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BEST PRACTICES FOR

PROJECT MANAGEMENT

Version: 1.0
Date: 08 Aug 2007

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Best Practices for Project Management

Table of Contents

1. Executive Summary .......................................................................................................... 4


2. Introduction ....................................................................................................................... 5
2.1. Purpose ....................................................................................................................... 5
2.2. Document Structure ..................................................................................................... 5
2.3. Referenced Documents................................................................................................ 5
3. Overview ............................................................................................................................ 6
3.1. The Importance of Project Management in the IT Department ..................................... 6
3.2. The Context of Project Management in the IT Department ........................................... 7
3.3. The Project Management Team Structure .................................................................... 8
3.4. Qualifications of the Project Manager ......................................................................... 10
3.4.1. Project Theory and Knowledge Areas ........................................................................................... 10
3.4.2. Management and Soft skills .......................................................................................................... 10
3.4.3. Technical Skills ............................................................................................................................ 11
3.5. Finding and Preparing Qualified Project Managers .................................................... 11
4. Projects in the Government............................................................................................ 13
5. Project Management Standard ....................................................................................... 15
5.1. PMI Process Groups .................................................................................................. 15
5.2. PMI Knowledge Areas ................................................................................................ 16
5.3. The Project lifecycle ................................................................................................... 17
6. Setting up Projects ......................................................................................................... 19
6.1. Staffing the Project ..................................................................................................... 19
6.2. Setting up Quality Management ................................................................................. 19
6.3. Establishing Project Reporting ................................................................................... 20
6.4. Example on Earned Value Management .................................................................... 21
7. Project Management Recommendations ....................................................................... 24
8. Appendix I – Methodologies Used ................................................................................. 25
9. Appendix II – Risk Management ..................................................................................... 26
9.1. Definitions .................................................................................................................. 26
9.2. Risk Management Process ........................................................................................ 27
9.2.1. Risk Identification ......................................................................................................................... 27
9.2.2. Risk Analysis ............................................................................................................................... 27
9.2.3. Risk Planning ............................................................................................................................... 27
9.2.4. Risk Tracking ............................................................................................................................... 28
9.2.5. Risk Control ................................................................................................................................. 28
9.2.6. Risk Learning ............................................................................................................................... 28
10. Appendix III: Managing Stakeholders Expectations ..................................................... 29
11. Appendix IV – Sample Project Report............................................................................ 30

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List of Tables
Table 1 - Examples of the Defined Project Roles ....................................................................... 9
Table 2 – Challenges – In-house Projects ................................................................................ 13
Table 3 – Challenges – External Projects ................................................................................. 13
Table 4 - Product vs. Project Deliverables ................................................................................ 17

List of Figures
Figure 1 - Project Management Context ..................................................................................... 7
Figure 2 - Structure of the Project Team..................................................................................... 8
Figure 3 - PMI Process Groups ................................................................................................ 16
Figure 4- Quality Management Concept ................................................................................... 20
Figure 5 – Example Earned Value Diagram ............................................................................. 23
Figure 6 - MSF Risk Management Process .............................................................................. 27

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1. Executive Summary
Projects are considered an integral part of the IT departments’ activities. Due to this fact,
IT departments need to view project management in the right context in term of
importance, skill requirements, ability to deliver, organizational integration, and expected
results.

This document aims to address the various areas that need to be considered by IT
Departments’ management when it comes to Project Management. In this document,
different focus was given to the critical areas in order to ensure a successful delivery of
projects according to right principles and environmental needs of project management.
Putting together the right principles does not only rely on good standards and best
practices, but it also takes into account different considerations such as the environment
type (private or government).

The critical areas that are addressed in this document include:


• Importance of project management in delivering successful results: Noting that
projects will have high tendency of failing to achieve expected results, having
proper project management should be endorsed and adopted in the IT department
• Building proper organization for project management: Within IT, project
management has to take a formal role in term of organization, team structures,
roles, and qualifications
• Handling projects according to their type: Within the government environment,
projects consists of two types: in-house and outsourced. Each comes with its own
requirements and challenges
• Strong know how of industry best practices and recommendations: An overview is
presented for Project Management Institute (PMI) standards as it is the de-facto
reference for project management in the Kingdom
• Practical considerations for adopting and implementing project management:
Practical examples and considerations have been presented along with relevant
recommendations that can be considered by the IT departments on Project
Management

This document is not a reiteration of the theory. This document presents the theoretical
and practical concepts in a manner that is relevant and of context to the IT departments
that plans to implement or enhance their project management activities.

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2. Introduction
This document is a set of best practices followed in the management of projects in IT
departments. It guides the IT managers in planning and setting up proper project
management structure and environment. This is a living document, and it will be further
developed and regularly reviewed to ensure that it continues to provide the latest and the
best practices used in managing IT projects within the government organization.

2.1. Purpose
The purpose of this document is to provide guidance for IT managers in setting up project
management structure and environment that insure the delivery of successful IT projects.
The main audience for this document is the IT managers, project managers and middle
managers who are involved in executing IT projects.

2.2. Document Structure


The structure of this document addresses the intention of the reader. It contains the
following sections:
1. Overview: This section describes the importance of project management for the IT
departments and its context. It also clarifies the structure of the project team, and
the qualifications of the project manager.
2. Projects in the Government: This section describes the projects in the
government, their types, nature, and recommendations for them.
3. Project Management Standard: This section describes on a high level the PMI
standards for project management. It also explains the confused or misunderstood
components of it.
4. Setting up Projects: This section describes how to prepare for projects and how
to start them. This covers staffing, quality management and reporting.
5. Project Management Recommendations: This section describes the best
practices of project management. It is for the IT managers who want to read
quickly a summary of recommendations or tips.

2.3. Referenced Documents


The documents listed below have been used as a reference material to the subject of
managing IT projects, they also provide details on their designated subjects:
1. Guide to the Documents of IT Best Practices
2. Glossary of Terms for the IT Best Practices
3. Best Practices of IT Organization Design
4. Project Management Office Guidelines and Processes

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3. Overview
3.1. The Importance of Project Management in the IT Department

Hugh W. Ryan, in an article for Outlook Journal summarized research shows


that among all IT development projects, only 16% are delivered to acceptable
cost, time and quality.
In 1999, Standish Group International found that only 28% of information
technology projects are completed successfully.
Of 1,027 projects surveyed by the British Computer Society, the Association
of Project Managers and the Institute of Management concluded that only
130 (12.7%) were successful.1

The performance of projects in Information Technology has been showing consistently low
success rates. The reasons for this are many, but one of the major reasons is the
inadequate project management discipline and processes.
Projects in the IT department constitute a huge portion of the work performed. The rest of
the work is routine and of operational nature. Almost any change in the IT department -
concerning the management, the process or the tools- is preformed through a project.
However, what is not a project is the routine, operation and repetitive work. The project
effort has to be unique, if it is not unique, it is not a project.
Projects are "change enablers" and thus they are used to meet strategic plans and IT
governance objectives. They are also very strong management tool, they are well defined,
they have specific purpose and objectives and they are bounded to a preset timeframe.
Running work by projects has many benefits:
1. It formalizes the work around objectives and sound justification
2. It facilitates working in teams and it enhances cooperation and communication
between individuals and team members
3. It makes tasks easier to organize, plan, control and track
4. It makes achievements visible and tracked, in addition, it allows knowledge and
experience to be accumulated and gained gradually and to be recorded as project
history, giving indicative information about future work
5. It allows controlling the cost of work and other constraints
6. It clarifies the responsibilities of individuals, teams and entities toward a project
and their expected contributions to its success
7. It gives visibility on the future and usage of resource as a direct benefit of formal
and indispensable planning activities

1
Software Metrics: Best Practices for Successful IT Management, by Paul Goodman. Rothstein
Associates © 2004

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3.2. The Context of Project Management in the IT Department


Projects manage tasks and small assignments, but the projects themselves are also
managed as programs. The following diagram depicts the idea:

Figure 1 - Project Management Context

Recently, projects and programs are managed under a formally established entity called a
Project Management Office (PMO). These organized and formalized entities exist mainly
to centralize the tracking of the running projects consistently and with coordination and
consistent prioritization of resources and constraints.

The Project Management Office has many benefits:


1. Establishes and deploys a common set of project management processes and
standards, and updates it to account for improvements and best practices
2. Provides training (in-house or outsourced) to build core project management
competencies and common experiences
3. Provides project management coaching, and supporting services to keep
projects from getting into trouble
4. Tracks and reports basic information on the current status of all projects in the
organization and provides project visibility to higher management in a common
and consistent manner in order to control the competing objectives (Time, Cost,
Scope and Quality) of projects
5. Tracks organization-wide metrics on the state of project management, project
delivery, and the value being provided as an outcome of the project
6. Identify dependencies between running projects and facilitate coordination and
prioritization of projects
7. Sharing of experiences and lessons learned amongst projects by facilitating
efficient communication and status reporting

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3.3. The Project Management Team Structure

The project team consists of the following main roles:


§ Project Sponsor: The ultimate decision maker regarding project management
decision and performance
§ Project End-users: The beneficiaries of the project results
§ Project Manager: Who is responsible and accountable for the project success and
meeting the project objectives
§ Project Director-Program Manager: Oversees the projects and has an overall
project accountability
§ Project Quality Manager: Responsible for meeting customer expectations and
the acceptable level of quality.
§ Project Team members: People who participate in project execution.

The reporting structure for project team can be represented as follows:

Figure 2 - Structure of the Project Team

The quality manager (as clarified in the diagram) is not reporting to the project manager,
he should report to the project director in order to give an unbiased and uninfluenced
opinion about the quality performance of the project.
It is also important to note that the project can consist on at least one person and the
project sponsor, it cannot be less than that.

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Each of these roles can be fulfilled by one person or more (a steering committee2 or a task
force3 can be formed to fulfill a role). The following table gives an example of the
functional roles in the IT department and the government that can play the identified roles:

Table 1 - Examples of the Defined Project Roles


Role Example of a role holder/s

IT Manager/Director, Government business entity


Project Sponsor
manager, Minister, or any High level manager

IT department staff, government employees, or public


Project End-users
citizens

IT Manager, section manger, team leader or any


Project Manager
qualified IT department member

Project Director - IT Manager, IT director, or Chief Technology Officer


Program Manager (CTO)

IT Manager, section manger, team leader or any


Project Quality Manager
qualified IT department member

Project Team members Any qualified IT department member

Please refer to the Project Management section in the "Best Practices of IT Organization
Design" for details on the project management organization structure in the IT department.

For details on Project Management Office setup and processes, please refer to "Project
Management Office Guidelines and Processes".

2
A steering committee is a team that decides on the priorities or order of projects, programs or tasks
3
A task force is a group specially organized and dedicated to accomplish a critical task

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3.4. Qualifications of the Project Manager


The project manager is an achiever who must have the ability to achieve the objectives of
the project and its expected results. This might seem easy, but it actually requires the
project manager to have a large set of skills and abilities that cover the different aspects
and nature of the project management work.
There are three main aspects of the project manager work, which require three different
skill sets:

3.4.1.Project Theory and Knowledge Areas


A project in nature is different from classical and traditional work: it is not a set of tasks,
routine procedures, relaxed research or production, it is however a work within
constraints to achieve challenging goals and objectives. Therefore, if the goals are
not met, the project fails, if the goals are met but outside the constraints, it also fails, it has
to meet the goals within constraints.
This unique nature of projects requires the project manager:
§ To have the ability to manage resources like cost, time, people, etc.
§ To be able to prioritize, understand what is important and what is not
§ To be able to manage concurrently multiple streams of work, and integrate the
different knowledge areas of project management altogether in order to serve the
project needs
§ To be skilled in technical issues related to project planning and tracking. For
example, creating project plans and reports using technical tools like MS project,
Primavera planner, office tools, etc.
§ To understand how the project impacts the organization and the project sponsor in
terms of budget, schedule and the change process being made
§ To live through real life projects, and see the full project lifecycle from beginning to
closure

Most importantly, the project manager must adapt a methodology in managing projects,
like the PMI standards. The project manager must be knowledgeable in the areas and
skills needed to manage a project successfully. These areas are called the project
management knowledge areas (See section 5: Project Management Standard ).

3.4.2.Management and Soft skills

"Management could have been easy if it was not for people"

Indeed, achieving results through people is difficult. This comes from the complex, and
changing nature of human beings. The different personalities of the project team members
and stakeholders require different handling and different techniques. What some people
see acceptable, others might see it not acceptable!

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The project manager deals with a large number of people and from different backgrounds
and with different requirements. The end users for example require more features, while
the project sponsor wants quick-wins.
It is important for the project manager:
§ To know how to deal with people with professionalism, fairness and objectivity
§ To take into account personal interests and align them with the project goals
§ To have general management skills, planning, organizing, controlling and
coordinating
§ To have superior communication skills, to be a good listener, understanding and
considerate
§ To know how to motivate people and how to reward good performance
§ To be able to understand personality traits and cultural differences
§ To be able to assess performance of individuals and enhance it
§ To be able to build teams and establish good work relationships
§ To be able to introduce change to the organization and align people on the vision
and the mission of the project

3.4.3. Technical Skills


The technical skills are the easiest of the three aspects, because they are acquired from
the field of work gradually. The level of knowledge in the project functional or technical
area depends on the project nature and situation.
If the project manager does not have adequate technical skills, he must have access to a
subject matter expert or have one in his team. The project manager can perform better
and can be creative and innovative if he has adequate technical or functional skills.
There are however, very rare cases in which a project manager managed successfully
projects outside their functional or technical specialty. The concept of a generic field or
generic industry project manager does not really exist4, but a generic project director, a
PMO manager or a generic executive manager does exist and he might span multiple
fields or industries.

3.5. Finding and Preparing Qualified Project Managers


Qualified project managers can be simply recruited, or prepared, trained and grown from
within the existing IT team. In searching for project managers -or project management
candidates with the good potential-, the focus should be on the personal traits, like:
§ Leadership
§ Accepting responsibilities
§ Flexibility and adaptability with others
§ Communication skills

4
Some cases worked when the project manager had large experience and multi talents. Or when the
project was a program or mega project, and his work had a nature of directing or coordinating. But the
project manager in the IT department, and for the IT projects, must be educated and informed (technically
or functionally) about the project field or nature

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§ Resourcefulness5
Note that skills and knowledge about project management can be learned either in the
work environment or on job training, or by professional training in project management.
Even qualified project managers must attend at least one professional training.

5
having the ability to find quick and clever ways to overcome difficulties

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4. Projects in the Government


There are two types of projects in the government:

1. In-house projects: In-house project are performed by the in-house government staff,
and for a government entity. These projects are within control and work is visible and
easily monitored by the government entity.

2. External projects: External projects are performed by external suppliers, vendors or


subcontractors. The execution of these projects is outside the control of the
governmental entity, and hence these projects have more risks and issues, and
require special handling.

This distinction between the two is important because it affects the staffing of projects, the
quality management system and the methodology followed in managing the projects.
The following table summarizes the impact and recommended approach to handle in-
house project challenges:
Table 2 – Challenges – In-house Projects
Challenge Impact Recommendation
Staffing Organization structure Dedication to project and § Establish a structure that
and control over the allocating adequate time supports projects
project team to perform activities
§ Clarify responsibilities and
commandments to
projects
Quality Less formalized Quality of deliverables Dedicate a quality manager
with each project
Methodology Requires training and Overhead, long learning Select a methodology that is
investment in time curve and difficult to simple, pragmatic and easy
implement to follow

While the following table summarizes the impact and recommended approach to handle
External project challenges:

Table 3 – Challenges – External Projects


Challenge Impact Recommendation
Staffing 1. Understaffing the Poor project § Agreement and approval of
project from the performance project team staff
client side
§ Strict conditions in the project
contract
2. Inadequate Poor project § Prepare client side project
resources from the performance managers
government entity
§ Recruit project management
consultants to manage the
subcontractor

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Quality Guarantee quality of Quality of Dedicate a quality manager with


deliverables from the deliverables each project from the
subcontractor government and from the
subcontractor for each project
Methodology Diverse methodologies Inconsistency in Unify methodologies to be
from different project management, followed by subcontractors
subcontractors, or no reporting and
followed methodology communication

It is recommended to have a formal entity (like a PMO) to manage projects and it should
impose the same methodology and project reporting structure for all types of projects.

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5. Project Management Standard


Using a defined project management standard or methodology has many benefits, but the
most important one (without ignoring consistency) is the clarity on what is needed to be
done and how to do it. This has been the reason for failure of many projects, when the
project team and the client do not talk the same language, and when their expectations
differ, the project will face many problems.
The most common standard used worldwide is the Project Management Institute (PMI)
standards. It is detailed in the Project Management Body of Knowledge (PMBOK), Third
edition.
As this standard is generic, it can be tuned and applied according to the unique project
needs, which differ from one project to another.
In the PMI standard, it is important to differentiate between three different elements that
cause confusion and misunderstanding:

1. PMI Project Management process groups (see section 5.1)


2. PMI Project Management knowledge areas (see section 5.2)
3. Project lifecycle which is determined by the project nature, field or the product of the
project (see section 5.3)

5.1. PMI Process Groups


The processes of the Project Management Institute fall into the following groups:

1. Initiating processes: These are the processes that authorize the project or various
phases of the project

2. Planning processes: The definition of objectives and selection of the best


alternatives falls into this category. These processes are time consuming but very
important to the success of the project

3. Executing processes: This is when you pull everything together. All your planning
and refining of the scope, objectives, and deliverables come into play during the
implementation of these processes. They include having all your resources in the right
place at the right time with the right plan

4. Monitoring and Controlling processes: This group involves scope management and
utilizing processes to keep the project in line with the original objectives. These
processes involve a lot of follow-up to make sure everything is within the constraints
mandated at the beginning of the project and in the charter

5. Closing process: The signoff process is the formalized closure of the project. This
process is linked with the determination by the stakeholders that the project has
fulfilled its obligations as stipulated in the original scope statement

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The diagram6 below shows the different process groups:

Figure 3 - PMI Process Groups

Note that these are not project phases; they are just groups of processes. Many people
confuse these with project phases and establish it as a formal project life cycle. ( See
Section 5.3 The Project Lifecycle )
There is not a single process for project management that falls outside these processes.
Any process or procedure should fall into one of these process groups.

5.2. PMI Knowledge Areas


The knowledge areas in the Project Management Body of Knowledge are essential to
each project. Project managers need to understand them and be educated and familiar
with them in order to integrate appropriately, they are:

1. Project integration management: This area includes plan development, execution,


and integrated change control. This involves input to develop the plan and the
processes to keep it on track.
2. Project scope management: This area is composed of project initiation, scope
planning, definition, verification, and change control. In initiation when the project
begins with the outline of what you want to accomplish and the processes that are
required to make any alterations to the scope.
3. Project time management: This area encompasses activity definition, sequencing,
duration estimating, schedule development, and control. Remember that time is a key
element to the project and its success.
4. Project cost management: This area incorporates resource planning, cost
estimating, budgeting, and control.
5. Project quality management: This area involves quality planning, assurance, and
control.
6. Project human resource management: This area pertains to organizational

6
PMI - Project Management Institute Standards, Project Management Body of Knowledge PMBOK
Version 3

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planning, staff acquisition, and team development.


7. Project communications management: This area involves communications
planning, information distribution, performance reporting, and administrative closure.
8. Project risk management: This area describes risk management planning,
identification, qualitative and quantitative risk analysis, response planning, monitoring,
and control.
9. Project procurement management: This area focuses on procurement planning,
solicitation planning, solicitation, source selection, contract administration, and
closeout.
These knowledge areas can be learned through reading, a course, or professional
training.

5.3. The Project lifecycle

The project lifecycle (as mentioned in the PMBOK) depends on the project nature and
domain. In the third edition, it might also depend on the product of the project. For
example, a software project can follow the MS MSF (Microsoft Solution Framework)
project life cycle or the RUP (Rational Unified Process). However, an infrastructure
implementation project has a very different lifecycle and approach.
There are however a set of phases that exist in each project:

1. Initiation phase: in which the project starts


2. Closure phase: in which the project ends, and closure activities take place
3. Interim phases: the number and order of those phases depend on the approach,
methodology, product of the project and field of the project. For example in a
software project, and according to the MSF, the phases of creating a software
product are (Envisioning, Planning, Development, Stabilizing and Deployment).

The product of the project is the measurable outcome or the deliverable. In IT projects, it
can be many of things, like:
§ Documentation of research, design, reports, templates, etc.
§ Software packages burned on a CD, or stored in a permanent digital format
§ Software code, including files of code, images, etc.
§ Hardware equipment
§ Activities or tasks measured by time or soft outputs like (support, training,
coaching, monitoring, coordination, etc.)
These deliverables are different from project management related deliverables. The
following table provides examples of both:
Table 4 - Product vs. Project Deliverables
Project Management Deliverables Product Deliverables
Project Management Plan Product Development Plan
Project Scope Product requirements and features

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Project Performance reports – status Product test reports and feedback


reporting
Meeting minutes, communications and Product training sessions, joint testing
correspondences and handover
Project schedule plan, cost, risks and Product specifications, manuals and
quality assurance packages

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6. Setting up Projects
6.1. Staffing the Project
Staffing projects starts with allocating a project manager. The project manager should
have the qualifications described in the "Qualifications of the Project Manager" section.
Then the project manager is responsible for staffing the rest of the project team. This step
goes through the following activities:
1. Understanding of the project requirements
2. Planning the staffing needs of the project, which includes
a. Number of people needed to complete the project
b. Needed expertise and knowledge (Functional and Technical)
c. Time table for joining and releasing project team members
3. Fulfilling the staffing needs as planned
Step (3) is very challenging: most projects tend to be understaffed because of the limited
number of people or because of the unavailability of adequate expertise.
Even when the project is staffed as planned, some people might not perform as expected,
and hence additional planning and monitoring is needed to handle such staffing problems.

6.2. Setting up Quality Management


Quality management is one of the most neglected areas in project management. It is
crucial to the success of the project. Despite that, project managers neglect it or add few
activities at the end of the project or phases. Therefore, Quality Management must be built
into the project management system, and should be aligned with all project activities.
Quality management aims to guarantee two things:

1. Fitness of use: the activities are producing what the client needs
2. Freedom from deficiencies: the product of the activities is free from bugs, problems
and deficiencies

Quality Management takes care of the quality policy, quality standards, and
responsibilities and implements them by means such as quality planning, quality control,
quality assurance and quality improvement.

The approach for ensuring that the appropriate Quality Management activities are
conducted should be from the Project Management Institute’s (PMI) Standard, which has
the following quality components:

1. Quality Planning – identifying and/or verifying quality standards that are relevant to
the project and determining how to satisfy them.
2. Quality Control – monitoring specific project results and deliverables to determine if
they comply with relevant quality standards and identifying ways to eliminate causes of
unsatisfactory performance or defects.

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Best Practices for Project Management

3. Quality Assurance – periodic executive review and evaluation of the overall project
performance in order to provide confidence that the project will satisfy the relevant
quality standards.
Quality management/planning includes selecting the kind of quality activities needed,
depending on the project nature and needs. For example, some project might need more
quality control than assurance because they are producing feasible deliverables like a
software applications or documents. Other projects need more quality assurance
activities because it is process dependant and the nature of the project depends on the
approach more that the output like research, analysis, and consulting assignment.
The following diagram represents how Quality Management/Planning controls both sides
of quality:

Figure 4- Quality Management Concept

6.3. Establishing Project Reporting

“You can’t control what you can’t measure.” Tom DeMarco, Controlling Software Projects

Measuring performance of projects is crucial to track and control deviation from project
plans. It is recommended to have an up to the minute Key Performance Indicators (KPI's)
that reflect the actual status of the project performance and progress accurately and
consistently.
One of the common and recommended project tracking and measurement methods is the
Earned Value Management.
Earned Value Management (EVM) gives an indication about project status in terms of
Time, Effort and Cost. It integrates three main KPI's and gives a true and objective status
of the project upon which conclusions and corrective actions can be made.
The main three KPI's used in EVM are:
§ BCWS - Budgeted Cost of Work Scheduled: Planned cost of the total amount of
work scheduled to be performed by the specified date
§ ACWP - Actual Cost of Work Performed: Cost incurred to accomplish the work that
has been done to the specified date
§ BCWP - Budgeted Cost of Work Performed: The planned (not actual) cost to
complete the work that has been done up to the specified date

Another two calculated metrics that gives indication about the status of schedule and
cost are:

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§ SV: Schedule Variance (BCWP-BCWS): A comparison of amount of work


performed during a given period of time to what was scheduled to be performed
§ CV: Cost Variance (BCWP-ACWP): A comparison of the budgeted cost of work
performed with actual cost

In order to apply the EVM method:


1. Specify a date on which and EVM report will be produced
2. Specify the three values (BCWS, ACWP, and the BCWP)
3. Calculate SV and CV
A negative variance for SV means the project is behind schedule, while a negative
variance for cost means the project is over budget.
It is important to look at these measures objectively and according to the requirements, for
example, it might be acceptable to be over budget with ahead of schedule.

6.4. Example on Earned Value Management


Project Case:
A task has been estimated to take (24) man-days of effort, and to be done by (2) resources
in (12) working days. Each resource costs SAR 1,000 a day.
The baseline of the task is:
§ Effort: 24 man days
§ Schedule: 12 man days
§ Cost: 24 X 1000 = SAR 24,000
The project status is requested to be reported every 4 days.

Status at the end of day 4:


One resource took a (2) days sick leave, and was able to work for (2) days only, while the
other one worked for (4) days, both were able to accomplish (25%) of the task. This means
that the:
Actual Effort spend so far is 2+4=6 man days
Actual Progress achieved (Earned) is 25% [which means 25% X 24= 6 days]
Applying the earned value measures gives us:

§ BCWS : Planned cost of the total amount of work scheduled to be performed by


end of the 4th day is: [4 + 4] days X SAR 1,000 = SAR 8,000 [this is also the
baseline at day 4]
§ ACWP : Cost incurred to accomplish the work that has been done until the 4th day
is the actual effort spent: which is 6 [man days] X SAR 1,000 = SAR 6,000 [this is
the spent until day 4]
§ BCWP : The planned cost to complete the work that has been done (actual
progress 25%) up to the 4th day is : 6 days X SAR 1,000 = SAR 6,000
§ The SV: Schedule Variance (BCWP-BCWS) is: 6000-8000 = SAR -2,000
§ While the CV: Cost Variance (BCWP-ACWP): 6000-6000 = SAR 0

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This means that the project is doing fine in terms of spending, but it is late by what worth
SAR 2,000.
Another way to look at cost, especially in government projects is to consider the cost unit
as a working man-day. And by this cost of resources is measured by how many days they
spend working on a task, the numbers become as follows:

§ BCWS : Planned cost of the total amount of work scheduled to be performed by


end of the 4th day is: [4 + 4] days = 8 man days [this is also the baseline at day 4]
§ ACWP : Cost incurred to accomplish the work that has been done until the 4th day
is the actual effort spent: which is 6 man days [this is the spent until day 4]
§ BCWP : The planned cost to complete the work that has been done (actual
progress 25%) up to the 4th day is : 25% X 24= 6 man days
§ The SV: Schedule Variance (BCWP-BCWS) is: 6-8 = -2 man days
§ While the CV: Cost Variance (BCWP-ACWP): 6-6 = 0 days
This means that the project is late by 2 man-days, but it is doing fine in terms of effort
being spent.

Status at the end of day 8:


Because of the delay, the project manager decided to add an extra resource, so the three
resources worked for (4) days and they were able to accomplish (70%) of the task. This
means that the:
Actual Effort spend is 4+4+4=12 man days
Actual Progress achieved (Earned) is 70% [which means 70% X 24= 16.8 days]
Applying the earned value measures gives us:

§ BCWS : Planned cost of the total amount of work scheduled to be performed by


end of the 8th day is: [8 (previous 4 days) + 8 ] days = 16 man days [this is also
the baseline at day 8]
§ ACWP : Cost incurred to accomplish the work that has been done until the 8th day
is the actual effort spent: which is [6 (previous 4 days) + 12] = 18 man days [this is
the spent until day 8]
§ BCWP : The planned cost to complete the work that has been done (actual
progress 70%) up to the 4th day is : 70% X 24= 16.8 man days
§ The SV: Schedule Variance (BCWP-BCWS) is: 16.8-16 = 0.8 man days
§ While the CV: Cost Variance (BCWP-ACWP): 16.8-18 = -1.2 days

This means that the project is ahead of schedule by 0.8 day, while it is overspent by 1.2
man-days.

Although the project progress is excellent because it is ahead of schedule, the project cost
suffered from the 3rd added resource because of the delay he caused due to learning and
communication with the team

The following diagram represents the data for the two periods:

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Earned Value Diagram


20
18
16
14
Effort in Days

Baseline
12
Spent
10
Progress - Earned Value
8
6
4
2
0
Reporting Period- 4 days

Figure 5 – Example Earned Value Diagram

Note that at the beginning of the project, all indicators were at point zero. Then at the first
reporting period (after 4 days), the cost was aligned with progress, but with deviation in
schedule. Currently at the third reporting period (after 8 days), the delivered value
(Progress) in yellow is ahead of schedule, it is above the baseline in blue, but as you can
see the cost is above the baseline as well!
At this point, the project manager discussed the status of the project with the project
director and the sponsor, and it turned out that the budget of the project has a buffer, and
meeting the schedule or finishing earlier is a strategic quick win for the IT department.
Thus, the decision was taken to continue with the same team (of three) and schedule
momentum, and finish the project as early as possible even with slight spending deviation
or overruns.

At the end of day 11, the status was as follows:


The task was completed at day 11, and the team was released to work on other
assignments:
Actual Effort spend at completion is 18 + 9 = 27 man days
Schedule at completion was 11 days
This means that the project was completed ahead of schedule but with overruns.

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7. Project Management Recommendations


The following tips summarize the common best practices and policies for managing
successful projects:

1. Clear and formal project sponsorship coupled with empowerment to the project
manager
2. Dedicated Project managers from the project provider and the client, fully qualified
and experienced
3. Active involvement of all the project stakeholders
4. Retaining the project team until the end of the project
5. Clear and adequate planning for dependencies
6. Adequate attention to the business case and requirements being addressed in the
project according to the client view
7. Interactive, engaged and responding client
8. Phased approach, dividing long projects in phases
9. Comprehensive analysis, design, and planning
10. No remote project management (managing a project team remotely while it resides
physically in a different location or country)
11. Applying quality management from the beginning
12. Avoiding procrastination of feedback and closure of deliverables
13. Establishing a project management office or entity that is responsible for monitoring
and reporting on all running projects
14. Used earned value management reports on projects and define measurable
indicators in order to make a clear reporting and take corrective actions on deviation
15. Validating the estimation of cost, time and resources
16. Clear, communicated and shared objectives and end results for the project
17. Adapting a project management methodology and support it to be used for all
running projects
18. Manage expectations of the client, and all the stakeholders
19. Integrated change management process and continues updating and improvements
to plans and deliverables

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8. Appendix I – Methodologies Used


This document made use of the following standards and methodologies:
1. PMI - Project Management Institute Standards, Project Management Body of
Knowledge PMBOK Version 3
2. PRINCE2® (Projects in Controlled Environment )

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9. Appendix II – Risk Management


9.1. Definitions7
Risk is exposure to the consequences of uncertainty. In a project context, it is the chance
of something happening that will have an impact upon objectives. It includes the possibility
of loss or gain, or variation from a desired or planned outcome, as a consequence of the
uncertainty associated with following a particular course of action. Risk thus has two
elements: the likelihood or probability of something happening, and the consequences or
impacts if it does.

Risk Management refers to the culture, processes and structures that are directed
towards the effective management of potential opportunities and adverse effects. The risk
management process proactively involves the systematic application of management
policies, processes and procedures to the tasks of establishing the context, identifying,
analyzing, assessing, treating, monitoring and communicating risk.

Risk identification is the process of determining what, how and why things may happen.
Risk analysis is the systematic use of available information to determine how often
specified events may occur and the magnitude of their consequences. It may use any of a
wide variety of mathematical and other models and techniques.

Risk evaluation determines whether the risk is tolerable or not and identifies the risks that
should be accorded the highest priority in developing responses for risk treatment. Risk
treatment establishes and implements management responses for dealing with risks, in
ways appropriate to the significance of the risk and the importance of the project.

We usually think about risk in terms of potential problems or negative outcomes. However,
under the definitions here, risk includes positive impacts or consequences as well, and risk
management includes processes for identifying and taking advantage of opportunities and
benefits.

7
Quoted as is form: "Project Risk Management Guidelines: Managing Risk in Large Projects and
Complex Procurements" Dale F. Cooper, Stephen Grey, Geoffrey Raymond and Phil Walker. Broadleaf
Capital International. Copyright © 2005 John Wiley & Sons Ltd, The Atrium, Southern Gate,
Chichester,West Sussex PO19 8SQ, England

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9.2. Risk Management Process8


According to the Microsoft solution framework, the risk management process consists of a
set of integrated processes as described in the following diagram:

Figure 6 - MSF Risk Management Process

9.2.1.Risk Identification
Risk Identification allows individuals to surface risks so that the team becomes aware of a
potential problem. As the input to the risk management process, risk identification should
be undertaken as early as possible and repeated frequently throughout the project life
cycle.

9.2.2.Risk Analysis
Risk Analysis transforms the estimates or data about specific project risks that developed
during risk identification into a form that the team can use to make decisions around
prioritization. Risk Prioritization enables the team to commit project resources to manage
the most important risks.

9.2.3.Risk Planning
Risk Planning takes the information obtained from risk analysis and uses it to formulate
strategies, plans, and actions. Risk Scheduling ensures that these plans are approved and
then incorporated into the standard day-to-day project management process and

8
Copyright© Microsoft: Microsoft Solution Framework MSF: Risk Management

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infrastructure to ensure that risk management is carried out as part of the day-to-day
activities of the team. Risk scheduling explicitly connects risk planning with project
planning.

9.2.4.Risk Tracking
Risk Tracking monitors the status of specific risks and the progress in their respective
action plans. Risk tracking also includes monitoring the probability, impact, exposure, and
other measures of risk for changes that could alter priority or risk plans and project
features, resources, or schedule. Risk tracking enables visibility of the risk management
process within the project from the perspective of risk levels as opposed to the task
completion perspective of the standard operational project management process. Risk
Reporting ensures that the team, sponsor, and other stakeholders are aware of the status
of project risks and the plans to manage them.

9.2.5.Risk Control
Risk Control is the process of executing risk action plans and their associated status
reporting. Risk control also includes initiation of project change control requests when
changes in risk status or risk plans could result in changes in project features, resources or
schedule.

9.2.6.Risk Learning
Risk Learning formalizes the lessons learned and relevant project artifacts and tools and
captures that knowledge in reusable form for reuse within the team and by the enterprise.

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10. Appendix III: Managing Stakeholders


Expectations
Project stakeholders are identified as person(s) or organization(s) that get actively
involved in the project and have a stake in its activities and deliverables. Stakeholders can
be the customer, sponsor, or even the public or general population.
Stakeholders will usually exert direct influence on the project and its deliverables.
Managing their expectations can be a challenging task taking into account the different
needs and requirements of each of the stakeholder. This becomes apparent when there is
a lack of scope clearance.
In order for the project manager to be successful in controlling and managing
stakeholders’ expectations, it is needed to take into consideration vital steps such as:
• Proper stakeholder identification exercise. Any project manager that does not
know or clearly identify the different stakeholders involved in the project will have
major difficulties in delivering the project to expectations. Many of the projects fail
of lack of stakeholders buy-in
• Documenting right stakeholder expectations: It is necessary that the scope of work
definition exercise to be thorough and complete. Lack of depth on the scope will
result in a gap in stakeholder expectations. As a result and during the initiation and
planning stages, the project manager needs to spend ample time to define the
right depth in order to identify the right scope to meet the exact stakeholder
expectations
• Effective Communication Plan: There should be a proper communication plan
defined in order for the project manager to handle and realign the expectations of
the stakeholders. Meetings, emails, and workshops are only some means in which
the communication plan will actively work to deliver the right messages and
measure the expectation and satisfaction levels of the stakeholders on the project
progress
The project manager personal skills also plays a vital role in managing stakeholder
expectations. In addition to the personal skills, there should always be channels of
informal and formal communication. Conflict Resolution has to take into account the
different types and natures of the different stakeholders.
Communication (Regardless of the mechanism and means) has to focus on four types:
• Informal Written: such as notes and memos
• Formal Written: such as Project Charter and Management Plan
• Informal Verbal: such as conversations
• Formal Verbal: such as meetings, workshops, and presentations

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11. Appendix IV – Sample Project Report


Project Weekly Status Report

Project Name:

Project Manager:

Date of Issue: 2006-11-04

Reporting period: 2006-10-27 to 2006-11-01

1. Executive Summary

Overall Status:
The project is moving slowly due to handover sessions and revision of the scope.

Green 1
2
§ Yellow Red 3 Reason for Deviation
(Controlled) (Caution) (Critical)
Schedule: [] [X] [] Delays are encountered due to handover
Scope: [] [X] [] The scope is being assessed again to decide on the
best fit approach for the project
Quality: [X] [] []
1
Project is within, scope and on schedule.
2
Project has deviated slightly from the plan.
3 Project has fallen significantly behind schedule, is forecasted to be significantly over budget, or has taken on tasks that are out of scope.

Main Phases:
Phase Status Owner Issues Next Action
Inception Complete
Elaboration In
progress
Construction Pending

Transition Not
Started

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2. Project Controls

Issues (Issues requiring resolution by Project Team or Executive Committee):


Issue Description Severity Owner Status Impacted Area

Risks (Report on any change in priority or status of major project risks, and any risks discovered since earlier risk assessments
along with proposed risk response):

Risk Description Probability Owner Mitigation

3. Action Items

Description Owner Status Due Date Notes

4. Accomplishments for This Period


Accomplishments during this Reporting Period (Should relate to project plan):
1.

5. Planed Accomplishment for Next Period


Plans during the next Reporting Period for the project team:
1.

Plans during the next Reporting Period for the CLIENT:


1.

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