAINED INTO Stakeholder Analysis? IF NOT, THEN THIS PROCESS WILL NOT YIELD YOU MUCH? MANY ARE NOT TRAINED ENOUGH ON THIS ASPECT!!
32 8

Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 1? 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!
32 9

Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 1?
Other stakeholders, you can identify: BY interviewing identified stakeholders EXAPANDING the list until all potential stakeholders are identified!!!
33 0
Project Communications Management HOW DO YOU HANDLE STEP 2? Well, please: 1. Identify the potential impact or SUPPORT each stakeholder can generate. 2. Classify them them to decide an APPROACH STARTEGY!
33 1
Project Communications Management In large stakeholder communities, it is very important to PRIORITIZE THE KEY STAKEHOLDERS! WHY? To communicate and manage their expectations!!
33 2

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!
33 3

Classify them
2) Power influence grid Grouping the stakeholders based on their level of authority (POWER) and their active involvement (INFLURNCE) in the project!
33 4

Classify the
3) Influence/impact grid Grouping the stakeholders based on their active involvement (INFLURNCE and their ability to effect changes to the projects planning or execution (IMPACT).
33 5

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).
33 6
A-H = Stakeholders
EXAMPLE: POWER/INTEREST GRID

High
Power
Keep Satisfied
Manage Closely
C H F
Monitor
Low (minimum effort) D Low
Keep Informed
E
33 7
Interest
High

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!
33 8
Make Stakeholder Register and place all the info!

Identify Stakeholders: Discussion on techniques EXPERT JUDGMENT
Used to ensure Comprehensive Identification and Listing of Stakeholders! Expert judgment can be taken through individual consultations or panel format (focus group, survey).
33 9
Project Communications Management Identify Stakeholders: OUTPUTS 1) Stakeholder Register 2) Stakeholder Management Strategy
34 0
Identify Stakeholders: OUTPUTS
Project Communications Management Stakeholder Register

1. Identification Information Name, position, location, role in project, contact info. 2. Assessment Information Major requirements, main expectations, potential influence, phase of most interest. 3. Stakeholder Classification Internal/external, Supporter/neutral/ resistor, etc.
34 1
Project Communications Management Stakeholder Management Strategy 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.
34 2
Stakeholder Analysis Matrix

Common way to represent Stakeholder Management Strategy. Stakeholder Interests in the project Assessment of impact Potential strategies 1) For gaining support
34 3
2) For reducing obstacles
PROJECT MANAGEMENT Progresses
PLANNING PROCESS GROUP
34 4
PLANNING PROCESS GROUP Consists of PROCESSES performed to: 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. 34
5
PLANNING PROCESS GROUP Question: Is planning on time affair? Answer: No, planning and documentation are iterative and ongoing processes! WHY? Because, 1) as more information or characteristics are gathered and understood, additional planning may be required.
34 6
PLANNING PROCESS GROUP Question: Is planning one time affair? Answer: No, planning and documentation are iterative and ongoing processes! 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. 34
7
PLANNING PROCESS GROUP Question: Is planning one time affair? Answer: No, planning and documentation are iterative and ongoing processes! 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.
34 8
PLANNING PROCESS GROUP Example For some projects, there might be little or no 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.
34 9
Planning Planning Process Group Planning a Project

Processes: Collect requirements Define scope Create WBS Define activities Sequence activities Estimate activity resources Estimate activity durations Develop schedule Estimate costs Determine budget Processes: Processes: Plan quality develop project Develop HR plan management plan Plan communications Plan risk management Identify risks Perform qualitative risk analysis Perform quantitative risk analysis Plan risk responses Plan procurements
35 0
Planning Process group

Project Management Plan and Project Documents explore all aspects of scope, time, 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!
35 1

Project Team should involve all appropriate stakeholders. Updates arising from approved changes revise them. Consequently, these updates provide greater precision in schedule, costs, and resource requirements!
35 2

Since planning process group borrows processes from all nine knowledge areas, we will showcase in brief 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.
35 3
Project Scope Management The Concept The processes required to ensure that the project includes ALL THE WORK REQUIRED (and only the work required) To complete the project successfully!
35 4
Project Scope Management The Concept It is primarily concerned with DEFINING AND CONTROLLING WHAT IS AND IS NOT INCLUDED IN THE PROJECT!
35 5
processes 1) 2) 3) 4) 5)
35 6
Collect requirements Define scope Create WBS Verify Scope 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 absolutely necessary! We need it to guide us on how project scope will be defined, documented, verified, managed, controlled.
35 7
So, we will make it just as we enter planning in the area of scope management!
Collect Requirements
Knowledge Area: Scope Management
35 8
Process Collect requirements the process by which we define and record stakeholders needs for meeting project objectives.
35 9
Projects success is directly influenced by the care taken in capturing project and product requirements!
36 0
Project Scope Management: Collect requirements Requirements mean 1) Quantified and documented needs and 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!
36 1
3) Requirements become foundation of WBS!
Project Scope Management: Collect requirements Requirements means 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.).
36 2

Collect requirements process
INPUTS
Project charter Stakeholder register
TOOLS & TECHNIQUES

Interviews Focused groups Facilitated workshops Group creativity techniques Group decision making techniques Questionnaires and surveys Observations Prototypes
OUTPUTS
Requirements documentation Requirements management plan Requirements traceability matrix
36 3
Project Scope Management: Collect Requirements Discussion on Inputs 1. Project charter provides high-level project 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!
36 4
Project Scope Management: Collect Requirements Discussion on Tools & Techniques 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!
36 5
Conducted on one-on-one basis but may involve Multiple interviewers and interviewees.
Project Scope Management: Collect Requirements Discussion on Tools & Techniques 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!
36 6
Project Scope Management: Collect Requirements Discussion on Tools & Techniques

3. Facilitated workshops a) Focused sessions to bring together key CrossFunctional 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.
36 7
Facilitated workshops: Examples
Project Scope Management: Collect Requirements

JAD (Joint Application Development/Design) Sessions: Users and software developers brought together for 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!
36 8

4. Group Creativity Techniques 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.
36 9

4. Group Decision Making Techniques 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.
37 0
d) Dictatorship: one individual forces decision on the group.

5. Questionnaires & surveys: appropriate when broad 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
37 1

6. Observations: 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!
37 2

7. Prototypes: - 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.
37 3
Project Scope Management: Collect Requirements Discussion on Outputs

1. Requirements documentation: - 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!
37 4
sample
Sample template
37 5
Requirements documentation: sample entries 1) Business need or opportunity to be seized, limitations 2) Business and project objectives for traceability 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).
Sample template
Requirements documentation: sample entries 8) Impacts to other organizational areas 9) Impacts to other entities inside or outside performing organization 10) Support or training requirements 11) Requirements assumptions and constraints
37 6

2. Requirements management plan: 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!
37 7
Sample template
Requirements management plan: sample entries 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!
37 8
c) Authorization levels to approve changes!
Sample template
Requirements management plan: sample entries 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).
37 9

3. Requirements traceability matrix: 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.
38 0
Discussion on Outputs Project Scope Management: Collect Requirements RTM traces requirements to a) Business need, opportunities objectives, and 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
38 1
Discussion on Outputs Project Scope Management: Collect Requirements

RTM contains requirements attributes: a) Unique identifier! 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).
38 2
Define Scope
38 3
Define Scope
Process to prepare a detailed description of 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!
38 4
Define Scope
Please note 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!
38 5
Define Scope
Importance of Scope statement! 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
38 6
4) guides teams work during execution!
Inputs-Tools-Outputs
Define Scope Inputs outputs
Tools and Techniques

1.
1. Project charter 2. Requirements documentation 3. Organizational process assets
1. 2. 3. 4.
Product Analysis Alternative Identification Expert Judgment Facilitated workshops
Project scope statement Project document UPDATES
2.
38 7
Define Scope process: Inputs

1) Project charter 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.
38 8
Define Scope process: Inputs
3) Organizational process assets - Provides policies, templates procedures - Historical information - Lessons learned
38 9
Define Scope: Tools & Techniques

1) Product analysis
Helps translate high-level product descriptions into tangible deliverables. Includes techniques like product breakdown, systems analysis, systems engineering, value analysis, and function analysis.
39 0

2) Alternative identification 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.
39 1

3) Expert judgment Used in developing scope statement 4) Facilitated workshops Used in developing scope statement
39 2
1. 2.
Define Scope: Outputs

Project scope statement
1) Describes, in detail, the projects deliverables, 2) Develops common understanding of the project scope among stakeholders, 3) Contains explicit SCOPE EXCLUSIONS that can help in managing stakeholder expectations,
39 3

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!
39 4
template

Project scope statement contains: 6 items product scope description
progressively elaborates characteristics of the product/service/result described in the charter and requirements documentation.
product acceptance criteria

39 5
defines the process and criteria for accepting completed product.
template

Project scope statement contains: 6 items product deliverables
product deliverables include product of the project and ancillary results, such as project management reports and documentation.
project exclusions
39 6
explicitly stating what is out of scope for the project for properly managing stakeholder expectations.
template

Project scope statement contains: 6 items 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
39 7
assumptions for project scope and potential impact. May also be noted in a separate log.
1. 2.
Project document updates Following documents may be updated: stakeholder register requirements documentation requirements traceability matrix
39 8
CREATE WBS
Knowledge Area: Project Scope Management
39 9
Planning Process Group CREATE WBS

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
40 0
Planning Process Group WBS

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.
40 1

Create WBS
WBS A deliverable-oriented hierarchical decomposition of project work:
to achieve 1. PROJECT OBJECTIVES 2. PRODUCE NEEDED DELIVERABLES to organize and define TOTAL PROJECT SCOPE
Work outside WBS is outside the scope of the project
Creating WBS
40 2

Create WBS
WBS 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
Creating WBS
40 3
Helps stakeholders view Project Deliverables

Create WBS
PROCESS OF SUBDIVIDING MAJOR PROJECT DELIVERABLES

(AS IDENTIFIED IN SCOPE STATEMENT) into
40 4
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
DELIVERABLES FINAL DELIVERABLE (external deliverable)

To be delivered to the customer Subject to customer/ sponsor approval BASED ON PREDEFINED ACCEPTANCE CRITERIA
40 6

Create WBS
DELIVERABLES ORGANIZATIONAL DELIVERABLE

EXPECTED BY SPONSOR/ PERFORMING ORGANIZATION By product of performing project (example: trained engineers, etc.)
40 7

Create WBS
DELIVERABLES PROJECT MANAGEMENT DELIVERABLE

FOR SUCCESSFUL MANAGEMENT OF THE PROJECT
(PROJECT CHARTER, SCOPE STATEMENT, WBS, SCHEDULE, BUDGET, STATUS REPORTS, ETC.)
40 8

Create WBS
DELIVERABLES INTERIM DELIVERABLE

CREATED AS PART OF PRODUCT DEVELOPMENT LIFE CYCLE/ PROJECT MANAGEMENT LIFE CYCLE
( TO ENABLE DEVELOPMENT OF FINAL DELIVERABLES)
40 9

Create WBS Sample deliverable chain
Interim deliverable
Organizational deliverable
Project Start
Interim deliverable
Interim deliverable Interim deliverable
FINAL deliverable
CUSTOMER
FINAL deliverable
Project management deliverable
41 0

Create WBS
DELIVERABLES ARE COMPLETE ONLY WHEN ACCEPTED
HANDS ACCEPTED OFF INSPECTED HANDS OFF INSPECTED
Interim deliverable
IF NOT OK?
Interim deliverable
IF NOT OK?
FINAL deliverable
REWORK
REWORK
41 1

Create WBS
Causes Rework
IMPACT OF POOR WBS
Increases Project Time
Lowers productivity
Lowers Morale
of
workforce
41 2
Increases final project cost due to inevitable changes that spoil project rhythm
Create WBS process overview

INPUTS
Organizational process assets Scope Statement Requirements documentation
TOOLS & TECHNIQUES

Decomposition
OUTPUTS
Work Breakdown Structure WBS dictionary Scope baseline Project document updates
41 3

ILLUSTRATIVE WBS Template (for Defense Material Items)
Aircraft System
Project Management
Systems Engineering Management
Training Equipment Training Facilities Training Services Training
Data Technical Orders Engineering Data Management Data
Air Vehicle
Support Equipment
Organizational Level SE Intermediate Level SE
Facilities Base Buildings Maintenance Facility
Test & Evaluation Mock-ups Operational Test

Developmental Test
Supporting PM Activities
Depot Level SE
Test
41 4
Airframe
Engine
Communication system
Navigation system
Fire control system

Create WBS
Decomposition
process of breaking down major project deliverables or sub-deliverables 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.
41 5

Create WBS
Performing decomposition
KEY POINTS 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.
41 6

Create WBS
KEY POINTS 2. Decomposition of work to lower levels of details ENHANCES the ability: - to plan - to manage THE WORK - to control
41 7

Create WBS
KEY POINTS Beware of excessive decomposition
TOOLS & TECHNIQUES
Decomposition Nonproductive management effort Inefficient Use of Resources Decreased Work Efficiency
41 8
Balance between too little and too much

Create WBS
KEY POINTS 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
41 9

Create WBS
KEY POINTS
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
42 0

Create WBS
KEY POINTS 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
42 1

Create WBS
PERFORMING DECOMPOSITION
TOOLS & TECHNIQUES
Mastering it is critical
to
Decomposition
Proper Scope Definition"
42 2

Create WBS
THE STEPS
STEP ONE Identify major deliverables (including project management deliverables) and associated work by analyzing detailed project statement. Expert Judgment
ALL THE WORK Helps (including Project identify Management Deliverables, Contracted Deliverables)
TOOLS & TECHNIQUES
Decomposition
42 3

Create WBS Performing decomposition THE STEPS
STEP TWO Structure and organize WBS. Major deliverables must correspond the way project will be organized in reality. It may take various forms:
-
TOOLS & TECHNIQUES
Decomposition
42 4
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
PERFORMING DECOMPOSITION: slide A Using major deliverables and subprojects as level 1 Using subprojects (external to project team)
Project
Phase 1
Deliverable 2.1 Deliverable 2.2.1 Work Package 2.2.1.1 Work Package 2.2.1.2 Work Package 2.2.1.3
Phase 2
Deliverable 2.2 Deliverable 2.2.2
Deliverable 3
Deliverable 2.3
Subproject 4
Subproject n
Deliverable 4.1 Deliverable 4.1.1
Deliverable 4.m Deliverable 4.1.x
Deliverable 4.1.2
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
Work Package
4.1.2.1
Work Package 4.1.2.2 Work Package 4.1.2.3
42 5
PERFORMING DECOMPOSITION: slide B Using phases of the project life cycle as level 1
Software Product Release 5.0
Project Management Product Requirements Detail Design Construct
INTEGRATION & TEST
PLANNING
SOFTWARE
SOFTWARE
SOFTWARE
SOFTWARE
MEETINGS
USER Documentation Training Program Materials
ADMINISTRATION
42 6
PERFORMING DECOMPOSITION: slide C Using different approaches within each branch of WBS
Aircraft System
Project Management
Systems Engineering Management
Training Equipment Training Facilities Training Services Training
Data Technical Orders Engineering Data Management Data
Air Vehicle
Support Equipment
Organizational Level SE Intermediate Level SE
Facilities Base Buildings Maintenance Facility
Test & Evaluation Mock-ups Operational Test

Developmental Test
Supporting PM Activities
Depot Level SE
Test
42 7
Airframe
Engine
Communication system
Navigation system
Fire control system

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
42 8

STEP THREE (CONTINUED)
TOOLS & TECHNIQUES
Decomposition
42 9
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.

STEP FOUR Develop and assign identification codes to each component of WBS (a unique identifier): 1) generally a number associated with the organizations 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
43 0

TOOLS & TECHNIQUES
STEP FIVE CORRECTNESS OF DECOMPOSITION This is a very important step!
Decomposition
43 1

Performing decomposition THE STEPS STEP FIVE
TOOLS & TECHNIQUES
Decomposition
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.
43 2

Performing decomposition THE STEPS STEP FIVE
TOOLS & TECHNIQUES
TESTING CORRECTNESS OF DECOMPOSITION
Decomposition
2. Whether decomposition of each deliverable is sufficient for its successful completion?
43 3
If no, then you should add, delete, or refine the components.
WBS
OUTPUTS
Work Breakdown Structure
WBS dictionary Scope baseline Project document updates
Congratulations! 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.
43 4
WBS
OUTPUTS
IS THE FOUNDATION upon which project is built. ALL planning and controlling depends on WBS
43 5
Project Scope Management CHARACTERISTICS OF WBS

OUTPUTS
GRAPHICAL PICTURE of the hierarchy of the project. VISUALIZES the entire project.
43 6

CHARACTERISTICS OF WBS Each descending level 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.
OUTPUTS
43 7

CHARACTERISTICS OF WBS
( CONTINUED)
OUTPUTS
Creates a common understanding of project scope among the stakeholders. Unstructured list of activities does not form WBS. Can be used as template for other projects.
43 8

(continued)
OUTPUTS
43 9
BREAKS DOWN the project work 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.

(continued) OUTPUTS
CREATED with help of the team HELPS prevent changes and work slipping through the cracks
44 0

(continued) OUTPUTS
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
44 1

OUTPUTS
(continued) Each element at each level of the WBS is assigned a unique identifier. This unique identifier is generally a number associated with the organizations 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.
44 2

OUTPUTS
Some project managers choose to note milestones on their WBS. A milestone is a major accomplishment in a project.
EXAMPLE: Completion of a deliverable
44 3
Milestones serve as check points to determine progress. IN MOST CASES, higher levels of WBS can be flagged as milestones.

(continued)
OUTPUTS
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.
44 4

(continued)
Work packages may be subdivided in a subproject work breakdown structure when some scope of work is assigned to another organization
44 5

Create WBS
ACTIVITY DEFINITION COST ESTIMATING
WBS
RESOURCE PLANNING COST BUDGETING
44 6
Risk management planning

WBS dictionary
OUTPUTS
WBS DICTIONARY
(COMPANION DOCUMENT TO WBS)
WBS dictionary
Scope baseline Project document updates
44 7
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

WBS dictionary
(continued)
OUTPUTS
WBS DICTIONARY
WBS dictionary
For each component: 6. 7. 8. 9. Quality requirements Technical references ( facilitate work performance) List of schedule milestones Charge number for a control account
44 8

Create WBS
OUTPUTS
WBS dictionary
(continued)
WBS DICTIONARY
WBS dictionary
For a work package: 10. 11. 12. List of schedule activities Needed resources Cost estimate
44 9

WBS dictionary
(continued)
OUTPUTS
WBS DICTIONARY
WBS dictionary
EACH WBS COMPONENT CROSS-REFERENCED

TO
45 0
OTHER WBS COMPONENTS

GLASS PLANT PROJECT
SAMPLE WBS
EARLIER PHASES
DESIGN PHASE
CIVIL DRAWINGS Architectural Drawings Structural Drawings Mechanical l Drawings
CONSTRUCTION PHASE
LATER PHASES
CIVIL CONSTRUCTION STRCUTURAL CONSTRUCTION MECHANICAL WORK ELECTRICAL WORK
PROJECT MANAGEMENT
PLANNING
MEETING
ADMINISTRATION
45 1
Electrical Drawings Instrumentation Drawings
INSTRUMENTATION WORK PROCESS COMPUTERS/EQPTS.

SAMPLE WBS
Toy project
REQUIREMENTS DEFINITION
GAME SOFTWARE REQUIREMENTS REQUIREMENTS
DESIGN SPECIFICATIONS
SOFTWARE DESIGN HARDWARE DESIGN
PROGRAM MODULES
PROJECT MANAGEMENT
CODE TESTING REQUIREMENTS REQUIREMENTS
DEFINE CHARACTERS DEFINE INSTRUMENTS
DETERMINE LANGUAGE DEFINE SYSTEMS
DESIGN SCREENS DESIGN USE CASES
DESIGN SPEAKERS DESIGN CASE
DESIGN MODULE 1 PROGRAM MODULE 1
DESIGN UNIT TEST DESIGN SYSTEM TEST
45 2

SAMPLE WBS
OS ROLLOUT
PROJECT MANAGEMENT
PLANNING
TRAINING
DEVELPOMENT COURSEWARE
TESTING
PLANNING SCENARIO SIMULATIONS PILOTS LAB
ROLL OUT
IT DEPARTMENT SALES HUMAN RESOURCE EDUCATION ACCOUNTING AAs
DOCUMENTATION
COURSEWARE OPERATIONS VERSIONING ISSUES KNOWLEDGE MANAGEMENT
MEETING
WBT HANDOUTS
ADMINISTRATION
45 3
TUTORIALS

ABC CARGO LOGON PROJECT
BASIC DESIGN (H) HARDWARE SOFTWARE SPECS (L) FABRICATION SITE OPERATIONS PURCHASE
SAMPLE WBS
Project Management
DESIGN (I) DRAWINGS (O)
DESIGN (J) DRAWINGS (K)
PART A
DRAWINGS (P) TEST (Z) FINAL
SOFTWARE
PART B
PART A
45 4
WORK PAKCAGES (H) through (Z)
INSTALLATION (Y)
PART B
ASSEMBLY (V) TEST (X)
ASSEMBLY (U) TEST (W)
PURCHASE (N) DELIVERY (S)
PURCHASE (M) DELIVERY (R)
PURCHASE (Q) DELIVERY (T)
Project Scope Management Scope baseline

OUTPUTS
Work Breakdown Structure WBS dictionary
Scope baseline
Project document updates
Scope baseline consists of three Documents: 1) Scope statement 2) WBS 3) WBS dictionary This baseline will be used to measure our scope performance!
45 5
Project Scope Management Project document updates

OUTPUTS
Work Breakdown Structure WBS dictionary
If approved change requests result from this process, then the requirements document is updated to reflect these approved changes.
45 6

After planning in the area of scope, we talk 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!
45 7

processes 1) 2) 3) 4) 5) 6)
45 8
Define activities Planning Sequence activities Process Estimate activity resources Group Estimate activity durations Develop schedule Control schedule Monitoring and Controlling
Process group
Purpose? Timely completion of the project.

45 9

Please note Some practitioners distinguish the printed project schedule from the schedule data and calculations to make schedule- by referring to the scheduling engine populated with project data as schedule model!
46 0
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 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!
46 1

Please note 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).
46 2

Please note 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.
46 3
It is a subsidiary plan of project management plan

Please note 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.
46 4

Please note 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!
46 5

What produces schedule? Answer: 1) Outputs of time management planning processes, 2) Scheduling methodology, 3) Scheduling tool
46 6
Define Activities
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!
46 7
Activities
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.
46 8
Activities
IMPACT OF ACTIVITIES ON PROJECT OBJECTIVES profound impact because: Activities consume resources, time, produce Deliverables, and determine quality
46 9
Define Activities process overview

INPUTS
Scope baseline Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Decomposition Templates Rolling wave planning Expert judgment
OUTPUTS
Activity list Activity attributes Milestone list
47 0
Define Activities-Inputs
Project Time Management 1) Scope baseline (Scope Statement WBS and
WBS dictionary)
47 1
Project scope statement 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)
Project Time Management WBS: MAIN INPUT 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
47 2
Project Time Management 2) Enterprise Environmental Factors That can be considered here include: - Project Management Information System (PMIS) 3) Organizational Process Assets
- formal/informal activity-related policies,
47 3
procedures and guidelines - historical information on activity list used by similar previous projects.
Project Time Management Define Activities

TOOLS & TECHNIQUES Decomposition
Templates Rolling wave planning Expert judgment
DECOMPOSITION The work packages are subdivided 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.
47 4
Project Time Management The WBS, WBS dictionary, and activity list can be developed either sequentially or concurrently. Involving team members can lead to better and more accurate results!
47 5
Project Time Management Define Activities TEMPLATES 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!
47 6

Define Activities
TOOLS & TECHNIQUES
Decomposition Templates
Rolling wave planning

Schedule activities exist at various 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.

Expert judgment Planning component
47 7

Define Activities
TOOLS & TECHNIQUES
Decomposition Templates
Rolling wave planning Rolling wave planning is 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 Planning component
47 8

Define Activities
TOOLS & TECHNIQUES
Decomposition Templates Rolling wave planning
Expert judgment Project team members/other Experts (experienced and skilled in developing detailed scope statements, WBS and schedules) provide expertise in defining activities.
Expert judgment
Planning component
47 9
Define Activities process: Outputs
ACTIVITY LIST 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!
48 0
Define Activities process: Outputs Activity attributes Extend the description of each activity by 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.
48 1
Define Activities process: Outputs
Activity attributes
When completed they may include:
1) 2) 3) 4) 5)
48 2
6)
activity codes, activity descriptions, predecessor, successor, logical relationships, leads and lags, resource requirements, imposed dates, Constraints, and assumptions.
Define Activities process: Outputs Question: What is the use of activity attributes? Answer: 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.
48 3
template Define Activities process: Outputs
Activity attributes
Identify attributes associated with each schedule activity:
1) 2) 3) 4) 5) 6) 7)
48 4
8)
Activity identifier Activity codes Activity description Predecessor/successor activities Logical relationships Leads and lags Resource requirements Imposed dates, constraints, assumptions
template Project Time Management

Define Activities
OUTPUTS
Activity list
Activity attributes
Activity attributes also include:
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 attributes
Milestone list
48 5

Define Activities
OUTPUTS
Activity list Activity attributes
Milestone list
Identifies all milestones and indicates: Mandatory milestones (in contract) Optional milestones (as per project requirements/historical information) Milestones list is a component of project management plan Milestones are used in schedule model.
Milestone list
48 6

Sequence Activities
IDENTIFYING AND DOCUMENTING INTERACTIVITY LOGICAL RELATIONSHIPS

Among schedule activities FOR DEVELOPMENT OF
48 7
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
Feeling uneasy about sequencing the whole host of

project activities? Dont worry, you dont have to do it all manually! You can choose to:
48 9
Use Project management software Do it by manual method Or use combination of both
Project Time Management Sequence Activities process overview

INPUTS
Project scope statement Activity list Activity attributes Milestone list Organizational process assets
TOOLS & TECHNIQUES

Precedence diagramming method (PDM) schedule network templates Dependency determination Applying leads and lags
OUTPUTS
Project Schedule Network Diagrams Project document updates
49 0
Sequence Activities process: INPUTS
49 1
Project scope statement 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.
Project Time Management Sequence Activities process: INPUTS

no doubt these effects are apparent in the activity list, but product scope description is reviewed for ensuring accuracy.
49 2
Sequence Activities process: INPUTS
Activity list is obviously the main input. 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

49 3
methodology data from project files.
Precedence diagramming method (PDM) 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.
49 4
Precedence diagramming method (PDM)

ACTIVITY Start D A F E G B H C End DEPENDENCY Start Start D, A D F, E F G H C, B
D
START
C
END
49 5
FS network (AOA)
Precludes those activities which can be started when their predecessors are partially complete.
PDM is defined by four types

of precedence relationships:
Finish to start Finish to finish Start to start Start to finish (FS) (FF) (SS) (SF)
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
49 6
PDM
Finish A Furniture move-in to Start B Employee move-in
precedence relationships
49 7
Finish to start The successor activity can begin only when predecessor activity completes. This is the most commonly used relationship.
PDM
Finish A to Finish B
Finish to finish
The successor activity can complete only when predecessor completes.
Lay asphalt
49 8
Paint parking lines
Start A Furniture move-in
to
Start B Employee move-in
PDM
Start to start
The successor can start only when predecessor starts.
49 9
Start A Test new System
to
Finish B Phase-out Old system
PDM
50 0
Start to finish The successor can finish only when predecessor starts. This relationship is rarely used.
PDM dependencies such as Start

to start, finish to finish, and start to finish have not been implemented consistently.
Therefore, if you use them on

50 1
your project management software, they can result in unexpected outcomes.
Project Time Management Schedule Network templates

SIMILAR networks from your past projects can be used to expedite preparing current projects 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.
TOOLS & TECHNIQUES

Precedence diagramming method (PDM)
Schedule network templates

Dependency determination Applying leads and lags
50 2
Schedule Network templates

When 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
50 3
TOOLS & TECHNIQUES

Precedence diagramming method (PDM) Schedule network templates
1) Mandatory dependencies (hard logic) determined by the type of work being

performed. offer physical limitations as the nature of work itself dictates the order of activities.
Dependency determination
Applying leads and lags
50 4
In the Century Cotton Mills example, you cant 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 wavesoldered.
TOOLS & TECHNIQUES

2) Discretionary
dependencies (soft
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.
50 5
Project Time Management 3) External dependencies

TOOLS & TECHNIQUES
50 6
are external to the project and depend on relationship between project activities and nonproject activities. Examples 1) Testing schedule activity on a software project may depend on delivery of hardware from an outside source
Project Time Management 3) External dependencies

TOOLS & TECHNIQUES
50 7
are external to the project and depend on relationship between project activities and nonproject activities. Examples 2) Governmental environmental forecasts may need to be held before site preparation on a construction project.
Leads and lags

TOOLS & TECHNIQUES
Precedence diagramming method (PDM) Schedule network templates Dependency determination
LEAD an overlap in the relationship allowing the successor activity to be scheduled earlier than the predecessor will generally allow. Example In a FS relationship with 5A day lead, the successor B activity begins 5 days before the predecessor has Lead subtracts time finished
50 8
Project Time Management Leads and lags

TOOLS & TECHNIQUES
Precedence diagramming method (PDM) Schedule network templates Dependency determination
LEAD
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).
This can be done by finish to start relationship with 15 days lead time! B
50 9
Lead subtracts time
Leads and lags

LAG a gap in the relationship causes the successor activity to be scheduled later than the predecessor will generally allow. A
51 0
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.
Lag adds time
OUTPUTS
Project Network Diagrams
Project documents updates
PROJECT Schedule NETWORK DIAGRAMS

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.
51 1

Sequence Activities PROJECT NETWORK DIAGRAMS
OUTPUTS
Project Network Diagrams
Project documents updates
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.

Sequence Activities
Project document updated:

1) Activity list updates 2) Activity attributes updates 3) Risk register updates
ACTIVITY LIST UPDATES

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.
51 3
Project Time Management ACTIVITY attributes updates Project document updated:

activity attributes are updated to Include: 1) Activity list updates 1) Defined logical relationships 2) Activity attributes 2) Associated leads and lags updates 3) Risk register If approved change requests resulting from updates activity sequencing affect the activity list,
51 4
then the related items in activity attributes are also updated to include these approved changes!
Project Time Management Risk register updates Project document updated:

1) Activity list updates 2) Activity attributes updates 3) Risk register updates to document critical areas in the schedule like path of convergence or divergence or there may be more than one critical paths!
51 5
FOR EACH ELEMENT AT LOWEST LEVEL OF WBS
WHAT TYPE OF PHYSICAL RESOURCES ARE REQUIRED?
WHEN ARE THEY REQUIRED?
Estimate Activity Resources

IN WHAT QUANTITIES?
TO PERFORM PROJECT ACTIVITIES
51 6
Closely coordinated with cost estimating!

Resources are a projects 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 7

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 8

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
51 9

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
52 0
TO COMPLETE PROJECT ACTIVITIES

Estimate Activity Resources process overview
INPUTS
Enterprise environmental factors Organizational process assets Activity list Activity attributes Resource calendars
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
52 1
Estimate Activity Resources process: INPUTS
Enterprise environmental factors provide 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.
52 2
Activity list identifies activities for which

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.
52 3
Resource Calendars
Helps us know what resources are potentially available (people, equipment, and material) during planned activity period. Resource calendars are developed during
52 4

Expert judgment helps you

Assess inputs to resource planning.
Alternative analysis makes you

identify alternative methods of accomplishing schedule activities, Each one needing:
1) 2) 3)
52 5
4)
Different levels of resource capability/skills Different size/types of machines Different tools (manual or automated) Make or buy decisions

Published estimating data

helps you in estimating resources 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
52 6

Project management software

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
52 7
Project Time Management Bottom-up estimating

Involves breaking up the work within a schedule activity into more detail. Used when a schedule activity cant 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.
52 8

Estimate Activity Resource
Bottom-up estimating
The pattern of resource usage may be influenced by dependencies between activities. Wherever this applies, we reflect it in the resource requirements of the concerned schedule activities.
52 9
Project Time Management Activity resource requirements

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!
53 0

please dont 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!
53 1

Project Document updates

resource types and quantities for each schedule activity is 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!
53 2
RBS
Hierarchical structure of the identified resources by resource category and resource type.
53 3

Estimate Activity Durations ESTIMATING FUNDAMENTALS? 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!
53 4
You should have reliable Network Diagram showing how project will flow from start to finish.
Estimate Activity Durations
ESTIMATING FUNDAMENTALS? 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.
53 5
ESTIMATING FUNDAMENTALS? You should have full understanding of the capabilities of both human and material resources you are going to use for performing project activities.
53 6
53 7
ESTIMATING FUNDAMENTALS? 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.

ESTIMATING FUNDAMENTALS? Project management software does the estimating to the extent it has data with it.
53 8
It can never replace your objective of doing a better job of estimating each time.

ESTIMATING FUNDAMENTALS? 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.
53 9

ESTIMATING FUNDAMENTALS? 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 0
ESTIMATING FUNDAMENTALS? 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.
54 1
54 2
ESTIMATING FUNDAMENTALS? 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 nonwork 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!
ESTIMATING FUNDAMENTALS? Using alternative work period calendar, almost all scheduling software take care of this. Total activity duration = work periods + non-work periods.
54 3
ESTIMATING FUNDAMENTALS? 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
54 4

Estimate Activity Durations PROCESS OF
Estimating schedule activity durations

For inputs to schedules
54 5
Using information: a) Schedule activity scope of work b) Required resource types Please c) Estimated resource quantities remember d) Resource calendars this! e) Resource capabilities

Estimate Activity Durations process overview
INPUTS
Enterprise environmental factors Organizational process assets Project scope statement Activity list Activity attributes Activity Resource requirements Resource calendar
TOOLS & TECHNIQUES

Expert judgment Analogous estimating Parametric estimating Three point estimates Reserve analysis
OUTPUTS
Activity duration estimates Project Document updates
54 6

1)
2) 3)
54 7
Provide duration estimating databases and other reference data, Productivity metrics Published commercial information!

1) 2) 3) 4)
54 8
Provide Historical duration information, Project calendars, Scheduling methodology, and Lessons Learned.
Estimate Activity Duration INPUTS

Provides constraints and assumptions that we do consider while estimating durations.
Examples
54 9
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

Serve as primary inputs.
55 0

55 1
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 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!!
55 2
Project Time Management Resource calendar

-
55 3
composite resource calendar 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.
Expert judgment
team members rely on their knowledge and 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.
55 4
Estimate Activity Durations TOOLS & TECHNIQUES
Expert judgment
Therefore, expert judgment must be combined 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.
55 5
Analogous estimating
THE actual duration of a similar activity completed on 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?

55 6
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 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.
55 7
parametric estimating
Uses a statistical relationship between historical 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
55 8
parametric estimating
Uses a statistical relationship between historical 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
55 9
parametric estimating EXAMPLE

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
56 0
Three-point estimates
1) 2)
Just consider how risky are your original single point estimates? We can improve the accuracy by finding three-point estimates and then take their average: Most likely Optimistic Pessimistic
56 1
3)
tM tO tP
1)
2)
56 2
3)
Most likely: duration considering all resources with their productivity, availability, dependencies on their participants, and interruptions. Optimistic: best case of most likely. Pessimistic: worst case of most likely.
The concept originated with the Program Evaluation 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:
56 3
t E = tO + 4 tM + tP 6
Reserve analysis
1.
56 4
2.
an additional time (known as time buffer, reserve, or contingency) added to the activity duration or elsewhere in the schedule as recognition of schedule risk: A percentage of estimated activity duration, a fixed number of work periods, or As developed by quantitative schedule risk analysis (good)
Reserve analysis
56 5
Please remember! 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!!!
Project Time Management USING Reserve time (contingency) 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.
56 6

USING Reserve time (contingency)
Estimate Activity Durations TOOLS & TECNIQUES
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.
56 7
Project Time Management USING Reserve time (contingency)

Estimate Activity Durations TOOLS & TECNIQUES
HOW should the time buffers be used?

ANSWER
56 8
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 OUTPUTS
Activity duration estimates

Activity duration estimates are quantitative assessments of the likely number of work periods that will be required to complete an activity.
Please note:
56 9
Duration estimates do not include any lags!

Activity duration estimates

Activity duration estimates may 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.
57 0


Activity attributes Assumptions made in developing the activity duration estimates (skill levels and availability)
57 1

Develop Schedule
57 2
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

Develop Schedule
THE KEY WORDS ARE START AND 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.
57 3

Develop Schedule
Please remember this!
57 4
Schedule development is an iterative process 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
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!
57 5

Develop Schedule FREQUENT CAUSES OF PROJECT FAILURE
57 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: Schedule Development

FREQUENT CAUSES OF PROJECT FAILURE The problem emerges during planning and continues 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.
57 7

Develop Schedule process overview INPUTS
Organizational process assets Project scope statement Activity list Activity attributes Project schedule network diagrams Activity resource requirements Resource Calendars Activity duration estimates Enterprise Environmental Factors
TOOLS & TECHNIQUES

Schedule network analysis Critical path method Schedule compression What-if scenario analysis Resource leveling Critical chain method Adjusting leads & lags Schedule Tool
OUTPUTS
Project schedule Schedule data Schedule baseline Schedule Data Project Document Updates
57 8
Develop Schedule - INPUTS Organizational process assets Provide project calendar: A Calendar of working days/shifts that establish the dates on which 1) Schedule activities are worked 2) Schedule activities are idle
57 9
Develop Schedule - INPUTS Project scope statement

Provides constraints and Assumptions that impact development of project schedule. Constraints
FACTORS THAT LIMIT project Management teams options when performing schedule network analysis. Two major categories of constraints used: 1) Imposed dates 2) Key events or major milestones
58 0
Develop Schedule - INPUTS

Develop Schedule

1) Imposed dates on activity start or 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):
58 1
CAN YOU THINK WHY SUCH CONSTRAINTS ?

Develop Schedule
These time constraints

are in response to:
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.)
58 2
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 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).
58 3
Develop Schedule - INPUTS develop Schedule
Assumptions
are the factors we have documented
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!
58 4

We have already discussed and use them for developing schedule: - Activity list - Activity attributes - Project schedule network diagrams - Activity resource requirements - Resource Calendars
58 5
- Activity duration estimates

Develop Schedule TOOLS & TECHNIQUES
Schedule network analysis

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.
58 6

Schedule network analysis

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.
58 7

CPM
Calculating theoretical early 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 ).
58 8

CPM
Calculated ES and EF and LS and LF dates may not be the same on any network diagram. WHY? Because total float (which gives scheduling flexibility) may be: Positive Negative zero
1) 2) 3)
58 9
Develop Schedule- TOOLS & TECHNIQUES CPM

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.
59 0

Develop Schedule
CPM
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.
59 1

Develop Schedule
CPM
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!
59 2

Develop Schedule
CPM
The Critical Path (CP) In any project is the longest full path of activities Any activity on critical path normally has zero float.
4 8 5 7 8
D
Start 6
E
7
G
5
C
End
F
Paths
59 3
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

Develop Schedule
CPM
59 4
Floats (slacks) 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.
Project Time Management Develop Schedule

FORWARD PASS
CPM
CALCULATING FLOAT
1. First, calculate early start and early finish dates: FORWARD PASS 4 8 12 13 14 20
ES EF 1 3
A, 3
START
B, 5
10 11
C, 2
12 15
D, 7
END
1 9
E, 9
F, 2
G, 4
59 5
WE HAVE NOT MARKED THE CRITICAL PATH SO FAR

BACKWARD PASS
CPM
CALCULATING FLOAT
2. Second, calculate late start and late finish dates: BACKWARD PASS
4 8 7 11 12 13 12 13 14 20 14 20
ES EF LS LF
1 3 4 6
A, 3
START
B, 5
10 11 10 11
C, 2
12 15 17 20
D, 7
END
1 9 1 9
E, 9
F, 2
G, 4
59 6
WE HAVE NOT MARKED THE CRITICAL PATH SO FAR

BACKWARD PASS
CPM
CALCULATING FLOAT
3. Now, calculate the float
12 13 12 13 14 20 14 20
ES EF LS LF
FLOAT (F) = LS - ES OR = LF - EF 1 3 4 8 4 6 7 11
A, 3
F=3
START
B, 5
F=3 10 11 10 11
C, 2
F=0 12 15 17 20
D, 7
F=0
END
1 9 1 9
59 7
E, 9
F=0
F, 2
F=0
G, 4
F=5
WE HAVE MARKED THE CRITICAL PATH HERE
Project Time Management CPM

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.
59 8
Project Time Management PERT just need to know

Program Evaluation and Review 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. Navys Polaris Missile System program.
59 9
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.
Project Time Management PERT just need to know PERT

Such 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.
60 0
Pert weighted average = Optimistic + 4 x Most Likely + Pessimistic 6
60 1

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. 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.
60 2
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.
Project Time Management PERT: THREE TIME ESTIMATES

WHO GIVES THREE TMES ESTIMTES?
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.
60 3
PERT: THREE TIME ESTIMATES

Three time estimates are used to calculate the expected time for each activity. OPTIMISTIC = O FORMULAS MOST LIKELY = M
1. EXPECTED TIME
PESSIMISTIC =P
60 4
= O + 4M + P / 6 2. STANDARD DEVIATION of an activity duration (SD) =PO/6 3. VARIABILITY IN THE ACTIVITY COMPLETION TIME (Activity Variance, V) V = (P O / 6 )2

KEY: (0, M, P) Exp. Time, V
PERT: THREE TIME ESTIMATES

OPTIMISTIC MOST LIKEY PESIMISTIC
ESTIMATING ACTIVITY DURATION

( 4, 11, 12 ) 10, 1.78
PROBABILITY
AVERAGE
2 1
6 7 8
( 6, 15, 30 ) 16, 16.00
( 1, 4, 7 ) 4, 1.00
60 5
13
ACTIVITY DURATION TIME IN DAYS
1 ( 3, 12, 21) 4 ( 3, 4, 5 ) 5
12, 9.00 4, 0.11
PERT: calculating expected time

( expected duration, expected value, weighted average)
For an activity: O = 3 days M = 5 days P = 13 days Formula O+4M+P/ 6
Then the expected duration = 3+4(5)+13 /6 = 36 / 6 = 6 days.
60 6
PERT: calculating standard deviation, SD

In present case, SD = 13 3 / 6 or = 10 / 6 = 1.67 days
For an activity: O = 3 days M = 5 days P = 13 days FORMULAS Expected value: O+4M+P/ 6 Standard deviation: PO/6 Hence Expected value = 6 days Standard deviation = 1.67 days
60 7
The range between estimates provides a measure of variability, which allows statistical conclusions regarding probability of project activities completing at particular times.
PERT: calculations
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).
60 8
PERT: calculations
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).
60 9
PERT: points to remember

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.
61 0

REAL LIFE SCENARIO
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?
61 1
REAL LIFE SCENARIO
ICICI Bank Gold Coin Project Solving the riddle:

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 1.
61 2
REAL LIFE SCENARIO

Develop Schedule
ICICI Bank Gold Coin Project- PERT Data worked out by Ms Vaijayanthis team ACTIVITIES
PERT
CALCULATIONS
A
On CP
non CP
B
-
C
-
non CP
D
On CP
E
38 57 45
45.83 3.17 10.05
F
20 32 22 23
1.67 2.79
G
On CP
H
On CP
I
On CP
On CP On CP
Optimistic Pessimistic Most likely Expected Value

Standard Deviation Standard Deviation Squared (SD) 2
10 14 12
12.00 0.67 0.45
8 14 10
10.33 1.00 1.0
5 10 8
7.83 0.83 0.69
3 3 3
3.00 0 0
1 1 1 1.00 0 0
TOTAL Expected Value
102.99 or Say 103 14.98
61 3
TOTAL SD Squared
CONCLUSIONS

Develop Schedule
REAL LIFE SCENARIO
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.
61 4

Schedule compression
shorten project schedule without changing the project scope, to meet schedule constraints, imposed dates, or other schedule objectives. The techniques: 1. Crashing 2. Fast tracking
61 5

1. Crashing
61 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.

2. Fast tracking 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.
61 7

Duration compression example HANDS-ON EXERCISE FOR STUDENTS
From data on two slides, please find out how much it will cost to crash the schedule by 3 weeks!
61 8
Activities A B C D E F
Dependencies A A B C,B D,E
Duration normal 4 THIS IS TO HELP 6 YOU TO DRAW 2 THE NETWORK 2 AND FIND CP 7 6
Slide 1

Duration compression example HANDS-ON EXERCISE FOR STUDENTS Data continues ( duration is in weeks, cost in rupees)
Activity Duration normal Crash duration Normal cost Crash cost Crash cost per week
A B C D E F
4 6 2 2 7 6
2 5 1 1 5 3
10,000 30,000 8,000 12,000 40,000 20,000
14,000 42,500 9,500 18,000 52,000 29,000
2,000 12,500 1,500 6,000 6,000 3,000
61 9
Slide 2
Develop Schedule- Tools & Techniques What-if scenario analysis

Calculating multiple project durations with different set of activity assumptions with the use of simulation techniques: Monte Carlo Analysis
(most common).
62 0
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.
Develop Schedule- Tools & Techniques What-if scenario analysis

What-if Analysis
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.
62 1
Develop Schedule- Tools & Techniques Resource leveling

WE have a schedule of activities. Now, its time to plug in resources because : Techniques like CPM and PERT did not consider resource availability and produced a preliminary earlystart schedule that needs more resources during certain times than available, or needs unmanageable alterations in resource levels.
62 2

WE have a schedule of activities. Now, its 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.
62 3

process of adjusting resource 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 underallocation elsewhere in the project.
62 4

process of adjusting resource 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.
62 5

Other techniques in an event of 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.
62 6
Develop Schedule- Tools & Techniques
Resource leveling
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.
62 7
Resource leveling
Resource leveling produces a RESOURCE-LIMITED SCHEDULE, or RESOURCE-CONSTRAINED SCHEDULE!
62 8
Develop Schedule- Tools & Techniques Critical chain method

Another network analysis technique 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?
62 9

THE STEPS: CRITICAL CHAIN METHOD
A) We find out CP making network diagram with nonconservative estimates (taking required dependencies and
defined constraints as inputs).
63 0
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.
Develop Schedule- Tools & Techniques Applying leads and lags

Leads and lags are adjusted during schedule network analysis to develop a viable schedule. This is particularly important as improper use of leads and lags distorts the schedule.
63 1
Scheduling Tool
Schedule data and information is 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:
63 2
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. SCHEDULE FORMATS
1.
2.
63 3
3.
Project network diagrams (display project logic and critical path activities). Bar charts or Gantt charts (depict activity start and finish dates, estimated durations, and occasionally dependencies). Milestone charts (show start or finish of major deliverables or key external interfaces).
Develop Schedule- OUTPUTS

Project Schedule FORMAT:
16 May 15 Jun CODE ENTRIES 1 May 15 May 16 May DESIGN 30 May 1 Jun 15 Jun CODE UPDATE 16 May 23 May CODE QUERY 16 May UNIT TEST 24 May 30 May UNIT TEST 15 Jun
Project network diagram WITH DATES

16 Jun 30 Jun UNIT TEST 1 Jul 15 Jul
SYSTEM TEST
63 4
WRITE MANUAL

DETAILED SCHEDULE WITH LOGICAL RELATIONSHIPS
Activity identifier
1.1. MB 1.1.1 1.1.1.D 1.1.1. B 1.1.1.T 1.1.1. M1 1.1.2 1.1.2.D 1.1.2.B 1.1.2.T 1.1.2M1 1.1.3 1.1.3.G 1.1.3.T 1.1.3.P 1.1.MF
Activity Description
Provide new product Z deliverable- BEGIN Work package 1- Develop comp 1 Design component 1 Build Component 1 TEST COMPONENT 1 Component 1 COMPLTED Work package 2 develop comp 2 Design component 2 Build component 2 TEST COMPONENT 2 Component 2 COMPLETED Work package 3 Integrate Comps Integrate component 1 & 2 TEST INTEGRATED PRODUCT Z DELIVER PRODUCT Z Provide New Product Z deliverable- FINISHED
Calendar Units
0 67 20 33 14 0 53 14 28 11 0 53 14 32 7 0
Project Schedule Time Frame Period 1 Period 2 Period 3 Period 4 Period 5
ss
63 5
DATA DATE

Project Schedule FORMAT: Bar charts or Gantt charts
Activity A Activity B Activity C Activity D
63 6
Jan
Feb
Mar
Apr
May
Jun

Project Schedule FORMAT: Bar charts or Gantt charts
Activity identifier 1.1 1.1.1 1.1.2 1.1.3 Activity Description Provide New Product Z deliverable Work Package 1 develop component 1 Work Package 2 develop component 2 Work Package 3 Integrate Components Calendar Units Project Schedule Time Frame Period 1 Period 2 Period 3 Period 4 Period 5
120 67 53 53
63 7
Data date

Project Schedule FORMATS: Milestone charts
Activity identifier 1.1. MB Activity Description Provide New Product Z deliverable - BEGUN Component 1 - completed Component 2 - completed Provide New Product Z Deliverable - FINISHED Calendar Units Project Schedule Time Frame Period 1 Period 2 Period 3 Period 4 Period 5
0 0 0
1.1.1. M1 1.1.2. M1 1.1. MF
63 8
Data date
Schedule data
Supporting data for the project schedule Includes (at least)
Schedule milestones Schedule activities Activity attributes All constraints and assumptions Amount of additional data varies by application area.
63 9
Schedule data
Supporting data for the project 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
64 0
Develop Schedule- OUTPUTS Project Document Updates

1) Activity resource requirements 2) Activity attributes 3) Calendar 4) Risk register
Discussion Activity resource requirements: Resource leveling
64 1
Can have a significant effect on preliminary estimates of the type and quantities of resources required.

Discussion Activity resource requirements: if the resource leveling
64 2
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 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.
64 3
Processes involved in planning, estimating, budgeting and controlling costs to complete the project WITHIN APPROVED BUDGET
64 4
Primarily concerned with the cost of resources needed to complete the schedule activities But, project cost management should also consider the effect of project decisions on the Less design reviews can reduce the cost of: project cost at the expense of 1) Using increase in customers operating costs! 2) Maintaining and 3) Supporting the product of the project.
64 5
This broader view of cost management is 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
64 6
Project Cost Management Generally,predicting and analyzing prospective financial performance of the product of the 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.
64 7
Project Cost Management Please remember!

Project cost management is preceded by a planning effort 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.
64 8

The cost management can establish: 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 organizations accounting system. May also include planning package.
64 9

The cost management can establish: 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.
65 0
Project Cost Management Please remember! 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.
65 1
Processes: 1. Cost estimating 2. Cost budgeting 3. Cost control
Estimate Costs process overview
INPUTS
Enterprise environmental factors Organizational process assets Risk Register Human Resource Plan Project Schedule Scope Baseline
TOOLS & TECHNIQUES

Analogous estimating Bottom-up estimating Parametric estimating Project management estimating software Vendor bid analysis Reserve analysis Cost of quality Three Point Estimates Expert Judgment.
OUTPUTS
Activity Cost estimates Basis Of Estimates Project Document Updates.
65 2
Estimate Costs - Inputs 1) Enterprise environmental factors Market conditions: what

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
65 3
Estimate Costs - INPUTS 2) Organizational environmental factors

Provide: 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
65 4
Estimate Costs - INPUTS 3) Human Resource Plan

Project staffing attributes and personal rates, and related rewards/recognition are necessary components for developing cost estimates.
4) Risk Register
should be reviewed to consider risk mitigation costs. Risks, either threat or opportunities, have impact on both activity and overall project costs.
65 5
Estimate Costs - INPUTS
Risk Register
Please remember: As a general rule, when project experiences a negative risk event, the near-term costs of the project will usually increase, and sometimes delay project schedule.
65 6
Estimate Costs - INPUTS 5) Project Schedule

The type and quantity of resources and the amount 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!
65 7
Estimate Costs - INPUTS 5) Project Schedule

Please remember: Activity duration estimates will effect cost estimates:
65 8
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).
Estimate Costs - INPUTS 6) Scope Baseline

A) Scope Statement: provides product 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.
65 9
Estimate Costs - INPUTS 6) Scope Baseline

Most common constraints for projects is a LIMTED 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.
66 0
Estimate Costs Tools & Techniques
Expert Judgment
Cost estimates are influence by numerous variables: 1) Labor rates 2) Material costs 3) Inflation 4) Risk factors, and 5) Other factors. Expert judgment, guided by 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.
66 1
Estimate Costs Tools & Techniques Analogous estimating

is top-down estimating that uses 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.
L1 L2 L3 L4 COST FLOW
66 2
TOP-DOWN TOTAL PROJECT COST
Bottom-up estimating
estimating cost of individual work packages or schedule activities and then rolling them up to higher levels for reporting and tracking purposes. find project cost
66 3
Estimate Costs Tools & Techniques Parametric modeling

Here, we use project characteristics (parameters) in a mathematical model to 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.
66 4
Estimate Costs Tools & Techniques Computerized tools

Widely used to facilitate the process of cost estimation. There 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.
66 5
Estimate Costs Tools & Techniques Reserve analysis

Most cost estimates include contingency for known-unknowns (identified risk). 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 nonschedule activity with zero duration. Place it across the network path. Like at work package level assign it to work package subnet to a zeroduration activity that runs from start to end.
66 6

Most cost estimates include contingency for known-unknowns (identified risk). This overstates the estimate (pessimistic) and needs to be tackled. 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 7

Most cost estimates include contingency for known-unknowns (identified risk). This overstates the estimate (pessimistic) and needs to be tackled. 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.
66 8
Please remember!
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?
66 9
Estimate Costs Tools & Techniques Cost of quality

Considered while developing cost estimates. 1) Cost of prevention 2) Cost of appraisal
if not provided, then incur cost of failure, that is many times of above two.
67 0
Just consider how risky are your original single point estimates? We can improve the accuracy by finding three-point estimates and then take their average: Most likely Optimistic pessimistic
1) 2)
67 1
3)
1)
2)
67 2
3)
Most likely: duration considering all resources with their productivity, availability, dependencies on their participants, and interruptions. Optimistic: best case of most likely. Pessimistic: worst case of most likely.
Estimate Costs OUTPUTS
1) Activity cost estimates

Quantitative approximation of costs 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.
67 3
Estimate Costs OUTPUTS 2) Basis Of Estimates

Document contains: 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
67 4
Estimate Costs OUTPUTS 3) Project Document Updates

may include The Risk register
67 5

Determine Budget
Solution
Issue
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!
67 6

Determine Budget Please remember! COST BASELINE includes all authorized budgets, but EXCLUDES management reserves!!! Please dont forget it! Project budgets constitutes the funds allowed to execute the project. Cost performance is measured against the authorized budget!
67 7

Determine Budget
67 8
REAL LIFE SCENARIO In real life, the cost estimates are made after the Planning Core Processes 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!
Project Cost Management Determine Budget process overview

INPUTS
Activity cost estimates Basis Of Estimates Project Schedule Resource calendars Contracts Scope Baseline OPAs
TOOLS & TECHNIQUES

Cost aggregation Reserve analysis Expert Judgment Historical Relationships Funding limit reconciliation
OUTPUTS
Cost Performance Baseline Project funding requirements Project Document Updates
67 9
Project Cost Management - Inputs

Determine Budget
Activity cost estimates

provide estimates of schedule activities within a work package which are added up to get cost baseline for each work package.
68 0

Determine Budget
Basis Of Estimates
guides 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.
68 1

Determine Budget
Project schedule
provides 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.
68 2

Determine Budget
Resource calendars
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.
Contracts
68 3
Applicable contract info and costs are included while determining the budget.

Determine Budget

-
existing cost budgeting-related policies, procedures, and guidelines, Cost budgeting tools, Reporting formats.
Scope Baseline a) Scope statement: provides formal

68 4
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.

Determine Budget
Scope Baseline
b) Work breakdown structure: provides 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.
68 5
Project Cost Management- Tools & Techniques

Determine Budget
1. Cost aggregation
Activity estimates are added up by work packages. Work package estimates are added up for higher component levels of WBS (control accounts) and finally for the entire project.
68 6

Determine Budget
2. Reserve analysis
Reserve analysis establishes 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.
68 7

Determine Budget
3. Expert Judgment
Judgment provided based upon expertise in an application area, knowledge area, discipline, industry, etc., as appropriate for the activity being performed should be used in determining budget.
68 8
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.
Funding limit reconciliation
Project Cost Management 4. Historical relationships

Any historical relationships that result in 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).
68 9
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.
Funding limit reconciliation
Project Cost Management 4. Historical relationships

Both the cost and accuracy of analogous and parametric models varies widely. They are helpful only when: Historical information used to develop is accurate Parameters used are readily quantifiable Models are scalable.
69 0
Determine Budget- Tools & Techniques 5. Funding limit reconciliation

Expenditure of funds should be reconciled with 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.
69 1
Determine Budget - Outputs
Cost Performance baseline

IT IS A TIME-PHASED BUDGET ONLY. Used for measuring and monitoring the cost performanceactual cost versus allocated cost. Displayed in the form of S-curve
69 2
Determine Budget - Outputs Cost baseline, Cash Flow and Funding

COST BASELINE FUNDING REQUIREMENTS
CUMMULATIVE VALUES
MANAGEMENT RESERVE Difference between the maximum funding And the end of the cost Baseline.
69 3
TIME
Determine Budget - Outputs
Project funding requirements

Total or periodic are derived from cost baseline. May include an additional margin to allow for either early progress or cost overruns.
69 4
Determine Budget - Outputs Project funding requirements

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).
69 5
Determine Budget - Outputs Project document updates

include - risk register - cost estimates - project schedule
69 6
69 7
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
69 8
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!
69 9

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
70 0

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.
70 1

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
70 2
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)

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
70 3
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

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:
70 4

Attention to quality continues even after the project is completed: 1) completely new, or 2) improvements upon existing products and systems
QUALITY PLAN MUST SPECIFY THE MEASURES AND PROCEDURES FOR MONITORING OPERATIONAL PERFORMANCE!
70 5

THE CONCEPT
Quality 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.
70 6

THE CONCEPT
In 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.
70 7

THE CONCEPT
Quality must be planned in, not inspected in.

70 8

THE CONCEPT
No GOLD PLATING. No customer extras, no extra functionality, no higher quality components, no extra scope of work or better performance.
70 9

THE CONCEPT
Low quality is a problem, low grade is not.

71 0

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
71 1

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.
71 2

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).
71 3

THE CONCEPT
A PRECISE MEASUREMENT IS NOT NECESSARILY AN ACCURATE MEASUREMENT! A VERY ACCURATE MEASUREMENT IS NOT NECESSARILY PRECISE!
71 4

THE CONCEPT
IT IS PRIME RESPONSIBILITY OF THE PROJECT MANAGEMENT TEAM TO DECIDE:
71 5
how much precision or accuracy or both are needed

THE CONCEPT
PROJECT QUALITY MANAGEMENT IS COMPATIBLE WITH:
71 6
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
Hence, Modern quality management complements Project Quality Management. Both advocate the same tenets: Customer satisfaction Prevention over inspection Management responsibility Continuous improvement
71 7

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
71 8

THE CONCEPT
CUSTOMER SATISFACTION 2) Fitness for use the product/service MUST satisfy the REAL NEEDS
71 9

THE CONCEPT
PREVENTION OVER INSPECTION THE COST OF PREVENTING MISTAKES IS NORMALLY MUCH LESS THAN THE COST OF CORRECTING THEM (DEMONSTRATED BY
INSPECTION)
72 0

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
72 1

THE CONCEPT
MANAGEMENT RESPONSIBILITY Deming suggested: once the quality issue has hit the floor, or the worker level, the workers have little control
72 2

THE CONCEPT
REAL LIFE SCENARIO
72 3
MANAGEMENT RESPONSIBILITY 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.

THE CONCEPT
CONTINUOUS IMPROVEMENT PDCA (plan-do-check-act) Cycle, defined by Shewhart and modified by Deming, forms the basis for quality improvement
72 4

THE CONCEPT
CONTINUOUS IMPROVEMENT Quality improvement initiatives (TQM, SIX SIGMA) can contribute in improving the quality of both: 1) Project management, and 2) The projects product Process improvement models (Malcolm Baldrige, CMM, CMMI) also provide useful guidance.
72 5

THE CONCEPT 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!
72 6

THE CONCEPT
Project quality management addresses both: Management of the project Management of projects product We MUST succeed in meeting quality requirements for both: a) Project b) Product of the project
72 7
Project Quality Management THE CONCEPT

Our inability to meet quality requirements either of the project or product of the product leads to SERIOUS NEGATIVE IMPACT FOR STAKEHOLDRES.
72 8

THE CONCEPT
Satisfying customer requirements by overstretching 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.
72 9

Processes consist of all the activities of the
performing organization that determine quality policies, objectives, and responsibilities to ensure: PROJECT WILL SATISFY THE NEEDS FOR WHICH IT WAS UNDERTAKEN
73 0

IMPLEMENTS the quality management system
Through: a) The policy b) Procedures c) Processes
OF
Quality Planning Quality Assurance Quality Control
73 1
CONTINUOUS PROCESS IMPROVEMENT ACTIVITIES THROUGHOUT

Standards & Regulations Quality policy Scope statement Product description Other planning outputs I N P U T S t o
Plan Quality
Project management plan
Perform Quality Approved Change requests Assurance Quality control measurements Perform Quality Control
OK deliverables Change requests
Quality management plan Quality metrics Project plan updates Checklists Quality baseline Corrective action Change requests Project plan updates
A P P R O V A L S
73 2
Other Planning Processes
Recommended corrective/ preventive actions/defect repair

Integrated Change control
Plan Quality
The process of Identifying quality requirements and standards for the project and the product and documenting how the project will demonstrate compliance.
73 3
Plan Quality
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.
73 4
WHY?
Plan Quality
BECAUSE
1) 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!
73 5
Plan Quality process overview

INPUTS
Enterprise Environmental factors Organizational process assets Scope Baseline Stakeholder Register. Cost Performance Baseline. Schedule Baseline Risk Register
TOOLS & TECHNIQUES

Cost-benefit Analysis Benchmarking Design of Experiments Cost of quality (COQ) Additional quality planning tools Control Charts Statistical sampling Flowcharting Proprietary Quality Management Methodologies
OUTPUTS
Quality Management Plan Quality metrics Quality Checklists Process improvement plan Project document updates
73 6
Plan Quality - INPUTS 1. Enterprise environmental Factors provide:

-
Standards and regulations Rules, standards, and guidelines specific to the application area, and Working/ operating conditions of the project/ product which may affect quality.
73 7
Plan Quality - INPUTS
2. Organizational process assets

provide: a) Quality policy, procedures and guidelines, b) historical database, and c) lessons learned.
73 8

Quality policy sets the intended direction of a 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.
73 9
3. Scope Baseline.
-
74 0
A. Scope statement: contains the product 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. documents the accepted time phase used to measure cost performance. Quality must be achieved within this time-phased budget.
4. Cost Performance baseline
5. Risk Register
74 1
provides threats and opportunities that may impact quality requirements
6. Schedule Baseline
accepted schedule within which quality parameters should be achieved.
7. Stakeholder Register
identifies stakeholders with a particular interest , or impact on quality.
74 2
Plan Quality Tools & Techniques 1. Cost/Benefit analysis

analyze cost-benefits tradeoffs
Primary benefit of meeting Quality Requirements: BENEFITS

1. 2. 3. 4. LESS REWORK HIGHER PRODUCTIVITY LOWER COSTS INCREASED STAKEHOLDER SATISFACTION
74 3
Plan Quality Tools & Techniques 1. Cost/ Benefit analysis

PRIMARY COST OF PROJECT QUALITY MANAGEMENT ACTIVITIES
COSTS
TRAINING SURVEYS STUDIES APPRAISAL DESIGN REVIEW
74 4
Plan Quality Tools & Techniques 2. Benchmarking

Purpose: To generate ideas for improvements and offer standards to measure performance. Method: We compare the actual or planned projects 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
74 5
Plan Quality Tools & Techniques 3. Design of experiments (DOE)

An analytical technique that identifies the elements, 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.
74 6
Plan Quality Tools & Techniques 4. Cost of quality

Consists of all our costs on efforts to: Achieve product / service quality Ensure conformance to requirements Work resulting from nonconformance to requirements
74 7
Plan Quality Tools & TechniquesPlan Quality Cost of quality

THREE TYPES OF COSTS ARE INCURRED: 1. Prevention costs 2. Appraisal costs 3. Failure costs
74 8

Prevention costs
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
74 9

Appraisal costs
Expended to examine the product or process and make certain that the Requirements are being met. Examples: inspection, testing
75 0

Failure costs
Are the costs incurred when things dont 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
75 1

Failure costs
Are the costs incurred when things dont 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 customers site returns, and customer service costs
75 2
COST OF POOR QUALITY: FAILURE COSTS!
Plan Quality Tools & Techniques
5. Flow charting
It is any diagram that shows logical steps that must be 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,
75 3
fishbone diagrams) show relationship between various factors (causes) to potential problems/effects.
Plan Quality Tools & Techniques 5. Flow charting Cause-and-effect diagrams (Ishikawa
diagrams, fishbone diagrams) show relationship between various factors (causes) to potential problems/effects.
Process flow diagram

75 4

EXAMPLE:CAUSE-AND-EFFECT DIAGRAM
MACHINE PROCESS MATERIAL
TIME
MAJOR DEFECT
ENERGY
PROJECT TEAM
ENVIRONMENT
MEASUREMENT
75 5
System or process flow charts

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.
75 6

EXAMPLE: Process Flowchart
N = No Y = Yes
1. Project Request 2. Compliance Copy 3. Develop Artwork 4. Artwork Approved N Y 5. Change Control for Specs 6. Artwork out for Proofs 8. Package development Review / Approval Y 9. QA Review / Approval N N 7. Vendors make Proofs 10. Approved Proofs back to Vendor 11. SPSECS SIGNED (PACKAGE AND QA) 12. ORDER MATERIAL
75 7
Plan Quality Tools & Techniques 6. Control Charts

Used to determine whether or not process is stable 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.
75 8
For repeatable processes are generally +/- 3 sigma!

A process is out of control when data points cross 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.
75 9

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!
76 0
Plan Quality Tools & Techniques 7. Statistical Sampling: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.
76 1
8. Additional quality planning tools:

76 2
Brainstorming Flowcharting Force field analysis Matrix diagrams Nominal group techniques Affinity diagrams Prioritization techniques
Plan Quality Tools & Techniques 9. Proprietary Quality Management Methodologies

- Six Sigma - Lean Six Sigma - Quality Function Deployment. - CMMI, etc
76 3
Plan Quality OUTPUTS
WOW! We have done so much! Lets examine our outputs.
76 4
Plan Quality OUTPUTS Quality management plan

describes how the project management team will implement its quality policy Details the project quality system that Includes: Organization structure Responsibilities Procedures Processes, and resources
76 5
REQUIRED TO IMPLEMENT
PROJECT QUALITY MANAGEMENT

PROVIDES input to overall project plan Addresses QC, QA, and CONTINUOUS IMPROVEMENT for the project
76 6

MUST include efforts at the front end of 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
76 7
Plan Quality OUTPUTS Quality metrics (Operational definitions)

A quality metrics is an operational definition that describes, in very specific terms 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.
76 8
Plan Quality OUTPUTS Quality metrics (Operational definitions)

A measurement is an actual value. The tolerance defines the allowable variations on the metrics
Example: 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.
76 9
Quality metrics are used in Quality Assurance and Quality Control.
Plan Quality - OUTPUTS Quality Checklists

It is a component specific, structured tool used to 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.
77 0
Plan Quality OUTPUTS

Process improvement plan
details steps for analyzing processes to identify activities which enhance their value.
1)
Process boundaries defining purpose, start and

end of processes, inputs, outputs, data required, process owner, and process stakeholder. Process configuration, a flowchart of process to help analysis with identified interfaces. Process metrics to maintain control over status of processes. Targets for improved performance, guides process improvement activities.
2) 3) 4)
77 1
Plan Quality OUTPUTS Project document updates -
Stakeholder Register. Responsibility Assignment Matrix
77 2
Project Human Resource Management

HR HR HR HR
HR HR
77 3
HR

THE CHALLENGES
Most project managers have considerably more 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.
77 4
HR

THE CHALLENGES
Project mangers role is so central that without it 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!
77 5
HR

THE CHALLENGES Managing people on projects involves: 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).
77 6
HR
Project Human Resource Management THE CHALLENGES

Further, application of these behavioral and HR 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.
77 7
HR

THE CHALLENGES 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.
77 8
HR

Consists of:
processes needed to organize and manage the project 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!
77 9
HR

Whats the difference between project team and project management team ?
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.
78 0
HR
EEFs
Organization Culture and Structure Templates Checklists
Develop HR Plan
HR Requirements
Project managnt. plan
Roles and Responsibilities Project Organization Charts Staffing Management Plan
Develop Project management plan
OPAs
Estimate activity resources Report Performance
Acquire project team

Project staff assignments Resource availability Staffing management plan updates
Develop project team

Performance reports Team Performance assessment
A P Approved Change P requests R Approved corrective/ O Preventive actions V A L S

Project plan management updates Requested Changes Integrated Recommended P Change & C actions control
Direct & manage Project Execution Work Performance reports
78 1
Close project
OPA Updates
Manage project team
HR
Develop Human Resource Plan
Determines project roles, responsibilities, and reporting

relationships. Project roles can be assigned to persons or groups, inside or outside the organization performing the project. The output is staffing management plan that describes:
1) 2) 3) 4) 5)
78 2
6) 7)
How and when team members will be acquired Criteria for releasing them Training needs Recognition & reward plans Compliance considerations Safety issues Effect of staffing management plan on the organization
HR
78 3
Done as part of earliest phases of the 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

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.
78 4

Human Resource Plan documents: - Project roles and responsibilities - Project organization charts - Staffing management plan
(including timetable for staff acquisition and release, training needs, team-building strategies).
78 5

IMPORTANT
Staffing management plan includes

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.
78 6

IMPORTANT consideration should be given to
The availability of or competition for, scarce or limited resources. These resources may be inside or outside the performing organization. Other projects may be competing for same skill sets.
78 7

IMPORTANT
These factors may significantly affect 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!
78 8
Project Human Resource Management Develop Human Resource Plan process view
INPUTS
Enterprise environmental factors Organizational process assets Activity Resource Requirements
TOOLS & TECHNIQUES

Organization charts and position descriptions Networking Organizational Theory
OUTPUTS
Human Resource Plan
78 9
HR
Develop Human Resource Plan INPUTS

Definition of roles and responsibilities on the project is evolved with an understanding of :
1) 2) 3)
79 0
The ways that existing organizations will be involved How the technical disciplines will interact with each other How people currently will interact with one another
HR
Commonly occurring enterprise environmental factors involving organizational culture and structure
1) 2) 3) 4)
79 1
5)
Organizational Interfaces Technical Interfaces Interpersonal Interfaces Logistical Political
HR
Organizational interfaces
1) which organizations / 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
79 2
quite simple).
HR
Project HR Management Project interfaces REAL LIFE SCENARIO

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.
79 3
BSNL Voice Clarity Project at Greater Noida site was a simple in-house project that did not offer such interface complexity.
HR
Technical interfaces
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!
79 4
HR
Technical interfaces
3) Whether transitions from one life cycle phase to another pose unique challenges TECHNICAL INTERFACES EXIST BETWEEN PHASES AS WELL AS WITHIN PHASES
79 5
HR
Project HR Management Project interfaces REAL LIFE SCENARIO
79 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.
HR
Interpersonal interfaces
1)
2) 3) 4)
79 7
5)
What types of formal and informal reporting relationships obtain among the prospective project team members What are their superiorsubordinate relationships What are their supplier-customer relationships What cultural and language differences will impact working relationships among them What levels of mutual trust and respect presently exists
HR
Logistical
how much distance separates project people and units Are project people located in different: 1) buildings 2) time zones 3) countries
79 8
HR
Political
1)
What are the individual goals and agendas of Prospective project stakeholders Which groups and people posses informal power in the areas significant to the project What informal alliances exist
2)
79 9
3)
HR
In addition to these EEFs:

Constraints that limit flexibility of HR Planning: Organization structure Collective bargaining agreements Economic conditions
80 0
HR
Organization structure
80 1
ORGANIZTION STRUCTURE CONSTRAINTS 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.
HR
Collective bargaining agreements

entered between the organizations and labor/other employee groups detail require certain roles and reporting relationships. Remember employee groups are important stakeholders !
80 2
HR
Economic conditions
Hiring, freezes, reduced training funds, or lack of travel budget are examples that can limit staffing options. entered between the organizations and
80 3
HR

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.
80 4
HR

1)
i. ii. iii. iv.
80 5
Templates helps HR planning and include: Project organization charts Position descriptions Project performance appraisals A standard conflict management approach
HR

2)
i. ii. iii. iv.
80 6
v. vi.
Checklists helps HR planning and include: Common project roles and responsibilities Typical competencies Training programs Team ground rules Compliance & safety issues Reward ideas
HR
Activity Resource Requirements

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.
80 7
HR
Develop Human Resource Plan TOOLS & TECHNIQUES
organization charts and position

Mostly three types used to document team member roles and responsibilities: 1) Hierarchical 2) Matrix 3) Text-oriented Objective: Each work package must have
an unambiguous owner and all team member have clear roles and responsibilities!
80 8
HR
Project HR Management Organization chart

Project reporting relationships are 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.
80 9
HR
Project HR Management OBS
Organization breakdown 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.
81 0
HR
Project HR Management RBS
Resource breakdown Structure

Another hierarchical chart that breaks down project by types of resources Helps tracking project costs, aligned with the organizations 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
81 1
HR
Sample RAM using RACI format

PERSON PHASES Vikas Rajiv Shasi Manas Mona Rahul .
Excavation Foundation Frame Walls and ceilings Interior systems
A I I
I A C R I
I R A C C
I C R C I
I C I C I
R C I C A
A R
81 2
R = responsible, A = accountable, C = consult, I = inform
HR
Project HR Management RAMs of larger projects

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!
81 3
HR
Text-oriented format
Role
Text-oriented format
Team member responsibilities that require detailed descriptions can be written here in outline form: Responsibilities, authority, Competencies, qualifications This format is also called: Position Descriptions and RoleResponsibility-Authority forms. Make great templates if updated throughout current project!
Responsibilities
Authority
81 4
HR
Other sections of project management plan

We consider team member responsibilities detailed in other sections of the project management plan: Risk register lists risk owners Communication management plan lists people responsible for communication activities Quality plan lists people responsible for quality assurance and quality control activities
1) 2)
3)
81 5
HR
Networking
For effectiveness of staffing management 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!
81 6
HR
Organization theory (OB)

Informs us on the ways people, 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. Goal-setting Group Dynamics TIP
1)
81 7
2) 3)
HR
Develop Human Resource Plan- OUTPUTS
Human Resource Plan includes:1) Role and responsibility assignments

Role: portion of project for which a person is accountable
Example Project Roles: business analyst, civil engineer, testing coordinator
81 8
Role clarity is vital for project success: - authority - responsibilities - boundaries
HR
Develop Human Resource Plan- OUTPUTS Role and responsibility assignments

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
81 9
HR
Develop Human Resource Plan- OUTPUTS Role and responsibility assignments Responsibility: the work team member is expected to perform to complete project activities
82 0
HR
Develop Human Resource Plan- OUTPUTS Role and responsibility assignments

Competency: Skill and capacity needed to accomplish project activities. Project performance will be adversely affected if team members do not have necessary competencies.
82 1
Must identify mismatches and make up through: training, hiring, schedule changes, or scope changes.
HR
Develop Human Resource Plan- OUTPUTS 2) Project organization chart Graphic display of project team member and their reporting relationships. We have already discussed it.
82 2
HR
3) Staffing management plan

Describes how and when HR requirements will be
met.
Updated regularly during the project to ONGOING

PROJECT TEAM ACQUISITION AND DEVELOPEMNT.
Made as per the project needs:

82 3
- may be detailed or broad - may be formal or informal
Subsidiary part of the project management plan
HR
Develop Human Resource Plan- OUTPUTS Staffing management plan

Contents:
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?
82 4
HR
Staffing management plan

Contents:
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.
82 5
HR

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).
82 6
HR
Sample Resource Histogram

90 80
Staff hours
70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
82 7
Resource Usage Staff hours
HR

Contents:
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
82 8
HR

Contents:
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.
82 9
HR

Contents:
83 0
5) Recognition & rewards: Clear criteria and planned system to encourage and reinforce DESIRED BEHAVIORS. Must be based on activities and performance under ones 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

Contents:
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.
83 1
HR

Contents:
83 2
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.
COMMUNICATIONS
83 3
Communication
THE CONCEPT
1. 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
83 4
Communication
THE CONCEPT
4. 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.
83 5
Communication
83 6
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
Communication
project communications management provides:

CRITICAL LINKS AMONG PEOPLE AND INFORMATION THAT ARE REQUIRED FOR SUCCESSFUL COMMUNICATIONS
83 7
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
Communication
Everyone involved in the project must understand:
HOW COMMUNICATIONS AFFECT THE PROJECT AS A WHOLE
83 8
Communication

Communication skills (though not same as project communications management) have great significance during Project Communications Management. MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT
83 9
Communication

MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT
IT INVOLVES:
1) 2) 3) 4) 5)
Sender-receiver models Choice of media Writing style Presentation techniques Meeting management techniques
84 0
Communication

Sender-receiver model
MESSAGE FLOW BRIDGE OF MEANING
S E N D E R
DEVELOP ENCODE TRANSMIT IDEA
RECEIVE DECODE ACCEPT USE
3
BRRIERS
R E C E I V E R
MESSAGE FLOW
84 1
8 (FEEDBACK)
Communication

IT REQUIRES 8 STEPS: WHETHER TWO PARTIES TALK, USE HAND SIGNAL, OR EMPLOY SOME OTHER MEANS OF COMMUNICATION
1) 2) 3) 4) 5) 6)
84 2
7) 8)
Develop an idea Encode Transmit Receive Decode Accept Use Provide feedback
sender end
receiver end
Communication

TWO-WAY COMMUNICATION
Step 1: Develop an idea That sender wishes to transmit. Its 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
84 3
Communication

84 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 its oral, they need to be good listeners. If receiver does not function, the message is lost.
Communication

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 RECEIVERS 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
84 5
Communication

Step 5: Decode
THEY THINK TELLING SOMEONE IS SUFFICIENT, BUT COMMUNICATION CAN NOT PROCEED UNTIL THERE IS UNDERSTANDING.
84 6
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

84 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 messages accuracy b) authority of the sender c) behavioral implications for the receiver
Communication

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.
84 8
Communication

COMMUNICATION BARRIERS 1) Personal barriers:
- human emotions
- values - poor listening habits - differences in education, culture, sex, socioeconomic status
2) Physical barriers:
84 9
- distance - noise - walls - static that interferes with electronic messages
Communication

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
85 0
Communication

Presentation techniques
- body language ( non-verbal 55%) - visual aids
Meeting management techniques:

- set a time limit and keep it
85 1
- 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
Communication

A BREAK DOWN IN COMMUNICATIONS HAS ADVERSE CONSEQUENCE ON THE PROJECT THE PROJECT MANAGERS MUST MASTER THE ART OF COMMUNICATING WITH THE STAKEHOLDRES
85 2
Identify Stakeholders
Plan Communications
Distribute Information Manage Stakeholders Expectations Report Performance
85 3
Communication
Plan Communications
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!
85 4
Communication
Plan Communications
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
85 5
Communication
Plan Communications
Please remember:
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!
85 6
Communication
Plan Communications
Please remember:
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.
85 7
Communication
Plan Communications
Please remember: Plan Communications process is tightly linked with Enterprise Environmental Factors. WHY? Because organizations structure will have a major effect on the projects communication requirements.
85 8
Communication
Project Communications Management Plan Communications process overview

INPUTS
Stakeholder register Stakeholder management strategy Enterprise Environmental Factors Organizational Process Assets
TOOLS & TECHNIQUES

Communication requirements Analysis Communications technology Communication Models Communication Methods
OUTPUTS
Communications Management Plan Project Document Updates
85 9
Communication
Plan Communications - INPUTS 1. Stakeholder register

provides information on the list of stakeholders, their interests, and influence.
2. Stakeholder management strategy

provides important guidance on planning communications.
3. Enterprise environmental factors

86 0
all enterprise environmental factors are used to adapt communication to the project environment.
Communication
Plan Communications - INPUTS 4. Organizational process assets

All organizational process assets are used as inputs. 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.
86 1
Communication
Plan Communications Tools & Techniques
1.Communications requirements analysis

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.
86 2
Communication
Communications Requirements analysis

For establishing project communications requirements, we normally need to know:
86 3
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
Communication requirements analysis

Whom do we need to send Project Information? Customer Sponsor Senior management Functional managers Team members Other project managers Regulatory authorities Media Society Outside specific interest groups, organizations Any other stakeholder stakeholders
86 4
Communication
Communication requirements analysis

What do we need to communicate on our project?
86 5
1) Status 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 deliverables acceptance, projects product acceptance, etc.
Communication
THROUGH
Status reports Progress reports Trend report Forecasting report Variance report Earned value analysis reports Compliance to regulations, and so on
86 6
Communication
Communication channels
The project manager needs to consider the number of potential communication channels to grasp the complexity of a projects Communications: ( 20 PEOPLE, 190 CHANNEL! )
2 PEOPLE, 1 CHANNEL 4 PEOPLE, 6 CHANNEL 5 PEOPLE, 10 CHANNEL
86 7
3 PEOPLE, 3 CHANNEL
Communication channels = n (n-1) / 2 n = number of stakeholders
Communication
2. Communications technology
What factors decide your choice of communications methods?
General factors are: Urgency for information Availability of method Expected project staffing Length of the project
86 8
Communication
Communications technology factor

1. Urgency for information 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.
86 9
Communication
Plan Communications Tools & Techniques Communications technology factors 2. Availability of method We examine if our existing communications 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.
87 0
Communication
Plan Communications Tools & Techniques Communications technology factors 4. Length of the project 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.
87 1
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 Does the team operate on a face-to-face basis or in a virtual environment.
87 2
Communication
3. Communication Models
-
87 3
A basic model is sender-receiver model. Components are: 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
Message Encode Sender Noise Decode Feedback-Message Encode Medium Noise Receiver Decode
87 4
Basic Communication Model
Plan Communications Tools & Techniques Please remember!
Inherent in this model is an action to 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.
87 5
Communication
3. Communication Models (duties)

The sender: Make the message clear and 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.
87 6
A failure in communication negatively impacts the project.
Communication
4. Communication Methods
include 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.
87 7
Communication
Communication Methods
Include 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.
87 8
Communication
Communication Methods
include Pull Communication:- Used for very large audiences that requires recipients to access the content at their own discretion. Intranet Sites, e-learning, Knowledge Repositories.
87 9
Base on the requirements, project manager decides what, how, and when communication methods are to be used on the project.
Communication
Plan Communications - Outputs Communications management plan

contains
1) 2)
3) 4) 5)
88 0
6)
Stakeholder communication requirements Information to be communicated, format, content, level of detail Person responsible Person/group who will receive Methods Frequency
Communication
Plan Communications - Outputs
Communications management plan

contains
7)
8) 9)
88 1
Escalation process: defining timeframes and management chain (names) for escalation of issues that cant be resolved at lower levels Method for updating and refining this plan as project progresses Glossary of common terminology (very important)
Communication

Sample communications
management plan, contents 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 Communications management 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.
88 2
Communication
Plan Communications - Outputs Project Document Updates It may include:1) Project Schedule. 2) Stakeholder Register. 3) Stakeholder Management strategy.
88 3
Communication

Please remember! 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.
88 4
Processes concerned with conducting: Plan Risk Management Identify Risks Perform Qualitative risk analysis Perform Quantitative risk analysis Plan Risk Responses Monitor and Control Risks
88 5
Project Risk Management Project Risks?

RISK An uncertain if Event or occurs Condition
HAS
+ ve
EFFECT
- ve
88 6
PROJECT OBJECTIVES SCOPE QUALITY COST SCHEDULE
Project Risk Management THE CONCEPT Project risk has its origin in the UNCERTAINTY 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!
88 7
Project Risk Management THE CONCEPT Project risk has its origin in the UNCERTAINTY that is present in ALL projects! risks could be negative (threats) risks could be known
88 8
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 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/-
88 9
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 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
89 0
Contingency amount = 3825 2750 = Rs.1075
Project Risk Management THE CONCEPT 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.
89 1
Project Risk Management THE CONCEPT 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.
89 2
Even in routine projects, the outcomes may be influenced by new factors, or those beyond your control.
Project Risk Management THE CONCEPT 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 organizations requirements) must be developed for EACH PROJECT! And communication about risk must be made open and honest!
89 3
Project Risk Management THE CONCEPT Risk responses reflect an organizations perceived balance between risk-taking and risk avoidance! TO BE SUCCESSFUL, we must manage risks proactively and consistently throughout the project!
89 4
Now, the first process: Risk Management Planning
Project Risk Management Why risk management planning? 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
89 5
provide sufficient time and resources for risk management activities establish an agreed-upon basis for evaluating risks.
Project Risk Management When risk management planning? Should be completed EARLY during project planning because it is CRUCIAL to performing other risk management activities!
89 6
Project Risk Management Plan Risk Management process overview

INPUTS
Enterprise environmental factors Organizational process assets Project scope statement Cost management plan Schedule management plan Communications management plan
TOOLS & TECHNIQUES

Planning meetings and analysis
OUTPUTS
Risk Management Plan
89 7

Plan Risk Management

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.
89 8


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
89 9
Project Risk Management Project scope statement

Provides a clear sense of the range of possibilities 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!
90 0
Project Risk Management Schedule management plan

defines how schedule contingencies will be informed and availed!

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.
90 1

TOOLS & TECHNIQUES
Planning meeting
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
90 2

TOOLS & TECHNIQUES
Planning meeting
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.
90 3

OUTPUTS
Risk management plan

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).
90 4

Plan Risk Management Risk management plan
OUTPUTS
90 5
INCLUDES 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)
Project Risk Management Risk management plan

Methodology: defines approaches, tools, and data sources 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!
90 6

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!
90 7

Sample RBS
Categorizing risks
Organizational Project dependencies Resources Funding Prioritization Project Management Estimating Planning Controlling Communication
Project
Technical
Requirements Technology Complexity & Interfaces Performance & Reliability
External
Subcontractors & suppliers Regulatory Market Customer Weather
90 8
Quality

Definition impact scales for four on project objectives
Project Objectives COST Very low .05 Insignificant Cost increase Insignificant Schedule Slippage Scope decrease Negligible Quality Deterioration Negligible Low .1 5% cost Increase 5% Schedule Slippage Scope: Minor areas affected Moderate .2 5-10% Cost Increase 5-10% Schedule Slippage Scope: Major areas affected High .4 10-20% Cost Increase
Scope Reduction Unacceptable To client Scope Reduction Unacceptable To client Quality Reduction Unacceptable To client
Very high .8 20% cost Increase 20% Schedule Slippage

Projects Product Effectively Useless Projects Product Effectively Not usable
SCHEDULE
SCOPE
90 9
QUALITY
Affected only Quality Very demanding Reduction Application Requires client areas Approval
Identify Risks
DETERMINES which risks might affect project objectives! And document their characteristics. IS it one time job? No, its an iterative job as new risks may appear just as the project moves ahead in project life cycle!
91 0
Identify Risks
Project Risk Management Risk identification is not easy job. 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.
91 1
IDENTIFIES which risks might affect the project DOCUMENTS their characteristics INVOLVES:
a) b) c)
Reviewing every input variable, activity, key material and resource Identifying threats and opportunities Preparing checklists from others experience and ensuring completeness
ADDRESSES:
91 2
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) 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) other stakeholders
91 3

Risks can not be identified by just conducting the exercise once. You have to iterate it to bring all risks to your grip. 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).
91 4
Project Risk Management Please remember! Risks identification process normally leads 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.
91 5
Project Risk Management Identify Risks process overview

INPUTS
Risk management plan Activity cost estimates Activity duration Estimates Scope baseline Stakeholder register Cost management plan Schedule management plan Quality management plan Project documents Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Documentation Reviews Information Gathering Techniques Checklist analysis Assumptions Analysis Diagramming Techniques SWOT analysis Expert judgment
OUTPUTS
RISK REGISTER
91 6

1)
2)
91 7
3)
Provides all these used here Assignment of roles and responsibilities for risk management activities Provision in budget and schedule Categories of risks

Categories of risks
First category pertains to Technical / Quality / Performance Risks

Examples: dependence on new, or complex, or unproven technology, unrealistic performance objectives, etc.
91 8

Categories of risks
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.
91 9

Categories of risks
92 0
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.

Categories of risks
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.
92 1
risk identification needs an understanding of:

1) 2) 3) 4)
92 2
The schedule, Cost, and Quality management plans Outputs of other knowledge area processes for review to find possible risks across entire project.

Outputs of other knowledge areas
most vital inputs to risk identification as they allow us understand projects mission, scope, and objectives of the stakeholders (including customer, sponsor, etc.) These outputs:
92 3
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 key stakeholders (like customer). Project documents
-
92 4
assumptions log Work performance reports EV reports Network diagrams Baselines Other project information of use
Project Risk Management Enterprise environmental factors

Provide for help in risk identification: 1) Commercial databases 2) Academic studies 3) Benchmarking 4) Other industry studies
92 5
Organization process assets

Provide information from previous project files, including actual data and lessons learned.
92 6

Identify Risks
TOOLS & TECHNIQUES Documentation Reviews
Information Gathering Techniques Checklist analysis Assumptions Analysis Diagramming Techniques SWOT analysis Expert judgment
Risk identification is a serious job,

hence 5 tools and techniques come to Your Help.
1.Documentation reviews
Is the structured review of Project plans Assumptions- project level Assumptions- detail scope levels Prior project files, and Any other information
92 7

2. Information-gathering techniques
The aim: to obtain a comprehensive list of
risks that can be later addressed in risk 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 (projects strengths, weaknesses, opportunities, threats are analyzed to give a much wider view of the risks under consideration).
92 8

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. 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!
92 9
Project Risk Management 3. Checklist analysis
Most handy and generally liked by

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.
93 0
Project Risk Management 3. Checklists But there is a caution!

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!
93 1
Project Risk Management 4. Assumptions analysis

Remember so many assumptions you have made while initiating the project, defining scope, planning resources, estimating time and cost, etc.?
93 2
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.
Project Risk Management 5. Diagramming techniques

Help you immensely in identifying the risks. You can use: Cause-and-effect diagrams (Ishikawa /
fishbone diagrams)
System / Process Flow Charts Influence Diagrams examples
93 3

Cause-and-effect diagrams (Ishikawa / fishbone diagrams)
SOFTWARE
Change in user requirements Software design does not meet Initial Requirements Hardware incompatible with existing user systems Inadequate customer site preparation Difficulty in teaching user New Procedures
HARDWARE
Hardware shipment delay Hardware Design incomputable with software requirements
FUNDS
Revenue from current Project delayed
Hardware supplier goes bankrupt
Insufficient funds to pay staff and suppliers
Insufficient technical skills Staff shortage

Inability to hire / train Additional staff
Project completion delay
93 4
INSTALLATION
STAFF

System/ process flow charts
depict interrelationship of elements and mechanism of causation.
Project specification
Develop engineering
No Yes
Develop detail engineering Develop manufacturing drgs
93 5
Proceed manufacturing

Influence diagrams- show a problem with casual influences, time
ordering, and other linkages among variables and results.
I.1 Hardware Incompatible With existing User systems S.1 Software design does not meet initial requirements H.1 Hardware Shipment delay F.1 Hardware Supplier goes bankrupt
I.2 Inadequate Customer site Preparation
S.2 Change in User Requirements T.1 Staff Shortage T.2 Inability to Hire / train Additional staff
I.3 Difficulty in Teaching user New Procedures
H.2 Hardware Design Incompatible With Software Requirements
F.2 Insufficient Funds to pay Staff and Suppliers
93 6
F.3 Revenues From Current Project Delayed
T.3 Insufficient technical skills
ARROWS SHOW INFLUENCE
Expert judgment
Experts with relevant experience help us identify risks.
93 7

We have done great job! Lets see the output we have got!
OUTPUTS
RISK REGISTER
Risks
all uncertain events or conditions that might have positive or negative effect on project objectives (In Case They Happen).
93 8
But where do we write them?
The risk register is first developed in the Identify Risks process and updated during rest of the risk management processes!
93 9

Sample Risk Register
Identified risks
List of identified Risks List of potential Responses Root causes of Risks Updated risk categories
Risks owners
A B C D E
Q&Q analysis
Response plans
Residual Secondary risks risks
94 0

List of identified risks: identified risks with root causes
under 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 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.
94 1
Updated risk categories: new risk categories being

added to the list of risk categories. RBS may be enhanced.
Perform QUALITATIVE RISK ANALYSIS

Process of assessing for each risk 1) The probability of occurring and 2) The corresponding impact on project objectives
94 2
FOR PRORITIZING RISKS FOR FUTHER ACTION Quantitative risk analysis or Risk response planning
Perform QUALITATIVE RISK ANALYSIS

Process of also assesses other factors 1) Timeframe 2) Risk tolerance of schedule, cost, scope, and quality
94 3
QUALITATIVE RISK ANALYSIS

Some principles-A 1) Organizations can IMPROVE POJECTS PERFORMANCE effectively by focusing on HIGHPRIORITY 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.
94 4
QUALITATIVE RISK ANALYSIS

Some principles-B 4) Definitions of the levels of probability and impact, and 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.
94 5
Qualitative Risk Analysis
What do we intend to achieve?

Prioritize risks according to their potential effect on project 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
94 6

Perform Qualitative risk analysis process overview
INPUTS
Organizational process assets Project scope statement Risk management plan Risk register
TOOLS & TECHNIQUES

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
94 7
INPUTS
Project scope statement Risk management plan Risk register

provide data about risks on the past projects and lessons learned knowledge base for use here
94 8
INPUTS

Common or recurring type projects have well-understood Risks. Projects using state-ofthe-art, first-of-its-kind technology, or highly complex ones have more certainty. We can know this from scope statement.

Risk management plan Risk register
94 9

INPUTS
Organizational process assets Project scope statement

Risk register
95 0
Provides for this process: roles & responsibilities Budgets and schedule activities Risk categories Definition of probability & impact P & I matrix Revised stakeholders tolerances
INPUTS
Organizational process assets Project scope statement Risk management plan
Risk register
Provides for this process: The KEY input LIST OF IDENTIFIED RISKS
Risk register
95 1
Project Risk Management Risk probability and impact

Describe probability and impact of a risk in
TOOLS & TECHNIQUES Risk probability and impact assessment
Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment
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.
95 2
TOOLS & TECHNIQUES

Risk probability and impact assessment
Probability/impact rating 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.
Probability / impact risk rating matrix

Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment
95 3

TOOLS & TECHNIQUES

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.
95 4

TOOLS & TECHNIQUES
impact scale can be Cardinal: assigning linear values

.1/.3/.5/.7/.9, or non-linear values .05/.1/.2/.4/.8 showing an organizations desire to avoid high impact risks.

Ordinal: simply rank-ordering, such as

very low, low, moderate, high, very high.
95 5
Project Risk Management Probability/impact rating matrix

TOOLS & TECHNIQUES
each risk is rated on its probability and impact of happening on a project objective (cost, schedule, scope, and quality) if it does happen an organizations 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

95 6

Risk Score Probability and Impact matrix: green = low, yellow = moderate, red = high
Probability Threats
0.05 0.04 0.03 0.02 0.01 0.05 0.09 0.07 0.05 0.03 0.01 0.10 0.18 0.14 0.10 0.06 0.02 0.20 0.36 0.28 0.20 0.12 0.04 0.40 0.72 0.56 0.40 0.24 0.08 0.80 0.72 0.56 0.40 0.24 0.08 0.80
Opportunities
0.36 0.28 0.20 0.12 0.04 0.40 0.18 0.14 0.10 0.06 0.02 0.20 0.09 0.07 0.05 0.03 0.01 0.10 0.05 0.04 0.03 0.02 0.01 0.05
0.90 0.70 0.50 0.30 0.10
95 7
Project Risk Management Risk Data quality assessment

TOOLS & TECHNIQUES
Risk probability and impact assessment Probability / impact risk rating matrix
Risk data quality assessment
95 8
Risk categorization Risk urgency assessment Expert judgment
We need accurate and unbiased 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
Project Risk Management Risk categorization

TOOLS & TECHNIQUES
Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment
Risk categorization
1) by sources of risk: RBS 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!
Group risks by common root causes for effective risk responses!!!
95 9
Risk urgency assessment

Expert judgment
TOOLS & TECHNIQUES

Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization
Risk urgency assessment

tells which risks need to be addressed in near term. INDICATORS:
1) 2) 3)
96 0
Risk urgency assessment Expert judgment
Time to effect a risk response Symptoms and warning signals Risk rating
Project Risk Management Expert judgment

From experts having recent experience of having 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.
96 1
Project Risk Management Risk register updates

OUTPUTS
1) 2) 3) 4) 5)
96 2
6)
We had initiated the risk register during risk identification. We fill up the relevant information from this process in it. Thus we update it, writing: Relative ranking or priority of list of the project risks Risks grouped by categories List of risks needing near-term response List of risk for additional analysis and response Watch lists of low priority risks Trends in qualitative risk analysis

Risk Register updates
Identified risks
Risks owners
A B C D E
Q&Q
analysis
-Relative Ranking or priority of list of the project risks -Risks grouped by categories -List of risks needing near term response
Response plans
96 3

Identified risks
Risks owners
A B C D E
Q&Q
analysis
-List of risk for Additional analysis and response -Watch lists of low priority risks -Trends in qualitative risk analysis
Response plans
96 4

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 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 dont forget to write the basis for assessed probability and impact for important risks.
96 5
Project Risk Management Risks grouped by categories

Very important! 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-term

We should place separately risks needing urgent attention and risks needing later attention.
96 6
Project Risk Management List of risks for additional analysis and response 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.
96 7
Project Risk Management Trends in qualitative risk analysis results You get various trends in results of qualitative 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.
96 8
Perform QUANTITATIVE RISK ANALYSIS

Process 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
96 9
Perform QUANTITATIVE RISK ANALYSIS

Hence, analyzes the prioritized risks showing potential and substantial impact on projects competing demands Presents a quantitative approach to DECISION MAKING amidst uncertainty Deploys techniques: - Monte Carlo Simulation - Decision Tree Analysis
97 0
QUANTITATIVE RISK ANALYSIS
97 1
TO: 1) determine realistic and achievable 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 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
97 2

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
97 3

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
97 4

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
97 5

TRENDS CAN HIGHLIGHT THE NECESSITY: FOR MORE OR LESS RISK MANAGEMENT ACTION
97 6

Perform Quantitative risk analysis process overview
INPUTS
Organizational process assets Risk management plan Risks register Schedule management Plan Cost management plan
TOOLS & TECHNIQUES

Data gathering and representation techniques Quantitative risk analysis and modeling techniques Expert judgment
OUTPUTS
97 7
Quantitative Risk Analysis

provide from industry or
1. 2. 3.
proprietary sources: Information on previous similar projects Studies of similar projects Risk databases
97 8

-
97 9
Provides for this process: roles & responsibilities Budgets and schedule activities Risk categories, RBS Revised stakeholders tolerances,
Risk register
-
Provides key inputs: List of identified risks Priority list of project risks Risks grouped by categories
98 0
98 1
Schedule management plan, 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.
Project Risk Management Data gathering & representation techniques Interviewing Probability distributions Expert judgment
TOOLS & TECHNIQUES Data gathering & representation techniques

Quantitative risk analysis and modeling techniques Expert judgment
1) 2) 3)
98 2
Project Risk Management Interviewing

Derive information from stakeholders and 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.
98 3

Probability distributions:
Dont forget to document The RATIONALE OF RISK RANGES! Triangular distribution/Mean and Standard 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.
Why?
Because it will help you make Effective Risk Response Strategies during risk Response planning.
98 4

Example of risk interview Identifies three point estimates for each WBS
Breaks the myth of conventional estimate (arrived at totaling most 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. Project Cost Estimates & Ranges
WBS
element
Low
Most likely
High
Design Build Test Total Project
3 17 9
7 22 16 45
12 37 24
98 5

EXAMPLE: COMMONLY USED PROBABILITY DISTRIBUTION
0.1
PROBABILITY
0.1
PROBABILITY
0.0
IMPACT
0.0
IMPACT
BETA DISTRIBUTION
TRINGULAR DISTRIBUTION
98 6

EXAMPLE: INTERVIEW DEPLOYING BETA DISTRIBUTION
Mean = O + 4 M + P / 6 , Standard Deviation = P O / 6, Variance = P O / 6
ACTIVITY NAME LOW O A B C 4 16 11 MOST LIKELY M 6 20 15 HIGH P 10 35 23 MEAN X 6.3 21.8 15.7 1 3.2 2 SIGMA VARIANCE
2
1 10 4
Total estimate
41
43.8
3.9
15
98 7

EXAMPLE: INTERVIEW DEPLOYING TRIANGULAR DISTRIBUTION
Mean = O + M + P / 3 , Variance = P O / 6
ACTIVITY NAME LOW O A B C 4 16 11 MOST LIKELY M 6 20 15 HIGH P 10 35 23 2
+ (M O) (M P) / 18
SIGMA VARIANCE
2
MEAN X 6.7 23.7 16.3
1.2 4.2 2.5
1.5 17.4 6.2
Total estimate
41
42.4
25.1
98 8
Expert judgment
used to validate data and techniques. experts could be internal or external. experts needed: engineering or statistical experts.
98 9
Quantitative risk analysis and modeling techniques:

1) 2)
3)
99 0
4)
Sensitivity analysis Expected monetary value analysis Decision tree analysis Modeling and simulation
Project Risk Management Sensitivity analysis

Want to know which risks have the most 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).
99 1
TOOLS & TECHNIQUES

Data gathering & representation techniques
Expected monetary value analysis

A 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
99 2
Expected monetary value analysis

commonly used in decision tree analysis. But modeling and simulation are more powerful and can not be misused compared to it.
99 3

Decision tree analysis
TOOLS & TECHNIQUES
Build or upgrade an exiting plant? Make or outsource? Or any other such dilemmas face you! Dont worry take the help of Decision Tree.
What is decision tree?

99 4
Its 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).

Decision Definition Decision to be Made Decision Node Input: cost of decision Output: decision made (true, false)
SAMPLE DECISION TREE
Chance Node Input: scenario probability Output: expected monetary Value (EMV) 65%
Strong Demand
Net Path Value Computed: Payoffs costs Along path Rs. 80 M
Rs. 200
BUILD NEW PLANT
False - Rs. 120
EMV of Chance Node Rs. 41.5 M

Weak Demand
35% - Rs. 30 M Rs. 90 65% Rs. 70 M Rs. 120
BUILD OR UPGRADE
EMV of the Decision Rs. 49.0 M

Strong Demand
UPGRADE EXISTING PLANT
True - Rs. 50
EMV of Chance Node Rs. 49.0 M 35%

Weak Demand
99 5
Rs. 10 M Rs. 60
Project Risk Management Simulation

TOOLS & TECHNIQUES
99 6
Translates uncertainties (specified 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

COST RISK SIMULATION TOTAL PROJECT COST: CUMULATIVE CHART
100% Mean = 46.67
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% !
PROBABILITY
75%
50%
25% 12% 0 30 41 50 ( in RUPEES LACS)
99 7
65
COST
Project Risk Management Risk register updates

OUTPUTS
1) 2) 3)
We had initiated the risk register during risk identification. We fill up the relevant information from this process in it. Thus we update it further, writing: Probabilistic analysis of the project Probability of achieving cost and time objectives Prioritized List of quantified risks
99 8

Identified risks
Risks owners
A B C D E
Q&Q analysis
-Probabilistic analysis of the project -Probability of achieving cost and time objectives -Prioritized List of quantified
Response plans
99 9
Risks -Trends in QRA

PROBALISTIC ANALYSIS OF THE PROJECT OUTPUTS
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.
10 00
Project Risk Management Prioritized list of quantified Risks (with a measure of their impact)
This list contains the risks that indicate: Major threat, or Major opportunity
OUTPUTS
10 01
OUTPUTS
Trends in Quantitative Risk Analysis

With the repetition of the quantitative risk analysis, a trend in its results emerges.
10 02
PLAN RISK RESPONSES

Developing options and determining actions to ENHANCE Opportunities and REDUCE threats to the project objectives Involves selecting BEST RESPONSE from several options
10 03
PLAN RISK RESPONSES

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
10 04
PLAN RISK RESPONSES

incorporates needed resources and activities into: a) schedule b) budget c) project management plan
10 05
PLAN RISK RESPONSES

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
10 06
PLAN RISK RESPONSES
Project Risk Management KEY PONITS NEED EMPHASIS AGAIN! Risk response planning:
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 !
10 07
PLAN RISK RESPONSES
Process Overview

INPUTS
Risk Management Plan Risk register
TOOLS & TECHNIQUES

Strategies for negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy Expert judgment
OUTPUTS
Risk Register updates Project management plan updates Risks-related contract decisions Project document updates
10 08
RISK RESPONSE PLANNING

INPUTS
Risk register

provides: Roles & responsibilities Risk threshold for L, M, H risks Time and budget for project risk management Risk analysis definitions
10 09

INPUTS
Risk register
Was created in risk identification process, 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
10 10

INPUTS
Risk register
We use these outputs here: 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
10 11

INPUTS
Risk register
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
Risk register
10 12
RISK OWNERS MUST PARTICIPATE IN DEVELOPING RISK RESPONSES
10 13
Project Risk Management WHICH STRATEGIES WILL YOU CHOOSE?

ANSWER: 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
10 14

TOOLS & TECHNIQUES Strategies for negative risk (threats)
Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment
Avoid
Eliminate threat by eliminating the cause! You change project plan to eliminate the 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
10 15

Transfer
Can you shift the risk? Yes, you can.
10 16

Transfer
You can shift it to third party for its 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.
10 17
Transfer
EXAMPLES Insurance performance bonds, warranties, guarantees Contracts ( a fixed-price contract has least with the
10 18
buyer. A cost reimbursable one leaves more risk with the buyer)

Mitigate
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.
10 19
Mitigate
CARDINAL PRINCIPLE Take early action to reduce probability of a risks 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!
10 20
Mitigate
Mitigation costs should be justified in view of the likely risk 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
10 21

TOOLS & TECHNIQUES
Strategies for negative risk (threats)
Exploit
Chosen for risks with positive impacts 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
Strategies for positive risks (opportunities)

Strategies for both threats and opportunities Contingent response strategy - Expert judgment
10 22

TOOLS & TECHNIQUES
Share
Sharing a positive risk involves 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.

Strategies for both threats and opportunities Contingent response strategy -Expert judgment
10 23

TOOLS & TECHNIQUES
Enhance
This strategy modifies the size of an 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.

Strategies for both threats and opportunities Contingent response strategy -Expert judgment
10 24

TOOLS & TECHNIQUES
Strategies for negative risk (threats) Strategies for positive risks (opportunities)
Accept
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.
Strategies for both threats and opportunities

Contingent response strategy -Expert judgment
10 25

TOOLS & TECHNIQUES
Accept
ACTIVE ACCEPTANCE
Your acceptance may be active and you develop a contingency plan.

PASSIVE ACCEPTANCE
It may be passive. Do nothingleaving the project team to deal with the risks as they happen.
10 26
Accept
FAQ
How much contingency allowance should be kept? Answer: It is determined by the impacts. Compute it at an acceptable level of risk exposure.
Most common risk acceptance response is establishing a contingency plan/reserve that incorporates amounts of: Money Time. Resources
10 27
to address accepted identified risks Or even sometimes potential unknown threats and opportunities)

CALCULATING COST RESERVE
IMPACT COST = - tive Benefits = + tive - Rs. 4000 + Rs. 3000 + Rs. 2100 - Rs. 2500
Accept
Expected Monetary Value (EMV) - Rs. 800 + Rs. 1350 - Rs. 210 - Rs. 1625
Risk A B C D
Probability 20% 45% 10% 65%
10 28
BENEFIT : COST : CONTINGENCY AMOUNT NEEDED :
Rs. + 1560, WE WILL SAVE Rs. - 2425, WE WILL SPEND Rs. 865

CALCULATING COST RESERVE: Hands-on Exercise for Students
For a product modification project, we have following data. Please calculate Cost Reserve!
RISK THREATS OPPORTUNITIES Delay in shipment of parts Parts need extra installation work Design defect will cause rework Parts will be cheaper than expected
Production will be simpler than expected
IMPACT Probability COST = - tive Benefits = + tive 30% 25% 5% 20% 30% - Rs. 9000 + Rs. 3500 - Rs. 5000 + Rs.10000 + Rs. 2500
10 29

CALCULATING COST RESERVE: hands-on Exercise for Students
RISK THREATS OPPORTUNITIES
Delay in shipment of parts Parts need extra installation work Design defect will cause rework Parts will be cheaper than expected Production will be simpler than expected
IMPACT Expected Probability COST = - tive Monetary Benefits = + tive Value (EMV) 30% 25% 5% 20% 30% - Rs. 9000 + Rs. 3500 - Rs. 5000 + Rs.10000 + Rs. 2500 - Rs. 2700 - Rs. 875 - Rs. 250 + Rs. 2000 + Rs. 750
10 30
BENEFIT : COST : CONTINGENCY AMOUNT NEEDED :
Rs. + 2750, WE WILL SAVE Rs. - 3825, WE WILL SPEND Rs. 1075

TOOLS & TECHNIQUES
Contingent response strategy

Designed for use only when CERTAIN EVENTS occur. Why? Well, for some risks, its 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

10 31

TOOLS & TECHNIQUES
Expert judgment
From knowledgeable parties, inputs can be taken regarding actions for specific and defined risks.

10 32

STRATEGIES FOR RISK RESPONSE
CONTINGENCY AMOUNT Can be added to individual activities or work packages, or to the project as a whole
10 33

OUTPUTS
Project management plan updates Risks-related contract decisions - Project document updates

We fill the outputs in the risk register. At this point, the risk register contains: 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
10 34

OUTPUTS
Risk Register updates Project management plan updates Risks-related contract decisions -Project document updates

We fill the outputs in the risk register. At this point, the risk register contains:
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
10 35

OUTPUTS
Risk Register updates Project management plan updates Risks-related contract decisions - Project document updates

We fill the outputs in the risk register. At this point, the risk 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 organizations risk thresholds
10 36

OUTPUTS
Project management plan updates

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)

Risks-related contract decisons -Project document updates
10 37

OUTPUTS
Risk Register updates Project management plan updates
Risk-related contractual agreements

Contractual agreements are prepared to specify each partys responsibility for specific risks, in case they occur. Example: Agreements for insurance, services, and other items as found suitable.
Risks-related contract decisions -Project document updates
10 38

OUTPUTS
Risk Register updates Project management plan updates

Example: 1) Assumptions log updates 2) Technical documentation updates
Risks-related contract decisions -Project document updates
10 39
Project Planning continues!
10 40

THE CONCEPT
Consists of processes to purchase or acquire the 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
10 41

THE CONCEPT
The processes 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!
10 42

THE CONCEPT
Contract
CONTRACTING PROCESS
Plan Procurements
Conduct Procurements
Administer Procurements
Close Procurements
10 43
LIFE CYCLE OF THE CONTRACT

CONTRACT LIFE CYCLE BRIEF
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.
10 44

CONTRACT LIFE CYCLE BRIEF 2) Conduct procurements: Proposals requested and received. Sellers selected and Contract awarded.
10 45

CONTRACT LIFE CYCLE BRIEF 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.
10 46

CONTRACT
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.
10 47

CONTRACT
Contract: Ushers a legal relationship between Buyer

and seller. It includes: SOW of the contracted item (CSOW) Terms and conditions. Sellers proposal Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide.
10 48

CONTRACT
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!
10 49

CONTRACT
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.
10 50

CONTRACT
Contract: is Also called

An agreement Subcontract, or Purchase order Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide.
10 51

CONTRACT
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.
10 52

CONTRACT
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 Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide.
10 53

CONTRACT Contract: Except for the purchase of materials, goods, or common products, A seller will manage the work as a project:
Buyer becomes customer, and then key stakeholder for the seller Sellers 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.
10 54

CONTRACT SELLER in contract life cycle
First a bidder Then the selected source And thereafter contracted vendor
10 55

Fundamental concept of project procurement management is that The buyer of the items is within 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.
10 56
10 57
Essence is that a formal Contractual Relationship exits between buyer and seller! If you are procuring items from your others units of the project teams 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
WHICH project needs
Can be accomplished by the project team during Project Execution
WHICH project needs

Can be best met by acquiring products/ services outside the project organization
10 58
identified DURING PROJECT DEFINITION EFFORT
Plan Procurements
Plan Procurements
Considers
1. whether to procure? 2. how to procure? 3. what to procure? 4. how much to procure? 5. when to procure? 6. potential subcontractors (make or buy!) (procurement methods) (description of products) (quantity) (procurement schedule) (prospective sellers)
10 59
(Consideration of potential sellers gives some degree of influence/ control to the buyer over contracting decisions)
Plan Procurements
PLEASE REMEMBER! While planning purchases and acquisitions, we must 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 ORGANIZATIONS 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!
10 60
Plan Procurements
PLEASE REMEMBER! While planning purchases and acquisitions, we must not forget to review: the type of contract you plan to use in relation to MITIGATING RISKS AND TRANSFERRING THEM TO THE SELLER!
10 61
Plan Procurements: PROCESS OVERVIEW

INPUTS
Enterprise environmental factors Organizational process assets Scope baseline Requirements documentation Teaming agreements Risk register Risk-related contract decisions Activity Resource requirements Project schedule Activity cost estimates Cost baseline
TOOLS & TECHNIQUES

Make-or-buy Analysis Expert Judgment Contract Types (Selection)
OUTPUTS
Procurement Management Plan Procurement Statements of work Make-or-buy decisions Procurement documents Source selection criteria (evaluation criteria) Change requests
10 62
Plan Procurements INPUTS
EEFs
provide information on
1) The marketplace 2) What product, services are available in the market and under what terms and conditions 3) Procurement resources: If you dont have a purchasing group, then the project team have to supply both resources and expertise for project procurement activities.
10 63

1) 2) 3)
OPAs
provide formal/informal procurement
policies, procedures, guidelines, and management systems for use in making Procurement Plan and deciding Contract Type. They act as constraints and limit: The ability to make specific make-or-buy decisions. May require specific types or sizes of sellers. 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.
10 64
Project Procurement Management Scope baseline

a) Scope statement b) WBS c) WBS dictionary a) Project Scope Statement provides important information on 1) project needs and strategies that 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 down within our contract to sellers!
10 65

a) Scope statement b) WBS c) WBS dictionary
A. B. C.
Project Scope Statement

describes project 3) boundaries, requirements, constraints and assumptions concerning project scope. EXAMPLES:
Constraints: availability of funds (most common on projects) Assumptions: availability of multiple sellers or sole seller Requirements with legal and contractual obligations: performance, intellectual property rights, insurance, licenses, permits, equal employment opportunities, health, safety, and security.
10 66

a) Scope statement b) WBS c) WBS dictionary b) WBS describes relationship among all the components of the project and 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.
10 67
Project Procurement Management Plan procurements

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 buyers project The difference no longer exists if the performing organization decides to procure the entire product.
10 68

Requirements documentation provides Important information about project requirements 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-employmentopportunity, etc.
10 69

Teaming Agreements (legal contractual agreement between two or more entities to form joint venture or 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 predetermined. Scope of work, competition requirements and other critical issues are also predefined.
10 70

We consider following too while planning procurements: - risk register - Risk related contract decisions - Activity resource requirements - Project schedule - Activity cost estimates - Cost performance baseline
10 71

Plan procurements
Make-or-buy analysis
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 costs
TOOLS & TECHNIQUES
Make-or-buy Analysis
Expert Judgment Contract Type Selection
10 72
example

Plan procurements
TOOLS & TECHNIQUES
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.
10 73

Plan procurements
TOOLS & TECHNIQUES
Reflects
1) Perspective of the performing organization, and 2) Immediate project needs 3) Long range strategy
10 74
examples
Project Procurement Management Make-or-buy analysis

example
TOOLS & TECHNIQUES
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)
10 75
Project Procurement Management Make-or-buy analysis

Example of long range strategy
TOOLS & TECHNIQUES
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
10 76
Expert judgement
TOOLS & TECHNIQUES
Expert Judgment
Contract Type Selection
10 77
What expert judgment is needed? 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.
Contract type selection

TOOLS & TECHNIQUES
Make-or-buy Analysis Expert Judgment
Different contract types suit different types of purchases Degree of risk assessed by both buyer and seller decides the choice of a Contract Type Common contract types
10 78
Project Procurement Management Contract type selection

TOOLS & TECHNIQUES
Common Contract Types: 1) fixed-price or lump-sum 2) Cost-reimbursable

a) cost-plus-fee: CPF, or cost-pluspercentage of cost: CPPC b) cost-plus-fixed-fee: CPFF c) cost-plus-incentive-fee: CPIF
10 79
3) time and material ( T & M )

TOOLS & TECHNIQUES
fixed-price or lump-sum
1) 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 Simplest form: Purchase Order
10 80

TOOLS & TECHNIQUES
a) fixed-price
Example Contract INR 5,500,00
Fixed-price-incentive-fee (FPIF)
Example
10 81
Contract INR 5,500,000 Incentive INR 50,000 for every month for finishing contracted work early

TOOLS & TECHNIQUES
Fixed-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
10 82

TOOLS & TECHNIQUES
Cost-reimbursable
1) Buyer reimburses sellers actual costs plus a fee as sellers 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.
10 83

Cost-reimbursable
Here, 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
10 84

TOOLS & TECHNIQUES
Cost-reimbursable include incentive clauses for:

IF THE SELLER MEETS OR EXCEEDS SELECTED OBJECTIVES (schedule/cost), THE SELLER GETS AN INCENTIVE / BONUS PAYMENT
10 85

TOOLS & TECHNIQUES
Cost-reimbursable
a) 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. Example: contract = cost plus 5% of costs as fee
10 86

TOOLS & TECHNIQUES
Cost-reimbursable
b) 1) Cost-plus-fixed-fee: CPFF (most common) Buyer reimburses all allowable costs and paid a fee ( profit) fixed at a specific rupee amount (as a percentage of estimated project cost) Fee is fixed: does not vary with cost Advantage: keeps sellers costs in line.
Contract Type Selection 2)
10 87
3)
WHY?

TOOLS & TECHNIQUES
Cost-reimbursable
b) 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)
10 88

Cost-reimbursable
c) 1) cost-plus-incentive-fee: CPIF Buyer reimburses all allowable costs + an agreed-upon fee + an incentive bonus, based on achieving certain performance objective levels
10 89
EXAMPLE Contract = Costs + fee, say INR 500,000 + INR 50,000 (for every month the project is earlier than agreed)

Cost-reimbursable
c) 2) cost-plus-incentive-fee: CPIF 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
10 90
HANDS-ON EXERCISE

HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2 DATA 1) Estimate cost INR 630,000, fee INR 75,000 2) If seller performs better, savings sharing: 80% buyer, 20% seller 3) 4) Actual costs INR 600,00 Find out final fee and final price
10 91

HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2 SOLUTION Step 1 Fee = INR 630,000 INR 600,000 = INR 30,000 x 20% = INR 6,000 = INR 75,000 target fee + INR 6,000 = INR 77,000
Final fee Step 2
10 92
Final price = INR 600,000 + 77,000 = INR 677,000

Plan purchases & Acquisitions

time and material ( T & M )
1) Hybrid of cost-reimbursable and fixedprice
10 93
- 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

time and material ( T & M )
Example Contract = INR 1000 per hour or material at cost or INR 300 per linear foot of tiles
10 94
Project Procurement Management Contract type selection Moot points

Contract 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 pricing
10 95
when 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).
Project Procurement Management Procurement management plan

Describes
how the procurement processes shall be managed from developing procurement documents through contract closure
OUTPUTS
Procurement Management Plan
Procurement Statements of work Make-or-buy decisions Procurement documents Source Selection Criteria Change requests
Includes
1) 2)
10 96
Contract types for use Who will make independent estimates and if they are required as evaluation criteria
Procurement management plan includes

3)
4) 5)
10 97
6)
If the performing organization has a procurement department, then what actions project management team is allowed to take on its own Standard procurement documents Information on managing multiple contractors Coordinating procurement with project scheduling, performance reporting, etc.
Project Procurement Management Procurement management plan includes

7) 8)
9)
Procurement related constraints and assumptions Lead times management and coordination with schedule development Managing make-or-buy decisions, linking well with resource planning and schedule development
10 98

10)
11)
12)
10 99
13) 14)
Determining scheduled dates for contract deliverables and coordinating them with schedule development and control processes Determining performance bonds / insurance to mitigate risks Establishing direction for seller to help develop and maintain contract WBS Establishing format for contract SOW Listing pre-qualified sellers

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
11 00
Project Procurement Management Procurement Statement of work

Each contract SOW defines:
the portion of the project scope to be acquired through the respective contract
Developed from: 1) Scope baseline 2) Activity resource requirements 3) Requirements documentation
11 01
Please remember it!
Procurement Statement of work

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!
11 02
Procurement Statement of 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!
11 03

INFORMATION IN CSOW: a) Specifications 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)
11 04
h)
Other requirements

INFORMATION IN CSOW: there are specific content and 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?
11 05

Because a prospective seller may suggest: A MORE EFFICIENT APPROACH OR LESS COSTLY PRODUCT (THAN
THE ONE ORIGINALLY SPECIFIED)
11 06

Make-or-buy decisions Are obvious output. 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)
11 07
Project Procurement Management Procurement documents

used to request proposals from 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
11 08

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 sellers technical skills or technical approach, experience, background, etc., are considered important
11 09

Terms may be used interchangeably also. Hence, please avoid making unwarranted assumptions
11 10
STRUCTURE OF PROCUREMENT DOCUMENTS MUST: 1) Facilitate an accurate and complete response from each prospective seller 2) Facilitate easy evaluation of the bids
Project Procurement Management Procurement documents include:

1) A description of the desired form of response 2) Contract SOW 3) Required contractual provisions (copy of model contract, nondisclosure provisions) 4) Evaluation criteria
11 11

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
11 12
Project Procurement Management Evaluation criteria

Developed and used to rate or 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)
Source selection criteria
11 13

Evaluation criteria
Source selection criteria
11 14
Developed and used to rate or score Proposals 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 management plan and its subsidiary plans. These changes are processed for approval through Integrated Change Control process.
11 15

Deals with Develop project charter (discussed) 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
11 16
Develop Project Management Plan

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.
11 17
Develop Project Management Plan

PROCESS RESULTS IN A Project Management Plan The contents of this plan depend on complexity of the project and the application area
11 18
Project Integration Management The project management plan is developed 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.
11 19
Project Management Overview

OUTPUTS OF ALL OTHER PM PROCESSES + PLUS THEIR MANAGEMENT PLANS, Organizational policies Constraints, Assumptions
Develop Project Management Plan PROJECT PLAN EXECUTION
PM PLAN UPDATES Project management plan
Recommended corrective action Recommended preventive action Recommended defect repair Forecasts
Monitor & Control Project Work INTEGRATED CHANGE CONTROL

deliverables
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
Project closeout
11 20
Contract closure Administrative closure
Close project
Project Management Plan Components

Subsidiary plans
Scope management plan Requirements management plan 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
components
All baselines - 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).
11 21
Project Documents: List 1

Activity attributes Activity cost estimates Activity list Assumptions log Basis of estimates Change log Charter Contracts Duration estimates Forecasts Issue log Milestone list Performance reports Project funding requirements Proposals Procurement documents Project organization structure QC measurements Quality checklists Quality metrics
11 22
Project Documents: List 2

Requirements traceability matrix RBS Resource calendars Risk register Roles and responsibilities Sellers list Source selection criteria Stakeholder analysis Stakeholder management strategy Stakeholder register Stakeholder requirements Statement of work Teaming agreements Team performance assessments Work performance information Work performance measurements
11 23
Project Integration Management Develop Project Management plan process overview
INPUTS
Project charter outputs from planning processes Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Expert Judgment
OUTPUTS
11 24
Develop Project Management Plan process: INPUTS
1) Project charter 2) Outputs from planning processes 3) Enterprise environmental factors considered here:
a) b) c) d) Government or industry standards PMIS Organization structure and culture Infrastructure (existing facilities and capital equipments) e) Personnel administration
11 25
4) Organizational Process Assets considered here:

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 organizations set of standard processes to satisfy needs of the project, Project closure guidelines (product validation and acceptance criteria)
11 26

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.
11 27

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).
11 28
Develop Project Management Plan process: TOOLS
11 29
EXPERT JUDGMENT Utilized to 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 management to apply on the project, and Determine which project documents will be subject to formal change control process.
11 30

WBS
CPM
EARNED VALUE
PMIS
HISTOGRAM
11 31
Develop Project Management Plan process: OUTPUTS
Project Management plan

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!

11 32
Develop Project Management Plan process: OUTPUTS
Kick-off meeting
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!!
11 33
EXECUTING PROCESS Group

11 34
Executing processes
EXECUTING PROCESS GROUP

THE CONCEPT
Consists of processes:
Deployed to accomplish the work described in the project management plan in order to achieve the projects requirements.
11 35
Executing processes

THE CONCEPT
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
11 36
Executing processes

THE CONCEPT
Requires some replanning: Due to normal execution
variances
11 37
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

THE CONCEPT
These variances: May or may not impact the project
management 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!!
11 38
Executing processes
Direct & Manage Project Execution

THE CONCEPT Utilizes : Majority of budget, as all the resources you had planned are put to maximum use here.
11 39
processes
1) 2) 3) 4) 5) 6) 7) 8) Direct and Manage Project Execution Acquire project team Develop project team Manage project team Perform quality assurance Distribute information Manage stakeholders expectations Conduct procurements
11 40

THE CONCEPT Is Primary Process for Carrying out the project management plan; Involves directing and managing various technical and organizational interfaces existing in the project to execute the work;
11 41
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 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,
11 42

What do we do? 6. Establish and manage project communication channels, 7. Generate project data (status, forecasting), 8. Issue change requests and adapt approved changes into the projects scope, plans, and environment,
11 43

What do we do? 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.
11 44
Direct and Manage Project Execution

Project manager, along with project 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 11 45 area!

What do we get?
Deliverables Work performance information about completion status of deliverables, and what has been accomplished is fed into the performance reporting process.
11 46
Work performance info used as input to monitoring and Controlling Process Group.

Here we also implement: 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.
11 47
Project Integration Management Direct and Manage Project Execution process overview
INPUTS
Project Management Plan Approved change requests: - Approved Corrective actions - Approved Preventive actions - Approved change requests (other types) - Approved defect repair EEFs OPAs
TOOLS & TECHNIQUES

Expert judgment Project management information system
OUTPUTS
Deliverables Work performance information Change requests Project management plan update Project document updates
11 48
Direct and Manage Project Execution process inputs 1. Project Management Plan We have discussed in detail. 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.
11 49
Direct and Manage Project Execution process inputs Approved Change Requests continued Approved change requests are scheduled for 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.
11 50
Direct and Manage Project Execution process inputs Approved Change Requests continued Approved change requests may also require 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,
11 51
Direct and Manage Project Execution process inputs Enterprise environmental factors Factors that can influence are: Infrastructure (existing facilities and capital equipments), Personnel administration (hiring and firing guidelines, employee performance review, and training records), Stakeholder risk tolerances
11 52
Direct and Manage Project Execution process inputs Enterprise environmental factors Factors that can influence are: 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).
11 53
Direct and Manage Project Execution process inputs 4. Organizational process assets OPAs that can influence are: Standard guidelines and work instructions, Communication requirements (defining allowed media, record retention, and security requirements), Issue and defect management procedures
11 54
(defining issue and defect controls, issue and defect identification and resolution, and action item tracking).
Direct and Manage Project Execution process inputs Organizational process assets continued OPAs that can influence are: 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).
11 55
Direct and Manage Project Execution process tools & techniques
TOOLS & TECHNIQUES
EXPERT JUDGMENT
Used to assess inputs 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
11 56
TOOLS & TECHNIQUES
EXPERT JUDGMENT
This expertise is provided by the 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
11 57

Project Management Information System Used here. Details already discussed.
TOOLS & TECHNIQUES

Expert judgment
11 58
Direct and Manage Project Execution process outputs

OUTPUTS
Deliverables
Work performance information Change requests Project management plan updates Project document updates
Deliverables 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.
11 59
Direct and Manage Project Execution process OUTPUTS Information on work results:
Which deliverables have been completed and which have not To what extent the quality standards are being met What costs have been incurred or committed
11 60
IS COLLECTED HERE AND FED INTO THE PERFORMANCE REPORTING PROCESS FOR NECESSARY ANALYSIS AND EVALUATION!
Direct and Manage Project Execution process OUTPUTS Work Results (DELIVERABLES) Are mostly tangible but intangible too: Example Tangible Deliverables 1) Buildings 2) Structures 3) Roads
11 61
Intangible Deliverables 1) Training 2) Mentoring 3) Facilitation
Direct and Manage Project Execution process OUTPUTS
Changes Requests
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.
11 62
Changes Requests
Other change requests cover required preventive or corrective actions to forestall negative impact later in the project.
11 63
Changes Requests
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).
11 64
Changes Requests
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.
11 65
Project Management Plan Updates

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
11 66
Project Document Updates

Include updates to: 1. Requirements documentation 2. Project logs (issue, assumptions, etc.) 3. Risk register, and 4. Stakeholder register
11 67
EXECUTION PROCESSES
11 68
Acquire Project Team

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!!
11 69
Project Human Resource Management Acquire Project Team

Please remember following: 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.
11 70

Please remember following: 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.
11 71

Please remember following: 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!!!
11 72
Project Human Resource Management Acquire project team process overview

INPUTS
Project Management Plan Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Preassignment Negotiations Acquisition Virtual teams
OUTPUTS
Project Staff Assignments Resource Calendars Project management plan updates
11 73
Acquire Project Team process INPUTS Project Management Plan provides Human Resource Plan
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).
11 74
Acquire Project Team process INPUTS Enterprise Environmental Factors

Following factors influence this process: 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
11 75
Acquire Project Team process INPUTS Organizational process assets

Following factors influence this process: Organization standard policies, processes, procedures.
11 76

Acquire project team Tools & Techniques
Preassignment
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!
11 77

Acquire Project Team Tools & Techniques
Negotiation
Happens when project team is drawn 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.
11 78

Negotiation
Here, your ability to influence and 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!
11 79

Acquisition
Recruit or hire or subcontract work if the performing organization lacks the in-house staff required to complete the project.
11 80

Virtual teams
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.
11 81

Virtual teams
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
11 82

Virtual teams
New possibilities caution!
You need to spend extra time to 1) SET CLEAR EXPECTATIONS 2) DEVELOP PROTOCOLS FOR CONFRONTING CONFLICTS 3) INVOLVE PEOPLE IN DECISIONMAKING 4) SHARE CREDIT IN SUCCESS So, communication planning becomes very important here!! Please remember!!!
11 83

Acquire project team OUTPUTS
Project staff assignments

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
11 84

Acquire project team OUPUTS
Resource Calendars
Documents time periods each team member will work on the project. Please remember: You can develop a reliable, final schedule only after considering each persons schedule conflicts, including his commitments to other projects and his vacations, etc.
11 85

Acquire project team OUTPUTS
Project management plan updates may include Human Resource Plan.
11 86
T E A M
11 87
D E V E L O P M E N T
Project Human Resource Development
Develop Project Team

Concept
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.
11 88

Concept
Teamwork Critical Success Factor for project 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
11 89

Concept
Teamwork Critical Success Factor for project 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.
11 90

Concept
HIGH Team Performance can be by 1) 2) 3) 4) Using open and effective communication, Developing trust among team members, Managing conflict in a constructive manner, and Encouraging collaborative problem-solving and decision making.
11 91
The project manager should request support and influence stakeholders to get resources for developing effective project teams!

Challenges
Global environment, cultural diversity Team members often have diverse industry experience, multiple languages, and sometimes operate in the tteam languageor norm that is a different language than their native one.
What should be done to tackle this?

11 92

Challenges
The project management team should 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?
11 93

Advantage
Developing the project team 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!
11 94
Objectives?

Objectives of developing a project team
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
11 95

Objectives of developing a project team
3) Create a dynamic and cohesive team culture to improve both individual and team productivity, team spirit, and cooperation, and allow crosstraining and mentoring to share knowledge and expertise.
11 96
Project Human Resource Management Team development basics

TEAM DEVELOPMENT is critical to the projects ability to meet its objectives INDIVIDUAL DEVELPOMENT
(behavioral and technical)
11 97
is the foundation essential to develop the team

Stage of Team Development
FORMING STAGE 1 Team members enthusiastic about new team: commitment high only beginning to work together: competence low

STORMING STAGE 2 Experience temporary lapse of commitment to the team as they struggle to find a good way to work together team learns: competence rises
NORMING, PERFORMING STAGE 3 Team has found and agreed a good way to work: commitment and competence high
MOURNING STAGE 4 Competence established at high level Commitment may surge or dip depending how disbanding the team handled
11 98

Team development basics
Organization structure
of the performing organization has great bearing on team development on projects
Efforts to develop team are complicated

When individual team members are accountable to both a functional manager and the project manager Its project managers responsibility to balance this relationship and get the due contribution and cooperation of the team members!
11 99
Project Human Resource Management Develop Project Team process overview

INPUTS
Project Staff assignments Project management Plan Resource calendars
TOOLS & TECHNIQUES

Interpersonal Skills Training Team-building Activities Ground rules Co-location Recognition and rewards
OUTPUTS
Team Performance assessments Enterprise Environmental Factors Update
12 00

Develop project team INPUTS

Team development starts with the list of the project team members, project staff assignments documents identify the people who are on the team.
12 01

Project management plan 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.
12 02

Resource Calendars Identifies times that project team

members can participate in team development activities.
12 03
Develop Project Team Tools & Techniques
Interpersonal skills
Sometimes known as soft skills, play Important 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.
12 04
Develop Project Team Tools & Techniques Interpersonal skills Skills that help you managing team members: 1) Empathy 2) Influence 3) Creativity 4) Group facilitation
12 05
Develop Project Team process Tools & Techniques
12 06
Training All activities designed to enhance competencies of team members. Can be formal, informal. Class room, online, computer-based, on-thejob 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.

Develop project team Tools & Techniques
Training
Planned Training: scheduled in staffing management plan. Unplanned Training: result of observation, conversations, performance appraisal conducted during the process Manage Project Team in Controlling!
12 07

Team-building activities
Vary from: 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.
12 08

Team-building activities
You should also: 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 dont get the benefit of face-to-face contact!
12 09
Project Human Resource Management Team-building activities: discussion As ongoing process, team building is crucial to
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

12 10
functioning and performance to determine if any actions are needed to prevent or correct team problems!!!
Project Human Resource Management Team-building activities: discussion Five stages (Tuckman ladder of team development)
1) 2) 3) 4) 5) Forming Storming Norming Performing 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!
12 11
We have already talked about these stages

Ground rules
Please establish clear expectations of acceptable behavior by project team members! Early commitment to these guidelines reduces misunderstanding and increases productivity!
12 12
Form by joint participation so that team members share responsibility to follow them.

Co-location
Placing all or most of the active team 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!
12 13

Co-location
When co-location is thought to be a good strategy, the use of virtual team members will reduce the frequency that team members are located together!
12 14

Recognition and Rewards

Is part of the team development 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.
12 15


CAUTION! Only desirable behavior should be rewarded! 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.
12 16


CAUTION! Only desirable behavior should be rewarded! 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.
12 17

Develop project team OUTPUTS
Team performance assessment

Effective team development strategies and activities increase Teams Performance, which in turns increases chances of achieving project objectives! We come to know this by assessing team performance.
12 18
Develop Project Team process OUTPUTS Team performance assessment Informal and formal assessments of teams effectiveness (resulting from team 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
12 19
Develop Project Team process OUTPUTS Team performance assessment Informal and formal assessments of teams effectiveness (resulting from team development activities): 4) Increased team cohesiveness where team members share information and experiences openly and help each other to improve the overall project performance!
12 20
Develop Project Team process OUTPUTS Team performance assessment Please remember
Such assessments can also identify need for Some specific training, coaching, mentoring, assistance, or changes to improve the teams performance.
Please note
12 21
This is especially important if team members are part of a union, involved in collective bargaining, bound by contract performance clauses, or other related situations!

Develop Project Team OUTPUTS
Enterprise Environmental Factors Updates may include Personnel Administration, including updates for Employee Training Records Skill Assessments.
12 22
Manage Project Team
12 23
Project HR Management Manage Project Team Involves:

1) 2) 3) 4)
12 24
Tracking team member performance Providing feedback Resolving issues Coordinating changes to enhance project performance
Project HR Management Manage Project Team HOW? Well, the project management team:
1) 2) 3) 4)
12 25
Observes team behavior Manages conflict Resolves issues APPRAISES TEAM MEMBER PEROFRMANCE
Project HR Management Manage Project Team RESULT?

1) 2) 3) 4) 5)
12 26
Staffing management plan is updated. Change requests are submitted. Issues are resolved. Inputs provided to performance appraisals Lessons learned are added to organizations database.
Project HR Management Manage Project Team 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. Its responsibility of Project Manager to manage it nicely! Remember it!!
12 27
Project HR Management Manage Project Team CAUTION!

Team Management requires a combination of skills with special emphasis on: 1) 2) 3) 4) Communication Conflict Management Negotiation, and Leadership.
CAUTION!
Project Managers should provide challenging assignments to the team members and provide recognition for high performance.
12 28
Project HR Management Manage Project Team process overview

INPUTS
Project staff assignments Project Management Plan Team performance assessment Performance Reports Organization Process Assets
TOOLS & TECHNIQUES

Observation and conversation Project performance appraisals Conflict management Issue log Interpersonal Skills
OUTPUTS
Change Requests Enterprise Environmental factors Update OPAs updates PM Plan updates
12 29
Manage Project team process INPUTS

Provide a list of team members to be evaluated.

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.
12 30

Team Performance Assessments
(ongoing, formal/informal)
Helps take actions to resolve issues, modify communication, address conflict, and improve team interactions.
12 31

Performance reports Results from control processes, such as: 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
12 32

Organizational process assets That can influence this process: 1) Certifications of appreciation 2) Newsletters 3) Websites 4) Bonus structures 5) Corporate apparel, and 6) Other organizational perquisites.
12 33
Manage Project Team process Tools & Techniques Observation & conversation To be in touch with work and attitudes of team members. PM team monitors: 1) Progress toward project deliverables. 2) Accomplishments that are source of pride among team members. 3) Interpersonal issues
12 34
Manage Project Team process Tools & Techniques Project performance appraisals
(feedback) 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.
12 35
Manage Project Team process Tools & Techniques Project performance appraisals
(feedback) Objectives? 3) Discover unknown and unresolved issues, 4) Develop individual training plans, and 5) Establish specific goals for future time periods.
12 36
ANSWER:
Manage Project Team process Tools & Techniques Conflict management Conflict is an inevitable part in a project environment. Successful conflict management increases productivity and brings in positive working relationships. Sources of conflict? - scarce resources - scheduling priorities - personal work styles
12 37
Manage Project Team process Tools & Techniques Conflict management What can help?
- Team ground rules - Solid project management practices (communication planning, role definition, etc.)
Benefit? If managed properly.

12 38
Differences of opinion are healthy Leads to enhanced creativity Better decision-making
Manage Project Team process Tools & Techniques Conflict management Please remember that differences become a
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.
12 39
Manage Project Team process Tools & Techniques Conflict management Please remember
Conflict should be addressed EARLY and usually IN PRIVATE, using a direct, collaborative approach!
12 40
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.
Manage Project Team process Tools & Techniques MOST VITAL POINTS:
1. CONFLICT IS NATURAL AND FORCES A SEARCH 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!
12 41
Manage Project Team process Tools & Techniques Success in managing project teams depends largely on the ability to resolve conflict. 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
12 42
4. Motivation to resolve conflict on long-term or short-term basis.
Manage Project Team process Tools & Techniques Conflict resolution techniques: 1. 2. 3. 4. 5. 6.
12 43
Withdrawal/avoiding Smoothing/accommodating Compromising Forcing Collaborating Confronting/Problem Solving
Manage Project Team process Tools & Techniques Conflict resolution techniques: 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 ones point of view at the expense of others. Win-Lose.
12 44
Manage Project Team process Tools & Techniques Conflict resolution techniques: 5. Collaborating: Incorporating multiple point of
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.
12 45
Manage Project Team process Tools & Techniques Issue log (issues arising during managing
project team) 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)
12 46
Manage Project Team process Tools & Techniques
Interpersonal Skills
Project managers use a combination of technical, human, and conceptual skills to analyze situations and interact appropriately with team members. Please note: Using appropriate interpersonal skills aids
12 47
project managers in capitalizing on the strengths of team ALL members!
1. Leadership 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.
12 48
1. Leadership 2. Influencing 3. Effective decision making
12 49
Influencing: Ability to influence stakeholders on a timely manner, especially in a matrix environment where project manager have little or no direct authority.
Manage Project Team process Tools & Techniques Key Influencing skills: 1. Ability to be persuasive and clearly 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.
12 50
Effective decision making

Ability to negotiate and influence the organization and the project management team. GUIDELINS: 1. 2. 3. 4. 5. 6. Focus on goals to be served Follow a decision-making process Study environmental factors Develop personal qualities of the team members Stimulate team creativity, and Manage opportunity and risk.
12 51
Manage Project Team process OUTPUTS Change Requests

Staffing changes emerging from this process ( 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!
12 52
Manage Project Team process OUTPUTS Change Requests

Staffing changes can include: 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.
12 53
Manage Project Team process OUTPUTS OPAs updates 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 database
12 54
examples
Manage Project Team process OUTPUTS OPAs updates HR-Related lessons learned posted in historical database: 1) Project org. charts, position descriptions, staffing management plan (kept as templates). 2) Ground rules, conflict management techniques, and recognition events that examples proved so good.
12 55
Manage Project Team process OUTPUTS OPAs updates HR-Related lessons learned posted in historical database: 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.
12 56
Manage Project Team process OUTPUTS
Enterprise Environmental Factors Updates 1. Input to organizational performance appraisals. 2. Personal Skills Updates
12 57
Manage Project Team process OUTPUTS
Project Management plan Updates 1. Staffing management plan
12 58
Perform Quality assurance

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!
12 59

Please remember A quality assurance department, or similar 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!
12 60

Please remember This process provides and umbrella for Continuous Process Improvement, that is an iterative means for improving quality of all processes.
12 61
Quality assurance
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.
12 62

Perform Quality Assurance process overview INPUTS
Project Management Plan Quality metrics Work performance information Quality control Measurements
TOOLS & TECHNIQUES

Plan Quality and perform Quality Control Tools & Techniques. Quality Audits Process analysis
OUTPUTS
Change Requests Organizational process assets updates Project management plan updates Project Document Updates
12 63

Perform Quality assurance INPUTS
Project management Plan provides

1. Quality Management Plan prescribes how quality will be performed within the project.
2. Process Improvement Plan

details steps for analyzing processes to identify activities that enhance value and the ones do not add value.
12 64

Quality metrics
We have dealt with this also during quality planning and we use them as another important input here.
12 65

Work performance information

Needed for quality audit, reviews, process analyses. Includes: 1) Technical performance measures 2) Project deliverables status 3) Required corrective actions 4) Performance reports
12 66

Quality control measurements

Are results of quality control activities. Based on the these results, we reanalyze and reevaluate the quality standards and processes of the performing organization during QA process!
12 67

Perform Quality Assurance Tools & Techniques Recap
Plan Quality & Perform Quality Control tools & techniques: already discussed Benefit/Cost analysis Benchmarking Flowcharting Design of experiments Cost of quality
Quality audits
carried out to identify: lessons learnt that can
12 68
improve performance of the present project, and also of other projects in performing organization
Perform Quality Assurance Tools & Techniques
Quality audits
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!
12 69
Quality audits
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
12 70
Quality audits
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.
12 71
Advantage
Quality audits
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!
12 72

Perform Quality Assurance TOOLS & TECHNIQUES
Process analysis
Done by following steps written in process improvement plan. PURPOSE? To find out required improvements from the technical and organizational point of view! HOW?
12 73
Process analysis
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.
12 74
Perform Quality Assurance OUTPUTS
Change Requests
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!
12 75
Project Management Plan updates

1. Quality Management Plan 2. Schedule Management Plan 3. Cost Management Plan.
12 76
Project Management Plan updates

What 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
12 77
implementation).

Project management Plan updates

These 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.
12 78

OPA Updates
may include Quality Standards
Project Document Updates

include 1. Quality Audit Reports. 2. Training Plans, and 3. Process Documentation.
12 79
DISTRIBUTE INFORMATION
12 80
Project Communication Management DISTRIBUTE INFORMATION

Timely communication of needed information to project stakeholders Implementing communications management plan Attending to unexpected requests for information
12 81
Project Communication Management

DISTRIBUTE INFORMATION Project information distributed: Sample status
progress, success forecast variance report corrective action problems, new risks discovered updated project plans/ components of project plan team members performance meeting schedule , etc
12 82

DISTRIBUTE INFORMATION - Sample Project information is distributed to
internal to the project external to the project management sponsor functional managers team team members managers other project managers project manager other stakeholders
12 83
Project Communications Management Distribute Information process overview

INPUTS
Project Management Plan Performance Reports. Organizational Process Assets
TOOLS & TECHNIQUES

Communications Methods Information Distribution Tools
OUTPUTS
OPAs Updates
12 84

The Project Management Plan contains the :Communications management plan which 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 cant be solved at lower level
12 85


contains
Method for updating and refining communications management plan AS PROJECT PROGRESSES GLOSSARY OF COMMON TERMINOLOGY (VERY IMPORTANT)! WHY?
12 86

Performance Reports:They are used to distribute project performance and status information. It should be as precise and current as possible.
12 87

OPAs include:Policies, Procedures, and guidelines regarding information distribution. Templates, and Historical Information and Lessons Learned.
12 88
Communication Methods includes:Individual and group meetings. Video and Audio Conferences. Computer Chats Remote Communication Methods are used to distribute information.
12 89

Information distribution methods

Using 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.
12 90

OPAs Updates
Consist of 1) Lessons learned documentation 2) Project records 3) Project reports 4) Project presentations 5) Feedback from stakeholders 6) Stakeholder notifications Lessons
12 91

OPAs Updates
1. Lessons learned 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
12 92

OPAs Updates
2. Project records Are documents
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
12 93

OPAs Updates
3. Project reports
Formal or informal project reports detailing: Project status Lessons learned Issue logs Project closure reports Outputs from other knowledge areas
12 94

OPAs Updates
4. Project presentations
Are made by the project team to the stakeholders to satisfy their information needs by using appropriate formal or informal methods.
12 95

OPAs Updates
5. Feedback from stakeholders
Information received from stakeholders concerning project progress. Distributed and used to modify or improve future project performance!.
12 96

OPAs Updates
6. Stakeholder notifications
Information provided to stakeholders about: 1) Approved changes 2) Resolved issues 3) General project status
12 97

12 98
Manage Stakeholder Expectations Process of communicating and working with stakeholders to meet their needs and addressing their issues as they occur.
12 99

Involves communication activities directed toward project stakeholders to influence their expectations, address concerns, and resolve their 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.
13 00

Involves communication activities directed toward project stakeholders to influence their expectations, address concerns, and resolve their 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).
13 01

ADVANTAGE: Managing stakeholder expectations helps increase the 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.
13 02

WHOSE DUTY?
Project Manager is responsible. It decreases the risk that the project will fail to meet its goals and objectives due to unresolved stakeholder issues. It limits disruptions during the project!
13 03

Manage Stakeholder Expectations process overview
INPUTS
Stakeholder Register Stakeholder Management Strategy Project Management Plan Issue Log Change Log OPAs
TOOLS & TECHNIQUES

Communication methods Interpersonal Skills Management Skills
OUTPUTS
Change Requests Project Document Updates OPAs updates PM Plan updates
13 04
Manage Stakeholder Expectations - INPUTS
1. Stakeholder Register
Provides list of the relevant stakeholders. Used to 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.
13 05
3. Project Management Plan

provides 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.
13 06
4. Issue logs (action-item log)

A tool used to record and monitor Resolution of 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.
13 07
4. Issue logs (action-item log)

Please note: 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!
13 08
5. Change Log
Used to record changes that occur during the project. These changes and their impact (time, cost, and risk) must be communicated to the concerned stakeholders.
6. Organizational Process Assets

13 09
- organization communication requirements - Issue mismanagement procedures - Change control procedures - Historical information
Manage Stakeholder Expectations Tools & Techniques
Methods of communication identified for each stakeholder (in communication management plan) are used during stakeholder management.
2. Interpersonal Skills
Project Manager applies toward: a) Building Trust, b) Resolving conflict, c) Active listening, and d) Overcoming resistance to change.
13 10
Manage Stakeholder Expectations Tools & Techniques
3. Management Skills
Managing is the act of directing and controlling 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
13 11
Manage Stakeholder Expectations OUTPUTS
1. Organizational process updates

Posting lessons learned like causes of issues and logic behind corrective action chosen, plus other type of lessons learned about stakeholder management!
2. Change requests
Managing stakeholder expectations may result in a change request to the product or the project. It may also include corrective or preventive actions.
13 12
3. Project Management Plan updates

Communication Management plan, that is part 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.
13 13
3. Project Documents updates

- Stakeholder Management Strategy: 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 and current ones are resolved!
13 14
Conduct Procurements
13 15
Project Procurement Management Conduct Procurements PROCESS

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.
13 16
Project Procurement Management Conduct Procurements

On major procurement items, the overall process of 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.
13 17
Project Procurement Management Conduct Procurements

Additionally, tools & techniques can be used alone or 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.
13 18
Project Procurement Management Conduct procurements process overview

INPUTS
OPAs Project management plan Procurement documents Source selection criteria Qualified seller list Seller proposals Project documents Make-or-buy decisions Teaming agreements
TOOLS & TECHNIQUES

Bidder Conferences Advertising Proposal evaluation techniques Independent estimates Expert judgment Internet search Procurement negotiations
OUTPUTS
Selected sellers Procurement contract award Resource calendars Change requests Procurement management plan updates Project document updates
13 19

Conduct Procurement INPUTS 1. OPAs List or files with information on 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.
13 20

Conduct Procurement INPUTS
2. Project management plan

provides procurement management plan for use here. We have discussed about it during plan procurements.
3. Procurement documents
We have discussed about procurement documents during plan contracting.
13 21

4. Source selection criteria

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 suppliers past record with the contracting organization and other buyers
13 22
5. Qualified sellers list

Pre-screened for their qualifications and past experience. 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
13 23
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 accordance with the requirements of procurement documents. Describe sellers ability and willingness to provide the requested products, as described in the procurement documents.
13 24
Reflect the application of applicable contract principles.
7. Project documents
We consider following documents: 1. Risk register 2. Risk-related contract decisions
8. Make-or-buy decisions
We have discussed already
13 25
9. Teaming agreements
Whenever such an agreement is in place consider following documents: 1. Risk register 2. Risk-related contract decisions
13 26
Conduct Procurements TOOLS & TECHNIQES
Bidder conferences (prebid/vendor/contractor conferences)
Meetings with prospective sellers prior to preparation of a proposal by sellers in response to buyers RFP.
13 27
Bidder conferences aims at ensuring that

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.
13 28
Advertising
Inviting proposals from 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.
13 29
Real life example
Request for Proposal (RPF)

For collection, Transportation and Disposal of Hotel Waste Under Green Lines Services Project of JMC
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
13 30
Real life example

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. 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)
2.
13 31
Real life example

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 A pre-bid meeting is arranged on 5.02.05 at 3:00 P.M. in the conference hall of JMC Head Office. Completed tender must be submitted up to 11.02.05 till 3:00 P.M. 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.
3. 4. 5.
13 32
Real life example

5. 6. Envelope B (Financial offer) shall be opened on suitable date for which separate intimation shall be sent to the qualified bidders. Interested eligible Bidders may obtain further information from the office of the Senior Health Officer. Name: xyz Designation:
13 33
Proposal evaluation techniques

On complex procurements, source selection is done Based on previously defined weighted criteria! Buyers procurement policies define a formal evaluation process! The evaluation committee makes their selection for approval by management prior to the award!
13 34
Weighting system
Evaluates proposals based on 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
13 35
Conduct Procurements TOOLS & TECHNIQES Sample Weighting system

Evaluation Criteria Understanding of need Life cycle cost Technical capability Sellers management approach Price Financial capability
Weightage % (W) Score (S) Total (W x S)
13 36
Total of weightage (100)
Sum W x S
CASE STUDY: DCA 21 PROJECT

1) EVALUATION CRITERIA using five point scale 1 2 3 Criteria
Technical solutions approach Price Project organization and management Likelihood of meeting schedule / cost targets
Bad above 1.8 Bad Bad Bad Poor 1.6-1.8 Poor Poor Poor
Adequate
4
Good 1.2-1.4 Good Good Good
5
Excellent
1.4-1.6
Adequate
Below 1.2
Excellent
Adequate
Excellent
13 37
Reputation of seller
Adequate
Excellent

2) Simple Rating using five point scale
Provided scores (S) Proposal B Proposal C
CRITERIA
Technical solutions approach Price Project organization and management Likelihood of meeting schedule / cost targets
Proposal A
4 5 5 4 4 22
2 5 3 3 4 17
5 2 4 5 5 21
13 38
Reputation of seller
SUM SCORES

3) Criteria and Weights (W)
Criteria
Technical solutions approach Price Project organization and management Likelihood of meeting schedule / cost targets Reputation of seller
Weight 0.25 0.25 0.20 0.15 0.15 1.00
13 39

Final evaluation (S x W): Proposal A selected and awarded contract !
Proposal A CRITERIA
TECHNICAL SOLUTION APPROACH PRICE OF CONTRACT PROJECT ORGANIZATION / MANAGEMENT RISK OF SOLUTION WEIGHT (W)
Proposal B S 2 5 3 3 4 SUM (S) (W) 0.5 1.25 0.6 0.45 0.6 3.4
Proposal C S 5 2 4 5 5 SUM (S) (W) 1.25 0.5 0.8 0.75 0.75 4.05
S 4 5 5 4 4 SUM
(S) (W) 1.0 1.25 1.0 0.6 0.6 4.45
O.25 O.25 O.20 O.15 O.15
13 40
REPUTATION OF SELLER
13 41
Independent estimates
Serve as benchmark on proposed responses. Buyer can make its own independent estimates (can also get it prepared by an outside professional estimator). n complex procurements, source selection is done
13 42
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 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
13 43
Expert judgment Used in evaluating proposals.

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!
13 44
Internet search
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.
13 45
Procurement negotiations
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.
13 46
Sample Contract Negotiation For Complex items
Contract negotiations
for complex items is taken up as an independent process
N E G O T I A T I O N S
Inputs
Issues Open items list
Outputs
Memorandum of Understanding
13 47
Conduct Procurements OUTPUTS
Selected sellers
Who are selected sellers? 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)
13 48

Procurement contract award Contract ! (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.
13 49
Contract !
What is inside a contract? 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
13 50
Contract !
What is inside a contract? 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
13 51
Resource calendars
Documents the quantity and availability of resources and the dates on which each specific resource will be ACTIVE OR IDLE.
13 52

Requested changes
This process may result in change requests relating to project schedule, procurement management plan, etc. These requests are reviewed and disposed by Perform Integrated Change Control process.

Updates to show approved changes to: Cost baseline, scope baseline, schedule baseline, and procurement management plan
13 53
Project Documents updates - requirements documentation
Conduct Procurements OUTPUTS Project Documents updates - Requirements documentation - Requirements traceability documentation, and - Risk register
13 54
Monitoring and Controlling
MONITORING & CONTROLLING PROCESS GROUP

13 55

The concept of Monitoring and Controlling 1.Checking performance 2. Managing changes
13 56

1.Checking performance against plan or
against baselines by conducting variance 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.
13 57

example: if you want to check my schedule performance, please compare the actual start 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 = -
13 58

Checking performance In case of variance: 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.

13 59

Once ICC approves it and returns it to Monitoring and controlling, then : 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.
13 60

This is called versioning. You must retain all versions! This will help us understand 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.
13 61

Once ICC approves it and returns it to Monitoring and controlling, then : 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.
13 62

2. Managing Changes: changes to scope, schedule, cost, and quality. There is a standard change control procedure. Step one
Change Request
Step two
Step three
Step four
ICC reviews and then approves or rejects.
Evaluation, Recommend Impact to ICC for Analysis approval
13 63

2. Managing Changes: once ICC approves and returns the change 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.
13 64
Controlling Concepts
Prevention is better than cure
Anticipate problems
13 65
Take preventive action
Monitoring & Controlling Concepts Purposes

of
Project control
Identify problems Solve problems Get the project back on track as soon as possible after problem has been identified!
13 66

CONCEPT THIS process group consists of processes to observe project execution, identify problems in timely manner, recommend corrective action for problems that
have occurred,
recommend preventive action in anticipation of

possible problems,
13 67
thus bring the project into compliance with the project management plan.

CONCEPT Key benefit 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
13 68

CONCEPT Key benefit 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 example get updated from such review!
13 69

CONCEPT example REQUIRES
A MISSED ACTIVITY FINISH DATE
ADJUSTMENTS TO CURRENT STAFFING PLAN RELIANCE ON OVERTIME TRADEOFFS BETWEEN BUDGET AND SCHEDULE OBJECTIVES
13 70

CONCEPT Key benefit 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
13 71

Dynamics of Project Management Process Groups
Initiating
Planning
Executing
13 72
Closing
Monitoring and Controlling: process interactions
Initiating processes
Verify Scope Control Scope Control Schedule
Planning processes
Monitor & Control Project Work
Control Costs Perform quality control
Closing processes
Executing processes
Perform Integrated Change control
Report Performance
Monitor & Control Risks
13 73
Monitor and Control Project Work
13 74
The process of: Tracking, reviewing, and regulating the progress to meet the project objectives defined in the project management plan.
13 75

What is the meaning of Monitoring? Monitoring means: 1. Collecting, measuring, and distributing performance information. 2. Assessing measurements and trends to effect process improvements!
13 76

Please remember! 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!
13 77

What is the meaning of Controlling? Controlling means: 1. Determining corrective or preventive actions or 2. Replanning, and 3. Following up on action plans
13 78
TO DETERMINE IF THE ACTIONS TAKEN RESOLVED THE PERFORMANCE ISSUE!

How do we do it? Most basic: 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. 13
79

How do we do it? Most basic: 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 projects product and related 13 documentation through project completion.
80

How do we do it? Most basic: 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 13 changes. 81

Monitor and Control Project Work process overview
INPUTS
Project Management Plan Performance reports Enterprise environmental factors Organizational process assets
TOOLS & TECHNIQUES

Expert Judgment
OUTPUTS
Change requests Project management plan updates Project document updates
13 82
Monitor and Control Project Work process: INPUTS
Project Management Plan provides baselines for measuring performance. Performance reports provide actual work performance information.Reports prepared by the project team detailing activities, accomplishments, Milestones, identified issues, and problems. Example
13 83
Performance reports provide key information. Examples: - Current status - Significant accomplishments for the period - Scheduled activities - Forecasts, and - Issues.
13 84
Enterprise environmental factors that can influence this process: 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).
13 85
Organizational process assets that can influence this process: 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,
13 86
Organizational process assets that can influence this process: 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
13 87
Organizational process assets that can influence this process: 5. Process measurement database (used to make available measurement data on processes and products, and 6. Lessons learned database.
13 88
Monitor and Control Project Work process: Tools and Techniques
Expert judgment 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.
13 89
Monitor and Control Project Work process: Tools and Techniques
Please remember Although not mentioned specifically, we use here all the performance measurement, forecasting, And change control tools and techniques, including PMIS.
13 90
Monitor and Control Project Work process: OUTPUTS
1. Change requests Variance Measurements resulting from this 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.
13 91
1. Change requests Variance Measurements resulting from this 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.
13 92
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. Change requests, if approved, may: - Expand, adjust project or product scope, - Revise project management plan, - Revise project documents, or - Revise product deliverables.
13 93
2. Project management plan updates Revision of following may happen: - Baselines (Scope baseline, schedule baseline, cost performance baseline). - Subsidiary plans (such as schedule management plan, cost management plan, quality management plan).
13 94
3. Project document updates Revision of following may happen: - Forecasts - Performance reports - Issue log
13 95
PERFORM INTEGRATED CHANGE CONTROL
13 96
Perform Integrated Change Control

Process of Reviewing all change requests, approving changes and managing changes to the deliverables, project management plan, project documents and the organizational process assets.
13 97

Please remember 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.
13 98

Please remember 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!
13 99

How do we do it? 1. Reviewing, analyzing, and approving change 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.
14 00

How do we do it? 2. Maintaining the integrity of baselines by 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.
14 01

How do we do it? 4. Documenting the complete impact of change requests. 5. Influencing the factors that circumvent integrated change control so that only approved changes are implemented.
14 02

Please remember Changes may be requested by any stakeholder. 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.
14 03

Please remember Every documented change request must be 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.
14 04

Please remember The Perform Change Control process may 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!
14 05
THE NEED FOR A CONFIGURATION MANAGEMENT SYSTEM
14 06
A configuration management system with integrated change control provides a standardized, effective, and efficient way to centrally manage approved changes and baselines within a project!
14 07

QUESTION
What is the difference between configuration 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.
14 08

Objectives accomplished?
Project-wide application of configuration management systems, including change control processes, accomplishes three main objectives
14 09

1) Establishes an evolutionary method to 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!
14 10

THREE Key configuration management activities:
1. Configuration identification 2. Configuration status accounting 3. Configuration verification and audit
14 11

Integrated Change Control What Configuration Management Activities are included in Integrated Change Control? 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 12

Integrated Change Control What Configuration Management Activities are included in Integrated Change Control?
Configuration Status Accounting

14 13
Capturing, storing, and assessing configuration information required to manage products and product information effectively.

Integrated Change Control What Configuration Management Activities are included in Integrated Change Control?
Configuration Verification & Auditing

14 14
Establishes that the performance and functional requirements defined in the configuration management have been met.

Perform Integrated Change Control process overview
INPUTS
Project Management Plan Work Performance Information Change requests Enterprise Environmental Factors Organizational Process Assets
TOOLS & TECHNIQUES

Expert judgment Change control Meetings
OUTPUTS
Change requests Status Updates Project management plan UPDATES Project document UPDATES
14 15

Perform Integrated Change Control process inputs
Project management plan Used in this process. We have talked about it in detail. Work performance information Used in this process. We have talked about it in detail.
14 16

Perform Integrated Change Control process inputs
Change requests - Recommended corrective action - Recommended preventive action - Recommended defect repair - Any other type of change request regarding scope, time, cost, quality addition or deletion.
14 17
All monitoring and controlling processes and many of executing processes produce change requests!

Please remember CORRECTIVE AND PREVETIVE ACTIONS DO NOT NORMALLY AFFECT THE BASELINES, ONLY THE PERFORMNCE AGAINST THE BASELINES!!
14 18

Perform Integrated Change Control inputs
14 19
Enterprise environmental factors provide 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 - Change control procedures - Procedures for approving and issuing change authorizations - Process measurement database (measurement data on processes and products) - Project files - Configuration management knowledgebase
14 20

Perform Integrated Change Control tools and techniques
Expert judgment In addition to the project management teams expert judgment, stakeholders may be requested to provide advantage of their expertise. They may be invited by the CCB.
14 21
Such expert judgment is applied to any technical and management aspect during this process.

Expert judgment 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
14 22

Change control meetings 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.
14 23
Perform Integrated Change Control process OUTPUTS Change Requests Status Updates 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.
14 24
Status of all changes, approved or not, put in the Change Request Log.
Perform Integrated Change Control process OUTPUTS Project Management Plan Updates - 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!
14 25
Perform Integrated Change Control process OUTPUTS Project Document Updates - Change Request Log - Any other project document (as applicable)
14 26

Verify SCOPE
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!
14 27

Verify SCOPE
Please remember! IF PROJECT IS TERMINATED EARLY, SCOPE VERIFICATION MUST BE DONE TO ESTABLISH THE LEVEL AND EXTENT OF COMPLETION!
14 28

Verify SCOPE
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!
14 29

Verify SCOPE
WHEN IS QUALITY CONTROL PERFORMED? Generally before SCOPE VERIFICATION. But these two can be performed parallel also.
14 30
Project Scope Management Verify Scope process overview

INPUTS
Project management plan Requirements documentation Requirements Traceability Matrix Validated Deliverables
TOOLS & TECHNIQUES

Inspection Reviews Product reviews Audits Walkthroughs
OUTPUTS
Accepted deliverables Change requests Project documentation updates
14 31
Project Scope Management Verify Scope

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.
14 32
Verify Scope- Inputs
Requirements documentation Provides:

All the project, product, technical and other types of 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 deliverables
14 33
All those deliverables that are duly checked by QC and offered for inspection for formal acceptance.

TOOLS & TECHNIQUES Inspection
Reviews Product reviews Audits Walkthroughs
Inspection
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!
14 34

OUTPUTS
Accepted deliverables
Change Requests Project document updates
Those completed deliverables
that have been accepted! Completed deliverables that are not accepted are recorded with reasons for nonacceptance. All supporting documents from customer or sponsor are maintained.
14 35

OUTPUTS
Change Requests
Change requests may result
from this process for deliverables not accepted and require defect repair!
Processed for review and

14 36
approval through Perform Integrated Change Control process.

OUTPUTS

Any document that define the product or report status on product completion may require updating as a result of this process!
14 37
Control SCOPE
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!
14 38
Project Scope Management Control Scope process overview

INPUTS
Project management plan Work performance information Requirements documentation Requirements traceability matrix Organizational process assets
TOOLS & TECHNIQUES

Variance analysis
OUTPUTS
Work performance measurements OPAs updates Change requests PM plan updates Project document updates
14 39
Control Scope- Inputs Project Scope Management

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
14 40
Control Scope- Inputs Project Scope Management

Configuration management plan defines1) 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
14 41
Control Scope- Inputs Project Scope Management Work performance information

Which deliverables have started, their progress Which deliverables have finished
Requirements documentation
To check accomplishment of requirements
Requirements traceability matrix

To trace requirements to their origin
OPAs
14 42
Scope control policies, procedures Monitoring and reporting methods
Project Scope Management Control Scope

TOOLS & TECHNIQUES Variance analysis
Variance analysis (comparing

actual with what is planned)
Assesses magnitude of variation Determines cause of variance

from scope baseline. Decides if corrective or preventive action is required.
14 43
Project Scope Management Control Scope

OUTPUTS
Work performance measurements
OPAs updates PM Plan updates Change requests Project document updates
Work performance measurements Planned vs. Actual technical performance, or other scope performance measurements! Also informed to stakeholders!
14 44
OPAs updates
Lessons learned are posted in the organizations
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!
14 45
Change Requests
Analysis of scope performance can result in a change request to scope baseline or other components of project management plan. Examples: Corrective action or preventive action or defect repair.
14 46
Change requests are sent to ICC for approval.

1. Scope baseline updates 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 cost
14 47
baseline and schedule baseline are also revised and reissued to reflect the approved changes.
Project Document updates
Scope changes result in corresponding updates to: 1) Requirements documentation 2) Requirements traceability matrix.
14 48
CONTROL SCHEDULE
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
14 49
Project Time Management Control Schedule process overview

INPUTS
Project management plan Project Schedule Work Performance information Organizational Process Assets
TOOLS & TECHNIQUES

Performance Reviews Resource Leveling Schedule Compression Project management software Variance analysis Schedule Tool
OUTPUTS
Work Performance measurements Change requests OPAs updates Project Management plan updates Project documents updates
14 50
Control Schedule process INPUTS

Project management plan provides
1. Schedule baseline 2. Schedule management plan * Actual results are compared with schedule baseline to determine if a change, corrective or preventive action is necessary.
14 51
* 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, completed activities, and started activities as of indicated data date!
14 52

Work Performance Information
provides information on project progress 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.
14 53
Control Schedule process TECHNIQUES

14 54
Performance reviews Variance analysis Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool

Performance reviews
Measure, compare, and 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.
14 55

Performance reviews
If we use Critical chain 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.
14 56

Variance analysis
SV and SPI help us to know 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.
14 57

PM Software
Provides ability to track planned 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.
14 58

What-if scenario analysis

Used to review various 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
14 59

Used to find ways to bring project activities that are behind into alignment with the plan. 1. Crashing 2. Fast tracking We have talked about them.
14 60

Scheduling tool
Schedule data is updated and 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.
14 61
Control Schedule process OUTPUTS

OUTPUTS Work performance measurements Organizational process asset updates Change requests Project management plan updates Project document updates
Work performance measurements

The calculated SV and SPI values For WBS components, specially the Work Packages and Control Accounts, are documented and communicated to the stakeholders!
14 62

Organizational process assets 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
14 63

Change requests
Schedule variance analysis, review 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!
14 64

Project management plan Updates after ICC approves

1. Schedule baseline 2. Schedule management plan 3. Cost baseline
14 65


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
14 66


Schedule management planMay be updated to reflect a change in the way the schedule is managed! Cost baselineThe cost baseline may be Updated to reflect changes caused by compression or Crashing techniques!
14 67

Project document Updates

1. Schedule data 2. Project schedule Schedule data update: New network diagrams may be developed to display approved remaining durations and modifications to the work plan.
14 68

Please remember In some cases, project

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!!!
14 69

Project document Updates

1. Schedule data 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.
14 70
CONTROL COST
14 71
COST CONTROL
CONTROL COST
THE CONCEPT
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.
Cost
14 72
COST CONTROL
CONTROL COST
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.
14 73
It is accomplished both at work package level and the project level using the cost account structure.
COST CONTROL
CONTROL COSTS
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
14 74
CONTROL COST
CONTROL COST
THE CONCEPT
So,
the key to cost control is to:
14 75
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
CONTROL COST
CONTROL COST
THE CONCEPT
So, 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
14 76
CONTROL COST
CONTROL COST
THE CONCEPT Remember improper responses to cost variances may lead to schedule or quality issues
14 77
CONTROL COSTS

CONTROL COSTS
THE CONCEPT
Remember improper responses to cost variances may lead to: Schedule problems or Quality problems or An unacceptable risk-level in future in the project
14 78
CONTROL COSTS

CONTROL COSTS
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
14 79
happen.
CONTROL COSTS

Control Costs process overview
INPUTS
Project management plan Project funding requirements Work performance information Organizational process assets
TOOLS & TECHNIQUES

Earned Value Management Forecasting To Complete Performance Index (TCPI) Performance reviews Variance analysis Project management Software
OUTPUTS
Work Performance measurements Budget Forecasts Change Requests Recommended corrective actions OPAs Updates PM Plan Updates Project Document Updates
14 80
CONTROL COSTS

INPUTS

- cost baseline - 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!
14 81
CONTROL COSTS

INPUTS
Project Funding requirements

Are used as input here. Used for comparing actual expenditure with planned expenditure as mentioned in the cost baseline.
14 82
CONTROL COSTS

INPUTS

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.
14 83
CONTROL COSTS

INPUTS
Organization process assets

- Cost-related policies, procedures, guidelines - Cost control tools - Monitoring and reporting methods to be used.
14 84
CONTROL COSTS Sample Change Control System

FLOW DIAGRAM OF COST CHANGE SYSTEM (Tracks and Documents Cost Change Issues)
NO Cost Change Tracking system Has Cost Change Already Taken place? NO Cost Change Approved? YES YES
Cost Change Request
14 85
DOCUMENTATION 1) Cause 2) Cost 3) Parties involved 4) Decision
CONTROL COSTS

TOOLS & TECHNIQUES
Earned Value Management Forecasting To Complete Performance Index (TCPI) Performance reviews Variance analysis Project management Software
Earned Value Management

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.
14 86
CONTROL COSTS
Project Cost Management 1) Earned value management

Earned Value Concept 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.
14 87
CONTROL COSTS

Earned Value Concept 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
14 88

Earned Value Concept 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
14 89

Earned value management Do you know the purpose of EVM Control Account 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)
14 90
Control Costs
Project Cost Management Earned value management

Planned value (PV) 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
14 91

Earned value (EV) 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
14 92

Actual costs (AC) 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)
14 93
Example In Essar Cargo Project, as of week 20: AC is Rs. 530,000
REAL LIFE EXAMPLE
Tabular form
Essar Cargo Project: Performance Report Week 20 (cumulative to date)

ACTIVITY H I J K L M N O P PV
(Rs. 1000 s)
AC
(Rs. 1000 s)
EV
(Rs. 1000 s)
SV 0 0 0 -2 - 18 - 51 0 4 0 - 16
CV 0 -6 -1 2
SPI 1.00 1.00 1.00 0.88
CPI 1.00 0.91 0.99 1.17 0.60 0.30 0.89 0.86 1.09 1.00
100 64 96 16 36 84 40 20 24 32
100 70 97 12 30 110 45 28 22 16
100 64 96 14 18 33 40 24 24 16
- 12 0.50 - 77 0.39 -5 -4 2 0 1.00 1.20 1.00 0.50
14 94
PROJECT
512
530
429
- 83 - 101 0.84
0.81
EVM in action
Project Performance
(Essar Cargo Project)
Schedule Variance (SV) SV = EV PV = 429 K 512 K = - 83 K

We are behind schedule as of week 20
At project level, Week 20: PV = INR 512 K EV = INR 429 K AC = INR 530 K
Cost Variance (CV ) CV = EV AC = 429 K 530 K = - 101 K
14 95
We have spent more than budgeted for the work done as of week 20
EVM in action
Work package Analysis and Performance Indices
For knowing the status of the project, 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
14 96
EVM in action
Work package Analysis and Performance Indices
Two types of indices are used to asses 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
14 97
EVM in action
YARD STICK
Work package Analysis and Performance Indices 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)
14 98
EVM in action
At project level, Week 20:
2) L and M had the greatest cost overruns relative to their size (they have smallest CPI)
PV = Rs. 512 K EV = Rs. 429 K AC = Rs. 530 K
The overall project is behind schedule and over cost:

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
14 99
EVM in action
Work package Analysis and Performance Indices Focusing on only the project level or 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
15 00
EVM in action
Work package Analysis and Performance Indices poor performance on many activities can easily be overlooked Even small cost overruns on many individual work packages can add up to large overruns for the project!!!
15 01
LESSON LEARNED? THE PROJECT MANAGER MUST SCAN BOTH PROJECT LEVEL AND WORK PACKAGE LEVEL, BACK AND FORTH example
Project Status as of week 20
550 500
AV SV CV
Cost Rs. 1000 s
450 400 350 300 250 200 150 100 50
PV EV AC
TV
Project level analysis says that the project is about 1 week behind schedule.
BUT
Status Date
15 02
0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Week
Project Status as of week 20
BUT
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
15 03
Gantt Chart: Work Status as of week 20
15 04
Basic design Hardware design A Hardware design B Drawings B Software specs Parts purchasing B Parts purchasing A Drawings A Installation drawings Software purchasing Delivery B Delivery A Software delivery Assembly A Assembly B Test A Test B Final installation Final test
H I J K L M N O P Q R S T U V W X Y Z
M is on critical path, And behind schedule Completed work Pending work
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36.48
Week
Resolving problems in calculating EV
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 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
15 05
2) Forecasting
As the project progresses, the project team can 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.
15 06
Forecasting
EAC is a prediction of conditions and events in future based on knowledge at the time of forecast. Forecasts are generated, updated, and re-issued based on work performance information.
15 07
Calculating EAC
Actual cost for work completed plus a new estimate to 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
15 08
Forecasting (EVM in action)

TODAY ORIGINAL PLAN BAC EAC
PV AC ETC
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?)
15 09
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).
Example
Say 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
CAUTION! WHEN ACTUAL PERFORMANCE IS UNFAVOURABLE, THE ASSUMPTION THAT FUTURE PERFORMNCE WILL IMPROVE SHOULD BE ACCEPTED ONLY WHEN SUPPORTED BY PROJECT RISK ANALYSIS!
15 11

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
Example
Say 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
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 managers judgment.
EAC = AC + [ (BAC-EV) / (cumulative CPI x Cumulative SPI) ]

ETC AND VAC
ESTIMATE TO COMPLETE (ETC)

HOW MUCH MORE THE PROJECT WILL COST! CALCULATION FORMULA: ETC = EAC - AC
VARIANCE AT COMPLETION (VAC)

HOW MUCH MORE THE PROJECT WILL COST!
15 14
CALCULATION FORMULA: VAC = BAC - EAC
FORECASTS AS OF WEEK 20
ESSAR CARGO PROJECT
ETC = BAC EV / CPI, EAC = AC + ETC BAC = Rs. 990 K, EV = Rs. 429 K, CPI = 0.81 AC = Rs. 530,000 Status Date ETC 990 K 429 K / 0.81 = Rs. 692,593 EAC 530,000 + 692,593 = Rs. 1,222,593
AC EV PV Forecast EV
1200 1100 1000
Forecast AC
EAC BAC ETC
COST ( Rs. 1000 s)
900 800 700 600 500 400 300 200
Initial target date
Revised Completion date
15 15
100
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
WEEK
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 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.
15 16

Control Costs
4) performance reviews
What do they give us: 1) Compare cost performance over time, 2) Find schedule activities/work packages overrunning and underruning budget (PV), 3) Milestones met and due.
15 17
These meetings must use one or more performance-reporting techniques

Control Costs
performance reviews
performance-reporting techniques to 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.
15 18

Control Costs
performance reviews
performance-reporting techniques to 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.
15 19
CONTROL COSTS

5) Variance Analysis Cost performance measurements (CV, CPI) are 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
15 20
example
Example: Variance Analysis

Progress Measurement data date: October 1, 2004
Work package H I J K L M O P Status COMPLETED COMPLETED COMPLETED Not started COMPLETED Not started Started Not started Planned Value 100 50 50 70 90 40 50 0 Earned Value 100 50 50 0 90 0 50 0 Actual cost 100 55 40 0 140 0 25 0 Work package Schedule 0 0 0 Cost 0
-10
20 -------
- 100
0
- 55.5
------50 -------
- 100
0 -----
15 21
450
340
360
- 24.4
- 5.9
VAIANCE ANALYSIS RESULTS: AS OF OCTOBER, 2004 THE PROJECT IS BEHIND SCHEDLUE AND OVER BUDGET
CONTROL COSTS

5) Variance Analysis please remember
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!
15 22
example
CONTROL COSTS
Project Cost Management 6) Project Management Software Used to monitor three EVM dimensions (PV, EV, and AC) to display graphical trends and forecast a range of possible final results!
15 23
Cost Costs process Outputs

Control Costs
1) Work Performance measurements

Calculated CV, SV, CPI, SPI
values for WBS components (work packages or control accounts).
Are recorded and informed to

15 24
stakeholders!

Control Costs
2) Budget Forecast
(EAC, ETC)
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!
15 25

3) Change Requests
To some aspect of the project resulting from project performance
analysis. Example: Increasing or decreasing the budget! Routed through ICC.
15 26

Control Costs
4) OPAs Updates
Lessons learned posted in database.
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
15 27

Control Costs
5) PM Plan Updates
Components of PM Plan are updated 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
15 28

Control Costs
6) PM Document Update include 1) Cost Estimates 2) Basis of Estimates
15 29
PERFORM QUALITY CONTROL

15 30

THE CONCEPT
15 31
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
A CRITICAL ELEMENT OF QUALITY MANAGEMENT IN PROJECT CONTEXT IS TO CONVERT STAKEHOLDER NEEDS, WANTS, AND EXPECTATIONS INTO REQUIREMENTS THROUGH STAKEHOLDER ANALYSIS DURING PROJECT SCOPE MANAGEMENT
15 32

THE CONCEPT
Quality is synonymous with ability to conform to the requirements of the enditem and work processes and procedures.
15 33

THE CONCEPT
15 34
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.

THE CONCEPT
15 35
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.)

THE CONCEPT
15 36
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.

THE CONCEPT
15 37
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.

THE CONCEPT
1) 2) 3)
15 38
4)
FUNDAMENTAL PILLARS OF QUALITY Customer Satisfaction Prevention over inspection Management Responsibility Continuous Improvement

FROM OUR DISCUSSION ON THE CONCEPT, IT IS EVIDENT THAT QUALITY CONTROL PROCESS requires us to:
1) Monitor specific project results to determine whether they comply with relevant quality standards
15 39
2) Identify ways to eliminate causes of unsatisfactory results

FROM OUR DISCUSSION ON THE CONCEPT, IT IS EVIDENT THAT QUALITY CONTROL PROCESS requires us to:
15 40
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: 1) PRODUCT RESULTS
Deliverables
2) PROJECT MANAGEMENT RESULTS

Schedule performance Cost performance
15 41
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
15 42
Probability

PROJECT MANAGEMENT TEAM
MUST KNOW THE DIFFERENCE between
Prevention
Keeping errors out of process!
Inspection
Keeping errors out of the hands of the customer!
Attribute Sampling
Variable Sampling
15 43
Implies either result conforms or Implies the result is rated on a it does not conform! continuous scale that measures magnitude of conformity!

PROJECT MANAGEMENT TEAM
MUST KNOW THE DIFFERENCE between
Special Causes / Non-random

Mean unusual occurrences!
Common Causes / Random Causes

Mean normal process variation
Tolerances
Control Limits
Define variation range of a process. The process is said to be in control if the result falls within this range!
15 44
Mean the result is acceptable if it is within specified tolerance range!
Project Quality Management Perform Quality Control process overview

INPUTS
Project Management Plan Quality metrics Quality checklists OPAs Work performance measurements Approved change requests Deliverables
TOOLS & TECHNIQUES

Cause and effect diagram Control Charts Flowcharting Histogram Pareto charts Run chart Scatter diagram Statistical Sampling Inspection Approved Change Requests review
OUTPUTS
Quality control measurements Validated Changes Change requests Recommended defect repair OPAs updates Validated deliverables PM Plan updates Project Document Updates
15 45
Project Quality Management Perform Quality 1) Project management plan It contains quality management Control process plan which is used to control INPUTS quality.
Guides us how quality control should be performed.
2) Quality metrics
15 46
Also have been duly deliberated by us during Plan Quality We bring them for use here.

Perform Quality Control
3) Quality Checklists
We have with us as an output of our 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.
15 47

5) Work performance Measurements

Important inputs to QC: Technical performance measures Project deliverables completion status Implementation of required corrective actions Planned results and actual results Implemented change requests
15 48

6) Approved change requests

Timely implementation of approved change requests needs to be examined. These change requests are modifications, such as: Revised work methods Revised schedule
7) Deliverables
15 49
We have amply talked about them. We examine them here if they meet quality requirements.
Project Quality Management Perform Quality Control process TOOLS & TECHNIQUES
1) Cause and effect diagram

(Ishikawa or fishbone diagrams)
Show how how various factors could be linked to potential problems or effects! Help us find the causes of the quality problems. example
15 50
SAMPLE CAUSE AND EFFECT DIAGRAM
TIME
MACHINE
METHOD
MATERIAL
Major Defect ENERGY MEASUREMENT PERSONNEL ENVIRONMENT
15 51
CAUSES
EFFECT
2) Control charts
Help us determine whether process is in control. They graphically display results, over time, of a process. COMPONENTS OF A CONTROL CHART: 1) Upper and lower control limitsthe acceptable range of variation of a process, often shown as dotted lines. 2) Mean- a line in the middle showing the middle of the range of acceptable variation of the process.
15 52
Control charts
COMPONENTS OF A CONTROL CHART: 3) Data points- random and non-random data points. Their appearance and position determines whether process is in control or out of control. 4) Out of control- the process is out of a state 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
15 53
Control charts
COMPONENTS OF A CONTROL CHART: 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.
15 54
Control charts
COMPONENTS OF A CONTROL CHART: 6) Assignable cause- a random data point 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.
15 55
Sample Control Chart

Center line: average of process data Upper line: upper range of acceptable data Lower line: lower range of acceptable data
X axis consists of sample numbers (time of sample)
Process out of control or Rule of seven unstable: 1) points outside UCL (out of control) and LCL; 2) inside UCL & LCL nonrandom points (seven)
Upper control limit
X Mean
15 56
Assignable cause (out of control)
Lower control limit
Control charts
Please do not adjust the process when it is in control. However, you may change the process to usher in improvements, but again remember that you will not adjust it when its in control!
Any type of process output can be monitored by using control charts.
15 57
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. 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.
15 58
Flowcharting
Helps the project management team anticipate: 1) What and where quality problems might occur 2) Hence, help develop approaches for dealing with them
Example Flowcharting
15 59
Example: Flowcharting
(PROCESS FLOWCHART FOR DESIGN REVIEWS)
1 Project request 7 Vendors make proofs NO 8

Package Development Review & approval
2 Compliance Copy 6 Artwork out For proofs NO 9 YES

QA review / approval
3 Develop Artwork 5 Change control For specs YES
NO
4
Artwork Approved
YES 10 Approved Proof back to Vendor 11 Specs signed (package & QA)
15 60
12 Order materials
4) Histogram
A bar chart showing distribution of 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.
15 61
5) Pareto charts
Know 80/20 Rule? It says 80% problems are due to 20% causes! Well, it Paretos law which opines that a relatively small number of causes create a large majority of defects/problems. Pareto diagrams follow this concept.
15 62
Pareto diagrams
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.
15 63
Sample Pareto Diagram (Chart)

40 Number of defective cases
CAR PROBLEMS
30
Cumulative Percentage
75
20 Frequency by Cause 10
50
25
15 64
Percentage of defective cases
100
6) Run chart
Shows history or pattern of variation! 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. Whats the advantage? Helps forecast future outcomes based on historical results!!!
15 65
Project Quality Management Perform Quality Run chart Control process Trend analysis often used to monitor: 1) Technical Performance: how many TOOLS & defects have been identified and TECHNIQUES how many remain uncorrected?
2) Cost and Schedule Performance: How many activities (per period) were done with significant variances?
15 66
7) Scatter diagram
Shows pattern of relationship between 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!
15 67
Project Quality Management Perform Quality 8) Statistical sampling Control process Inspecting by choosing only a part of population of interest (SAMPLE). TOOLS & TECHNIQUES 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.
15 68
8) Inspection
DETERMINE if a work product 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
15 69
Technical performance
We have sufficiently discussed about schedule and cost 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).
15 70
The purpose of measuring technical performance is to 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
15 71
BOTH KINDS OF ESTIMATES ARE BASED ON THE 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!!!
15 72
Examples of Technical Performance Measures
Availability Back-up Utility Safety Speed Survivability Maintainability Flexibility Cycle Time Efficiency Output Rate
15 73
Capacity Response Time Security Setup Time Durability Range Variance Cost Utilization Error / Defect Rate
Size or space Reliability Power Interface Compatibility Interoperability Simplicity / Complexity Signal-to-noise Ratio Trip Time Idle Time
MEASUREMENT:
STEP 1 Periodically, current (actual) Performance Estimates are computed or measured STEP 2 And then, they are compared to objectives STEP 3 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
15 74
Initially, they are based on results from Modeling and Simulation Activities, and later on Test and Demonstration results Using actual Hardware and Software
9) Approved Change Requests review

Done to ensure that product defects are repaired and brought into compliance with requirements/specifications!
15 75
Project Quality Management Perform Quality Control process OUPUTS
1) Quality control measurements

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!
15 76
Please do remember!!
2) Validated Changes
Repaired items re inspected to confirm if they are ok now. Rejection again may require further repair. Decision is notified after examination.
15 77
3) PM Plan Updates
Quality management plan (a 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!
15 78
Project Quality Management Perform Quality Control process OUPUTS 4) OPA Updates include a) Completed Checklists, b) Lessons learned documentation.
15 79
Project Quality Management Perform Quality Control process OUPUTS 5) Validated Deliverables
Quality Control is done to 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.
15 80
Project Quality Management Perform Quality 6) Change Requests include Control process a) defect repair OUPUTS
b) corrective action c) preventive action
7) Project Document Updates may include

15 81
- Quality Standards.
Project communications management
REPORT PERFORMANCE
15 82
REPORT PERFORMANCE
The process of 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.
15 83
REPORT PERFORMANCE
The process of Performance reports need to be provide 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.
15 84
REPORT PERFORMANCE
An elaborate report may include:
1) 2) 3) 4) 5) 6) Analysis of past performance Current status of risks and issues Work completed during the period Work to be completed next Summary of changes approved for the period Other relevant information which may be reviewed and discussed. A COMPLETE REPORT SHOULD ALSO INCLUDE FORECASTED COMPLETION INCLUDING TIME AND COST!!
15 85
Project communications management REPORT PERFORMANCE
CONSISTS OF
collecting and disseminating performance information to stakeholders about HOW RESOURCES ARE USED TO ACHIEVE PROJECT OBJECTIVES
15 86
Project communications management REPORT PERFORMANCE

1. Status reporting
Where the project now stands Budget metrics Schedule achieved
2. Progress reporting
Work packages complete Work packages in progress, Percentage complete
3. Forecasting
Estimating where it will land in future Forecasting schedule and cost based on the trends of current progress
15 87
Must provide information on:
Scope Schedule Cost Quality

15 88
Many projects need information on Risk and Procurement also!
Project Communications Management Report Performance process overview

INPUTS
Project Management Plan Work Performance measurements Budget Forecasts Project Management Plan Organizational Process Assets
TOOLS & TECHNIQUES

Variance Analysis Forecasting Methods Communication Methods Reporting systems
OUTPUTS
Performance Reports Change Requests OPAs updates
15 89
Report Performance - INPUTS
1. Project Management Plan

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.
15 90
2. Work performance information

(collected from execution) 1. Deliverables Status 2. Schedule progress 3. Costs incurred
15 91
3. Work performance measurements

Work performance information is used to 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
15 92
4. Work performance measurements

Budget forecast information from Control Cost 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.
15 93

provide: a) Reporting templates b) Policies and procedures with measures and indicators for use c) Defined variance limits
15 94
Report Performance TOOLS & TECHNIQUES
1. Variance Analysis
An after-the-fact look at what caused a 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
15 95
COMMON STEPS a) Verify the quality of the information collected 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.
15 96
c) Determine the impact of variances.
ANALYZE THE TRENDS OF VARIANCES AND RECORD FINDINGS ABOUT SOURCES OF VARIATIONS AND IMPACT AREA.
15 97
2. Forecasting Methods
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.
15 98
b) CASUAL/ ECONOMICAL METHODS: 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.
15 99
b) CASUAL/ ECONOMICAL METHODS: 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.
16 00
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.
16 01
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!.
16 02
4. Reporting Systems
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 of
16 03
distribution formats: Table Reporting, Spreadsheet Analysis, and Presentations.
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
16 04
Report Performance - OUTPUTS
1. Performance reports
16 05
You prepare performance reports by organizing 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!
Reports must display the type of information 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:
16 06
Elaborate reports include: - 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.
16 07

Example: Performance Report in bar chart
Unit Engineering Design Facility And so on Projected Actual
16 08
Time

Example: Performance Report in S-curve
Cumulative Values in INR
Date of measurement Planned Value (PV)
Actual Value (AV)
Earned Value (EV)
16 09
Time
REAL LIFE EXAMPLE
Tabular form
Essar Cargo Project: Performance Report Week 20 (cumulative to date)

ACTIVITY H I J K L M N O P PV 100 64 96 16 36 84 40 20 24 32 AC 100 70 97 12 30 110 45 28 22 16 EV 100 64 96 14 18 33 40 24 24 16 SV 0 0 0 -2 - 18 - 51 0 4 0 - 16 CV 0 -6 -1 2 SPI 1.00 1.00 1.00 0.88 CPI 1.00 0.91 0.99 1.17 0.60 0.30 0.89 0.86 1.09 1.00
- 12 0.50 - 77 0.39 -5 -4 2 0 1.00 1.20 1.00 0.50
16 10
PROJECT
512
530
429
- 83 - 101 0.84
0.81
Report Performance - OUTPUTS 2. Organizational process assets updates

1) Report Formats, 2) Lessons Learned Documentation , including the causes of issues, reasoning behind corrective action, 3) Other type of lessons learned about performance reporting.
16 11
3. Change Requests
Analysis of performance often generates Change 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.
16 12
MONITOR AND CONTROL RISKS

16 13
Monitor and control Risks

THE CONCEPT
Planned Risk Responses are executed during project life cycle, but the Project Work MUST BE CONTINOUSLY
MONITORED 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 16 ONES ON WATCHLIST
14
Monitor and Control Risks

THE CONCEPT
16 15
3. REANALYZE EXISTING RISKS 4. MONITOR TRIGGER CONDITIONS FOR CONTINGENCY PLANS

THE CONCEPT
16 16
5. MONITOR RESIDUAL RISKS 6. REVIEW EXECUTION OF RISK RESPONSES WHILE EVALUATING THEIR EFFECTIVENESS

THE CONCEPT
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)
16 17
IS AN ONGOING PROCESS FOR THE LIFE OF THE PROJECT!

THE CONCEPT 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
16 18

THE CONCEPT
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!
16 19

THE CONCEPT
HELPS US ENSURE WHETHER
16 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.

THE CONCEPT
HELPS US ENSURE WHETHER
16 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.

THE CONCEPT
REQUIRES YOU TO
1) Choose Alternative Strategies 2) Execute a Contingency Plan or Fallback Plan 3) Take Corrective Action
16 22
4) Modify the Project Management plan

THE CONCEPT
RISK RESPONSE OWNERS REPORTS PERIODICALLY TO THE PROJECT MANAGER
The effectiveness of the plan, Any unexpected impacts,

16 23
Any corrective action required in the midcourse for handling the risk appropriately.
Project Risk Management Monitor and Control Risks process overview

INPUTS
Project Management Plan Risk Register Work performance information Performance Reports
TOOLS & TECHNIQUES

Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings
OUTPUTS
Risk register updates Change Requests OPAs updates PM Plan updates Project document updates
16 24

Monitor and Control Risks INPUTS
Project Management Plan Risk Register
Work performance information Performance Reports
Project Management Plan Provides RMP that Defines procedure

for structuring and performing the response planning during the project life cycle.
Risk Register (provides key inputs)

Identified risks, risk owners, agreedupon risk responses, specific implementation actions, symptoms, warning signals, residual and secondary risks, watchlist, time and cost contingency reserves.
16 25
INPUTS
Project Management Plan Risk Register

Including project deliverables status, corrective actions, and performance reports serve as important inputs here!

Performance Reports
16 26
Performance reports
INPUTS
Project Management Plan Risk Register Work performance information
Provide us information on project work performance. We need to know if any performance analysis impacts the risk management processes!
Performance Reports
16 27
Risk reassessment
TOOLS & TECHNIQUES Risk Reassessment
Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings
We regularly identify new risks and reassess known ones! Risk management must be an agenda in at project team status meeting!
16 28
Risk reassessment
AS PROJECT PERFORMANCE MEASURED AND REPORTED

MAY SURFACE
POTENTIAL RISKS NOT IDENTIFIED EARLIER

IMPLEMENT
16 29
CYCLE OF RISK MANAGEMENT PROCESSES FOR THESE RISKS

Additional risk response planning That was

1)
A RISK EMERGES
2)
TO CONTROL RISK
Not anticipated in the Risk response plan, or Its impact on objectives IS GREATER THAN EXPECTED
16 30
ADDITIONAL RISK RESPONSE PLANNING
Planned response not adequate
Risk audits
Conducted during the project life cycle
TOOLS & TECHNIQUES
Risk Reassessment
Risk audits
Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings
Risk Auditors
EXAMINE AND RECORD EFFECTIVENESS OF RISK RESPONSE ACTIONS
16 31
How much they have succeeded in avoiding, transferring, mitigating negative risks, and enhancing the opportunities for positive risks Effectiveness of the RM Process!
Variance & trend analysis

TOOLS & TECHNIQUES
Risk Reassessment Risk audits
Variance and trend analysis

Technical Performance Measurement Reserve analysis Status meetings
Variance and trend in project 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 these
analyses may forecast cost and schedule potential deviations at project completion!
16 32
Variance & trend analysis

TOOLS & TECHNIQUES

WHY? 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!
examples
16 33
TOOLS & TECHNIQUES

BEWARE OF SCOPE CHANGES!

SCOPE CHANGES

NEW RISK ANALYSIS
16 34
NEW RESPONSE PLANS

WE HAVE ALREADY DISCUSSED SCOPE CHANGES
Earned value analysis

TOOLS & TECHNIQUES

EV analysis ( as already discussed ) 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!
16 35
TOOLS & TECHNIQUES

Risk Reassessment Risk audits Variance and trend analysis
Technical performance measurement

Compares technical performance accomplishments during execution to the project plans schedule for technical achievement. Example:
If a functionality planned as a milestone is not demonstrated, it poses risk to attaining projects scope!
Technical Performance Measurement

Reserve analysis Status meetings
16 36
Reserve analysis
TOOLS & TECHNIQUES
Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement
Compares the amount of COST AND 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!
Reserve analysis
16 37
Status meetings
Status meetings
VERY IMPORTANT TOOL!
TOOLS & TECHNIQUES
Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis
Risk reviews must be done regularly All meetings should have it as a necessary agenda!
ALSO, PLEASE REMEMBER:
16 38
Status meetings
1) As the project advances, the risk ratings and prioritization may change. 2) These changes may need additional qualitative and quantitative analysis.

OUTPUTS
Change Requests OPAs updates PM Plan updates Project document updates
Two categories of updates: Results of risk reassessments, risk audits, and risk views. Examples: updates to Probability, Impact, priority, response plans, ownership, and other items of risk register.
16 39

Two categories of updates: 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!
16 40

Record and Evaluate RISKS Performing Risk Controls reduces the impact or probability of identified - tive Risks and enhances opportunity for + tive risks
16 41
Reassess Risk Ratings to properly control New, Important Risks
Record and Close in risk register
Change Requests
Frequently, the implementation of 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
16 42
Change Requests
Contingency or Workaround plans Implemented Direct & Manage Project Execution Risk Monitoring & Control Integrated Change control
Often Results Into
Requirement to Change the project Plan Change Request
Approves the requested change
16 43
Include : Contingency plans and workaround plans Workaround plans must be properly recorded. They are included in both Direct & Manage Project Execution process and Monitor & Control Project Work process! Remember!!
Change Requests
16 44
Change Requests May lead to
Workaround plans
Are Unplanned Responses to the emerging risks which were not identified or accepted passively.
RISKS ( not identified or accepted passively)
WORKAROUNDS: Unplanned Responses
16 45
DOCUMENT WORKAROUNDS IN PM PLAN AND RISK RESPONSE PLAN
Change Requests May lead to
Recommended preventive actions

Are actions taken to bring the project into compliance with Project Management Plan.
OPAs updates
All the six risk management processes provide information that can help future projects, and hence must be entered in OPAs. examples
16 46
OPAs updates
Examples: 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.
16 47
OPAs updates Examples:

4) Data on actual costs and durations can be added to organizations database. 5) Final versions of risk register and risk management plan templates are included.
16 48
Risk database ( a useful repository )

RISK REPOSITORY
RISK DATA COLLECTED, MAINTAINED, And ANALYSED
USED IN RISK MANAGEMENT PROCESSES
Assists risk management throughout the organization Over time, builds basis of A RISK LESSONS LEARNED PROGRAM ITS USE
16 49
Updates to risk identification checklist

ORIGINAL CHECKLIST 1. 2. 3. 4. 5.
Updated checklist
UPDATED BY EXPERIENCE 1 2 3 4 5 6 7 8 9 WILL HELP RISK MANAGEMENT OF FUTURE PROJECTS
16 50
PM Plan updates
When approved changes impact risk management processes, corresponding component documents of PM Plan are revised and reissued to reflect those changes.

- Assumptions log updates - Technical documentation updates
16 51
ADMINSTER PROCUREMENTS
16 52
You have selected the seller who begins work as per contract. Now what is your prime responsibility from buyers side?
16 53
Ensure that sellers 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 54
But how do you ensure that sellers performance meets your projects requirements?
Well, you apply suitable project management processes and integrate outputs of these processes into overall management of the project!
16 55
But how do you ensure that sellers performance meets your projects requirements?
You also integrate and coordinate at many levels if your project involves many sellers and many products from them
16 56
Project Procurement Management Sample: Application of project management processes to

Administer Procurements process Contract administration
Authorizing contractors work at appropriate time Monitoring contractors technical performance, schedule, and cost Inspecting and verifying the adequacy of contractors product Ensuring that changes are properly approved , and this information is distributed to the concerned stakeholders
PM Process used
Project plan execution Performance reporting Quality control Change control
16 57
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 sellers work! Otherwise, difference of opinion between you and the seller will
16 58
give rise to claims,
disputes, and appeals.
Project Procurement Management Administer Procurements process overview

INPUTS
Procurement documents Project Management Plan Contract Performance reports Approved change requests Work Performance information
TOOLS & TECHNIQUES

Contract Change Control System Procurement Performance reviews Inspections & audits Performance reporting Payment Systems Claims administration Records management system
OUTPUTS
Procurement documentation Change requests OPAs updates PM Plan updates
16 59
Administer Procurements process INPUTS Project Procurement Management Procurement documents

provide complete supporting records for administration of procurement process and includes procurement contract awards and SOW.
Procurement management plan

Guides us on how to administer the contract. We have discussed it already.
16 60
Project Procurement Management Administer Procurements

process INPUTS
Contract
Is the main input. We have discussed it already.
Performance reports
- Seller-developed technical
16 61
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 requests

INCLUDE approved modifications 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!
16 62

process INPUTS

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.
16 63

process INPUTS
Seller invoices
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.
16 64

process Tools & Techniques
Contract change control system

Procedure for modifying the contract. Consists paper work, tracking system, dispute resolution procedures, approval levels necessary for authorizing changes.
CAUTION: PLEASE DONT FORGET TO INTEGRATE THE CONTRACT CHANGE CONTROL SYSTEM WITH THE INTEGRATED CHANGE CONTROL SYSTEM!!!
16 65

Procurement performance reviews

Consists
Sellers 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
16 66

Procurement performance reviews

Whats the objective? Answer:
To identify performance successes or failures, To judge Sellers progress as compared to CSOW, Find contract non-compliance to quantify sellers demonstrated ability/inability to do work.
16 67

TOOLS & TECHNIQUES
Contract Change Control System Procurement Performance reviews
Inspection and audits

Required by buyer, supported by seller (as mentioned in contract)
To identify any weaknesses in sellers work processes or deliverables during execution. May include buyers procurement personnel if authorized by contract.
Inspections & audits

Performance reporting Payment System Claims administration Records management system
16 68

TOOLS & TECHNIQUES
Contract Change Control System Procurement Performance reviews Inspections & audits
Performance reporting
How effectively seller is achieving contractual objectives! You should not forget to integrate it into Performance Reporting Process of your project (buyer side).
Performance reporting Payment System

Claims administration Records management system
Payment system
Buyer accounts payable system handles payments to the seller. On large projects, you can have your own payment system.
16 69

TOOLS & TECHNIQUES
Contract Change Control System Procurement Performance reviews Inspections & audits Performance reporting
Payment system
The project management team reviews and approves payment and then the payment is made in accordance with the the contract terms.
Claims administration
Claims 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.
Payment System Claims administration
16 70
Records management system

TOOLS & TECHNIQUES
Contract Change Control System Procurement Performance reviews Inspections & audits Performance reporting
Claims administration
Claims are recorded, processed, and 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!
Payment System Claims administration
16 71

TOOLS & TECHNIQUES
Contract Change Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration

A set of processes to manage contract documentation and records (S/W, PMIS).
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!
16 72
Outputs
Procurement documentation
INCLUDES: Contract itself with supporting schedules 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
16 73
Outputs
Change Requests
CONTRACT ADMINSTRATION MAY LEAD TO REQUESTED CHANGES TO PM PLAN, ITS COMPONENTS, LIKE PROJECT SCHEDULE. ICC reviews before their approval.
16 74
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!
Outputs
OPAs updates
1) Seller performance evaluation documentation 2) Payment schedules & payments 3) Correspondence
16 75
Outputs
OPAs updates
Seller performance evaluation documentation records sellers 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.
16 76
These documents also help decide contract termination, penalties, fees, or incentives!
Outputs
OPAs updates
Payment schedules and requests are received and disposed by buyers Accounts Payable System (assuming it is external to project).
OPAs updates
Correspondence is written record of buyer-seller communication, mainly: 1) warnings of unsatisfactory performance, requests for changes, or clarifications.
16 77
Outputs
OPAs updates
Correspondence is written record of buyer-seller communication, mainly: 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.
16 78
Outputs
PM Plan updates
Procurement management plan is 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!
16 79
CLOSING PROCESSES
16 80

POSITION IN PROJECT MANAGEMENT LIFE CYCLE
INITIATING PROCESSES PLANNING PROCESSES
CONTROLLING & MONITORING PROCESSES
EXECUTING PROCESSES
16 81
CLOSING PROCESSES

Process Groups Interactions (partial)
Organizational Process Assets
M & C Process Group

Recommended corrective actions Recommended preventive actions Recommended defect repair Forecasts Validated defect repair Approved change requests Rejected change requests Approved corrective actions/ preventive actions Approved defect repair PM Plan Updates Scope statement updates Administrative closure procedure Contract closure procedure
Approved deliverables
Organizational process updates
16 82
Customer
Final product, Service, result

THE CONCEPT
Projects are have a definite beginning and a definite end. The end is reached
1. When objectives are accomplished 2. When it is concluded that objectives will not be / cant be achieved 3. When the need for the project no longer exists, or 4. The project is terminated before completion ( for various reasons )
16 83

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 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.
16 84

THE CONCEPT
As a result, the project closeout gets little 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.
16 85

THE CONCEPT
UNLESS formally closed, the projects have a 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
16 86

THE CONCEPT
As long as the project has not been officially 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.
16 87

THE CONCEPT
Any subsequent changes to criteria (made during the project) must be approved both by contractor and customer. Throughout all phases of the project, the project manager must emphasize achievement of customers acceptance criteria!
16 88

THE CONCEPT
1)
2)
3)
The Closing Process Group consists of THE PROCESSES USED TO FORMALLY TERMINATE ALL ACTIVITIES OF THE PROJECT OR A PHASE HAND OFF THE COMPLETED PRODUCT TO OTHERS, OR CLOSE A CANCELLED PROJECT
16 89

THE CONCEPT
The Closing Process Group (when completed) verifies THAT THE DEFINED PROCESSES ARE COMPLETED WITHIN ALL PROCESS GROUPS TO CLOSE THE PROJECT OR A PHASE! FORMALLY ESTABLISHES THAT THE PROJECT OR PHASE IS FINISHED!
1)
2)
16 90

THE CONCEPT
The Closing Process Group processes
Close Procurements CLOSE PROJECT or phase
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
1)
COMPLETION AND SETTLEMENT OF THE CONTRACT, RESOLUTION OF OPEN ITEMS IF ANY
2)
16 91
CLOSE PROCUREMENTS
16 92
CLOSE PROCUREMENTS
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:

16 93
1) Updating of records to reflect final results 2) Archiving this information for future use
CLOSE PROCUREMENTS
ADDRESSES each contract applicable to the project
or 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
16 94
CONTRACT terms and conditions can mention:

Specific Procedure for contract closure
CLOSE PROCUREMENTS
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

16 95
early termination) detailing the rights and responsibilities of the parties
CLOSE PROCUREMENTS
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:

16 96
1) Sellers preparations, and 2) Any completed and accepted work UNRESOLVED CLAIMS LEAD TO LITIGATION
AFTER CONTRACT CLOSURE!
CLOSE PROCUREMENTS
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

16 97
circumstances under which they come to an end: 1) Whether completed, or 2) Terminated
CLOSE PROCUREMENTS
PRODUCT VERIFICATION Was the work completed Correctly and Satisfactorily? Was the product of the project same as what was requested? Does it meet the needs?
ADMINISTRATIVE CLOSURE UPDATING RECORDS To reflect final results To archive it for future use Contract performance Financial closure Contract file
16 98
Project Procurement Management Close Procurements process overview

INPUTS
Procurement management plan Procurement documentation
TOOLS & TECHNIQUES

Procurement Audits Negotiated settlement Records management system
OUTPUTS
Closed Procurements OPAs updates
16 99
Project Procurement Management Close Procurements

INPUTS

Provides directions for closing procurements!
17 00
Close Procurements Project Procurement Management Procurement documentation

Consists
INPUTS
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
17 01
Procurement audits
TOOLS & TECHNIQUES
STRUCTURED REVIEW Of the entire procurement process from procurement planning through contract administration OBJECTIVE LESSONS LEARNED Identify success and failures that GUIDE US on other procurement items or to other projects within the performing organization
N O T A U D I T O F C O S T S
17 02
Procurement audits
TOOLS & TECHNIQUES
OTHER SPECIAL ACTIVITES:
1)
Arranging for storage of contract records and drawings Creating and delivering legal documents (release of lien documents and formal acceptance letters) Return of property used on the contract to its owner
2)
17 03
3)
Negotiated Settlements
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.
17 04
Lastly, court of law 9although least desirable option).
TOOLS & TECHNIQUES


We have discussed it already.
17 05

Close Procurements
OUTPUTS
Closed Procurements
OPAs updates
Closed Procurements
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.
17 06

Close Procurements
OUTPUTS
Closed Procurements
OPAs updates
OPAs updates
1) Contract file IS THE COMPLETE SET of
indexed records including closed contract, and it
IS MERGED with the final project

records.
17 07

Contract Closure
OUTPUTS
Closed Contracts
OPAs updates
2) Deliverable acceptance Written formal notice from buyer to seller about deliverables accepted or not accepted as per contract terms. 3) Lessons learned documentation Lessons learned analysis and process improvement recommendations for future procurement management.
OPAs updates
17 08
ADMINISTRATIVE ADMINISTRATIVE CLOSE CLOSURE CLOSURE PROJECT or Phase

17 09
Close Project or Phase Process
Performing Close Project portion Of the project management plan!

17 10
Close Project or Phase Process 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.
17 11
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
17 12
Close Project Process
How do we do it?
We develop TWO PROCESSES for this purpose: Administrative closure procedure Close procurements procedure
17 13
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
17 14
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
17 15
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
17 16
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
17 17
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
17 18
Close Project or Phase process overview

INPUTS
Project Management Plan Organizational process assets Accepted Deliverables
TOOLS & TECHNIQUES

Expert Judgment
OUTPUTS
Final product, service or result transition Organizational process assets (UPDATES)
17 19
Close Project process inputs

INPUTS
Organizational process assets Accepted Deliverables

We have already discussed about it. We take it as an important input here.
17 20
Close Project or Phase process inputs OPAs provides

INPUTS

Accepted Deliverables
Project or phase closure guidelines or requirements (project audits, project evaluations, and transitions criteria). Historical information and lessons learned guides proper closure.
17 21
Close Project or Phase process inputs

INPUTS
Project Management Plan Organizational process assets
Refers to transition of final product (or case of phase closure, then intermediate product).
17 22
Close Project process tools & techniques

TOOLS & TECHNIQUES
Expert Judgment
Applied in developing and performing Used to both the administrative closure procedures.
Expert Judgment
17 23
Project Integration Management Administrative closure: Three most important things! 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
17 24
Actions and activities necessary to satisfy Completion or Exit criteria for the project
Close Project process outputs

OUTPUTS
Final product, service or result
Organizational process assets (UPDATES)
Final product, service, or result

Formal 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!
17 25

OUTPUTS
OPAs updates
Development of the index and location of project documentation
(using the configuration management system) Formal acceptance documentation Project files Project closure documentation Historical information
17 26

OUTPUTS
OPAs updates
formal acceptance documentation Formal confirmation from customer or sponsor that customer requirements and specifications have been met. Indicates official acceptance.
17 27

OUTPUTS

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.
17 28

OUTPUTS

project closure documents Documents indicating completion of project and transfer of completed deliverables to others(operations).
17 29

OUTPUTS

historical information Historical information and lessons learned information are transferred to the LESSONS LEARNED KNOWLEDGE BASE for future use!
17 30
Professional Responsibility
AS PROJECT MANAGEMENT PROFESSIONAL
We should
17 31
1. ENSURE INTEGRITY 2. CONTRIBUTE TO KNOWLEDGEBASE 3. APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE 4. BALANCE STAKEHOLDER INTERESTS 5. RESPECT DIVERSITY
We should
17 32
Uphold and Support the integrity and ethics of the profession
OUR ACTIONS must always be
17 33
In line with Legal requirements and Ethical standards
We must always
Uphold the needs of the Project Stakeholders and the part of the Society impacted by our projects
17 34
Professional Responsibility ENSURE INTEGRITY Of

The Project Management Process The Projects Product
17 35
Your own Personal Conduct

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
17 36

The Projects Product
A product that has integrity is the one that is complete and sound, or fit for use.
17 37
The correct application of project management processes will ensure it.

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
17 38

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
17 39
Professional Responsibility CONTRIBUTE TO KNOWLEDGE BASE

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.
17 40
Professional Responsibility CONTRIBUTE TO KNOWLEDGE BASE

Perform research on projects done within your organization for the purpose of calculating performance metrics. Perform research to discover best practices for use of project management and share the findings
17 41
with other.
APPLY PROFESSIONAL KNOWLEDGE / ENHANCE, INDIVIDUAL COMPETENCE Professional knowledge means knowledge of project management practices and the technical knowledge needed to complete the project (specific to the application area).
17 42
Train others to use correct techniques. Inform stakeholders of correct processes.
APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE
Constantly look for new information and practices 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
17 43
applying professional knowledge to improve services
APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE Work to understand your personal strengths and weaknesses. Continue to learn. Plan your own professional development.
17 44
BALANCE STAKEHOLDER INTERESTS
Determine and understand the needs and objectives of 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.
17 45
Determine options for fair resolution of conflict.
RESPECT DIVERSITY
Understand cultural differences Uncover communication preferences when identifying stakeholders Prevent cultural shock by training and advance research
17 46
RESPECT DIVERSITY
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
17 47
THE PROJECT MANAGEMENT
WE WISH YOU ALL SUCCESS!

AND HOPE
YOU WILL ACHIEVE HIGHER LANDMARKS!

17 48
THE PROJECT MANAGEMENT
THANK YOU!
17 49

Course Book

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Course Book

Uploaded by

Copyright:

Available Formats

PMAC

PMAC Consulting Private Limited

GOOD MORNING FOLKS!

LATEST PMI STANDARDS!

LATEST PMI STANDARDS! The PMBOK Guide provides Knowledge,

Their application enhances the chances of

But, all the processes may not apply uniformly

LATEST PMI STANDARDS!

Purpose of this Course

Education Agenda LEARNING OBJECTIVES

Education Agenda LEARNING OBJECTIVES

Education Agenda LEARNING OBJECTIVES

WARMING UP WITH A PROJECT FORETHOUGHT!

Do you have a vision?

How do you articulate it in the backdrop of todays realities?

Backdrop of todays realities?

Backdrop of todays realities?

Project forethought Questions to help you articulate your vision?

Project forethought Questions to help you articulate your vision?

Project forethought Questions to help you articulate your vision?

Project forethought Questions to help you articulate your vision?

Project forethought Articulating your vision

Project forethought Articulating your vision

Project forethought Questions to help you articulate your vision?

How to make coming generation better equipped to succeed in life?

Project forethought Realizing vision

Project forethought Projects make it possible

Needs Aspirations Visions Strategies

Operations provide us benefits of the 23 product of the project on ongoing basis

PM Basics: Fundamental Concepts

PM Basics: Fundamental Concepts

PM Basics: Fundamental Concepts

PM Basics: Understanding Project Characteristics

PM Basics: Understanding Project Characteristics

Project end IS REACHED when:

PM Basics: Understanding Project Characteristics

Temporary does not necessarily mean

PM Basics: Understanding Project Characteristics

Temporary does not mean

PM Basics: Understanding Project Characteristics

Certain others cater to an opportunity or market window that is short in duration

PM Basics: Understanding Project Characteristics

Unique product, service, or result

PM Basics: Understanding Project Characteristics

Progressive elaboration is critical to project success

PM Basics: Understanding Project Characteristics

WHY Progressive elaboration?

PM Basics: Understanding Project Characteristics

Each projects product is unique.

PM Basics: Understanding Project Characteristics

The distinguishing characteristics

PM Basics: Progressively elaborated

Sample Progressive Elaboration

PM Basics: Understanding Project Characteristics

ABC CARGO LOGON PROJECT

DESIGN (I) DRAWINGS (O)

DESIGN (J) DRAWINGS (K)

DRAWINGS (P) TEST (Z) FINAL

WORK PAKCAGES (H) through (Z)

ASSEMBLY (V) TEST (X)

ASSEMBLY (U) TEST (W)

PURCHASE (N) DELIVERY (S)

PURCHASE (M) DELIVERY (R)

PURCHASE (Q) DELIVERY (T)