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 1

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. 6 th ed. John Wiley & Sons, 1998.

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

Module 1 - Introduction 2

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 3

INTRODUCTION

PMBOK

TM

Knowledge Areas

•

Based on the Project Management Institute’s Project Management Body of Knowledge: PMBOK 1

•

Nine knowledge areas:

–

This webinar: Scope, Time, Cost, Risk, Integration -- Next webinar: Quality, Procurement, Communications, Human Resources, Integration

Module 1 - Introduction 4

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 5

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

Module 1 - Introduction 6

INTRODUCTION

•

The Triple Constraint of Projects

On Time, Budget, Quality = Required Scope

Time •

Integration

•

Trade – Off’s

Cost Quality Module 1 - Introduction 7

INTRODUCTION

Project Life Cycle

Concept Planning Execution/Control Closing

Definition | Analysis |Design|Build|Test|Accept| Implement| Operation

20% 60% 5% 15% Percentages and graph refer to the amount of effort (people) In IT projects = 90-95% of cost!

Module 1 - Introduction 8

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 )

Module 1 - Introduction 9

Project Planning: set expectations of Stakeholders

Contractors

Stakeholders

Project Sponsor Users Project Leader Project Manager

Finance Procure ment Systems Engineering Support Sales Maintenance IM/ IT Module 1 - Introduction 10

Project Planning: Time and Cost Estimate

• •

Iterative Accuracy

–

Estimates become more accurate

Initiation Planning Execution Closing Definition Analysis Design +25% 0 75%

Preliminary Plan

+15 -50

Proposal Plan Final Plan

Module 1 - Introduction +10 -25

Revised Plan

11

Project Management

Module 2: Scope Management

Module 1 - Introduction 12

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.

Module 1 - Introduction 13

Work Breakdown Structure - Formats

1. Organization Chart Method

0. Title 1. Major Phase 1 2. 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

Module 1 - Introduction 14

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

Module 1 - Introduction 15

WBS - Typical Tasks

Detailed WBS Example for procuring an Equipment System

Module 1 - Introduction 16

Work Breakdown Structure

Summary (Top Level) WBS

Summary and Detail tasks, or Parent and Child tasks (Work Package)

Module 1 - Introduction 17

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

Module 1 - Introduction 18

Project Management

Module 3: Project Time Planning

Module 1 - Introduction 19

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

Module 1 - Introduction 20

Project Time Planning

Estimating Efforts (cont’d)

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

Module 1 - Introduction 21

Project Time Planning

Estimating Efforts (cont’d) 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.

Module 1 - Introduction 22

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 11-15% 6-10% 8-12% 6-10% 2-4% 5-7% 8-11% 3-5% 4-6% 9-12% 20-28% 24-32% 10-14% 11-15% 5-7% 2-4% 8-12% N/A 8-12% 7-10%

MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES!

Module 1 - Introduction 23

Scheduling

If Estimate was Effort, must convert it to Duration

Duration = Effort/Resources (sometimes)

Taking into account

: Resource availability Desire Skill Productivity Module 1 - Introduction 24

Scheduling: Requires Duration and Precedents

Two Graphical tools for Scheduling: 1. PERT Chart

Plan (from WBS) Task

A B C D E F G

Precedent

A C E F

Duration

7d 3d 10d 5d 4d 6d 3d Module 1 - Introduction 25

Scheduling

Ordering the Activities: PERT Chart

Arrow Diagramming Method (ADM)

1 4d E A 7d C 10d 4 2 3 F 6d 3d B D 5d 5 G 3d 6 Module 1 - Introduction 26

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

Module 1 - Introduction 27

Scheduling - Gantt Chart

Module 1 - Introduction 28

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

Module 1 - Introduction 29

Scheduling - Gantt Chart

Gantt (Schedule) Drives

• • • • • • •

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

Module 1 - Introduction 30

Project Management

Module 4: Resource Assignment and Cost Planning

Module 1 - Introduction 31

Assigning Resources

       

Availability Skills

• •

Desire More experienced people Less experienced people 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

Module 1 - Introduction 32

Resource Loading and Optimizing

Gantt with Resource Histogram

Module 1 - Introduction 33

Resource leveling - possible rescheduling

Gantt with Resource Histogram

Manual resource leveling: fast vs good vs cheap Automatic resource leveling: use only as ‘suggestion’ Module 1 - Introduction 34

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 Example: 10 days 2 people Need Effort = Duration x Resources 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

Module 1 - Introduction 35

Costed WBS

Use Software to roll costs up the WBS

47 48 49 50 ID 36 37 38 39 40 41 42 43 44 45 46 Ta sk Na me Fina l Submission

Fi na l De si gn Wo rk Fi na l Pl an TB Su bmi ssi on EPA

Softw are (Subcontrac t 50 -B) SW De sign

Do P re li m SW desi gn PDR Do Fin al S W d esig n CDR

SW Construction

Co de CSC A Co de CSC B Integrate& Tst CSCI 1

Ac count

C1 4 C1 4 S2 1 S2 2 S3 1 S3 1 S3 2

Fixe d Cos t $0 .0 0

$5 ,0 00.00

$0 .0 0 $0 .0 0 $0 .0 0

$0 .0 0 $1 2,000 .0 0

$0 .0 0 $0 .0 0 $0 .0 0 $0 .0 0

$1 2,000 .0 0

$0 .0 0 $0 .0 0 $0 .0 0

Tota l Cost $3 3,000 .0 0

$2 5,000 .0 0 $8 ,0 00.00

$0 .0 0 $0 .0 0

$1 33,00 0.00

$6 2,000 .0 0

$2 0,000 .0 0 $0 .0 0 $3 0,000 .0 0 $0 .0 0

$7 1,000 .0 0

$6 ,0 00.00

$8 ,0 00.00

$2 0,000 .0 0

Pa yment $0 .0 0

$0 .0 0 $0 .0 0 $0 .0 0 $4 0,000 .0 0

$0 .0 0 $0 .0 0

$0 .0 0 $0 .0 0 $0 .0 0 $7 0,000 .0 0

$0 .0 0

$0 .0 0 $0 .0 0 $0 .0 0 Module 1 - Introduction 36

Cost Ramp-Up

Use Software to report cash flow Q3 Q4

1997

Q1 Q2 Q3 Q4

1998

Q1 $400,000.00

$300,000.00

$200,000.00

$100,000.00

Cumulative Cost: $53,920.00

$127,160.00

Filtered resources

CPM

$274,360.00

Total: Total: $331,440.00

$349,920.00

$368,400.00

$376,500.00

$376,500.00

Module 1 - Introduction 37

Cost - Sanity checks

Cost Estimate Error Range – same as Time Estimate +75% 25 0 -25% Indicative PPA Init Plan -10 Budget EPA Final Plan 10 -8 Definitive PDR Design PPA - Preliminary Project Approval EPA - Effective PDR - Preliminary Design Review

Module 1 - Introduction 38

Project Management

Module 5: Risk Management

Module 1 - Introduction 39

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 don’t 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.

Module 1 - Introduction 40

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??

Module 1 - Introduction 41

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?

Module 1 - Introduction 42

Step 1: Risk Identification

Risk Checklist at Preliminary Planning Time (Risk Taxonomy) (cont’d)

         

Does failure of this application affect the customer’s 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?

Module 1 - Introduction 43

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 TECHNOLOGY & FINANCIAL ECONOMIC

History of past Similar Projects

Module 1 - Introduction HUMAN FACTORS HEALTH & SAFETY 44

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 Module 1 - Introduction 45

Step 2: Risk Analysis

Impact Criteria: Impact Rank Schedule

High Medium Low

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

Cost

High Medium Could add more than 25% to the project budget Could add between 10 and 25% to the project budget Low Could add less than 10% to the project budget

Quality

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

Module 1 - Introduction 46

Step 2: Risk Analysis

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

Low Medium High High Medium

3. Lack of skilled staff, 2. Time estimate and 1. Lack of commitment. organization slow to hire funds inadequate for the adequate staff; may scope of this project; Headquarters may have to assume more responsibility; delay implementation.

may be late and over will result in project delay, cost overruns.

budget.

6. Cannot get office space for staff; may cause communication problems, 5. Expecting major scope changes from clients; may cause delay and delaying the execution cost escalation.

phase.

4. Not enough time spent planning, lack of understanding of problem; may take longer/ cost more than anticipated.

Low

Module 1 - Introduction 47

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

Module 1 - Introduction 48

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

Module 1 - Introduction 49

Project Management

Module 6: Scope/ Time/ Cost Control

Module 1 - Introduction 50

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

Module 1 - Introduction 51

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.

Module 1 - Introduction 52

Project Control – Reporting Schedule using a Tracking Gantt

Double Gantt: Shows Project Schedule Progress vs baseline

Module 1 - Introduction 53

Project Control – Cost Control/Reporting

Financial Report vs Baseline

Module 1 - Introduction 54

Project Management

Module 7: Conclusions

Module 1 - Introduction 55

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

Module 1 - Introduction 56

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.

Module 1 - Introduction 57

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!

Module 1 - Introduction 58