PROJECT MANAGEMENT

Presented by: John Rakos, MSc, PMP President, John J. Rakos & Associates Consultants Ltd.
John J. Rakos is available to teach or consult in any topic presented in this seminar.

Module 1 - Introduction

INTRODUCTION Reference sources

A Guide to the Project Management Body of Knowledge (2003). The Project Management Institute. http://www.pmi.org
Rakos, John J. et al, A Practical Guide to Project Management Documentation, Wiley, 2004 Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling and Controlling. 6th ed. John Wiley & Sons, 1998.

Rakos, John J. Software Project Management for Small to Medium Sized Projects. Prentice-Hall, 1990.

Module 1 - Introduction

INTRODUCTION
The Value of Project Management
Allows for excellent organization and tracking Better control and use of resources Reduces complexity of inter-related tasks Allows measurement of outcome versus plans Early identification of problems and quick correction

Module 1 - Introduction

INTRODUCTION PMBOKTM Knowledge Areas

Based on the Project Management Institutes Project Management Body of Knowledge: PMBOK1
Nine knowledge areas:
This webinar:

Scope, Time, Cost, Risk, Integration -- Next webinar: Quality, Procurement, Communications, Human Resources, Integration
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INTRODUCTION
PMP Certification
Internationally accepted accreditation Get certification 3 (5 without degree) years experience 35 hours training 4 hour, 200 questions, multiple choice exam! Have to be re-certified every 3 years 60 PDUs Attending a conference Attending course PMI membership Publications PM work

Module 1 - Introduction

INTRODUCTION What is a Project?

A project is a temporary endeavor undertaken to create a unique product or service
- A Guide to the Project Management Body of Knowledge (PMBOK), Project Management Institute, 2003

One time Limited funds/time Specific resources utilized Performed by people - Single or multi-person team Planned, controlled Specific Deliverables
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INTRODUCTION
The Triple Constraint of Projects
On Time, Budget, Quality = Required Scope

Time

Cost Integration Trade Offs

Quality

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INTRODUCTION
Project Life Cycle
Concept Planning Execution/Control
Definition | Analysis 20% 5%

Closing
Operation

|Design|Build|Test|Accept| Implement| 60% 15%

Percentages and graph refer to the amount of effort (people) In IT projects = 90-95% of cost!

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Project Planning
Write a Plan Containing
1. Steps required to accomplish the project objectives 2. Tasks needed to be done at each step (using Work Breakdown Structures) 3. Estimate of how much effort each task requires 4. The resources required for each task 5. (Given 3. and 4.) Calculation of how long each task/step will take 6. (Given 4. and 5.) Calculation of task, step and project costs 7. The inter-dependencies of tasks 8. The schedule for each task and the whole project (Milstones, Deliverables, payments)

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Project Planning: set expectations of Stakeholders

Stakeholders
Contractors

Project Sponsor Project Leader

Users

Project Manager
Finance Procurement Systems Engineering Sales Maintenance IM/ IT

Support

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Project Planning: Time and Cost Estimate Iterative Accuracy

Estimates become more accurate
Initiation Definition
+25% 0 -50 -25 Final Plan
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Planning Analysis
+15

Execution Design

Closing

+10

-75%
Preliminary Plan Proposal Plan

Revised Plan
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Project Management
Module 2: Scope Management

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Project Scope Planning

Scope Management
Ensuring that the project includes all the work required, only the work required. Dividing the work into major pieces, then subdividing into smaller, more manageable pieces.

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Work Breakdown Structure - Formats

1. Organization Chart Method
0. Title

1. 2. Major Phase 1 Major Phase 2

3. Major Phase 3

1.1 Section 1 of Phase 1

1.2 Section 2 of Phase 1

1.3 Section 3 of Phase 1

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Work Breakdown Structure - Formats

2. Outline Method
0. TITLE 1. 1.1 1.2 1.3 2. ... etc.

MAJOR PHASE 1 S1 OF PHASE1 S2 OF PHASE1 S3 OF PHASE1 MAJOR PHASE 2

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WBS - Typical Tasks

Detailed WBS Example for procuring an Equipment System

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Work Breakdown Structure

Summary (Top Level) WBS

Summary and Detail tasks, or

Parent and Child tasks (Work Package)
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Work Breakdown Structure

Using the Work Breakdown Structure
1. Estimate and schedule the work (Durations, precedences on WBS) 2. Organize and schedule resources (resource allocated WBS) 3. Assign responsibilities (Resource ramp-up, resource allocated WBS) 4. Estimate and allocate costs and budgets (costed WBS) 5. Add up costs to different levels
Task Levels on the WBS (phase, account/contract) Cost account Total project

6. Get resource commitments 7. Schedule start <--> end dates 8. Track expenditures, schedules and performance
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Project Management
Module 3: Project Time Planning

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Project Time Planning

Estimating Effort: 3 Methods
1. Professional Judgment Expert picks a number (out of the air!) Requires an expert Requires experience Good memory May ignore people VERY RELIABLE FOR THEMSELVES

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Project Time Planning

Estimating Efforts (contd)
2. History
Look at tables of past actuals on major tasks Interpolate Requires professional judgment Requires good history (which changes!)

3. Formula 3.1 Variables

Determine major variable factors (task, person) Using measurement determine formula of factors Interview and plug into formula

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Project Time Planning

Estimating Efforts (contd)
3.2 Function Points
Determine smallest pieces (function points) of project. Using measurement establish time for each one. For new project, break into function points; add up times, then multiply for worker productivity.

(Possibly: Junior x 2, Average x 1, Senior x 0.5)

FORMULA IS BEST (IN THEORY).
IN REALITY,____________ BEST.
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Estimating use of History

Ratios for Systems project
SYSTEMS ACTIVITIES SYSTEM SPECIFICATIONS SYSTEM DESIGN SOFTWARE REQUREMENTS SOFTWARE PRELIMINARY DESIGN SOFTWARE DETAILED DESIGN CODE AND UNIT TEST SOFTWARE INTEGRATION & TEST SOFTWARE QUALIFICATION SYTEM INTEGRATION & QUAL. WARRANTY AND SUPPORT DUR EFFORT 6-10% 6-10% 3-5% 4-6% 9-12% 24-32% 11-15% 2-4% 8-12% 7-10%

11-15% 8-12% 2-4% 5-7% 8-11% 20-28% 10-14% 5-7% 8-12% N/A

MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES!

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Scheduling

If Estimate was Effort, must convert it to Duration

Duration = Effort/Resources (sometimes)

Taking into account: Resource availability Desire Skill Productivity

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Scheduling: Requires Duration and Precedents

Two Graphical tools for Scheduling: 1. PERT Chart

Plan (from WBS) Task Precedent A B A C D C E F E G F Duration 7d 3d 10d 5d 4d 6d 3d
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Scheduling
Ordering the Activities: PERT Chart
Arrow Diagramming Method (ADM)
2 A 3d 7d 1 C 10d E 4d 4 F 6d 5 3 D 5d G 3d 6 B

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Scheduling - Gantt Chart

Order of building the Gantt Chart: Work Breakdown Estimates (duration) Dependencies Resource use

Gantt shows: Critical Path Non Critical Path(s) Early Start/Finish Late Start/Finish Slack
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Scheduling - Gantt Chart

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Scheduling - Gantt Chart

Gantt (Schedule) Drives
1. Milestones
Clear, concrete, binary events implying progress For example: Review (with approval), Sign off of a deliverable, Funds approved Shown as 0 length task

Try for even frequency

Not too close Not more than 2 - 3 months apart

Major Point to communicate with

Client Outside world Management
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Scheduling - Gantt Chart

Gantt (Schedule) Drives
Training Meetings Reviews Reports Site preparation Delivery dates (date to order) for external items Payment

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Project Management
Module 4: Resource Assignment and Cost Planning
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Assigning Resources
Availability Skills
More experienced people Less experienced people

Desire Similar tasks to one person to use learning curve Assign critical tasks to most reliable people Tasks that need interaction or are similar
Same person Two who communicate

Personality and team communication does matter and again, Availability

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Resource Loading and Optimizing Gantt with Resource Histogram

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Resource leveling - possible rescheduling Gantt with Resource Histogram

Manual resource leveling: fast vs good vs cheap

Automatic resource leveling: use only as suggestion

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Cost Estimating
Similar to Time Estimating (usually done by the same person/group that does the Time Estimates)

Calculation of Cost for each WP: If estimate was duration Assign human resources
Need Effort = Duration x Resources

Example: 10 days 2 people

E=2x10=20pd

e.g., Resource Cost (RC) = Effort x Rate(includes overhead)

RC=20x$1,000=$20,000 (Possible) Plus Fixed Cost (FC)

e.g., FC = $5,000
Total cost (TC) = Resource cost + Fixed Cost TC=20,000 + 5,000 = 25,000
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Costed WBS
Use Software to roll costs up the WBS
ID 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Task Name Final Submission Final Design Work Final Plan TB Submission EPA Softw are (Subcontract 50-B) SW Design Do Preli m SW desig n PDR Do Final SW design CDR SW Construction Code CSC A Code CSC B Integrate&Tst CSCI 1 S31 S31 S32 S22 S21 C14 C14 Account Fixed Cost $0.00 $5,000.00 $0.00 $0.00 $0.00 $0.00 $12,000.00 $0.00 $0.00 $0.00 $0.00 $12,000.00 $0.00 $0.00 $0.00 Total Cost $33,000.00 $25,000.00 $8,000.00 $0.00 $0.00 $133,000.00 $62,000.00 $20,000.00 $0.00 $30,000.00 $0.00 $71,000.00 $6,000.00 $8,000.00 $20,000.00 Payment $0.00 $0.00 $0.00 $0.00 $40,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $70,000.00 $0.00 $0.00 $0.00 $0.00

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Cost Ramp-Up
Use Software to report cash flow
1997 Q3 $400,000.00 Q4 Q1 Q2 Q3 Q4 1998 Q1

$300,000.00

$200,000.00

$100,000.00

Cumulativ e Cost:

$53,920.00

$127,160.00

$274,360.00 Total: Total:

$331,440.00

$349,920.00

$368,400.00

$376,500.00

$376,500.00

Filtered resources CPM

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Cost - Sanity checks

Cost Estimate Error Range same as Time Estimate
+75%
25 10 0 -25%
Indicative PPA Init Plan

-8 -10
Budget EPA Final Plan Definitive PDR Design

PPA - Preliminary Project Approval EPA - Effective PDR - Preliminary Design Review
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Project Management
Module 5: Risk Management

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Risk Management
Planning and Control Processes
Risk: anything not in the project plan that may occur and cause your project to be late, cost more or compromise its quality/performance. Risk is an opportunity as well as a threat:
You dont put power brakes on a car to slow it down - you do so to allow it to go faster. -Mark Davies, KPMG We will concentrate on the threat.
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Four Steps of Risk Management

1. Identification
Anticipate the risk List the risks, event triggers, symptoms

2. Analysis
Evaluate probability, impact Qualitative vs Quantitative

3. Risk Response
Strategy Development to mitigate the risk: Eliminate the risk or reduce impact Contingency planning

4. Risk Control
Monitor Update lists, strategies Action the contingency plan Fight the fires

Which is most important??

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Step 1: Risk Identification

Anticipate the Risk
Risk Checklist at Preliminary Planning Time (Risk Taxonomy)
Are we proposing the right solution? Any risk in technical components? Performance expectations reasonable? Is the hardware standard? How much experience do we have with it? Is the operating software standard? Well documented? How much experience do we have with it? Is the development method standard? Well documented? How much experience do we have with it? Any component availability risks?
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Step 1: Risk Identification

Risk Checklist at Preliminary Planning Time (Risk Taxonomy) (contd)
Does failure of this application affect the customers business? Is the project over 6 months? 12 months? 24 months? Does it need over 5 people? Are we dependent on third party resources? Internal? External? Who is the project manager? Who is the project leader/architect? Are the resources available when needed? Who is the client? Have we worked with this client? How is our relationship? Is client available when needed?
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Step 1: Risk Identification: Inputs Risk Checklists, The WBS, Environment:

SENIOR MANAGEMENT NATURAL ENVIRONMENTS CORPORATE POLICY AND CULTURE

POLITICAL

CORPORATE PROGRAMS

PROJECT/ PM

REGULATORY AND LEGAL

& FINANCIAL TECHNOLOGY ECONOMIC

HUMAN FACTORS HEALTH & SAFETY

History of past Similar Projects

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Step 2: Risk Analysis

Evaluate Probability and Impact into three levels: Low, Medium, High:
Probability Criteria: Probability Rank High Medium Low Description
Greater than 66% probability of occurring 34 to 65% probability of occurring Less than 33% probability of occurring

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Step 2: Risk Analysis

Impact Criteria: Impact Rank Schedule High Medium Description
Could add over 25% delay to the completion of the project Could add over 10% delay to the completion of the project Could add less than 10% delay to the completion of the project, or delays a non critical deliverable Could add more than 25% to the project budget Could add between 10 and 25% to the project budget Could add less than 10% to the project budget

Low
Cost High Medium

Low
Quality

Determine a combined impact level based on which constraint is most affected.

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Step 2: Risk Analysis

Draw a Risk Table to Summarize Wonderful Management Tool/Report
Prob. Impact

Low
3. Lack of skilled staff, organization slow to hire adequate staff; may delay implementation.
6. Cannot get office space for staff; may cause communication problems, delaying the execution phase.

Medium
2. Time estimate and funds inadequate for the scope of this project; may be late and over budget.
5. Expecting major scope changes from clients; may cause delay and cost escalation.

High
1. Lack of commitment. Headquarters may have to assume more responsibility; will result in project delay, cost overruns. 4. Not enough time spent planning, lack of understanding of problem; may take longer/ cost more than anticipated.

High

Medium

Low
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Step 3: Risk Response

Strategy Development: Reduce the Probability and/or Impact of the Risk
Risk Mitigation: Reducing the probability and/or impact Take immediate action. Can be risk avoidance (if eliminated) or risk reduction (still there, but probability or impact is reduced). Contingency Plans Take action only when the risk is imminent or has occurred Or Acceptance (do nothing), depends on Risk Tolerance

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Risk as a Monetary Value Tempering the Estimate

Estimate range is
ESTIMATE ESTIMATE + RISK Try to work within the range, depending on how crucial the accuracy has to be.

If you can get several estimates

Use the Standard Deviations to give you confidence levels:
Expected estimate +/- 1 SD gives you 68% confidence Expected estimate +/- 2 SD gives you 95% confidence Expected estimate +/- 3 SD gives you 99% confidence

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Project Management
Module 6: Scope/ Time/ Cost Control

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Project Control Scope Control

Scope Change Control Formal change control Evaluate cost/time impact
Renegotiate, set expectations Implement or defer to next release

Configuration Management
Keep track of what changes were made to which modules Versioning Interoperability of modules

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Project Control Schedule and Cost

Step 1 - Take a baseline.
Baseline plan: a copy of the plan (WBS with all dates, assignments, costs). Used to report progress against the baseline. Taken at a mutually agreed upon planning point: Proposal or Analysis completion +25% to -10% stage
Baseline is (theoretically) not alterable Unless major scope change occurs.

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Project Control Reporting Schedule using a Tracking Gantt

Double Gantt: Shows Project Schedule Progress vs baseline

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Project Control Cost Control/Reporting

Financial Report vs Baseline

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Project Management
Module 7: Conclusions

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Resources Available
To help you Manage your Projects
Training & Learning Universities Project Management courses Major/Masters in Project Others public Project Management Institute (PMI) PMP Certification courses PMI conferences 250,000 members worldwide Your own Subject Matter Experts
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Resources Available
To help you Manage your Projects
Training & Learning Internet PMI.org Many sites: search on Project Management NASA Software Engineering Institute Software Productivity Center DOD/Pentagon Project Management Software (WBS, Schedule, Cost, Resource usage, Multiple project roll-up, Internet reporting,...)
Microsoft Project Primavera Open source: OpenProj

John J. Rakos is available to teach or consult in any topic presented in this seminar.

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Final Details
Can you be a good project manager?
Ask yourself:
Can I say 'NO'? Can I attack problems as soon as/even before they arise? Can I live unloved? If you do your job well, people will wonder what you do!
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