Transcript Principles of Project Management How to help make your projects more successful

Principles of Project Management
How to help make your projects
more successful
Project Management - Project Bailout - www.ProjectBailout.com
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Why Project Management?
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Learn from lessons, success, and mistakes of others
Better understanding of financial, physical, and
human resources
Successful Project Management Contributes to
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Improved customer relations
Shorter development times
Lower costs
Higher quality and increased reliability
Improved productivity
Project Management Generally Provides
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Better internal coordination
Higher worker morale
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Why Projects Fail
Communications
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Misunderstandings
Not Talking, Emailing etc.
Scope Creep
Poor planning
Weak business case
Lack of management direction &
involvement
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Lack of Resources
Talking and Not Building
Incomplete specifications
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Excessive Specifications
Mismanagement of expectations
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$
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Project Management Benefits for the
Individual
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Develops leaders in organization with
a detailed understanding of multiple
areas of the organization
Cross departmental communication
and networking
Benefits not limited to just the Project
Manager, Team members get same
exposure
Attention from executive
management team
Reputation of being a team player,
problem solver, and a get things done
person
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Organization
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Lectures
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Presentations
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And Discussions!
Sample Projects
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Book Chapters
Plan, Schedule and Allocate Resources
Review
Practice Tests
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Joint Attempt At Questions
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http://www.yancy.org/research/project_management.html
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Lectures
1 - Introduction to Project Management
2 - Project Management Context
2’- Project Management for Dummies - Summary
3 - Project Management Integration
4 - Project Scope Management
5 - Project Time Management
6 - Project Cost Management
7 - Project Quality Management
8 - Project Human Resource Management
9 - Project Communications Management
10 - Project Risk Management
11 - Project Procurement Management
12 - Project Management as a Profession
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Sources – Use the Web
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Project Management Institute: www.pmi.org
Project World: www.projectworld.com
Software Program Managers Network:
www.spmn.com
PM forum: www.allpm.com
ESI International: www.esi-intl.com
Project Bailout – www.ProjectBailout.com
“Project Management for Dummies”
“Project Planning Scheduling & Control,” James P.
Lewis
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A Hands-on Guide to Bringing Projects in on time and On
Budget
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Why are you here?
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Who are you
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Why
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What do you want to learn?
How much effort?
Me
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What is your background?
Jim Bullough-Latsch, [email protected]
20 years managing projects, 818-993-3722
All material will be provided on a CD!
Sign In, Email Addresses etc.
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Exchange Business Cards
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Mapping Lectures and Lewis Book
1. Introduction to Project Management
• Chapter 1 – Introduction to PM
2. Project Management Context
• Chapter 5 – Headless Chicken
3. Project Management Integration
• Chapter 6 – Project Strategy
• Chapter 7 – Implementation Plan
4. Project Scope Management
• Chapter 9 – Scheduling
5. Project Time Management
6. Project Cost Management
7. Project Quality Management
8. Project Human Resource Management
9. Project Communications Management
10. Project Risk Management
• Chapter 8
11. Project Procurement Management
12. Project Management as a Profession
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Project•Management
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CHAPTER 1
Introduction to Project
Management
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PM is used in all industries, at all
levels
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Why Project Management?
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Better control of financial, physical, and human
resources
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Accountability
Learn from mistakes of others!
Improved customer relations
More Managed Outcomes
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Lower costs
Higher quality and increased reliability
Higher profit margins
Improved productivity
Better internal coordination
Higher worker morale
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Why Projects Fail
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Poor communications
Scope Creep
Poor planning
Weak business case
Lack of management direction & involvement
Incomplete specifications
Mismanagement of expectations
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Project versus Program
What is a project?
 Temporary and unique
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Definite beginning and end
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Unique purpose
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Require resources, often from various areas involve uncertainty
Note: temporary does not mean short in duration
What is a program?
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A group of projects managed in a coordinated way to obtain
benefits not available to managing them individually
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Long Term for: a collection of projects
Same Techniques Work for Projects, Products, & Programs!
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Use them where they work!
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Triple Constraints Theory
Every project is constrained in
different ways by its
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Scope goals: What is the
project trying to accomplish?
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Time goals: How long should
it take to complete?
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Cost goals: What should it
cost?
It is the project manager’s duty
to balance these three often
competing goals
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Project Management Framework
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Project Stakeholders
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Stakeholders are the people involved in or
affected by project activities
Stakeholders include
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the project sponsor and project team
support staff
customers
users
Suppliers and vendors
opponents to the project
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PM Knowledge Areas
Knowledge areas describe the key competencies that
project managers must develop
 core knowledge areas lead to specific project
objectives (scope, time, cost, and quality)
 facilitating knowledge areas are the means through
which the project objectives are achieved (human
resources, communication, risk, and procurement
management
 knowledge area (project integration management)
affects and is affected by all of the other knowledge
areas
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Relationship to other disciplines
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PM Tools & Techniques
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Project management tools and techniques
assist project managers and their teams in
various aspects of project management
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#1 communicating with people!!
Some specific ones include
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Project Charter and Work Breakdown Structure
(WBS) (scope)
Gantt charts, network diagrams, critical path
analysis, critical chain scheduling (time)
Cost estimates and earned value management
(cost)
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Sample GANTT Chart
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Sample Network Diagram
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Sample Earned Value Chart
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Points From Lewis Chapter 1
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A project is a one-time job, as opposed to a repetitive activity
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Project management is facilitation of the planning, scheduling,
and controlling of all activities that must be done to meet
project objectives.
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???????????
Principle: Can assign values to only three of the PCTS
constraints
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Disagree, can make repetitive into a series of projects
Performance, Cost, Time, Scope
Disagree - There are relationship, but it is not magic
Principle: To reduce both cost and time in a project, must
change the process by which you do work.
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Maybe “Understand” and control is better than change
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Lewis Principles Chapter 1
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Principle: Improving quality reduces costs.
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Good Project Management includes tools, people, and systems
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Tools are not very important!
The people who must do the work should develop the plan
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Partially Agree
Controlling quality contributes to controlling cost
Bugs / Errors Cost Money
Formal QA Organizations can be negative
Disagree – The people who do the work should contribute to the
plan, but some project management is needed to focus the effort.
The Thought process can be applied to any project regardless o
type or size
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Agree
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“Lewis Method” Five Phases
Definition
Planning Strategy
Implementation Planning
Execution and Control
Lessons Learned
1.
2.
3.
4.
5.
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I have only worked at one company that
practiced this, TRW called it a debriefing or post
mortem
Usually everyone is gone prior to the
completion!
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Projects for Homework
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Sample Project
Plan, Schedule, and Presentation
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Develop a brief project plan and top-level schedule (MS Project is preferred).
Effort at Each Session
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Discuss Concepts
Assign Teams, Choose Subject, Divide work
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Plan and Document
Schedule
Coordinate
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Keep it simple
Present for Review
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You can do home work to make it better
Criticize Others
Update
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Project Can Be Anything
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Suggested Projects - Defaults
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CHAPTER 2
Project Management Context
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Projects are not Isolated
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Projects must operate in a broad organizational
environment
Project managers need to take a holistic or systems
view of a project and understand how it is situated
within the larger organization
Systems View to Project Management
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Systems philosophy: View things as systems, interacting
components working within an environment to fulfill some
purpose
Systems analysis: problem-solving approach
Systems management: Address business, technological, and
organizational issues before making changes to systems
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Project Phases
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Projects are divided up into phases, collectively project phases
are known as the project lifecycle
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Project phases are marked by completion of one or more
deliverables
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Determine if the project should continue
Detect and correct errors cost effectively
Deliverables from the preceding phase are usually approved
before work exceeds 20% of the next phase’s budget
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Deliverable is a tangible, verifiable work product
Questions at the end of each phase (known as phase exits, kill
points, or stage gates)
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The Phases often overlap!!!
IE Overlapping work is done at cost risk to meet schedule
FAST TRACKING: projects that have overlapping phases
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Project Lifecycle
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Most project lifecycles have common characteristics
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Phases: Concept, Development, Implementation, Support
Cost and staffing levels are low to start and higher toward the end and drop
rapidly as the project draws to conclusion
Stakeholders have more influence in the early phases of the project
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Cost of changes and error correction often increases as the project continues
Some changes can be deferred until after delivery
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Phases of the Project Life Cycle
Phase
Concept
Development
Implementation
Close-Out
Planning
Management Plan
Project Plan
Work Package
Completed Work
Financial
Preliminary Cost
Estimate
Budgetary Cost
Estimate
Costs and Over Runs
Lessons Learned
Reporting /
Decomposition
3-level WBS
6+ level WBS
Performance Reports
Customer Acceptance
Deliverables
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Project Life Cycle
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Determination of Mission Need—ends with Concept Studies
Approval
Concept Exploration and Definition—ends with Concept
Demonstration Approval
Demonstration and Validation –ends with Development Approval
Engineering and Manufacturing –ends with Production Approval
Production and Deployment –overlaps with Operations and Support
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Systems Development Life Cycles
•Waterfall model: has well-defined, linear stages of
systems development and support
•Spiral model: shows that software is developed using
an iterative or spiral approach rather than a linear
approach
•Incremental release model: provides for progressive
development of operational software
•RAD model: used to produce systems quickly without
sacrificing quality
•Prototyping model: used for developing prototypes to
clarify user requirements
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Pr ojec t
In itia tion
Pr oces s
The Waterfall Model of
the Software Life Cycle
Co ncep t
Ex plor atio n
Pr oces s
Sy stem
Al loca tion
Pr oces s
Re quir emen ts
Pr oces s
De sign
Pr oces s
Im plem enta tion
Pr oces s
Ve rifi cati on
& Vali dati on
Pr oces s
In stal lati on
Pr oces s
Op erat ion &
Su ppor t Pr oces s
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Spiral
Determine objectiv es,
alternatives, & c onstraints
Evaluate alternatives,
identify & resolve risks
Risk
analysis
Risk
analysis
Risk
analysis
P1
P rototype3
P rototype2
P rototype1
Requirements
plan
Concept of
operation
Development Requirements
plan validati on
Plan nex t phase
Integrat ion Desi gn
plan validati on
Softw are
Requirements
System
P roduct
Desi gn
P2
Det ailed
Desi gn
Code
Unit Test
Develop & verify
nex t level produc t
Integrat ion &Test
Acceptance
Test
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Fast Tracking / Overlap of
Processes
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Extreme Programming
- Focuses on customer driven
changes
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Organizational Structures
TOP?
Bottom
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Critical Success Factors
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Critical Success Factors According to the Standish
Group’s report CHAOS 2001: A Recipe for Success,
the following items help IT projects succeed, in order
of importance:
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Executive support
User involvement
Experience project manager
Clear business objectives
Minimized scope
Standard software infrastructure
Firm basic requirements
Formal methodology
Reliable estimates
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Headless Chicken (Lewis)
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Software Projects – 1990s
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17% Succeeded
33% Failed
50% Revised
Headless Chick is about a bird dying
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Body keeps moving after head is cut off!
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More on The Lewis Method
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Projects often fail at the beginning, not at the
end.
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The false consensus effect is a failure to
manage disagreement, because no knows it
exists.
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Agree
Not that important ….
I think this is also the blind leading the blind
Process will always affect task performance.
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Agree
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Lewis …
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Write the Mission Statement
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The first objective for a project manager is to
achieve a shared understanding of the team’s
mission.
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Write something would be better
Disagree, it is important, but $ and convincing
yourself are more important
The way a problem is defined determines
how we attempt to solve it.
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???
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Lewis and Strategy
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Strategy is an overall approach to a project.
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It is best not to employ cutting-edge
technology in a project that has very tight
deadline.
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Game plan
It is usually best to use proven technology.
(period!)
It is best to separate discovery from
development.
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Agree
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Project Management For
Dummies – Chapter 2’
Project Management For Dummies
By Stanley E. Portny
ISBN: 0-7645-5283-X
Format: Paper
Pages: 384 Pages
Pub. Date: October 2000
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PART I: Defining Your Project and
Developing Your Game Plan.
Chapter 1: What Is Project Management?
(And Do I Get Paid Extra to Do It?).
Chapter 2: Defining What You're Trying to
Accomplish — and Why.
Chapter 3: Getting from Here to There.
Chapter 4: You Want This Done When?
Chapter 5: Estimating Resource
Requirements.
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PART II: Organizing the
Troops.
Chapter 6: The Who and the How of
Project Management.
Chapter 7: Involving the Right People in
Your Project.
Chapter 8: Defining Team Members' Roles
and Responsibilities.
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PART III: Steering the Ship.
Chapter 9: Starting Off on the Right Foot.
Chapter 10: Tracking Progress and
Maintaining Control.
Chapter 11: Keeping Everyone Informed.
Chapter 12: Encouraging Peak
Performance.
Chapter 13: Bringing Your Project to a
Close.
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PART IV: Getting Better and
Better.
Chapter 14: Dealing with Risk and
Uncertainty.
Chapter 15: Using the Experience You've
Gained.
Chapter 16: With All the Great New
Technology, What's Left for You to Do?
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PART V: The Part of Tens.
Chapter 17: Ten Questions to Help You
Plan Your Project.
Chapter 18: Ten Ways to Hold People
Accountable.
Chapter 19: Ten Steps to Getting Your
Project Back on Track.
Chapter 20: Ten Tips for Being a Better
Project Manager.
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Chapter 17: Ten Questions to
Help You Plan Your Project.
Why is your project being Done?
Who will you need to Involve?
What results will you Produce
What Constraints Must you Satisfy?
What assumptions are you Making
What work must be done?
When will you start and end each activity?
Who’ll perform the project Work?
What other Resources will you need?
What could go wrong?
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Chapter 18: Ten Ways to Hold
People Accountable.
Involve People who really have authority
Be Specific
Get a Commitment
Put it in writing.
Emphasize the Urgency and Importance of the assignment
Tell others about the person’s commitment
Agree on a plan for monitoring the person’s work.
Monitor the persons work.
Always Acknowledge Good Performance
Act as if you have the authority
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Chapter 19: Ten Steps to Getting
Your Project Back on Track.
Determine why project got off track
Reaffirm key drivers
Reaffirm Project Objectives
Reaffirm activities remaining to be done.
Reaffirm Roles and Responsibilities
Develop a viable schedule
Reaffirm Personnel assignments
Develop a Risk-Management Plan
Hold a midcourse Kick-off Session
Closely Monitor Performance
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Chapter 20: Ten Tips for Being a
Better Project Manager
Be a “why” person
Be a “Can Do” person
Don’t Assume
Say what you mean; Mean what you say
View people as allies, not adversaries
Respect other people
Think “big Picture”
Think Detail
Acknowledge good performance
Be both a manager and a leader
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Rest
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Appendix A: Glossary
Appendix B: Earned Value Analysis.
Index.
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CHAPTER 3
Project Management Integration
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Project Integration Management
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Planning and Control
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Project Plan Development: taking the results of other
planning processes and putting them into a
consistent, coherent document—the project plan
Project Plan Execution: carrying out the project plan
Integrated Change Control: coordinating changes
across the entire project
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Influence the factors that create changes to ensure they are
beneficial
Determine that a change has occurred
Manage actual changes when and as they occur
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Project Plan Development
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A project plan is a document used to
coordinate all project planning documents
Its main purpose is to guide project execution
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Also helps the Project Management to Express their vision
Project plans assist the project manager in
leading the project team and assessing
project status
Project performance should be measured
against a baseline project plan
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What is a Project Plan?
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Common misunderstanding: Project Schedule
Introduction or overview of the project
Description of how the project is organized
Management and technical processes used on
the project
Work to be done, schedule, and budget
information
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Chapter 17: Ten Questions to
Help You Plan Your Project.
Why is your project being Done?
Who will you need to Involve?
What results will you Produce
What Constraints Must you Satisfy?
What assumptions are you Making
What work must be done?
When will you start and end each activity?
Who’ll perform the project Work?
What other Resources will you need?
What could go wrong? (Project Management for Dummies)
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Sample Project Plan – Security
Audits
1. Information Security - Introduction
Why an Information Security Audit?
Referenced Documents and Web Sites
Customer Support to Audit
Audit Results
2. Tasks and Sub Tasks
Preparation
Technical Review
End User Sample
Discussion with Responsible Management
Final report (Hardcopy, Executive Briefing, 2 CDs, Destroy Working Notes)
3. Project Controls
Confidentiality
Need-to-know
Certification
Secure Storage of Results
Progress reporting
Security
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Quality
Assurance
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More on Project Plan
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First Page needs to Sell the Project!
Plan addresses what, how, which
organizations, order of magnitude;
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but generally does not whom, when, and
exact $
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Stakeholder Analysis
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A stakeholder analysis documents important
(often sensitive) information about
stakeholders such as
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stakeholders’ names and organizations
roles on the project
unique facts about stakeholders
level of influence and interest in the project
suggestions for managing relationships
Budget and Other Money!
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Project Plan Execution
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Project plan execution involves managing performing
the work described in the project plan
Work Authorization System: a method ensuring
that qualified people do work at right time and in the
proper sequence
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Common in Aerospace
Status Review Meetings: regularly scheduled
meetings used to exchange project information
Project Management Software: special software
to assist in managing projects
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Integrated Change Control
Integrated change control
involves identifying, evaluating,
and managing changes throughout
the project life cycle
Three main objectives of change
control:
– Influence the factors that create
changes to ensure they are
beneficial
– Determine that a change has
occurred
– Manage actual changes when
and as they occur
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Establish Change Control System
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A formal, documented process that describes when
and how official project documents and work may be
changed
Describes who is authorized to make changes and
how to make them
Often includes a change control board (CCB),
configuration management, and a process for
communicating changes
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A formal group of people responsible for approving or
rejecting changes on a project
Provides guidelines for preparing change requests, evaluates
them, and manages the implementation of approved
changes
Includes stakeholders from the entire organization
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Lewis – Developing an
Implementation Plan
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The more important a project deadline, the
more important the plan becomes.
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Never plan in more detail than control.
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“Planning” versus Plan versus Work
Agree
To ignore probable risk is not a “can-do”
attitude but a fool hardy approach to project
management.
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Yes/No – Need to present positive face to extent
feasible
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More Lewis Points Chapter 7
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You don’t worry about the sequence of tasks
while constructing the WBS.
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Agree
A work breakdown structure does not show
the sequence in which work is performed!
A WBS is a list activities.
Parkinson’s Law: Work will expand to take the
time allowed
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CHAPTER 4
Project Scope Management
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What is Scope Management?



Scope refers to all the work involved in
creating the products of the project and
processes used to create them
Project scope management includes the
processes involved in defining and controlling
what is or is not included in the project
The project team and stakeholders must have
the same understanding of what products be
produces as a result of a project and what
processes will be used in producing them
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Defining Scope – The Process





Initiation: beginning a project or continuing to the
next phase
Scope planning: developing documents to provide the
basis for future project decisions
Scope definition: subdividing the major project
deliverables into smaller, more manageable
components
Scope verification: formalizing acceptance of the
project scope
Scope change control: controlling changes to project
scope
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Project & Organization Alignment
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Project & Organization
Alignment - 2

Stages / Results

Strategy
Business
Area
Analysis

Project Planning

Resource Allocation

Ties technology
strategy to mission
and vision
Key Business
Processes
Scope, Benefits,
constraints
Allocates People and
$
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Project Financial Analysis
Financial considerations are often an
important consideration in selecting projects
 Three primary methods for determining the
projected financial value of projects:




Net present value (NPV) analysis
Return on investment (ROI)
Payback analysis
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Net Present Value (NPV)



Net present value (NPV) analysis is a method
of calculating the expected net monetary gain
or loss from a project by discounting all
expected future cash inflows and outflows to
the present point in time
Projects with a positive NPV should be
considered if financial value is a key criterion
The higher the NPV, the better
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NPV Sample
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Return on Investment

Return on investment (ROI) is income divided
by investment ROI = (total discounted
benefits - total discounted costs) / discounted
costs



The higher the realized ROI, the better
Too Often, it is hyped
Many organizations have a required rate of
return or minimum acceptable rate of return
on investment for projects
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Sample: NPV, ROI, & Payback
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Payback Analysis



The payback period is the amount of time it
will take to recoup, in the form of net cash
inflows, the net dollars invested in a project
Payback occurs when the cumulative
discounted benefits and costs are greater
than zero
Many organizations want projects to have a
fairly short payback period
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Project Selection Tool: Weighted Scoring
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Project Charter




After deciding what project to work on, it is important
to formalize projects
A project charter is a document that formally
recognizes the existence of a project and provides
direction on the project’s objectives and management
Key project stakeholders should sign a project charter
to acknowledge agreement on the need and intent of
the project
Defines project’s purpose, products, scope,
objectives, constraints, assumptions, risks,
organization, reporting structure, priority and
completion criteria
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Sample Project Charter
Project Title: Information Technology (IT) Upgrade Project
Project Start Date: March 4, 200 Projected Finish Date: December 4, 2002
Project Manager: Kim Nguyen, 691-2784, [email protected]
Project Objectives: Upgrade hardware and software for all employees (approximately
2,000) within 9 months based on new corporate standards. See attached sheet describing the
new standards. Upgrades may affect servers and midrange computers as well as network
hardware and software. Budgeted $1,000,000 for hardware and software costs and $500,000
for labor costs.
Approach:
• Update the IT inventory database to determine upgrade needs
• Develop detailed cost estimate for project and report to CIO
• Issue a request for quotes to obtain hardware and software
• Use internal staff as much as possible to do the planning, analysis, and installation
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More
Name Role Responsibility
Walter Schmidt, CEO Project Sponsor Monitor project
Mike Zwack CIO Monitor project, provide staff
Kim Nguyen Project Manager Plan and execute project
Jeff Johnson Director of IT Operations Mentor
Nancy Reynolds VP, Human Resources Provide staff, issue memo
to all employees about project
Steve McCann Director of Purchasing Assist in purchasing hardware and software
Sign-off: (Signatures of all above stakeholders)
Comments: (Handwritten comments from above stakeholders, if applicable)
This project must be done within ten months at the absolute latest. Mike Zwack, CIO
We are assuming that adequate staff will be available and committed to supporting this
project. Some work must be done after hours to avoid work disruptions, and overtime
will be provided. Jeff Johnson and Kim Nguyen, Information Technology Department
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Scope Statement & Planning
A scope statement is a document used to develop and
confirm a common understanding of the project.
 a project justification
 a brief description of the project’s products
 a summary of all project deliverables
 a statement of what determines project success
 helps improve the accuracy of time, cost, and
resource estimates
 defines a baseline for performance measurement and
project control
 aids in communicating clear work responsibilities
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Work Breakdown Structure (WBS)



After completing scope planning, the next
step is to further define the work by breaking
it into manageable pieces
A work breakdown structure (WBS) is an
outcome-oriented analysis of the work
involved in a project that defines the total
scope of the project
It is a foundation document in project
management because it provides the basis for
planning and managing project schedules,
costs, and changes
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Approaches to developing WBS
1. A unit of work should appear at only one place in the WBS.
2. The work content of a WBS item is the sum of the WBS items below it.
3. A WBS item is the responsibility of only one individual, even though
many people may be working on it.
4. The WBS must be consistent with the way in which work is actually
going to be performed; it should serve the project team first and other
purposes only if practical.
5. Project team members should be involved in developing the WBS to
ensure consistency and buy-in.
6. Each WBS item must be documented to ensure accurate understanding
of the scope of work included and not included in that item.
7. The WBS must be a flexible tool to accommodate inevitable changes
while properly maintaining control of the work content in the project
according to the scope statement.
*Cleland, David I. Project Management: Strategic Design and
Implementation, 1994
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Sample WBS: by product
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Sample WBS: by phase
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Sample WBS: tabular form
1.0 Concept
1.1 Evaluate current systems
1.2 Define Requirements
1.2.1 Define user requirements
1.2.2 Define content requirements
1.2.3 Define system requirements
1.2.4 Define server owner requirements
1.3 Define specific functionality
1.4 Define risks and risk management approach
1.5 Develop project plan
1.6 Brief web development team
2.0 Web Site Design
3.0 Web Site Development
4.0 Roll Out
5.0 Support
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WBS and GANTT in Project 2000
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CHAPTER 5
Project Time Management
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Developing a project schedule


Project schedules grow out of the WBS
Activity definition


developing a more detailed WBS to complete all the work to
be done
Activity sequencing

Involves reviewing activities and determining dependencies




Mandatory dependencies: inherent in the nature of the work;
hard logic
Discretionary dependencies: defined by the project team; soft
logic
External dependencies: involve relationships between project
and non-project activities
You must determine dependencies in order to use critical
path analysis
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Project Network Diagrams

Project network diagram is one technique to
show activity sequencing, relationships
among activities, including dependencies.

Sample Activity-on-Arrow (AOA) Network Diagram
Also called activity-on-arrow
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Project Network Diagram
Start
Milestone Date: Fri 11/ 14/ 03
I D: 1
Understand System
Collect Existing
Start: 11/ 17/ 03
I D: 2
Start: 11/ 17/ 03
I D: 3
Start: 11/ 19/ 03
I D: 4
Start: 11/ 21/ 03
I D: 5
Finish: 11/ 21/ 03
Dur: 5 days?
Finish: 11/ 18/ 03
Dur: 2 days
Finish: 11/ 20/ 03
Dur: 2 days
Finish: 11/ 21/ 03
Dur: 1 day?
Comp: 0%
New Features
Res:
Feature List
Res:
Res:
Software Requirements
Baseline
Start: 11/ 24/ 03
I D: 6
Start: 11/ 24/ 03
I D: 7
Start: 12/ 2/ 03
I D: 8
Finish: 1/ 5/ 04
Dur: 31 days
Finish: 12/ 1/ 03
Dur: 6 days
Finish: 12/ 24/ 03
Dur: 17 days
Comp: 0%
New
Res:
Bugs & Problem
Res:
Web Tool
Add
Start: 11/ 24/ 03
I D: 11
Start: 11/ 24/ 03
I D: 12
Start: 11/ 26/ 03
I D: 13
Finish: 12/ 30/ 03
Dur: 27 days
Finish: 11/ 25/ 03
Dur: 2 days
Finish: 11/ 28/ 03
Dur: 3 days
Comp: 0%
Res:
Res:
Start: 11/ 25/ 03
I D: 14
Finish: 12/ 30/ 03
Dur: 26 days
Comp: 0%
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Precedence Diagramming Method (PDM)



Activities are represented by boxes
Arrows show relationships between activities
Used by most PM software
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Sample PDM
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Activity Duration Estimating




After defining activities and determining their sequence, the
next step in time management is duration estimating
Duration includes the actual amount of time worked on an
activity plus elapsed time
People doing the work should help create estimates, and an
expert should review them
Estimates should be—





Based on a set of assumptions and collected data
Based on the current approved scope and project specifications
Changed when the scope of the project changes significantly
Changed when there are authorized changes in resources,
materials, services, and so forth
Budgets are only estimates
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Schedule Development


Schedule development uses results of
the other time management processes
to determine the start and end date of
the project and its activities
Ultimate goal is to create a realistic
project schedule that provides a basis
for monitoring project progress for the
time dimension of the project
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GANTT Charts


Gantt charts provide a standard format for
displaying project schedule information by
listing project activities and their
corresponding start and finish dates in a
calendar format
Symbols include:




A black diamond: milestones or significant events
on a project with zero duration
Thick black bars: summary tasks
Lighter horizontal bars: tasks
Arrows: dependencies between tasks
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Tracking using GANTT charts
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Tracking versus Planning




Real world is never the same as the
clean paper
Too detailed and miss the bigger picture
Too high level and are late to respond
to problems
People do not always tell the truth!
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Critical Path Method




CPM is a project network analysis technique used to
predict total project duration
A critical path for a project is the series of activities
that determines the earliest time by which the project
can be completed
The critical path is the longest path through the
network diagram and has the least amount of slack
or float
Finding the Critical Path



First develop a good project network diagram
Add the durations for all activities on each path through the
project network diagram
The longest path is the critical path
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Program Evaluation and Review
Technique PERT



PERT is a network analysis technique used to
estimate project duration when there is a high degree
of uncertainty about the individual activity duration
estimates
PERT uses probabilistic time estimates based on
using optimistic, most likely, and pessimistic
estimates of activity durations
PERT weighted average formula:


(optimistic time + 4X most likely time + pessimistic time)/W
(8 workdays + 4 X 10 workdays + 24 workdays)/6 = 12
days
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CHAPTER 6
Project Cost Management
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Project Cost Management


Costs are usually measured in monetary units like
dollars
Project cost management includes the processes
required to ensure that the project is completed
within an approved budget




Resource planning: determining what resources and
quantities of them should be used
Cost estimating: developing an estimate of the costs and
resources needed to complete a project
Cost budgeting: allocating the overall cost estimate to
individual work items to establish a baseline for measuring
performance
Cost control: controlling changes to the project budget
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Basic Principles of Cost
Management





Profits are revenues minus expenses
Life cycle costing is estimating the cost of a
project over its entire life
Cash flow analysis is determining the
estimated annual costs and benefits for a
project
Benefits and costs can be tangible or
intangible, direct or indirect
Sunk cost should not be a criteria in project
selection
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Resource Planning
The nature of the project and the organization will
affect resource planning. Some questions to consider:
 How difficult will it be to do specific tasks on the
project?
 Is there anything unique in this project’s scope
statement that will affect resources?
 What is the organization’s history in doing similar
tasks?
 Does the organization have or can they acquire the
people, equipment, and materials that are capable
and available for performing the work?
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Cost Estimating



An important output of project cost management is a
cost estimate
It is also important to develop a cost management
plan that describes how cost variances will be
managed on the project
3 basic tools and techniques for cost estimates:



analogous or top-down: use the actual cost of a previous,
similar project as the basis the new estimate
bottom-up: estimate individual work items and sum them to
get a total estimate
parametric: use project characteristics in a mathematical
model to estimate costs
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Type of Estimate




WAG (Wild Ass Guess)
Rough Order of Magnitude (ROM)
Budgetary
Definitive
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Earned Value Management Terms



The planned value (PV), formerly called the
budgeted cost of work scheduled (BCWS), also called
the budget, is that portion of the approved total cost
estimate planned to be spent on an activity during a
given period
Actual cost (AC), formerly called actual cost of
work performed (ACWP), is the total of direct and
indirect costs incurred in accomplishing work on an
activity during a given period
The earned value (EV), formerly called the
budgeted cost of work performed (BCWP), is the
percentage of work actually completed multiplied by
the planned value
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Earned Value Calculations 1 wk
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Formulas
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Earned Value Formulas
To estimate what it will cost to complete a project or
how long it will take based on performance to date,
divide the budgeted cost or time by the appropriate
index.
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CHAPTER 7
Project Quality Management
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What is quality management?


The International Organization for
Standardization (ISO) defines quality as the
totality of characteristics of an entity that
bear on its ability to satisfy stated or implied
needs
Other experts define quality based on

conformance to requirements: meeting written
specifications


Has the problem that specifications are not 100%
complete or correct
fitness for use: ensuring a product can be used as
it was intended
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Quality Management Processes




Quality planning: identifying which quality standards are
relevant to the project and how to satisfy them
Quality assurance: evaluating overall project performance to
ensure the project will satisfy the relevant quality standards
Quality control: monitoring specific project results to ensure that
they comply with the relevant quality standards while identifying
ways to improve overall quality
Modern quality management





SIX SIGMA
requires customer satisfaction
prefers prevention to inspection
recognizes management responsibility for quality
Noteworthy quality experts include Deming, Juran, Crosby,
Ishikawa, Taguchi, and Feigenbaum
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Sample Fishbone or Ishikawa Diagram
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Pareto Analysis



Pareto analysis involves
identifying the vital few
contributors that account for
the most quality problems in
a system
Also called the 80-20 rule,
meaning that 80% of
problems are often due to
20% of the causes
Pareto diagrams are
histograms that help identify
and prioritize problem areas
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Standard Deviation



Standard deviation measures how much variation exists in a
distribution of data
A small standard deviation means that data cluster closely
around the middle of a distribution and there is little variability
among the data
A normal distribution is a bell-shaped curve that is symmetrical
about the mean or average value of a population
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QCC, Six Sigma, Rule of 7



A control chart is a graphic display of data that
illustrates the results of a process over time. It helps
prevent defects and allows you to determine whether
a process is in control or out of control
Operating at a higher sigma value, like 6 sigma,
means the product tolerance or control limits have
less variability
The seven run rule states that if seven data points in
a row are all below the mean, above, the mean, or
increasing or decreasing, then the process needs to
be examined for non-random problems
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Sample Quality Control Chart
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Reducing Defects with Six Sigma
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Cost of Quality

The cost of quality is



the cost of conformance or delivering products
requirements and fitness for use
the cost of nonconformance or taking
responsibility failures or not meeting quality
expectations
Business Cost per Hour Downtime





Automated teller machines (medium-sized bank)
Package shipping service
Telephone ticket sales
Catalog sales center
Airline reservation center (small airline)
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Five Cost Categories Related to Quality





Prevention cost: the cost of planning and executing a project
so it is error-free or within an acceptable error range
Appraisal cost: the cost of evaluating processes and outputs
to ensure quality
Internal failure cost: cost incurred to correct an identified
defect before the customer receives the product
External failure cost: cost that relates to all errors not
detected and corrected before delivery to the customer
Measurement and test equipment costs: capital cost
equipment used to perform prevention and appraisal activities
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Quality, Security, etc

Quality Assurance can often be another
tool for uncovering cost, schedule, and
other project problems.

When QA says they can not evaluate
because there is not enough detail, it is a
red flag!
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CHAPTER 8
Project Human Resource
Management
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Start With Good People

#1 Get Good People Assigned to your
project


Know who the good people are!
#2 You usually get less than your pay
for.


Cheap people may cost a lot!
Expensive consultants usually do not build
things
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Projects and HR?

Project human resource management includes the processes
required to make the most effective use of the people involved
with a project. Processes include




Organizational planning
Staff acquisition
Team development
Keys to managing people


Psychologists and management theorists have devoted much
research and thought to the field of managing people at work
Important areas related to project management include



motivation
influence and power
effectiveness
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Maslow’s Hierarchy of Needs
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McGregor’s Theory X and Y




Douglas McGregor popularized the human relations
approach to management in the 1960s
Theory X: assumes workers dislike and avoid work,
so managers must use coercion, threats and various
control schemes to get workers to meet objectives
Theory Y: assumes individuals consider work as
natural as play or rest and enjoy the satisfaction of
esteem and self-actualization needs
Theory Z: introduced in 1981 by William Ouchi and is
based on the Japanese approach to motivating
workers, emphasizing trust, quality, collective
decision making, and cultural values
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Thamhain and Wilemon’s Influence on
Projects
1.
2.
3.
4.
5.
6.
7.
8.
9.
Authority: the legitimate hierarchical right to issue orders
Assignment: the project manager's perceived ability to influence
a worker's later work assignments
Budget: the project manager's perceived ability to authorize
others' use of discretionary funds
Promotion: the ability to improve a worker's position
Money: the ability to increase a worker's pay and benefits
Penalty: the project manager's ability to cause punishment
Work challenge: the ability to assign work that capitalizes on a
worker's enjoyment of doing a particular task
Expertise: the project manager's perceived special knowledge
that others deem important
Friendship: the ability to establish friendly personal relationships
between the project manager and others
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Power


Power is the potential ability to influence
behavior to get people to do things they
would not otherwise do
Types of power include





Coercive
Legitimate
Expert
Reward
Referent
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Improving Effectiveness - Covey’s 7
Habits

Project managers can apply Covey’s 7 habits
to improve effectiveness on projects







Be proactive
Begin with the end in mind
Put first things first
Think win/win
Seek first to understand, then to be understood
Synergies
Sharpen the saw
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Empathic Listening and Rapport




Good project managers are empathic
listeners; they listen with the intent to
understand
Before you can communicate with others, you
have to have rapport
Mirroring is a technique to help establish
rapport
IT professionals often need to develop
empathic listening and other people skills to
improve relationships with users and other
stakeholders
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Organizational Planning


Organizational planning involves identifying, documenting, and
assigning project roles, responsibilities, and reporting relationships
Outputs and processes include




project organizational charts
work definition and assignment process
responsibility assignment matrixes
resource histograms
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Sample Responsibility Assignment Matrix
(RAM)
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Staff Acquisition




Staffing plans and good hiring procedures are
important in staff acquisition, as are incentives for
recruiting and retention
Some companies give their employees one dollar for
every hour a new person they helped hire works
Some organizations allow people to work from home
as an incentive
Research shows that people leave their jobs because
they don’t make a difference, don’t get proper
recognition, aren’t learning anything new, don’t like
their coworkers, and want to earn more money
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Resource Loading



Resource loading refers to the amount of individual resources an
existing project schedule requires during specific time periods
Resource histograms show resource loading
Over-allocation means more resources than are available are
assigned to perform work at a given time
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Resource Leveling


Resource leveling is a technique for resolving
resource conflicts by delaying tasks
The main purpose of resource leveling is to create a
smoother distribution of resource usage and reduce
over allocation
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Team Development: MBTI

Meyers-Briggs Type Indicator (MBTI) is
a popular tool for determining
personality preferences and helping
teammates understand each other

Four dimensions include:




Extrovert/Introvert (E/I)
Sensation/Intuition (S/N)
Thinking/Feeling (T/F)
Judgment/Perception (J/P)
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Social Styles Profiles

People are perceived as behaving primarily in
one of four zones, based on their
assertiveness and responsiveness:





Drive
Expressive
Analytical
Amiable
People on opposite corners (drive and
amiable, analytical and expressive) may have
difficulties getting along
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Reward and Recognition Systems



Team-based reward and recognition
systems can promote teamwork
Focus on rewarding teams for achieving
specific goals
Allow time for team members to mentor
and help each other to meet project
goals and develop human resources
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Organizational Systems

Project based: Operations consist primarily of projects. Two
categories:


Organizations that derive their revenue primarily from performing
projects for others (architectural firms, engineering firms,
consultants, construction contractors, government contractors, etc.)
Organizations that have adopted management by projects


Have management systems such as accounting, financial, reporting and
tracking in place to facilitate project management
Non-project based:


Absence of project-oriented systems generally makes project
management more difficult.
Examples include: manufacturing companies, financial service
firms, etc.
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Organizational Cultures and Style


Culture is reflected in shared values, beliefs, norms,
expectations, policies, procedures, view of authority
relationships, etc.
Organizational cultures often have a direct influence
on the project.



A team proposing an unusual or high-risk approach is more
likely to secure approval in an aggressive or entrepreneurial
organization.
A project manager with a highly participative style may
encounter problems in a rigidly hierarchical organization
while a project manager with an authoritarian style may be
equally challenged in a participative organization.
Project managers need to be aware of the
organization's cultures and style.
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Organizational Structure types:

Functional:




Project Expeditor (PE):





A hierarchy where each employee has one clear superior.
Staff are grouped by specialty, such as production, marketing, engineering, and accounting.
Project work is done independently within each department.
The project expeditor acts as a staff assistant to the executive who has ultimate responsibility for the project.
The workers remain in their functional organizations and provide assistance as needed.
The PE has little formal authority. The PE's primary responsibility is to communicate information between the
executive and the workers.
Most useful in the traditional functional organization where the project's worth and costs are relatively low.
Project Coordinator (PC):





Project expeditor is moved out of facilitator position into a staff position reporting to a much higher level in the
hierarchy.
The project coordinator has more authority and responsibility than a PE.
The PC has the authority to assign work to individuals within the functional organization.
The functional manager is forced to share resources and authority with the PC.
The size of projects in terms of dollars is relatively small compared to the rest of the organization.
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Matrix:




Maintains the functional (vertical) lines of authority while establishing a
relatively permanent horizontal structure to interact with all functional
units supporting the projects.
One result of the matrix is that workers frequently find themselves caught
between the project manager and their functional manager.
Advantages: Improved PM control over resources, rapid response to
contingencies, improved coordination effort across functional lines, people
have a "home" after the project is over, etc. (See Principles of PM, pg. 18)
Disadvantages: Not cost effective due to excess administrative personnel,
workers report to multiple bosses, more complex structure to monitor and
control, higher potential for conflicts due to differing priorities, power
struggles, and competition for resources, etc. (See Principles of PM, pg.
19)
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Matrix Staffing!
Functions Project A
Project B
Project C
Project K
Project Z
QA
2
5
1
1/2
½
Software
2
1
½
½
3
2
5½
1½
2 1/2
4
2
5
1
6
½
1
5
5
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Matrix Types



Weak matrix: Maintains many of the characteristics
of a functional organization. The project manager's
role is more like that of a project coordinator or
project expeditor.
Balanced matrix: In-between weak and strong.
The project manager has more authority than in a
weak matrix. The PM is more likely to be full-time
than part-time as in a weak matrix.
Strong matrix: Similar in characteristics to a
projectized organization. There is likely to be a
department of project managers which are full-time.
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Projectized:
Team members are often collocated.
 Most of the organization's resources
are involved in project work.
 Project managers have a great deal
of independence and authority.
 Departments either report directly to
the project manager or provide
services to the various projects.

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Project Manager Roles and
Responsibilities

Integrator



PM is the most likely person who can view both the project and the way it fits into the overall plan
for the organization.
Must coordinate the efforts of all the units of the project team.
Communicator

Communicates to upper management, the project team, and other stakeholders.



Team Leader


Must be able to solve problems
Guide people from different functional areas


Coordinate the project to show leadership capabilities
Decision Maker



The PM who fails to decipher and pass on appropriate information to the appropriate people can become a
bottleneck in the project.
The PM has the responsibility of knowing what kind of messages to send, who to send them to, and translating
the messages into a language understood by all recipients.
Makes key decisions such as allocation of resources, costs of performance and schedule tradeoffs,
changing the scope, direction or characteristics of the project.
This is an important role with significant consequences for the project as a whole.
Climate Creator or Builder


The PM should attempt to build a supportive atmosphere so that project team members work
together and not against one another.
Seek to avoid unrest and negative forms of conflict by building supportive atmosphere early.
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General Advice on Teams

Focus on meeting project objectives and producing
positive results




Fix the problem instead of blaming people
Establish regular, effective meetings
Use PM tools and reports to help focus



Remember the product is important, not the paper
Nurture team members and encourage them to help
each other
Acknowledge individual and group accomplishments


Make sure everyone understands the goals
Free Lunch etc.
Establish accountability
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Project Meals

Can be very effective method for team
building




Can be a hassle and negative



Lunches where management pays
Friday at 4:00 for Beer and Pizza
Bagels with Lox’s
Christmas Dinners
Upper Management plus/minus
Tailored to Team / Location

Pot Luck , Hotdogs/Sandwiches at the Park,
Expensive Lunch
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More Advice

Project managers should



Treat people with consideration and respect
Understand what motivates them
Communicate carefully with them


Goal is to enable project team members to
deliver their best work


Never confuse people
Motivation and morale helps meet schedules
Use Accountability to your benefit

SOMETIMES FIRING A TURKEY HELPS
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CHAPTER 9
Project Communications
Management
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Communications Planning






Communications planning: determining the information and
communications needs of the stakeholders
Information distribution: making needed information
available in a timely manner
Performance reporting: collecting and disseminating
performance information
Administrative closure: generating, gathering, and
disseminating information to formalize phase or project
completion
Every project should include some type of communications
management plan, a document that guides project
communications
Creating a stakeholder analysis for project communications also
aids in communications planning
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Communications Management Concept







A description of a collection and filing structure for
gathering and storing various types of information
A distribution structure describing what information
goes to whom, when, and how
A format for communicating key project information
A project schedule for producing the information
Access methods for obtaining the information
A method for updating the communications
management plans as the project progresses and
develops
A stakeholder communications analysis
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Communication Interception





Lack of Clear Communications Channels
Physical or temporal (time) distance between the
communicator and receiver
Difficulties with Technical Language
Distracting Environmental Factors (noise)
Detrimental Attitudes (hostility, disbelief)
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Conflict Handling Modes







Withdrawal - retreat or withdraw from an actual or potential
disagreement
Forcing - the win-lose approach
Smoothing - de-emphasize areas of differences and emphasize
areas of agreement
Compromise- use a give-and-take approach
Confrontation problem-solving - directly face a conflict
Conflict often produces important results, such as new ideas,
better alternatives, and motivation to work harder and more
collaboratively
Groupthink can develop if there are no conflicting viewpoints
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Running Effective Meetings



Determine if a meeting can be avoided
Define the purpose and intended outcome of the
meeting
Determine who should attend the meeting




Provide an agenda to participants before the meeting
Prepare handouts, visual aids, and make logistical
arrangements ahead of time
Run the meeting professionally



Allow who should, but will not!
Use the Agenda to keep it focused
Build relationships
Follow UP!!!!!!!!!!!!!!!!!!
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Follow Up To A Meeting




Minutes
Agreements!
Action Items
Attendees


Contact Information
I prefer minutes within 24 hours and to
Status the Action Items within 7 days
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Sample Stakeholder Analysis for Project
Communications

Stakeholders







Customer Management
Customer Business Staff
Customer Technical Staff
Internal Management
Internal Business and Technical Staff
Training Subcontractor
Software Subcontractor
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Number of Communication Channels =
n(n-1)/2
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Communication Methods
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Communications Channels
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Communication Role of the PM
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Interpersonal Communication



To ensure messages are received and understood, two-way
communication is necessary.
Interpersonal communication is the process of sharing information with
others.
Three basic elements of interpersonal communication:




The sender (or encoder) of the message.
The signal or the message.
The receiver (or decoder) of the message.
Process of interpersonal communication:





Sender determines what information to share and with whom and encodes
the message.
Sender transmits the message as a signal to the receiver.
The receiver receives the message.
The receiver decodes the message to determine its meaning and then
responds accordingly.
Communication is successful if the decoded message is the same as the
sender intended.
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Methods of Communication

Verbal:

Advantages:






Disadvantages: technical jargon especially in complex projects may make verbal communication
difficult for non-technical people and other stakeholders.
Three stages of effective verbal communication and presentation:




The introduction: Tell them what you're going to tell them.
The explanation: Tell them.
The summary: Tell them what you just told them.
Non-verbal:




Timely exchange of information
Rapid feedback
Immediate synthesis of message
Timely closure
Encoding a message without using words. Usually done through body language.
Total Message Impact = Words (7%) + Vocal tones (38%) + Facial expressions (55%)
PM's may combine vocal and nonverbal factors but must be careful that the two do not present
contradictory messages.
Written communication:



The main aim of business writing is that it should be understood clearly when read quickly.
The message should be well planned, simple, clear, and direct.
Major steps to writing:





Establish the basic purpose of the message.
Collect and organize material.
Prepare draft.
Check the overall structure.
Send the message.
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Macro-Barriers to Successful
Communication

Information overload:



Lack of subject knowledge:




Meanings and interpretations may vary among different cultures.
Encourage team members to learn each other's cultures.
Organizational climate:



Must have sufficient knowledge to send message.
Must know level of understanding of receiver.
Cultural differences:


Keep messages simple and direct.
Provide sufficient information but not too much.
Minimize the differences associated with status and ego within the organization.
Encourage open and trusting atmosphere.
Number of links:



Reduce the number of transmission links.
The more links, the more opportunity for distortion.
Be aware of entropy. 23-27% of message is lost in upward communication.
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Micro-Barriers to
Successful Communication

Perceptions:



Message competition:



Sender's view of the receiver: how sender perceives the receiver's
level of knowledge and ability to understand the message.
Receiver's view of the sender: How the receiver personally feels
about the sender may influence how carefully the receiver listens.
Communicate only when you have the total attention of the
recipient.
Try to minimize noise or other factors contributing to message
interference.
Project jargon and terminology:


Define project terminology used in messages.
Be aware of the use of project terminology and the intended
audience.
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Types of Project Communications




Interpersonal communication.
Communication with public and
community.
Formal communication.
Informal communication.
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Communication Channels and Links


The PM must recognize and understand
the project's formal communication
channels.
Three basic channels of communication:



Upward communication (vertically or
diagonally)
Downward communication (vertically or
diagonally)
Lateral communication (horizontally)
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Effective Listening



Effective listening is one of the most important skills for a PM to acquire and
practice.
It helps develop mutual respect, rapport, and trust among project participants.
Verbal listening behaviors:







Asking questions to clarify and gather more information.
Paraphrasing what the speaker has said.
Summarizing at intervals what the speaker has said to confirm what you have
understood.
Asking the speaker for examples.
Ascertaining the speaker's feelings and acknowledging them. ("You seem angry.")
Directing the speaker to the most appropriate listener. ("George can best help you with
that.")
Non-verbal listening behaviors:





Making eye contact.
Being expressive and alert.
Moving closer to the speaker.
Listening for the intention behind the speaker's communication.
Facial expressions, touching, use of space, use of time.
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Barriers to Effective Listening


The mismatch between our speed of talking (100-400
words per minute) and our speed of thinking (approx. 600
words per minute) makes effective listening tough.
Some of the personal and environmental barriers that
influence the overall effectiveness of communication
include:



Poor listeners: People do not talk freely when they know the
audience isn't listening.
Resistance to the message: People don't like to listen to something
that is contrary to their preconceived ideas.
Physical distractions: telephone calls, people coming in and out of
office / meetings, etc.
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Guidelines for Active Listening


Stop talking!
Show the speaker you are ready to
listen:



Silence: signals you are ready to listen.
Few distractions: shut the door, put the
phone on hold, etc.
A receptive attitude: empathize with the
speaker's point of view.
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Performance / Status Reports

Performance reporting keeps stakeholders
informed about how resources are being used
to achieve project objectives




Status reports describe where the project stands
at a specific point in time
Progress reports describe what the project team
has accomplished during a certain period of time
Project forecasting predicts future project status
and progress based on past information and
trends
Status review meetings often include performance
reporting
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Developing a Communications
Infrastructure

A communications infrastructure is a set of tools,
techniques, and principles that provide a foundation
for the effective transfer of information



Tools include e-mail, project management software,
groupware, fax machines, telephones, teleconferencing
systems, document management systems, and word
processors
Techniques include reporting guidelines and templates,
meeting ground rules and procedures, decision-making
processes, problem-solving approaches, and conflict
resolution and negotiation techniques
Principles include using open dialog and an agreed upon
work ethic
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Project Portal / Website

What





Useful Documents
Contact Information
Propaganda
Test Versions
Why Not

Maintenance Cost!
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Final Project Report
A project or phase of a project requires
closure
 Administrative closure produces
 – project archives
 – formal acceptance
 – lessons learned
 Final Free Lunch!
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CHAPTER 10
Project Risk Management
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What is Risk?



A dictionary definition of risk is “the possibility
of loss or injury”
Project risk involves understanding potential
problems that might occur on the project and
how they might impede project success
Risk management is like a form of insurance

it is an investment
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Risk Utility

Risk utility or risk tolerance is the amount of satisfaction or
pleasure received from a potential payoff



Utility rises at a decreasing rate for a person who is risk-averse
Those who are risk-seeking have a higher tolerance for risk and
their satisfaction increases when more payoff is at stake
The risk neutral approach achieves a balance between risk and
payoff
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Project Risk Management

The goal of project risk management is to minimize potential
risks while maximizing potential opportunities. Major processes
include






Risk management planning: deciding how to approach and plan the
risk management activities for the project
Risk identification: determining which risks are likely to affect a
project and documenting their characteristics
Qualitative risk analysis: characterizing and analyzing risks and
prioritizing their effects on project objectives
Quantitative risk analysis: measuring the probability and
consequences of risks
Risk response planning: taking steps to enhance opportunities and
reduce threats to meeting project objectives
Risk monitoring and control: monitoring known risks, identifying
new risks, reducing risks, and evaluating the effectiveness of risk
reduction
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Questions in a Risk Management Plan






The risk questions:
Why?
What?
How?
When?
How Much?
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Other Types of Risk



Market Risk: Will the new product be useful
to the organization or marketable to others?
Will users accept and use the product or
service?
Financial Risk: Can the organization afford to
undertake the project? Is this project the best
way to use the company’s financial
resources?
Technology Risk: Is the project technically
feasible? Could the technology be obsolete
before a useful product can be produced?
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Risk Identification


Risk identification is the process of
understanding what potential unsatisfactory
outcomes are associated with a particular
project
Several risk identification tools and
techniques include




Brainstorming
The Delphi technique
Interviewing
SWOT analysis
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Knowledge Area









Integration
Scope
Time
Cost
Quality
Human Resources
Communications
Risk
Procurement
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Quantitative Risk Management

Assess the likelihood and impact of identified
risks to determine their magnitude and
priority


Common in Hardware System
Risk quantification tools and techniques
include



Probability/Impact matrixes
The Top 10 Risk Item Tracking
Expert judgment
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Graphical View of Risk
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Decision Tree and EMV


A decision tree is a diagramming method used to
help you select the best course of action in situations
in which future outcomes are uncertain
EMV is a type of decision tree where you calculate
the expected monetary value of a decision based on
its risk event probability and monetary value
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Simulation



Simulation uses a representation or model of
a system to analyze the expected behavior or
performance of the system
Monte Carlo analysis simulates a model’s
outcome many times to provide a statistical
distribution of the calculated results
To use a Monte Carlo simulation, you must
have three estimates (most likely, pessimistic,
and optimistic) plus an estimate of the
likelihood of the estimate between the
optimistic and most likely values
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Results
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Risk Response Planning


After identifying and quantifying risk, you must
decide how to respond to them
Four main strategies:




Risk avoidance: eliminating a specific threat or risk, usually
by eliminating its causes
Risk acceptance: accepting the consequences should a risk
occur
Risk transference: shifting the consequence of a risk and
responsibility for its management to a third party
Risk mitigation: reducing the impact of a risk event by
reducing the probability of its occurrence
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Risk Monitoring & Control







Monitoring risks involves knowing their status
Controlling risks involves carrying out the risk management
plans as risks occur
Workarounds are unplanned responses to risk events that must
be done when there are no contingency plans
The main outputs of risk monitoring and control are corrective
action, project change requests, and updates to other plans
Risk response control involves executing the risk management
processes and the risk management plan to respond to risk
events
Risks must be monitored based on defined milestones and
decisions made regarding risks and mitigation strategies
Sometimes workarounds or unplanned responses to risk events
are needed when there are no contingency plans
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CHAPTER 11
Project Procurement
Management
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Project Procurement Management







Procurement planning: determining what, when, and how much
to procure
Solicitation planning: documenting product requirements and
identifying potential sources
Solicitation: obtaining quotations, bids, offers, or proposals as
appropriate
Source selection: choosing from among potential vendors
Contract administration: managing the relationship with the
vendor
Contract close-out: completion and settlement of the contract
Make-or-buy analysis: determining whether a particular product
or service should be made or performed inside the organization
or purchased from someone else.
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Often involves financial analysis
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Types of Contracts
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Unit price contracts
Time and material contracts
Cost reimbursable
Fixed price or lump sum
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Statement of Work SOW
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A statement of work is a description of
the work required for the procurement
Many contracts, mutually binding
agreements, include SOWs
A good SOW gives bidders a better
understanding of the buyer’s desires
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SOW
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Scope of Work: Describe the work to be done to detail. Specify the hardware
and software involved and the exact nature of the work.
Location of Work: Describe where the work must be performed. Specify the
location of hardware and software and where the people must perform the work
Period of Performance: Specify when the work is expected to start and end,
working hours, number of hours that can be billed per week, where the work
must be performed, and related schedule information.
Deliverables Schedule: List specific deliverables, describe them in detail, and
specify when they are due.
Applicable Standards: Specify any company or industry-specific standards
that are relevant to performing the work.
Acceptance Criteria: Describe how the buyer organization will determine if
the work is acceptable.
Special Requirements: Specify any special requirements such as hardware or
software certifications, minimum degree or experience level of personnel, travel
requirements, and so on.
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Solicitation Planning
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Solicitation planning involves preparing several documents:
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Solicitation involves obtaining proposals or bids from prospective sellers
Organizations can advertise to procure goods and services in several
ways
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Request for Proposals: used to solicit proposals from prospective sellers
where there are several ways to meet the sellers’ needs
Requests for Quotes: used to solicit quotes for well-defined procurements
Invitations for bid or negotiation and initial contractor responses are also
part of solicitation planning
Request For Qualification: used to get a set of interested vendors
approaching the preferred vendor
approaching several potential vendors
advertising to anyone interested
A bidders’ conference can help clarify the buyer’s expectations
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Source Selection
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Source selection involves
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evaluating bidders’ proposals
choosing the best one
negotiating the contract
awarding the contract
It is helpful to prepare formal evaluation
procedures for selecting vendors
Buyers often create a “short list”
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Contract Administration
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Contract administration ensures that the
seller’s performance meets contractual
requirements
Contracts are legal relationships, so it is
important that legal and contracting
professionals be involved in writing and
administering contracts
Many project managers ignore contractual
issues, which can result in serious problems
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Contract Close Out
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Contract close-out includes
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product verification to determine if all work
was completed correctly and satisfactorily
administrative activities to update records
to reflect final results
archiving information for future use
Procurement audits identify lessons
learned in the procurement process
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Cost Reimbursable Contracts
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Cost plus incentive fee (CPIF): the buyer pays the
seller for allowable performance costs plus a
predetermined fee and an incentive bonus
Cost plus fixed fee (CPFF): the buyer pays the seller
for allowable performance costs plus a fixed fee
payment usually based on a percentage of estimated
costs
Cost plus percentage of costs (CPPC): the buyer pays
the seller for allowable performance costs plus a
predetermined percentage based on total costs
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Chapter 12
Project Management
as a Profession
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PM Career Development Path
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Project Management Institute (PMI)
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Project Management Institute (PMI®)
Not-for-profit professional association
Over 80,000 members worldwide
Established 1969
Global Organization Headquartered in:

Newtown Square, Pennsylvania USA
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PMP Certification Requirements

Four main requirements for earning PMP
certification
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Having experience working in the field of project
management. You need 4,500 hours with a
baccalaureate degree and 7,500 without a degree
Signing a PMP Certificate and Candidate
Agreement and Release form
completing the PMP Certification Exam Application
and paying a fee of $555 for non-PMI members
and $405 for members
Passing the PMP exam
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PMP Certification (by industry)
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PM Needs Some Domain
Knowledge
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No one understands everything well!
It helps to be effective project
management if you understand (or
once understood) one the domains well!
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Software
Quality etc..
People Skills are required!
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Discussion
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???
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