1 Global R.E.P. PMI, USA presents presents presents presents ADVANCED PROJECT MANAGEMENT COURSE IN CONFORMANCE WITH LATEST PMI STANDARDS PMBOK GUIDE-2008, FOURTH EDITION GOOD MORNING FOLKS! Welcome to 2 the world of Project Management Latest PMI Standards LATEST PMI STANDARDS! A guide to the Project Management Body of Knowledge (PMBOK 3 Body of Knowledge (PMBOK Guide) is a recognized standard for the project management profession worldwide! LATEST PMI STANDARDS! The PMBOK Guide provides Knowledge, Processes, Skills, Tool and Techniques that are generally recognized good practice. 4 generally recognized good practice. Their application enhances the chances of success over a wide variety of projects. But, all the processes may not apply uniformly to all projects. Hence, it is the RESPONSIBILITY of your organization and/or the project management team to determine what is appropriate for any given project. This is called TAILORING! LATEST PMI STANDARDS! In addition to taking advantage of the PMBOK Guide for the success of your 5 PMBOK Guide for the success of your projects, PMI also requires the practitioners to demonstrate a commitment to ethical and professional conduct. Project Management Institute Code of Ethics and Professional Conduct. Purpose of this Course 6 To provide a proven, holistic approach to the professional of Project Management. An approach that has been globally recognized to enhance chances of success over a wide range of projects. Education Agenda LEARNING OBJECTIVES Upon completion of this course, the students will: 1. Comprehend entire gamut of concepts, tools and 7 1. Comprehend entire gamut of concepts, tools and techniques, and terminology relating to the profession of Project Management in conformance with per PMI standards. 2. Master identification of project needs, creation of WBS and how to plan to avoid scope creep, time and cost overruns, or quality problems later in the project. Education Agenda LEARNING OBJECTIVES Upon completion of this course, the students will: 3. Command the art of estimating project costs and 8 3. Command the art of estimating project costs and schedules using simple and proven techniques. 4. Attain expertise on meeting triple constraints, assessing and dealing with risks, and establishing a dependable project control and monitoring system. Education Agenda LEARNING OBJECTIVES Upon completion of this course, the students will: 5. Achieve proficiency in vendor management and project 9 5. Achieve proficiency in vendor management and project closure. 6. Acquire knowledge and ability to pass PMP examination. Education Agenda WARMING UP WITH A PROJECT FORETHOUGHT! 10 A PROJECT FORETHOUGHT! Project forethought Do you have a vision? 11 Do you have a vision? Your personal vision Your functional areas vision Your organizations vision Project forethought How do you articulate it in the 12 How do you articulate it in the backdrop of todays realities? Project forethought Backdrop of todays realities? Over capacity of production facilities 13 Over capacity of production facilities Sharp increases in the cost of material, energy, and labor Changing customer values and more exacting quality requirements Increased competition among companies in saturated and dwindling markets Environmental problems Project forethought Backdrop of todays realities? A need to introduce new products more rapidly 14 A need to introduce new products more rapidly A need to lower breakeven point Globalization of markets Social problems, economic problems, political problems Project forethought How can your organization balance the need for radical Questions to help you articulate your vision? 15 What will be the new management model for tomorrow, and how it will be different from todays? How can your organization balance the need for radical change with strategic continuity? What role must managers play in the post hierarchical organization of future? Project forethought Questions to help you articulate your vision? How can strategic thinking about the future be embedded 16 How can strategic thinking about the future be embedded within the organization? Whom should your organization involve in the process of developing and implementing strategy? Project forethought Questions to help you articulate your vision? How can a radically-decentralized organization be 17 How can a radically-decentralized organization be created and sustained? As corporations and their networks become increasingly complex, how can they be controlled? Project forethought Questions to help you articulate your vision? How can organizations shift from spreading 18 How can organizations shift from spreading information around to building knowledge? How to discover better technologies to increase quality of human life on earth? Project forethought Articulating your vision You can now choose with an end in mind 19 It should be worthy of pursuance Challenging and achievable To make it happen, take up its realization as a PROJECT Project forethought Articulating your vision You can now choose with an end in mind 20 It should be worthy of pursuance Challenging and achievable To make it happen, take up its realization as a PROJECT Project forethought How to train and ensure competency of people to work Questions to help you articulate your vision? 21 How to train and ensure competency of people to work together to achieve common goals? How to make coming generation better equipped to succeed in life? Project forethought Realizing vision Needs and aspirations of people 22 Needs and aspirations of people are the reasons for organized effort in society. Projects have been taken up since earliest civilizations to fulfill them. Project forethought Projects make it possible Products Services 23 Needs Aspirations Visions Strategies Projects Services Infrastructure Monuments Space research War victories Entertainment Media Earnings Growth Etc. Operations provide us benefits of the product of the project on ongoing basis Fundamental PMBasics 24 Fundamental Concepts We begin our discussion on fundamental concepts under three broad headings: PMBasics: Fundamental Concepts 25 1. Project Management Framework 2. Project Life Cycle and Organization 3. Project Management Processes PM Basics: Fundamental Concepts PROJECT MANAGEMENT FRAMEWORK What is a project? 26 Projects vs. Operations! Projects and Strategic Planning! What is Project Management? What is a Program? What is a Portfolio? PM Basics: Fundamental Concepts PROJECT MANAGEMENT FRAMEWORK Relationships among Project Management, Program Management, and Portfolio 27 Program Management, and Portfolio Management! What is a PMO? Role of a Project Manager! PMBOK Guide! Enterprise Environmental Factors! PM Basics A Project is A TEMPORARY ENDEAVOR What is a project? 28 A Project is A TEMPORARY ENDEAVOR undertaken to create A UNIQUE PRODUCT, SERVICE, OR RESULT! Lets understand the definition PM Basics - What do we mean by the word TEMPORARY? 29 - What do we mean by the words A UNIQUE PRODUCT, SERVICE, OR RESULT! - We would also discuss on a very important terms called Progressive Elaboration! Lets understand the definition Temporary means: PM Basics: Understanding Project Characteristics 30 Temporary means: - Definite beginning - Definite end - With defined project objectives (scope, time, cost, and quality) Project end IS REACHED when: PM Basics: Understanding Project Characteristics 31 Project end IS REACHED when: 1) Its objectives are met, or 2) It becomes clear that the project objectives will or can not be met, or 3) The need for the project no longer exists. Temporary does not PM Basics: Understanding Project Characteristics 32 Temporary does not necessarily mean Short in duration! Projects can last for several years!! Government of Indias E-governance project is A multi-year project. All that temporary means is that project duration is finite, not ongoing. Temporary does not mean PM Basics: Understanding Project Characteristics 33 The product of the project will also be temporary. Most projects are done to produce products, service or result that is long lasting. Examples a bridge, a dam, a building, a monument, a park Temporary nature PM Basics: Understanding Project Characteristics 34 Temporary nature Some projects produce a product or service for a particular occasion. Examples: Olympics, Fashion show, Grammy awards Certain others cater to an opportunity or market window that is short in duration Examples: Sale Campaigns for Christmas, Diwali, Pongal, IId, etc PROJECT TEAMS ARE FORMED AS IT BEGINS AND DISBANDED AS IT COMPLETES Unique product, service, or result PM Basics: Understanding Project Characteristics 35 Unique product, service, or result Projects involve creating a product, service, or result that has not been done exactly the same way before EVEN IF YOU HAVE BEEN DOING SAME CATEGORY OF PROJECTS MANY TIMES OVER! Different CLIENTS, REQUIREMENTS, LOCATIONS, etc. A project can create: 1. A product (component of another item or end PM Basics: Comprehending Project 36 1. A product (component of another item or end item). 2. A service (a business function to support production or logistics). 3. A result (an outcome or document, such as R&D project develops Knowledge, Market Survey). Progressive elaboration PM Basics: Understanding Project Characteristics 37 is critical to project success Progressive means proceeding in steps, continuing steadily with increment. Elaboration means worked out with care and detail, developed thoroughly WHY Progressive elaboration? PM Basics: Understanding Project Characteristics 38 WHY Progressive elaboration? Because projects are temporary and unique! Example: Project scope is high-level in the beginning. It becomes more detailed as project team progresses and develops better understanding of project objectives and deliverables. Many people confuse it with scope creep that happens due to poor scope definition, poor WBS formation and Uncontrolled changes. Each projects product is unique. Hence, its characteristics PM Basics: Understanding Project Characteristics 39 Hence, its characteristics THAT DISTINGUISH IT must be PROGRESSIVELY ELABORATED! Thats why so much emphasis on processes called: - Identify stakeholders (during initiation) - Collect requirements (during planning) Progressive elaboration is critical to project success! PM Basics: Understanding Project Characteristics 40 The distinguishing characteristics Broadly defined early in the project More explicit and detailed as project progresses THEN, PROJECT TEAM BEGINS TO GRASP THEM BETTER PRODUCT SCOPE Product Scope and Project Scope PROJECT SCOPE PM Basics: Progressively elaborated 41 Functions and features characterizing the product or service. COMPLETION Measured against product requirements The work required to be performed to deliver a product bearing specified functions and features. COMPLETION Measured against project management plan PM Basics: Understanding Project Characteristics Sample Progressive Elaboration ABC CARGO LOGON PROJECT BASIC DESIGN (H) HARDWARE FABRICATION SITE OPERATIONS Project Management PURCHASE SOFTWARE SPECS (L) L 0 L 1 42 DESIGN (H) OPERATIONS Management DESIGN (J) DRAWINGS (K) PART B DRAWINGS (P) FINAL INSTALLATION (Y) TEST (Z) SOFTWARE PART A DESIGN (I) DRAWINGS (O) SPECS (L) ASSEMBLY (U) PART A TEST (W) ASSEMBLY (V) TEST (X) PART B PURCHASE (N) DELIVERY (S) PURCHASE (M) DELIVERY (R) PURCHASE (Q) DELIVERY (T) WORK PAKCAGES (H) through (Z) L 2 L 3 PM Basics Projects Vs. Operations 43 Projects Vs. Operations What do organizations do? PM Basics: Projects vs. Operational Work 1. 44 ORGANIZATIONS PERFORM WORK to accomplish a set of defined objectives 1. PM Basics: Projects vs. Operational Work Work can be categorized as 2. 45 Work can be categorized as either PROJECTS OPERATIONS or Sometimes they overlap! PM Basics: Projects vs. Operational Work What is common to projects and operations? 3. 46 Performed by people Limited by Constraints, including resource constraint Planned, executed, monitored and controlled Performed to achieve organizational objectives Or strategic plans PM Basics: Projects vs. Operational Work Projects are temporary PROJECTS OPERATIONS 47 Operations are ongoing and repetitive. The purpose of an ongoing operation is to sustain the business. Operations adopt new set of objectives and the work continues. Projects are temporary and unique. The purpose of a project is to attain its objective and then terminate. The project concludes when its specified objectives have been achieved. PM Basics Remember: 1. Operations produce same product until the product becomes obsolete. 48 becomes obsolete. 2. Within the life cycle of a product, projects can intersect with operations at various points: a) During improving productivity/process, b) Developing new product or upgrading a product c) Expanding outputs d) At each closeout phase or until divestment of the product, there can be many projects! PM Basics Remember: 3. At each point, deliverables and knowledge are transferred between projects and operations. Why? 49 transferred between projects and operations. Why? Answer: For implementation of the delivered work! 4. How it happens? Answer: It happens in two way! a) Transfer of project resources to operations toward the end of the project. b) Transfer of operational resources to the project at the start. Operation examples Manufacturing operations PM Basics: Comprehending Project Examples 50 Manufacturing operations Production operations Usage of the product of a project, such as a software application, or using network infrastructure Accounting operations Project examples Developing a new product or service PM Basics: Comprehending Project Examples 51 Developing a new product or service Starting a new business, or expansion of the existing one Installing a new facility/ infrastructure Increasing productivity Increasing market share Increasing profitability Project examples Cost reduction (operation and maintenance) PM Basics: Comprehending Project Examples 52 Cost reduction (operation and maintenance) R & D projects Technology up-gradation/ new technology projects Pharmaceutical projects Organizational Change management projects (work environment, performance management, organization structure, training, etc.) Projects and Strategic Planning PM Basics: Projects and Strategic Planning 53 Projects and Strategic Planning Projects are are a means to achieve Strategic Plan of an organization! PM Basics: Projects implement strategy 54 One or more of the following Strategic Considerations give rise to projects: 1) Market demand 2) Customer request 3) Strategic opportunity/Business Need 4) Technological advance 5) Legal requirements PM Basics: Projects implement strategy Hence, Projects (within programs or 55 portfolios) are a means by which we achieve organizational goals and objectives within the context of strategic plan! Projects are PM Basics: Projects encompass entire organization 56 are -Taken up at all organizational levels - May require few persons to thousands - May be undertaken within an organization or involve many outside organizations YET Worldwide concern PM Basics: Hey! Its important 57 YET It is concerning to note that only about 34% of all the projects undertaken globally SUCCEED! Worldwide concern This only means that the concept PM Basics: Hey! Its important 58 of Managing Projects Effectively is poorly understood. Addressing the concern To master PM Basics: Hey! Its important 59 To master the concepts, tools, and techniques for Managing Projects Successfully lets first understand the genesis of PROJECTS! What PM Basics 60 What is Project Management PM Basics : Defining Project Management What is Project Management? PROJECT MANAGEMENT IS 61 PROJECT MANAGEMENT IS The application of KNOWLEDGE, SKILLS, TOOLS AND TECHNIQUES to project activities to meet the Project Requirements! PM Basics What is Project Management? The project management is accomplished through application and integration of the 42 logically grouped 62 application and integration of the 42 logically grouped Project Management Processes comprising 5 Process Groups Initiating Planning Executing Monitoring and Controlling Closing THE GIST Managing a project consists of 3 main items: Identifying requirements! 1 63 Identifying requirements! Addressing the various Needs, Concerns, and Expectations of the stakeholders- as the project is planned and executed! 2 THE GIST Managing a project consists of 3 main items: Balancing competing project constraints, 3 64 Balancing competing project constraints, such as: a) Scope, b) Schedule, c) Budget, d) Quality, e) Resources, and f) Risk. PM Basics: Managing a project REQUIRES Iteration of many of the processes within 65 project management Progressive elaboration in a project throughout the Projects life cycle The more a project management team learns about a project, the better the team can manage to greater level of detail Because of the existence of and necessity for HOW TO manage the TRIPLE CONSTRAINTS PM Basics: Triple Constraints 66 Q Time Scope Cost Dimensions of TRIPLE CONSTRAINTS PM Basics: Triple Constraints Time Cost Scope 67 Customer satisfaction Cost Scope Risk Quality PM Basics: Program, Portfolio - What is a program? - What is a portfolio? 68 - What is a portfolio? - Relationships among project management, program management, and portfolio management! PM Basics: Project Management Context Wider Perspective of Project Management Project Management exists in a broader canvas: 69 Project Management exists in a broader canvas: Program Management Portfolio Management Project Management exists in a broader context governed by PM Basics: Fundamental concepts 70 a broader context governed by Program and Portfolio Management! Organizational Strategies and Priorities are linked and have relationships - Between portfolios and programs, - Between programs and individual projects! Organizational Planning decides prioritization among the projects, having regard to: PM Basics: Program, Portfolio 71 - Strategic plan - Funding - Risk This means finds and support for component projects is provided on the basis of risk categories, specific lines of business, or general type of projects ( internal process improvement or infrastructure projects). What is a program? PM Basics: Program, Portfolio A program is a group of related projects 72 A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually! Programs may include elements of related work outside the scope of the discrete projects in the program. PM Basics: Project Management Context Strategic plan Generally, there is a hierarchy of 73 Portfolio Program Project Subproject In this hierarchy, a program consists of several associated projects that will contribute to the accomplishment of a STRATEGIC PLAN! Space program Airplane program Poverty alleviation PM Basics: Project Management Context Strategic plan Portfolio 74 Poverty alleviation program Subprojects OFTEN OUTSOURCED Externally, or Internally (to other unit) on the basis: - Single phase, HR Skill requirement, Technology Program Project A Project B Project C Subproject Subproject PM Basics: Project Management Context A PROGRAM 1) extends over a longer period of time horizon. 2) consists of several parallel or sequential work efforts 75 2) consists of several parallel or sequential work efforts that are coordinated toward program goals. 3) time scale for projects tends to be shorter, and projects are often the individual work efforts of a program. Urban Development Program Housing rehab Job & Skill Training Small business Consulting Assistance Projects Program PM Basics: Project Management Context Typical Aircraft Weapons System Development Program Senior Management Integration 76 Program Management Aerodynamics project Aerodynamics project Structures Project Structures Project Propulsion Project Propulsion Project Avionics Project Avionics Project Comptroller Comptroller Processing Data Processing Field Support Integration & Testing Procurement PM Basics: Project Management Context Programs also entail a series of Cyclical undertakings Fund Raising Program of Helpage India Publishing India Today Magazine 77 Project 1 Membership drive Project 2 Advertising Project 3 Corporate Appeal Project n A series of Discrete Projects Project 1 Issue January Project 2 Issue February Project 3 Issue March Project n Issue every month A program where general operations become MBO PM Basics: Project Management Context DYNAMICS OF Portfolio and Portfolio Management Portfolio Management 1. Maximize the value of portfolio by careful scrutiny of 78 1. Maximize the value of portfolio by careful scrutiny of the Proposed Projects and Programs for being taken within the Portfolio. 2. Timely exclusion of the projects not meeting Portfolios Strategic Business Objectives. 3. Balance the portfolio AMONG Incremental & Radical investments AND for efficient utilization of resources. Relationships Among Project Management, Program Management and Portfolio Management! Highest Level Portfolio Lower Level Portfolios Higher Level Programs Projects 79 Higher Level Programs Projects Low Level Programs Projects Lower Level Programs Projects Projects Comparison Project Management, Program Management and Portfolio Management! Item Projects Programs Portfolios Scope Defined objectives, progressively elaborated Larger scope, more significant benefits Scope changes with strategic goals 80 Change Project Managers expect change, monitor & control them. Program Managers must expect change from inside & outside program, and manage. Portfolio Managers continually monitor changes in broad environment. Planning Project Managers progressively elaborate hi-level info into detailed plans throughout project life cycle Program Managers develop overall program plan, create hi-level plans for guiding detailed planning at component level Portfolio Managers develop and maintain relevant processes and communication at total portfolio level. Comparison Project Management, Program Management and Portfolio Management! Item Projects Programs Portfolios Management Project Managers manage the project team for meeting project Program Managers manage program staff and project Manage portfolio management staff. 81 for meeting project objectives. staff and project managers. Provide overall leadership and vision. Success Success criteria: product & project quality, time and cost and degree of customer satisfaction. Success criteria: degree to which program satisfies needs. Success criteria: aggregate performance and value indicators. Monitoring Project Manager monitors & controls the project work Program Manager monitors and controls program components Portfolio Manager monitors aggregate performance and value indicators PM Basics: Project Management Context Project Management Office An organizational unit to centralize and coordinate management of projects under its domain. PMO 82 management of projects under its domain. At minimum, PMO provides Project Management Support Functions: 1. Training 2. Software 3. Standardized policies & procedures PM Basics: Project Management Context PMO Advanced PMOs: Can get delegated authority to act as integral 83 Can get delegated authority to act as integral stakeholder and key decision-maker during initiation of each project. Can have authority to Recommend or Terminate projects TO KEEP BUSINESS OBJECTIVES CONSISTENT. Be involved in selection, management and redeployment of shared/dedicated project staff. PM Basics: Functions of PMO 1) Administer shared and coordinated resources across all projects. 2) Identify and deploy PM Methodology/Bests Practices/ 84 2) Identify and deploy PM Methodology/Bests Practices/ Standards. 3) Clearinghouse and management of project policies, procedures, templates, and other shared documents. 4) Central repository/management for shared & unique risks for all projects. 5) Central office for operation/management of PM Tools (enterprise pm software). 6) Mentoring of Project Managers. PM Basics: Functions of PMO 7) Central coordination of communication across all projects. 8) Central coordination of overall project quality standards 85 8) Central coordination of overall project quality standards between PM & other quality staff (internal or external), or standards organization. 9) Central monitoring: all project timelines and budgets at enterprise level! What is the difference between the role of a Project Manager and a PMO? PM Basics: Functions of PMO Role Differences: 1) Project Mangier focuses on specified project objectives. 86 1) Project Mangier focuses on specified project objectives. PMO manages major program scope changes that (opportunities to better achieve business objectives). 2) Project manager controls assigned project resources. PMO optimizes use of shared resources across all projects. PM Basics: Functions of PMO Role Differences: 3) Project Manager manages constraints of the project. 87 3) Project Manager manages constraints of the project. PMO manages constraints among all projects at the enterprise level. PMO manages the methodologies, standards, overall risk/opportunity, and interdependences among Projects at the enterprise level! PM Basic: Role of a Project Manager Role The project manager is a person assigned by the performing organization to achieve project 88 performing organization to achieve project objectives! Role of project manager is different from the role of a functional manager or operations manager. - functional manager is responsible for providing oversight for and administrative area. - operations manager is responsible for a facet of core business. PM Basic: Role of a Project Manager Reporting- depends on the organizational structure!! 1) May report to functional manager (functional, matrix organizations). 89 organizations). 2) A project manager may one of many other project managers who report to a program or portfolio manager! PM Basic: Role of a Project Manager Success In addition to area-specific skills and general management proficiencies, a project manager needs to have three 90 proficiencies, a project manager needs to have three Characteristics for effective project management: 1. Knowledge (about project management knowledge). 2. Performance (what he/she is able to accomplish by using project management knowledge). PM Basic: Role of a Project Manager Success For effective project management, the project manager is supposed to possess following characteristics: 91 supposed to possess following characteristics: 3. Personal (personal effectiveness-attitudes, core personality traits, and leadership-ability to guide the project team for success while balancing project constraints Project Management Body of Knowledge The PMBOK is the standard for managing: 1. MOST PROJECT, 92 1. MOST PROJECT, 2. MOST OF THE TIMES, 3. ACROSS MANY INDUSTIRES THIS STANDARD DEFINES: - The project management processes (42) - The tools and techniques of each process Used to manage a project toward a successful completion! Project Management Body of Knowledge THIS STANDARD: - IS unique to the project management 93 - IS unique to the project management - HAS interrelationships to other project management disciplines such as program management and portfolio management! Note: this standard does not address all the details of every topic! It contains processes generally recognized as good practice applicable to single projects!! Project Management Body of Knowledge THIS STANDARD: Note: this standard does not address all the details of every topic! It contains processes generally 94 of every topic! It contains processes generally recognized as good practice applicable to single projects!! Projects are done in a broader context of program and portfolio management. Other standards may also be consulted to gain the broader view: -The Standard For Program Management -The Standard For Portfolio Management Project Management Body of Knowledge THIS STANDARD: Note: this standard does not address all the details of every topic! It contains processes generally 95 of every topic! It contains processes generally recognized as good practice applicable to single projects!! Other standards may also be consulted to gain the broader view: - Organizational Project Management Maturity Model (OPM3) for assess project management process capabilities. Enterprise Environmental Factors We need to consider all the external and internal factors that surround our project! WHY? 96 WHY? Answer They may enhance or constraint project management options! They may have a positive or negative influence on the outcome!! Remember this. You will agree when you see what all are these factors. Enterprise Environmental Factors factors 1) Organization culture, structure, and processes 2) Market conditions 97 2) Market conditions 3) Government or industry standards 4) Stakeholder risk tolerances 5) Infrastructure 6) Existing human resources and their special skills 7) Personnel administration (staffing, retention, training 8) Work authorization system Enterprise Environmental Factors factors 9) Political climate 10) Organizations established communication channels 98 10) Organizations established communication channels 11) Commercial databases 12) PMIS (project management information system) PMIS- an automated tool. Examples: - scheduling software tool - a configuration management system - an information collection and distribution system - web interfaces to other online automated systems Project Life Cycle and Organization 1) The Project Life Cycle and Project Phases 99 1) The Project Life Cycle and Project Phases 2) Project Stakeholders 3) Organizational Influences Project Life Cycle and Organization The Project Life Cycle 10 0 The Project Life Cycle and Project Phases Project Life Cycle and Organization What is a project life cycle? A project life cycle is a collection of generally sequential 10 1 A project life cycle is a collection of generally sequential and sometimes overleaping project phases! What leads to deciding their number and names? Management and control needs of the organization or Organizations involved in the project determine names and numbers of the project phases! The industry, the technology, and unique aspects of the organization! PM Basics : Project Life Cycle and Project Phases Project Projects are unique undertakings. Involve a degree of 10 2 Phase 1 Phase 2 Phase 3 Involve a degree of uncertainty. Hence, each project is divided into several phases for better management control and providing for links to the ongoing operations. Together, the project phases are called the Project Life Cycle. Project phases: Sequential Logic Project Deliverable I Deliverable II Deliverable n Makes sure proper definition of the projects product 10 3 Deliverable I Deliverable II Deliverable n Each phase marked by completion of one or more deliverables. Takes its name from the item/items, it has to deliver-the primary phase deliverable. Output of Preceding phase is input to Succeeding phase Project phases: What is a deliverable? DELIVERABLE is 10 4 is A TANGIBLE, VERIFIABLE WORK PRODUCT EXAMPLES 1. A specification, 2. Feasibility report, 3. Detailed design document, or 4. A working prototype End products or the components of Deliverables of the Project management Project phases: Types of deliverables 1. Product deliverables 2. Project Management Deliverables 10 5 Deliverables, and therefore phases, are part of a sequential process designed to ascertain proper control of the project and to accomplish the intended Product/ Service that is the objective of the project. the components of end products for which the project is undertaken Project management process (charter, scope statement, plan, baseline, etc.) PM Basics : Project Phases and Project Life Cycle Phases can be further subdivided into subphases Project Size, complexity, level of risk, and cash flow constraints 10 6 Phase 3 Phase 2 Phase 1 Subphase Subphase Subphase and cash flow constraints decide further division of phases into subphases. Each subphase is aligned with defined deliverable (s) for monitoring and control, and are related to primary phase deliverable. PM Basics : Phase End Review Project Requirements Design Deliverable n Completion of each phase marked by review of: 1) Key deliverable, 10 7 Design n Determine - Should project continue into phase. - Find out errors cost effectively, and correct them if necessary. 1) Key deliverable, 2) Project performance to date R R Phase end review = R phase exits stage gates kill points PM Basics : Fast-tracking Phases Starting activities of next phase without closing the current phase! Examples abound: Often, the management review is conducted to decide Beware! 10 8 Often, the management review is conducted to decide beginning activities of next phase before the current one is closed. Most IT projects use an iterative cycle in which more than one phase are undertaken at the same time: Requirements for a module are collected and analyzed prior to the design and construction the module. Requirements of another module are collected while analysis of previous module is underway! PM Basics : Project Phases Common characteristics of phases 1. When they are sequential 10 9 a) at the close transfer of work product b) phase end review (called phase exit, milestones, phase gates, decision gates, or kill points) 2. The work has distinct focus in each phase and involves different organizations and skill sets. PM Basics : Project Phases Common characteristics of phases 2. The primary deliverable requires an extra degree of 11 0 2. The primary deliverable requires an extra degree of control for success 3. The repetition of process across all 5 process groups provides that additional degree of control and defines boundaries of the phase! PM Basics : Project Phases Project phases vital points Many projects may have similar phases, few are 11 1 Many projects may have similar phases, few are identical. 2. Some projects may have just one phase. Single phase project. 3. Others may have multiple phases. PM Basics : Project Phases Project phases vital points 4. There is no rigid, single way to define ideal structure for a project. Industry common practices. Some 11 2 a project. Industry common practices. Some organizations own way of defining phases. Example: Feasibility Study - A routine pre-project work OR - First phase of the project OR - A separate stand-alone project Typical Sequence of Phases in a PLC Phases FINAL INITIAL INTERMEDIATE Inputs Idea Resources 11 3 Project Deliverable Project Management Outputs Charter Scope Statement Plan Baseline Progress Acceptance Approval Handover PRODUCT Each phase is formally initiated to keep focus on project objectives! PM Basics: Project Life Cycle Project Life Cycle Project life cycle (PLC) defines what one needs to do to do the work on the project 11 4 to do the work on the project Construction PLC Feasibility, planning, design, product, turnover, and startup. Information systems PLC Requirements analysis, high-level design, detailed design, coding, testing, installation, conversion, and operation. PM Basics : Project Phases and Project Life Cycle BSES Project Requirements Test Turnover Build Design Project Management 11 5 Management Project life cycle defines start and finish of the project determines transactional actions at the start and finish of the project START FINISH PLC Characteristics Uncertainty and risk are highest in the beginning. PM Basics : Project life cycle characteristics 11 6 The chances of successfully completing the project are therefore lowest at the start. But as we proceed, the uncertainty, risk become progressively reduced, and our chances of successfully completing the project become progressively brighter Project life cycle characteristics PM Basics : Project Phases and Project Life Cycle 11 7 Life Cycle of Project (Time) High Low Amount at Stake Uncertainty of Success AND RISK The cardinal principle Stakeholders ability to influence the final Project life cycle characteristics PM Basics : Project Phases and Project Life Cycle 11 8 Stakeholders ability to influence the final characteristics the product of the project is highest only in the beginning . As project proceeds, it gets diminished progressively and then the cost of any change, or correction becomes very high. This lays stress proper scope definition to avoid later surprises . PM Basics : Project Phases and Project Life Cycle Project life cycle characteristics PLC Characteristics opportunity to add High Opportunity to add value 11 9 opportunity to add value highest at the start and lowest at the end. Cost of change lowest at the start and highest at the end Low High Cost of change Opportunity to add value Time Project life cycle COST TO CORRECTION PM Basics : Project Phases and Project Life Cycle Project life cycle characteristics 12 0 Life Cycle of Project (Time) High Low Requirements / Architecture / Detailed Design / Construction Maintenance. COST TO CORRECTION PM Basics : Project Phases and Project Life Cycle Project life cycle Example: BSES Project 12 1 BSES Project Requirements Test Turnover Build Design Project Management Project life cycle All the project phases of a project together determine the project life cycle! EXAMPLE 1: Project life cycle and project phases CONSTRUCTION PROJECTS Full operation Engineering and major contracts let P e r c e n t a g e
c o m p l e t e Synthetic Yarn Project 12 2 Life cycle stages Stage I Stage II Stage III Stage IV Installation substantially complete let Project GO decision P e r c e n t a g e
c o m p l e t e Yarn Project Stage handoffs Operations and production Support EVALUATE IDENTITY Deploy Test Evaluation Unit Requirements EXAMPLE 2: Project life cycle and project phases SOFTWARE PROJECTS 12 3 CONSTRUCT DESIGN Software Development Logical Design Physical Design Final Design First Build Second Build Third Build Proof of Concept Conceptual Design Evaluation Evaluation Risk Analysis Business Requirements System Requirements subsystem Requirements Unit Requirements A Pharmaceutical PROJECT Drug Discovery Project Process Development Formulation Stability EXAMPLE 2: Project life cycle and project phases 12 4 A P P R O V A L Post Registration Activity Drug Sourcing Screening Lead Identified Preclinical IND Workup File IND Patent Process File IND Metabolism Toxicology Phase-I Clinical Tests Phase-II Clinical Tests Phase-III Clinical Tests Ten Plus Years Preclinical Discovery Screening Development Registration(s) Workup Post Submission Activity Project Life Cycle Most projects are linked to the ongoing operations of the performing organization 12 5 of the performing organization Projects are authorized only after due feasibility study (or preliminary plan/ equivalent analysis), which may be taken as a separate project. This sometimes requires extra phases to develop and test a prototype before initiating a project for developing the final product. Certain internal service projects are initiated informally. Project Life Cycle: Phase-to-phase relationships Sequential relationship Overlapping relationship (another phase can start 12 6 Overlapping relationship (another phase can start before completion of another one. Fast tracking. Increases risk and rework. Used for schedule compression. Iterative relationship (only one phase is planned at any given time and the planning for the next is done as work progresses on the current phase and deliverables. Useful in undefined, uncertain, or rapidly changing environments. Research projects. PM Basics: Project Life Cycle and Product life Cycle Project life cycle defines start and finish of a project with intermediate phases. Product life cycle is a broader concept. It begins with business plan, through idea, to product, ongoing operations and ends with product divestment. Project life cycle is but a phase of product life cycle! 12 7 Feasibility Product development Operations Disposal Operation and support Maintenance and support R e q u i r e m e n t s D e s i g n
C o n s t r u c t
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i n s t a l l Project Life Cycle Product life cycle divestment. Project life cycle is but a phase of product life cycle! Relationship between Project and Product Life Cycle We must take care to distinguish project life cycle from the product life cycle, and understand how fast the product will become obsolete, in view of the technological advances and stiff competition! The design should withstand longer stay. 12 8 DIVESTMENT Project Lifecycle FINAL INITIAL INTERMEDIATE Business plan PRODUCT LIFE CYCLE I D E A OPRNS DIV OPERATIONS UPGRADE PRODUCT should withstand longer stay. PM Basics : Project Management Life Cycle Project Management Life Cycle Project management life cycle (PMLC) defines 12 9 Project management life cycle (PMLC) defines what one needs to do to manage the project PHASE OF PROJECT MANAGEMENT LIFE CYCLE Initiating, planning, executing, monitoring and controlling, and closing. Define Goal Plan project Execute plan Evaluate project Close project Project Stakeholders Individuals and organizations PM Basics: Project Stakeholders 13 0 Actively involved in the project OR Whose interests may be positively or negatively affected by the performance or completion of the project. Stakeholders may exert influence over the project, its deliverables, and the project team members! KEY POINT The project Manager MUST PM Basics: Project Stakeholders 13 1 identify all internal and external stakeholders! determine their requirements and expectations!! manage the influence of the various stakeholders in relation to project requirements to ensure successful outcome!!! Examples of stakeholders Customers/users Sponsor PM Basics: Project Stakeholders 13 2 Sponsor Portfolio managers/portfolio review board Program managers Project management office Project managers Project team Functional managers Operations management Sellers/business partners Key Project Stakeholders Government Suppliers Performing Sponsor 13 3 Government Customers/ user Suppliers Sub Contractors Performing organization Top Management Boss Internal Users Functional department personnel Project Staff Team members Project Manager PMO INFUENCERS in Customer organization Influencers Project sponsor PROJECT PM Basics: Project Stakeholders Relationship between stakeholders and the project 13 4 Project stakeholders Project team Project Management Team Project Manager sponsor PROJECT PM Basics: Project Stakeholders Stakeholders responsibility and project outcomes Stakeholders Responsibility and authority Project outcomes 13 5 authority Varying levels Changes over the course of project life cycle Occasional contributions in surveys to focus groups to full project sponsorship (financial / political support) Project outcomes DAMAGING Project outcomes HIGHLY POSITIVE Stakeholders responsibility and project outcomes Stakeholders Responsibility PM Basics: Project Stakeholders 13 6 Stakeholders Responsibility and authority Project Managers who ignore stakeholders DAMAGING Project outcomes DAMAGING Positive stakeholders Positive / Negative Stakeholders Negative stakeholders PM Basics: Project Stakeholders 13 7 Positive stakeholders Those who would benefit from the project Community Business leaders gain from an industrial project as they find economic benefit for the community from projects success - Rs. 100 million Reliance Power Project in Dadri, U.P. hailed by Amar Singh Group of Ruling Party. Negative stakeholders Those who see negative outcomes from projects success Environmental activists may see projects success leading to environmental hazards. THE CHALLENGE Stakeholder Management PM Basics: Project Stakeholders 13 8 THE CHALLENGE Stakeholders have differing needs, perspectives, and expectations to be managed by the project manager. Stakeholder expectations: differing objectives MARKETING DEPT. High features TECHNICAL DEPT. State-of-Art MANAGEMENT 13 9 PRODUCT of PROJECT State-of-Art Technology, low cost of operation CUSTOMER Cheaper and Long lasting SOCIETY Comfortable and Eco-friendly GOVERNMENT Satisfying Government pollution and safety norms MANAGEMENT profitable FINANCE Low cost of procurement Stakeholder Management CONCURRENT ENGINEERING PM Basics: Project Stakeholders 14 0 provides Solution to the problem of differing stakeholder needs, perspectives, and expectations. CONCURRENT ENGINEERING Stakeholder Management CONCURRENT ENGINEERING PM Basics: Project Stakeholders 14 1 It refers to the combined early efforts of CONCURRENT ENGINEERING That final product of the project satisfies everyone designers developers producers salesperson, and other stakeholders To ensure Identify stakeholders Assess their knowledge and skills Stakeholder Management PM Basics: Project Stakeholders 14 2 Assess their knowledge and skills Analyze the project to make sure their needs will be met Get and keep them involved through assigning them work, using them as experts, reporting to them, involving them in changes and the creation of lessons learned Get them to sign-off and obtain their formal acceptance Managing Stakeholders Resolving stakeholder conflicts is major task on the project. You have to continuously find ways to satisfy PM Basics: Project Stakeholders 14 3 project. You have to continuously find ways to satisfy their needs. In general, differences between and among stakeholders should be resolved in favor of the customer! But remember, not to disregard needs and expectations of other stakeholders. In fact, it is your major challenge to find appropriate resolutions to such differences!! PM Basics: organizational influences Organizational influences on the project 14 4 PROJECT corporations Healthcare Institutions Other Organizations PM Basics: organizational influences Organizational influences on the project Maturity of the organization with respect to 14 5 organizational SYSTEMS organizational CULTURE and STYLES organizational STRCUTURE role of PMO in ORGANIZATIONAL STRUCTURES PROJECT MANAGEMENT SYSTEM Maturity of the organization with respect to its: PM Basics: organizational influences Organizational influences on the project organizational SYSTEMS 14 6 organizational SYSTEMS Project-based Non-project-based Organizational influences on the project PM Basics: organizational influences organizational SYSTEMS 14 7 derive their revenue from performing projects engineering/ consultant/ architectural / construction companies, government contractors Project-based organizational SYSTEMS PM Basics: organizational influences Organizational influences on the project organizational SYSTEMS 14 8 adopted management by projects like their financial system account, track, and report on multiple, simultaneous projects try to have project management systems generally do not have adequate PM Systems organizational SYSTEMS Non-project-based PM Basics: organizational influences Performance of work Organizational Culture 14 9 organizational CULTURE and STYLES Values, norms, beliefs, and expectations (shared within organization) Work ethics and work hours Policies and procedures View of authority relationships IMPACT OF ORGANIZATIONAL INFLUENCES on the success of the project Organization culture can be entrepreneurial, aggressive, participatory, rigid hierarchical, fraught with infighting and politics, friendly and human- centered, etc. 15 0 centered, etc. 1) Pepsi has a culture that is aggressive, your high-risk approach is welcome there. 2) Century Cotton Mill has rigid hierarchical culture, your participatory style will not work there. 3) HCL Corporation has participatory culture, it can not accommodate anybodys authoritarian style. REAL LIFE EXAMPLES PM Basics: organizational influences organizational STRCUTURE Constraints the availability 15 1 Constraints the availability of resources resources Functional to Projectized Functional MATRIX Weak matrix Balanced matrix Strong matrix Projectized Impact of organizational structure Tell me what type of organizational structure you are working in and I will tell you how much you will SUCCEED as a Project Manager ! 15 2 Organizational structure that has served ongoing organizations for ages is no longer suitable for performing projects !! As Project Manager, you are responsible for managing the project and if you do not have authority to make resources available, you will fail miserably !!! Impact of organizational structure FORMS OF ORGANIZATIONAL STRUCTURE WEAK MATRIX 15 3 Functional MATRIX BALANCED MATRIX STRONG MATRIX PROJECTIZED COMPOSITE Functional Structure MOST COMMON / TRADITIONAL FORM 15 4 Organization is structured by functions: Marketing, Engineering, Manufacturing, Finance, HR. Each one works as separate entity with managers and subordinates. Functional Structure organizational STRCUTURE Functional CEO Project coordination Staff engaged in project work 15 5 CEO Functional Manager A Functional Manager C Functional Manager B Staff Staff Staff Staff Staff Staff Staff Staff Staff coordination EXAMPLE A PRODUCT DEVELOPMENT PROJECT Design phase called design project by engineering department Communication through heads of departments only Functional Structure ADVANTAGES 1) Easier management of functional specialists. DISADVANTAGES 1) More emphasis on functional specialty to 15 6 2) Team members report to only one supervisor. 3) Similar resources are centralized to function, companies are grouped by functions/specialties. 4) Clearly defined career path in the functional area. 2) Project Manager has no detriment of the project. 2) Project Manager has no authority.Power with FMs. 3) Scope of the project limited to functional boundary. 4) No career in project management. Projectized Structure PROJECTIZED ORGANIZATIONS ARE JUST OPPOSITE OF FUNCTIONAL: 15 7 JUST OPPOSITE OF FUNCTIONAL: All organization is by projects. The project manager has total control of projects. Team members are collocated Most organizations resources assigned to project work Projectized Structure organizational STRCUTURE CEO Project coordination Staff engaged in project work Projectized 15 8 CEO Project Manager A Project Manager C Project Manager B Staff Staff Staff Staff Staff Staff Staff Staff Staff coordination IDEAL Project Manager Sole Authority Departments report directly to the Project Manager or provide support services Projectized Structure ADVANTAGES 1) Project manager has ultimate authority over DISADVANTAGES 1) No home for project team members when 15 9 ultimate authority over the project. 2) Loyalty to the project. 3) More effective communication than functional. 4) Team members are collocated team members when project is completed. 2) Less efficient resource utilization, though efficient project organization. 3) Lack of professionalism in disciplines. 4) Duplication of facilities and job functions. Matrix Structure SINCE BOTH FUNTIONAL AND PROJECTIZED HAVE STRENGTHS AND WEAKNESSES, we need to maximize strengths and weaknesses. 16 0 weaknesses. MATRIX: best of both organizational structures. Employees in a matrix organization report to one FM and at least one PM. PM and FM together conduct performance review of the employees. Matrix Structure Matrix organizations are of three types: 16 1 WEAK MATRIX BALANCED MATRIX STRONG MATRIX Matrix Structure Weak matrix (more like functional)- Here, the balance of power rests with the FM and PM is merely an expeditor or coordinator. WEAK MATRIX 16 2 expeditor or coordinator. Project expeditor acts mainly as a staff assistant and coordinates communication. Project expeditor can not make or enforce any decisions. Project coordinator has some power to make decisions and reports to higher level manager than expeditor. Matrix Structure organizational STRCUTURE CEO Staff engaged in project work Weak matrix 16 3 Staff Project coordination CEO Functional Manager A Functional Manager C Functional Manager B Staff Staff Staff Staff Staff Staff Staff Staff Matrix Structure BALANCED MATRIX Balanced matrix- The power is balanced between project manager and functional manager. 16 4 project manager and functional manager. Each manager has responsibility for his/her part of the project or organization, and people get assigned to projects based on the needs of the project, not strengths or weakness of the managers position. Most organizations are Balanced Matrix these days! Matrix Structure organizational STRCUTURE CEO Staff engaged in project work Balanced matrix 16 5 Project coordination CEO Functional Manager A Functional Manager C Functional Manager B Staff Project Manager Staff Staff Staff Staff Staff Staff Staff Matrix Structure STRONG MATRIX 16 6 Strong matrix is more like projectized. Here, The balance of power rests with The project manager not The functional manager. Matrix Structure organizational STRCUTURE Strong matrix CEO Staff engaged in project work 16 7 Project coordination CEO Functional Manager A Functional Manager C Functional Manager B Staff Staff Staff Staff Staff Staff Staff Staff Staff Manager of Project Managers Project Manager Project Manager Project Manager Matrix Structure RELEVANCE FOR PROJECTS Highly visible project Not cost effective as ADVANTAGES DISADVANTAGES 16 8 Highly visible project objectives. Improved PM control over resources. More support from functions. Maximum utilization of scarce resources. Better coordination. Not cost effective as more administrative personnel are needed. More than one boss for project team. More complex to monitor and control. Matrix Structure Better information flow (both horizontal and Tougher problems with resource allocation. ADVANTAGES DISADVANTAGES 16 9 (both horizontal and vertical) than functional. Team members maintain a home, they continue to belong to their respective departments unlike projectized. resource allocation. Requires extensive policies and procedures. FMs may have differing priorities than PMs. Higher potential for conflicts and duplication of efforts. Composite Structure organizational STRCUTURE Composite organization CEO Staff engaged in project work Project Y 17 0 Project X coordination CEO Functional Manager A Functional Manager C Functional Manager B Staff Staff Staff Staff Staff Staff Staff Staff Staff Manager of Project Managers Project Manager Project Manager Project Manager Project Y Coordination Staff Staff Functional Matrix Weak Balanced Strong Projectized Structure Features Organizational structure influences on project 17 1 Weak Balanced Strong Project Manager Power Little or none Limited Low to Moderate Moderate to High FULL AUTHORITY Resource Availability Little or none Limited Moderate Moderate to High ALMOST TOTAL Budget Control Functional Manager Functional Mixed Project Manager Manager Project Manager Role of Project Manager Part time Part time Full time Full time On projects on projects on projects FULL TIME ON PROJECTS Administrative Staff Part time on Part time Full time Full time On projects on projects on projects FULL TIME ON PROJECTS Features Organization Process Assets 1. Corporate Knowledgebase OPAs help us throughout the project! 17 2 1. Corporate Knowledgebase 2. Policies, Processes and Procedures Organization Process Assets 1. Corporate Knowledgebase OPAs help us throughout the project! 17 3 1. Corporate Knowledgebase - Historical information from previous projects - Lessons learned from previous projects Project files, process measurement databases, issue and defect management databases, configuration management databases, versioning and rebaselining info, Financial databases, overruns, etc. Organization Process Assets 2. Policies and Procedures OPAs help us throughout the project! - organization's policy and procedures for conducting work 17 4 - organization's policy and procedures for conducting work Organizational standards, policies, standard product and project lifecycles, quality policy and procedures, work instructions, performance measurement criteria, proposal evaluation criteria, Templates (WBS, Network Diagram, Contract Templates), ethics policy, project management policy, Guidelines/criteria for tailoring, Project Closure Guidelines/Requirements.. Organization Process Assets 2. Policies and Procedures OPAs help us throughout the project! - organization's policy and procedures for conducting work 17 5 - organization's policy and procedures for conducting work Issue and defect management procedures, Procedures for prioritizing, approving and issuing work instructions, Change Control Procedures, Risk Control Procedures, Financial Control Procedures, Organizational Communication Requirements. PM Basics 17 6 Project Management Processes PM Basics: Project Management Knowledge Areas PM Basics: Last Leg! The Project Management Processes 17 7 The Project Management Processes But, before we master its concepts, we need to know the knowledge areas which contribute as building blocks of the Project Management Process Groups! PM Basics: Project Management Knowledge Areas Project Management Knowledge Areas 17 8 Knowledge Areas Describe Project Management Knowledge and Practice in terms of THEIR COMPONENT PROCESSES. 9 Knowledge Areas! PM Basics: Project Management Knowledge Areas o Integration o Scope WHY 17 9 o Scope o Time o Cost o Quality o Human Resource o Communications o Risk o Procurement WHY NINE KNOWLEDGE AREAS? Supports various elements of project management which Project Integration Management PM Basics: Project Management Knowledge Areas Develop Project Charter Develop Project Management Plan Direct and Manage project execution 18 0 of project management which are identified, defined, Combined and coordinated To ensure project includes all the work required and Only the Work needed to complete project Successfully Project Scope Management execution Monitor and control project work Perform Integrate change control Close project or phase Collect requirements Define scope Create WBS Verify scope Control scope To ensure timely completion Project Time Management PM Basics: Project Management Knowledge Areas Define Activities Sequence Activities Estimate Activity Resources 18 1 To ensure timely completion of the project Planning, controlling, and managing costs so that project is completed within approved Budget Project Cost Management Estimate Activity Resources Estimate Activity Durations Develop Schedule Control Schedule Estimate Costs Determine budget Control Costs To ensure project will satisfy Project Quality Management PM Basics: Project Management Knowledge Areas Plan Quality Perform Quality Assurance 18 2 To ensure project will satisfy NEEDS for which it was undertaken To make most effective use of people involved with the project Project HR Management Perform Quality Assurance Perform Quality Control Develop Human Resource plan Acquire project team Develop project team Manage project team To ENSURE TIMELY and APPROPRIATE generation, Project Com. Management PM Basics: Project Management Knowledge Areas Identify Stakeholders Plan Communications Distribute Information 18 3 APPROPRIATE generation, collection, dissemination, Storage and disposition of the PROJECT INFORMATION Concerned with identifying, analyzing, and responding to project risks Project Risk Management Distribute Information Manage stakeholders expectations Report Performance Plan Risk Management Identify Risks Perform Qualitative risk analysis Perform Quantitative risk analysis Plan Risk responses Monitor and control Risks To acquire material, goods Project Procurement Management PM Basics: Project Management Knowledge Areas Plan procurements Conduct procurements Administer procurements 18 4 To acquire material, goods and services outside performing organization To meet project scope Administer procurements Close procurements PM Basics So, here we come! We will now deal with 18 5 We will now deal with Project Management Processes Project Processes Process Groups Process Interactions Customizing Process Interactions Mapping of Project Management Processes Just a foundation talk at the outset! PM Basics: Project Management Processes Project Team must: 1) Select right processes within the process groups. 18 6 1) Select right processes within the process groups. 2) Use defined approach to adapt product specs and plans to fulfill PROJECT and PRODUCT Requirements. 3) Adhere to the requirements to fulfill the needs, wants, and expectations of the stakeholders. 4) Balance competing demands of Scope, Time, Cost, Quality, Resources, and risk to accomplish a quality product, service, or result. PM Basics: Project Management Processes We will discuss about what is required to: 18 7 We will discuss about what is required to: 1) Initiate 2) Plan 3) Execute 4) Monitor and control, and 5) Close a project. PM Basics: Project Management Processes What is a process? Project Processes 18 8 A set of interrelated actions & activities To accomplish A pre-specified set of products, services, or results PERFORMED PM Basics: Project Management Processes Project processes are performed by the project team and consist of two main categories: 1) 18 9 Project Processes Project Management Processes Product-oriented Processes 1) 2) PM Basics: Project Management Processes 1) Are common to most projects most of the time. 19 0 2) Are related with each other by their performance for an integrated purpose of initiating, planning, executing, monitoring and controlling, and closing a project! 3) These processes interact with each other in complex ways (discussed a little later). PM Basics: Product-oriented Processes 1) Specify and create projects product. 2) Are typically defined by the respective project life cycle. 19 1 project life cycle. 3) Vary by application area! Both project management processes and product-oriented processes overlap throughout the project. Example: You can not define the project scope without basic knowledge of how to create the concerned product! PM Basics: Project Processes Project management is an integrative effort A change in scope Always Though, it may or 19 2 Scope, Time, Cost, Quality, Risk, etc. Any action or lack of it in one area affects other areas Project cost Always affects Though, it may or may not affect product quality or morale of the team PM Basics: Project Processes SOME TRUTHS! Project processes interactions require trade offs among project objectives (scope, time, cost, and performance). 19 3 cost, and performance). Enhancing performance in one area leads to scarifying SOMETHING in another area. Hence, project objectives are called triple constraints shown through a triangle with its sides or corners representing each constraint (we have already discussed it). PM Basics: PM Process Groups Initiating Process Group 19 4 Process Group Authorizes the project or phase PM Basics: PM Process Groups Planning Process Group 19 5 Process Group 1) Establish the scope of the project, 2) Refine the objectives, 3) Define the course of action for attaining the objectives. PM Basics: PM Process Groups Executing Process Group 19 6 Complete the work defined in the project management plan to satisfy the project specifications! Coordinates people and resources. PM Basics: PM Process Groups Monitoring & Controlling Process Group 19 7 Process Group - Track, review, and regulate the progress and performance of the project. - Manage changes to the project management plan PM Basics: PM Process Groups Closing Process Group 19 8 - Finalize all activities across all Process Groups to formally close the project or phase. - Brings it to an orderly end. PM Basics: Project Management Process Groups Project Management Process Groups INTERACTIONS Initiating Process Planning Process Charter PM process groups are linked by their outputs. Output of one is input to another . 19 9 Executing Process Closing Process Controlling Process Project Plan Recommended Corrective actions Work results Implemented Corrective actions For Project Plan updates Correctly Produced deliverables for formal acceptance Project Process Groups Interactions: HIGH LEVEL SOW Culture, PMIS, HR Pool Defined work processes, Knowledge base Organization Environmental factors Project Initiator of Sponsor INITIATING Process Group CONTRACT Project Charter 20 0 Organizational Process assets Customer PLANNING Process Group EXECUTING Process Group MONITORING & CONTROLLING Process Group CLOSING Process Group Project PLAN Deliverables APPROVED DELIVERABLES Final product Administrative & contract closure Org. process assets updates PM Basics: Project Management Process Groups Project Management Process Groups overlapping in a phase Executing Process Group Controlling Process Group Closing Process Group PM process groups overlap and occur at various levels of intensity throughout each Project Phase. 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a c t i v i t y Phase Start Phase Finish Closing Process Initiating Process Planning Process Executing process Controlling Process Group Group PM Basics: Project Management Process Groups Closing one phase offers input to initiating the next phase! Project Management Process Groups cross phases Design phase Execution phase Output: 20 2 Later Phases Execution phase Prior Phases Output: Design document requiring customer acceptance Output: Design document Serves as product description for Execution phase PM Basics: Project Management Processes Project Management Process Groups Why repeat initiation process at the beginning of each phase? 20 3 1) Well, it keeps the project focused on the business need for which it has been taken up! 2) It helps you halt the project if the project is not likely to satisfy the business need! 3) It helps you halt the project if the business need does not exist any more! PM Basics: Project Management Process Groups Project Management Process Groups PM Process Groups 20 4 PM Process Groups Controlling Processes Initiating Processes Planning processes Executing processes Project boundaries Project boundaries PM Basics: Project Management Process Groups 20 5 Project boundaries Controlling Processes Initiating Processes Planning processes Executing processes Project Inputs Project Initiator Sponsor Project Deliverables Project Records End User Process Assets INITIATING PROCESSES 20 6 INITIATION PROCESS GROUP INTEGRATION COMMUNICATION Develop Project Charter Identify stakeholders Planning process group Executing process group Monitoring & controlling process group INITIATING PROCESS GROUP THE PURPOSE Facilitates formal authorization to begin a new 20 7 Facilitates formal authorization to begin a new project or phase. Done outside the projects scope of control. Business needs or requirements are documented. Normally the feasibility is established by evaluating various alternatives and choosing the best one. INITIATING PROCESS GROUP WHAT IS DONE HERE? Clear descriptions of project objectives are developed, noting down the reasons for selecting the project to 20 8 noting down the reasons for selecting the project to best satisfy the requirements Such decision also gives us basic description of 1) project scope 2) deliverables 3) forecast of resources 4) high-level constraints, assumptions, risks INITIATING PROCESS GROUP VERY IMPORTANT Involving stakeholders during initiation 20 9 Involving stakeholders during initiation 1) develops Shared Ownership, 2) enhances Chances of Deliverable Acceptance, And 3) Customer/other stakeholders Satisfaction! INITIATING PROCESS GROUP Simply put, this process group 21 0 1. Authorizes/starts a project or phase 2. Defines projects purpose 3. Identifies objectives 4. Empowers project manager to start the project Please remember this! PLANNING processes Are used to plan and manage a successful project Purpose of Planning Processes: 21 1 Are used to plan and manage a successful project Help gather information from many sources for completeness and confidence Develop project plan Identify, define, and mature: Project scope, requirements Project cost, and Schedule the project activities PLANNING processes As new information is found out, additional Purpose of Planning Processes: 21 2 As new information is found out, additional requirements, risks, opportunities, constraints, assumptions, and dependencies are identified and resolved! As more information is grasped, follow-on actions are undertaken Additional analysis through feedback loops PLANNING processes Purpose of Planning Processes: 21 3 One/more Planning processes revisited ( may be some initiating processes too ) Significant changes throughout Project life cycle PLANNING processes Purpose of Planning Processes: 21 4 Parts of the project plan Updates from Approved changes Substantially influence Costs, schedule, and resource requirements to meet Project Scope Provide greater precision PLANNING PROCESSES (with interactions) Define scope- Project scope statement Create WBS- Scope baseline Enterprise- OPAs, EEFs Collect requirements- requirements docs, RMP Develop Project Charter- charter Develop Project Management Plan- Proj. Mgt. Plan Verify scope Control scope Control schedule 21 5 Collect requirements- requirements docs, RMP Determine budget- cost performance baseline Develop schedule- schedule baseline Plan quality- QMP, PIP Develop HR plan- HR Mgt. Plan Plan communications- Com Mgt. plan Plan risk management- Risk Mgt. Plan Plan procurements- Procurement Mgt. Plan Plan- Proj. Mgt. Plan Direct & Manage Project Execution Monitor & Control Project Work Perform Integrated CC Close project or phase schedule Control cost Perform QC Report performance Monitor & control Risks Administer procurements PLANNING PROCESSES Scope management plan Requirements management plan Project baselines (Scope baseline, Cost baseline, and Schedule baseline) Subsidiary plans Components Project Management Plan 21 6 Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communication management plan Risk management plan Procurement management plan and Schedule baseline) Project life cycle & phase processes chosen PM processes selected Execution methods Change management plan Configuration mgt. Plan Baseline integrity process Key mgt. Review to facilitate open and pending decisions Understanding Component Processes of PLANNING PROCESS Group Before we develop final project plan, take approval, and publish it for execution, we need to conduct 21 7 for execution, we need to conduct many iterations to make sure that our plan meets: 1) project objectives 2) is realistic and 3) achievable. EXECUTING process group Perform activities to accomplish project requirements Create project deliverables 21 8 Create project deliverables Acquire, train, and manage team members. Obtain and manage resources Implement planned methods and standards Establish and manage communication Generate project data for status and forecasting EXECUTING process group Issue change request Adapt approved changes into projects scope, plans and environment 21 9 scope, plans and environment Manage risks and execute response activities Manage sellers and suppliers Execute approved process improvement activities Collect and record lessons learned Project manager and project management team manages performance of activities and various organizational interfaces. EXECUTING processes Direct and Manage Project Execution also needs implementation of: 22 0 - Approved corrective action to recover variance. - Approved preventive action to reduce chances of negative consequences of associated project risks. - Approved defect repair to repair or replace a defective component. EXECUTING PROCESSES Perform Quality Assurance Monitoring & Controlling Process Group Initiating Process Group 22 1 Acquire Project Team Manage Project Team Conduct procurements Distribute Information Direct and Manage Project Execution Closing Process Group Planning Process Group Develop Project Team Manage Stakeholder Expectations Monitoring & Controlling process group Main benefit: 22 2 Main benefit: PROJECT PERFORMANCE IS OBSERVED AND MEASURED REGULARLY TO IDENTIFY VARIANCES FROM THE PROJECT MANAGEMENT PLAN Monitoring & Controlling process group Consists of processes needed to Track, review, and regulate progress and 22 3 Track, review, and regulate progress and performance Identify areas where changes to the plan are needed. And initiate such changes. Monitoring & Controlling process group CONTROL CHANGES AND RECOMMEND 22 4 RECOMMEND PREVENTIVE ACTION in Anticipation of potential problems Monitoring & Controlling process group 1. Monitor project activities! 2. Influence the factor that could circumvent integrated 22 5 2. Influence the factor that could circumvent integrated change control to ensure only approved changes are executed! The project team gets insight into the health of the project ! Highlights areas needing additional care ! Helps monitoring and controlling ENTIRE PROJECT EFFORT ! Monitoring & Controlling process group SAVES THE PROJECT 22 6 When variances threaten the project objectives relevant project management processes within the PLANNING PROCESS GROUP are REVISITED Recommends updates to the project plan rescue the project Monitoring & Controlling process group A missed activity completion Date needs: SAVES THE PROJECT 22 7 When variances threaten the project objectives Date needs: 1. Trade-offs between schedule & budget targets 2. Dependence on over time 3. Adjustments to present staffing plan Recommends updates to the project plan rescue the project MONITORING AND CONTROLLING PROCESSES Verify Scope Control Scope Initiating Process Group 22 8 Control Schedule Control Costs Perform quality control Report Performance Monitor & Control Risks Administer Procurements Monitor & Control Project work Perform Integrated Change Control Planning Process Group Executing Process Group Closing Process Group MONITORING AND CONTROLLING PROCESSES Monitor and Provides Change requests. 22 9 Monitor and Control Project Work Change requests. Recommended corrective / preventive action. Recommended defect repair. FORECASTS. MONITORING AND CONTROLLING PROCESSES Perform Provides Approved change requests 23 0 Perform Integrated Change Control Approved change requests Approved preventive action Approved corrective action Approved defect repair Validated defect repair Non-approved change requests Updates of Project Management Plan CLOSING processes Consists of processes to Finalize all activities across all PM Process Groups for formal completion of the project, 23 1 Groups for formal completion of the project, phase, or contractual obligations. Hand off the completed product to others (customer if on contract) Close a cancelled project CLOSING processes Completion of defined processes 23 2 Completion of defined processes within all Process Groups is verified Accomplishment of a project or phase is formally established CLOSING processes Following occurs during project or phase closure: Customer or sponsor acceptance Project-end or phase end review 23 3 Project-end or phase end review Impacts of tailoring to any process documented Lessons learned recorded OPAs updated Documents archived as historical information in project management information system. Procurements are closed out. CLOSING processes Closing Process Group Planning Process Group 23 4 CLOSE PROJECT or Phase CLOSE PROCUREMENTS Executing Process Group Monitoring & Controlling Process Group Understanding Component Processes of CLOSING PROCESS Group Soon as we meet accomplish one project, we tend to move on to the next one without properly closing the earlier one. 23 5 closing the earlier one. Result? We keep on reinventing the wheel! Project information created in a particular project along with mistakes committed, corrective actions taken are not documented. Then, there is no literature to guide us on similar future projects. RECAP Project Process Monitoring & Controlling Processes Planning Processes Initiating Process Group Pyramid 23 6 Process Groups Project Life Cycle Phase Phase Phase Phase Phase Executing Processes Initiating Processes Closing Processes Pyramid A WORD OF CAUTION ALL OF THE PROCESSES AND INTERACTIONS DO NOT APPLY TO ALL PROJECTS OR PHASES! 23 7 DO NOT APPLY TO ALL PROJECTS OR PHASES! The project manager, along with project team, is always responsible for determining: 1. What processes are appropriate? 2. What is the appropriate degree of rigor for each process? THIS IS CALLED TAILORING! EXAMPLES: Customizing process interactions Software development projects dependent on unique A WORD OF CAUTION 23 8 Software development projects dependent on unique resources define roles and responsibilities before scope definition. A firm whose projects find sizable outsourcing need to describe in their planning where the work is contracted out. On smaller projects, involving handful of people, there is no need for communications planning. EXAMPLES: Customizing process interactions On larger and complex projects, more detailed and A WORD OF CAUTION 23 9 On larger and complex projects, more detailed and meticulous planning is required Risk is a big agenda and risk identification will be more exhaustive, creating separate risk categories: a) Quality risks, b) Technical risks, c) Cost risks, d) Schedule risks, and e) Managerial risks. recap ABOUT Project Management Processes The five process groups we have discussed 24 0 The five process groups we have discussed are not one time processes. They are iterative and revisited throughout the project life cycle as the project is refined. recap ABOUT Project Management Processes Apart from entire project, each phase is also 24 1 initiated, planned, executed, controlled, and closed. The output of preceding phase becomes input to the succeeding phase. recap ABOUT Project Management Processes Completion of each phase allows the project 24 2 Completion of each phase allows the project manager and Stakeholders to reanalyze the business needs and determine whether the project is satisfying those needs or not! Here is another opportunity to make a go or no-go decision. Mapping 5 PM Process Groups to 9 Knowledge Areas Consists of 3 slides SLIDE 1 Process Groups Knowledge Areas INITIATING PLANNING EXECUTING CONTROLLING CLOSING Project Integration Management Develop Project Management Plan Direct and Manage Project Execution Monitor & Control Project Work Develop Project Charter Close Project or Phase 24 3 Plan Execution Perform Integrated Change Control -Collect requirements - Define Scope - Create WBS - Verify Scope - Control Scope Project Scope Management Project Time Management - Define Activities - Sequence Activities - Estimate Activity Resources - Estimate Activity Durations - Develop Schedule Control Schedule Charter Phase Mapping 5 PM Process Groups to 9 Knowledge Areas Consists of 3 slides SLIDE 2 Process Groups Knowledge Areas INITIATING PLANNING EXECUTING CONTROLLING CLOSING Project Cost Management Estimate Costs Determine budget Cost control Project Quality Perform 24 4 Project Quality Management Plan Quality Perform Quality Assurance Perform Quality control Project HR Management Develop Human Resource Plan Acquire Project Team Develop Project Team Manage project team Project Communications Management Identify Stakeholders Plan Communications Information distribution Manage stakeholder expectations Report Performance Mapping 5 PM Process Groups to 9 Knowledge Areas Consists of 3 slides SLIDE 3 Process Groups Knowledge Areas INITIATING PLANNING EXECUTING M and C CLOSING Project Risk Management Monitor And Control - Plan Risk Management - Identify Risks 24 5 Control Risks - Identify Risks - Perform Qualitative Risk analysis - Perform Quantitative risk analysis - Plan Risk responses Project Procurement Management Plan procurements Conduct procurements Close procurements Administer procurements Mapping 5 PM Process Groups to 9 Knowledge Areas From this mapping, we understand: 24 6 From this mapping, we understand: Where the project management processes fit into both: 1) Nine knowledge areas, and 2) Five project management process groups Major project documents We have three major documents on our project 24 7 We have three major documents on our project 1) Project Charter: formally authorizes project. 2) Project Scope Statement: tells what work needs to be performed and what deliverables need to be made. 3) Project Management Plan: tells how the work will be done. Project Management INITIATING 24 8 INITIATING PROCESS GROUP Processes: develop project charter identify stakeholders INTIATING PROCESS GROUP PROJECT INTEGRATION MANAGEMENT Processes borrowed from 24 9 1) Develop project charter PROJECT INTEGRATION MANAGEMENT PROJECT COMMUNICATIONS MANAGEMENT 2) Identify Stakeholders Now, project management begins! Initiating Process Group 25 0 Initiating Process Group Initiating a Project Processes: develop project charter Project Integration Management Develop Project Charter 1) Developing a document that formally 25 1 1) Developing a document that formally authorizes a project or a phase. 2) Documenting initial requirements that that satisfy the stake holders needs and expectations. Project Integration Management Develop Project Charter ESTABLISHES 25 2 ESTABLISHES A partnership between the performing organization and the requesting organization (or customer in case of external projects)! Project Integration Management Develop Project Charter 25 3 The real project starts when there is a chosen solution to the business need, and the decision to invest has been made. An approved project charter formally initiates a project! Project Integration Management Develop Project Charter Question: 25 4 Question: When a project manager should be identified and assigned? Answer: As early as feasible, preferably while The charter is being developed but always prior to start of planning! Project Integration Management Develop Project Charter Question: 25 5 Question: Should the project manager be involved in the development of project charter? Answer: It is recommended that the project manager participate in the development of the project charter, as it provides him/her authority to apply resources to project activities. Project Integration Management Develop Project Charter Question: Who authorizes the projects? 25 6 Question: Who authorizes the projects? Answer: They are authorized by someone external to the project! Sponsor, PMO, Portfolio Steering Committee. They can create it or delegate that duty to the project manager. Note: project initiator/sponsor is a position having funding authority! Project Integration Management Develop Project Charter 25 7 Needs assessment and feasibility study in some cases precedes initiation. Initiation is always done Formally. EXCEPTION: Internal service projects Project Integration Management Develop Project Charter The main areas WHO needs this business change? 25 8 The main areas to be addressed in Project Initiation (clue : Who will be benefited) WHICH solution is recommended ? (clue: Why is it preferred to the alternative?) WHAT are the benefits? (clue: Are they real and enforceable?) Project Integration Management What are estimated project Costs and Assumptions? Develop Project Charter 25 9 The main areas to be addressed in Project Initiation Costs and Assumptions? (clue: high-level estimates at this point of time). WHAT are the significant risks? (clue: things which may get in the way of success). Project Integration Management Once your organization recognizes a need and decides to respond to it, you have a Project 26 0 Project It involves Selecting a project and Committing organizational resources to it. Since every phase is also initiated, the initiation also means authorizing the project to continue to the next phase. But its not so simple! Project Integration Management The project has to support: a) Your company's Strategic Plan, b) Address management concerns. 26 1 b) Address management concerns. There are many management concerns! You need to survive and grow in a highly competitive market!! But its not so simple Project Integration Management You want bigger market share!! You want better (and faster) 26 2 You want better (and faster) return on investment!! You want to have a nice public perception!! But its not so simple SO THAT people prefer to buy your products, subscribe to your stocks, consider you a market leader ! Providing best value for money! Project Integration Management Your organization is already doing something: 26 3 providing certain products and services through its ongoing operations. INITIATION of a project , therefore, provides links with your organizations ongoing work. But its not so simple Project Integration Management Develop Project Charter process overview INPUTS TOOLS & OUTPUTS 26 4 Project statement of work Business case Contract (if applicable) Enterprise environmental factors Organizational process assets INPUTS TOOLS & TECHNIQUES OUTPUTS Expert Judgment PROJECT CHARTER Project Integration Management Project SOW Develop project charter 26 5 Project SOW Describes product or services to be provided by the project. For internal projects, it is given by project initiator or sponsor. For external projects, it is given by external customer as part of RFP. Project Integration Management HERE, Project SOW indicates: 1) Business need 2) Product scope description: Product requirements 26 6 2) Product scope description: Product requirements that project will create. Less details during initiation, more during later processes as product characteristics are progressively elaborated. Product requirements must show the relation of the product with the business need. These requirements should be detailed enough to support later planning. 3) Strategic plan: all projects must support organizations strategic goals! Project Integration Management Strategic plan Projects are the means by which performing organization implements its Project SOW indicates a: Strategic plan: all projects must 26 7 performing organization implements its strategic plan. Hence, each project you select must support your organizations strategic plan. ABC Industries had taken up a TV Project because Marketing VP had wanted it. It was neither core competence of the company nor FITTED into its strategic plan. The project did not get enough attention later on and fell through. all projects must support the organizations strategic goals! Project Integration Management Business Case Describes justification for investment from business standpoint. 26 8 business standpoint. Business need and cost-benefit analysis contained. Requesting organization or customer (in external projects) write the business case. Reviewed periodically in multi-phase projects for benefits. Project Integration Management Business Case emerges from one or more of the following: a) Market demand 26 9 a) Market demand b) Organizational need c) Customer request d) Technological advance e) Legal requirement f) Ecological impacts g) Social need Project Integration Management Contract (if applicable) - Contract becomes input here if the project is 27 0 - Contract becomes input here if the project is being undertaken for an external customer. Project Integration Management: initiation Enterprise environmental factors Develop project charter 27 1 INPUTS factors We must consider the influence of all such factors and systems on Projects Success: Government/ Industry standards Infrastructure Project Integration Management: initiation Enterprise environmental Develop project charter 27 2 INPUTS factors Existing Human Resources Personnel administration (guidelines to hiring, performance reviews, training history) Companys work authorization system Project Integration Management: initiation Enterprise environmental factors Develop project charter 27 3 INPUTS environmental factors Market conditions Stakeholder tolerances Commercial databases (standardized cost estimating data, industry risk study information/ risk databases) Project Integration Management: initiation Enterprise environmental factors Develop project charter 27 4 INPUTS environmental factors PMIS (automated tool suite like scheduling s/w, configuration management system, information collection and distribution system, or web interfaces to other online systems) Project Integration Management: initiation Organizational process assets Develop project charter 27 5 INPUTS assets We must consider the influence of all the org. process assets on Projects Success: 1) Organizations Formal/ informal policies, - procedures, plans, and - guidelines Project Integration Management: initiation Organizational process assets Develop project charter 27 6 INPUTS assets We must consider the influence of all the org. process assets on Projects Success: 2) Organizations learning and knowledge from earlier projects Project Integration Management: initiation Organizational Develop project charter 27 7 INPUTS Organizational process assets - Organizations learning and knowledge from earlier projects like: Completed schedules Risk data Earned Value data Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 27 8 1) organizations processes & procedures for conducting work organizational standard processes - safety & health policy - project management policy standard product and project life cycles quality policies and procedures - process audits - improvement targets - checklists and standardized process definitions Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 27 9 1) organizations processes & procedures for conducting work (continued) standardized guidelines, work instructions, proposal evaluation criteria and performance measurement criteria Templates - risk templates - WBS templates - project schedule network diagram templates Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 28 0 1) organizations processes & procedures for conducting work (continued) guidelines and criteria for framing organizations set of standard processes to meet specific needs of the project organization communication requirements - specific technology available - permitted communication media - record retention - security requirements Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 28 1 1) organizations processes & procedures for conducting work (continued) project closure guidelines/ requirements - final project audits - project evaluations - acceptance criteria financial control procedures - time reporting - required expenditure and disbursement reviews - accounting codes and standard contract provisions Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 28 2 1) organizations processes & procedures for conducting work (continued) Issue and defect management procedures - Issue and defect controls - Issue and defect identification and resolution - Action item tracking Change control procedures plus steps - Steps for modifying official company standards, policies, plans, and procedures, or any project documents. And how changes will be approved/ validated. Project Integration Management: initiation Organizational process assets 1) organizations processes & procedures for 28 3 1) organizations processes & procedures for conducting work (continued) Risk control procedures plus risk categories probability definition and impact, and probability and impact matrix Procedures for approving and issuing work authorizations Project Integration Management: initiation Organizational process assets 2) organizational corporate knowledge base for 28 4 2) organizational corporate knowledge base for storing and retrieving information: Process measurement database - for collecting and making available data on processes and products Project files (information from earlier projects) - info on scope, schedule, cost, and quality baselines, performance measurement baselines, project calendars, project schedule, network diagrams, risk registers, planned response actions, and defined risk impact Project Integration Management: initiation Organizational process assets 2) organizational corporate knowledge base for 28 5 2) organizational corporate knowledge base for storing and retrieving information (continued): Historical information and lessons learned knowledge base - Project records and documents - All project closure information and documentation - Information on the previous projects performance - Information on the previous projects results - Information on risk management efforts Project Integration Management: initiation Organizational process assets 2) organizational corporate knowledge base for 28 6 2) organizational corporate knowledge base for storing and retrieving information (continued): Issue and defect management database - Issue and defects status - Control information - Issue and defects resolution and Action item results Configuration management knowledge base consisting of versions and baselines of - All official company standards, policies, procedures, and - Project documents Project Integration Management: initiation Organizational process assets 2) organizational corporate knowledge base for 28 7 2) organizational corporate knowledge base for storing and retrieving information (continued): Financial database - Information on labor hours, - Incurred costs - Budgets - Project cost overruns, if any Develop Project Charter Process TOOLS AND TECHNIQUES Expert Judgment 1) Help assess inputs required to develop the charter 2) Applied to any technical and management details Develop project charter 28 8 2) Applied to any technical and management details 3) Comprises special expertise from any group or individual Sources: - other units within performing organization - consultants - stakeholders (also customers/sponsors) - professional/technical associations - industry groups Discussion on OUTPUTS Project Charter DOCUMENT that formally authorizes a project 28 9 project ISSUED by a project initiator or sponsor, external to project organization, at a level appropriate to project funding EMPOWERS the project manager to apply resources to project activities PROJECT CHARTER OUTPUTS Discussion on OUTPUTS Project Charter AUTHORITY of project manager 29 0 AUTHORITY of project manager is particularly important when project team comes from various functional areas. He/she has to deal with many issues relating to cooperation and performance of the team members working on the project. PROJECT CHARTER OUTPUTS Discussion on OUTPUTS Project Charter 29 1 Documents Business Needs, Current understanding of customers needs, or the new product, service or result that is intended to meet! Discussion on OUTPUTS Information in the Project Charter OUTPUTS 1. Project purpose and justification, 29 2 OUTPUTS PROJECT CHARTER 1. Project purpose and justification, 2. Measurable project objectives and related success criteria, 3. High-level requirements, 4. Assigned project manager and empowerment, 5. High-level project description 6. High-level risks 7. Summary level milestone schedule Discussion on OUTPUTS Information in the Project Charter 8. Summary level budget, OUTPUTS 29 3 8. Summary level budget, 9. Project approval requirements: a) What constitutes project success b) Who decides project is successful c) Who will sing off on the project Name and authority of the sponsor or other persons authoring the project charter. OUTPUTS Discussion on INITIATION Constraints Factor that limit project management teams options Examples: 29 4 Examples: 1. an imposed date, 2. a predefined budget, 3. scope 4. staffing 5. specified quality 6. contractual terms 7. Project product to be socially, economically, and environmentally sustainable (puts further constraint on in terms of scope, time, staffing , and cost). PROJECT CHARTER Discussion on INITIATION Assumptions Things assumed to be real, true and 29 5 certain for the purpose of planning. If they do not come true? THEY BECOME RISK PROJECT CHARTER Discussion on INITIATION EXAMPLES OF Assumptions While planning, you assume: 1. vendor delivery date will be 29 6 1. vendor delivery date will be honored, 2. help from other functional areas will come on date as planned. 3. certain team members or specialists required on your project will be there. PROJECT CHARTER Discussion on INITIATION EXAMPLES OF Assumptions You assume so many things. 29 7 Must document these assumptions. They impact all areas of planning Are progressively elaborated as project progresses. PROJECT CHARTER Discussion on INITIATION EXAMPLES OF Assumptions During initiation, high-level 29 8 assumptions are discovered and documented. Assumptions are monitored throughout the project. OUTPUTS PROJECT CHARTER Discussion on OUTPUTS Sample project charter PROJECT TITLE AND DESCRIPTION ABC Customer Satisfaction Project 29 9 ABC Customer Satisfaction Project Recent Customer satisfaction survey has found that many of our customers orders for mobile sets has taken the customer 8 times longer to place order on our network than the competitors network. The goal of this project is to examine the root causes and offer solution. Implementation of solution will be separate project. PROJECT MANAGER ASSIGNED AND AUTHORITY LEVEL Vikas Chopra shall be the project manager for this project and have the authority to select his team and determine final project budget. Continued Discussion on INITIATION OUTPUTS OBJECTIVES Complete the project no later than February 1, 2009. Spend no more than Sample project charter 30 0 Complete the project no later than February 1, 2009. Spend no more than INR 200,000, result in a tested plan to reduce the order time by at least 90%. BUSINESS CASE (Business need) This project is being undertaken to prevent further dissatisfaction of customers with LGs offerings on net. We expect that increased customer satisfaction will improve revenues. Developing new ideas to satisfy customers will be an additional advantage arising from this project. Continued Discussion on INITIATION OUTPUTS PRODUCT DESCRIPTION The project should result in specific deliverables like: Sample project charter 30 1 The project should result in specific deliverables like: 1. The solution describing what should be changed, how much time and cost each change will take ,and how much order placement time each change will ensure. The proposed solution must be consented by related departmental managers (Marketing, Quality Assurance, Customer Care, and Support Services). 2. The document describing names of customers with whom necessary interactions are advised for implementing the solution. 3. The Work Breakdown Structure that details the plan for completing the project and the list of risks involved in the project. SIGNED AND APPROVED: Manas Banerjee, President Discussion on INITIATION CASE STUDY ABC LTD. manufactures valves for filling 30 2 and controlling water level in industrial tanks. The company ABC LTD. manufactures valves for filling and controlling water level in industrial tanks. The company envisioned a new valve, THE TURBO VALVE, to garner bigger market share. The objective was to design, and produce the new valve with higher quality and lower cost than the competition. ABC decided to outsource the development and design. The RFP included: Discussion on INITIATION CASE STUDY ABC sent RFP to six companies and selected XYZ 30 3 ABC sent RFP to six companies and selected XYZ Designs based on lowest bid. XYZs proposal was written by its Sales & Marketing departments, revised by senior management but no input from industrial designers, engineers, or anyone else who would work on the project. XYZ had no prior experience in such valves but quoted to grab the opportunity and expand client base. Discussion on INITIATION CASE STUDY ABC assigned Mr. Bamish Kumar, a seasoned design engineer, to head the project with four engineers. 30 4 The team could not assemble until 5 months because of prior project commitments. Then, industry research was conducted. Bamish divided project into phases and work packages and prepared a Gantt chart. He found that the proposal had missed several critical steps and processes and funding was underestimated. He rewrote the proposal, cost, and schedule estimates. Discussion on INITIATION CASE STUDY 30 5 The design concept, work tasks, and schedules had to be changed throughout the project! The woes of the XYZ design team were augmented by constant pressure from ABC on functional superiority and low cost. Discussion on INITIATION CASE STUDY It was realized during the project that designing such a valve needed more resources than budgeted! All the changes led to overshooting budget 5 times and 30 6 changes led to overshooting budget 5 times and requesting ABC for additional funds! Another blunder: XYZ sent a Prototype to ABC. ABC considered Prototype to be virtually finished product with replicable components.XYZ visualized it to be a simple working model to display design and functionality. Proposal didnt mention clearly what prototype would be, and ABC expected much more. Discussion on INITIATION CASE STUDY To resolve the issue in of favor ABC, extra money and time was spent by EICHER! FINISHED PROTOTYPE 30 7 and time was spent by EICHER! FINISHED PROTOTYPE SAW EVEN MORE TIME AND COST OVERRUNS. SHORT-CUT APPROACH: To makeup for delay, XYZ chose to cram project stages and executed them without sequence. XYZ began making production-ready models but the finished ones showed they could not be produced. Discussion on INITIATION CASE STUDY ULTIMATELY, XYZ did make a real innovative valve! 30 8 ULTIMATELY, XYZ did make a real innovative valve! But? But, the design necessitated good deal of fresh tooling to really produce it at ABC FACTORY! It meant ABC would have to incur about 40% more to manufacture than had been expressed. Discussion on INITIATION CASE STUDY ABC cancelled the contract. Work was 90% completed. ABC is now trying to finish balance 10% but that will be great challenge because: 30 9 but that will be great challenge because: 1. Thus far, ABC has already spent twice as much time and money on development as expected, and still does not have a product to produce 2. Even though the development completes, the high tooling cost will not the product to be priced low enough to be competitive. Lessons learned from the case study: Project objectives should be clear and agreeable early in advance. Project objectives in RFP should not be too rigid to 31 0 Project objectives in RFP should not be too rigid to accommodate changing priorities. Sufficient time should be spent by the performing organization to define objectives. Objectives should be adequately quantified. Objectives should be documented enough. Efforts of client and project team should be coordinated properly to ensure common understanding. Discussion on INITIATION Lessons learned from the case study: Ensure that Project has a complete and sound basis before major commitment to the project or phase. 31 1 before major commitment to the project or phase. An adequately made project charter (contract) to act as a base document against which the project can assess progress, change management issues, and ongoing viability questions. Discussion on INITIATION Lessons learned from the case study: As a minimum, it must answer following questions 31 2 As a minimum, it must answer following questions about the product of the project: 1. What the project is aiming to accomplish? 2. Why is it important to achieve? 3. Who will be involved in managing the process, their responsibilities? 4. How and when the project will be undertaken? Project Communications Management Initiating Process Group 31 3 Initiating Process Group Initiating a Project Processes: identify stakeholders Project Communications Management the process of identify stakeholders 31 4 the process of 1) Identifying all people or organizations impacted by the project. 2) Documenting their interests, involvement,a and impact on project success! Project Communications Management It is critical for project success to identify please remember 31 5 It is critical for project success to identify the stakeholders early in the project! AND Analyze their levels of interest, expectations, importance and influence!! Project Communications Management For approaching each stakeholder and please develop a strategy 31 6 For approaching each stakeholder and determining the level and timing of stakeholders involvement to maximize positive influences and minimize potential negative impacts! Please keep reviewing this strategy during project execution! Project Communications Management Due to large number of stakeholders and please classify the stakeholders 31 7 Due to large number of stakeholders and limited time with the project manager,it helps to classify according to: 1) Interest 2) Influence 3) Involvement Project Communications Management Identify stakeholders data flow diagram Develop project charter Project charter Project Communications Management Identify stakeholders Collect Requirements Stakeholder Stakeholder Register 31 8 Project charter Procurement documents Plan procurements Enterprise/ organization Enterprise environmental factors OPAs stakeholders Plan Communications Requirements Plan Quality Identify risks Stakeholder Management Strategy Register Manage Stakeholder expectations Identify Stakeholders process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Stakeholder Register Project Communications Management 31 9 Project Charter. Procurement Documents Enterprise Environmental Factors Organizational Process Assets INPUTS Stakeholder Analysis Expert Judgment Stakeholder Register Stakeholder Management Strategy Identify Stakeholders: Discussion on inputs Project Communications Management Project Charter 32 0 provide information about internal and external parties involved in and affected by the project. Example Sponsor (s), customers, team members, groups and departments,and other organizations involved in the project, and affected by the project. Project Communications Management Procurement Documents Identify Stakeholders: Discussion on inputs 32 1 If the project is the result of the procurement activity, or based on established contract, the parties involved in that contract are key project stakeholders. Note: Suppliers are also project stakeholders! Remember this! Project Communications Management Enterprise Environmental Factors Identify Stakeholders: Discussion on inputs 32 2 - Organizational or company culture. - Government or industry standards. OPAs do help, you cant deny. See - Stakeholder Register Templates. - Lessons Learned from previous projects. - Stakeholders registers from previous projects. Do you maintain such OPAs ? Project Communications Management There are two ways to identify stakeholders Identify Stakeholders: Discussion on techniques 32 3 1. Stakeholder analysis 2. Expert judgment Project Communications Management Stakeholder analysis Identify Stakeholders: Discussion on techniques 32 4 the process of systematically gathering and analyzing quantitative and qualitative information TO DETERMINE WHOSE INTERESTS should be taken into account throughout the project! Project Communications Management Stakeholder analysis Identify Stakeholders: Discussion on techniques 32 5 identifies 1) Interests, 2) Expectations, and 3) Influence of the stakeholders Relates them to the purpose of the project! Project Communications Management Stakeholder analysis Identify Stakeholders: Discussion on techniques 32 6 identifies stakeholder relationships that can be leveraged to build COALITIONS AND POLITICAL PARTNERSHIPS to enhance the projects chance of success! Project Communications Management Stakeholder analysis THE STEPS Identify Stakeholders: Discussion on techniques 32 7 THE STEPS Step 1: Identify all Potential Stakeholders. Step 2: Identify Potential impact or support each stakeholder could generate. Step 3: Assess how key stakeholders are likely to react. Project Communications Management ARE YOU TRAINED INTO Stakeholder Analysis? Identify Stakeholders: Discussion on techniques 32 8 ARE YOU TRAINED INTO Stakeholder Analysis? IF NOT, THEN THIS PROCESS WILL NOT YIELD YOU MUCH? MANY ARE NOT TRAINED ENOUGH ON THIS ASPECT!! Project Communications Management HOW DO YOU HANDLE STEP 1? Well, please: Identify Stakeholders: Discussion on techniques 32 9 Well, please: 1. Identify all project stakeholders 2. Their roles, departments, interests, expectations, and last but not the least- their influence levels! Note: key stakeholders are easy to identify. Anyone in a decision-making or management role. Sponsor, project Manager, primary customer. But you must find more, not stop at only them! Please remember! Project Communications Management HOW DO YOU HANDLE STEP 1? Other stakeholders, you can identify: Identify Stakeholders: Discussion on techniques 33 0 Other stakeholders, you can identify: - BY interviewing identified stakeholders - EXAPANDING the list until all potential stakeholders are identified!!! Project Communications Management HOW DO YOU HANDLE STEP 2? Well, please: 33 1 Well, please: 1. Identify the potential impact or SUPPORT each stakeholder can generate. 2. Classify them them to decide an APPROACH STARTEGY! Project Communications Management In large stakeholder communities, it is very important to PRIORITIZE THE KEY STAKEHOLDERS! 33 2 PRIORITIZE THE KEY STAKEHOLDERS! WHY? To communicate and manage their expectations!! Project Communications Management Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 2? Classify them 33 3 Classify them 1) Power grid/interest grid Grouping the stakeholders based on their level of authority (POWER) and their level or concern (INTERST) regarding project outcomes! Project Communications Management Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 2? Classify them 33 4 Classify them 2) Power influence grid Grouping the stakeholders based on their level of authority (POWER) and their active involvement (INFLURNCE) in the project! Project Communications Management Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 2? Classify the 33 5 Classify the 3) Influence/impact grid Grouping the stakeholders based on their active involvement (INFLURNCE and their ability to effect changes to the projects planning or execution (IMPACT). Project Communications Management Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 2? Classify them 33 6 Classify them 4. Salience Model Describing classes of the stakeholders based on their power (ABILITY TO IMPOSE THEIR WILL), urgency (NEED FOR IMMEDIATE ACTION), and legitimacy (THEIR INVOLVEMENT IS APPROPRIATE). EXAMPLE: POWER/INTEREST GRID High A-H = Stakeholders Keep Manage B 33 7 Power Low Low Interest High Keep Satisfied Manage Closely Keep Informed Monitor (minimum effort) A C D E H F Project Communications Management Identify Stakeholders: Discussion on techniques HOW DO YOU HANDLE STEP 3? Assess how key stakeholders are likely to react 33 8 Assess how key stakeholders are likely to react or respond in various situations. Then, plan how to influence them 1) to enhance their support, and 2) minimize potential negative impacts! Make Stakeholder Register and place all the info! Project Communications Management Identify Stakeholders: Discussion on techniques EXPERT JUDGMENT 33 9 Used to ensure Comprehensive Identification and Listing of Stakeholders! Expert judgment can be taken through individual consultations or panel format (focus group, survey). Identify Stakeholders: OUTPUTS Project Communications Management 1) Stakeholder Register 34 0 1) Stakeholder Register 2) Stakeholder Management Strategy Identify Stakeholders: OUTPUTS Project Communications Management Stakeholder Register 1. Identification 2. Assessment 3. Stakeholder 34 1 Information Information Classification Name, position, location, role in project, contact info. Major requirements, main expectations, potential influence, phase of most interest. Internal/external, Supporter/neutral/ resistor, etc. Project Communications Management Defines approach to increase the support and Stakeholder Management Strategy 34 2 Defines approach to increase the support and minimize negative impacts of stakeholders Elements included: 1) Key stakeholders who can significantly impact, 2) Level of participation in the project desired, 3) Stakeholder groups and their management. Stakeholder Analysis Matrix Common way to represent Stakeholder Management Strategy. Stakeholder Interests in Assessment Potential 34 3 Stakeholder Interests in the project Assessment of impact Potential strategies 1) For gaining support 2) For reducing obstacles PROJECT MANAGEMENT Progresses 34 4 PLANNING PROCESS GROUP PLANNING PROCESS GROUP Consists of PROCESSES performed to: 1) establish TOTAL SCOPE OF THE EFFORT, 34 5 1) establish TOTAL SCOPE OF THE EFFORT, 2) Define and refine the objectives, 3) develop the course of action required to attain those objectives! 4) Project Management Plan and Project documents are developed to carry out the project. PLANNING PROCESS GROUP Question: Is planning on time affair? Answer: No, planning and documentation are iterative and ongoing processes! 34 6 are iterative and ongoing processes! WHY? Because, 1) as more information or characteristics are gathered and understood, additional planning may be required. PLANNING PROCESS GROUP Question: Is planning one time affair? Answer: No, planning and documentation are iterative and ongoing processes! 34 7 are iterative and ongoing processes! WHY? Because, 2) plus significant changes during the project may trigger a need to revisit one or more planning processes, and some of the initiating processes. PLANNING PROCESS GROUP Question: Is planning one time affair? Answer: No, planning and documentation are iterative and ongoing processes! 34 8 are iterative and ongoing processes! WHY? This progressive detailing of the project Management plan is called Rolling Wave Planning. This proves that planning and documentation are iterative and ongoing processes. PLANNING PROCESS GROUP Example For some projects, there might be little or no identifiable risk until after significant planning 34 9 identifiable risk until after significant planning has been done. This would mean that time and cost targets are overly aggressive, thus involving considerably more risk than earlier understood. So, additional time and cost need to be added in the schedule and budget. Planning Planning Process Group Planning a Project 35 0 Planning a Project Processes: Collect requirements Define scope Create WBS Define activities Sequence activities Estimate activity resources Estimate activity durations Develop schedule Estimate costs Determine budget Processes: Plan quality Develop HR plan Plan communications Plan risk management Identify risks Perform qualitative risk analysis Perform quantitative risk analysis Plan risk responses Plan procurements Processes: develop project management plan Planning Process group Project Management Plan and Project Documents explore all aspects of scope, time, cost, quality, human resource, communication, 35 1 cost, quality, human resource, communication, risk, and procurement. Updates arising from approved changes revise them. Consequently, these updates provide greater precision in schedule, costs, and resource requirements! Planning Process group Project Team should involve all appropriate stakeholders. 35 2 Updates arising from approved changes revise them. Consequently, these updates provide greater precision in schedule, costs, and resource requirements! Planning Process group Since planning process group borrows processes from all nine knowledge areas, we will showcase in brief THE CONCERNED KNOWLEDGE AREA, and then 35 3 THE CONCERNED KNOWLEDGE AREA, and then discuss about the ones contributing in the planning process group. For example, planning begins with Collect Requirements Process from Scope Management Knowledge Area. So, we will briefly describe concept of Scope Management and all its processes and then take up the ones coming in Planning Process Group. Project Scope Management The Concept 35 4 The processes required to ensure that the project includes ALL THE WORK REQUIRED (and only the work required) To complete the project successfully! Project Scope Management The Concept 35 5 It is primarily concerned with DEFINING AND CONTROLLING WHAT IS AND IS NOT INCLUDED IN THE PROJECT! Project Scope Management processes 1) Collect requirements 35 6 1) Collect requirements 2) Define scope 3) Create WBS 4) Verify Scope 5) Control scope Planning Process Group Monitoring and Controlling Process group Project Scope Management Please note A separate process has not been shown for making Scope Management Plan but this plan is 35 7 making Scope Management Plan but this plan is absolutely necessary! We need it to guide us on how project scope will be defined, documented, verified, managed, controlled. So, we will make it just as we enter planning in the area of scope management! Planning Process Group 35 8 Collect Requirements Knowledge Area: Scope Management Project Scope Management Process Collect requirements 35 9 Collect requirements the process by which we define and record stakeholders needs for meeting project objectives. Project Scope Management Projects success is directly influenced 36 0 Projects success is directly influenced by the care taken in capturing project and product requirements! Project Scope Management: Collect requirements Requirements mean 1) Quantified and documented needs and expectations of the sponsor, customer, and 36 1 expectations of the sponsor, customer, and other stakeholders. 2) These requirements need to be elicited, analyzed, and documented in enough details to be measured as project execution begins! 3) Requirements become foundation of WBS! Project Scope Management: Collect requirements Requirements means 4) Schedule, cost, quality planning are all built 36 2 4) Schedule, cost, quality planning are all built upon these requirements only! 5) Requirements may be known as: a) Project requirements (business requirements, project management requirements, delivery requirements, etc.). b) Product requirements (information on technical requirements, security requirements, performance requirements, etc.). Project Scope Management INPUTS TOOLS & OUTPUTS Collect requirements process 36 3 Project charter Stakeholder register INPUTS TOOLS & TECHNIQUES OUTPUTS Interviews Focused groups Facilitated workshops Group creativity techniques Group decision making techniques Questionnaires and surveys Observations Prototypes Requirements documentation Requirements management plan Requirements traceability matrix Project Scope Management: Collect Requirements Discussion on Inputs 1. Project charter provides high-level project 36 4 requirements and high-level product description for developing detailed level product requirements! 2. Stakeholder Register is used to identify stakeholders who will provide details level project and product requirements! Project Scope Management: Collect Requirements Discussion on Tools & Techniques 1. Interviewing experienced project 36 5 1. Interviewing experienced project participants, stakeholders and subject matter experts through prepared and spontaneous questions to gain understanding of features and functions of project deliverables! Conducted on one-on-one basis but may involve Multiple interviewers and interviewees. Project Scope Management: Collect Requirements Discussion on Tools & Techniques 2. Focus groups 36 6 2. Focus groups a) trainer-moderated,brings together pre-qualified stakeholders, subject matter experts. b) Interactive session, more conversational than interviews. c) PURPOSE: to learn about their expectations and attitudes about a proposed product or service or result! Project Scope Management: Collect Requirements Discussion on Tools & Techniques 3. Facilitated workshops 36 7 3. Facilitated workshops a) Focused sessions to bring together key Cross- Functional Stakeholders to define product requirements! b) Primary technique to quickly define Cross-Functional Requirements and reconcile stakeholders differences! c) Builds trust, fosters relationships and improves communications. d) Issues discovered and resolved more quickly than in individual sessions. Project Scope Management: Collect Requirements JAD (Joint Application Development/Design) Sessions: Users and software developers brought together for improving software development process. Facilitated workshops: Examples 36 8 improving software development process. QFD (Quality Function Deployment): in manufacturing industry. Helps determine critical characteristics for new product development. Procedure: customer needs (VOC) collected, objectively sorted and prioritized and goals are set for achieving them! Project Scope Management: Collect Requirements Discussion on Tools & Techniques 4. Group Creativity Techniques a) Brainstorming: generate & collect multiple ideas. 36 9 a) Brainstorming: generate & collect multiple ideas. b) Nominal group technique: voting added to rank most useful ideas. Enhances brainstorming. c) Delphi: common opinion of experts anonymously. d) Idea/mind mapping: ideas from individual brainstorming build a map showing commonalities and differences. Helps understand better and generate new ideas. e) Affinity diagram: large number of ideas sorted in groups for review and analysis. Project Scope Management: Collect Requirements Discussion on Tools & Techniques 4. Group Decision Making Techniques a) Unanimity: everyone agrees for single course of action. 37 0 a) Unanimity: everyone agrees for single course of action. b) Majority: more than 50% support the idea. useful ideas. Enhances brainstorming. c) Plurality: even if majority not achieved, largest block in the group decides. d) Dictatorship: one individual forces decision on the group. Project Scope Management: Collect Requirements Discussion on Tools & Techniques 5. Questionnaires & surveys: appropriate when broad audience and statistical analysis needed. 37 1 audience and statistical analysis needed. 6. Observations: seeing people in their environment. Particularly useful for detailed processes (when people who use the product have difficulty or are unwilling to articulate their requirements!! Also called Job Shadowing- external observer watches user performing the job. To uncover hidden requirements, a participant observer Project Scope Management: Collect Requirements Discussion on Tools & Techniques 6. Observations: 37 2 Also called Job Shadowing- external observer watches user performing the job. To uncover hidden requirements, a participant observer (who actually performs the process) can also experience how it done! Project Scope Management: Collect Requirements Discussion on Tools & Techniques 7. Prototypes: - Method of obtaining early feedback on requirements by 37 3 - Method of obtaining early feedback on requirements by providing a working model of the expected product. - Allows stakeholders to experiment with a model of their Final product. Removes abstractions as it is tangible. Sufficient Requirements gathered through many feedback cycles. Example: iterative cycles of mockup creation, user Experimentation, feedback generation and prototype revision. Project Scope Management: Collect Requirements Discussion on Outputs 1. Requirements documentation: - describes how individual requirements meet the 37 4 - describes how individual requirements meet the business need for the project. - Before baselining, the requirements must be fully detailed, complete, clear, measurable, traceable and agreeable to all stakeholders!!! - Formats may be simple or elaborate with attachments! sample Project Scope Management: Collect Requirements Requirements documentation: sample entries 1) Business need or opportunity to be seized, limitations 2) Business and project objectives for traceability Sample template 37 5 3) Functional requirements (detailing business processes, Information, and interaction with the product). 4) Non-functional requirements (level of service, performance, compliance, security, safety, etc.). 5) Quality requirements 6) Acceptance criteria 7) Business rules (guiding principles of the organization). Project Scope Management: Collect Requirements Requirements documentation: sample entries 8) Impacts to other organizational areas Sample template 37 6 9) Impacts to other entities inside or outside performing organization 10) Support or training requirements 11) Requirements assumptions and constraints Project Scope Management: Collect Requirements Discussion on Outputs 2. Requirements management plan: a) describes how requirements will be analyzed, 37 7 a) describes how requirements will be analyzed, documented and managed throughout the project! b) Project manager must decide approach how how phase to phase requirements relationship will be maintained! c) Entries in requirements management plan largely depend on such relationship! Project Scope Management: Collect Requirements Requirements management plan: sample entries a) How requirements activities will be planned, monitored, Sample template 37 8 a) How requirements activities will be planned, monitored, and reported! b) How configuration management activities will be initiated, how impacts will be evaluated, how changes will be traced, tracked and informed! c) Authorization levels to approve changes! Project Scope Management: Collect Requirements Requirements management plan: sample entries d) Requirements prioritization process Sample template 37 9 d) Requirements prioritization process e) Product metrics to be used and its rationale f) Traceability structure (which requirements attributes will be captured on traceability matrix and to which project documents requirements will be traced). Project Scope Management: Collect Requirements Discussion on Outputs 3. Requirements traceability matrix: a) A table that links requirements to their origin and traces 38 0 a) A table that links requirements to their origin and traces them throughout the project. b) Ensures each requirement adds to business value (by linking it to the business and project objectives). c) Ensures requirements approved in the requirement doc are delivered at the completion of project. Project Scope Management: Collect Requirements Discussion on Outputs RTM traces requirements to a) Business need, opportunities objectives, and goals! 38 1 goals! b) Project objectives c) Project scope/WBS deliverables d) Product design e) Product development f) Test strategies and test scenarios g) High level requirements to detailed level ones Project Scope Management: Collect Requirements Discussion on Outputs RTM contains requirements attributes: a) Unique identifier! b) Textual description 38 2 b) Textual description c) Rationale d) Owner e) Source f) Version g) Current status (added, deleted, approved, etc) h) Date of completion i) Additional (stability, complexity, acceptance criteria). Define Scope Planning Process Group 38 3 Define Scope Project Scope Management Define Scope Process to prepare a detailed description of project and product! 38 4 project and product! Note: preparation of a detailed Project Scope Statement is critical to project success The project scope statement builds upon the major deliverables, assumptions, and constraints that are are documented during Project Initiation! Define Scope Please note During planning, the project scope statement is 38 5 During planning, the project scope statement is defined with greater specificity as we come to know more information about the project. Example: existing risks, assumptions, and constraints are analyzed for completeness. additional risks, assumptions, and constraints are added as necessary! Define Scope Importance of Scope statement! 1) describes in details project deliverables and 38 6 1) describes in details project deliverables and the work needed to produce these deliverables! 2) develops common understanding among stakeholders! 3) helps team conduct more detailed planning 4) guides teams work during execution! Inputs-Tools-Outputs Inputs outputs Define Scope 38 7 Inputs outputs Tools and Techniques 1. Product Analysis 2. Alternative Identification 3. Expert Judgment 4. Facilitated workshops 1. Project scope statement 2. Project document UPDATES 1. Project charter 2. Requirements documentation 3. Organizational process assets 1) Project charter High-level project description and Define Scope process: Inputs 38 8 High-level project description and product characteristics and project approval requirements mentioned in the charter, are used to develop scope statement. 2) Requirements documentation Helps development of scope statement. 3) Organizational process assets Define Scope process: Inputs 38 9 3) Organizational process assets - Provides policies, templates procedures - Historical information - Lessons learned 1) Product analysis Helps translate high-level product Define Scope: Tools & Techniques 39 0 Helps translate high-level product descriptions into tangible deliverables. Includes techniques like product breakdown, systems analysis, systems engineering, value analysis, and function analysis. 2) Alternative identification techniques to find out alternative, better Define Scope: Tools & Techniques 39 1 techniques to find out alternative, better approaches for executing and performing the work of the project! General management techniques: Brainstorming Lateral thinking Pair-wise comparison, etc. 3) Expert judgment Used in developing scope statement Define Scope: Tools & Techniques 39 2 Used in developing scope statement 4) Facilitated workshops Used in developing scope statement Project scope statement 1) Describes, in detail, the projects Define Scope: Outputs 1. Project scope statement 2. Project document UPDATES 39 3 1) Describes, in detail, the projects deliverables, 2) Develops common understanding of the project scope among stakeholders, 3) Contains explicit SCOPE EXCLUSIONS that can help in managing stakeholder expectations, Project scope statement 4) Enables team to perform more detailed Define Scope: Outputs 39 4 4) Enables team to perform more detailed planning, 5) Guides the project team during execution, and 6) Acts as baseline for EVALUATING changes or additional work contained or outside the project boundaries! Project scope statement contains: 6 items product scope description Define Scope: Outputs template 39 5 product scope description progressively elaborates characteristics of the product/service/result described in the charter and requirements documentation. product acceptance criteria defines the process and criteria for accepting completed product. Define Scope: Outputs template Project scope statement contains: 6 items product deliverables 39 6 product deliverables product deliverables include product of the project and ancillary results, such as project management reports and documentation. project exclusions explicitly stating what is out of scope for the project for properly managing stakeholder expectations. Define Scope: Outputs template Project scope statement contains: 6 items project constraints 39 7 project constraints specified, such as a predetermined budget, imposed dates, schedule milestones, contractual provisions (if project being done under contract). Note: Constraints may also be listed in a separate log. project assumptions assumptions for project scope and potential impact. May also be noted in a separate log. Project document updates Following documents may be updated: 1. Project scope statement 2. Project document UPDATES Define Scope: Outputs 39 8 stakeholder register requirements documentation requirements traceability matrix Planning Process Group CREATE WBS 39 9 CREATE WBS Knowledge Area: Project Scope Management Planning Process Group CREATE WBS Process of subdividing project deliverables and 40 0 Process of subdividing project deliverables and project work into more manageable components. What is WBS? A deliverable-oriented hierarchical decomposition of work to be executed by the project team to: - create required deliverables - accomplish project objectives Planning Process Group WBS WBS organizes and defines the total scope and 40 1 WBS organizes and defines the total scope and represents specified in the current approved Scope Statement! What is a work package? Lowest level of WBS. A work package can be scheduled, cost estimated, monitored, and controlled. Project Scope Management Create WBS Creating WBS WBS 40 2 WBS A deliverable-oriented hierarchical decomposition of project work: to achieve 1. PROJECT OBJECTIVES 2. PRODUCE NEEDED DELIVERABLES to organize and define TOTAL PROJECT SCOPE Work outside WBS is outside the scope of the project Project Scope Management Create WBS Creating WBS WBS Each descending level provides 40 3 Each descending level provides increasingly detailed definition of project work Planned work at lowest level WBS Components (work package) is: - Scheduled - Cost estimated - Monitored - Controlled Helps stakeholders view Project Deliverables Project Scope Management Create WBS 40 4 PROCESS OF SUBDIVIDING MAJOR PROJECT DELIVERABLES (AS IDENTIFIED IN SCOPE STATEMENT) into SMALLER, MORE MANAGEABLE COMPONENTS UPTO WORK PACKAGE LEVEL Project Scope Management Create WBS 40 5 PURPOSE 1. IMPROVES accuracy of time, cost, and resource estimation 2. DEFINES a baseline for measuring and controlling performance! 3. FACILITATES unambiguous responsibility assignments! Project Scope Management Create WBS 40 6 DELIVERABLES FINAL DELIVERABLE (external deliverable) To be delivered to the customer Subject to customer/ sponsor approval BASED ON PREDEFINED ACCEPTANCE CRITERIA Project Scope Management Create WBS 40 7 DELIVERABLES ORGANIZATIONAL DELIVERABLE EXPECTED BY SPONSOR/ PERFORMING ORGANIZATION By product of performing project (example: trained engineers, etc.) Project Scope Management Create WBS 40 8 DELIVERABLES PROJECT MANAGEMENT DELIVERABLE FOR SUCCESSFUL MANAGEMENT OF THE PROJECT (PROJECT CHARTER, SCOPE STATEMENT, WBS, SCHEDULE, BUDGET, STATUS REPORTS, ETC.) Project Scope Management Create WBS 40 9 DELIVERABLES INTERIM DELIVERABLE CREATED AS PART OF PRODUCT DEVELOPMENT LIFE CYCLE/ PROJECT MANAGEMENT LIFE CYCLE ( TO ENABLE DEVELOPMENT OF FINAL DELIVERABLES) Project Scope Management Create WBS Sample deliverable chain 41 0 Project Start Project management deliverable Interim deliverable Interim deliverable Interim deliverable Interim deliverable Organizational deliverable FINAL deliverable FINAL deliverable CUSTOMER Project Scope Management Create WBS DELIVERABLES ARE COMPLETE ONLY WHEN ACCEPTED HANDS HANDS ACCEPTED 41 1 Interim deliverable Interim deliverable FINAL deliverable HANDS OFF HANDS OFF INSPECTED INSPECTED ACCEPTED IF NOT OK? IF NOT OK? REWORK REWORK Project Scope Management Create WBS Increases Causes 41 2 Increases final project cost due to inevitable changes that spoil project rhythm Increases Project Time IMPACT OF POOR WBS Causes Rework Lowers productivity Lowers Morale of workforce Project Scope Management Create WBS process overview 41 3 Organizational process assets Scope Statement Requirements documentation INPUTS TOOLS & TECHNIQUES Decomposition OUTPUTS Work Breakdown Structure WBS dictionary Scope baseline Project document updates ILLUSTRATIVE WBS Template (for Defense Material Items) Aircraft System Project Test & Training Data Air Support Facilities Project Scope Management 41 4 Project Management Test & Evaluation Training Data Air Vehicle Support Equipment Facilities Systems Engineering Management Supporting PM Activities Technical Orders Equipment Training Facilities Training Services Training Engineering Data Management Data Intermediate Level SE Organizational Level SE Depot Level SE Base Buildings Maintenance Facility Mock-ups Operational Test Developmental Test Test Airframe Engine Communication system Navigation system Fire control system Decomposition process of breaking down major project deliverables or sub-deliverables into smaller, manageable components Project Scope Management Create WBS 41 5 into smaller, manageable components until the they are defined to the work package level. WORK PACKAGE LEVEL is the point at which cost, duration, and resources can be reliably estimated, and supports later development project of management activities. Project Scope Management Performing decomposition KEY POINTS Create WBS 41 6 1. Different deliverables may require different levels of decomposition to arrive at a work package stage: a) SOME deliverables require decomposition to the next level only. b) OTHERS require decomposition to more levels. Project Scope Management Performing decomposition KEY POINTS Create WBS 41 7 2. Decomposition of work to lower levels of details ENHANCES the ability: - to plan - to manage - to control THE WORK Project Scope Management Performing decomposition KEY POINTS Create WBS 41 8 TOOLS & TECHNIQUES Decomposition Beware of excessive decomposition Nonproductive management effort Inefficient Use of Resources Decreased Work Efficiency Balance between too little and too much Project Scope Management Performing decomposition KEY POINTS Create WBS 41 9 3. The level of detail for work packages varies with: project size project complexity 4. Decomposition is difficult for a deliverable or subproject that will be produced FAR INTO THE FUTURE! TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition KEY POINTS Create WBS 42 0 5. Before developing details of the WBS, the project management team must wait until the deliverable or subproject is CLARIFIED! THIS IS CALLED ROLLING WAVE PLANNING TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition KEY POINTS Create WBS 42 1 6. While performing decomposition, think through entire project. Think deliverables. Think with the end in mind. Think through the production of deliverables. Have A VISION OF FINAL PRODUCT formulated in your mind. TOOLS & TECHNIQUES Decomposition Project Scope Management PERFORMING DECOMPOSITION Create WBS 42 2 TOOLS & TECHNIQUES Decomposition Mastering it is critical to Proper Scope Definition" Project Scope Management Performing decomposition THE STEPS Create WBS 42 3 THE STEPS STEP ONE Identify major deliverables (including project management deliverables) and associated work by analyzing detailed project statement. TOOLS & TECHNIQUES Decomposition Expert Judgment Helps identify ALL THE WORK (including Project Management Deliverables, Contracted Deliverables) Project Scope Management Performing decomposition THE STEPS STEP TWO Structure and organize WBS. Create WBS 42 4 Structure and organize WBS. Major deliverables must correspond the way project will be organized in reality. It may take various forms: - Using major deliverables and subprojects as level 1 - Using subprojects (external to project team) - Using phases of the project life cycle as level 1 - Using different approaches within each branch of WBS TOOLS & TECHNIQUES Decomposition PERFORMING DECOMPOSITION: slide A Using major deliverables and subprojects as level 1 Using subprojects (external to project team) Project Phase 1 Phase 2 Deliverable 3 Subproject n Subproject 4 42 5 Deliverable 2.2 Deliverable 2.1 Deliverable 2.3 Deliverable 2.2.2 Deliverable 2.2.1 Work Package 2.2.1.1 Work Package 2.2.1.2 Work Package 2.2.1.3 Subproject 2.2.2.1 Subproject 2.2.2.2 Work Package 2.2.2.2.1 Work Package 2.2.2.2.2 Work Package 3.1 Work Package 3.2 Work Package 3.3 Work Package 3.4 Deliverable 4.1 Deliverable 4.m Deliverable 4.1.1 Deliverable 4.1.2 Deliverable 4.1.x Work Package 4.1.2.1 Work Package 4.1.2.2 Work Package 4.1.2.3 PERFORMING DECOMPOSITION: slide B Using phases of the project life cycle as level 1 Software Product Release 5.0 Product Requirements Detail Design Construct INTEGRATION & TEST Project Management 42 6 Requirements Design Construct TEST Management PLANNING MEETINGS ADMINISTRATION SOFTWARE USER Documentation Training Program Materials SOFTWARE SOFTWARE USER Documentation Training Program Materials Training Program Materials USER Documentation SOFTWARE USER Documentation Training Program Materials Aircraft System Project Test & Training Data Air Support Facilities PERFORMING DECOMPOSITION: slide C Using different approaches within each branch of WBS 42 7 Project Management Test & Evaluation Training Data Air Vehicle Support Equipment Facilities Systems Engineering Management Supporting PM Activities Technical Orders Equipment Training Facilities Training Services Training Engineering Data Management Data Intermediate Level SE Organizational Level SE Depot Level SE Base Buildings Maintenance Facility Mock-ups Operational Test Developmental Test Test Airframe Engine Communication system Navigation system Fire control system Project Scope Management Performing decomposition THE STEPS STEP THREE Create WBS 42 8 STEP THREE Decompose each upper WBS level deliverable into its fundamental components. These components are defined in terms of how the work of the project will actually be accomplished, performed, and managed. The components of WBS represent verifiable, products, results, or services. TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition THE STEPS STEP THREE (CONTINUED) Create WBS 42 9 STEP THREE (CONTINUED) Now, the project team should judge if it is possible to adequately estimate time and cost if at this level of decomposition (different deliverables may require different levels of decomposition). If yes, then decomposition is complete, but before treating it final, you must put it to pass test for correctness of decomposition as detailed in step FIVE. TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition THE STEPS STEP FOUR Develop and assign identification codes to Create WBS 43 0 Develop and assign identification codes to each component of WBS (a unique identifier): 1) generally a number associated with the organizations financial system. 2) help hierarchical summation of costs and resources, and also help tracking them. 3) known as code of accounts or chart of accounts. TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition THE STEPS Create WBS 43 1 STEP FIVE CORRECTNESS OF DECOMPOSITION This is a very important step! TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition THE STEPS STEP FIVE 43 2 please check: 1. Whether each component (work package) can be accurately budgeted, scheduled, and assigned to the concerned person, team, or department responsible for its successful completion? If no, then you need to make necessary revisions to ensure proper management control. TOOLS & TECHNIQUES Decomposition Project Scope Management Performing decomposition THE STEPS STEP FIVE 43 3 STEP FIVE TESTING CORRECTNESS OF DECOMPOSITION 2. Whether decomposition of each deliverable is sufficient for its successful completion? If no, then you should add, delete, or refine the components. TOOLS & TECHNIQUES Decomposition Project Scope Management WBS Congratulations! You have done great job! OUTPUTS 43 4 You have done great job! You have mastered the art of making WBS. WORK BREAKDOWN STRCUTURE a deliverable-oriented grouping of project components that organizes and defines the total scope of the project. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management WBS IS THE FOUNDATION upon OUTPUTS 43 5 which project is built. ALL planning and controlling depends on WBS Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS OUTPUTS 43 6 GRAPHICAL PICTURE of the hierarchy of the project. VISUALIZES the entire project. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS - Each descending level progressively elaborates the OUTPUTS 43 7 progressively elaborates the deliverables into their detailed components. - Serves as scope baseline. Identifies all work to be performed. Work not in WBS is outside the project scope. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS ( CONTINUED) - Creates a common understanding OUTPUTS 43 8 - Creates a common understanding of project scope among the stakeholders. - Unstructured list of activities does not form WBS. - Can be used as template for other projects. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) BREAKS DOWN the project work into work packages that OUTPUTS 43 9 into work packages that 1) Can be realistically estimated 2) Can be completed quickly 3) Have no logic for further division 4) Can be completed without interruption 5) Have meaningful conclusion and deliverable. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) OUTPUTS 44 0 - CREATED with help of the team - HELPS prevent changes and work slipping through the cracks Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) - Gets team buy-in and builds the OUTPUTS 44 1 - Gets team buy-in and builds the team - Determines proof of need for staff, cost and time - Facilitates communication and cooperation between and among the stakeholders Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) - Each element at each level of the WBS is assigned a unique identifier. OUTPUTS 44 2 assigned a unique identifier. - This unique identifier is generally a number associated with the organizations financial system. - These identifiers help hierarchical summation of costs and resources, and also help tracking them. - These identifiers are known as code of accounts or chart of accounts. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS Some project managers choose to note milestones on their WBS. OUTPUTS 44 3 to note milestones on their WBS. A milestone is a major accomplishment in a project. EXAMPLE: Completion of a deliverable Milestones serve as check points to determine progress. IN MOST CASES, higher levels of WBS can be flagged as milestones. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) The items at the lowest level of OUTPUTS 44 4 The items at the lowest level of WBS are called Work Packages. Work packages can be easily assigned to individuals, with clear accountability and reasonability for completing the assignment. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management CHARACTERISTICS OF WBS (continued) Work packages may be 44 5 Work packages may be subdivided in a subproject work breakdown structure when some scope of work is assigned to another organization Project Scope Management COST ACTIVITY Create WBS 44 6 WBS COST ESTIMATING COST BUDGETING ACTIVITY DEFINITION RESOURCE PLANNING Risk management planning Project Scope Management WBS dictionary OUTPUTS 44 7 WBS DICTIONARY (COMPANION DOCUMENT TO WBS) DETAILED CONTENTS OF WBS components, including work packages and control accounts. For each component: 1. A code of account identifier 2. SOW 3. Responsible organization 4. List of schedule milestones 5. Contract information Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management WBS dictionary (continued) WBS DICTIONARY OUTPUTS 44 8 WBS DICTIONARY (COMPANION DOCUMENT TO WBS) For each component: 6. Quality requirements 7. Technical references ( facilitate work performance) 8. List of schedule milestones 9. Charge number for a control account Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management WBS dictionary (continued) WBS DICTIONARY Create WBS OUTPUTS 44 9 WBS DICTIONARY (COMPANION DOCUMENT TO WBS) For a work package: 10. List of schedule activities 11. Needed resources 12. Cost estimate Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management WBS dictionary (continued) OUTPUTS 45 0 WBS DICTIONARY (COMPANION DOCUMENT TO WBS) EACH WBS COMPONENT CROSS-REFERENCED TO OTHER WBS COMPONENTS Work Breakdown Structure WBS dictionary Scope baseline Project document updates Project Scope Management SAMPLE WBS SAMPLE WBS GLASS PLANT PROJECT 45 1 EARLIER PHASES DESIGN PHASE CONSTRUCTION PHASE LATER PHASES PROJECT MANAGEMENT CIVIL DRAWINGS Architectural Drawings Structural Drawings Mechanical l Drawings Electrical Drawings Instrumentation Drawings CIVIL CONSTRUCTION STRCUTURAL CONSTRUCTION MECHANICAL WORK ELECTRICAL WORK INSTRUMENTATION WORK PROCESS COMPUTERS/EQPTS. PLANNING MEETING ADMINISTRATION Project Scope Management SAMPLE WBS SAMPLE WBS Toy project 45 2 REQUIREMENTS DEFINITION DESIGN SPECIFICATIONS PROGRAM MODULES PROJECT MANAGEMENT GAME REQUIREMENTS SOFTWARE REQUIREMENTS DEFINE CHARACTERS DETERMINE LANGUAGE DEFINE SYSTEMS SOFTWARE DESIGN HARDWARE DESIGN DESIGN SCREENS DESIGN USE CASES DESIGN SPEAKERS DESIGN CASE DEFINE INSTRUMENTS CODE REQUIREMENTS TESTING REQUIREMENTS DESIGN MODULE 1 PROGRAM MODULE 1 DESIGN UNIT TEST DESIGN SYSTEM TEST Project Scope Management SAMPLE WBS SAMPLE WBS OS ROLLOUT 45 3 TRAINING TESTING ROLL OUT PROJECT MANAGEMENT DEVELPOMENT COURSEWARE WBT HANDOUTS TUTORIALS PLANNING SCENARIO SIMULATIONS PILOTS LAB PLANNING MEETING ADMINISTRATION DOCUMENTATION IT DEPARTMENT SALES AAs EDUCATION HUMAN RESOURCE ACCOUNTING COURSEWARE ISSUES KNOWLEDGE MANAGEMENT VERSIONING OPERATIONS Project Scope Management SAMPLE WBS SAMPLE WBS ABC CARGO LOGON PROJECT BASIC DESIGN (H) HARDWARE FABRICATION SITE OPERATIONS Project Management PURCHASE SOFTWARE SPECS (L) 45 4 DESIGN (H) OPERATIONS Management DESIGN (J) DRAWINGS (K) PART B DRAWINGS (P) FINAL INSTALLATION (Y) TEST (Z) SOFTWARE PART A DESIGN (I) DRAWINGS (O) SPECS (L) ASSEMBLY (U) PART A TEST (W) ASSEMBLY (V) TEST (X) PART B PURCHASE (N) DELIVERY (S) PURCHASE (M) DELIVERY (R) PURCHASE (Q) DELIVERY (T) WORK PAKCAGES (H) through (Z) Project Scope Management Scope baseline Scope baseline consists of three Documents: OUTPUTS 45 5 Documents: 1) Scope statement 2) WBS 3) WBS dictionary Work Breakdown Structure WBS dictionary Scope baseline Project document updates This baseline will be used to measure our scope performance! Project Scope Management Project document updates If approved change requests result from this process, then the OUTPUTS 45 6 from this process, then the requirements document is updated to reflect these approved changes. Work Breakdown Structure WBS dictionary Scope baseline Project document updates Planning Process Group After planning in the area of scope, we talk about planning in the area of time. 45 7 about planning in the area of time. The result of planning in the area of time gives us schedule baseline. First we will have a brief on time management and then we will see all the processes helping us to make a realistic and dependable schedule! processes 1) Define activities Project Time Management 45 8 1) Define activities 2) Sequence activities 3) Estimate activity resources 4) Estimate activity durations 5) Develop schedule 6) Control schedule Planning Process Group Monitoring and Controlling Process group Purpose? Project Time Management 45 9 Purpose? Timely completion of the project. Please note Some practitioners distinguish the printed project Project Time Management 46 0 schedule from the schedule data and calculations to make schedule- by referring to the scheduling engine populated with project data as schedule model! But in general practice both are referred as Schedule! So, we will use the term schedule Please note On some projects, smaller in scope, all schedule Project Time Management 46 1 On some projects, smaller in scope, all schedule planning activities are so tightly linked that they are taken to be one single process- so that These can be done by a person in short time! Please note No process has been mentioned for making Project Time Management 46 2 No process has been mentioned for making schedule management plan but it is necessary. So, we will presume that as we enter time management, we make a schedule management plan that: a) Selects a scheduling methodology, a tool scheduling tool (generally PM Software). Please note A scheduling methodology defines the rules Project Time Management 46 3 A scheduling methodology defines the rules and approaches for the scheduling process. Examples: 1) critical path method 2) critical chain method. b) Sets a criteria for developing and controlling the schedule. It is a subsidiary plan of project management plan Please note Schedule Management Plan is a subsidiary plan Project Time Management 46 4 Schedule Management Plan is a subsidiary plan of project management plan, includes control thresholds. It may be formal or informal, highly detailed or broadly framed, based on the needs of the project. Please note The finalized and schedule is called schedule Project Time Management 46 5 The finalized and schedule is called schedule baseline that will be used to start and finish activities and also used to monitor schedule performance to ensure timely completion of the project! What produces schedule? Answer: Project Time Management 46 6 Answer: 1) Outputs of time management planning processes, 2) Scheduling methodology, 3) Scheduling tool Project Time Management Process of Define Activities 46 7 Process of Identifying the specific actions to be performed to produce project deliverables at the lowest level in WBS (work packages). Therefore we decompose work packages into activities needed to complete them! Project Time Management Activities 46 8 Provide a basis for estimating, scheduling, executing, and monitoring and controlling the project work. We should define and plan activities in order to achieve project objectives. Project Time Management IMPACT OF ACTIVITIES ON Activities 46 9 IMPACT OF ACTIVITIES ON PROJECT OBJECTIVES profound impact because: Activities consume resources, time, produce Deliverables, and determine quality Project Time Management Define Activities process overview 47 0 Scope baseline Enterprise environmental factors Organizational process assets INPUTS TOOLS & TECHNIQUES Decomposition Templates Rolling wave planning Expert judgment OUTPUTS Activity list Activity attributes Milestone list Project Time Management 1) Scope baseline (Scope Statement WBS and WBS dictionary) Define Activities-Inputs 47 1 Project scope statement Provides us information on - Project deliverables - Constraints (schedule milestones with imposed completion dates). - Assumptions (work hour per week, time of the year that the construction work will be done) Project Time Management WBS: MAIN INPUT The work packages from WBS are decomposed Define Activities-Inputs 47 2 The work packages from WBS are decomposed to arrive at the required activities to be performed on the project. WBS dictionary Provide work package descriptions that guide development of activities for each work package Project Time Management 2) Enterprise Environmental Factors That can be considered here include: - Project Management Information System (PMIS) Define Activities-Inputs 47 3 - Project Management Information System (PMIS) 3) Organizational Process Assets - formal/informal activity-related policies, procedures and guidelines - historical information on activity list used by similar previous projects. Project Time Management DECOMPOSITION The work packages are subdivided into smaller and more manageable TOOLS & Define Activities 47 4 into smaller and more manageable components (schedule activities). The process of decomposition is the same as we discussed during create WBS, except that the output in this case is activities instead of deliverables. TOOLS & TECHNIQUES Decomposition Templates Rolling wave planning Expert judgment Project Time Management The WBS, WBS dictionary, and activity list can be developed either sequentially or 47 5 concurrently. Involving team members can lead to better and more accurate results! Project Time Management TEMPLATES an activity list or a portion of an activity list Define Activities 47 6 an activity list or a portion of an activity list from a previous project. Related activity attributes info in the templates also helps. Templates can help identify typical schedule milestones! Project Time Management Rolling wave planning Schedule activities exist at various levels of detail in the project life TOOLS & Define Activities 47 7 levels of detail in the project life cycle. More detailed for work packages to be accomplished in the near term. They are less detailed for the ones to be performed far in the future. This leads to progressive detailing.During strategic planning, activities kept a at milestone level due to little information. TOOLS & TECHNIQUES Decomposition Templates Rolling wave planning Expert judgment Planning component Project Time Management Rolling wave planning TOOLS & Rolling wave planning is progressive elaboration Define Activities 47 8 TOOLS & TECHNIQUES Decomposition Templates Rolling wave planning Expert judgment Planning component progressive elaboration planning. Work to be done in near term is planned in details at lower level of WBS. And the one that is to be done far in future is planned at higher levels in WBS. Project Time Management Expert judgment Project team members/other Experts (experienced and skilled TOOLS & Define Activities 47 9 Experts (experienced and skilled in developing detailed scope statements, WBS and schedules) provide expertise in defining activities. TOOLS & TECHNIQUES Decomposition Templates Rolling wave planning Expert judgment Planning component Define Activities process: Outputs ACTIVITY LIST Consists of all the schedule activities to be 48 0 Consists of all the schedule activities to be performed to complete the project. Includes the activity identifier and a scope of work description for each activity in sufficient detail to help team members understand what work is required to be accomplished! Define Activities process: Outputs Activity attributes Extend the description of each activity by identifying multiple components associated with 48 1 identifying multiple components associated with each activity. Please note: components for each activity evolve over time. During initial stages of the project they include: activity ID, WBS ID, and activity name. Define Activities process: Outputs Activity attributes When completed they may include: 48 2 1) activity codes, activity descriptions, 2) predecessor, successor, logical relationships, 3) leads and lags, 4) resource requirements, 5) imposed dates, 6) Constraints, and assumptions. Define Activities process: Outputs Question: What is the use of activity attributes? Answer: 1) Used to identify the person responsible, 48 3 1) Used to identify the person responsible, geographical area, and activity type such as level of effort (LOE), discrete effort, and apportioned effort. 2) Used for schedule development. 3) Used for selecting, sorting, ordering in various ways within reports. Define Activities process: Outputs Activity attributes Identify attributes associated with each schedule activity: 1) Activity identifier template 48 4 1) Activity identifier 2) Activity codes 3) Activity description 4) Predecessor/successor activities 5) Logical relationships 6) Leads and lags 7) Resource requirements 8) Imposed dates, constraints, assumptions Project Time Management Activity attributes Activity attributes also include: 8) Person responsible for the work OUTPUTS Define Activities template 48 5 8) Person responsible for the work 9) Geographical area/place of work 10) Schedule activity type like level of effort (LOE), discrete effort, and apportioned effort. Activity list Activity attributes Milestone list Project Time Management Milestone list Identifies all milestones and indicates: - Mandatory milestones (in contract) OUTPUTS Define Activities 48 6 - Mandatory milestones (in contract) - Optional milestones (as per project requirements/historical information) Milestones list is a component of project management plan Activity list Activity attributes Milestone list Milestones are used in schedule model. Project Time Management Sequence Activities 48 7 IDENTIFYING AND DOCUMENTING INTERACTIVITY LOGICAL RELATIONSHIPS Among schedule activities FOR DEVELOPMENT OF A REALISTIC AND ATTAINABLE SCHEDULE LATER Project Time Management Sequence Activities 48 8 The schedule activities can be logically sequenced with proper precedence relationships and leads and lags for developing an achievable and realistic schedule later. Project Time Management Sequence Activities 48 9 Feeling uneasy about sequencing the whole host of project activities? Dont worry, you dont have to do it all manually! You can choose to: Use Project management software Do it by manual method Or use combination of both Project Time Management Sequence Activities process overview INPUTS TOOLS & OUTPUTS 49 0 Project scope statement Activity list Activity attributes Milestone list Organizational process assets INPUTS TOOLS & TECHNIQUES Precedence diagramming method (PDM) schedule network templates Dependency determination Applying leads and lags OUTPUTS Project Schedule Network Diagrams Project document updates Project Time Management Project scope statement provides product scope description that Sequence Activities process: INPUTS 49 1 provides product scope description that contains: Product characteristics that have direct impact on activity sequencing. Examples: 1) Physical layout of the facility to be built. 2) Subsystem interfaces on a software project. Project Time Management Project scope statement no doubt these effects are Sequence Activities process: 49 2 no doubt these effects are apparent in the activity list, but product scope description is reviewed for ensuring accuracy. process: INPUTS Project Time Management Activity list is obviously the main input. Activity attributes may describe a necessary Sequence Activities process: INPUTS 49 3 Activity attributes may describe a necessary sequence of activities or defined predecessor or successor relationships. Milestone list helps sequence with regard to meeting milestones. Organizational process assets provide scheduling methodology data from project files. Project Time Management Precedence diagramming method (PDM) 1) Used in Critical Path Methodology (CPM). 49 4 1) Used in Critical Path Methodology (CPM). 2) Shows activities in rectangle boxes linked by arrows showing dependencies. 3) These boxes are called nodes. 4) Therefore, this technique is also termed as activity-on-node (AON). 5) Most software programs use it these days. Project Time Management Precedence diagramming method (PDM) 49 5 START D E B G H C F A END ACTIVITY DEPENDENCY Start D Start A Start F D, A E D G F, E B F H G C H End C, B Project Time Management PDMis defined by four types of precedence relationships: FS network (AOA) Precludes those activities which 49 6 of precedence relationships: Finish to start (FS) Finish to finish (FF) Start to start (SS) Start to finish (SF) Precludes those activities which can be started when their predecessors are partially complete. PDM Allows for various situations of interactivity relationships. It also allows for TIME LAGS in these relationships: - Lag between two starts - Lag between two finishes, or - Lag between a start and a finish Project Time Management PDM precedence relationships Finish to Start 49 7 Finish to start The successor activity can begin only when predecessor activity completes. This is the most commonly used relationship. A B Finish to Start Furniture move-in Employee move-in Project Time Management PDM precedence relationships Finish to Finish 49 8 precedence relationships Finish to finish The successor activity can complete only when predecessor completes. A B Finish to Finish Lay asphalt Paint parking lines Project Time Management PDM Start to Start 49 9 PDM precedence relationships Start to start The successor can start only when predecessor starts. A B Start to Start Furniture move-in Employee move-in Project Time Management PDM precedence relationships Start to Finish 50 0 precedence relationships Start to finish The successor can finish only when predecessor starts. This relationship is rarely used. A B Start to Finish Test new System Phase-out Old system Project Time Management PDM dependencies such as Start 50 1 dependencies such as Start to start, finish to finish, and start to finish have not been implemented consistently. Therefore, if you use them on your project management software, they can result in unexpected outcomes. Project Time Management Schedule Network templates SIMILAR networks from your past TOOLS & TECHNIQUES 50 2 SIMILAR networks from your past projects can be used to expedite preparing current projects network MAY use it for the entire project or for a portion of it. The companies doing same type of projects over the years have standardized the networks based on their experience. Portions of the such schedule network diagrams are called FRAGMENT NETWORK or SUBNETWORK. TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management Schedule Network templates 50 3 Schedule Network templates When are Subnetwork templates especially useful? Answer: When a project includes identical nearly identical deliverables. EXAMPLES 1) Coding program modules on a software project 2) Clinical trials on pharmaceutical project 3) Start-up phase of a development project 4) Floors on a high-rise building Project Time Management 1) Mandatory dependencies (hard logic) determined by the type of work being TOOLS & TECHNIQUES 50 4 determined by the type of work being performed. offer physical limitations as the nature of work itself dictates the order of activities. In the Century Cotton Mills example, you cant prime the walls until scraping is done before. In ECE Industries example, you can not make control board until printed circuit boards are populated and wave- soldered. TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management 2) Discretionary dependencies (soft logic, preferred logic, preferential logic) TOOLS & TECHNIQUES 50 5 logic, preferred logic, preferential logic) DETERMINED by the project management team. THESE dependencies allow the activities to happen in a preferred order because of best practices in the application area. SOMETIMES, specific sequence is desired due some unusual aspect of the project, besides alternative sequences being available. TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management 3) External dependencies are external to the project and depend on relationship between TOOLS & TECHNIQUES 50 6 depend on relationship between project activities and non- project activities. Examples 1) Testing schedule activity on a software project may depend on delivery of hardware from an outside source TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management 3) External dependencies are external to the project and depend on relationship between TOOLS & TECHNIQUES 50 7 depend on relationship between project activities and non- project activities. Examples 2) Governmental environmental forecasts may need to be held before site preparation on a construction project. TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management Leads and lags LEAD TOOLS & TECHNIQUES 50 8 LEAD an overlap in the relationship allowing the successor activity to be scheduled earlier than the predecessor will generally allow. A B Lead subtracts time Example In a FS relationship with 5- day lead, the successor activity begins 5 days before the predecessor has finished TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags Project Time Management Leads and lags LEAD Example TOOLS & TECHNIQUES 50 9 A B Lead subtracts time Example A technical writing team can begin writing the second draft of a large document (successor activity) 15 days before they complete writing the entire first draft (predecessor activity). TECHNIQUES Precedence diagramming method (PDM) Schedule network templates Dependency determination Applying leads and lags This can be done by finish to start relationship with 15 days lead time! Leads and lags LAG a gap in the relationship causes Project Time Management 51 0 a gap in the relationship causes the successor activity to be scheduled later than the predecessor will generally allow. Example In Century Mills, there is a 3-day delay between Priming and Painting. The painting activity begins 3 days after the predecessor has finished, for primer to dry up. A B Lag adds time Project Time Management PROJECT Schedule NETWORK DIAGRAMS Schematically show project OUTPUTS 51 1 Schematically show project activities along with their dependencies May be drawn manually or on computer, using PDM or ADM May incorporate full project details ,or just one or more summary details- called Hammocks. OUTPUTS Project Network Diagrams Project documents updates Project Time Management PROJECT NETWORK DIAGRAMS A summary description of Sequence Activities OUTPUTS 51 2 A summary description of sequencing approach accompanies them Unusual sequences, if any, are properly narrated A network diagram is traditionally known as PERT Chart, however PERT (program evaluation and review technique was a particular type of network diagram using weighted average. OUTPUTS Project Network Diagrams Project documents updates Project Time Management ACTIVITY LIST UPDATES While preparing network diagrams, Sequence Activities Project document updated: 51 3 While preparing network diagrams, we may discover some instances where certain activities must be divided or refined in order to show correct logical dependencies. This leads to activity list updates to include approved changes. updated: 1) Activity list updates 2) Activity attributes updates 3) Risk register updates Project Time Management ACTIVITY attributes updates activity attributes are updated to Project document updated: 51 4 Include: 1) Defined logical relationships 2) Associated leads and lags If approved change requests resulting from activity sequencing affect the activity list, then the related items in activity attributes are also updated to include these approved changes! updated: 1) Activity list updates 2) Activity attributes updates 3) Risk register updates Project Time Management Risk register updates to document critical areas in the schedule like path of Project document updated: 51 5 schedule like path of convergence or divergence or there may be more than one critical paths! updated: 1) Activity list updates 2) Activity attributes updates 3) Risk register updates Project Time Management FOR EACH ELEMENT AT LOWEST LEVEL OF WBS WHAT TYPE OF PHYSICAL RESOURCES 51 6 Estimate Activity Resources TO PERFORM PROJECT ACTIVITIES RESOURCES ARE REQUIRED? IN WHAT QUANTITIES? WHEN ARE THEY REQUIRED? Closely coordinated with cost estimating! Project Time Management Estimate Activity Resources 51 7 Resources are a projects most important assets. The project managers are often faced with the issue of limited resources Management of resources is as important as managing time, cost, quality and scope Project Time Management Estimate Activity Resources 51 8 Ability of the project manager to effectively organize resources can make difference between project success or failure! Resources must be planned and coordinated to avoid common problems of resources non-availability or their being taken away from the project Project Time Management Estimate Activity Resources 51 9 Resource Planning must be well coordinated with cost estimating. The quality of resource, their knowledge of latest techniques of performing work in their application area, and their skills will immensely impact the cost Project Time Management Estimate Activity Resources 52 0 THE PROCESS OF DETERMINING 1. WHAT PHYSICAL RESOURCES (PEOPLE, EQUIPMENT, MATERIALS) 2. WHAT QUANTITY OF EACH RESOURCE (SHOULD BE USED) 3. WHEN THEY WOULD BE REQUIRED TO COMPLETE PROJECT ACTIVITIES Project Time Management Estimate Activity Resources process overview 52 1 Enterprise environmental factors Organizational process assets Activity list Activity attributes Resource calendars INPUTS TOOLS & TECHNIQUES Expert judgment Alternatives analysis Published estimating data Project management software Bottom-up estimating OUTPUTS Activity Resource requirements Project Document Updates updates Resource breakdown structure Estimate Activity Resources process: INPUTS Enterprise environmental factors provide information on availability and skills of resources. 52 2 information on availability and skills of resources. Organizational process assets provide 1) policies and procedures regarding staffing, 2) Policies and procedures for rental and purchases 3) Historical information on resources used in similar projects. Estimate Activity Resources process: INPUTS Activity list identifies activities for which resources are to be estimated. 52 3 resources are to be estimated. Activity Attributes developed during Define Activities and Sequence Activities processes provide PRIMARY DATA input for estimating resources for each activity. Estimate Activity Resources process: INPUTS Resource Calendars Helps us know what resources are potentially 52 4 available (people, equipment, and material) during planned activity period. Resource calendars are developed during Expert judgment helps you Assess inputs to resource planning. Alternative analysis makes you Estimate Activity Resources Project Time Management 52 5 Alternative analysis makes you identify alternative methods of accomplishing schedule activities, Each one needing: 1) Different levels of resource capability/skills 2) Different size/types of machines 3) Different tools (manual or automated) 4) Make or buy decisions Project Time Management Published estimating data helps you in estimating resources for schedule activities. Estimate Activity Resources 52 6 for schedule activities. Many companies trading in these resources routinely publish extensive array of: Labor trades Material Equipment For different countries and different locations within countries Project Time Management Project management software Helps plan, organize, and manage resource pools and Estimate Activity Resources 52 7 Helps plan, organize, and manage resource pools and develop resource estimates. Sophisticated ones can define: Resource breakdown structures Resource availabilities Resource rates Various resource calendars Project Time Management Bottom-up estimating Involves breaking up the work within a schedule activity into more detail. 52 8 more detail. Used when a schedule activity cant be estimated for resource with confidence. Resource needs of each smaller piece are estimated and then added up to find total resource need for the particular schedule activity as a whole. Project Time Management Bottom-up estimating The pattern of resource usage may be influenced Estimate Activity Resource 52 9 usage may be influenced by dependencies between activities. Wherever this applies, we reflect it in the resource requirements of the concerned schedule activities. Project Time Management Activity resource requirements Identify and describe the types and quantities of resources Estimate Activity 53 0 Identify and describe the types and quantities of resources required for EACH SCHEDULE ACTIVITY IN A WORK PACKAGE. We can find resource requirements for each work package by adding up resource requirements of all its schedule activities. Level of specificity and detail varies by application area! Activity Resources Project Time Management Activity resource requirements please dont forget to document: Estimate Activity Resources 53 1 please dont forget to document: 1) Basis of estimate and 2) Assumptions made while determining which type of resources are applied, their availability, and what quantities are used! SCHEDULE DEVELOPMENT PROCESS DETERMINES WHEN RESOURCES WOULD BE REQUIRED! Resources Project Time Management Project Document updates resource types and quantities for each schedule activity is mentioned in the concerned Estimate Activity Resources 53 2 mentioned in the concerned activity attributes. If approved requested changes result from this process, then activity list and activity attributes are updated to reflect these approved changes! Project Time Management RBS Hierarchical structure of the identified resources by Estimate Activity Resources 53 3 identified resources by resource category and resource type. Project Time Management ESTIMATING FUNDAMENTALS? Estimate Activity Durations 53 4 ESTIMATING FUNDAMENTALS? You should have properly defined scope (WBS). Many people do not take time to freeze complete scope of work in the beginning and the scope keeps getting defined till delivery of the product of the project! You should have reliable Network Diagram showing how project will flow from start to finish. Project Time Management Estimate Activity Durations 53 5 ESTIMATING FUNDAMENTALS? You should have information on what were estimates on similar past projects, with errors and omissions. Additionally, you should also have access to commercially available estimating databases. Project Time Management Estimate Activity Durations 53 6 ESTIMATING FUNDAMENTALS? You should have full understanding of the capabilities of both human and material resources you are going to use for performing project activities. Project Time Management Estimate Activity Durations 53 7 ESTIMATING FUNDAMENTALS? You must be aware of all the potential risks that may have negative or positive impact on your estimates. This is a grey area in many organizations. We seem to have enough time to do rework than to do it right the first time. Risks are not fully identified in the beginning. They are taken to be a way of life. Project Time Management Estimate Activity Durations 53 8 ESTIMATING FUNDAMENTALS? Project management software does the estimating to the extent it has data with it. It can never replace your objective of doing a better job of estimating each time. Project Time Management ESTIMATING FUNDAMENTALS? Estimate Activity Durations 53 9 ESTIMATING FUNDAMENTALS? Who should provide inputs for estimates of duration? In many organizations everybody seem to offer them! It is highly risky to accept them from just anybody. They should be provided only by those people or the group who are well conversant with the nature of the concerned schedule activity. Project Time Management Estimate Activity Durations 54 0 ESTIMATING FUNDAMENTALS? ONLYthe person or group (on the project team) who is most knowledgeable about the particular activity should develop or at least approve the estimate. Project Time Management ESTIMATING FUNDAMENTALS? 54 1 ESTIMATING FUNDAMENTALS? Can estimate be accurate and of good quality (achievable) if done just once? No, estimate evolves progressively CONSIDERING THE AVAILABILTY AND RELIABILITY OF DATA, and it becomes more accurate and reliable only after due progressive elaboration. Project Time Management ESTIMATING FUNDAMENTALS? DURATION is the time required for completing an 54 2 DURATION is the time required for completing an activity. Estimating this duration is actually approximating how many work periods (hours, days, weeks, months), it will take. In real life, while performing an activity, you have non- work periods also, like Sundays and other holidays. Your estimation should not ignore them. You need to use both Project calendar and Schedule activity resource calendar! Project Time Management ESTIMATING FUNDAMENTALS? 54 3 Using alternative work period calendar, almost all scheduling software take care of this. Total activity duration = work periods + non-work periods. Project Time Management ESTIMATING FUNDAMENTALS? Total project duration is properly arrived at only 54 4 Total project duration is properly arrived at only after schedule development. However, schedule activity duration estimating gives a preliminary idea of total project duration and serves as an important input to creating schedule. The project team is free to choose to estimate project duration: 1. As a probability distribution by using probabilistic methods 2. As a single point estimate using deterministic methods Project Time Management PROCESS OF Estimate Activity Durations 54 5 PROCESS OF Estimating schedule activity durations For inputs to schedules Using information: a) Schedule activity scope of work b) Required resource types c) Estimated resource quantities d) Resource calendars e) Resource capabilities Please remember this! Project Time Management Estimate Activity Durations process overview INPUTS TOOLS & OUTPUTS 54 6 Enterprise environmental factors Organizational process assets Project scope statement Activity list Activity attributes Activity Resource requirements Resource calendar INPUTS TOOLS & TECHNIQUES Expert judgment Analogous estimating Parametric estimating Three point estimates Reserve analysis OUTPUTS Activity duration estimates Project Document updates Project Time Management Enterprise environmental factors Provide Estimate 54 7 Provide 1) duration estimating databases and other reference data, 2) Productivity metrics 3) Published commercial information! Estimate Activity Durations Project Time Management Organizational process assets Provide Estimate 54 8 Provide 1) Historical duration information, 2) Project calendars, 3) Scheduling methodology, and 4) Lessons Learned. Estimate Activity Durations Estimate Activity Duration INPUTS Project scope statement Provides constraints and assumptions that we do consider while estimating durations. 54 9 consider while estimating durations. Examples 1) Constraint: - Available skilled resource - Contract terms and conditions 2) Assumptions: - existing conditions - Availability of information, and - Length of the reporting periods. Project Time Management Activity list and activity attributes Estimate 55 0 Serve as primary inputs. Estimate Activity Durations Project Time Management Estimate Activity resource requirements resources assigned to the 55 1 Estimate Activity Durations resources assigned to the schedule activity and their availability significantly influences duration Example: If a schedule activity needs two engineers to work together to complete it, and we get only one, then its duration will double. Project Time Management Activity resource requirements What happens if additional Estimate Activity Durations 55 2 What happens if additional resources (than required) are added or lower skilled one are applied to the schedule activity? Answer: Efficiency reduces! Work production increase becomes less than the equivalent increase in percentage of resources!! Project Time Management Resource calendar composite resource calendar details: Estimate 55 3 details: - Availability - Capability - Skills of HR RESOURCES - Type,quantity, availability and capability of material and equipment resources They can greatly influence duration and hence considered. Estimate Activity Durations Project Time Management Expert judgment team members rely on their knowledge and experience, but these estimates can be very Estimate Activity Durations 55 4 experience, but these estimates can be very risky: 1) Many factors influence activity durations, such as resource capability, resource levels required/assigned, etc., that need to be carefully considered. 2) May be subject to bias, not based on scientific means. 3) Not based on documented data but simply on recall. Estimate Activity Durations TOOLS & TECHNIQUES Expert judgment Therefore, expert judgment must be combined with historical information and use as many 55 5 with historical information and use as many experts as possible. Expert judgment, guided by historical information, can provide: 1) Duration estimate or recommended maximum activity durations from similar past projects. 2) Knowledge whether to combine methods of estimating and how to reconcile differences. Estimate Activity Durations TOOLS & TECHNIQUES Analogous estimating THE actual duration of a similar activity completed on a previous project to determine the duration of same 55 6 a previous project to determine the duration of same type of activity on the current project. USED only in early phases of the project (initiation) when we don not have detailed information about the project. Uses historical info and expert judgment! When analogous estimating is most reliable? When previous projects activities are really similar, not just apparently similar The people making this kind of estimate have necessary expertise Estimate Activity Durations TOOLS & TECHNIQUES Analogous estimating It is a gross value estimation approach, sometimes adjusted for known differences in 55 7 sometimes adjusted for known differences in project complexity. Less costly and time consuming, less accurate too. May be applied to total project or its segment and may be combined with other estimating methods. Estimate Activity Durations TOOLS & TECHNIQUES parametric estimating Uses a statistical relationship between historical data and other variables (square footage in 55 8 data and other variables (square footage in construction) to calculate an estimate for activity parameters like cost, budget, and duration. on a Design Project: 1) number of drawings X labor hours per drawing 2) cable installation in meters X labor hours per meter Estimate Activity Durations TOOLS & TECHNIQUES parametric estimating Uses a statistical relationship between historical data and other variables (square footage in 55 9 data and other variables (square footage in construction) to calculate an estimate for activity parameters like cost, budget, and duration. It Can provide higher levels of accuracy depending upon sophistication and underlying data built into the model. Parametric estimate can be applied to entire project or its segment and can be used in combination with other techniques. EXAMPLE Estimate Activity Durations TOOLS & TECHNIQUES parametric estimating EXAMPLE Total resource quantities are multiplied by labor hours 56 0 Total resource quantities are multiplied by labor hours per unit of work. Say, on a design project: Number of drawings X Number of labor hours per Drawing On cable installation project: Meters of cable X Number of labor hours per meter Project Time Management Three-point estimates Just consider how risky are your original single point estimates? Estimate Activity 56 1 original single point estimates? We can improve the accuracy by finding three-point estimates and then take their average: 1) Most likely tM 2) Optimistic tO 3) Pessimistic tP Estimate Activity Durations TOOLS & TECHNIQUES Project Time Management Three-point estimates 1) Most likely: duration considering all resources with their Estimate Activity 56 2 all resources with their productivity, availability, dependencies on their participants, and interruptions. 2) Optimistic: best case of most likely. 3) Pessimistic: worst case of most likely. Estimate Activity Durations TOOLS & TECHNIQUES Estimate Activity Durations TOOLS & TECHNIQUES Three-point estimates The concept originated with the Program Evaluation and Review technique (PERT). PERT uses three 56 3 and Review technique (PERT). PERT uses three estimates to define an approximate range for activity duration: Most Likely, Optimistic, and Pessimistic. Then, calculates an EXPECTED (tE) activity duration using a weighted average of three estimates: tE = tO + 4 tM + tP 6 Project Time Management Reserve analysis an additional time (known as time buffer, reserve, or contingency) Estimate Activity 56 4 buffer, reserve, or contingency) added to the activity duration or elsewhere in the schedule as recognition of schedule risk: 1. A percentage of estimated activity duration, a fixed number of work periods, or 2. As developed by quantitative schedule risk analysis (good) Estimate Activity Durations TOOLS & TECHNIQUES Project Time Management Reserve analysis Please remember! Estimate 56 5 A contingency reserve can be used completely or PARTIALLY , OR LATER REDUCED OR ELIMINATED as you progress and get more precise information about the project. Contingency reserve is also documented with other related data and assumptions!!! Estimate Activity Durations Project Time Management USING Reserve time (contingency) TWO things prevail: 56 6 TWO things prevail: 1. Parkinson's law Work expends to the available time. 2. Student syndrome Work is attended only when the deadline dangles like Damocles sword over our head. Project Time Management USING Reserve time (contingency) Estimate 56 7 HOW should the time buffers be used? Use them too freely and too early and you have nothing left for later when reserves might be critical. Be too stingy and you stifle progress, increase risk, and end up with left over reserves that might have to be put to better use. Estimate Activity Durations TOOLS & TECNIQUES Project Time Management USING Reserve time (contingency) Estimate 56 8 HOW should the time buffers be used? ANSWER A guideline that must be adopted for allocation of time reserves is to set hard limits as to how much to release in each period of the project. Estimate Activity Durations TOOLS & TECNIQUES Project Time Management Activity duration estimates Activity duration estimates are quantitative assessments of the Estimate Activity Durations OUTPUTS 56 9 quantitative assessments of the likely number of work periods that will be required to complete an activity. Please note: Duration estimates do not include any lags! OUTPUTS Project Time Management Activity duration estimates Activity duration estimates may include some range of possible results: Estimate Activity Durations OUTPUTS 57 0 include some range of possible results: 2 weeks +/- 2 days to indicate that the activity will take at least eight days and no more than twelve days (assuming 5 day week). 15 % probability of exceeding three weeks to indicate a high probability, 85%, that the activity will take three weeks or less. OUTPUTS Project Time Management Project document updates Activity attributes Estimate Activity Durations OUTPUTS 57 1 Activity attributes Assumptions made in developing the activity duration estimates (skill levels and availability) OUTPUTS Project Time Management ONE OF THE MOST CRUCIAL AREAS Develop Schedule 57 2 ONE OF THE MOST CRUCIAL AREAS of THE PROJECT MANAGEMENT ! It is the basis for 1. Allocating resources, 2. Estimating costs, and 3. Tracking project performance. APPROVED SCHEDULE SERVES AS SCHEDULE BASELINE Project Time Management THE KEY WORDS ARE START AND FINISH DATES! Develop Schedule 57 3 FINISH DATES! Schedules show the timing for work elements start and finish dates and denote when events and milestones take place. Therefore, schedule development is the process of determining start and finish dates for project activities. Project Time Management Schedule development is an iterative process Requires that duration estimation and resource Develop Schedule Please remember this! 57 4 Requires that duration estimation and resource estimates are reviewed and revised to create an approved schedule Continues throughout as: 1) project progresses, 2) project management plan changes, and 3) anticipated risk events occur or disappear as new risks are identified Please remember this! Project Time Management Schedule Development 57 5 But what if our start and end dates are unrealistic? Well then, we will never finish our project as scheduled and this by far is the most common experience! Project Time Management FREQUENT CAUSES OF PROJECT FAILURE Develop Schedule 57 6 FREQUENT CAUSES OF PROJECT FAILURE 1. Scheduling and allocation of resources are incorrect. 2. Assignments are not anticipated. 3. Resource skills and capabilities are unknown. 4. Resources for back up are not available. Project Time Management: FREQUENT CAUSES OF PROJECT FAILURE The problem emerges during planning and continues through out the project: Schedule Development 57 7 through out the project: Project staff are reassigned and turned over without readjusting the schedule to allow for the lost time or the learning curve. Resource requirements are not anticipated and scheduled, and resource issues are addressed only as they occur. There is generally no skill inventory indicating who is available for the project. Project Time Management Develop Schedule process overview Organizational process assets INPUTS TOOLS & TECHNIQUES Schedule network OUTPUTS Project schedule Schedule data 57 8 assets Project scope statement Activity list Activity attributes Project schedule network diagrams Activity resource requirements Resource Calendars Activity duration estimates Enterprise Environmental Factors Schedule network analysis Critical path method Schedule compression What-if scenario analysis Resource leveling Critical chain method Adjusting leads & lags Schedule Tool Schedule data Schedule baseline Schedule Data Project Document Updates Develop Schedule - INPUTS Organizational process assets Provide project calendar: 57 9 A Calendar of working days/shifts that establish the dates on which 1) Schedule activities are worked 2) Schedule activities are idle Develop Schedule - INPUTS Project scope statement Provides constraints and Assumptions that impact 58 0 Assumptions that impact development of project schedule. Constraints FACTORS THAT LIMIT project Management teams options when performing schedule network analysis. Two major categories of constraints used: 1) Imposed dates 2) Key events or major milestones Develop Schedule - INPUTS Develop Schedule Project scope statement 1) Imposed dates on activity start or 58 1 finish dates to occur no earlier than a specified date or no later than a specified date. Most commonly used: A) Start No Earlier Than (SNET): B) B) Finish No Later Than (FNLT): CAN YOU THINK WHY SUCH CONSTRAINTS ? Develop Schedule - INPUTS Develop Schedule These time constraints are in response to: Agreed-upon contract dates 58 2 Agreed-upon contract dates a market window on a technology project weather conditions for outdoor work compliance to government requirements (safety requirements for hazardous projects, or pollution control requirements, etc.) supplies form the outside agencies not shown in the project schedule, etc. Develop Schedule - INPUTS Develop Schedule 2. Key events or major milestones: Project sponsor, customer, or other stakeholders often dictate key 58 3 stakeholders often dictate key events and major milestones affecting the completion of certain deliverables. Once scheduled, these dates become expected. They can be moved only through approved changes! Milestones are also used to indicate work outside (not shown project database). Develop Schedule - INPUTS develop Schedule Assumptions are the factors we have documented so far and taken them true or certain 58 4 so far and taken them true or certain for planning purpose. We examine them for their impact while developing project schedule. All endeavors are to be made to ensure that they do not turn out false and become risks! Develop Schedule - INPUTS We have already discussed and use them for developing schedule: - Activity list 58 5 - Activity list - Activity attributes - Project schedule network diagrams - Activity resource requirements - Resource Calendars - Activity duration estimates Project Time Management Develop Schedule TOOLS & TECHNIQUES Schedule network analysis A technique to generate project 58 6 TECHNIQUES A technique to generate project schedule. Uses a schedule model and various analytical techniques (CPM, CCM, what-if-analysis, resource leveling) to calculate early start and finish dates, and scheduled start and finish dates for uncompleted portions of schedule activities. Project Time Management Schedule network analysis Loops and open ends in the Develop Schedule TOOLS & TECHNIQUES 58 7 Loops and open ends in the network diagram are adjusted before any analytical technique is applied. Path convergence/divergence points are identified and used in schedule compression or other analysis. TECHNIQUES Project Time Management CPM Calculating theoretical early and late start and finish dates Develop Schedule TOOLS & TECHNIQUES 58 8 and late start and finish dates for project activities (without considering resource limitations). Indicate the time periods within which the activity could be scheduled (given activity durations, logical relationships, leads and lags and other known constraints ). TECHNIQUES Project Time Management CPM Calculated ES and EF and LS and LF dates may not be the Develop Schedule TOOLS & TECHNIQUES 58 9 and LF dates may not be the same on any network diagram. WHY? Because total float (which gives scheduling flexibility) may be: 1) Positive 2) Negative 3) zero TECHNIQUES Develop Schedule- TOOLS & TECHNIQUES CPM Finding scheduling flexibility on any network path 59 0 Finding scheduling flexibility on any network path Find positive value of LF-EF or LS-ES This positive value is called TOTAL FLOAT TOTAL FLOAT is the amount of time that a schedule activity can be delayed from its ES date without delaying the project finish date or violating a schedule constraint. Project Time Management Develop Schedule CPM Critical paths 59 1 Critical paths Have either a ZERO or Negative total float! Schedule activities on critical path are called critical Adjustments to activity durations, logical relationships, leads and lags, or other schedule constraints are necessary to make network paths with zero or positive total float. Project Time Management Develop Schedule CPM Finding FREE FLOAT 59 2 Finding FREE FLOAT When the total float for a network path is zero or positive, then the free float can be found! Free float is the amount of time that a schedule activity can be delayed without delaying the early start date of any immediately successor activity! Project Time Management Develop Schedule CPM The Critical Path (CP) In any project is the longest full path of activities 59 3 In any project is the longest full path of activities Any activity on critical path normally has zero float. Start D C H E G A F B End 4 8 5 7 8 6 7 5 Paths D, E, G, H, C = 32 Weeks A, F, B = 18 Weeks D, F, B = 16 Weeks D, F, G, H, C = 31 Weeks A, F, G, H, C = 33 Weeks Project Time Management Develop Schedule CPM Floats (slacks) Free float 59 4 Free float the amount of time an activity can be delayed without delaying the early start date of its any successor activities. Total float the amount of time an activity can be delayed without delaying the project completion date. Project float the amount of time a project can be delayed without delaying the externally imposed project completion date required by the customer or management, or previously committed by the project manager. Project Time Management Develop Schedule CPM CALCULATING FLOAT 1. First, calculate early start and early ES EF FORWARD PASS 59 5 finish dates: FORWARD PASS START A, 3 END B, 5 C, 2 D, 7 E, 9 F, 2 G, 4 1 3 ES EF 4 8 12 13 14 20 1 9 10 11 12 15 WE HAVE NOT MARKED THE CRITICAL PATH SO FAR Project Time Management Develop Schedule CPM CALCULATING FLOAT 2. Second, calculate late start and late finish dates: BACKWARD PASS ES EF BACKWARD PASS 59 6 finish dates: BACKWARD PASS START A, 3 END B, 5 C, 2 D, 7 E, 9 F, 2 G, 4 1 3 ES EF 4 8 4 6 12 13 14 20 1 9 10 11 12 15 LS LF 7 11 12 13 14 20 1 9 10 11 17 20 WE HAVE NOT MARKED THE CRITICAL PATH SO FAR Project Time Management Develop Schedule CPM CALCULATING FLOAT 3. Now, calculate the float ES EF BACKWARD PASS FLOAT (F) = LS - ES 59 7 WE HAVE MARKED THE CRITICAL PATH HERE START A, 3 END B, 5 C, 2 D, 7 E, 9 F, 2 G, 4 1 3 ES EF 4 8 4 6 12 13 14 20 1 9 10 11 12 15 LS LF 7 11 12 13 14 20 1 9 10 11 17 20 F = 3 F = 3 F = 0 F = 0 F = 0 F = 0 F = 5 FLOAT (F) = LS - ES OR = LF - EF Project Time Management CPM Use of float (slack) 59 8 Use of float (slack) Float is extremely useful for you: 1. It allows better allocation of resources 2. It helps team members juggle multiple projects by telling them how much time flexibility they have on each activity they are working on. Project Time Management PERT just need to know Program Evaluation and Review Technique (PERT) 59 9 Technique (PERT) PERT was developed for application in projects where there was uncertainty in the nature and duration of the activities. It originated in late 1950s during U.S. Navys Polaris Missile System program. In complex Research and Development projects, there are questions about the kind of research to be done, how long it will take, what stages of development are necessary, and how fast they can be completed- largely because the nature of THE UNCERTAINITY about the exact nature of the final outcomes. Project Time Management PERT just need to know PERT 60 0 PERT Such projects are contracted as new developments unfold and before problems in technology, materials, and processes are identified and resolved. Hence, the duration of the project is uncertain along with the risk of overrun of target completion date. So, PERT was developed as a solution to handling uncertainties in estimating activity durations. BY using three time estimates: Optimistic, Most likely, and Pessimistic. Pert weighted average = Optimistic + 4 x Most Likely + Pessimistic 6 Project Time Management 60 1 Project Time Management Understanding meaning of three time estimates: OPTIMISTIC is the minimum time an activity could take. It is a situation when everything goes well. There is some hope of finishing earlier. 60 2 everything goes well. There is some hope of finishing earlier. MOST LIKELY is the normal time to complete the activity, and would occur most frequently if the activity could be repeated. PESSIMISTIC is the maximum time an activity could take. The situation where bad luck is encountered at every step. The pessimistic time includes likely internal problems in development or fabrication, but not environmental snags such as fire, power shortages, bankruptcy, strikes, or natural disasters. Project Time Management PERT: THREE TIME ESTIMATES WHO GIVES THREE TMES ESTIMTES? You get them from: 60 3 You get them from: 1. THE most knowledgeable people who know the difficulties likely to occur and the potential variability in time. 2. THE expert estimators 3. THOSE who will actually perform or manage the activity. PERT: THREE TIME ESTIMATES Three time estimates are used to calculate the expected time Project Time Management 60 4 Three time estimates are used to calculate the expected time for each activity. FORMULAS 1. EXPECTED TIME = O + 4M + P / 6 2. STANDARD DEVIATION of an activity duration (SD) = P O / 6 3. VARIABILITY IN THE ACTIVITY COMPLETION TIME (Activity Variance, V) V = (P O / 6 )2 OPTIMISTIC = O MOST LIKELY = M PESSIMISTIC = P Project Time Management PERT: THREE TIME ESTIMATES KEY: (0, M, P) Exp. Time, V 60 5 ESTIMATING ACTIVITY DURATION 0 3 5 6 13 PESIMISTIC AVERAGE OPTIMISTIC MOST LIKEY P R O B A B I L I T Y ACTIVITY DURATION TIME IN DAYS ( 4, 11, 12 ) 10, 1.78 ( 3, 4, 5 ) 4, 0.11 ( 3, 12, 21) 12, 9.00 1 7 8 2 6 1 4 5 ( 1, 4, 7 ) 4, 1.00 ( 6, 15, 30 ) 16, 16.00 PERT: calculating expected time ( expected duration, expected value, weighted average) Project Time Management 60 6 Then the expected duration = 3+4(5)+13 /6 = 36 / 6 = 6 days. For an activity: O = 3 days M = 5 days P = 13 days Formula O+4M+P/ 6 Project Time Management PERT: calculating standard deviation, SD For an activity: O = 3 days 60 7 In present case, SD = 13 3 / 6 or = 10 / 6 = 1.67 days O = 3 days M = 5 days P = 13 days FORMULAS Expected value: O+4M+P/ 6 Standard deviation: P O / 6 Hence Expected value = 6 days Standard deviation = 1.67 days The range between estimates provides a measure of variability, which allows statistical conclusions regarding probability of project activities completing at particular times. Project Time Management PERT: calculations 60 8 Completion probability for this activity: 1. There is a 68.26% chance that this activity will be completed between 4.33 days and 7.67 days: We get it by once deducting the value of one SD from value of expected duration ( 6 1.67 = 4.33 ) and then adding the value of one SD to the value of expected duration (6+1.67 = 7.67). Project Time Management PERT: calculations 60 9 Completion probability for this activity: 2. There is a 95.44% chance that this activity will be completed between 2.66 days and 9.34 days. We get it by once deducting the value of two SD from the value of expected duration ( 6 3.34 = 2.66 ) and then adding the value of one SD to the value of expected duration (6+ 3.34 = 9.34). Project Time Management PERT: points to remember 61 0 1. The higher the standard deviation for an activity, the higher the risk. 2. Standard deviation measures the difference between the pessimistic and optimistic times. 3. A greater spread between the two results in higher standard deviation and therefore higher risk. 4. Hence, lower the standard deviation, lower the risk. Project Time Management REAL LIFE SCENARIO 61 1 Bank Gold Coin Project S. Vaijayanthi is the project manager for this project where the bank has desired the sale of Gold Coins on Web. She is required to devise a software system. There are 9 activities to complete the project. With her team, she has made network diagram, performed activity duration estimation, and found critical path. She has also found out values of optimistic, pessimistic, and most likely estimates. How can she calculate the project duration using PERT method? Project Time Management REAL LIFE SCENARIO ICICI Bank Gold Coin Project Solving the riddle: 61 2 Solving the riddle: 1. First calculate the expected value for each activity on critical path and total all values to get total expected value. 2. Second, find out Standard deviation for each activity and square it to get SD Squared (called Activity Variance) for each activity, and total SD Squared. 3. Third, find out square root of the sum of SD Squared, which gives us value of standard deviation. 4. Now everything is easy, we can comfortably tell probability of project completing at 1 standard deviation or 2 standard deviation. Let's apply it to ICICI Bank Gold Coin Project. Examine the data Ms Vaijayanthi has worked out so far as shown in the next slide REAL LIFE SCENARIO Project Time Management Develop Schedule ICICI Bank Gold Coin Project- PERT Data worked out by Ms Vaijayanthis team A B C D E F G H I ACTIVITIES PERT CALCULATIONS Optimistic 10 On CP On CP On CP On CP On CP On CP On CP 8 38 20 5 3 1 - - non CP non CP 61 3 Optimistic Pessimistic Most likely Expected Value Standard Deviation Standard Deviation Squared (SD) 2 TOTAL SD Squared TOTAL Expected Value 14 10 12 12.00 0.67 0.45 8 14 10 10.33 1.00 1.0 38 57 45 45.83 3.17 10.05 20 32 22 23 1.67 2.79 5 10 8 7.83 0.83 0.69 3 3 3 3.00 0 0 1.00 0 0 1 1 1 102.99 or Say 103 14.98 CONCLUSIONS - - - - - - - - - - - - Project Time Management Develop Schedule REAL LIFE SCENARIO Project duration of ICICI Bank Gold Coin Project 61 4 Project duration of ICICI Bank Gold Coin Project Total of expected value = 103 days Total of SD squared = 14.98 Square root of SD squared = 3.87 Therefore the standard deviation is 3.87 Conclusions about ICICI Gold Coin Project: 1. 68.26% probability, it will complete between 99.13 days and 106.87 days. 2. 95.44% probability, it will complete between 95.26 days and 110.74 days. Project Time Management Schedule compression shorten project schedule without changing the project scope, to meet Develop Schedule TOOLS & TECHNIQUES 61 5 changing the project scope, to meet schedule constraints, imposed dates, or other schedule objectives. The techniques: 1. Crashing 2. Fast tracking TECHNIQUES Project Time Management Schedule compression 1. Crashing analysis of cost and schedule Develop Schedule TOOLS & TECHNIQUES 61 6 analysis of cost and schedule tradeoffs to obtain greatest schedule compression for least increase in cost. Crashing leads to adding more resources to critical path activities while maintaining scope. It generally results in increased cost and can not always promise a viable alternative. TECHNIQUES Project Time Management Schedule compression 2. Fast tracking performing critical path activities in Develop Schedule TOOLS & TECHNIQUES 61 7 performing critical path activities in parallel that are planned to be performed in series. Fast tracking trades of cost for time and increases the risk of achieving the shortened schedule. Often results in in rework, increases risk, and needs more attention to communications. TECHNIQUES HANDS-ON EXERCISE FOR STUDENTS From data on two slides, please find out how much it will cost to crash the Project Time Management Duration compression example 61 8 From data on two slides, please find out how much it will cost to crash the schedule by 3 weeks! Activities Dependencies Duration normal A - 4 B A 6 C A 2 D B 2 E C,B 7 F D,E 6 Slide 1 THIS IS TO HELP YOU TO DRAW THE NETWORK AND FIND CP HANDS-ON EXERCISE FOR STUDENTS Data continues ( duration is in weeks, cost in rupees) Duration compression example Project Time Management 61 9 Data continues ( duration is in weeks, cost in rupees) Activity Duration normal Crash duration Normal cost Crash cost Crash cost per week A 4 2 10,000 14,000 2,000 B 6 5 30,000 42,500 12,500 C 2 1 8,000 9,500 1,500 D 2 1 12,000 18,000 6,000 E 7 5 40,000 52,000 6,000 F 6 3 20,000 29,000 3,000 Slide 2 Develop Schedule- Tools & Techniques What-if scenario analysis Calculating multiple project durations with different set of activity assumptions with the use 62 0 different set of activity assumptions with the use of simulation techniques: Monte Carlo Analysis (most common). USES three time estimates like PERT but does not use PERT formula. Thus distribution of probable results is determined for each activity and then utilized in arriving at a distribution of probable results for the whole project. Develop Schedule- Tools & Techniques What-if scenario analysis What-if Analysis primarily used to understand the feasibility of 62 1 primarily used to understand the feasibility of schedule under unfavorable conditions. This method also helps in making contingency, or response plans to tackle or lessen the effect of adverse situations. Here, different scenarios are made using network logic, assuming instances like delay in supply from an external source, new regulation, etc. Develop Schedule- Tools & Techniques Resource leveling WE have a schedule of activities. Now, its time to plug in resources 62 2 Now, its time to plug in resources because : Techniques like CPM and PERT did not consider resource availability and produced a preliminary early- start schedule that needs more resources during certain times than available, or needs unmanageable alterations in resource levels. Develop Schedule- Tools & Techniques Resource leveling WE have a schedule of activities. Now, its time to plug in resources 62 3 Now, its time to plug in resources because : We will also have to adjust our schedule if we find any resource constraints to our schedule of activities made so far using mathematical analysis techniques. Develop Schedule- Tools & Techniques Resource leveling process of adjusting resource utilization on your project to match 62 4 utilization on your project to match with real resource availability. OFTEN INVOLVES: Allocate scarce resources to critical path activities first. Move an activity in time to take advantage of a period of under- allocation elsewhere in the project. Develop Schedule- Tools & Techniques Resource leveling process of adjusting resource utilization on your project to match 62 5 utilization on your project to match with real resource availability. OFTEN INVOLVES: Replace the resources that are not over-allocated during the same timeframe. Increase the duration of an activity while applying the same total effort. Resource leveling generally extends schedule. It can change CP. Develop Schedule- Tools & Techniques Resource leveling Other techniques in an event of critical or limited resource 62 6 critical or limited resource availability: Utilization of extended hours Productivity increase of resources Fast tracking Reverse resource allocation Critical chain method modifies project schedule to account for limited resources. Develop Schedule- Tools & Techniques Resource leveling 62 7 Some projects have can have a finite and critical resource. In such cases, the resource is scheduled in reverse from the project ending date. It is called REVERSE RESOURCE ALLOCATION SCHEDULING! It may not result in an optimal project schedule. Develop Schedule- Tools & Techniques Resource leveling 62 8 Resource leveling produces a RESOURCE-LIMITED SCHEDULE, or RESOURCE-CONSTRAINED SCHEDULE! Develop Schedule- Tools & Techniques Critical chain method Another network analysis technique that modifies project schedule to 62 9 that modifies project schedule to account for LIMITED RESOURCES. Combines deterministic and probabilistic approaches. This method adds time buffers to focus on planned activity durations. How do we do it? A) We find out CP making network diagram with non- conservative estimates (taking required dependencies and defined constraints as inputs). THE STEPS: CRITICAL CHAIN METHOD Develop Schedule- Tools & Techniques 63 0 defined constraints as inputs). B) Then, we enter resource availability and determine resource-limited schedule. Resulting schedule often has an changed CP. C) Now we determine duration buffers and schedule the planned activities TO THEIR LATEST POSSIBLE START AND FINISH DATES. D) Consequently, in lieu of managing the total float of network paths, we focus on managing 1) the time buffers, 2) the resources for schedule activities. Develop Schedule- Tools & Techniques Applying leads and lags Leads and lags are adjusted during schedule network analysis to 63 1 schedule network analysis to develop a viable schedule. This is particularly important as improper use of leads and lags distorts the schedule. Develop Schedule- Tools & Techniques Scheduling Tool Schedule data and information is compiled into the schedule model 63 2 compiled into the schedule model for the project. We may use the schedule model tool and its supporting data along with manual methods or project management software: to perform schedule network analysis for generating the project schedule. Develop Schedule- OUTPUTS Project schedule MAY be displayed in summary form for the whole project, or in detailed form for various levels of WBS. 63 3 or in detailed form for various levels of WBS. SCHEDULE FORMATS 1. Project network diagrams (display project logic and critical path activities). 2. Bar charts or Gantt charts (depict activity start and finish dates, estimated durations, and occasionally dependencies). 3. Milestone charts (show start or finish of major deliverables or key external interfaces). Develop Schedule- OUTPUTS Project network diagram WITH DATES CODE UNIT 30 Jun 15 Jun 16 Jun 16 May Project Schedule FORMAT: 63 4 WRITE MANUAL 1 May DESIGN CODE QUERY CODE ENTRIES CODE UPDATE UNIT TEST UNIT TEST UNIT TEST SYSTEM TEST 15 May 16 May 1 Jul 15 Jul 30 May 1 Jun 15 Jun 30 May 24 May 16 May 23 May 15 Jun 16 May Activity identifier Activity Description 1.1. MB Provide new product Period 1 Project Schedule Time Frame Calendar Units DETAILED SCHEDULE WITH LOGICAL RELATIONSHIPS Period 2 Period 3 Period 4 Period 5 Develop Schedule- OUTPUTS 63 5 Z deliverable- BEGIN 0 1.1.1 Work package 1- Develop comp 1 67 1.1.1.D Design component 1 20 1.1.1. B Build Component 1 33 1.1.1.T TEST COMPONENT 1 14 1.1.1. M1 Component 1 COMPLTED 0 1.1.2 Work package 2 develop comp 2 53 1.1.2.D Design component 2 14 1.1.2.B Build component 2 28 1.1.2.T TEST COMPONENT 2 11 1.1.2M1 Component 2 COMPLETED 0 1.1.3 Work package 3 Integrate Comps 53 1.1.3.G Integrate component 1 & 2 14 1.1.3.T TEST INTEGRATED PRODUCT Z 32 1.1.3.P DELIVER PRODUCT Z 7 1.1.MF Provide New Product Z 0 deliverable- FINISHED ss DATA DATE Project Schedule FORMAT: Bar charts or Gantt charts Develop Schedule- OUTPUTS 63 6 Jan Feb Mar Apr May Jun Activity A Activity B Activity C Activity D Project Schedule FORMAT: Bar charts or Gantt charts Activity Activity Description Project Schedule Time Frame Calendar Develop Schedule- OUTPUTS 63 7 Activity identifier Activity Description Period 1 Units Period 2 Period 3 Period 4 Period 5 1.1 Provide New Product Z deliverable 120 1.1.1 Work Package 1 develop component 1 67 1.1.2 Work Package 2 develop component 2 53 1.1.3 Work Package 3 - Integrate Components 53 Data date Project Schedule FORMATS: Milestone charts Activity Activity Description Project Schedule Time Frame Calendar Develop Schedule- OUTPUTS 63 8 Activity identifier Activity Description Period 1 Units Period 2 Period 3 Period 4 Period 5 1.1. MB Provide New Product Z deliverable - BEGUN 0 1.1.1. M1 Component 1 - completed 0 1.1.2. M1 Component 2 - completed 0 1.1. MF Provide New Product Z Deliverable - FINISHED 0 Data date Schedule data Supporting data for the project schedule Develop Schedule- OUTPUTS 63 9 schedule Includes (at least) Schedule milestones Schedule activities Activity attributes All constraints and assumptions Amount of additional data varies by application area. Schedule data Supporting data for the project schedule Develop Schedule- OUTPUTS 64 0 schedule Frequently supplied supporting details: Resource requirements by time period as Resource Histogram Alternative schedules (best case, worst case, resource not leveled, resource leveled, with/without imposed dates) Schedule contingency reserves Develop Schedule- OUTPUTS Project Document Updates 1) Activity resource requirements 2) Activity attributes 64 1 2) Activity attributes 3) Calendar 4) Risk register Discussion Activity resource requirements: Resource leveling Can have a significant effect on preliminary estimates of the type and quantities of resources required. Develop Schedule- OUTPUTS Project Document Updates Discussion 64 2 Activity resource requirements: if the resource leveling analysis changes the project resource requirements, then the resource requirements are updated. Activity attributes: activity attributes are updated to include any revised resource requirements and any other revisions generated by Develop Schedule process. Develop Schedule- OUTPUTS Project Document Updates Discussion 64 3 Calendar: the calendar for each project may use different units as the basis for scheduling the project. Risk Register: is updated to reflect opportunities or threats perceived through scheduling assumptions. Project Cost Management Processes involved in planning, estimating, 64 4 Processes involved in planning, estimating, budgeting and controlling costs to complete the project WITHIN APPROVED BUDGET Project Cost Management Primarily concerned with the cost of resources needed to complete the schedule activities 64 5 needed to complete the schedule activities But, project cost management should also consider the effect of project decisions on the the cost of: 1) Using 2) Maintaining and 3) Supporting the product of the project. Less design reviews can reduce project cost at the expense of increase in customers operating costs! Project Cost Management This broader view of cost management is called Life Cycle Costing. 64 6 called Life Cycle Costing. Life cycle costing together with value engineering techniques can: 1) Improve decision-making 2) Reduce cost and execution time 3) Improve quality and performance of project deliverable Project Cost Management Generally,predicting and analyzing prospective financial performance of the product of the project is done outside the the project. 64 7 project is done outside the the project. If it is done within the project, then we include additional processes and general management techniques: ROI, Discounted Cash Flow and Investment payback analysis. Project Cost Management Please remember! Project cost management is preceded by a planning effort by the project management team. This planning effort is 64 8 by the project management team. This planning effort is part of the Develop Project Management Plan process. We develop a cost management plan, setting out the format and establishing the criteria for planning, structuring, estimating, budgeting and controlling project costs. The cost management plan processes, tools and techniques are selected during project life cycle definition. Project Cost Management Please remember! The cost management can establish: 1) Precision level: cost estimates will rounded off to a 64 9 1) Precision level: cost estimates will rounded off to a prescribed precision (Rs. 100, Rs. 1000) based on scope of activities and magnitude of the project, including amount for contingencies. 2) Units of measure: staff hours, staff days, week, lump sum, etc. for each of the resources. 3) Organizational procedures links: each control account (WBS component used for project accounting) is assigned a code or account number linked to performing organizations accounting system. May also include planning package. Project Cost Management Please remember! The cost management can establish: 4) Control thresholds: agreed-upon amount of variation allowed 65 0 4) Control thresholds: agreed-upon amount of variation allowed at designated time periods during project. 5) EV Rules: a) EVM computation formula for determining estimate to complete are defined, b) EV credit criteria (50-50, 0-100), c) define WBS level at which EV analysis will be done. 6) Reporting formats: for various reports 7) Process descriptions: descriptions of each of the three cost management processes are documented. Project Cost Management Please remember! So the cost management plan sets the framework 65 1 So the cost management plan sets the framework for each of the cost management processes. WHY? So that performance of the processes will be efficient and coordinated. Processes: 1. Cost estimating 2. Cost budgeting 3. Cost control Estimate Costs process overview Enterprise INPUTS TOOLS & TECHNIQUES Analogous estimating OUTPUTS Activity Cost 65 2 Enterprise environmental factors Organizational process assets Risk Register Human Resource Plan Project Schedule Scope Baseline Analogous estimating Bottom-up estimating Parametric estimating Project management estimating software Vendor bid analysis Reserve analysis Cost of quality Three Point Estimates Expert Judgment. Activity Cost estimates Basis Of Estimates Project Document Updates. 1) Enterprise environmental factors - Market conditions: what Estimate Costs - Inputs 65 3 products/services are available, from whom, under what terms and conditions. - Commercial databases: resource cost rates that track skills and human resource cost, provide standard cost of material and equipment. Another source: seller price lists. helps organizing cost estimates 2) Organizational environmental factors Provide: 1) Cost estimating policies Estimate Costs - INPUTS 65 4 1) Cost estimating policies 2) Cost estimating templates 3) Historical information (from various sources within organization) 4) Project files: records of previous project performance help in developing cost estimates. 5) Project team knowledge 6) Lessons learned 3) Human Resource Plan Project staffing attributes and personal rates, and related rewards/recognition are necessary Estimate Costs - INPUTS 65 5 and related rewards/recognition are necessary components for developing cost estimates. 4) Risk Register should be reviewed to consider risk mitigation costs. Risks, either threat or opportunities, have impact on both activity and overall project costs. Risk Register Please remember: As a general rule, when project experiences a negative Estimate Costs - INPUTS 65 6 when project experiences a negative risk event, the near-term costs of the project will usually increase, and sometimes delay project schedule. 5) Project Schedule The type and quantity of resources and the amount of time they are used ARE major factors in Estimate Costs - INPUTS 65 7 of time they are used ARE major factors in estimating costs. Schedule activity resources and their respective durations are key inputs. Please remember: Impact of Estimate Activity Resources process and Estimate Activity Durations process on the Estimate Costs process! Estimate Activity Resources determines quantities of resources and is closely coordinated with cost estimating! 5) Project Schedule Please remember: Activity duration estimates will effect cost estimates: Estimate Costs - INPUTS 65 8 Activity duration estimates will effect cost estimates: a) Where project budget includes an allowance for the cost of financing (including interest charges), b) Where resources are applied per unit of time for the duration of activity, c) Where we have time-sensitive costs (materials with seasonal cost variations, union labor with regularly expiring collective bargaining agreements). 6) Scope Baseline A) Scope Statement: provides product description, acceptance criteria, key Estimate Costs - INPUTS 65 9 description, acceptance criteria, key deliverables, project boundaries, assumptions and constraints about the project. IMPORTANT: Clarify whether you will include only direct costs or indirect costs too. Indirect cost are those which can be directly traced to a specified project. Your accounting procedure will decide how to apportion them among various projects. 6) Scope Baseline Most common constraints for projects is a LIMTED Project Budget. Estimate Costs - INPUTS 66 0 Project Budget. Other constraints: required delivery dates, available skilled resources, organizational policies. B) Work Breakdown Structure: provides relationships among all the components of the project and the project deliverables. C) WBS Dictionary: WBS dictionary and related documents provide identification of the deliverables and description of work required to produce each deliverable. Expert Judgment Cost estimates are Estimate Costs Tools & Techniques Expert judgment, guided by historical information, 66 1 Cost estimates are influence by numerous variables: 1) Labor rates 2) Material costs 3) Inflation 4) Risk factors, and 5) Other factors. historical information, 1) provides valuable insight about environment and info from past projects, 2) can help determine combination of estimating methods, and reconcile difference between them. Analogous estimating is top-down estimating that uses actual costs of similar, past Estimate Costs Tools & Techniques 66 2 actual costs of similar, past project as ground for cost estimation on present project. It is a form of expert judgment and used only in early phases when detailed information about the project is not there. Most reliable when when previous project are similar in fact not just in appearance, and when estimators have needed experience. L 1 L 2 L 3 L 4 TOP-DOWN TOTAL PROJECT COST COST FLOW Bottom-up estimating estimating cost of individual Estimate Costs Tools & Techniques 66 3 work packages or schedule activities and then rolling them up to higher levels for reporting and tracking purposes. find project cost Parametric modeling Here, we use project characteristics (parameters) in a mathematical model to Estimate Costs Tools & Techniques 66 4 estimate project costs. Example: lines of code in s/w development, required labor hours, square footage in construction. This method is reliable only when: a) Historical information used to develop model is correct, b) The parameters are quantifiable, and c) the model is scalable. Computerized tools Widely used to facilitate the process of cost estimation. There are many project management Estimate Costs Tools & Techniques 66 5 are many project management spread sheets and simulation and statistical tools- some of them you must already be using. vendor bid analysis (Other cost estimating methods) For example, you are able to estimate costs of procurement items during vendor bid analysis. Reserve analysis Most cost estimates include contingency for known-unknowns (identified risk). Estimate Costs Tools & Techniques 66 6 This overstates the estimate (pessimistic) and needs to be tackled. Solution 1: add up contingencies for related schedule activities and put this total contingency in a non- schedule activity with zero duration. Place it across the network path. Like at work package level assign it to work package subnet to a zero- duration activity that runs from start to end. Reserve analysis Most cost estimates include contingency for known-unknowns (identified risk). Estimate Costs Tools & Techniques 66 7 This overstates the estimate (pessimistic) and needs to be tackled. Solution 1: the contingency reserve, as measured by the resource consumption by performing the work package activities, can be adjusted. Thus cost variances will be more accurate and not based on pessimistic estimate of contingency reserve. Reserve analysis Most cost estimates include contingency for known-unknowns (identified risk). Estimate Costs Tools & Techniques 66 8 This overstates the estimate (pessimistic) and needs to be tackled. Solution 2: put the contingency reserve at the end of CP. The contingency reserve, as measured by the resource consumption by performing the work package activities, can be adjusted. Thus cost variances will be more accurate and not based on pessimistic estimate of contingency reserve. Estimate Costs Tools & Techniques Please remember! Contingency reserves must be used at the 66 9 Contingency reserves must be used at the discretion of the project manager to deal with known unknowns, anticipated but uncertain events. What about management reserves? Cost of quality Considered while developing cost estimates. Estimate Costs Tools & Techniques 67 0 1) Cost of prevention 2) Cost of appraisal if not provided, then incur cost of failure, that is many times of above two. Estimate Costs Tools & Techniques Three-point estimates Just consider how risky are your original single point estimates? 67 1 original single point estimates? We can improve the accuracy by finding three-point estimates and then take their average: 1) Most likely 2) Optimistic 3) pessimistic Estimate Costs Tools & Techniques Three-point estimates 1) Most likely: duration considering all resources with their 67 2 all resources with their productivity, availability, dependencies on their participants, and interruptions. 2) Optimistic: best case of most likely. 3) Pessimistic: worst case of most likely. 1) Activity cost estimates Quantitative approximation of costs to be incurred on the resources to Estimate Costs OUTPUTS 67 3 to be incurred on the resources to complete project activities. It includes inflation allowance and cost reserve. We can present them in summary form or detailed form as per the requirement. 2) Basis Of Estimates Document contains: Estimate Costs OUTPUTS 67 4 Description of the scope of work estimated by reference to WBS Basis for estimation Assumptions made An indication of possible results Any other application area specific information 3) Project Document Updates may include Estimate Costs OUTPUTS 67 5 The Risk register Determine Budget Project Cost Management Issue Solution 67 6 How to have a cost baseline for measuring and monitoring cost performance? Aggregate cost estimates of activities or work packages to establish a COST BASELINE! Issue Determine Budget Project Cost Management 67 7 Please remember! COST BASELINE includes all authorized budgets, but EXCLUDES management reserves!!! Please dont forget it! Project budgets constitutes the funds allowed to execute the project. Cost performance is measured against the authorized budget! Determine Budget Project Cost Management 67 8 Planning Core Processes REAL LIFE SCENARIO In real life, the cost estimates are made after the budgetary approval has been given, but we should try to make estimates before we present request for budget! WE should prepare cost estimates before budget requests and work authorization! Project Cost Management TOOLS & Determine Budget process overview 67 9 Activity cost estimates Basis Of Estimates Project Schedule Resource calendars Contracts Scope Baseline OPAs INPUTS TOOLS & TECHNIQUES Cost aggregation Reserve analysis Expert Judgment Historical Relationships Funding limit reconciliation OUTPUTS Cost Performance Baseline Project funding requirements Project Document Updates Activity cost estimates Project Cost Management - Inputs Determine Budget 68 0 Activity cost estimates provide estimates of schedule activities within a work package which are added up to get cost baseline for each work package. Basis Of Estimates Project Cost Management Determine Budget 68 1 Basis Of Estimates guides cost budgeting as any basic assumptions dealing with the inclusion or exclusion of indirect costs in the project budget is specified in the basis of estimates. Project schedule Project Cost Management Determine Budget 68 2 Project schedule provides start and finish dates of the activities, schedule milestones, work packages, planning packages, and control accounts. This information helps to aggregate costs to the calendar periods when the costs are planned to be incurred. Resource calendars provide information on which resources Project Cost Management Determine Budget 68 3 provide information on which resources are assigned to the project and when They are assigned. This in formation is used to indicate resource rates over the Duration of the project. Contracts Applicable contract info and costs are included while determining the budget. Organizational process assets - existing cost budgeting-related policies, procedures, and guidelines, Project Cost Management Determine Budget 68 4 policies, procedures, and guidelines, - Cost budgeting tools, - Reporting formats. Scope Baseline a) Scope statement: provides formal limitations by period for expenditure of project funds can be mandated by the organization, by contract or by the other entities, such as government agencies. Scope Baseline b) Work breakdown structure: provides relationships among all the project Project Cost Management Determine Budget 68 5 relationships among all the project deliverables and their various complements. c) WBS dictionary (and related detailed statements) : provide an identification of the deliverables and a description of work in each WBS component needed to produce each deliverable. 1. Cost aggregation Activity estimates are added up by work packages. Work Project Cost Management- Tools & Techniques Determine Budget 68 6 by work packages. Work package estimates are added up for higher component levels of WBS (control accounts) and finally for the entire project. 2. Reserve analysis Reserve analysis establishes contingency reserves. Here, we Project Cost Management Determine Budget 68 7 contingency reserves. Here, we establish management contingency reserves: budgets for reserved for unknown unknowns. These budgets are not part of cost baseline and are not considered in EV calculations. Project manager has to obtain management approval before spending them. 3. Expert Judgment Judgment provided based upon expertise in an application area, Project Cost Management Determine Budget 68 8 expertise in an application area, knowledge area, discipline, industry, etc., as appropriate for the activity being performed should be used in determining budget. 4. Historical relationships Any historical relationships that result in parametric estimates or analogous estimates Project Cost Management Funding limit reconciliation Large expenditure of funds is undesirable for organizational operations. Hence, expenditure of funds is reconciled with funding disbursement limits set by the customer or performing organization. 68 9 parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs. Such models may be simple (construction based on cost per square foot) or complex (model of software development costing multiple separate adjustment factors, each of which has numerous points in it- Function Point Analysis). 4. Historical relationships Both the cost and accuracy of analogous and parametric models varies widely. They are helpful Project Cost Management Funding limit reconciliation Large expenditure of funds is undesirable for organizational operations. Hence, expenditure of funds is reconciled with funding disbursement limits set by the customer or performing organization. 69 0 parametric models varies widely. They are helpful only when: Historical information used to develop is accurate Parameters used are readily quantifiable Models are scalable. 5. Funding limit reconciliation Expenditure of funds should be reconciled with any funding limits on the commitment of funds for Determine Budget- Tools & Techniques 69 1 any funding limits on the commitment of funds for the project. A variance between funding limits and planned expenditure leads to the rescheduling of work. Cost Performance baseline IT IS A TIME-PHASED BUDGET Determine Budget - Outputs 69 2 IT IS A TIME-PHASED BUDGET ONLY. Used for measuring and monitoring the cost performance- actual cost versus allocated cost. Displayed in the form of S-curve Cost baseline, Cash Flow and Funding COST BASELINE FUNDING REQUIREMENTS Determine Budget - Outputs 69 3 MANAGEMENT RESERVE Difference between the maximum funding And the end of the cost Baseline. TIME C U M M U L A T I V E
V A L U E S Determine Budget - Outputs Project funding requirements 69 4 requirements Total or periodic are derived from cost baseline. May include an additional margin to allow for either early progress or cost overruns. Determine Budget - Outputs Project funding requirements 69 5 Total funds required= cost baseline + management contingency reserve. Each funding may include some part of management contingency or it may be given only when needed (depends on organization's policies). Determine Budget - Outputs Project document updates include 69 6 include - risk register - cost estimates - project schedule Project Quality Management 69 7 Project Quality Management Project Quality Management Processes include all activities of the 69 8 Processes include all activities of the performing organization that determine: Quality policy, objectives, and responsibilities to ensure project satisfies the needs for which it has been undertaken Project Quality Management Implements the quality management system 69 9 Implements the quality management system through: Quality policy, procedures and processes of Plan Quality, Perform Quality Assurance, and Perform Quality Control- WITH CONTINUOUS PROCESS IMPROVEMENT ACTIVITIES performed throughout! Project Quality Management 70 0 Quality is delivering to satisfy the customer. A quality-oriented project has two aims: 1) To produce the correct end-item 2) To produce it in the correct way Project Quality Management 1) To produce the correct end-item: 70 1 1) To produce the correct end-item: Concerns the product of the project Addressed through good definition of user requirements and project objectives If the requirements and objectives specification (from the relevant phase) are clear, accurate, and complete, the project will be headed toward producing the correct end-item. Project Quality Management 2) To produce it in the correct way: 70 2 2) To produce it in the correct way: Concerns the process of conducting the the project and ensures it actually produces the end-item according to the requirements Addressed by a good project quality plan which ensures that the work performed will result in an end-item that conforms to prescribed user and project requirements and continues to do so after the end-item is put to operation (QUALITY OF CONFORMANCE) Project Quality Management 70 3 Attention to quality requires: Continuous review of project progress Checking that the product of the project is meeting user requirements Checking that the user requirements and project objectives are satisfying changing customer needs The quality plan specifies the measures and procedures for: 1) monitoring and comparing work output with requirements 2) comparing requirements with current needs and realities Project Quality Management 70 4 Attention to quality continues even after the project is completed: by monitoring the end-item for how well it continues to perform and meet customer needs This monitoring ( done by the customer or contractor) provides information to suggest FUTURE DESIGNS or SOLUTIONS which are: Project Quality Management Attention to quality continues even after the project is completed: 70 5 project is completed: 1) completely new, or 2) improvements upon existing products and systems QUALITY PLAN MUST SPECIFY THE MEASURES AND PROCEDURES FOR MONITORING OPERATIONAL PERFORMANCE! Project Quality Management THE CONCEPT 70 6 THE CONCEPT Quality is the totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs. IN OTHER WORDS, it is the degree to which a set of inherent characteristics fulfill requirements. Stated or implied needs, therefore, needs guide us in developing project requirements. Project Quality Management THE CONCEPT 70 7 THE CONCEPT In project context, the key issue is converting IMPLIED NEEDS INTO REQUIREMENTS- through project scope management. Quality therefore is conformance to requirements and fitness for use. This means you must produce what you promised to produce and the product must be fit for use for which it is meant. Project Quality Management THE CONCEPT 70 8 THE CONCEPT Quality must be planned in, not inspected in. Project Quality Management THE CONCEPT 70 9 THE CONCEPT No GOLD PLATING. No customer extras, no extra functionality, no higher quality components, no extra scope of work or better performance. Project Quality Management THE CONCEPT 71 0 THE CONCEPT Low quality is a problem, low grade is not. Project Quality Management THE CONCEPT 71 1 THE CONCEPT GRADE (a category assigned to product/services) - same functional use - different technical characteristics Example: a software product HIGH QUALITY: readable manual, no defects LOW GRADE : limited features Project Quality Management THE CONCEPT 71 2 THE CONCEPT Example: a software product LOW QUALITY : poorly organized manual, many defects HIGH GRADE : numerous features THE PROJECT MANAGEMENMT TEAM MUST DETERMINE AND DELIVER THE REQUIRED LEVELS OF BOTH: QUALITY, and GRADE. Project Quality Management THE CONCEPT 71 3 THE CONCEPT Precision and accuracy: two different things 1) PRECISION IS CONSISTENCY ( the value of repeated measurements are clustered and have little scatter). 2) ACCURACY IS CORRECTNESS ( the measured value is very close to true value). Project Quality Management THE CONCEPT 71 4 THE CONCEPT A PRECISE MEASUREMENT IS NOT NECESSARILY AN ACCURATE MEASUREMENT! A VERY ACCURATE MEASUREMENT IS NOT NECESSARILY PRECISE! Project Quality Management THE CONCEPT 71 5 THE CONCEPT IT IS PRIME RESPONSIBILITY OF THE PROJECT MANAGEMENT TEAM TO DECIDE: how much precision or accuracy or both are needed Project Quality Management 71 6 THE CONCEPT PROJECT QUALITY MANAGEMENT IS COMPATIBLE WITH: ISO 9000 and 10000 series Proprietary quality management approaches (Deming, Juran, Crosby, and others) Nonproprietary approaches (TQM, Six Sigma, FMEA, Design Reviews, Voice of Customer, COQ, and Kaizen (continuous improvement) Project Quality Management THE CONCEPT 71 7 THE CONCEPT Hence, Modern quality management complements Project Quality Management. Both advocate the same tenets: Customer satisfaction Prevention over inspection Management responsibility Continuous improvement Project Quality Management THE CONCEPT 71 8 THE CONCEPT CUSTOMER SATISFACTION understanding, evaluating, defining, and managing expectations to fulfill customer requirements THIS NECESSITATES A COMBINATION OF 1) Conformance to requirements the project MUST produce what it said it would Project Quality Management THE CONCEPT 71 9 THE CONCEPT CUSTOMER SATISFACTION 2) Fitness for use the product/service MUST satisfy the REAL NEEDS Project Quality Management THE CONCEPT 72 0 THE CONCEPT PREVENTION OVER INSPECTION THE COST OF PREVENTING MISTAKES IS NORMALLY MUCH LESS THAN THE COST OF CORRECTING THEM (DEMONSTRATED BY INSPECTION) Project Quality Management THE CONCEPT 72 1 THE CONCEPT MANAGEMENT RESPONSIBILITY success needs participation of all team members, but it stays with the management to provide resources required to succeed. Deming suggested: as much as 85% of the cost of quality is management problem Project Quality Management THE CONCEPT 72 2 THE CONCEPT MANAGEMENT RESPONSIBILITY Deming suggested: once the quality issue has hit the floor, or the worker level, the workers have little control Project Quality Management THE CONCEPT 72 3 THE CONCEPT MANAGEMENT RESPONSIBILITY A company had bid on the an Express Highway Project and won it. To earn more profits, management decided to use inferior-grade asphalt. The workers laying the asphalt have little control over its quality. REAL LIFE SCENARIO Project Quality Management THE CONCEPT 72 4 THE CONCEPT CONTINUOUS IMPROVEMENT PDCA (plan-do-check-act) Cycle, defined by Shewhart and modified by Deming, forms the basis for quality improvement Project Quality Management THE CONCEPT 72 5 THE CONCEPT CONTINUOUS IMPROVEMENT Quality improvement initiatives (TQM, SIX SIGMA) can contribute in improving the quality of both: 1) Project management, and 2) The projects product Process improvement models (Malcolm Baldrige, CMM, CMMI) also provide useful guidance. Project Quality Management THE CONCEPT 72 6 Key difference project team MUST know: Projects are too temporary to reap the rewards of investments in product quality improvement (mainly defection prevention, appraisal), hence performing organization must bear these investments! THE CONCEPT THE CONCEPT Project Quality Management 72 7 THE CONCEPT Project quality management addresses both: Management of the project Management of projects product We MUST succeed in meeting quality requirements for both: a) Project b) Product of the project Project Quality Management 72 8 THE CONCEPT Our inability to meet quality requirements either of the project or product of the product leads to SERIOUS NEGATIVE IMPACT FOR STAKEHOLDRES. Project Quality Management 72 9 THE CONCEPT Satisfying customer requirements by over- stretching project team leads often to their quitting the organization subsequently. Accomplishing project schedule by hurrying planned quality inspections generally leads to negative impact when defects go unchecked. Project Quality Management 73 0 Processes consist of all the activities of the performing organization that determine quality policies, objectives, and responsibilities to ensure: PROJECT WILL SATISFY THE NEEDS FOR WHICH IT WAS UNDERTAKEN Project Quality Management 73 1 IMPLEMENTS the quality management system Through: a) The policy b) Procedures c) Processes Quality Planning Quality Assurance Quality Control OF CONTINUOUS PROCESS IMPROVEMENT ACTIVITIES THROUGHOUT Plan Quality Quality management plan Quality metrics Project management plan A Standards & Regulations Quality policy Project Quality Management Project plan updates 73 2 Perform Quality Assurance Perform Quality Assurance Perform Quality Control Quality metrics Checklists Quality baseline Integrated Change control Quality control measurements Recommended corrective/ preventive actions/defect repair OK deliverables Change requests Corrective action Change requests Project plan updates A P P R O V A L S Scope statement Product description Other planning outputs Other Planning Processes I N P U T S t o Project plan updates Approved Change requests Project Quality Management Plan Quality 73 3 The process of Identifying quality requirements and standards for the project and the product and documenting how the project will demonstrate compliance. Project Quality Management Plan Quality IMPORTANCE 73 4 IMPORTANCE One of the key processes while performing Planning Process Group and developing the Project Management Plan Must be performed in parallel with other planning processes. WHY? Project Quality Management Plan Quality 73 5 BECAUSE 1) The required changes in the product to meet quality standards MAY REQUIRE SCHEDULE AND COST ADJUSTMENTS! OR 2) The desired product quality MAY NEED DETAILED RISK ANALYSIS OF AN IDENTIFIED PROBLEM! Plan Quality process overview Enterprise Environmental factors INPUTS TOOLS & TECHNIQUES Cost-benefit Analysis OUTPUTS Quality Management Plan Quality metrics 73 6 factors Organizational process assets Scope Baseline Stakeholder Register. Cost Performance Baseline. Schedule Baseline Risk Register Analysis Benchmarking Design of Experiments Cost of quality (COQ) Additional quality planning tools Control Charts Statistical sampling Flowcharting Proprietary Quality Management Methodologies Quality metrics Quality Checklists Process improvement plan Project document updates 1. Enterprise environmental Factors provide: - Standards and regulations Plan Quality - INPUTS 73 7 - Standards and regulations - Rules, standards, and guidelines specific to the application area, and - Working/ operating conditions of the project/ product which may affect quality. Plan Quality - INPUTS 2. Organizational process assets provide: 73 8 provide: a) Quality policy, procedures and guidelines, b) historical database, and c) lessons learned. Plan Quality - INPUTS 2. Organizational process assets Quality policy sets the intended direction of a performing organization with regard to quality. 73 9 performing organization with regard to quality. Quality policy of the performing organization for their products can be adopted as is for use on the project. BUT if there is no quality policy or multiple organizations are involved, then the project management team should develop a quality policy for the project with knowledge of the stakeholders. 3. Scope Baseline. - A. Scope statement: contains the product description, major project deliverables, and acceptance criteria. The product description contains Plan Quality - INPUTS 74 0 description, major project deliverables, and acceptance criteria. The product description contains details of technical issues and other concerns that can affect quality planning. The definition of acceptance criteria can significantly increase or decrease project costs and quality costs. Satisfying acceptance criteria means the needs of the customer have been met. - B. WBS: identifies the deliverables, the work packages and the control accounts used to measure project performance. Scope Baseline. - C. WBS dictionary: defines technical information for WBS elements and must be considered during quality planning. Plan Quality - INPUTS 74 1 WBS elements and must be considered during quality planning. 4. Cost Performance baseline documents the accepted time phase used to measure cost performance. Quality must be achieved within this time-phased budget. 5. Risk Register provides threats and opportunities that may impact quality requirements 6. Schedule Baseline accepted schedule within which quality parameters should be achieved. Plan Quality - INPUTS 74 2 should be achieved. 7. Stakeholder Register identifies stakeholders with a particular interest , or impact on quality. Plan Quality Tools & Techniques 1. Cost/Benefit analysis analyze cost-benefits tradeoffs Primary benefit of meeting Quality 74 3 Primary benefit of meeting Quality Requirements: BENEFITS 1. LESS REWORK 2. HIGHER PRODUCTIVITY 3. LOWER COSTS 4. INCREASED STAKEHOLDER SATISFACTION Plan Quality Tools & Techniques 1. Cost/ Benefit analysis PRIMARY COST OF PROJECT QUALITY MANAGEMENT ACTIVITIES 74 4 QUALITY MANAGEMENT ACTIVITIES COSTS TRAINING SURVEYS STUDIES APPRAISAL DESIGN REVIEW 2. Benchmarking Purpose: To generate ideas for improvements and offer standards to measure performance. Plan Quality Tools & Techniques 74 5 offer standards to measure performance. Method: We compare the actual or planned projects practices to those of other projects. Sources: These projects can be: a) within performing organization or outside b) Within same application area or in another Application area Plan Quality Tools & Techniques 3. Design of experiments (DOE) An analytical technique that identifies the elements, or variables, that will have impact on overall project 74 6 or variables, that will have impact on overall project outcomes. Generally, this method is used concerning the product of the project but can also be applied to project management processes. This process designs and sets up experiments to determine the ideal solution for a problem utilizing a Limited number of sample cases. Plan Quality Tools & Techniques 4. Cost of quality Consists of all our costs on efforts to: Achieve product / service quality 74 7 Achieve product / service quality Ensure conformance to requirements Work resulting from nonconformance to requirements Plan Quality Tools & TechniquesPlan Quality Cost of quality 74 8 THREE TYPES OF COSTS ARE INCURRED: 1. Prevention costs 2. Appraisal costs 3. Failure costs Plan Quality Tools & TechniquesPlan Quality Cost of quality Prevention costs Prevention means keeping defects 74 9 Prevention means keeping defects out of the hands of the customer. These costs are associated with producing a product/service without defects in order to satisfy Customer Requirements. Example: quality planning, training, design review, contractor and supplier costs Plan Quality Tools & TechniquesPlan Quality Cost of quality Appraisal costs 75 0 Appraisal costs Expended to examine the product or process and make certain that the Requirements are being met. Examples: inspection, testing Plan Quality Tools & TechniquesPlan Quality Cost of quality Failure costs 75 1 Failure costs Are the costs incurred when things dont happen according to the plan: 1) Internal failure costs result when customer requirements are not satisfied and the product is still in the control of the performing organization Example: corrective action, rework, scraping, and downtime Plan Quality Tools & TechniquesPlan Quality Cost of quality Failure costs Failure costs Are the costs incurred when things 75 2 Are the costs incurred when things dont happen according to the plan: 2) External failure costs result when the product has reached the customer and they determine that their requirements have not been met. Example: inspections at customers site returns, and customer service costs COST OF POOR QUALITY: FAILURE COSTS! 5. Flow charting It is any diagram that shows logical steps that must be Plan Quality Tools & Techniques 75 3 performed to accomplish an objective. It displays how individual elements of a System interrelate. In the case of quality management,two types of flow charts are used: Cause-and-effect diagrams (Ishikawa diagrams, fishbone diagrams) show relationship between various factors (causes) to potential problems/effects. 5. Flow charting Cause-and-effect diagrams (Ishikawa Plan Quality Tools & Techniques 75 4 Cause-and-effect diagrams (Ishikawa diagrams, fishbone diagrams) show relationship between various factors (causes) to potential problems/effects. Process flow diagram PROCESS EXAMPLE:CAUSE-AND-EFFECT DIAGRAM MATERIAL MACHINE TIME Plan Quality Tools & Techniques 75 5 ENVIRONMENT PROJECT TEAM MAJOR DEFECT ENERGY MEASUREMENT System or process flow charts Show the logical steps needed to Plan Quality Tools & Techniques 75 6 Show the logical steps needed to accomplish an objective and interrelation of individual elements of a system. These charts assist project team to assess the type and area where quality problems may appear. Plan Quality Tools & Techniques EXAMPLE: Process Flowchart 1. Project Request 2. Compliance Copy N = No Y = Yes 75 7 N N N Y Y Y 9. QA Review / Approval 8. Package development Review / Approval 4. Artwork Approved 3. Develop Artwork 5. Change Control for Specs 6. Artwork out for Proofs 12. ORDER MATERIAL 7. Vendors make Proofs 11. SPSECS SIGNED (PACKAGE AND QA) 2. Compliance Copy 10. Approved Proofs back to Vendor 6. Control Charts Used to determine whether or not process is stable or has predictable performance. Plan Quality Tools & Techniques 75 8 or has predictable performance. Upper and lower specification i are set based on the requirements, reflecting minimum and maximum values allowed. There may be penalties for crossing these limits. For repeatable processes are generally +/- 3 sigma! 6. Control Charts A process is out of control when data points cross the limits or seven consecutive points are above or Plan Quality Tools & Techniques 75 9 the limits or seven consecutive points are above or below the mean, although inside the control limits. Control charts are used to monitor various types of variable outputs. 6. Control Charts Generally, control charts are used to track Plan Quality Tools & Techniques 76 0 Generally, control charts are used to track repetitive activities for producing manufactured lots, but may also be used to monitor schedule and cost variances, volume and frequency of scope changes, other management results to determine if management processes are in control! 7. Statistical Sampling:- It involves choosing part of a population of Plan Quality Tools & Techniques 76 1 It involves choosing part of a population of interest for inspection. Sample frequency and sizes should be determined during the plan quality process so the cost of quality will include the no. of tests, expected scrap, etc. 8. Additional quality planning tools: Brainstorming Plan Quality Tools & Techniques 76 2 Brainstorming Flowcharting Force field analysis Matrix diagrams Nominal group techniques Affinity diagrams Prioritization techniques 9. Proprietary Quality Management Methodologies - Six Sigma Plan Quality Tools & Techniques 76 3 - Six Sigma - Lean Six Sigma - Quality Function Deployment. - CMMI, etc WOW! Plan Quality OUTPUTS 76 4 WOW! We have done so much! Lets examine our outputs. Quality management plan describes how the project management team will implement its quality policy Plan Quality OUTPUTS 76 5 team will implement its quality policy Details the project quality system that Includes: Organization structure Responsibilities Procedures Processes, and resources REQUIRED TO IMPLEMENT PROJECT QUALITY MANAGEMENT Quality management plan PROVIDES input to overall project plan Plan Quality OUTPUTS 76 6 PROVIDES input to overall project plan Addresses QC, QA, and CONTINUOUS IMPROVEMENT for the project Quality management plan MUST include efforts at the front end of the project to make sure that the earlier Plan Quality OUTPUTS 76 7 the project to make sure that the earlier decisions on: Concepts, designs, and tests ARE CORRECT This should be done through independent Peer Review. Benefits of the review: reduction of schedule and cost overruns due to rework Quality metrics (Operational definitions) A quality metrics is an operational definition that describes, in very specific terms Plan Quality OUTPUTS 76 8 1) a project or product attribute and 2) how the quality control will measure it. Examples: 1) On-time performance, 2) Budget control, 3) Defect frequency, 4) Failure rate, 5) Availability, 6) Reliability, and 7) Test coverage. Quality metrics (Operational definitions) A measurement is an actual value. The tolerance defines the allowable variations on the metrics Plan Quality OUTPUTS 76 9 defines the allowable variations on the metrics Example: A metric related to the quality objective of staying within the within the approved budget by +/- 10% could be to measure the cost of every deliverable and determine the percent variance from the approved budget for that deliverable. Quality metrics are used in Quality Assurance and Quality Control. Quality Checklists It is a component specific, structured tool used to verify a set of required steps has been performed. Plan Quality - OUTPUTS 77 0 verify a set of required steps has been performed. A do this list, or have you done this monitor! These lists ascertain consistency in frequently performed tasks. Most organizations have it, or you can get one from commercial service providers or professional associations. Process improvement plan details steps for analyzing processes to identify activities which enhance their value. Process boundaries defining purpose, start and Plan Quality OUTPUTS 77 1 1) Process boundaries defining purpose, start and end of processes, inputs, outputs, data required, process owner, and process stakeholder. 2) Process configuration, a flowchart of process to help analysis with identified interfaces. 3) Process metrics to maintain control over status of processes. 4) Targets for improved performance, guides process improvement activities. Project document updates - Stakeholder Register. Plan Quality OUTPUTS 77 2 - Responsibility Assignment Matrix Project Human Resource Management 77 3 HR HR HR HR HR HR THE CHALLENGES Most project managers have considerably more responsibility than authority, so they need different HR Project Human Resource Management 77 4 responsibility than authority, so they need different skills and approaches than traditional managers. Stakeholders often have different needs and perspectives, but project manager has to balance them, and yet achieve project objectives. Generally, project staff comes from various functional areas and do not report to the project manager, but he has to get work done by them. THE CHALLENGES Project mangers role is so central that without it there would be no such thing as project HR Project Human Resource Management 77 5 there would be no such thing as project management. But he/she has to wear lot of different hats, many at the same time. He/she has to be an integrator, communicator, decision maker, motivator, entrepreneur, and change agent. The Project Manager has to make most effective use of all project stakeholders- sponsor, customer, functional managers, individual contributors, etc. Look at his task! THE CHALLENGES Managing people on projects involves: Key General Management Skills, like leading, HR Project Human Resource Management 77 6 Key General Management Skills, like leading, communicating, negotiating, problem solving, and influencing organization. Dealing with individuals- delegating, motivating, coaching, mentoring, etc. Dealing with groups- team building, solving conflicts, etc. Administering the human resource function. May also have the responsibility of HR redeployment and release (depends on where they belong). THE CHALLENGES Further, application of these behavioral and HR Management skills is different on projects than in HR Project Human Resource Management 77 7 Management skills is different on projects than in operations because: Personal and organizational relations on projects are transient and new (as projects are temporary). Often the number and type of stakeholders change as project phase changes leading to the issue of adopting new techniques as old ones may not apply in another phase. THE CHALLENGES The project manager and project team must know HR Project Human Resource Management 77 8 The project manager and project team must know administrative requirements to ascertain compliance, even though HR Administration activities are not their responsibility. All this poses great managing problems for the project manager and project team, and they must understand things involved in advance to address them properly. Consists of: processes needed to organize and manage the project team, the people who are assigned roles and HR Project Human Resource Management 77 9 team, the people who are assigned roles and responsibilities for completing the project. Apart from assigning roles, we must involve the team members in planning and decision making. WHY? Early involvement of team members ADDS EXPERTISE DURING PLANNING PROCESSES AND ALSO ENSURES COMMITMENENT! Whats the difference between project team and project management team ? HR Project Human Resource Management 78 0 Project team: All the project team members, including project management team, the project manager and, for some projects, project sponsor. Project management team: A subset of project team. The group is called core, executive, or leadership team and is responsible for project management activities like planning, controlling and closing. Develop Project management plan Project HR Management HR Develop HR Plan Roles and Responsibilities Project Organization Charts Staffing Management Plan A EEFs HR Requirements Organization Culture and Structure Templates Checklists Project managnt. plan 78 1 Integrated Change control Performance reports Work Performance reports O P A Updates Acquire project team Develop project team Project staff assignments Resource availability Staffing management plan updates Project plan management updates Requested Changes Recommended P & C actions Approved Change requests Approved corrective/ Preventive actions A P P R O V A L S Close project Direct & manage Project Execution Report Performance Estimate activity resources Manage project team Team Performance assessment OPAs Checklists Project HR Management Determines project roles, responsibilities, and reporting relationships. Project roles can be assigned to persons or groups, inside or outside the organization performing HR Develop Human Resource Plan 78 2 or groups, inside or outside the organization performing the project. The output is staffing management plan that describes: 1) How and when team members will be acquired 2) Criteria for releasing them 3) Training needs 4) Recognition & reward plans 5) Compliance considerations 6) Safety issues 7) Effect of staffing management plan on the organization Done as part of earliest phases of the project HR Project HR Management Develop Human Resource Plan 78 3 project Its results are reviewed throughout project to ascertain continued applicability Is closely linked with communications planning because organization structure has significant influence on communication needs of the stakeholders Develop Human Resource Plan Is the process of 78 4 Is the process of 1) identifying and documenting project roles, 2) Responsibilities and required skills, 3) reporting relationships, and 4) Creating a staffing management plan. Develop Human Resource Plan Human Resource Plan documents: - Project roles and responsibilities 78 5 - Project roles and responsibilities - Project organization charts - Staffing management plan (including timetable for staff acquisition and release, training needs, team-building strategies). Develop Human Resource Plan IMPORTANT Staffing management plan includes a) Timetable for staff acquisition and release, 78 6 a) Timetable for staff acquisition and release, b) Training needs, c) Team-building strategies, d) Plan for recognition and rewards programs, e) Compliance considerations, f) Safety issues, and g) Impact of staffing management plan on the organization. Develop Human Resource Plan IMPORTANT consideration should be given to The availability of or competition for, scarce or limited resources. 78 7 or limited resources. These resources may be inside or outside the performing organization. Other projects may be competing for same skill sets. Develop Human Resource Plan IMPORTANT These factors may significantly affect project costs, schedules, risks, quality, and 78 8 project costs, schedules, risks, quality, and other areas. Effective human resource planning must consider these factors and plan for for them and develop human resource options! Develop Human Resource Plan process view INPUTS TOOLS & TECHNIQUES OUTPUTS Project Human Resource Management 78 9 Enterprise environmental factors Organizational process assets Activity Resource Requirements INPUTS TECHNIQUES Organization charts and position descriptions Networking Organizational Theory OUTPUTS Human Resource Plan Enterprise environmental factors Definition of roles and responsibilities on the HR Project HR Management Develop Human Resource Plan INPUTS 79 0 Definition of roles and responsibilities on the project is evolved with an understanding of : 1) The ways that existing organizations will be involved 2) How the technical disciplines will interact with each other 3) How people currently will interact with one another INPUTS Commonly occurring enterprise environmental factors involving organizational culture and HR Project HR Management Develop Human Resource Plan INPUTS 79 1 organizational culture and structure 1) Organizational Interfaces 2) Technical Interfaces 3) Interpersonal Interfaces 4) Logistical 5) Political INPUTS HR Organizational interfaces 1) which organizations / departments will participate in Project HR Management Develop Human Resource Plan INPUTS 79 2 departments will participate in the project 2) what are present working arrangements among them 3) what formal / informal relationships prevail among them(could be highly complex or quite simple). INPUTS Project HR Management HR Project interfaces REAL LIFE SCENARIO 79 3 Delhi Metro Project has engaged 38 contractors ( 33 Indian, 5 International) to work over several years. The reporting relationships are pretty complex. Various technical disciplines also interface. BSNL Voice Clarity Project at Greater Noida site was a simple in-house project that did not offer such interface complexity. Project HR Management Technical interfaces 1) What are different technical HR Develop Human Resource Plan INPUTS 79 4 1) What are different technical disciplines and specialties that will be required to accomplish the project 2) Are there various types of: a) engineering approaches b) software languages c) equipments THAT NEED TO BE COORDINATED! INPUTS Project HR Management HR Technical interfaces 3) Whether transitions from one Develop Human Resource Plan INPUTS 79 5 3) Whether transitions from one life cycle phase to another pose unique challenges TECHNICAL INTERFACES EXIST BETWEEN PHASES AS WELL AS WITHIN PHASES INPUTS HR Project interfaces REAL LIFE SCENARIO Project HR Management 79 6 In L & T Cement Project, the site design made by civil engineers needed to correspond with the superstructure developed by structural experts. In Honda- Siel Project, the fabrication design team passed work results to construction team to begin plant construction. Interpersonal interfaces 1) What types of formal and informal reporting relationships obtain among the prospective HR Project HR Management Develop Human Resource Plan INPUTS 79 7 obtain among the prospective project team members 2) What are their superior- subordinate relationships 3) What are their supplier-customer relationships 4) What cultural and language differences will impact working relationships among them 5) What levels of mutual trust and respect presently exists INPUTS Project HR Management HR Logistical how much distance separates project Develop Human Resource Plan INPUTS 79 8 how much distance separates project people and units Are project people located in different: 1) buildings 2) time zones 3) countries INPUTS Project HR Management Political 1) What are the individual goals and HR Develop Human Resource Plan INPUTS 79 9 1) What are the individual goals and agendas of Prospective project stakeholders 2) Which groups and people posses informal power in the areas significant to the project 3) What informal alliances exist INPUTS Project HR Management In addition to these EEFs: Constraints that limit flexibility of HR HR Develop Human Resource Plan INPUTS 80 0 Constraints that limit flexibility of HR Planning: Organization structure Collective bargaining agreements Economic conditions INPUTS Project HR Management Organization structure HR ORGANIZTION STRUCTURE CONSTRAINTS If you work in a functional organization, you will face lot Develop Human Resource Plan 80 1 If you work in a functional organization, you will face lot of difficulties in acquiring resources from iron walls of various functional departments. Here, the authority over resources lies with functional managers. You are called project manager, but in fact you just and an expeditor. You are more comfortable in strong matrix because you have authority to direct resources and deploy for project work. Project HR Management Collective bargaining agreements HR Develop Human Resource Plan INPUTS 80 2 agreements entered between the organizations and labor/other employee groups detail require certain roles and reporting relationships. Remember employee groups are important stakeholders ! INPUTS Project HR Management Economic conditions Hiring, freezes, reduced training HR Develop Human Resource Plan INPUTS 80 3 Hiring, freezes, reduced training funds, or lack of travel budget are examples that can limit staffing options. entered between the organizations and INPUTS Project HR Management Organizational process assets with the maturity of project HR Develop Human Resource Plan INPUTS 80 4 with the maturity of project management methodology, organizations have HR planning experiences as Lessons Learned that helps HR planning on our present project. Templates and checklists save time in the beginning and keep us from missing important responsibilities. INPUTS Project HR Management Organizational process assets 1) Templates helps HR planning HR Develop Human Resource Plan INPUTS 80 5 1) Templates helps HR planning and include: i. Project organization charts ii. Position descriptions iii. Project performance appraisals iv. A standard conflict management approach INPUTS Project HR Management Organizational process assets 2) Checklists helps HR planning HR Develop Human Resource Plan INPUTS 80 6 2) Checklists helps HR planning and include: i. Common project roles and responsibilities ii. Typical competencies iii. Training programs iv. Team ground rules v. Compliance & safety issues vi. Reward ideas INPUTS Project HR Management Activity Resource Requirements Provides activity resource HR Develop Human Resource Plan INPUTS 80 7 Provides activity resource requirements and description of other activities like quality assurance, risk management and procurement. For all this, we need to do HR planning. Initial requirements of people and competencies are elaborated and refined in HR planning. INPUTS Project HR Management HR organization charts and position Mostly three types used to Develop Human Resource Plan TOOLS & 80 8 Mostly three types used to document team member roles and responsibilities: 1) Hierarchical 2) Matrix 3) Text-oriented Objective: Each work package must have an unambiguous owner and all team member have clear roles and responsibilities! TOOLS & TECHNIQUES Project HR Management HR Organization chart Project reporting relationships are graphically displayed. 80 9 graphically displayed. Depending on the project needs, you can make it formal or informal; broadly-detailed or highly-detailed. INR 2 billion Reliance Power Dadri Project, has mind-boggling organization chart for about 7000 people. Project HR Management HR Organization breakdown Structure (OBS) OBS Develop Human Resource Plan 81 0 Structure (OBS) WBS shows how project deliverables are broken down into work packages and becomes one way to depict high-level areas of responsibility. OBS looks similar but arranged according to departments, units, or teams: the project activities or work packages listed under each Department. This helps each operational department to see its portion of OBS. Project HR Management HR Develop Human Resource Plan Resource breakdown Structure Another hierarchical chart that breaks RBS 81 1 Another hierarchical chart that breaks down project by types of resources Helps tracking project costs, aligned with the organizations accounting system RBS of Delhi Metro Project shows all welders (over 600) and welding machines (630) being used in different areas of this massive even though they are scattered in different branches of Project OBS PERSON PHASES Vikas Rajiv Shasi Manas Mona Rahul . Excavation HR Sample RAM using RACI format Project HR Management Develop Human Resource Plan 81 2 R = responsible, A = accountable, C = consult, I = inform Excavation A I I I I R Foundation I A R C C C Frame I C A R I I Walls and ceilings A R C C C C Interior systems R I C I I A Project HR Management HR RAMs of larger projects RAMs on larger projects are developed at various 81 3 RAMs on larger projects are developed at various levels of WBS. High-level RAM describes the group or unit accountable for each component of WBS. Lower-level RAMs assigns roles and responsibilities for specific activities to concerned persons. RAM shows connection between work and team members! Project HR Management HR Text-oriented format Team member responsibilities that require detailed descriptions can be Text-oriented format Role 81 4 require detailed descriptions can be written here in outline form: Responsibilities, authority, Competencies, qualifications This format is also called: Position Descriptions and Role- Responsibility-Authority forms. Make great templates if updated throughout current project! Authority Responsibilities Project HR Management HR Other sections of project management plan Develop Human Resource Plan INPUTS 81 5 We consider team member responsibilities detailed in other sections of the project management plan: 1) Risk register lists risk owners 2) Communication management plan lists people responsible for communication activities 3) Quality plan lists people responsible for quality assurance and quality control activities INPUTS Project HR Management HR Networking For effectiveness of staffing management plan options, we must understand Develop Human Resource Plan INPUTS 81 6 plan options, we must understand political and interpersonal factors that may impact them. So, we need to use networking, such as: 1) Proactive correspondence 2) Luncheon meetings 3) Informal conversations 4) Trade conferences Networking pays from start of the project till its completion! INPUTS Project HR Management HR Organization theory (OB) Informs us on the ways people, teams and organizations behave. Develop Human Resource Plan INPUTS 81 7 teams and organizations behave. We must use proven principles to shorten the time needed to arrive at outputs of HR planning. It makes planning more effective. 1) Goal-setting 2) Group Dynamics 3) TIP INPUTS Develop Human Resource Plan- OUTPUTS HR Human Resource Plan includes:- 1) Role and responsibility assignments 81 8 1) Role and responsibility assignments Role: portion of project for which a person is accountable Example Project Roles: business analyst, civil engineer, testing coordinator Role clarity is vital for project success: - authority - responsibilities - boundaries HR Role and responsibility assignments Authority: Develop Human Resource Plan- OUTPUTS 81 9 Authority: - right to apply project resources - make decisions - sign approvals Clarity about authority is necessary for project success. Examples of decisions requiring Clear Authority: - quality acceptance - how to respond to project variances Develop Human Resource Plan- OUTPUTS HR Role and responsibility assignments Responsibility: 82 0 the work team member is expected to perform to complete project activities Develop Human Resource Plan- OUTPUTS HR Role and responsibility assignments Competency: Skill and capacity needed to accomplish project 82 1 Skill and capacity needed to accomplish project activities. Project performance will be adversely affected if team members do not have necessary competencies. Must identify mismatches and make up through: training, hiring, schedule changes, or scope changes. Develop Human Resource Plan- OUTPUTS HR 2) Project organization chart Graphic display of project team member 82 2 Graphic display of project team member and their reporting relationships. We have already discussed it. Develop Human Resource Plan- OUTPUTS HR 3) Staffing management plan Describes how and when HR requirements will be met. 82 3 met. Updated regularly during the project to ONGOING PROJECT TEAM ACQUISITION AND DEVELOPEMNT. Made as per the project needs: - may be detailed or broad - may be formal or informal Subsidiary part of the project management plan Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 1) Staff acquisition: many questions need to be answered 82 4 1) Staff acquisition: many questions need to be answered when planning acquisition of team members: Will they come from within the organization or outside? Will they need to work at a central location or distant ones? What costs are entailed with each level of expertise required? How much help HR depart will extend to project management team? Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 82 5 2) Timetable: necessary time frames they will be used, plus when recruitment should begin. One tool: Resource Histogram: bar chart showing number of hours that a person, department, or whole project team will be required each week or month during the project. Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 82 6 Contents: Resource Histogram: may include a horizontal line maximum number of hours available from a particular resource. If bars extend beyond the available resource hours, we need to use resource leveling (adding more resources or extending schedule). 70 80 90 HR S t a f f
h o u r s Sample Resource Histogram 82 7 0 10 20 30 40 50 60 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr S t a f f
h o u r s Resource Usage Staff hours Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 82 8 3) Release criteria: determining method and timing. Benefits project and team members. Special Attention should be paid to releasing persons or groups when their work completes. Benefits of proper reassignment procedures: 1. Lowers costs by reducing the tendency to make work to fill the time between present and the next assignments 2. Boosts morale by eliminating uncertainty about future employment Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 82 9 4) Training needs: if training members assigned are not expected to have necessary competencies, we need to develop a training plan as part of the project and also help them obtain certifications. Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 5) Recognition & rewards: Clear criteria and 83 0 5) Recognition & rewards: Clear criteria and planned system to encourage and reinforce DESIRED BEHAVIORS. Must be based on activities and performance under ones control. Example: If someone is to be rewarded for meeting cost objectives, then he/she must be given authority on matters that affect expenses. Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 83 1 5) Recognition & rewards: Such a with defined timeframes ensures that recognition doe take place and not ignored! Given as part of the Develop Project Team process. Develop Human Resource Plan- OUTPUTS HR Staffing management plan Contents: 83 2 6) Compliance: strategies for complying with applicable government regulations, union contracts, and other HR policies. 7) Safety: policies and procedures to protect team members from hazards. Include in Risk Register also. Project Communications Management 83 3 COMMUNICATIONS THE CONCEPT Project Communications Management Communication 83 4 THE CONCEPT 1. Proper communication is one of the critical success factors. 2. There should be a structured approach to it. 3. Communication needs of all project stakeholders must be identified in advance: What they need to be communicated How they are going to be communicated When they will to be communicated THE CONCEPT Project Communications Management Communication 83 5 THE CONCEPT 4. This is a very proactive approach and must be adopted on all projects to ensure smooth working, amicable relations, and project success. 5. This is particularly more important due the fact that most project managers do not know what this is, nor do they realize that individual needs of each stakeholder must be addressed. Hence, project communications management employs Communication Project Communications Management 83 6 Hence, project communications management employs processes needed to ensure timely and appropriate: 1) generation 2) collection 3) distribution 4) storage 5) retrieval, and 6) ultimate disposition OF PROJECT INFORMATION project communications management provides: Communication Project Communications Management 83 7 project communications management provides: CRITICAL LINKS AMONG PEOPLE AND INFORMATION THAT ARE REQUIRED FOR SUCCESSFUL COMMUNICATIONS Project managers spend about 90% time communicating: 1) With the project team 2) With the customer 3) With the functional managers 4) With the sponsor 5) With other stakeholders Everyone involved in the project must understand: Communication Project Communications Management 83 8 Everyone involved in the project must understand: HOW COMMUNICATIONS AFFECT THE PROJECT AS A WHOLE Communication skills (though not same as project Communication Project Communications Management 83 9 Communication skills (though not same as project communications management) have great significance during Project Communications Management. MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT Communication Project Communications Management 84 0 MASTERING THE ART OF COMMUNICATION IS VERY IMPORTANT IT INVOLVES: 1) Sender-receiver models 2) Choice of media 3) Writing style 4) Presentation techniques 5) Meeting management techniques Communication Project Communications Management Sender-receiver model 84 1 R E C E I V E R DEVELOP IDEA ENCODE TRANSMIT RECEIVE DECODE ACCEPT USE S E N D E R MESSAGE FLOW 1 MESSAGE FLOW 7 6 5 4 2 3 BRRIERS BRIDGE OF MEANING 8 (FEEDBACK) IT REQUIRES 8 STEPS: WHETHER TWO PARTIES TALK, USE HAND Communication Project Communications Management 84 2 IT REQUIRES 8 STEPS: WHETHER TWO PARTIES TALK, USE HAND SIGNAL, OR EMPLOY SOME OTHER MEANS OF COMMUNICATION 1) Develop an idea 2) Encode 3) Transmit 4) Receive 5) Decode 6) Accept 7) Use 8) Provide feedback sender end receiver end TWO-WAY COMMUNICATION Communication Project Communications Management 84 3 TWO-WAY COMMUNICATION Step 1: Develop an idea That sender wishes to transmit. Its key step, because unless there is a worthwhile message, all other steps are useless. Be sure brain is engaged before putting mouth in gear. Step 2: Encode Translate the idea into suitable words, charts, or other symbols and organize in a fashion that is appropriate to the type of transmission you choose TWO-WAY COMMUNICATION Communication Project Communications Management 84 4 TWO-WAY COMMUNICATION Step 3: Transmit Send by the method chosen: memo, phone call, email, video conference, personal visit. Keep communication channel free of barriers or interference to ensure message reaches the receivers and hold their attention. Step 4: Receive Receivers tune to receive. If its oral, they need to be good listeners. If receiver does not function, the message is lost. TWO-WAY COMMUNICATION Communication Project Communications Management 84 5 TWO-WAY COMMUNICATION Step 5: Decode Translate the message back into meaningful idea just as it was sent. If the sender has sent a square and receiver decodes it as circle, then no understanding has happened. UNDERSTANDING CAN HAPPEN ONLY IN RECEIVERS MIND. A COMMUNICATOR MAY MAKE OTHERS LISTEN, BUT THERE IS NO WAY TO MAKE THEM UNDERSTAND. THE RECEIVER ALONE CHOOSES WHETHER TO UNDERSTAND OR NOT. MANY PROJECT MANAGERS FORGET THIS WHEN GIVING INSTRCUTIONS OR EXPLANATIONS TO THE STAKEHOLDERS TWO-WAY COMMUNICATION Communication Project Communications Management 84 6 TWO-WAY COMMUNICATION Step 5: Decode THEY THINK TELLING SOMEONE IS SUFFICIENT, BUT COMMUNICATION CAN NOT PROCEED UNTIL THERE IS UNDERSTANDING. THIS IS CALLED, GETTING THROUGH A PERSON STEP 6: Accept Having received and decoded the message, the receiver have The opportunity to accept or reject it. Project Managers, of course, would like receivers to accept their communications TWO-WAY COMMUNICATION Communication Project Communications Management 84 7 TWO-WAY COMMUNICATION STEP 6: Accept In the manner intended so that activities can progress as planned. Acceptance, however, is a matter of choice and Degree, such that the receiver has considerable control over Whether or not to embrace all the message or just its parts. Some factors affecting acceptance decision: a) perceptions of the messages accuracy b) authority of the sender c) behavioral implications for the receiver TWO-WAY COMMUNICATION Communication Project Communications Management 84 8 TWO-WAY COMMUNICATION STEP 7: Use The receiver may use the information, discard it , perform the task as directed, store the information for future, or do something else. Step 8: Feedback When the receiver acknowledges the message and responds to the sender feedback has occurred. It completes the communication loop. COMMUNICATION BARRIERS Communication Project Communications Management 84 9 1) Personal barriers: - human emotions - values - poor listening habits - differences in education, culture, sex, socioeconomic status 2) Physical barriers: - distance - noise - walls - static that interferes with electronic messages Choice of media (depends on situation) Communication Project Communications Management 85 0 Choice of media (depends on situation) - in writing or orally - informal memo or formal report - face-to-face or email / video conference Writing style: - active or passive voice - sentence structure - word choice Presentation techniques Communication Project Communications Management 85 1 - body language ( non-verbal 55%) - visual aids Meeting management techniques: - set a time limit and keep it - schedule and agenda in advance - stick to agenda - chair and lead with set rules - assign deliverables and time limits for resulting tasks - bring right people together A BREAK DOWN IN COMMUNICATIONS Communication Project Communications Management 85 2 A BREAK DOWN IN COMMUNICATIONS HAS ADVERSE CONSEQUENCE ON THE PROJECT THE PROJECT MANAGERS MUST MASTER THE ART OF COMMUNICATING WITH THE STAKEHOLDRES Project Communications Management Identify Stakeholders 85 3 Plan Communications Distribute Information Report Performance Manage Stakeholders Expectations Communication Plan Communications the process of 85 4 the process of Determining the project stakeholders information needs and defining a communication approach. Identifying information needs of stakeholders and deciding suitable means of meeting them are key factors for project success! Communication Plan Communications This process responds to the information and 85 5 This process responds to the information and communication needs of the stakeholders. EXAMPLE: - Who needs what information - When they will need it - How it will be given - By whom Communication Plan Communications Please remember: Improper communication planning leads to 85 6 Improper communication planning leads to problems as delay in message delivery, sending sensitive info to wrong audience, or lack of communication to some required stakeholders! Effective communication means that the information is provided in the right format, at the right time, and with the right impact! Communication Plan Communications Please remember: On most projects, communication planning is done 85 7 On most projects, communication planning is done very early, such as during project management plan development. This allows appropriate resources, time and budget, for communication activities. The results of this process should be reviewed throughout and revised as needed. Communication Plan Communications Please remember: Plan Communications process is tightly linked 85 8 Plan Communications process is tightly linked with Enterprise Environmental Factors. WHY? Because organizations structure will have a major effect on the projects communication requirements. Plan Communications process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Communications Management Communication 85 9 Stakeholder register Stakeholder management strategy Enterprise Environmental Factors Organizational Process Assets INPUTS TECHNIQUES Communication requirements Analysis Communications technology Communication Models Communication Methods OUTPUTS Communications Management Plan Project Document Updates Plan Communications - INPUTS Communication 1. Stakeholder register provides information on the list of stakeholders, their interests, and influence. 86 0 their interests, and influence. 2. Stakeholder management strategy provides important guidance on planning communications. 3. Enterprise environmental factors all enterprise environmental factors are used to adapt communication to the project environment. Plan Communications - INPUTS Communication 4. Organizational process assets All organizational process assets are used as inputs. 86 1 Particularly important: - Lessons Learned and Historical Information, as they give insights on both the decisions taken regarding communication issues and the results of those decisions. Plan Communications Tools & Techniques 1.Communications requirements analysis CAUTION! Communication 86 2 CAUTION! Please do not waste you resources on unnecessary communications. use them when communicating contributes to success, OR when lack of communication may cause failure. Communications Requirements analysis For establishing project communications requirements, we normally need to know: 1) Organization charts Communication Plan Communications Tools & Techniques 86 3 1) Organization charts 2) Project organization and the stakeholder responsibility relationships 3) Departments disciplines, specialties concerned with the project 4) People logistics and locations 5) Internal communication needs 6) External communication needs 7) Stakeholder information Plan Communications Tools & Techniques Communication requirements analysis Whom do we need to send Project Information? Customer Sponsor Communication 86 4 Sponsor Senior management Functional managers Team members Other project managers Regulatory authorities Media Society Outside specific interest groups, organizations Any other stakeholder stakeholders Plan Communications Tools & Techniques Communication requirements analysis What do we need to communicate on our project? 1) Status Communication 86 5 2) Performance baselines 3) Achievements (major milestones, intermediate milestones, etc.) 4) Problems 5) Changes to scope, schedule, cost, etc. 6) Adherence to standards and regulations 7) New risks uncovered 8) Team members performance 9) Project phase deliverables acceptance, projects product acceptance, etc. Plan Communications Tools & Techniques Communication THROUGH 86 6 Status reports Progress reports Trend report Forecasting report Variance report Earned value analysis reports Compliance to regulations, and so on Plan Communications Tools & Techniques Communication channels Communication The project manager needs to consider the number of potential communication channels to grasp the complexity of a projects 86 7 communication channels to grasp the complexity of a projects Communications: 2 PEOPLE, 1 CHANNEL 3 PEOPLE, 3 CHANNEL 4 PEOPLE, 6 CHANNEL 5 PEOPLE, 10 CHANNEL ( 20 PEOPLE, 190 CHANNEL! ) Communication channels = n (n-1) / 2 n = number of stakeholders 2. Communications technology What factors decide your choice of communications methods? Plan Communications Tools & Techniques Communication 86 8 methods? General factors are: Urgency for information Availability of method Expected project staffing Length of the project Plan Communications Tools & Techniques Communications technology factor 1. Urgency for information We must examine if the stakeholders Communication 86 9 We must examine if the stakeholders like customer, senior management, or functional managers require reports updates instantaneously, or normal formal reporting will sufficient. It depends on nature of project. Plan Communications Tools & Techniques Communication Communications technology factors 2. Availability of method We examine if our existing communications 87 0 technology is competent to meet project communication requirements or we need to change. 3. Expected project staffing We analyze whether the project people have the requisite abilities to use the communications technology or they need training. Plan Communications Tools & Techniques Communication Communications technology factors 4. Length of the project The length of our project may see changes in 87 1 The length of our project may see changes in communications technology. If it is very long project, the advances in communications field may offer better or preferred mode of communication. Therefore, we need to consider this aspect also because it will cost time and money to install new technology. Plan Communications Tools & Techniques Communication Communications technology 5. Project environment 87 2 5. Project environment Does the team operate on a face-to-face basis or in a virtual environment. Plan Communications Tools & Techniques Communication 3. Communication Models A basic model is sender-receiver model. Components are: Encode: 87 3 - Encode: Translate thoughts into a language that is understood by others. - Message and feedback-message: the output of encoding both by sender and receiver. - Noise: anything that interferes with the transmission and understanding of the message(distance, unfamiliar technology, lack of background information). - Decode: to translate the message back into meaningful thoughts or ideas. Plan Communications Tools & Techniques Communication Encode Decode Message 87 4 Encode Decode Encode Decode Medium Noise Noise Sender Receiver Feedback-Message Basic Communication Model Plan Communications Tools & Techniques Please remember! Inherent in this model is an action to acknowledge a message. Acknowledgement 87 5 acknowledge a message. Acknowledgement means that the receiver signals receipt, but not necessarily agreement with the message! Another action is the response, which means that the receiver has decoded, understands, and is replying to the message. Plan Communications Tools & Techniques Communication 3. Communication Models (duties) The sender: Make the message clear and complete so that the receiver can receive 87 6 complete so that the receiver can receive it correctly, and for confirming that it is properly understood. The Receiver: Make sure that the message is received in its entirety, understood correctly, and acknowledged. A failure in communication negatively impacts the project. Plan Communications Tools & Techniques Communication 4. Communication Methods include Interactive Communication: 87 7 - Interactive Communication: Between two or more parties performing a multidirectional exchange of information. Most effective way to ensure common understanding. Meeting, Phone Calls, Video Conferencing, etc. Plan Communications Tools & Techniques Communication Communication Methods Include - Push Communication: Sent to specific 87 8 - Push Communication: Sent to specific recipients who need to know the information. This ensures that the information is distributed but does not certify that it has actually reached or was understood by the intended audience. Letter, Memos, Reports, Emails, Faxes, Voice Mails, Press Releases, etc. Plan Communications Tools & Techniques Communication Communication Methods include Pull Communication 87 9 - Pull Communication:- Used for very large audiences that requires recipients to access the content at their own discretion. Intranet Sites, e-learning, Knowledge Repositories. Base on the requirements, project manager decides what, how, and when communication methods are to be used on the project. Plan Communications - Outputs Communications management plan Communication 88 0 contains 1) Stakeholder communication requirements 2) Information to be communicated, format, content, level of detail 3) Person responsible 4) Person/group who will receive 5) Methods 6) Frequency Plan Communications - Outputs Communications management plan Communication 88 1 contains 7) Escalation process: defining timeframes and management chain (names) for escalation of issues that cant be resolved at lower levels 8) Method for updating and refining this plan as project progresses 9) Glossary of common terminology (very important) Plan Communications - Outputs Communication Sample communications management plan, contents 1. Communications item Communications management plan can have guidelines for 88 2 1. Communications item 2. Purpose (reason for distribution of info) 3. Frequency 4. Start date/end dates (time frame for distribution of info) 5. Format/medium 6. Responsibility plan can have guidelines for Project status meetings Project team meetings E-meetings E-mail This plan is a subsidiary plan of overall project management plan. Plan Communications - Outputs Communication Project Document Updates It may include:- 88 3 It may include:- 1) Project Schedule. 2) Stakeholder Register. 3) Stakeholder Management strategy. Communication Please remember! Communication planning involves creation of additional Plan Communications - Outputs 88 4 Communication planning involves creation of additional deliverables (reports, charts,etc). Time and effort required for this must be reflected in WBS, schedule, and budget. Update them accordingly. Processes concerned with conducting: Plan Risk Management Project Risk Management 88 5 Plan Risk Management Identify Risks Perform Qualitative risk analysis Perform Quantitative risk analysis Plan Risk Responses Monitor and Control Risks Project Risk Management Project Risks? 88 6 An uncertain Event or Condition if occurs - ve + ve HAS PROJECT OBJECTIVES SCOPE QUALITY COST SCHEDULE RISK EFFECT Project Risk Management Project risk has its origin in the UNCERTAINTY THE CONCEPT 88 7 Project risk has its origin in the UNCERTAINTY that is present in ALL projects! risks could be positive (opportunities): -an equipment is cheaper than planned, a work package is accomplished earlier than expected, achieving quality level on a work package takes lesser time than expected, work can be done faster as we were able to acquire a more productive resource! Project Risk Management Project risk has its origin in the UNCERTAINTY THE CONCEPT 88 8 Project risk has its origin in the UNCERTAINTY that is present in ALL projects! risks could be negative (threats) risks could be known risks could be unknown Project Risk Management What is cost contingency in following analysis of a product modification project? 30% probability of delay in components receipt with a cost to the 88 9 30% probability of delay in components receipt with a cost to the project of Rs.9,000/- 20% probability that components will be Rs.10,000 cheaper than expected. 25% probability that two parts will pose installation issue costing extra Rs.3,500/- 30% probability that production will be simpler than expected, saving Rs.2,500/- 5% probability of a design-defect causing Rs.5,000 rework Project Risk Management What is cost contingency in following analysis of a product modification project? 30% X Rs.9,000 = Rs.2,700 outflow, add 89 0 30% X Rs.9,000 = Rs.2,700 outflow, add 20% X Rs.10,000 = Rs.2,000 saving, subtract 25% X Rs.3,500 = Rs.875 outflow, add 30% X Rs.2,500 = Rs. 750 saving, subtract 5% X Rs.5,000 = Rs.250 outflow, add OUTFLOW TOTAL Rs.3825, SAVING TOTAL Rs.2750 Contingency amount = 3825 2750 = Rs.1075 Project Risk Management THE CONCEPT Risk is a function of the UNIQUENESS of a 89 1 Risk is a function of the UNIQUENESS of a project and the EXPERIENCE of the project team. When activities are routine, you can anticipate the range of potential outcomes. Project Risk Management THE CONCEPT When project activities are non-routine (not 89 2 When project activities are non-routine (not performed before and your team is inexperienced), the potential outcomes are more uncertain, making it difficult for you to know what may go wrong and how to avoid problems. Even in routine projects, the outcomes may be influenced by new factors, or those beyond your control. Project Risk Management THE CONCEPT Persons (by extension organizations) have 89 3 Persons (by extension organizations) have attitudes towards risks that affect both accuracy of the perception of the risk and the way they respond!! A consistent approach to risk that meets organizations requirements) must be developed for EACH PROJECT! And communication about risk must be made open and honest! Project Risk Management THE CONCEPT Risk responses reflect an organizations 89 4 Risk responses reflect an organizations perceived balance between risk-taking and risk avoidance! TO BE SUCCESSFUL, we must manage risks proactively and consistently throughout the project! Now, the first process: Risk Management Planning Project Risk Management Why risk management planning? CAREFUL AND EXPLICIT planning increases the 89 5 CAREFUL AND EXPLICIT planning increases the possibility of SUCCESS of five other risk management processes! decide how to approach and conduct risk management activities on the project provide sufficient time and resources for risk management activities establish an agreed-upon basis for evaluating risks. Project Risk Management When risk management planning? Should be completed EARLY during project 89 6 Should be completed EARLY during project planning because it is CRUCIAL to performing other risk management activities! Project Risk Management Plan Risk Management process overview INPUTS TOOLS & 89 7 Enterprise environmental factors Organizational process assets Project scope statement Cost management plan Schedule management plan Communications management plan INPUTS TOOLS & TECHNIQUES Planning meetings and analysis OUTPUTS Risk Management Plan Enterprise environmental factors Project Risk Management Plan Risk Management 89 8 environmental factors the attitudes toward risk and risk tolerance of organizations and people involved in the project will influence the project management plan. Risk attitudes and tolerances can be found in policy statements or in actions. Project Risk Management Organizational process assets Plan Risk Management 89 9 assets predefined approaches to risk management, such as: 1) Risk categories 2) Common definition of concepts and terms 3) Standard templates 4) Roles and responsibilities 5) Authority levels for decision-making Project Risk Management Project scope statement - Provides a clear sense of the range of possibilities related to the project and its deliverables. 90 0 related to the project and its deliverables. - Establishes the framework for how significant the risk management effort may ultimately become! Cost management plan - defines how risk budgets, contingencies, and management reserves will be informed and availed! Project Risk Management Schedule management plan - defines how schedule contingencies will be informed and availed! 90 1 and availed! Communications management plan - defines the interactions that will occur on the project - Determines who will be available to share information on various risks and responses at different locations and times. Planning meeting The meetings are held by project Project Risk Management TOOLS & TECHNIQUES Plan Risk Management 90 2 The meetings are held by project teams. Must ensure participation of: 1. project manager 2. project team leaders 3. people responsible to manage risks and implement plans 4. Key stakeholders 5. Others as necessary TECHNIQUES Planning meetings and analysis Planning meeting What do we do in the meetings: Project Risk Management TOOLS & TECHNIQUES Plan Risk Management 90 3 What do we do in the meetings: 1. Define basic plans for risk management activities 2. Develop risk cost elements and schedule activities for including in project budget and schedule 3. Assign risk responsibilities 4. Tailor to the project: templates for risk categories and definitions of terms like Levels of Risk, Probability by type of Risk, Impact by type of objectives, plus probability and impact matrix. TECHNIQUES Planning meetings and analysis Risk management plan Project Risk Management OUTPUTS Plan Risk Management 90 4 Risk management plan documents how risk identification, qualitative and quantitative risk analysis, risk response planning, risk monitoring and controlling will be structured and performed during the project life cycle (It does not tell you how to manage individual risks. Management of individual risks is contained in the risk response plan). OUTPUTS Risk Management Plan Risk management plan INCLUDES Methodology Project Risk Management Plan Risk Management 90 5 Methodology Roles and responsibilities Budgeting Timing Risk categories Definitions of risk probability and impact (Scoring and interpretation) Probability and impact matrix set and tailored to the project Revised stakeholders tolerances as they apply to the specific project Reporting formats Tracking ( how to record lessons learned) OUTPUTS Risk Management Plan Risk management plan Methodology: defines approaches, tools, and data sources that may be used in risk management on the project. Project Risk Management 90 6 that may be used in risk management on the project. Roles and responsibilities: defines lead, support, and risk management team membership for each type of activity in the risk management plan. Budgeting: assigns resources and estimate costs required for risk management FOR INCLUSION IN THE RISK MANAGEMENT PLAN! Timing: defines when and how often the risk management process will be performed throughout the project life cycle. Establishes risk management activities TO BE INCLUDED IN THE SCHEDULE! Risk management plan Risk categories: Provides a structure that makes sure a Project Risk Management 90 7 Risk categories: Provides a structure that makes sure a comprehensive process of SYSTEMATICALLY identifying risk to a consistent level of detail. Contributes to the quality and effectiveness of Risk Identification. Example: 1) A RBS 2) Simple listing various aspects of the project Risk categories may be revised during risk identification process! GOOD PRACTICE: Review risk categories during risk management planning process before their use in risk identification process FOR TAILORING THEM TO SUIT YOUR CURRENT PROJECT! Project Risk Management Project Organizational External Technical Project Management Sample RBS Categorizing risks 90 8 Organizational External Technical Management Requirements Technology Complexity & Interfaces Performance & Reliability Quality Subcontractors & suppliers Regulatory Project dependencies Market Customer Weather Resources Funding Prioritization Estimating Planning Controlling Communication Project Risk Management Definition impact scales for four on project objectives Project Objectives Very low .05 Low .1 Moderate .2 High .4 Very high .8 90 9 COST Insignificant Schedule Slippage Insignificant Cost increase 20% cost Increase 10-20% Cost Increase 5-10% Cost Increase 5% cost Increase Quality Deterioration Negligible Scope decrease Negligible QUALITY SCOPE SCHEDULE 5-10% Schedule Slippage Affected only Very demanding Application areas Scope: Minor areas affected 20% Schedule Slippage Quality Reduction Requires client Approval 5% Schedule Slippage Scope: Major areas affected Quality Reduction Unacceptable To client Projects Product Effectively Not usable Projects Product Effectively Useless Scope Reduction Unacceptable To client Scope Reduction Unacceptable To client Project Risk Management DETERMINES which risks might affect project Identify Risks 91 0 DETERMINES which risks might affect project objectives! And document their characteristics. IS it one time job? No, its an iterative job as new risks may appear just as the project moves ahead in project life cycle! Risk identification is not easy job. Identify Risks Project Risk Management 91 1 I have seen many organizations taking it casually on their projects, only to pay heavily later (negative risk), or miss opportunity (positive risk) that they would have benefited from. Project Risk Management IDENTIFIES which risks might affect the project DOCUMENTS their characteristics 91 2 DOCUMENTS INVOLVES: a) Reviewing every input variable, activity, key material and resource b) Identifying threats and opportunities c) Preparing checklists from others experience and ensuring completeness ADDRESSES: 1) Internal risks ( risks within control / influence of project team, such as staff assignments, cost estimates, etc.) 2) External risks ( risks beyond control / influence of the project team, such as market shifts or Government actions, etc.) Project Risk Management SHOULD not be done by the project team alone. MUST INCLUDE : your project team (for a sense of ownership/responsibility) 91 3 your project team (for a sense of ownership/responsibility) risk management team (can you tell why?) subject matter experts (from other parts of your organization) other project managers (can you tell why?) outside experts customers end users (very important) other stakeholders Risks can not be identified by just conducting the exercise once. You have to iterate it to bring all risks to your grip. Project Risk Management 91 4 Risk identification iterations: 1. First iteration- by a part of your project team. 2. Second iteration- by entire project team and primary stakeholders. 3. Final iteration- by people not involved in your project (to remove the chances of any biased analysis). Please remember! Risks identification process normally leads to qualitative risk analysis. Project Risk Management 91 5 to qualitative risk analysis. May also lead to quantitative risk analysis if done by an EXPERIENCED RISK MANAGER. Sometimes, simply conducting risk identification may suggest its response that is for further analysis and implementation in the risk response planning. Project Risk Management Identify Risks process overview INPUTS TOOLS & TECHNIQUES 91 6 Risk management plan Activity cost estimates Activity duration Estimates Scope baseline Stakeholder register Cost management plan Schedule management plan Quality management plan Project documents Enterprise environmental factors Organizational process assets INPUTS TECHNIQUES Documentation Reviews Information Gathering Techniques Checklist analysis Assumptions Analysis Diagramming Techniques SWOT analysis Expert judgment OUTPUTS RISK REGISTER Risk management plan Project Risk Management 91 7 Risk management plan Provides all these used here 1) Assignment of roles and responsibilities for risk management activities 2) Provision in budget and schedule 3) Categories of risks Risk management plan Categories of risks Project Risk Management 91 8 First category pertains to Technical / Quality / Performance Risks Examples: dependence on new, or complex, or unproven technology, unrealistic performance objectives, etc. Project Risk Management Risk management plan Categories of risks 91 9 Second category relates to Project Management Risks Examples: inadequate application of project management disciplines, Poor quality of project plan, Insufficient allocation of resources and time, etc. Project Risk Management Risk management plan Categories of risks 92 0 Third category pertains to Organizational Risks Examples: internal inconsistency with scope, time, and cost objectives, poor project prioritization, funding problems,resource conflict due to multiple projects in the organization, etc. Project Risk Management Risk management plan Categories of risks 92 1 Fourth category belongs to External Risks Examples: labor unrests, shifting owner priorities, weather, legal/regulatory changes, country-related risk. FORCE MAJEURE RISKS : floods, earthquakes, civil riots, cyclones, etc.) do not call for risk management, but they need disaster recovery actions. Project Risk Management risk identification needs an understanding of: 92 2 an understanding of: 1) The schedule, 2) Cost, and 3) Quality management plans 4) Outputs of other knowledge area processes for review to find possible risks across entire project. Project Risk Management Outputs of other knowledge areas most vital inputs to risk identification as they allow us understand projects mission, scope, and objectives of the stakeholders (including customer, sponsor, etc.) 92 3 (including customer, sponsor, etc.) These outputs: Project charter WBS Product description Schedule and cost estimates Resource plan Procurement plan Assumptions and constraints lists Project Risk Management Stakeholder Register Used in inviting inputs for identifying risks from 92 4 Used in inviting inputs for identifying risks from key stakeholders (like customer). Project documents - assumptions log - Work performance reports - EV reports - Network diagrams - Baselines - Other project information of use Enterprise environmental factors Project Risk Management 92 5 Provide for help in risk identification: 1) Commercial databases 2) Academic studies 3) Benchmarking 4) Other industry studies Organization process assets Project Risk Management 92 6 Organization process assets Provide information from previous project files, including actual data and lessons learned. Risk identification is a serious job, hence 5 tools and techniques come to Your Help. Project Risk Management Identify Risks TOOLS & TECHNIQUES 92 7 Your Help. 1.Documentation reviews Is the structured review of Project plans Assumptions- project level Assumptions- detail scope levels Prior project files, and Any other information Documentation Reviews Information Gathering Techniques Checklist analysis Assumptions Analysis Diagramming Techniques SWOT analysis Expert judgment 2. Information-gathering techniques The aim: to obtain a comprehensive list of risks that can be later addressed in risk assessment processes. Project Risk Management 92 8 assessment processes. TECHNIQUES: Brainstorming (frequently used) Delphi- to reach consensus of experts anonymously Interviewing: experienced project participants and subject matter experts Root cause identification (for effective response) SWOT analysis (projects strengths, weaknesses, opportunities, threats are analyzed to give a much wider view of the risks under consideration). 2. Information-gathering techniques Brainstorming (frequently used): project team performs with multidisciplinary set of experts not on project team. Ideas on project risk are gathered with the help of a facilitator. Project Risk Management 92 9 project risk are gathered with the help of a facilitator. Categories of risk (like RBS) can be used as a framework. Risk are identified and categorized and their definitions refined. Delphi- to reach consensus of experts anonymously . A facilitator sends a questionnaire to gather ideas about important project risks, summarizes responses and sends them again. Consensus is reached in few rounds, but without experts knowing names of participants. Advantage: helps reduce bias in data and keeps any one person from having undue influence on the outcome! 3. Checklist analysis Most handy and generally liked by Project Risk Management 93 0 people for they are quick and simple. Checklists are made, based on: Historical information, knowledge derived from experience on prior projects, and other sources. ITEMIZE all categories of risks relevant to your project. 3. Checklists But there is a caution! It is not possible to make an exhaustive Project Risk Management 93 1 It is not possible to make an exhaustive checklist containing all risks on your project. There may be some important risks on current project not listed in your standard checklist! IMPROVIZE YOUR CHECKLIST DURING CLOSING PROCESS FOR USE ON NEXT PROJECTS! 4. Assumptions analysis Remember so many assumptions you have made while initiating the project, defining Project Risk Management 93 2 made while initiating the project, defining scope, planning resources, estimating time and cost, etc.? What if they turn out to be inaccurate, inconsistent, and incomplete later? THEY BECOME RISKS! Hence, you must analyze their validity to assess how far they will stand to be true. 5. Diagramming techniques Help you immensely in identifying the risks. You can use: Project Risk Management 93 3 You can use: Cause-and-effect diagrams (Ishikawa / fishbone diagrams) System / Process Flow Charts Influence Diagrams examples Cause-and-effect diagrams (Ishikawa / fishbone diagrams) Project Risk Management HARDWARE SOFTWARE FUNDS Change Hardware shipment Revenue from current Project delayed 93 4 Insufficient funds to pay staff and suppliers Project completion delay INSTALLATION STAFF in user requirements Inadequate customer site preparation Hardware incompatible with existing user systems Hardware Design incomputable with software requirements shipment delay Hardware supplier goes bankrupt Project delayed Difficulty in teaching user New Procedures Software design does not meet Initial Requirements Insufficient technical skills Staff shortage Inability to hire / train Additional staff System/ process flow charts depict interrelationship of elements and mechanism of causation. Project Risk Management 93 5 of causation. Develop manufacturing drgs Develop engineering Develop detail engineering Project specification Proceed manufacturing Yes No Influence diagrams- show a problem with casual influences, time ordering, and other linkages among variables and results. Project Risk Management S.1 Software design does I.1 Hardware Incompatible F.1 Hardware Supplier goes H.1 Hardware 93 6 I.2 Inadequate Customer site Preparation design does not meet initial requirements S.2 Change in User Requirements Incompatible With existing User systems T.2 Inability to Hire / train Additional staff T.1 Staff Shortage I.3 Difficulty in Teaching user New Procedures Supplier goes bankrupt F.3 Revenues From Current Project Delayed T.3 Insufficient technical skills F.2 Insufficient Funds to pay Staff and Suppliers H.2 Hardware Design Incompatible With Software Requirements Shipment delay ARROWS SHOW INFLUENCE Project Risk Management Expert judgment 93 7 Expert judgment Experts with relevant experience help us identify risks. We have done great job! Lets see the output we have got! Project Risk Management OUTPUTS 93 8 got! Risks all uncertain events or conditions that might have positive or negative effect on project objectives (In Case They Happen). But where do we write them? OUTPUTS RISK REGISTER Project Risk Management The risk register is first developed in the 93 9 The risk register is first developed in the Identify Risks process and updated during rest of the risk management processes! Project Risk Management Identified risks Risks owners Q & Q analysis Response plans Residual risks Secondary risks Sample Risk Register 94 0 List of identified Risks List of potential Responses Root causes of Risks Updated risk categories A B C D E Project Risk Management List of identified risks: identified risks with root causes under certain project assumptions. Examples: 1) A few large items with long lead times are on CP 2) IR problem at port may delay delivery and then delay 94 1 2) IR problem at port may delay delivery and then delay completion of construction phase 3) Plan for a size of ten but only six resources available List of potential responses: identified during risk identification. Root causes of risk: fundamental conditions/events causing risk. Updated risk categories: new risk categories being added to the list of risk categories. RBS may be enhanced. Perform QUALITATIVE RISK ANALYSIS Project Risk Management 94 2 ANALYSIS Process of assessing for each risk 1) The probability of occurring and 2) The corresponding impact on project objectives FOR PRORITIZING RISKS FOR FUTHER ACTION Quantitative risk analysis or Risk response planning Perform QUALITATIVE RISK ANALYSIS Project Risk Management 94 3 ANALYSIS Process of also assesses other factors 1) Timeframe 2) Risk tolerance of schedule, cost, scope, and quality QUALITATIVE RISK ANALYSIS Project Risk Management 1) Organizations can IMPROVE POJECTS PERFORMANCE effectively by focusing on HIGH- Some principles-A 94 4 PERFORMANCE effectively by focusing on HIGH- PRIORITY RISKS. 2) A quick and cost-effective method of establishing priorities for: RISK RESPONSE PLANNING. Lays foundation for Quantitative Risk Analysis. MUST be revisited during project life cycle to remain current with the changes in the project risks. QUALITATIVE RISK ANALYSIS Project Risk Management 4) Definitions of the levels of probability and impact, and expert interviewing corrects the element of bias present Some principles-B 94 5 expert interviewing corrects the element of bias present in the data utilized in this process. 5) Time criticality of risk actions highlight the significance of A RISK 6) This process can lead to quantitative risk analysis or directly into risk response planning. What do we intend to achieve? Prioritize risks according to their potential effect on project objectives Qualitative Risk Analysis Project Risk Management 94 6 objectives Sort out high or moderate risks for more analysis, their quantification, and management Find trends in qualitative risk analysis results to see urgency and significance for risk response and further analysis. Determine overall risk ranking of the project. Remove biases in the project plan Project Risk Management Perform Qualitative risk analysis process overview INPUTS TOOLS & TECHNIQUES OUTPUTS 94 7 Organizational process assets Project scope statement Risk management plan Risk register INPUTS TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment OUTPUTS Risk register updates Organizational process assets Project Risk Management Qualitative Risk Analysis INPUTS 94 8 assets provide data about risks on the past projects and lessons learned knowledge base for use here Organizational process assets Project scope statement Risk management plan Risk register INPUTS Project scope statement Common or recurring type Project Risk Management Qualitative Risk Analysis INPUTS 94 9 Common or recurring type projects have well-understood Risks. Projects using state-of- the-art, first-of-its-kind technology, or highly complex ones have more certainty. We can know this from scope statement. Organizational process assets Project scope statement Risk management plan Risk register INPUTS Risk management plan Provides for this process: Project Risk Management Qualitative Risk Analysis INPUTS 95 0 - roles & responsibilities - Budgets and schedule activities - Risk categories - Definition of probability & impact - P & I matrix - Revised stakeholders tolerances Organizational process assets Project scope statement Risk management plan Risk register INPUTS Risk register Project Risk Management Qualitative Risk Analysis INPUTS 95 1 Risk register Provides for this process: The KEY input LIST OF IDENTIFIED RISKS Organizational process assets Project scope statement Risk management plan Risk register INPUTS Risk probability and impact Describe probability and impact of a risk in qualitative terms. Project Risk Management Qualitative Risk Analysis TOOLS & TECHNIQUES 95 2 qualitative terms. Risk probability The likelihood that a risk will happen Risk consequences Its effect on project objectives, if it happens Applied to specific risk events not entire project Helps identify risks that need to be managed more aggressively. TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Probability/impact rating Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 95 3 matrix Now, we build a matrix by combining probability and impact scales to know the risk in qualitative terms, such as very high, high, moderate, low, very low. These scales improve quality of data and enable repeatability of process. TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Probability/impact rating matrix probability scale: 0.0 1.0 Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 95 4 probability scale: 0.0 1.0 0.0 means no probability 1.0 means certainty Ordinal scale defines relative probability from very unlikely to almost certain, can also be used. Alternatively, specific probabilities could be denoted general scale: .1/.3/.5/.7/.9. TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Probability/impact rating matrix impact scale can be Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 95 5 impact scale can be Cardinal: assigning linear values .1/.3/.5/.7/.9, or non-linear values .05/.1/.2/.4/.8 showing an organizations desire to avoid high impact risks. Ordinal: simply rank-ordering, such as very low, low, moderate, high, very high. TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Project Risk Management Qualitative Risk Analysis Probability/impact rating matrix each risk is rated on its probability and impact of happening on a project TOOLS & TECHNIQUES 95 6 and impact of happening on a project objective (cost, schedule, scope, and quality) if it does happen an organizations thresholds for low, moderate, or high are depicted in PI Matrix and determine if the risk is scored low, moderate, or high for that project objective TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Qualitative Risk Analysis Project Risk Management Probability and Impact matrix: green = low, yellow = moderate, red = high Probability Threats Opportunities Risk Score 95 7 0.90 0.70 0.50 0.30 0.10 0.05 0.04 0.03 0.05 0.02 0.03 0.01 0.01 0.02 0.09 0.18 0.07 0.14 0.36 0.10 0.28 0.56 0.40 0.06 0.20 0.12 0.04 0.20 0.10 0.05 0.80 0.80 0.40 0.20 0.10 0.05 0.08 0.72 0.40 0.24 0.72 0.56 0.40 0.24 0.08 0.04 0.02 0.01 0.01 0.12 0.06 0.03 0.02 0.20 0.10 0.05 0.03 0.28 0.14 0.07 0.04 0.36 0.18 0.09 0.05 Risk Data quality assessment We need accurate and unbiased data for our analysis of risks to Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 95 8 data for our analysis of risks to be really useful. So we must test them for their degree of correctness by determining: Extent of understanding of the risk Data availability on the risk Quality of data Reliability and integrity of data TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Risk categorization 1) by sources of risk: RBS 2) by area of the project Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 95 9 2) by area of the project affected: WBS 3) other useful category: phase To DETERMINE AREAS OF PROJECT MOST EXPOSED TO THE EFFECTS OF UNCERTAINTY! TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Group risks by common root causes for effective risk responses!!! Risk urgency assessment Qualitative Risk Analysis Project Risk Management TOOLS & TECHNIQUES 96 0 Risk urgency assessment tells which risks need to be addressed in near term. INDICATORS: 1) Time to effect a risk response 2) Symptoms and warning signals 3) Risk rating TECHNIQUES Risk probability and impact assessment Probability / impact risk rating matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Expert judgment From experts having recent experience of having Managed such projects. Qualitative Risk Analysis Project Risk Management 96 1 Managed such projects. Used to assess the probability and impact of each risk To determine its location in the Matrix. To remove bias this should be obtained by using risk facilitation workshops or interviews. Risk register updates We had initiated the risk register during risk identification. We fill up the relevant information from this process in it. Thus Project Risk Management Qualitative Risk Analysis OUTPUTS 96 2 information from this process in it. Thus we update it, writing: 1) Relative ranking or priority of list of the project risks 2) Risks grouped by categories 3) List of risks needing near-term response 4) List of risk for additional analysis and response 5) Watch lists of low priority risks 6) Trends in qualitative risk analysis OUTPUTS Risk register updates Project Risk Management Qualitative Risk Analysis Identified risks Risks owners Q & Q analysis Response plans Residual risks Secondary risks Risk Register updates 96 3 List of identified Risks List of potential Responses Root causes of Risks Updated risk categories -Relative Ranking or priority of list of the project risks -Risks grouped by categories -List of risks needing near term response A B C D E Project Risk Management Qualitative Risk Analysis Identified risks Risks owners Q & Q analysis Response plans Residual risks Secondary risks Risk Register updates 96 4 List of identified Risks List of potential Responses Root causes of Risks Updated risk categories -List of risk for Additional analysis and response -Watch lists of low priority risks -Trends in qualitative risk analysis A B C D E Relative ranking or priority of list of the project risks PI matrix classifies risks according to their individual significance! This helps project manager focus on high-importance items where responses can lead Project Risk Management Qualitative Risk Analysis 96 5 significance! high-importance items where responses can lead to better project outcomes!! RISKS SHOULD BE LISTED BY PRIORITY SEPARATELY FOR TIME, COST, SCOPE, AND QUALITY. WHY? Because organizations may value one objective over another! Please dont forget to write the basis for assessed probability and impact for important risks. Risks grouped by categories Very important! 1) Reveals COMMON ROOT CAUSES of risk or Project Risk Management Qualitative Risk Analysis 96 6 1) Reveals COMMON ROOT CAUSES of risk or project areas needing specific attention! 2) Improves effectiveness of risk response due to our finding CONCENTRATIONS of risk. List of risks requiring response in the near-term We should place separately risks needing urgent attention and risks needing later attention. List of risks for additional analysis and response Which risks need further analysis and more Project Risk Management Qualitative Risk Analysis 96 7 Which risks need further analysis and more active management? High or moderate ones. You go ahead with their Quantitative Risk Analysis and pay more attention to planning response for them and their subsequent management. Trends in qualitative risk analysis results You get various trends in results of qualitative Project Risk Management Qualitative Risk Analysis 96 8 risk analysis as you repeat it. These trends may help you decide: whether risk response and further analysis is more or less urgent, and important or not. Perform QUANTITATIVE RISK Project Risk Management 96 9 QUANTITATIVE RISK ANALYSIS Process of 1) Assessing numerically the probability of each risk prioritized by Qualitative Risk Analysis and its consequence on project objectives, 2) Evaluating the extent of overall project risk Perform QUANTITATIVE RISK ANALYSIS
Project Risk Management
97 0 Hence, analyzes the prioritized risks showing potential and substantial impact on projects competing demands Presents a quantitative approach to DECISION MAKING amidst uncertainty Deploys techniques: - Monte Carlo Simulation - Decision Tree Analysis TO: 1) determine realistic and achievable scope, schedule, cost targets in the Project Risk Management QUANTITATIVE RISK ANALYSIS 97 1 scope, schedule, cost targets in the backdrop of identified / quantified risks 2) evaluate possibility of achieving a specific project objectives TO: 3) quantify risk exposure for the project and decide schedule and cost contingency reserve TO: 4) determine risks needing most attention by quantifying their relative contribution Project Risk Management QUANTITATIVE RISK ANALYSIS 97 2 by quantifying their relative contribution to overall project risk 5) quantify the probable outcomes for the project their probabilities 6) arrive at the best project management amidst some uncertain outcomes QUANTITATIVE RISK ANALYSIS Project Risk Management 97 3 ANALYSIS Normally follows qualitative risk analysis, but Experienced Managers may prefer it immediately after risk identification May not be needed in some cases for developing effective risk response QUANTITATIVE RISK ANALYSIS Project Risk Management 97 4 ANALYSIS requirement of methods on a project is decided by: a) availability of time and budget b) need for qualitative or quantitative statements about risks and consequences QUANTITATIVE RISK ANALYSIS Project Risk Management 97 5 ANALYSIS MUST be repeated after: a) risk response planning b) part of risk monitoring and control TO EVALUATE WHETHER OVERALL PROJECT RISK HAS BEEN DECREASED TO SATISFACTION QUANTITATIVE RISK Project Risk Management 97 6 QUANTITATIVE RISK ANALYSIS TRENDS CAN HIGHLIGHT THE NECESSITY: FOR MORE OR LESS RISK MANAGEMENT ACTION Project Risk Management Perform Quantitative risk analysis process overview INPUTS TOOLS & TECHNIQUES OUTPUTS 97 7 Organizational process assets Risk management plan Risks register Schedule management Plan Cost management plan INPUTS TECHNIQUES Data gathering and representation techniques Quantitative risk analysis and modeling techniques Expert judgment OUTPUTS Risk register updates Organizational process assets Quantitative Risk Analysis Project Risk Management 97 8 assets provide from industry or proprietary sources: 1. Information on previous similar projects 2. Studies of similar projects 3. Risk databases Risk management plan Provides for this Quantitative Risk Analysis Project Risk Management 97 9 Provides for this process: - roles & responsibilities - Budgets and schedule activities - Risk categories, RBS - Revised stakeholders tolerances, Risk register Provides key inputs: Quantitative Risk Analysis Project Risk Management 98 0 Provides key inputs: - List of identified risks - Priority list of project risks - Risks grouped by categories - Schedule management plan, sets format and establishes Quantitative Risk Analysis Project Risk Management 98 1 sets format and establishes criteria for developing and controlling project schedule. - Cost management plan, sets the format and establishes criteria for planning, structuring, estimating, budgeting, and controlling project costs. Data gathering & representation techniques Interviewing Project Risk Management Quantitative Risk Analysis TOOLS & TECHNIQUES 98 2 1) Interviewing 2) Probability distributions 3) Expert judgment Data gathering & representation techniques Quantitative risk analysis and modeling techniques Expert judgment Interviewing Derive information from stakeholders and subject matter experts by interviewing them. Project Risk Management Quantitative Risk Analysis 98 3 subject matter experts by interviewing them. Information needed depends on what type of probability distribution we are going to use. Quantifying risks? What is your first step? Answer: Conduct risk interview with Project stakeholders and subject matter experts. Probability distributions: Triangular distribution/Mean and Standard deviation for Normal and Log Distributions: Dont forget to document Project Risk Management Quantitative Risk Analysis 98 4 deviation for Normal and Log Distributions: For these, we gather information on the optimistic (low), pessimistic (high), and most likely scenarios, shown in slide ahead. Continuous probability distributions: show both probability and consequences of project component. Common distribution types: uniform, normal, triangular, beta, and log normal. The RATIONALE OF RISK RANGES! Why? Because it will help you make Effective Risk Response Strategies during risk Response planning. Example of risk interview Breaks the myth of conventional estimate (arrived at totaling most Likely estimates). Project Cost Estimates & Ranges Project Risk Management Quantitative Risk Analysis Identifies three point estimates for each WBS 98 5 Likely estimates). Actually, conventional estimate Is relatively unlikely. SEE THE EXAMPLE Cost estimates and Ranges Risk Interview. Here, cost is INR. The conventional estimate summing up to INR 45 is relatively unlikely. WBS element Low Most likely High Design 3 7 12 Build 17 22 37 Test 9 16 24 Total Project 45 Project Risk Management Quantitative Risk Analysis EXAMPLE: COMMONLY USED PROBABILITY DISTRIBUTION 0.1 0.1 98 6 0.0 0.1 0.1 0.0 BETA DISTRIBUTION TRINGULAR DISTRIBUTION P R O B A B I L I T Y P R O B A B I L I T Y IMPACT IMPACT Project Risk Management Quantitative Risk Analysis EXAMPLE: INTERVIEW DEPLOYING BETA DISTRIBUTION Mean = O + 4 M + P / 6 , Standard Deviation = P O / 6, Variance = P O / 6 2 98 7 ACTIVITY NAME MOST LIKELY HIGH MEAN SIGMA VARIANCE LOW 6 M 15 20 X 21.8 2 3.2 1 1 4 A P 6.3 O B C 4 2 16 11 41 15.7 43.8 3.9 15 10 23 35 10 Total estimate Project Risk Management Quantitative Risk Analysis EXAMPLE: INTERVIEW DEPLOYING TRIANGULAR DISTRIBUTION 2 Mean = O + M + P / 3 , Variance = P O / 6 + (M O) (M P) / 18 98 8 ACTIVITY NAME MOST LIKELY HIGH MEAN SIGMA VARIANCE LOW 6 M 15 20 X 23.7 2.5 4.2 1.2 1.5 6.2 A P 6.7 O B C 4 2 16 11 41 16.3 42.4 5 25.1 17.4 23 35 10 Total estimate Expert judgment used to validate data and Project Risk Management Quantitative Risk Analysis 98 9 techniques. experts could be internal or external. experts needed: engineering or statistical experts. Quantitative risk analysis and modeling techniques: Project Risk Management Quantitative Risk Analysis 99 0 and modeling techniques: 1) Sensitivity analysis 2) Expected monetary value analysis 3) Decision tree analysis 4) Modeling and simulation Sensitivity analysis Want to know which risks have the most potential impact on the project? Project Risk Management Quantitative Risk Analysis 99 1 potential impact on the project? Sensitivity analysis does the same for you. How? Well, it examines the extent to which the uncertainty of each project element impacts the objective you are examining ( caution: keep all other uncertain elements at their baseline values). Expected monetary value analysis Project Risk Management Quantitative Risk Analysis TOOLS & TECHNIQUES 99 2 analysis A statistical concept, an analysis under uncertainty. Calculates average outcome scenarios that may or may not happen. EMV of opportunity shown as positive values EMV of threats shown as negative values EMV = Value of each possible outcome x Probability, and add them together Data gathering & representation techniques Quantitative risk analysis and modeling techniques Expert judgment Expected monetary value analysis Project Risk Management Quantitative Risk Analysis 99 3 analysis commonly used in decision tree analysis. But modeling and simulation are more powerful and can not be misused compared to it. Decision tree analysis Build or upgrade an exiting plant? Make or outsource? Or any other such dilemmas face you! Dont worry take the help of Decision Tree. Project Risk Management Quantitative Risk Analysis TOOLS & TECHNIQUES 99 4 Dont worry take the help of Decision Tree. What is decision tree? Its a tree-like diagram. Begins with the decision to be evaluated, say Build or upgrade. Branches are logical path of available alternatives. Each branch shows probabilities of risks and associated costs or rewards. Solving three shows you which decision provides greatest expected value to you (after quantifying all uncertain implications, costs, rewards, and subsequent decisions). Data gathering & representation techniques Quantitative risk analysis and modeling techniques Expert judgment Project Risk Management Quantitative Risk Analysis SAMPLE DECISION TREE Decision Definition 65% Decision Node Chance Node Net Path Value Decision to be Made Input: cost of decision Output: decision made (true, false) Input: scenario probability Output: expected monetary Value (EMV) Computed: Payoffs costs Along path 99 5 EMV of Chance Node Rs. 49.0 M EMV of the Decision Rs. 49.0 M EMV of Chance Node Rs. 41.5 M BUILD OR UPGRADE BUILD NEW PLANT UPGRADE EXISTING PLANT Strong Demand Strong Demand Weak Demand Weak Demand Rs. 80 M - Rs. 30 M Rs. 70 M Rs. 10 M - Rs. 120 Rs. 200 False - Rs. 50 True 65% 35% 35% 65% Rs. 90 Rs. 120 Rs. 60 Simulation Translates uncertainties (specified at a detail level) into potential Project Risk Management Quantitative Risk Analysis TOOLS & TECHNIQUES 99 6 at a detail level) into potential impacts on project objectives expressed at whole project level. Most popular software: Monte Carlo WBS is used for simulation for cost risk analysis PDM schedule is used for schedule risk analysis Data gathering & representation techniques Quantitative risk analysis and modeling techniques Expert judgment Project Risk Management Quantitative Risk Analysis 100% COST RISK SIMULATION TOTAL PROJECT COST: CUMULATIVE CHART Mean = 46.67 PROJECT IS ONLY 99 7 COST 30 0 65 50 12% 25% 50% 75% 41 Mean = 46.67 P R O B A B I L I T Y PROJECT IS ONLY 12% LIKELY TO MEET Rs. 41 LAC ESTIMATE. IF A Conservative Organization WANTS 75% LIKELIHOOD OF SUCCESS, A BUDGET OF RS. 50 LAC IS NEEDED: A CONTINGENCY OF ALMOST 22% ! ( in RUPEES LACS) Project Risk Management Quantitative Risk Analysis OUTPUTS Risk register updates We had initiated the risk register during risk identification. We fill up the relevant information from this 99 8 OUTPUTS Risk register updates the relevant information from this process in it. Thus we update it further, writing: 1) Probabilistic analysis of the project 2) Probability of achieving cost and time objectives 3) Prioritized List of quantified risks Project Risk Management Identified risks Risks owners Q & Q analysis Response plans Residual risks Secondary risks Risk Register updates Quantitative Risk Analysis 99 9 List of identified Risks List of potential Responses Root causes of Risks Updated risk categories A B C D E -Probabilistic analysis of the project -Probability of achieving cost and time objectives -Prioritized List of quantified Risks -Trends in QRA PROBALISTIC ANALYSIS OF THE PROJECT Provides predictions of potential project Project Risk Management Quantitative Risk Analysis OUTPUTS 10 00 Provides predictions of potential project schedule and cost results detailing expected completion dates or project duration and costs- along with concerned confidence levels PROBABILITY OF ACHIEVING THE COST AND TIME OBJECTIVES Using quantitative risk analysis, we can estimate the probability of achieving the project objectives- under the current plan and given knowledge of the risks. OUTPUTS Risk register updates Prioritized list of quantified Risks (with a measure of their impact) Project Risk Management Quantitative Risk Analysis OUTPUTS 10 01 This list contains the risks that indicate: Major threat, or Major opportunity OUTPUTS Risk register updates Trends in Quantitative Risk Project Risk Management Quantitative Risk Analysis OUTPUTS 10 02 Trends in Quantitative Risk Analysis With the repetition of the quantitative risk analysis, a trend in its results emerges. OUTPUTS Risk register updates Project Risk Management PLAN RISK RESPONSES Developing options and determining 10 03 Developing options and determining actions to ENHANCE Opportunities and REDUCE threats to the project objectives Involves selecting BEST RESPONSE from several options Project Risk Management PLAN RISK RESPONSES Follows the processes of qualitative and 10 04 Follows the processes of qualitative and quantitative risk analysis Involves identification of risk response owners to carry through the responsibility of each agreed and funded risk response Deals with risks as per their priority Project Risk Management PLAN RISK RESPONSES incorporates needed resources and 10 05 incorporates needed resources and activities into: a) schedule b) budget c) project management plan Project Risk Management PLAN RISK RESPONSES MUST be appropriate to: 10 06 MUST be appropriate to: a) the importance of risk b) timely c) cost-effective d) agreed upon by ALL PARTIES e) owned by a responsible person KEY PONITS NEED EMPHASIS AGAIN! Risk response planning: Should correspond to severity of risk PLAN RISK RESPONSES Project Risk Management 10 07 Should correspond to severity of risk Should be cost effective Should be realistic Should be consented by all involved parties Should be owned by a responsible person MOST OFTEN RISK RESPONSE DOES NOT GIVE US INTENDED RESULTS BECAUSE ONE OR MORE OF THESE KEY PONITS ARE IGNORED ! Project Risk Management Risk Management Plan Risk register INPUTS TOOLS & TECHNIQUES Strategies for negative risk OUTPUTS Risk Register updates Project management PLAN RISK RESPONSES Process Overview 10 08 negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy Expert judgment Project management plan updates Risks-related contract decisions Project document updates Risk management plan provides: Project Risk Management RISK RESPONSE PLANNING Risk Management Plan Risk register INPUTS 10 09 provides: Roles & responsibilities Risk threshold for L, M, H risks Time and budget for project risk management Risk analysis definitions Risk register Was created in risk identification process, Project Risk Management RISK RESPONSE PLANNING Risk Management Plan Risk register INPUTS 10 10 updated with outputs of qualitative and quantitative risk analysis. We use these outputs here: 1) From risk identification Identified Risks, their root causes List of potential responses Risk owners Symptoms & warning signs Risk register We use these outputs here: 2) From qualitative risk analysis Project Risk Management RISK RESPONSE PLANNING Risk Management Plan Risk register INPUTS 10 11 2) From qualitative risk analysis Priority list of risks Risks needing near-term response Risks for additional analysis and response Trends in qualitative risk analysis results Root causes Risks grouped by categories Watchlist of low priority risks Risk register We use these outputs here: Project Risk Management RISK RESPONSE PLANNING Risk Management Plan Risk register INPUTS 10 12 We use these outputs here: 2) From quantitative risk analysis Probabilistic analysis of the project Probability of achieving cost and time objectives Prioritized list of quantified risks Trends in quantitative risk analysis results Project Risk Management 10 13 RISK OWNERS MUST PARTICIPATE IN DEVELOPING RISK RESPONSES WHICH STRATEGIES WILL YOU CHOOSE? ANSWER: First, the MOST EFFECTIVE STRATEGY for each risk Project Risk Management RISK RESPONSE PLANNING 10 14 First, the MOST EFFECTIVE STRATEGY for each risk Then, BACKUP STRATEGIES in case the best one fails After choosing Primary and Backup Strategies, develop actions to implement them A fallback plan if selected strategy not fully effective, or if accepted risk occurs Avoid Eliminate threat by eliminating the cause! You change project plan to eliminate the threat, to isolate the project objective from Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 15 threat, to isolate the project objective from the its impact, or to relax the objective that is in jeopardy: Examples Extending schedule or reducing scope Some risk that arise early can be avoided by: Clarifying requirements Obtaining information Improving communication or Acquiring expertise negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment Transfer Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 16 Can you shift the risk? Yes, you can. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment Transfer You can shift it to third party for its ownership. Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 17 ownership. But remember, it is just shifted, the risk remains. Only its ownership and management is off-loaded to the third party for which due premium is paid by you. Risk transference is found most effective in transferring financial risk exposure. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment EXAMPLES Insurance Project Risk Management Transfer RISK RESPONSE PLANNING 10 18 Insurance performance bonds, warranties, guarantees Contracts ( a fixed-price contract has least with the buyer. A cost reimbursable one leaves more risk with the buyer) Mitigate A very important response Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 19 A very important response technique. We should try to master it. Here, we attempt to reduce the probability and/or consequence of a negative risk to acceptable threshold. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment Mitigate Project Risk Management RISK RESPONSE PLANNING 10 20 CARDINAL PRINCIPLE Take early action to reduce probability of a risks occurrence or its consequence on the project objectives. It is far better than making whole lot of repairs after it has taken place. A STICH IN TIME SAVES NINE! Mitigation costs should be justified in view of the likely risk probability and its impact. Project Risk Management Mitigate RISK RESPONSE PLANNING 10 21 probability and its impact. EXAMPLES Implementing a new course of action Adopting a less complex process Conducting more seismic/engineering tests Choosing more reliable seller Adding resources/time to schedule Developing prototypes Designing redundancy into a system Exploit Chosen for risks with positive impacts to ensure that the opportunity is Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 22 to ensure that the opportunity is realized. It tries to eliminate the uncertainty of an upside risk by making the opportunity surely happen. Examples: Assigning more talented resources to reduce time to completion To provide better quality than originally planned negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy - Expert judgment Share Sharing a positive risk involves allocating ownership with a third Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 23 allocating ownership with a third party who is best able to capture the opportunity. Examples: Forming risk-sharing partnerships, teams, special purpose companies, JVs for the sole purpose of managing opportunities. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment Enhance This strategy modifies the size of an opportunity by: Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 24 opportunity by: 1) Increasing probability and positive impact 2) Identifying and enhancing key drivers of these risks. This means seeking to facilitate/strengthen the cause of opportunity and reinforcing its trigger conditions. Impact drivers are also targeted. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment Accept This approach shows your Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 25 This approach shows your project team has agreed: not to change project plan in order to deal with a risk, or is unable to find out any appropriate response strategy This approach may be adopted both threats and opportunities. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment Accept Project Risk Management ACTIVE ACCEPTANCE RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 26 ACTIVE ACCEPTANCE Your acceptance may be active and you develop a contingency plan. PASSIVE ACCEPTANCE It may be passive. Do nothing- leaving the project team to deal with the risks as they happen. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment Accept Project Risk Management Most common risk acceptance response is FAQ How much RISK RESPONSE PLANNING 10 27 establishing a contingency plan/reserve that incorporates amounts of: Money Time. Resources to address accepted identified risks Or even sometimes potential unknown threats and opportunities) How much contingency allowance should be kept? Answer: It is determined by the impacts. Compute it at an acceptable level of risk exposure. Accept Project Risk Management CALCULATING COST RESERVE IMPACT Expected RISK RESPONSE PLANNING 10 28 Risk Probability IMPACT COST = - tive Benefits = + tive Expected Monetary Value (EMV) A B C D 20% 45% 10% 65% - Rs. 4000 + Rs. 3000 + Rs. 2100 - Rs. 2500 - Rs. 800 - Rs. 210 + Rs. 1350 - Rs. 1625 BENEFIT : Rs. + 1560, WE WILL SAVE COST : Rs. - 2425, WE WILL SPEND CONTINGENCY AMOUNT NEEDED : Rs. 865 Project Risk Management CALCULATING COST RESERVE: Hands-on Exercise for Students For a product modification project, we have following data. Please calculate Cost Reserve! RISK IMPACT RISK RESPONSE PLANNING 10 29 RISK THREATS OPPORTUNITIES Probability IMPACT COST = - tive Benefits = + tive Delay in shipment of parts 30% 25% 20% 30% - Rs. 9000 + Rs. 3500 + Rs.10000 + Rs. 2500 Parts need extra installation work Parts will be cheaper than expected Design defect will cause rework Production will be simpler than expected 5% - Rs. 5000 Project Risk Management CALCULATING COST RESERVE: hands-on Exercise for Students RISK IMPACT Expected RISK RESPONSE PLANNING 10 30 RISK THREATS OPPORTUNITIES Probability IMPACT COST = - tive Benefits = + tive Expected Monetary Value (EMV) Delay in shipment of parts 30% 25% 20% 30% - Rs. 9000 + Rs. 3500 + Rs.10000 + Rs. 2500 - Rs. 2700 + Rs. 2000 - Rs. 875 + Rs. 750 Parts need extra installation work Parts will be cheaper than expected Design defect will cause rework Production will be simpler than expected 5% - Rs. 5000 - Rs. 250 BENEFIT : Rs. + 2750, WE WILL SAVE COST : Rs. - 3825, WE WILL SPEND CONTINGENCY AMOUNT NEEDED : Rs. 1075 Contingent response strategy Designed for use only when CERTAIN EVENTS occur. Why? Well, for some Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 31 EVENTS occur. Why? Well, for some risks, its better to make a response plan that will be used only under certain predefined conditions (when there will be sufficient warning to implement the plan). Events that trigger contingency response: 1) Missing intermediate milestones 2) Gaining higher priority with a supplier negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment Expert judgment From knowledgeable parties, Project Risk Management RISK RESPONSE PLANNING TOOLS & TECHNIQUES Strategies for negative risk 10 32 inputs can be taken regarding actions for specific and defined risks. negative risk (threats) Strategies for positive risks (opportunities) Strategies for both threats and opportunities Contingent response strategy -Expert judgment CONTINGENCY AMOUNT Project Risk Management STRATEGIES FOR RISK RESPONSE RISK RESPONSE PLANNING 10 33 CONTINGENCY AMOUNT Can be added to individual activities or work packages, or to the project as a whole Risk register updates We fill the outputs in the risk register. At this point, the risk register contains: Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project management 10 34 Identified risks with descriptions, concerned area of project like WBS element, their causes, and how they may impact project objectives outputs from qualitative and quantitative risk analysis Risk owners and their assigned responsibilities Budget and times for responses Project management plan updates Risks-related contract decisions - Project document updates Risk register updates We fill the outputs in the risk register. At this point, the risk register contains: Expected level of residual risks Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project management 10 35 Expected level of residual risks Consented responses for each risk and specific actions for chosen response strategy Symptoms and warning signals of risks occurrence Budget and schedule activities for implementing chosen responses Contingency reserves of time and cost designed to provide for stakeholders risk tolerances Contingency plans and trigger that call for their execution Project management plan updates Risks-related contract decisions -Project document updates Risk register updates We fill the outputs in the risk register. At this point, the risk register contains: Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project management 10 36 register contains: Fallback plans if primary response inadequate Residual risks expected to remain after planned responses have been taken and those that have been deliberately accepted Secondary risks that arise as a direct outcome of of implementing a risk response Contingency reserves calculated on the basis of quantitative risk analysis and organizations risk thresholds Project management plan updates Risks-related contract decisions - Project document updates Project management plan updates Updated as response activities are added Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project 10 37 Updated as response activities are added to it after review and approval through Integrated Change Control. Integrated change control is applied in the Direct and Manage Project Execution process. Why? To make sure that agreed-upon actions are implemented and monitored as part of the progressing project. Risk response strategies are fed back into concerned processes in other knowledge areas (WBS, budget, schedule) Project management plan updates Risks-related contract decisons -Project document updates Risk-related contractual agreements Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project 10 38 Contractual agreements are prepared to specify each partys responsibility for specific risks, in case they occur. Example: Agreements for insurance, services, and other items as found suitable. Project management plan updates Risks-related contract decisions -Project document updates Project document updates Project Risk Management RISK RESPONSE PLANNING OUTPUTS Risk Register updates Project 10 39 updates Example: 1) Assumptions log updates 2) Technical documentation updates Project management plan updates Risks-related contract decisions -Project document updates Project Planning continues! Project 10 40 Project Procurement Management Project Procurement Management THE CONCEPT Consists of processes to purchase or acquire the products, services, or results needed from outside 10 41 products, services, or results needed from outside the project team to perform the work. Procurement has two perspectives: 1) The buyer organization 2) The seller organization Project Procurement Management THE CONCEPT The processes 1) Plan procurements: make or buy decision, preparing 10 42 1) Plan procurements: make or buy decision, preparing procurement documents, and identifying potential sellers. 2) Conduct procurements: obtaining proposals, selecting sellers, and awarding contract. 3) Administer procurements: checking performance and managing changes. 4) Contract procurements: completing each procurement. These 4 processes together make the contract life cycle! Project Procurement Management THE CONCEPT Contract 10 43 CONTRACTING PROCESS LIFE CYCLE OF THE CONTRACT Plan Procurements Administer Procurements Close Procurements Conduct Procurements 1) Plan procurements: Make or buy decision CONTRACT LIFE CYCLE BRIEF Project Procurement Management 10 44 1) Plan procurements: Make or buy decision made, contract type selected, scope of work drafted. Procurement management plan developed. Procurement documents created. Potential buyers identified. 2) Conduct procurements: Proposals requested CONTRACT LIFE CYCLE BRIEF Project Procurement Management 10 45 2) Conduct procurements: Proposals requested and received. Sellers selected and Contract awarded. 5) Administer procurements: Managing CONTRACT LIFE CYCLE BRIEF Project Procurement Management 10 46 5) Administer procurements: Managing procurement relationships, monitoring contract performance, and making changes and corrections as required. 6) Close procurements: Seller provides contracted product, buyer accepts and makes final payment, lessons learned documented, contract file archived. This is completion of procurement for each item. Contract: Ushers a legal relationship between Buyer CONTRACT Project Procurement Management 10 47 Contract: Ushers a legal relationship between Buyer and seller. It obligates the seller to provide the contracted item, and it obligates the buyer to pay for it. Hence, contract is a legal document and must be prepared by the buyer with due care. It is subject to remedy in the courts. Contract comes into force only after it is accepted and signed by both the parties. Contract: Ushers a legal relationship between Buyer CONTRACT Project Procurement Management 10 48 Contract: Ushers a legal relationship between Buyer and seller. It includes: SOW of the contracted item (CSOW) Terms and conditions. Sellers proposal Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide. Contract: project management team is responsible to CONTRACT Project Procurement Management 10 49 Contract: project management team is responsible to tailor the contract to the specific needs of the project. It is subjected to extensive reviewing process before approval to ensure THAT THE CONTRACT LANGUAGE DESCRIBES THE CONTRACTED PRODUCTS, SERVICES, OR RESULTS THAT SATISFY THE IDENTIFIED PROJECT NEED! Contract: project management team should take help CONTRACT Project Procurement Management 10 50 Contract: project management team should take help of specialists in contracting, purchasing and law! Most organizations have policies and procedures defining who can sign and administer such agreements on behalf of the the organization! By actively managing the contract life cycle and carefully wording the contract, we can avoid or mitigate some identifiable project risks. Contracting is one way of transferring the risk to seller. Contract: is Also called CONTRACT Project Procurement Management 10 51 Contract: is Also called An agreement Subcontract, or Purchase order Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide. Contract: A seller can Also be called CONTRACT Project Procurement Management 10 52 Contract: A seller can Also be called Contractor, vendor, service provider, supplier, or subcontractor, A buyer can Also be called Client, acquiring organization, customer, acquiring organization, service requester, purchaser, government agency, prime contractor, contractor. Contract: A complex project may involve multiple CONTRACT Project Procurement Management 10 53 Contract: A complex project may involve multiple contracts or subcontracts! Each contract life cycle may complete during any phase of the project life cycle. Subcontract, or Purchase order Sellers marketing literature, and Any other documentation buyer is relying upon to establish what the seller is to perform or provide. Contract: Except for the purchase of materials, goods, or common products, A seller will manage the work CONTRACT Project Procurement Management 10 54 or common products, A seller will manage the work as a project: Buyer becomes customer, and then key stakeholder for the seller Sellers project management team will follow all knowledge areas and project management process groups to mange it as a project Inputs will be major deliverables, key milestones, cost objectives. Plus contract terms and conditions. Constraints may be buyer approval of staffing decisions, etc. CONTRACT Project Procurement Management SELLER in contract life cycle 10 55 First Then And thereafter a bidder the selected source contracted vendor Fundamental concept of project procurement management is that The buyer of the items is within the project team and seller is external to project Project Procurement Management 10 56 the project team and seller is external to project team: 1) This relationship true if the performing organization is the seller a project to the customer. 2) This relationship is also true when the performing organization is the buyer from other vendors, suppliers of products, services, results, or subproject components on a project. Essence is that a formal Contractual Relationship exits between buyer and seller! Project Procurement Management 10 57 exits between buyer and seller! If you are procuring items from your others units of the project teams organizations also, you may not enter into a non-contractual formal agreement but most of our discussion on project procurement management is relevant for such agreements also. Example: Tata Motors procured steel sheets from its Tata Steel for its Indices Project. Plan Purchases and Acquisitions Determines 10 58 WHICH project needs WHICH project needs Can be accomplished by the Can be best met by project team during Project acquiring products/ Execution services outside the project organization identified DURING PROJECT DEFINITION EFFORT Plan Procurements Considers Plan Procurements 10 59 Considers 1. whether to procure? (make or buy!) 2. how to procure? (procurement methods) 3. what to procure? (description of products) 4. how much to procure? (quantity) 5. when to procure? (procurement schedule) 6. potential subcontractors (prospective sellers) (Consideration of potential sellers gives some degree of influence/ control to the buyer over contracting decisions) PLEASE REMEMBER! While planning purchases and acquisitions, we must not forget to consider issues like: Plan Procurements 10 60 not forget to consider issues like: Who is responsible for obtaining or holding any applicable permits and professional licenses required by LEGISLATION, REGULATION, OR YOUR ORGANIZATIONS PLOICY! Project Schedule greatly influences this process. Plus your decisions in procurement management plan may also influence project schedule and therefore must be considered when developing project schedule and activity resource estimating, and make-or-buy decisions! PLEASE REMEMBER! While planning purchases and acquisitions, we must not forget to review: Plan Procurements 10 61 not forget to review: the type of contract you plan to use in relation to MITIGATING RISKS AND TRANSFERRING THEM TO THE SELLER! Enterprise environmental factors Organizational process INPUTS TOOLS & TECHNIQUES Make-or-buy Analysis OUTPUTS Procurement Management Plan Procurement Statements Plan Procurements: PROCESS OVERVIEW 10 62 Organizational process assets Scope baseline Requirements documentation Teaming agreements Risk register Risk-related contract decisions Activity Resource requirements Project schedule Activity cost estimates Cost baseline Analysis Expert Judgment Contract Types (Selection) Procurement Statements of work Make-or-buy decisions Procurement documents Source selection criteria (evaluation criteria) Change requests Project Procurement Management EEFs provide information on 1) The marketplace Plan Procurements 10 63 1) The marketplace 2) What product, services are available in the market and under what terms and conditions 3) Procurement resources: If you dont have a purchasing group, then the project team have to supply both resources and expertise for project procurement activities. INPUTS Project Procurement Management OPAs provide formal/informal procurement policies, procedures, guidelines, and management systems for use in making Plan Procurements 10 64 management systems for use in making Procurement Plan and deciding Contract Type. They act as constraints and limit: 1) The ability to make specific make-or-buy decisions. 2) May require specific types or sizes of sellers. 3) Some organizations have multi-tier system of selected and pre-qualified sellers to decrease the number of direct sellers and establish an extended supply chain. INPUTS Project Procurement Management a) Project Scope Statement provides important information on 1) project needs and strategies Plan Procurements INPUTS Scope baseline a) Scope statement b) WBS 10 65 1) project needs and strategies that we must consider when during what to procure. Also provides 2) list of deliverables, acceptance criteria for the project and its products, plus any technical issues relating to the product of the project. All these factors must be considered and flowed down within our contract to sellers! b) WBS c) WBS dictionary Project Procurement Management Project Scope Statement describes project 3) boundaries, requirements, constraints and Scope baseline a) Scope statement b) WBS Plan Procurements INPUTS 10 66 requirements, constraints and assumptions concerning project scope. EXAMPLES: A. Constraints: availability of funds (most common on projects) B. Assumptions: availability of multiple sellers or sole seller C. Requirements with legal and contractual obligations: performance, intellectual property rights, insurance, licenses, permits, equal employment opportunities, health, safety, and security. b) WBS c) WBS dictionary Project Procurement Management b) WBS describes relationship among all the components of the project and project deliverables. We will Scope baseline a) Scope statement b) WBS 10 67 project deliverables. We will outsource some portion of it, or we may outsource entire project also. c) WBS dictionary provides detailed SOWs identifying deliverables plus description of work within each WBS component needed to be done to produce that deliverable. b) WBS c) WBS dictionary Project Procurement Management Plan procurements 10 68 Difference between Product Description and Statement of Work: Product Description describes the ultimate end product of the project. Statement of work describes the portion of that product to be provided by seller to the buyers project The difference no longer exists if the performing organization decides to procure the entire product. Project Procurement Management Requirements documentation provides Important information about project requirements which need to be considered when we plan 10 69 which need to be considered when we plan procurements Requirements with legal and contractual implications: health, safety, security, performance, IPR, insurance, environmental, licenses, permits, equal-employment- opportunity, etc. Project Procurement Management Teaming Agreements (legal contractual agreement between two or more entities to form joint venture or partnership. Whenever new business opportunity 10 70 partnership. Whenever new business opportunity ends, this agreement also ends) Whenever a Teaming Agreement is in place on a project, the roles of buyers and sellers are pre- determined. Scope of work, competition requirements and other critical issues are also predefined. Project Procurement Management We consider following too while planning procurements: - risk register - Risk related contract decisions 10 71 - Risk related contract decisions - Activity resource requirements - Project schedule - Activity cost estimates - Cost performance baseline Project Procurement Management TOOLS & Make-or-buy analysis General management technique Plan procurements 10 72 TOOLS & TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection General management technique used to decide whether a particular product/service can be produced (COST EFFECTIVELY) by the project team or need to be purchased Budget constraints are factored in Considers both direct and indirect costs example Project Procurement Management TOOLS & TECHNIQUES Make-or-buy analysis example Plan procurements 10 73 TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection example Buy-side of analysis includes actual 1) Direct out-of-pocket costs to procure the product, and 2) Indirect costs of managing the purchasing process. Project Procurement Management TOOLS & TECHNIQUES Make-or-buy analysis Reflects Plan procurements 10 74 TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Reflects 1) Perspective of the performing organization, and 2) Immediate project needs 3) Long range strategy examples Project Procurement Management TOOLS & TECHNIQUES Make-or-buy analysis example Buying an item (say material 10 75 TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Buying an item (say material handling equipments or computers) or leasing it may or may be cost effective on the current project. But, if performing organization Requires it on regular basis and buys the item, then the part of the purchase cost apportioned to the project may be less than the leasing cost. (Margin Analysis helps allocate such costs) Project Procurement Management TOOLS & TECHNIQUES Make-or-buy analysis Example of long range strategy Certain items needed for performing the 10 76 TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Certain items needed for performing the project may not be with the organization But having regard to future requirements (for such items) and the business plans, The organization may decide to purchase them despite project requirements and Constraints If this happens, then the only marginal cost is charged to the project and difference is treated as investment for future Project Procurement Management Expert judgement What expert judgment is needed? 1) Expert technical judgment to access TOOLS & TECHNIQUES 10 77 1) Expert technical judgment to access inputs and outputs from this process. 2) Expert purchasing judgment to develop or modify evaluation criteria. 3) Expert legal judgment to make terms and conditions for non-standard procurement items. 4) Such technical, business and legal judgment can also be applied to other aspects of procurement management processes. TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 78 Different contract types suit different types of purchases Degree of risk assessed by both buyer and seller decides the choice of a Contract Type TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Common contract types Project Procurement Management Contract type selection Common Contract Types: TOOLS & TECHNIQUES 10 79 Common Contract Types: 1) fixed-price or lump-sum 2) Cost-reimbursable a) cost-plus-fee: CPF, or cost-plus- percentage of cost: CPPC b) cost-plus-fixed-fee: CPFF c) cost-plus-incentive-fee: CPIF 3) time and material ( T & M ) TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 80 fixed-price or lump-sum 1) Fixed total price for a well-defined product 2) Buyer at least cost risk as seller bears the risk of cost escalation 3) Seller most concerned about scope 4) Suitable if buyer can fully describe scope 5) Also incentives for fixed-price contracts TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Simplest form: Purchase Order Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 81 fixed-price or lump-sum a) fixed-price Example Contract INR 5,500,00 Fixed-price-incentive-fee (FPIF) Example Contract INR 5,500,000 Incentive INR 50,000 for every month for finishing contracted work early TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 82 fixed-price or lump-sum Fixed-price-economic-price-adjustment (FPEPA) Example Contract INR 5,500,000 Buyer agreed for price increase in in year 2 based on All India Price Index for year 1 for material price escalation, or based on increase in Statutory Variable Dearness Allowance for labor TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection Cost-reimbursable TOOLS & TECHNIQUES 10 83 Cost-reimbursable 1) Buyer reimburses sellers actual costs plus a fee as sellers profit. 2) Buyer at highest cost risk as complete scope is not clear and total contracted costs are unknown. 3) Such contracts are awarded when buyers can only describe what they need and not what to do. TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection Cost-reimbursable 10 84 Cost-reimbursable Here, costs are categorized as direct costs or indirect costs. Indirect cost: a percentage of direct cost Direct costs incurred solely for the benefit of the project. Example: salaries of full-time project staff Indirect costs (overhead/general/ administrative cost): allocated to the project as cost of doing Business. Example: 1)salary of management staff indirectly involved in the Project, 2) office electricity bill Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 85 Cost-reimbursable include incentive clauses for: IF THE SELLER MEETS OR EXCEEDS SELECTED OBJECTIVES (schedule/cost), THE SELLER GETS AN INCENTIVE / BONUS PAYMENT TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 86 Cost-reimbursable a) Cost-plus-fee (CPF) or Cost-plus-percentage of cost (CPPC) 1) Buyer reimburses all allowable costs plus an agreed-upon percentage of costs as fee 2) Here, seller is not motivated to control costs. WHY? Fee varies with the actual cost. The seller will get fee on every cost without limit. TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Example: contract = cost plus 5% of costs as fee Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 87 Cost-reimbursable b) Cost-plus-fixed-fee: CPFF (most common) 1) Buyer reimburses all allowable costs and paid a fee ( profit) fixed at a specific rupee amount (as a percentage of estimated project cost) 2) Fee is fixed: does not vary with cost 3) Advantage: keeps sellers costs in line. TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection WHY? Project Procurement Management Contract type selection TOOLS & TECHNIQUES 10 88 Cost-reimbursable b) Cost-plus-fixed-fee: CPFF (most common) because a cost overrun will not get the seller any extra fee (profit) Example: Contract = cost plus INR 500,000 (fixed) TECHNIQUES Make-or-buy Analysis Expert Judgment Contract Type Selection Project Procurement Management Contract type selection 10 89 Cost-reimbursable c) cost-plus-incentive-fee: CPIF 1) Buyer reimburses all allowable costs + an agreed-upon fee + an incentive bonus, based on achieving certain performance objective levels EXAMPLE Contract = Costs + fee, say INR 500,000 + INR 50,000 (for every month the project is earlier than agreed) Project Procurement Management Contract type selection 10 90 Cost-reimbursable c) cost-plus-incentive-fee: CPIF 2) In some cases, if the final costs are less than expected costs, then both buyer and seller benefit from the savings, base on mutually agreed sharing formula HANDS-ON EXERCISE Project Procurement Management HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2 DATA 1) Estimate cost INR 630,000, fee INR 75,000 10 91 1) Estimate cost INR 630,000, fee INR 75,000 2) If seller performs better, savings sharing: 80% buyer, 20% seller 3) Actual costs INR 600,00 4) Find out final fee and final price Project Procurement Management HANDS-ON EXERCISE : COST REIMBURSABLE CASE 2 SOLUTION Step 1 10 92 Step 1 Fee = INR 630,000 INR 600,000 = INR 30,000 x 20% = INR 6,000 Final fee = INR 75,000 target fee + INR 6,000 = INR 77,000 Step 2 Final price = INR 600,000 + 77,000 = INR 677,000 Project Procurement Management Contract type selection Plan purchases & Acquisitions 10 93 time and material ( T & M ) 1) Hybrid of cost-reimbursable and fixed- price - Cost-reimbursable portion: open ended - Fixed-price portion : unit rates are fixed 2) Full value and exact quantity of items to be delivered are not defined by buyer, but unit rate of the category of item is are set by mutual agreement 3) Buyer has medium amount of cost risk Project Procurement Management Contract type selection 10 94 time and material ( T & M ) Example Contract = INR 1000 per hour or material at cost or INR 300 per linear foot of tiles Project Procurement Management Contract type selection Moot points 10 95 Moot points Contract type is also determined by: the requirements buyer imposes on seller Example: standard/custom product version, cost data submittal, performance reporting 2) Other planning considerations Example: degree of risk, market competition Contract pricing when high future potential of purchase item is promised by the buyer, the seller may charge less, but buyer should be honest in promising such a potential (otherwise it may lead to legal remedy by the seller). Project Procurement Management Procurement management plan OUTPUTS 10 96 Describes how the procurement processes shall be managed from developing procurement documents through contract closure Includes 1) Contract types for use 2) Who will make independent estimates and if they are required as evaluation criteria OUTPUTS Procurement Management Plan Procurement Statements of work Make-or-buy decisions Procurement documents Source Selection Criteria Change requests Project Procurement Management Procurement management plan includes 10 97 plan includes 3) If the performing organization has a procurement department, then what actions project management team is allowed to take on its own 4) Standard procurement documents 5) Information on managing multiple contractors 6) Coordinating procurement with project scheduling, performance reporting, etc. Project Procurement Management Procurement management plan includes 10 98 7) Procurement related constraints and assumptions 8) Lead times management and coordination with schedule development 9) Managing make-or-buy decisions, linking well with resource planning and schedule development Project Procurement Management Procurement management plan includes 10 99 10) Determining scheduled dates for contract deliverables and coordinating them with schedule development and control processes 11) Determining performance bonds / insurance to mitigate risks 12) Establishing direction for seller to help develop and maintain contract WBS 13) Establishing format for contract SOW 14) Listing pre-qualified sellers Project Procurement Management Procurement management plan includes 11 00 15) Determining procurement metrics for managing contracts and evaluating sellers Depending on the needs of the project, this plan may be: - formal or informal - highly detailed or broadly framed IS A SUBBIDIARY PART OF PROJECT PLAN Project Procurement Management Procurement Statement of work Each contract SOW defines: the portion of the project scope to be acquired through the 11 01 the portion of the project scope to be acquired through the respective contract Developed from: 1) Scope baseline 2) Activity resource requirements 3) Requirements documentation Please remember it! Project Procurement Management Procurement Statement of work Describes the procurement item 11 02 Describes the procurement item in sufficient detail TO ALLOW THE PROSPECTIVE SELLERS TO DETERMINE IF THEY ARE CAPABLE OF PROVIDING THE ITEM! Please remember it! Project Procurement Management Procurement Statement of work 11 03 work SUFFICIENT DETAIL depends on: 1) NATURE OF THE ITEM 2) NEEDS OF THE BUYER, OR 3) EXPECTED CONTRACT FORM Contract SOW must be CLEAR, COMPLETE AND CONCISE! Project Procurement Management INFORMATION IN CSOW: a) Specifications b) Desired quantity 11 04 b) Desired quantity c) Quality levels d) Performance data e) Period of performance f) Work location g) Collateral services (performance reporting/ post-project operational support) h) Other requirements Project Procurement Management INFORMATION IN CSOW: there are specific content and format requirements for a contract 11 05 format requirements for a contract SOW in some application areas CSOW as it moves the Procurement process: is revised and refined until incorporated into a signed contract. WHY? Project Procurement Management Because a prospective seller may suggest: 11 06 A MORE EFFICIENT APPROACH OR LESS COSTLY PRODUCT (THAN THE ONE ORIGINALLY SPECIFIED) Project Procurement Management Make-or-buy decisions Are obvious output. 11 07 May also include: Decisions to buy insurance policies, performance bond contracts! WHY? Answer: To address some of the identified risks. May be simple (short justification) May be complex (iterative as subsequent procurement activities may require a different approach) Project Procurement Management Procurement documents used to request proposals from prospective sellers 11 08 prospective sellers Common names for different types of procurement documents: invitation for bid (IFB), request for bid (RFB) request for proposal (RFP) request for quotation (RFQ) invitation for negotiation, tender notice contactor initial response Project Procurement Management Procurement documents Term quotation, bid, tender is often used: 11 09 Term quotation, bid, tender is often used: When buyer selects seller based on price Example: purchasing standard or commercial items Term proposal is often used: When other considerations, such as sellers technical skills or technical approach, experience, background, etc., are considered important Project Procurement Management Procurement documents Terms may be used interchangeably also. Hence, please avoid making unwarranted 11 10 Hence, please avoid making unwarranted assumptions STRUCTURE OF PROCUREMENT DOCUMENTS MUST: 1) Facilitate an accurate and complete response from each prospective seller 2) Facilitate easy evaluation of the bids Project Procurement Management Procurement documents include: 11 11 include: 1) A description of the desired form of response 2) Contract SOW 3) Required contractual provisions (copy of model contract, non- disclosure provisions) 4) Evaluation criteria Project Procurement Management Procurement documents COMPLEXITY AND LEVEL OF DETAIL: 11 12 COMPLEXITY AND LEVEL OF DETAIL: Correspond the value of purchase and the risk involved PROCUREMENT DOCUMENTS SHOULD BE RIGOROUS ENOUGH: to ensure complete, consistent, and comparable responses FLEXIBLE ENOUGH: to permit consideration of suggestions from the sellers regarding better ways to satisfy requirements Project Procurement Management Evaluation criteria Developed and used to rate or score Proposals Source selection 11 13 score Proposals 1) FOR THE ITEMS READILY AVAILABLE FROM MANY SELLERS Evaluation Criteria limited to purchase price. Purchase Price means landed cost ( cost of the item and ancillary expenses, such as freight) selection criteria Project Procurement Management Source selection Evaluation criteria Developed and used to rate or score Proposals 2) FOR A MORE COMPLEX PRODUCT 11 14 selection criteria 2) FOR A MORE COMPLEX PRODUCT OR SERVICE 1) Understanding of need 2) Overall life cycle cost 3) Technical capability 4) Management approach 5) Financial capacity 6) Production capacity and interest 7) Business size and type 8) References 9) Intellectual property rights 10) Proprietary rights Project Procurement Management Change Requests This process may lead to requested changes to the project 11 15 requested changes to the project management plan and its subsidiary plans. These changes are processed for approval through Integrated Change Control process. Project Integration Management Deals with Develop project charter (discussed) Develop project management plan (We will discuss now) 11 16 Develop project management plan (We will discuss now) Direct and manage project execution Monitor and control project work Perform Integrated change control Close project or phase Project Integration Management Develop Project Management Plan PROCESS of documenting the actions necessary 11 17 PROCESS of documenting the actions necessary to define, prepare, integrate, and coordinate all subsidiary plans. The project management plan defines how the project is executed, monitored and controlled, and closed. It integrates and consolidates all baselines and subsidiary plans. PROCESS RESULTS IN Project Integration Management Develop Project Management Plan 11 18 PROCESS RESULTS IN A Project Management Plan The contents of this plan depend on complexity of the project and the application area The project management plan is developed Through a series of integrated processes Project Integration Management 11 19 Through a series of integrated processes until project closure. This process results in a project management plan that is progressively elaborated by updates and controlled and approved through the Perform Integrated Change Control process. Develop Project Management Plan PROJECT PLAN PM PLAN UPDATES OUTPUTS OF ALL OTHER PM PROCESSES + PLUS THEIR MANAGEMENT PLANS, Organizational policies Constraints, Assumptions Project Management Overview Project management plan 11 20 PROJECT PLAN EXECUTION INTEGRATED CHANGE CONTROL Deliverables Requested changes Implemented change requests Implemented corrective action Implemented preventive action Implemented defect repair Work performance report Approved change requests Approved corrective action Approved preventive action Validated defect repair Rejected change requests Recommended corrective action Recommended preventive action Recommended defect repair Forecasts Project closeout Contract closure Administrative closure Constraints, Assumptions Monitor & Control Project Work Close project deliverables Project Management Plan Components Scope management plan Requirements management plan All baselines - scope baseline Subsidiary plans components 11 21 Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communication management plan Risk management plan Procurement management plan Change management plan Configuration management plan - scope baseline - schedule baseline - cost baseline Life cycle selected Results of tailoring How work will be executed Key management reviews (for addressing open issues and pending issues). Project Documents: List 1 Activity attributes Activity cost estimates Activity list Milestone list Performance reports Project funding 11 22 Activity list Assumptions log Basis of estimates Change log Charter Contracts Duration estimates Forecasts Issue log Project funding requirements Proposals Procurement documents Project organization structure QC measurements Quality checklists Quality metrics Project Documents: List 2 Requirements traceability matrix RBS Stakeholder register Stakeholder requirements Statement of work 11 23 RBS Resource calendars Risk register Roles and responsibilities Sellers list Source selection criteria Stakeholder analysis Stakeholder management strategy Statement of work Teaming agreements Team performance assessments Work performance information Work performance measurements Project Integration Management Develop Project Management plan process overview 11 24 Project charter outputs from planning processes Enterprise environmental factors Organizational process assets INPUTS TOOLS & TECHNIQUES OUTPUTS Expert Judgment Project Management Plan Develop Project Management Plan process: INPUTS 1) Project charter 2) Outputs from planning processes 3) Enterprise environmental factors considered 11 25 3) Enterprise environmental factors considered here: a) Government or industry standards b) PMIS c) Organization structure and culture d) Infrastructure (existing facilities and capital equipments) e) Personnel administration Develop Project Management Plan process: INPUTS 4) Organizational Process Assets considered here: a) Standardized guidelines, work instructions, 11 26 a) Standardized guidelines, work instructions, proposal evaluation criteria, and performance measurement criteria, b) Project management plan templates- elements of the project management plan that may be updated: Guidelines for tailoring the organizations set of standard processes to satisfy needs of the project, Project closure guidelines (product validation and acceptance criteria) Develop Project Management Plan process: INPUTS 4) Organizational Process Assets considered here: 11 27 c) Change control procedures d) Project files from past projects: Scope, cost, schedule and performance measurement baselines, project calendars, network diagrams, risk registers, planned response actions, and defined risk impact. Develop Project Management Plan process: INPUTS 4) Organizational Process Assets considered here: d) Project files from past projects: 11 28 d) Project files from past projects: Historical information and lessons learned, Configuration management knowledgebase (versions and baselines of all official company standards, policies, procedures, and any other project document). Develop Project Management Plan process: TOOLS EXPERT JUDGMENT Utilized to tailor the process to meet project needs, 11 29 tailor the process to meet project needs, Develop technical and management details to include in project management plan, Determine resources and skills needed to perform the project work, Develop Project Management Plan process: TOOLS EXPERT JUDGMENT Utilized to Define the level of configuration 11 30 Define the level of configuration management to apply on the project, and Determine which project documents will be subject to formal change control process. Project Integration Management WBS EARNED VALUE CPM 11 31 PMIS EARNED VALUE CPM HISTOGRAM Develop Project Management Plan process: OUTPUTS Project Management plan We have already discussed about Project 11 32 We have already discussed about Project Management Plan. Please get it approved and then we are ready for Execution! Did we hear it right? Hold kick-off meeting! Develop Project Management Plan process: OUTPUTS Kick-off meeting After project plan is developed and 11 33 After project plan is developed and approved and before we begin implementation, we hold kick-off meeting! WHY? SO THAT EVERYONE IS ON THE SAME PAGE!! EXECUTING Executing Process Group 11 34 EXECUTING PROCESS Group Executing processes EXECUTING PROCESS GROUP THE CONCEPT 11 35 THE CONCEPT Consists of processes: Deployed to accomplish the work described in the project management plan in order to achieve the projects requirements. Executing processes EXECUTING PROCESS GROUP THE CONCEPT Involves: 11 36 Involves: 1) Coordinating PEOPLE and RESOURCES 2) Integrating and performing the activities according to the project management plan 3) Addressing the defined scope 4) Implementing approved changes Executing processes EXECUTING PROCESS GROUP THE CONCEPT 11 37 Requires some replanning: Due to normal execution variances Examples of general variances: a) Activity duration variances b) Resource productivity variances c) Resource availability variances d) Unanticipated risks (variance from what risks you had expected) Executing processes EXECUTING PROCESS GROUP THE CONCEPT These variances: 11 38 These variances: May or may not impact the project management plan. But you must analyze them! WHY? Because the results of your analysis may: 1) Trigger a change request 2) If the change request is approved, it would modify the project plan and MAY NEED REBASELINING!! Executing processes Direct & Manage Project Execution THE CONCEPT Utilizes : Majority of budget, as all the resources 11 39 Utilizes : Majority of budget, as all the resources you had planned are put to maximum use here. EXECUTING PROCESS GROUP processes 1) Direct and Manage Project Execution 11 40 1) Direct and Manage Project Execution 2) Acquire project team 3) Develop project team 4) Manage project team 5) Perform quality assurance 6) Distribute information 7) Manage stakeholders expectations 8) Conduct procurements Direct & Manage Project Execution THE CONCEPT Is Primary Process for Carrying out the project management plan; 11 41 management plan; Involves directing and managing various technical and organizational interfaces existing in the project to execute the work; Deliverables are produced as outputs (from the processes as defined in the project management plan). Direct & Manage Project Execution What do we do? 1. Perform activities to accomplish project 11 42 1. Perform activities to accomplish project requirements, 2. Create project deliverables, 3. Staff, train, and manage the team members, 4. Obtain, manage, and use resources (all types), 5. Implement the planned standards and methods, Direct & Manage Project Execution What do we do? 6. Establish and manage project communication 11 43 6. Establish and manage project communication channels, 7. Generate project data (status, forecasting), 8. Issue change requests and adapt approved changes into the projects scope, plans, and environment, Direct & Manage Project Execution What do we do? 9. Manage risks and implement risk response 11 44 9. Manage risks and implement risk response activities, 10. Manage sellers and suppliers, 11. Collect and document lessons learned, and implemented approved process improvement activities. Direct and Manage Project Execution Project manager, along with project management team, directs the performance 11 45 management team, directs the performance of planned activities, and manages various Technical and Organizational Interfaces that exist within the project! Direct and manage project execution is directly affected by the project application area! Direct and Manage Project Execution What do we get? Deliverables 11 46 Deliverables Work performance information about completion status of deliverables, and what has been accomplished is fed into the performance reporting process. Work performance info used as input to monitoring and Controlling Process Group. Direct and Manage Project Execution Here we also implement: Approved corrective actions to bring 11 47 Approved corrective actions to bring anticipated project performance as per project plan. Approved preventive actions to reduce probability of negative consequences. Approved defect repair with recommendation to either repair or replace defective component. Project Integration Management Direct and Manage Project Execution process overview INPUTS TOOLS & OUTPUTS 11 48 Project Management Plan Approved change requests: - Approved Corrective actions - Approved Preventive actions - Approved change requests (other types) - Approved defect repair EEFs OPAs INPUTS TOOLS & TECHNIQUES Expert judgment Project management information system OUTPUTS Deliverables Work performance information Change requests Project management plan update Project document updates Direct and Manage Project Execution process inputs 1. Project Management Plan We have discussed in detail. 11 49 2. Approved Change Requests As a part of the Perform Integrated Change Control process, a change control status update shows that some changes are approved and some are not. Direct and Manage Project Execution process inputs Approved Change Requests continued Approved change requests are scheduled for 11 50 implementation by the project team. Approved change requests are the documented, authorized changes to expand or reduce scope. Approved change requests can also modify, project management plan, procedures, costs/budget, or revise schedule. Direct and Manage Project Execution process inputs Approved Change Requests continued Approved change requests may also require 11 51 implementation of Corrective Action, or Preventive Action, or Defect Repair or Replacement of Defective Component. 3. Enterprise environmental factors Factors that can influence are: Organizational, company or customer culture and structure, Direct and Manage Project Execution process inputs Enterprise environmental factors Factors that can influence are: 11 52 Infrastructure (existing facilities and capital equipments), Personnel administration (hiring and firing guidelines, employee performance review, and training records), Stakeholder risk tolerances Direct and Manage Project Execution process inputs Enterprise environmental factors Factors that can influence are: 11 53 Project Management Information System (PMIS) AN AUTOMATED TOOL: 1) a scheduling software, 2) A configuration management system, 3) An information collection and distribution system, 4) Web interfaces to other online automated systems). Direct and Manage Project Execution process inputs 4. Organizational process assets OPAs that can influence are: Standard guidelines and work instructions, 11 54 Standard guidelines and work instructions, Communication requirements (defining allowed media, record retention, and security requirements), Issue and defect management procedures (defining issue and defect controls, issue and defect identification and resolution, and action item tracking). Direct and Manage Project Execution process inputs Organizational process assets continued OPAs that can influence are: Process measurement databases used to 11 55 Process measurement databases used to collect and make available measurement data on processes and products, Project files from previous projects, Issue and defect databases (having historical issue and defect status, control info, resolution, and action item results). Direct and Manage Project Execution process tools & techniques EXPERT JUDGMENT Used to assess inputs needed for this process. TOOLS & TECHNIQUES Expert judgment 11 56 needed for this process. Such judgment and expertise is applied to all technical and management details during this process. Expert judgment Project management information system Direct and Manage Project Execution process tools & techniques EXPERT JUDGMENT This expertise is provided by the project manager and the project TOOLS & TECHNIQUES Expert judgment 11 57 project manager and the project management team. Additional expertise is available from many sources: - other units within organization, - consultants, stakeholders - professional/technical associations Expert judgment Project management information system Direct and Manage Project Execution process tools & techniques Project Management Information System TOOLS & TECHNIQUES Expert judgment 11 58 Used here. Details already discussed. Expert judgment Project management information system Direct and Manage Project Execution process outputs Deliverables An deliverable is any unique OUTPUTS Deliverables Work performance 11 59 An deliverable is any unique and verifiable product, result or capability to perform a service that must be produced to complete a process, phase, or project. Work performance information Change requests Project management plan updates Project document updates Direct and Manage Project Execution process OUTPUTS Information on work results: To what extent Which 11 60 To what extent the quality standards are being met What costs have been incurred or committed Which deliverables have been completed and which have not IS COLLECTED HERE AND FED INTO THE PERFORMANCE REPORTING PROCESS FOR NECESSARY ANALYSIS AND EVALUATION! Work Results (DELIVERABLES) Are mostly tangible but intangible too: Example Direct and Manage Project Execution process OUTPUTS 11 61 Example Tangible Deliverables 1) Buildings 2) Structures 3) Roads Intangible Deliverables 1) Training 2) Mentoring 3) Facilitation Direct and Manage Project Execution process OUTPUTS Changes Requests When issues are found while work is being 11 62 When issues are found while work is being performed, change requests are issued. Change requests may to expand modify project policies or procedures, project cost or budget, project schedule or project quality. Direct and Manage Project Execution process OUTPUTS Changes Requests Other change requests cover required 11 63 Other change requests cover required preventive or corrective actions to forestall negative impact later in the project. Direct and Manage Project Execution process OUTPUTS Changes Requests Please note: requests for a change can be direct 11 64 Please note: requests for a change can be direct or indirect, externally or internally initiated, and can be optional or legally/contractually mandated. They can include: a) Corrective action (to bring expected future performance in line with the project management plan). Direct and Manage Project Execution process OUTPUTS Changes Requests They can include: 11 65 They can include: b) Preventive action (to reduce the probability of negative consequences associated with project risks). c) Defect repair d) Updates (changes to formally controlled documentation, plans to reflect modified or additional ideas or content. Direct and Manage Project Execution process OUTPUTS Project Management Plan Updates Include updates to: 11 66 Include updates to: 1. Requirements management plan 2. Schedule management plan 3. Cost management plan 4. Quality management plan 5. Human resource plan 6. Procurement management plan, and 7. Project baselines Direct and Manage Project Execution process OUTPUTS Project Document Updates Include updates to: 11 67 Include updates to: 1. Requirements documentation 2. Project logs (issue, assumptions, etc.) 3. Risk register, and 4. Stakeholder register Executing Process Group 11 68 EXECUTION PROCESSES Project Human Resource Management The process of confirming Human Resource Acquire Project Team 11 69 The process of confirming Human Resource availability and obtaining the team necessary to complete project assignments. Please remember: The project management team may or may not have control over team members! WHY? Because of collective bargaining agreements, use of subcontractor personnel, matrix organization, internal or external reporting relationships, or other various reasons!! Project Human Resource Management Please remember following: Acquire Project Team 11 70 1) The project manager or project management team should effectively negotiate with others who are in a position to project human resources for the project. 2) Failure to acquire necessary human resources may affect project schedules, budgets, customer satisfaction, quality, and risks! It could decrease probability of success and finally lead to project cancellation. Project Human Resource Management Please remember following: Acquire Project Team 11 71 3) If human resources are not available due to constraints, economic factors, or previous assignments to other projects, the project manager or project team may be required to assign alternative resources with lower competencies, provided there is no violation of legal, regulatory, mandatory, or other specific criteria. Project Human Resource Management Please remember following: All these factor must be considered and planned Acquire Project Team 11 72 All these factor must be considered and planned for during planning stages. BE SURE! The project manager or project management team should reflect Impact of any unavailability of required human resources in the project schedule, project budget, project risks, project quality, training plans, and other project management plans!!! Acquire project team process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Human Resource Management 11 73 Project Management Plan Enterprise environmental factors Organizational process assets INPUTS TECHNIQUES Preassignment Negotiations Acquisition Virtual teams OUTPUTS Project Staff Assignments Resource Calendars Project management plan updates Acquire Project Team process INPUTS Project Management Plan provides Human Resource Plan That has information on How Project Human 11 74 That has information on How Project Human Resource should be identified, staffed, managed, controlled, and eventually released. Defines: a) Roles and responsibilities describing positions, skills, and competencies that the project demands. b) Project organization charts indicating the number and hierarchy of people needed for the project. c) Staffing management plan (time periods of usage, and other necessary information). Acquire Project Team process INPUTS Enterprise Environmental Factors Following factors influence this process: 11 75 1) Existing information for human resources (Availability Competency levels, Experience, Interest in working on the project, their Cost Rates). 2) Personnel administration policies (that affect outsourcing). 3) Organizational structure 4) Location or multiple locations Acquire Project Team process INPUTS Organizational process assets Following factors influence this process: 11 76 Organization standard policies, processes, procedures. Acquire project team Tools & Techniques Project Human Resource Management Preassignment Happens when project team is 11 77 Happens when project team is promised as part of competitive bid, or project depends on some special expertise, or staff assignments are defined in the charter. Please remember it! Project Human Resource Management Negotiation Happens when project team is drawn from within: Acquire Project Team Tools & 11 78 from within: You negotiate with Functional Managers for competent staff, to be provided in needed timeframes, and stay with until their job is completed. You negotiate with other project management teams for sharing scarce or specialized resources. Tools & Techniques Project Human Resource Management Negotiation Here, your ability to influence and politics of the organizations involved Acquire Project Team Tools & 11 79 politics of the organizations involved play important part. A Functional Manager will provide his/her exceptional performers only where he/she sees benefits and visibility of competing projects demanding those resources! Tools & Techniques Project Human Resource Management Acquisition Recruit or hire or subcontract work if Acquire Project Team Tools & 11 80 Recruit or hire or subcontract work if the performing organization lacks the in-house staff required to complete the project. Tools & Techniques Project Human Resource Management Virtual teams Creates new possibilities when Acquire Project Team Tools & 11 81 Creates new possibilities when acquiring project team members! These teams are groups of people, though not meeting face to face, but share common goal and fulfill their roles. Video-conferencing, emails, etc. have really helped success of such teams. Tools & Techniques Project Human Resource Management Virtual teams New possibilities Acquire Project Team Tools & 11 82 New possibilities Teams of people from same company located in different geographical areas Add special expertise through remote Include employees working from home offices or people with mobility handicaps Teams of people working in different shifts/hours Take up projects ignored due to travel expenses Tools & Techniques Project Human Resource Management Virtual teams New possibilities caution! Acquire Project Team Tools & 11 83 New possibilities caution! You need to spend extra time to 1) SET CLEAR EXPECTATIONS 2) DEVELOP PROTOCOLS FOR CONFRONTING CONFLICTS 3) INVOLVE PEOPLE IN DECISION- MAKING 4) SHARE CREDIT IN SUCCESS So, communication planning becomes very important here!! Please remember!!! Tools & Techniques Acquire project team OUTPUTS Project Human Resource Management Project staff assignments Project is staffed when 11 84 Project is staffed when necessary people are assigned to work on it! Includes documentation: 1) Project team directory 2) Memos to team members 3) Their names written in organization charts, schedules Acquire project team OUPUTS Project Human Resource Management Resource Calendars Documents time periods each team 11 85 Documents time periods each team member will work on the project. Please remember: You can develop a reliable, final schedule only after considering each persons schedule conflicts, including his commitments to other projects and his vacations, etc. Acquire project team OUTPUTS Project Human Resource Management Project management plan updates may include 11 86 Human Resource Plan. Project Human Resource Management D E 11 87 T E A M E V E L O P M E N T Project Human Resource Development Develop Project Team Concept 11 88 Consists of 1) Improving the competencies, team interaction, and overall team environment to enhance project performance. 2) Project managers should acquire skills to identify, build, maintain, motivate, lead, and inspire project teams to achieve high performance and meet project objectives. Concept Teamwork Critical Success Factor for project success Develop Project Team 11 89 success 1) Developing effective project team is one of the primary responsibility of the project manager! 2) Project managers should create an environment that facilitates teamwork. 3) Project Manager Concept Teamwork Critical Success Factor for project success Develop Project Team 11 90 success 3) Project Manager should continually motivate their team by: 1) Providing challenges and opportunities, 2) Timely feedback, 3) Support as needed, and 4) Recognizing and rewarding good performance. Concept HIGH Team Performance can be by Develop Project Team 11 91 1) Using open and effective communication, 2) Developing trust among team members, 3) Managing conflict in a constructive manner, and 4) Encouraging collaborative problem-solving and decision making. The project manager should request support and influence stakeholders to get resources for developing effective project teams! Challenges Global environment, cultural diversity Develop Project Team 11 92 Team members often have diverse industry experience, multiple languages, and sometimes operate in the tteam languageor norm that is a different language than their native one. What should be done to tackle this? Challenges The project management team should Develop Project Team 11 93 a) Capitalize on cultural differences, b) Focus developing and sustaining the project team throughout the project life cycle, and c) Promote working interdependently in a climate of mutual trust. Advantage? Advantage Developing the project team Develop Project Team 11 94 Improves the people skills and technical competencies, and overall team environment and project performance! It requires clear, timely, effective and efficient communication between team members throughout the project lifecycle! Objectives? Objectives of developing a project team 1) Improve knowledge and skills to increase ability Develop Project Team 11 95 1) Improve knowledge and skills to increase ability to complete project deliverables, while lowering costs, reducing schedules, and improving quality. 2) Improve feelings of trust and agreement among team members to raise morale, lower conflict, and increase teamwork, and Objectives of developing a project team Develop Project Team 3) Create a dynamic and cohesive team culture 11 96 3) Create a dynamic and cohesive team culture to improve both individual and team productivity, team spirit, and cooperation, and allow cross- training and mentoring to share knowledge and expertise. Project Human Resource Management Team development basics TEAM DEVELOPMENT 11 97 INDIVIDUAL DEVELPOMENT (behavioral and technical) is the foundation essential to develop the team TEAM DEVELOPMENT is critical to the projects ability to meet its objectives Project Human Resource Management FORMING STORMING NORMING, PERFORMING MOURNING STAGE 1 STAGE 2 STAGE 3 STAGE 4 Stage of Team Development 11 98 STAGE 1 STAGE 2 STAGE 3 STAGE 4 Team members enthusiastic about new team: commitment high only beginning to work together: competence low Experience temporary lapse of commitment to the team as they struggle to find a good way to work together team learns: competence rises Team has found and agreed a good way to work: commitment and competence high Competence established at high level Commitment may surge or dip depending how disbanding the team handled Project Human Resource Management Team development basics Organization structure 11 99 Organization structure of the performing organization has great bearing on team development on projects Efforts to develop team are complicated When individual team members are accountable to both a functional manager and the project manager Its project managers responsibility to balance this relationship and get the due contribution and cooperation of the team members! Develop Project Team process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Human Resource Management 12 00 Project Staff assignments Project management Plan Resource calendars INPUTS TECHNIQUES Interpersonal Skills Training Team-building Activities Ground rules Co-location Recognition and rewards OUTPUTS Team Performance assessments Enterprise Environmental Factors Update Develop project team INPUTS Project Human Resource Management Project staff assignments 12 01 Team development starts with the list of the project team members, project staff assignments documents identify the people who are on the team. Develop project team INPUTS Project Human Resource Management Project management plan Provides human resource plan 12 02 Provides human resource plan which Identifies training strategies and plans for developing project team members. The project moves on and so do project team assessments, resulting in addition of items like rewards, feedback, additional training, and disciplinary actions to the plan. Develop project team INPUTS Project Human Resource Management Resource Calendars Identifies 12 03 Identifies times that project team members can participate in team development activities. Develop Project Team Tools & Techniques Interpersonal skills Sometimes known as soft skills, play Important Role in team development. 12 04 Role in team development. The project management team can GREATLY REDUCE problems and increase cooperation By understanding the SENTIMENTS OF TEAM MEMEBRS, ANTICIPATING THEIR ACTIONS, ACKNOWLEDGING THEIR CONCERNS, AND FOLLOWING UP ON THEIR ISSUES. Develop Project Team Tools & Techniques Interpersonal skills Skills that help you managing team members: 12 05 members: 1) Empathy 2) Influence 3) Creativity 4) Group facilitation Develop Project Team process Tools & Techniques Training All activities designed to enhance competencies of team members. Can be formal, informal. 12 06 of team members. Can be formal, informal. Class room, online, computer-based, on-the- job assisted by another team member, mentoring, and coaching. Please remember if anyone lacks necessary managerial or technical skills, these skills must be developed as part of project work. Develop project team Tools & Techniques Project Human Resource Management Training 12 07 Planned Training: scheduled in staffing management plan. Unplanned Training: result of observation, conversations, performance appraisal conducted during the process Manage Project Team in Controlling! Develop project team Tools & Techniques Project Human Resource Management Team-building activities Vary from: 1. Five-minute agenda item in status 12 08 1. Five-minute agenda item in status review meeting to 2. Off-site, professionally facilitated TEAMBUILDING WORKSHOP 3. Involving non-management level team members in the planning process, also develops team spirit. Project Human Resource Management Team-building activities You should also: Encourage informal communication Develop project team Tools & Techniques 12 09 Encourage informal communication and activities as they establish trust and build good working relationships! Please remember team building strategies are quite necessary for virtual team as they dont get the benefit of face-to-face contact! Project Human Resource Management Team-building activities: discussion As ongoing process, team building is crucial to project success. Changes in project 12 10 project success. Changes in project environment are inevitable, and to manage them effectively, a continued or a renewed team building effort must be applied!! Project Manager must continually monitor team functioning and performance to determine if any actions are needed to prevent or correct team problems!!! Project Human Resource Management Team-building activities: discussion Five stages (Tuckman ladder of team development) 12 11 1) Forming 2) Storming 3) Norming 4) Performing 5) Adjourning These occur in order but a team may get stuck up at one stage or slip to an earlier one. Team Members who have worked in the past may even skip a stage! We have already talked about these stages Project Human Resource Management Ground rules Develop project team Tools & Techniques 12 12 Please establish clear expectations of acceptable behavior by project team members! Early commitment to these guidelines reduces misunderstanding and increases productivity! Form by joint participation so that team members share responsibility to follow them. Project Human Resource Management Co-location Placing all or most of the active team members at same location increases Develop project team Tools & Techniques 12 13 members at same location increases their ability to work as a team. It may be: a) temporary, b) at strategically important times, or c) for entire project. Co-location strategy includes: A meeting room, sometimes called war room, having electronic devices, place to post schedules, and other conveniences to EHNHANCE COMMUNICATION and A SENSE OF COMMUNITY! Project Human Resource Management Co-location When co-location is thought to be a good strategy, the use of virtual team Develop project team Tools & Techniques 12 14 good strategy, the use of virtual team members will reduce the frequency that team members are located together! Project Human Resource Management Recognition and Rewards Is part of the team development process. Develop project team Tools & Techniques 12 15 process. Recognize and reward desirable team behavior. Please remember: 1) Ways to reward developed during HR Planning process. 2) Awards decisions are made during Manage Project Team process through performance appraisals. Project Human Resource Management Recognition and Rewards CAUTION! Only desirable behavior should be rewarded! Develop project team Tools & Techniques 12 16 behavior should be rewarded! Please remember: 1) Willingness to work overtime to meet an aggressive schedule should be recognized/rewarded. 2) Needing to work overtime due to poor planning should not be rewarded. Project Human Resource Management Recognition and Rewards CAUTION! Only desirable behavior should be rewarded! Develop project team Tools & Techniques 12 17 behavior should be rewarded! Please remember: 3) Win-lose rewards (that only some team members can achieve, like of the month) destroys cohesiveness. 4) Reward win-win behavior that everyone can achieve (like progress reports in time) increases team spirit. 5) Consider cultural differences! Team rewards in a culture of individualism will be difficult to work. Develop project team OUTPUTS Project Human Resource Management Team performance assessment Effective team development 12 18 Effective team development strategies and activities increase Teams Performance, which in turns increases chances of achieving project objectives! We come to know this by assessing team performance. Develop Project Team process OUTPUTS Team performance assessment Informal and formal assessments of teams effectiveness (resulting from team 12 19 effectiveness (resulting from team development activities): 1) Improvement in skills (that allow one to perform more effectively). 2) Improvement in competencies and sentiments that help the team to perform better as a group. 3) Less staff turnover Develop Project Team process OUTPUTS Team performance assessment Informal and formal assessments of teams effectiveness (resulting from team 12 20 effectiveness (resulting from team development activities): 4) Increased team cohesiveness where team members share information and experiences openly and help each other to improve the overall project performance! Develop Project Team process OUTPUTS Team performance assessment Please remember Such assessments can also identify need for 12 21 Such assessments can also identify need for Some specific training, coaching, mentoring, assistance, or changes to improve the teams performance. Please note This is especially important if team members are part of a union, involved in collective bargaining, bound by contract performance clauses, or other related situations! Develop Project Team OUTPUTS Project Human Resource Management Enterprise Environmental Factors Updates may include 12 22 may include Personnel Administration, including updates for Employee Training Records Skill Assessments. Project HR Management 12 23 Manage Project Team Project HR Management Manage Project Team Involves: 12 24 1) Tracking team member performance 2) Providing feedback 3) Resolving issues 4) Coordinating changes to enhance project performance Project HR Management Manage Project Team HOW? Well, the project management team: 12 25 HOW? Well, the project management team: 1) Observes team behavior 2) Manages conflict 3) Resolves issues 4) APPRAISES TEAM MEMBER PEROFRMANCE Project HR Management Manage Project Team RESULT? 12 26 RESULT? 1) Staffing management plan is updated. 2) Change requests are submitted. 3) Issues are resolved. 4) Inputs provided to performance appraisals 5) Lessons learned are added to organizations database. Project HR Management Manage Project Team CAUTION! 12 27 CAUTION! Managing team members becomes difficult when they report to two bosses! Functional Managers and Project Managers (in matrix organization). Project success largely depends on how well this dual reporting relationship is managed. Its responsibility of Project Manager to manage it nicely! Remember it!! Project HR Management Manage Project Team CAUTION! CAUTION! 12 28 CAUTION! Team Management requires a combination of skills with special emphasis on: 1) Communication 2) Conflict Management 3) Negotiation, and 4) Leadership. CAUTION! Project Managers should provide challenging assignments to the team members and provide recognition for high performance. Manage Project Team process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Change Requests Project HR Management 12 29 Project staff assignments Project Management Plan Team performance assessment Performance Reports Organization Process Assets INPUTS Observation and conversation Project performance appraisals Conflict management Issue log Interpersonal Skills Change Requests Enterprise Environmental factors Update OPAs updates PM Plan updates Manage Project team process INPUTS Project staff assignments Provide a list of team members to be evaluated. Project management plan 12 30 Project management plan Provide human resource plan which gives us information on: A) ROLES AND RESPONSIBILITES B) PROJECT ORGANIZATION C) STAFFINGMANAGEMENT PLAN a list of R & R to be used to monitor and evaluate performance. Manage Project team process INPUTS Team Performance Assessments (ongoing, formal/informal) 12 31 Helps take actions to resolve issues, modify communication, address conflict, and improve team interactions. Performance reports Results from control processes, such as: 1) schedule control, cost control Manage Project team process INPUTS 12 32 1) schedule control, cost control 2) quality control, scope verification 3) procurement audits Results from performance reports including forecasts helps decide: a) recognition & rewards, b) future HR requirements c) updates to staffing management plan Organizational process assets That can influence this process: 1) Certifications of appreciation Manage Project team process INPUTS 12 33 1) Certifications of appreciation 2) Newsletters 3) Websites 4) Bonus structures 5) Corporate apparel, and 6) Other organizational perquisites. Observation & conversation To be in touch with work and attitudes of team members. PM team monitors: Manage Project Team process Tools & Techniques 12 34 team members. PM team monitors: 1) Progress toward project deliverables. 2) Accomplishments that are source of pride among team members. 3) Interpersonal issues Project performance appraisals (feedback) Performance Feedback to team Manage Project Team process Tools & Techniques 12 35 Performance Feedback to team members from their supervisors. It can also be 360-degree (from superior, peer, and subordinates). Objectives? 1) To re-clarify Roles & responsibilities, 2) To ensure positive feedback is given through a Structured Time in an otherwise hectic environment. Project performance appraisals (feedback) Objectives? Manage Project Team process Tools & Techniques 12 36 Objectives? 3) Discover unknown and unresolved issues, 4) Develop individual training plans, and 5) Establish specific goals for future time periods. Conflict management Conflict is an inevitable part in a project environment. Successful conflict Manage Project Team process Tools & Techniques ANSWER: 12 37 environment. Successful conflict management increases productivity and brings in positive working relationships. Sources of conflict? - scarce resources - scheduling priorities - personal work styles Conflict management What can help? - Team ground rules Manage Project Team process Tools & Techniques 12 38 - Team ground rules - Solid project management practices (communication planning, role definition, etc.) Benefit? If managed properly. Differences of opinion are healthy Leads to enhanced creativity Better decision-making Conflict management Please remember that differences become a negative factor, team members are first responsible Manage Project Team process Tools & Techniques 12 39 negative factor, team members are first responsible to resolve their own conflicts. If it is not resolved and escalates, then the project manager must facilitate satisfactory resolution. Conflict management Please remember Conflict should be addressed EARLY and usually Manage Project Team process Tools & Techniques 12 40 Conflict should be addressed EARLY and usually IN PRIVATE, using a direct, collaborative approach! If disruptive conflict continues, formal procedures may be used, including disciplinary actions. it is not resolved and escalates, then the project manager must facilitate satisfactory resolution. MOST VITAL POINTS: 1. CONFLICT IS NATURAL AND FORCES A SEARCH FOR ALTERNATIVES Manage Project Team process Tools & Techniques 12 41 FOR ALTERNATIVES 2. CONFLICT IS A TEAM ISSUE 3. OPENESS RESOLVES CONFLICTS 4. CONFLICT RESOLUTION MUST FOCUS ON ISSUES, not personalities 5. Conflict resolution should focus on present, not past! Success in managing project teams depends largely on the ability to resolve conflict. Factors that effect conflict resolution methods: Manage Project Team process Tools & Techniques 12 42 Factors that effect conflict resolution methods: 1. Relative importance and intensity of conflict 2. Time pressure for resolving conflict 3. Position taken by players involved 4. Motivation to resolve conflict on long-term or short-term basis. Conflict resolution techniques: 1. Withdrawal/avoiding Manage Project Team process Tools & Techniques 12 43 1. Withdrawal/avoiding 2. Smoothing/accommodating 3. Compromising 4. Forcing 5. Collaborating 6. Confronting/Problem Solving Conflict resolution techniques: 1. Withdrawal / Avoiding: Retreating from an Manage Project Team process Tools & Techniques 12 44 1. Withdrawal / Avoiding: Retreating from an actual or potential conflict situation. 2. Smoothing / Accommodating: Emphasizing areas of agreement rather than areas of differences. 3. Compromising: searching for solutions that bring some degree of satisfaction to all parties. 4. Forcing: Pushing ones point of view at the expense of others. Win-Lose. Conflict resolution techniques: 5. Collaborating: Incorporating multiple point of views and insights from differing perspectives. Leads Manage Project Team process Tools & Techniques 12 45 views and insights from differing perspectives. Leads to consensus, commitment. 6. Confronting/Problem Solving: Treating conflict as a problem to be solved. A written log documents and helps monitor who is responsible for resolving by a target date. Needs give-and-take attitude and open dialogue. Issue log (issues arising during managing project team) Helps so much! Documents persons Manage Project Team process Tools & Techniques 12 46 Helps so much! Documents persons responsible to resolve issues by a target date. Addresses obstacles that may stall team from achieving goals. Example of obstacles: Differences of opinion Situations to be investigated Emerging/unanticipated responsibilities (need to be assigned to someone in project team) Interpersonal Skills Project managers use a combination of technical, human, and conceptual skills to Manage Project Team process Tools & Techniques 12 47 technical, human, and conceptual skills to analyze situations and interact appropriately with team members. Please note: Using appropriate interpersonal skills aids project managers in capitalizing on the strengths of team ALL members! Interpersonal Skills 1. Leadership 2. Influencing Manage Project Team process Tools & Techniques 12 48 2. Influencing 3. Effective decision making Leadership: Communicate the vision and inspire the project team to achieve high performance. Important through all phases of project life cycle. Interpersonal Skills 1. Leadership 2. Influencing Manage Project Team process Tools & Techniques 12 49 2. Influencing 3. Effective decision making Influencing: Ability to influence stakeholders on a timely manner, especially in a matrix environment where project manager have little or no direct authority. Key Influencing skills: 1. Ability to be persuasive and clearly articulate points and positions. Manage Project Team process Tools & Techniques 12 50 articulate points and positions. 2. High levels of active and effective listening habits 3. Consideration of various perspectives 4. Gathering relevant and critical information to address important issues and reach agreements. Effective decision making Ability to negotiate and influence the organization and the project management team. GUIDELINS: Manage Project Team process Tools & Techniques 12 51 and the project management team. GUIDELINS: 1. Focus on goals to be served 2. Follow a decision-making process 3. Study environmental factors 4. Develop personal qualities of the team members 5. Stimulate team creativity, and 6. Manage opportunity and risk. Change Requests Staffing changes emerging from this process ( whether by choice or by uncontrollable Manage Project Team process OUTPUTS 12 52 ( whether by choice or by uncontrollable events) can cause schedule to be extended, budget to be exceeded, etc. Staffing issues can disrupt project plan. These change requests are examined by ICC and then approved with due consideration of their impact on the project! Change Requests Staffing changes can include: 1. Moving people to different assignments Manage Project Team process OUTPUTS 12 53 1. Moving people to different assignments 2. Outsourcing some work 3. Replacing team members who leave 4. Preventive actions to reduce probability and impact of problems before they occur. Example: a) Cross-training to reduce problems during team member absences b) Additional role clarification to ensure all responsibilities are fulfilled. OPAs updates 1) inputs to performance appraisals Manage Project Team process OUTPUTS 12 54 1) inputs to performance appraisals of team members. Provided by project staff for team members with whom they interact significantly. 2) HR-Related lessons learned posted in historical database examples OPAs updates HR-Related lessons learned posted in historical database: Manage Project Team process OUTPUTS 12 55 historical database: 1) Project org. charts, position descriptions, staffing management plan (kept as templates). 2) Ground rules, conflict management techniques, and recognition events that proved so good. examples OPAs updates HR-Related lessons learned posted in historical database: Manage Project Team process OUTPUTS 12 56 historical database: 3) Procedures for co-location, virtual teams, training, negotiation, and team building that proved so useful. 4) Special competencies or skills of team members discovered during project. 5) Issues and their solutions from issue log. Enterprise Environmental Factors Updates Manage Project Team process OUTPUTS 12 57 1. Input to organizational performance appraisals. 2. Personal Skills Updates Project Management plan Updates Manage Project Team process OUTPUTS 12 58 1. Staffing management plan Project Quality Management Perform Quality assurance 12 59 The process of Auditing the quality requirements and results from quality control measurements Assurance may be provided to ensure appropriate quality standards and operations definitions are used! Perform Quality assurance Perform Quality assurance Please remember A quality assurance department, or similar organization, often oversees quality 12 60 organization, often oversees quality assurance activities. Quality assurance support may be provided to the project team, the management of the performing organization, the customer or sponsor, as well as other stakeholders not actively involved in the project! Perform Quality assurance Please remember This process provides and umbrella for Continuous Process Improvement, that is 12 61 Continuous Process Improvement, that is an iterative means for improving quality of all processes. Project Quality Management Quality assurance CONTINOUS PROCESS IMPORVEMENT 12 62 CONTINOUS PROCESS IMPORVEMENT Reduces waste and eliminates activities that do not add value non-value-added activities, Increases efficiency and effectiveness of processes, Reviews and improves organizational business processes. Perform Quality Assurance process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Change Requests Project Quality Management 12 63 Project Management Plan Quality metrics Work performance information Quality control Measurements Plan Quality and perform Quality Control Tools & Techniques. Quality Audits Process analysis Change Requests Organizational process assets updates Project management plan updates Project Document Updates Project Quality Management Project management Plan provides 1. Quality Management Plan Perform Quality assurance INPUTS 12 64 1. Quality Management Plan prescribes how quality will be performed within the project. 2. Process Improvement Plan details steps for analyzing processes to identify activities that enhance value and the ones do not add value. Project Quality Management Quality metrics We have dealt with this also during quality planning and we use them Perform Quality assurance INPUTS 12 65 quality planning and we use them as another important input here. Project Quality Management Work performance information Needed for quality audit, reviews, Perform Quality assurance INPUTS 12 66 Needed for quality audit, reviews, process analyses. Includes: 1) Technical performance measures 2) Project deliverables status 3) Required corrective actions 4) Performance reports Project Quality Management Quality control measurements Are results of quality control Perform Quality assurance INPUTS 12 67 Are results of quality control activities. Based on the these results, we reanalyze and reevaluate the quality standards and processes of the performing organization during QA process! Project Quality Management Perform Quality Assurance Tools & Recap Plan Quality & Perform Quality Control tools & techniques: already discussed Benefit/Cost analysis 12 68 Techniques Quality audits carried out to identify: lessons learnt that can improve performance of the present project, and also of other projects in performing organization Benefit/Cost analysis Benchmarking Flowcharting Design of experiments Cost of quality Project Quality Management Quality audits A structured, independent review Perform Quality Assurance Tools & Techniques 12 69 A structured, independent review (scheduled or random, in-house or by outside third party) to determine WHETHER PROJECT ACTIVITIES COMPLY WITH ORGANIZATIONAL AND PROJECT PLOICIES, PROCESSES, AND PROCEDURES! Project Quality Management Quality audits OBJECTIVES: Perform Quality Assurance Tools & Techniques 12 70 OBJECTIVES: 1. Identify all the good /best practices are being implemented, 2. Identify all gaps, 3. Share the good practices introduced or implemented in similar projects in the organization or the industry, 4. Proactively offer assistance in a positive manner to improve implementation of processes to help team Project Quality Management Quality audits OBJECTIVES: Perform Quality Assurance Tools & Techniques 12 71 OBJECTIVES: 4. Proactively offer assistance in a positive manner to improve implementation of processes to help team raise productivity, 5. Highlight contributions of each audit in the Lessons Learned repository of the organization. Advantage Project Quality Management Quality audits ADVATAGE: Subsequent efforts to correct these Perform Quality Assurance Tools & Techniques 12 72 ADVATAGE: Subsequent efforts to correct these deficiencies will result in: Reduced cost of quality Increase in the percentage of acceptance of the product/service by the customer or sponsor Quality audits confirm the implementation of approved change request/corrective/preventive actions/defect repairs! Project Quality Management Perform Quality Assurance TOOLS & Process analysis Done by following steps written in 12 73 TECHNIQUES Done by following steps written in process improvement plan. PURPOSE? To find out required improvements from the technical and organizational point of view! HOW? Project Quality Management Process analysis What do you analyze during process operations? Perform Quality Assurance TOOLS & TECHNIQUES 12 74 What do you analyze during process operations? 1. Problems experienced 2. Constraints experienced 3. Non-value-added activities identified We conduct root cause analysis, may use a specific technique to analyze a problem/situation, to understand underlying causes. Then, we decide preventive actions TO AVOID SIMILAR PROBLEMS. Project Quality Management Change Requests Requests for actions to be taken for quality Perform Quality Assurance OUTPUTS 12 75 Requests for actions to be taken for quality improvement for the increasing the efficiency and effectiveness of policies, processes, and procedures of the performing organization. TO PROVIDE ADDED BENEFITS TO THE STAKE HOLERDS OF ALL PROJECTS! Project Quality Management Project Management Plan updates Perform Quality Assurance TOOLS & TECHNIQUES 12 76 updates 1. Quality Management Plan 2. Schedule Management Plan 3. Cost Management Plan. Project Quality Management Project Management Plan updates Perform Quality Assurance TOOLS & TECHNIQUES 12 77 updates What are these changes? 1. Incorporation of processes that have been through continuous process improvement (and are ready to repeat the cycle). 2. Improvements to processes that have been identified and measured (and are ready for implementation). Project Quality Management Project management Plan updates Perform Quality Assurance TOOLS & 12 78 Plan updates These changes can lead to: 1. Additions 2. Modifications 3. Deletions to the Project management Plan and its Subsidiary Plans, after they are processed and approved by ICC process. TECHNIQUES Project Quality Management OPA Updates may include Perform Quality Assurance TOOLS & 12 79 may include Quality Standards Project Document Updates include 1. Quality Audit Reports. 2. Training Plans, and 3. Process Documentation. TECHNIQUES Project Communications Management DISTRIBUTE 12 80 DISTRIBUTE INFORMATION Project Communication Management DISTRIBUTE INFORMATION 12 81 Timely communication of needed information to project stakeholders Implementing communications management plan Attending to unexpected requests for information Project Communication Management DISTRIBUTE INFORMATION Sample Project information distributed: status 12 82 progress, success forecast variance report corrective action problems, new risks discovered updated project plans/ components of project plan team members performance meeting schedule , etc Project Communication Management DISTRIBUTE INFORMATION - Sample Project information is distributed to 12 83 internal to the project external to the project management sponsor functional managers team team members managers other project managers project manager other stakeholders Distribute Information process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Communications Management 12 84 Project Management Plan Performance Reports. Organizational Process Assets INPUTS TECHNIQUES Communications Methods Information Distribution Tools OUTPUTS OPAs Updates Project Communication Management The Project Management Plan contains the :- Communications management plan which includes:- Distribute Information 12 85 includes:- Stakeholder communication requirements Information to be sent, format, content, detail Persons responsible for communication Persons/groups to be communicated Methods of communication Frequency (weekly, monthly) Escalation process-identifying timeframes and the management chain (names) for escalation issues that cant be solved at lower level Project Communication Management Communications management plan Distribute Information 12 86 plan contains Method for updating and refining communications management plan AS PROJECT PROGRESSES GLOSSARY OF COMMON TERMINOLOGY (VERY IMPORTANT)! WHY? Project Communication Management Performance Reports:- They are used to distribute project performance Distribute Information 12 87 They are used to distribute project performance and status information. It should be as precise and current as possible. Project Communication Management OPAs include:- Policies, Procedures, and guidelines regarding Distribute Information 12 88 Policies, Procedures, and guidelines regarding information distribution. Templates, and Historical Information and Lessons Learned. Project Communication Management Communication Methods includes:- Distribute Information 12 89 includes:- Individual and group meetings. Video and Audio Conferences. Computer Chats Remote Communication Methods are used to distribute information. Project Communication Management Information distribution methods Distribute Information 12 90 methods Using various methods to send project information to the stakeholders as per their needs. Examples: project meetings videoconferencing, web conferencing voice mail, fax, telephone email, fax, shared networked databases hard copy, web publishing Web interfaces, virtual office, portals, etc. Project Communication Management OPAs Updates Consist of 1) Lessons learned documentation Distribute Information 12 91 1) Lessons learned documentation 2) Project records 3) Project reports 4) Project presentations 5) Feedback from stakeholders 6) Stakeholder notifications Lessons Project Communication Management OPAs Updates 1. Lessons learned documentation: OPAs are Distribute Information 12 92 documentation: OPAs are updated as new lessons learned are included in its database! What is documented? a) Causes of issues b) Reasoning behind corrective action chosen c) Other types of lessons learned about information distribution Project Communication Management OPAs Updates 2. Project records Are documents that describe the project. They are Distribute Information 12 93 that describe the project. They are arranged and kept in an organized manner. Project team can also maintain records in a project notebook. Project record Examples: correspondence memos documents describing the project Project Communication Management OPAs Updates 3. Project reports Formal or informal project reports Distribute Information 12 94 Formal or informal project reports detailing: Project status Lessons learned Issue logs Project closure reports Outputs from other knowledge areas Project Communication Management OPAs Updates Distribute Information 12 95 OPAs Updates 4. Project presentations Are made by the project team to the stakeholders to satisfy their information needs by using appropriate formal or informal methods. Project Communication Management OPAs Updates Distribute Information 12 96 OPAs Updates 5. Feedback from stakeholders Information received from stakeholders concerning project progress. Distributed and used to modify or improve future project performance!. Project Communication Management OPAs Updates Distribute Information 12 97 OPAs Updates 6. Stakeholder notifications Information provided to stakeholders about: 1) Approved changes 2) Resolved issues 3) General project status Project Communications Management 12 98 Manage Stakeholder Expectations Project Communications Management Process of communicating and working Manage Stakeholder Expectations 12 99 Process of communicating and working with stakeholders to meet their needs and addressing their issues as they occur. Involves communication activities directed toward project stakeholders to influence their expectations, address concerns, and resolve their Manage Stakeholder Expectations 13 00 their expectations, address concerns, and resolve their issues, such as: 1) Actively managing their expectations to increase chances of project acceptance by negotiating and influencing their desires to achieve and maintain project goals. 2) Addressing concerns that have not become issues yet, often related to anticipation of future problems. Involves communication activities directed toward project stakeholders to influence their expectations, address concerns, and resolve their Manage Stakeholder Expectations 13 01 their expectations, address concerns, and resolve their issues, such as: 3) Clarifying and resolving issues identified. This may result in a change request or may be addressed outside the project (postponed for another project or phase or deferred to another organizational entity). ADVANTAGE: Managing stakeholder expectations helps increase the probability of project success by ensuring that the Manage Stakeholder Expectations 13 02 probability of project success by ensuring that the stakeholders understand the project benefits and risks. This enables them to be ACTIVE SUPPORTERS of the project and to help with risk assessment of project choices! By anticipating their reaction to the project, we can take preventive action TO WIN THEIR SUPPORT or minimize potential negative impacts. WHOSE DUTY? Project Manager is responsible. It decreases the risk that the project will fail to meet its Manage Stakeholder Expectations 13 03 the risk that the project will fail to meet its goals and objectives due to unresolved stakeholder issues. It limits disruptions during the project! Manage Stakeholder Expectations process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Change Requests Project Communications Management 13 04 Stakeholder Register Stakeholder Management Strategy Project Management Plan Issue Log Change Log OPAs INPUTS Communication methods Interpersonal Skills Management Skills Change Requests Project Document Updates OPAs updates PM Plan updates Manage Stakeholder Expectations - INPUTS 1. Stakeholder Register Provides list of the relevant stakeholders. Used to ensure all stakeholders are included in the project 13 05 ensure all stakeholders are included in the project communications! 2. Stakeholder Management Strategy Gives an understanding of stakeholder goals and objectives. The strategy documented immensely helps us here in managing stakeholder expectations. Manage Stakeholder Expectations - INPUTS 3. Project Management Plan provides a) Communications management plan. The needs 13 06 a) Communications management plan. The needs and expectations are identified, analyzed, and documented in the communications management plan. b) Stakeholder requirements and expectations provide an understanding of their goals, objectives, and level of communication required during the project. Manage Stakeholder Expectations - INPUTS 4. Issue logs (action-item log) A tool used to record and monitor Resolution of Issues! Please note: 13 07 Issues! Please note: 1) The purpose of issue resolution is to maintain good, constructive working relationships among different stakeholders (including team members!). 2) An issue must be stated in such a way that its resolution becomes feasible. Manage Stakeholder Expectations - INPUTS 4. Issue logs (action-item log) Please note: 3) For each issue the responsibility is assigned and a 13 08 3) For each issue the responsibility is assigned and a target date is fixed for closure! 4) Unresolved issues can become major source of conflict and may delay project! Manage Stakeholder Expectations - INPUTS 5. Change Log Used to record changes that occur during the project. These changes and their impact (time, cost, 13 09 project. These changes and their impact (time, cost, and risk) must be communicated to the concerned stakeholders. 6. Organizational Process Assets - organization communication requirements - Issue mismanagement procedures - Change control procedures - Historical information 1. Communication Methods Methods of communication identified for each stakeholder (in communication management plan) Manage Stakeholder Expectations Tools & Techniques 13 10 stakeholder (in communication management plan) are used during stakeholder management. 2. Interpersonal Skills Project Manager applies toward: a) Building Trust, b) Resolving conflict, c) Active listening, and d) Overcoming resistance to change. 3. Management Skills Managing is the act of directing and controlling a group of people for coordinating an Manage Stakeholder Expectations Tools & Techniques 13 11 a group of people for coordinating an harmonizing toward achieving a goal that is beyond the scope of individual effort! Project Manager uses these management skills: a) Presentation skills b) Negotiating c) Writing skills d) Public Speaking Manage Stakeholder Expectations OUTPUTS 1. Organizational process updates Posting lessons learned like causes of issues and logic behind corrective action 13 12 issues and logic behind corrective action chosen, plus other type of lessons learned about stakeholder management! 2. Change requests Managing stakeholder expectations may result in a change request to the product or the project. It may also include corrective or preventive actions. Manage Stakeholder Expectations OUTPUTS 3. Project Management Plan updates Communication Management plan, that is part of the project management plan, may be 13 13 of the project management plan, may be updated when NEW Communication Requirements are identified! EXAMPLE: - Some communication may no longer be necessary, - An ineffective method is replaced, - A new communication requirement identified. Manage Stakeholder Expectations OUTPUTS 3. Project Documents updates - Stakeholder Management Strategy: Updated as a result of addressing concerns and 13 14 Updated as a result of addressing concerns and issues. - Stakeholder register: Updated as information on stakeholders change. Example: New stakeholders identified, if registered stakeholders are no longer involved in or impacted by the project, or other updates for any stakeholder. - Issue Log: Updated as new issues identified and current ones are resolved! Project Procurement Management 13 15 Conduct Procurements Project Procurement Management Conduct Procurements PROCESS Consists of 13 16 Consists of Obtaining responses (bids, proposals) from prospective sellers, selecting a seller, and awarding a contract. The project team receives proposals, applies previously defined selection criteria to select seller. Project Procurement Management Conduct Procurements On major procurement items, the overall process of requesting responses may be repeated! 13 17 requesting responses may be repeated! A short list of qualified sellers made based on Preliminary proposal. More detailed evaluation is done on the basis of more detailed requirements document Obtained from short-listed ones. Project Procurement Management Conduct Procurements Additionally, tools & techniques can be used alone or combination. 13 18 combination. Example A weighting system may be used to: - select a single seller who will sign a standard contract. - Establish a negotiating sequence by ranking all proposals by weighted evaluation. Conduct procurements process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Procurement Management 13 19 OPAs Project management plan Procurement documents Source selection criteria Qualified seller list Seller proposals Project documents Make-or-buy decisions Teaming agreements INPUTS TECHNIQUES Bidder Conferences Advertising Proposal evaluation techniques Independent estimates Expert judgment Internet search Procurement negotiations OUTPUTS Selected sellers Procurement contract award Resource calendars Change requests Procurement management plan updates Project document updates Project Procurement Management 1. OPAs List or files with information on prospective or previously qualified Conduct Procurement INPUTS 13 20 prospective or previously qualified sellers. We can invite them to bid, propose or quote on work. Provides information on prospective sellers past experience and other characteristics. Some companies maintain preferred sellers list, selected through some qualification method. INPUTS Project Procurement Management 2. Project management plan provides procurement management plan for use here. Conduct Procurement INPUTS 13 21 management plan for use here. We have discussed about it during plan procurements. 3. Procurement documents We have discussed about procurement documents during plan contracting. INPUTS Project Procurement Management 4. Source selection criteria Conduct Procurement INPUTS 13 22 We use it as an as key input here. Involves examining samples of the suppliers (previously produced products) to evaluate their capabilities and product quality Involves reviewing suppliers past record with the contracting organization and other buyers INPUTS Project Procurement Management Project Procurement Management 5. Qualified sellers list Pre-screened for their qualifications and past experience. We developed Qualified sellers list using: Conduct Procurement INPUTS 13 23 We developed Qualified sellers list using: 1) Lists already available (OPA) 2) Internet, library directories, local associations, trade catalogues, or similar sources 3) Site visits (when more extensive efforts needed) 4) Contact with previous customers Procurement documents can also be sent to find if some or all prospective sellers are willing to quote! Project Procurement Management Project Procurement Management 6. Proposals (quotations/bids) Seller-prepared documents made in Conduct Procurement INPUTS 13 24 accordance with the requirements of procurement documents. Describe sellers ability and willingness to provide the requested products, as described in the procurement documents. Reflect the application of applicable contract principles. INPUTS Project Procurement Management Project Procurement Management 7. Project documents We consider following documents: Conduct Procurement INPUTS 13 25 1. Risk register 2. Risk-related contract decisions 8. Make-or-buy decisions We have discussed already Project Procurement Management Project Procurement Management 9. Teaming agreements Whenever such an agreement is in place consider following documents: Conduct Procurement INPUTS 13 26 consider following documents: 1. Risk register 2. Risk-related contract decisions Conduct Procurements TOOLS & TECHNIQES Bidder conferences (pre- bid/vendor/contractor conferences) 13 27 Meetings with prospective sellers prior to preparation of a proposal by sellers in response to buyers RFP. Conduct Procurements TOOLS & TECHNIQES Bidder conferences aims at ensuring that 1) Each prospective seller has a common understanding of 13 28 1) Each prospective seller has a common understanding of the procurement (technical requirements, contract requirements, etc.) 2) All potential sellers must remain on equal standing during the process. Responses to questions may be incorporated into the Procurement documents as amendments. Conduct Procurements TOOLS & TECHNIQES Advertising Inviting proposals from prospective sellers by putting 13 29 prospective sellers by putting advertisements in newspapers or professional journals The purpose of this method is: to have a wider base than the existing list of potential sellers. for certain government departments, it is mandatory to advertise in order to procure the goods or services. Real life example Request for Proposal (RPF) For collection, Transportation and Disposal of Hotel Waste Under Green Lines Services Project of JMC 1. STATEMENT OF WORK 13 30 1. STATEMENT OF WORK The Green Line Services Project is an ambitious project of Jaipur Municipal Corporation (JMC) under which a private Entrepreneur will be issued a license to collect, transport, process and dispose off the waste generated from hotels, restaurants, sweets shops, canteens, and other eating joints. Processing may be by any suitable means like Vermicomposting/ Composting/ Biogas or any other method as per MSW Rules 2000. The approximate number of hotels under different categories are: (I) Five Star-9, (II) Other Starred Hotels and A/C Restaurants-70, (III) Others-900 with overall approximate biodegradable waste Real life example Request for Proposal (RPF) For collection, Transportation and Disposal of Hotel Waste Under Green Lines Services Project of JMC 1. STATEMENT OF WORK (continued) 13 31 1. STATEMENT OF WORK (continued) quantity as 10 tons per day. However the interested bidders should ascertain themselves about the quantity and number of generating units before submission of the bid. The project has to be operated on Build, Own, Operate (BOO) basis by the license holder by collecting user charges for initial period of three years. 2. INVITATION sealed tenders are invited from interested contractors having experience of working in the field in the two envelope systems: Envelope A (Technical offer) and Envelope B (Financial offer) Real life example Request for Proposal (RPF) For collection, Transportation and Disposal of Hotel Waste Under Green Lines Services Project of JMC 2. INVITATION (continued) 13 32 2. INVITATION (continued) The tender documents may be obtained on during office-hours from 28.01.05 to 10.02.05 from: The Office of Senior Health Officer Civil Lines Zone, JMC, Jaipur (RAJ) Tel: xxxx- xxxxxxx 3. A pre-bid meeting is arranged on 5.02.05 at 3:00 P.M. in the conference hall of JMC Head Office. 4. Completed tender must be submitted up to 11.02.05 till 3:00 P.M. 5. Envelope A (Technical offer) shall be opened on 11.02.05 at 4:00 P.M. in the presence of bidders at Conference Hall of JMC. Real life example Request for Proposal (RPF) For collection, Transportation and Disposal of Hotel Waste Under Green Lines Services Project of JMC 13 33 5. Envelope B (Financial offer) shall be opened on suitable date for which separate intimation shall be sent to the qualified bidders. 6. Interested eligible Bidders may obtain further information from the office of the Senior Health Officer. Name: xyz Designation: Conduct Procurements TOOLS & TECHNIQES Proposal evaluation techniques On complex procurements, source selection is done 13 34 Based on previously defined weighted criteria! Buyers procurement policies define a formal evaluation process! The evaluation committee makes their selection for approval by management prior to the award! Evaluates proposals based on quantifying qualitative data Weighting system Conduct Procurements TOOLS & TECHNIQES 13 35 quantifying qualitative data Minimizes the effect of personal prejudice on source selection THE PROCESS 1) Assigns a weight to each criterion 2) Rates prospective proposals on each criterion 3) Multiplies rates with weight 4) Totals the results to arrive at PROPOSAL-WISE SCORE Conduct Procurements TOOLS & TECHNIQES Weightage Score Total Evaluation Criteria Sample Weighting system 13 36 Weightage % (W) Score (S) Total (W x S) Evaluation Criteria Understanding of need Life cycle cost Technical capability Sellers management approach Price Financial capability Total of weightage (100) Sum W x S CASE STUDY: DCA 21 PROJECT 1) EVALUATION CRITERIA using five point scale Criteria 1 2 3 4 5 Technical solutions Bad Poor Adequate Good Excellent 13 37 Technical solutions approach Bad Poor Adequate Good Excellent Price above 1.8 1.6-1.8 1.4-1.6 1.2-1.4 Below 1.2 Project organization and management Bad Poor Adequate Good Excellent Likelihood of meeting schedule / cost targets Bad Poor Adequate Good Excellent Reputation of seller Bad Poor Adequate Good Excellent CASE STUDY: DCA 21 PROJECT 2) Simple Rating using five point scale CRITERIA Proposal A Proposal B Proposal C Provided scores (S) 13 38 Technical solutions approach 4 2 5 Price 5 5 2 Project organization and management 5 3 4 Likelihood of meeting schedule / cost targets 4 3 5 Reputation of seller SUM SCORES 4 22 4 17 5 21 CASE STUDY: DCA 21 PROJECT Criteria Weight 3) Criteria and Weights (W) 13 39 Technical solutions approach 0.25 Price 0.25 Project organization and management 0.20 Likelihood of meeting schedule / cost targets 0.15 Reputation of seller 0.15 1.00 CASE STUDY: DCA 21 PROJECT Final evaluation (S x W): Proposal A selected and awarded contract ! Proposal A Proposal B Proposal C 13 40 S (S) (W) 4 1.0 CRITERIA TECHNICAL SOLUTION APPROACH PRICE OF CONTRACT PROJECT ORGANIZATION / MANAGEMENT REPUTATION OF SELLER RISK OF SOLUTION S (S) (W) S (S) (W) WEIGHT (W) O.25 O.25 O.20 O.15 O.15 5 1.25 5 1.0 4 0.6 4 0.6 SUM 4.45 2 0.5 5 1.25 3 0.6 3 0.45 4 0.6 5 1.25 2 0.5 4 0.8 5 0.75 5 0.75 SUM 3.4 SUM 4.05 13 41 Conduct Procurements TOOLS & TECHNIQES Independent estimates Serve as benchmark on proposed responses. 13 42 Buyer can make its own independent estimates (can also get it prepared by an outside professional estimator). n complex procurements, source selection is done What does it mean if the difference between independt estimate made by buyer anf the one submitted by seller? Conduct Procurements TOOLS & TECHNIQES Independent estimates What does it mean if the difference between 13 43 independent estimate made by buyer and the one submitted by seller? Answer: a) SOW was deficient or ambiguous! Or b) Prospective seller has misunderstood or c) Prospective seller failed to respond fully to the procurement SOW Conduct Procurements TOOLS & TECHNIQES Expert judgment Used in evaluating proposals. It may consist of multi-discipline review team in each 13 44 It may consist of multi-discipline review team in each of the areas covered by procurement documents and proposed contract. Expert may come from functional disciplines, such as: - Contracting, Legal, Finance, Accounting, Engineering, Design, R&D, Sales, and manufacturing! Conduct Procurements TOOLS & TECHNIQES Internet search Used to locate and expand search for suitable sellers. 13 45 Used to locate and expand search for suitable sellers. Caution: Many commodities, and off-the-shelf items can be quickly located and secured at a fixed price on the net BUT The high-risk, highly complex, procurement effort that needs to be closely monitored can not be accomplished through net. Conduct Procurements TOOLS & TECHNIQES Procurement negotiations 1. Clarify structure, requirements and other terms for 13 46 1. Clarify structure, requirements and other terms for mutual agreement before contract is signed! 2. Final contract language shows all agreements reached, covering: Responsibilities, authority to make changes, applicable terms and governing laws, technical & business management approaches, propriety rights, contract financing, technical solutions, overall schedule, payments, price. Sample Contract Negotiation For Complex items N Contract negotiations for complex items is taken up as an independent process 13 47 Open items list Inputs Issues Open items list Understanding Outputs Memorandum of Understanding N E G O T I A T I O N S process Conduct Procurements OUTPUTS Selected sellers Who are selected sellers? Answer: 13 48 Answer: 1) Those who are in the competitive range 2) Who have negotiated a draft contract (that will the actual contract when it is awarded) Conduct Procurements OUTPUTS Procurement contract award Contract ! (Called a contract, an agreement, a memorandum 13 49 (Called a contract, an agreement, a memorandum of understanding, a subcontract, or a purchase order) Once you sign it, it becomes a mutually binding document with due obligations both sides: 1. obligates the seller to provide the specified product 2. obligates the buyer to pay for it. Conduct Procurements OUTPUTS Contract ! What is inside a contract? 1) Section headings 13 50 1) Section headings 2) SOW 3) Schedule 4) Period of performance 5) Roles and responsibilities 6) Pricing and payment, 7) Inflation adjustment 8) Acceptance criteria 9) Warranty, product support 10) Limitation of liability, fees, retainage 11) Penalties Conduct Procurements OUTPUTS Contract ! What is inside a contract? 12) Incentives 13 51 12) Incentives 13) Insurance 14) Performance bonds 15) Subcontractor approval 16) Change request handling 17) A termination and dispute resolution mechanism Contract can be: A complex document, or A simple purchase order Conduct Procurements OUTPUTS Resource calendars Documents the quantity and availability of resources and the 13 52 availability of resources and the dates on which each specific resource will be ACTIVE OR IDLE. Conduct Procurements OUTPUTS Requested changes This process may result in change requests relating to project schedule, procurement management plan, etc. These 13 53 schedule, procurement management plan, etc. These requests are reviewed and disposed by Perform Integrated Change Control process. Project management plan updates Updates to show approved changes to: Cost baseline, scope baseline, schedule baseline, and procurement management plan Project Documents updates - requirements documentation Conduct Procurements OUTPUTS Project Documents updates - Requirements documentation 13 54 - Requirements traceability documentation, and - Risk register Monitoring and Controlling MONITORING & 13 55 MONITORING & CONTROLLING PROCESS GROUP Monitoring and Controlling The concept of Monitoring and Controlling 13 56 1.Checking performance 2. Managing changes Monitoring and Controlling 1.Checking performance against plan or against baselines by conducting variance analysis. 13 57 analysis. Variance analysis means comparing actual with the plan. Formula = Plan Actual example: if you want to check my scope performance, please compare the scope performed and scope planned. Monitoring and Controlling example: if you want to check my schedule performance, please compare the actual start and finish dates of a work completed and 13 58 and finish dates of a work completed and actual time taken in doing it with the dates planned and duration written in schedule baseline (approved schedule). It will give you schedule variance, called performance measurements, that may be: SV = 0 or SV = + or SV = - Monitoring and Controlling Checking performance In case of variance: 1) Find causes of variance, 13 59 1) Find causes of variance, 2) Find corrective action to recover, 3) Recommend it to ICC for approval. ICC will review it and then approve. Monitoring and Controlling Once ICC approves it and returns it to Monitoring and controlling, then : 13 60 1) Give it execution for implementation, 2) Write approved changes in the project plan. This is called Replanning and done with the help of configuration management system. You had original project plan and when you write approved changes, its version or configuration changes. Monitoring and Controlling This is called versioning. You must retain all versions! This will help us understand evolution of project management plan 13 61 evolution of project management plan through approved changes during the project life cycle. Also update project documents. We will learn more on it as we proceed. Right now, we are talking of concept. Monitoring and Controlling Once ICC approves it and returns it to Monitoring and controlling, then : 13 62 3) Inform concerned stakeholders about approved changes. This was about the first part of the concept of Monitoring and Controlling. Now, the second part: Managing Changes. Monitoring and Controlling 2. Managing Changes: changes to scope, schedule, cost, and quality. There is a standard change control procedure. 13 63 change control procedure. Step one Step two Step three Step four Change Evaluation, Recommend ICC reviews Request Impact to ICC for and then Analysis approval approves or rejects. Monitoring and Controlling 2. Managing Changes: once ICC approves and returns the change request to you, then: 13 64 request to you, then: 1) Give it to execution for implementation 2) Write approved changes in project management plan. 3) Update project documents. 4) Inform concerned stakeholders about approved changes. Controlling Concepts Prevention is better than cure 13 65 Take preventive action Anticipate problems Monitoring & Controlling Concepts Purposes of Project control 13 66 Project control Identify problems Solve problems Get the project back on track as soon as possible after problem has been identified! Monitoring and Controlling CONCEPT THIS process group consists of processes to observe project execution, 13 67 observe project execution, identify problems in timely manner, recommend corrective action for problems that have occurred, recommend preventive action in anticipation of possible problems, thus bring the project into compliance with the project management plan. Monitoring and Controlling CONCEPT Key benefit project performance is observed and 13 68 project performance is observed and measured regularly to find variances from the project management plan continuous monitoring provides insight into the health of the project and suggests areas that need additional attention Monitoring and Controlling CONCEPT Key benefit Monitors and controls not only the work 13 69 Monitors and controls not only the work being done in a process group but the entire project effort! When variances JOEPARDIZE PROJECT OBJECTIVES, appropriate processes in planning PM Group are revisited (as a part of modified PDCA cycle), and pm plan may get updated from such review! example Monitoring and Controlling CONCEPT example REQUIRES 13 70 A MISSED ACTIVITY FINISH DATE REQUIRES ADJUSTMENTS TO CURRENT STAFFING PLAN RELIANCE ON OVERTIME TRADEOFFS BETWEEN BUDGET AND SCHEDULE OBJECTIVES Monitoring and Controlling CONCEPT Key benefit Monitoring the ongoing project activities 13 71 Monitoring the ongoing project activities against project management plan and the project management baseline. Influencing factors that could circumvent integrated change control so that only APPROVED CHANGES ARE IMPLEMENTED. example Monitoring and Controlling Dynamics of Project Management Process Groups Initiating Planning 13 72 Initiating Planning Monitoring and Controlling Executing Closing Monitoring and Controlling: process interactions Verify Scope Initiating processes Control Scope Control Schedule 13 73 Perform Integrated Change control Monitor & Control Project Work Planning processes Executing processes Closing processes Perform quality control Control Schedule Control Costs Report Performance Monitor & Control Risks Administer Procurements Project Integration Management 13 74 Monitor and Control Project Work Monitor and Control Project Work The process of: Tracking, reviewing, and regulating the 13 75 Tracking, reviewing, and regulating the progress to meet the project objectives defined in the project management plan. Monitor and Control Project Work What is the meaning of Monitoring? Monitoring means: 13 76 1. Collecting, measuring, and distributing performance information. 2. Assessing measurements and trends to effect process improvements! Monitor and Control Project Work Please remember! Monitoring: 13 77 Monitoring: 3. Is done throughout the project. 4. Continuous monitoring gives the project management team an insight into the health of the project, and IDENTIFIES AREAS THAT MAY REQUIRE SPECIAL ATTENTION! Monitor and Control Project Work What is the meaning of Controlling? Controlling means: 13 78 Controlling means: 1. Determining corrective or preventive actions or 2. Replanning, and 3. Following up on action plans TO DETERMINE IF THE ACTIONS TAKEN RESOLVED THE PERFORMANCE ISSUE! Monitor and Control Project Work How do we do it? Most basic: 13 79 1. Comparing actual project performance against the project management plan! 2. We assess performance to determine whether any corrective and preventive actions are indicated. If so, then we recommend them to ICC for approval. Monitor and Control Project Work How do we do it? Most basic: 13 80 3. We analyze, track, monitor project risks to ensure the risks are identified, their status is reported, and appropriate response plans are executed. 4. We maintain accurate and timely information base about projects product and related documentation through project completion. Monitor and Control Project Work How do we do it? Most basic: 13 81 5. We provide information to support STATUS REPORTING,PROGRESS MEASUREMENT, FORECASTING! 6. We provide forecasts to update current schedule and cost information. 7. We monitor implementation of approved changes. Project Integration Management Monitor and Control Project Work process overview INPUTS TOOLS & OUTPUTS 13 82 Project Management Plan Performance reports Enterprise environmental factors Organizational process assets INPUTS TOOLS & TECHNIQUES Expert Judgment OUTPUTS Change requests Project management plan updates Project document updates Monitor and Control Project Work process: INPUTS Project Management Plan provides baselines for measuring performance. 13 83 Performance reports provide actual work performance information.Reports prepared by the project team detailing activities, accomplishments, Milestones, identified issues, and problems. Example Monitor and Control Project Work process: INPUTS Performance reports provide key information. Examples: - Current status 13 84 - Current status - Significant accomplishments for the period - Scheduled activities - Forecasts, and - Issues. Monitor and Control Project Work process: INPUTS Enterprise environmental factors that can influence this process: 13 85 1. PMIS used for variance analysis and evaluation of impact on the project. 2. Stakeholder risk tolerances 3. Company work authorization systems 4. Government or industry standards (regulatory agency regulations, product standards, quality standards, and workmanship standards). Monitor and Control Project Work process: INPUTS Organizational process assets that can influence this process: 13 86 1. Issue and risk management procedures, 2. Financial control procedures (time reporting, accounting codes, expenditure and disbursement reviews, and standard contract provisions), 3. Organization communication requirements, Monitor and Control Project Work process: INPUTS Organizational process assets that can influence this process: 13 87 4. Risk control procedures (risk categories, probability definition and impact, and probability and impact matrix), Issue and risk management procedures, 5. Process measurement database (used to make available measurement data on processes and products, and Monitor and Control Project Work process: INPUTS Organizational process assets that can influence this process: 13 88 5. Process measurement database (used to make available measurement data on processes and products, and 6. Lessons learned database. Monitor and Control Project Work process: Tools and Techniques Expert judgment The project management team uses expert 13 89 The project management team uses expert judgment to interpret the information provided by the monitor and control process. The project manager, along with the team, determines the actions required to ensure project performance matches with the expectations detailed in the project management plan. Monitor and Control Project Work process: Tools and Techniques Please remember Although not mentioned specifically, we use here 13 90 Although not mentioned specifically, we use here all the performance measurement, forecasting, And change control tools and techniques, including PMIS. Monitor and Control Project Work process: OUTPUTS 1. Change requests Variance Measurements resulting from this 13 91 Variance Measurements resulting from this process may lead to following change requests: a) Corrective action to bring expected future performance in line with project management plan). b) Preventive action to reduce the probability of negative consequences associated with project risks. Monitor and Control Project Work process: OUTPUTS 1. Change requests Variance Measurements resulting from this 13 92 Variance Measurements resulting from this process may lead to following change requests: c) Defect repair Corrective action to either repair the defect in a project component or completely replace it. Change requests are sent to ICC for review and approval. Monitor and Control Project Work process: OUTPUTS Change requests are sent to ICC for review and approval. Without review and approval of ICC, no change request can be implemented. 13 93 change request can be implemented. Change requests, if approved, may: - Expand, adjust project or product scope, - Revise project management plan, - Revise project documents, or - Revise product deliverables. Monitor and Control Project Work process: OUTPUTS 2. Project management plan updates Revision of following may happen: - Baselines 13 94 - Baselines (Scope baseline, schedule baseline, cost performance baseline). - Subsidiary plans (such as schedule management plan, cost management plan, quality management plan). Monitor and Control Project Work process: OUTPUTS 3. Project document updates Revision of following may happen: 13 95 Revision of following may happen: - Forecasts - Performance reports - Issue log Project Integration Management 13 96 PERFORM INTEGRATED CHANGE CONTROL Perform Integrated Change Control Process of Reviewing all change requests, approving 13 97 Reviewing all change requests, approving changes and managing changes to the deliverables, project management plan, project documents and the organizational process assets. Perform Integrated Change Control Please remember PERFORM INTEGRATED CHANGE 13 98 PERFORM INTEGRATED CHANGE CONTROL PROCESS IS CONDUCTED FROM PROJECT INCEPTION THROUGH COMPLETION. During planning also, all updates, refining, maturing of the project management plan and other project documents happens only after the information is reviewed and allowed for inclusion. Perform Integrated Change Control Please remember One of the major job of this process is to 13 99 One of the major job of this process is to carefully and continuously manage changes and permit only approved changes to revise a baseline. This is the only way to maintain the project management plan, the project scope statement, and other deliverables! Perform Integrated Change Control How do we do it? 1. Reviewing, analyzing, and approving change request PROMPTLY. A slow decision may 14 00 request PROMPTLY. A slow decision may negatively affect time, cost or the feasibility of a change! A quick approval or denial of all recommended corrective or preventive actions or any other type of request is necessary. Perform Integrated Change Control How do we do it? 2. Maintaining the integrity of baselines by releasing only approved changes for 14 01 releasing only approved changes for incorporation into the project management plan and project documents. 3. Coordinating changes across the entire project. example: a proposed schedule change will often affect cost, risk, quality, and staffing. Perform Integrated Change Control How do we do it? 4. Documenting the complete impact of change requests. 14 02 requests. 5. Influencing the factors that circumvent integrated change control so that only approved changes are implemented. Perform Integrated Change Control Please remember Changes may be requested by any stakeholder. 14 03 Although they may be initiated verbally, but they must always be recorded in written form and entered into the change management or configuration management system! The cost and time impacts must be understood. Perform Integrated Change Control Please remember Every documented change request must be either approved or rejected by some authority 14 04 either approved or rejected by some authority within the project management team or an external organization. On some projects, the project manager may be given authority to approve certain types of changes! And this would be mentioned in the roles and responsibilities document. Perform Integrated Change Control Please remember The Perform Change Control process may include a Change Control Board (CCB). Then, 14 05 include a Change Control Board (CCB). Then, CCB will approve or reject change requests. The roles and responsibilities of CCBs are defined in Configuration Control and Change Control Procedures with due consent of appropriate stakeholders. Large organizations have multi-tier board structure! Perform Integrated Change Control THE NEED FOR A 14 06 THE NEED FOR A CONFIGURATION MANAGEMENT SYSTEM Perform Integrated Change Control A configuration management system with integrated change control provides 14 07 integrated change control provides a standardized, effective, and efficient way to centrally manage approved changes and baselines within a project! Perform Integrated Change Control QUESTION What is the difference between configuration control and change control? 14 08 control and change control? ANSWER Configuration control is focused on the specification of both the deliverables and the processes. Change control is focused on identifying, documenting and controlling changes to the project and the product baselines. Perform Integrated Change Control Project-wide application of configuration Objectives accomplished? 14 09 Project-wide application of configuration management systems, including change control processes, accomplishes three main objectives Perform Integrated Change Control 1) Establishes an evolutionary method to consistently identify and request changes to 14 10 consistently identify and request changes to established baseline! 2) Provides opportunities to continuously validate and improve the project by considering impact of change! 3) Provides the mechanism for the project management team to consistently communicate all changes to the stakeholders! Perform Integrated Change Control THREE Key configuration management activities: 1. Configuration identification 14 11 1. Configuration identification 2. Configuration status accounting 3. Configuration verification and audit Project Integration Management Integrated Change Control What Configuration Management Activities are included in Integrated Change Control? 14 12 are included in Integrated Change Control? Provides basis from which 1) the configuration of products is defined and verified 2) Products and documents are labeled 3) Changes are managed and accountability is maintained Configuration Identification Project Integration Management Integrated Change Control What Configuration Management Activities are included in Integrated Change Control? 14 13 are included in Integrated Change Control? Capturing, storing, and assessing configuration information required to manage products and product information effectively. Configuration Status Accounting Project Integration Management Integrated Change Control What Configuration Management Activities are included in Integrated Change Control? 14 14 are included in Integrated Change Control? Establishes that the performance and functional requirements defined in the configuration management have been met. Configuration Verification & Auditing Project Integration Management Perform Integrated Change Control process overview INPUTS TOOLS & OUTPUTS 14 15 Project Management Plan Work Performance Information Change requests Enterprise Environmental Factors Organizational Process Assets INPUTS TOOLS & TECHNIQUES Expert judgment Change control Meetings OUTPUTS Change requests Status Updates Project management plan UPDATES Project document UPDATES Project Integration Management Perform Integrated Change Control process inputs Project management plan Used in this process. We have talked about it 14 16 Used in this process. We have talked about it in detail. Work performance information Used in this process. We have talked about it in detail. Project Integration Management Perform Integrated Change Control process inputs Change requests - Recommended corrective action 14 17 - Recommended corrective action - Recommended preventive action - Recommended defect repair - Any other type of change request regarding scope, time, cost, quality addition or deletion. All monitoring and controlling processes and many of executing processes produce change requests! Project Integration Management Please remember 14 18 CORRECTIVE AND PREVETIVE ACTIONS DO NOT NORMALLY AFFECT THE BASELINES, ONLY THE PERFORMNCE AGAINST THE BASELINES!! Project Integration Management Perform Integrated Change Control inputs Enterprise environmental factors provide PMIS 14 19 PMIS An automated system used by the project management team as an aid for implementing an Integrated Change Control Process for the project. - Also facilitates FEEDBACK for the project - Controls changes across the project. Project Integration Management Perform Integrated Change Control inputs Organizational process assets provide 14 20 - Change control procedures - Procedures for approving and issuing change authorizations - Process measurement database (measurement data on processes and products) - Project files - Configuration management knowledgebase Project Integration Management Perform Integrated Change Control tools and techniques Expert judgment 14 21 In addition to the project management teams expert judgment, stakeholders may be requested to provide advantage of their expertise. They may be invited by the CCB. Such expert judgment is applied to any technical and management aspect during this process. Project Integration Management Perform Integrated Change Control tools and techniques Expert judgment 14 22 CCB can use expertise from various sources: - Subject matter experts - Project Management Office - Stakeholders (including customers or sponsors) - Consultants - Professional and technical associations - Industry groups Project Integration Management Perform Integrated Change Control tools and techniques Change control meetings 14 23 Change control board conducts meetings and reviews change requests. Then, approves or rejects the. All CCB decisions are recorded and communicated to the stakeholders for information and follow-up actions. Perform Integrated Change Control process OUTPUTS Change Requests Status Updates Change requests are processed according to the 14 24 Change requests are processed according to the change control system by the project manager or assigned team member. Approved change requests are implemented by the Direct and Manage Project Execution process. Status of all changes, approved or not, put in the Change Request Log. Perform Integrated Change Control process OUTPUTS Project Management Plan Updates - Baselines are updated 14 25 - Baselines are updated - Subsidiary Management Plans updated Please note: Changes to the baselines must only show the CHANGES FROM THE CURRENT TIME FORWARD. Past performance may not be changed! This protects the integrity of the baselines and the data of past performance! Perform Integrated Change Control process OUTPUTS Project Document Updates - Change Request Log 14 26 - Change Request Log - Any other project document (as applicable) Monitoring and Controlling Verify SCOPE PURPOSE: 14 27 PURPOSE: To obtain stakeholders formal acceptance of the completed project scope and associated deliverables! HOW IS IT DONE? By verifying the project scope and reviewing deliverables to make sure each is completed satisfactorily! Monitoring and Controlling Please remember! Verify SCOPE 14 28 Please remember! IF PROJECT IS TERMINATED EARLY, SCOPE VERIFICATION MUST BE DONE TO ESTABLISH THE LEVEL AND EXTENT OF COMPLETION! Monitoring and Controlling WHAT IS THE DIFFERENCE BETWEEN SCOPE Verify SCOPE 14 29 WHAT IS THE DIFFERENCE BETWEEN SCOPE VERIFICATION AND QUALITY CONTROL? SCOPE VERIFICATION IS PRIMARILY CONCERNED WITH ACCEPTANCE OF DELIVERABLES! QUALITY CONTROL IS PRIMARILY CONCERNED WITH QUALITY REQUIREMENTS FOR THESE DELIVERABLES! Monitoring and Controlling WHEN IS QUALITY CONTROL PERFORMED? Verify SCOPE 14 30 WHEN IS QUALITY CONTROL PERFORMED? Generally before SCOPE VERIFICATION. But these two can be performed parallel also. Verify Scope process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Scope Management 14 31 Project management plan Requirements documentation Requirements Traceability Matrix Validated Deliverables INPUTS TECHNIQUES Inspection Reviews Product reviews Audits Walkthroughs OUTPUTS Accepted deliverables Change requests Project documentation updates Verify Scope Project Scope Management Project management plan Provides scope baseline: 14 32 Provides scope baseline: 1. Project scope statement for product scope description, product deliverables, product user acceptance criteria. 2. WBS defines each deliverable and its decomposition into work packages. 3. WBS dictionary for detailed technical description for each WBS element. Verify Scope- Inputs Project Scope Management Requirements documentation Provides: All the project, product, technical and other types of requirements that must be present in the deliverables 14 33 requirements that must be present in the deliverables along with their acceptance criteria. Requirements traceability matrix Links: Requirements to their origin and tracks them throughout the project life cycle. Validated deliverables All those deliverables that are duly checked by QC and offered for inspection for formal acceptance. Verify Scope Project Scope Management Inspection Includes measuring, TOOLS & TECHNIQUES 14 34 Includes measuring, examining, and verifying to determine whether work and deliverables meets requirements and product acceptance criteria! Termed as reviews, product reviews, audits, and walkthroughs. Remember this! TECHNIQUES Inspection Reviews Product reviews Audits Walkthroughs Verify Scope Project Scope Management Accepted deliverables Those completed deliverables OUTPUTS Accepted 14 35 Those completed deliverables that have been accepted! Completed deliverables that are not accepted are recorded with reasons for non- acceptance. All supporting documents from customer or sponsor are maintained. Accepted deliverables Change Requests Project document updates Project Scope Management Change Requests Change requests may result Verify Scope OUTPUTS Accepted 14 36 Change requests may result from this process for deliverables not accepted and require defect repair! Processed for review and approval through Perform Integrated Change Control process. Accepted deliverables Change Requests Project document updates Project Scope Management Project document updates Verify Scope OUTPUTS Accepted 14 37 updates Any document that define the product or report status on product completion may require updating as a result of this process! Accepted deliverables Change Requests Project document updates Project Scope Management Control SCOPE Involves: 14 38 Involves: 1) Influencing factors that create scope changes 2) Control impact of those changes 3) To ensure that only approved changes are implemented by sending requested changes and recommended corrective actions to ICC. 4) To manage actual scope changes when they happen and integrate them with other control processes Uncontrolled changes are called scope creep! Control Scope process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Scope Management 14 39 Project management plan Work performance information Requirements documentation Requirements traceability matrix Organizational process assets INPUTS TECHNIQUES Variance analysis OUTPUTS Work performance measurements OPAs updates Change requests PM plan updates Project document updates Control Scope- Inputs Project Scope Management Project management plan Includes information that is used: 14 40 Includes information that is used: Scope baseline: compared to actual results to decide if a change, corrective action, or preventive action is required! Scope management plan (describes how project scope will be managed and controlled) Change management plan for handling changes Control Scope- Inputs Project Scope Management Project management plan Configuration management plan defines- 1) items that are configurable 14 41 1) items that are configurable 2) items that require formal change control 3) process to control changes to such items Requirements management plan includes: a) how requirements activities will be planned, tracked and informed b) how changes to requirements will be initiated c) how impacts will be analyzed d) authorization level for approving these changes Control Scope- Inputs Project Scope Management Work performance information Which deliverables have started, their progress Which deliverables have finished 14 42 Which deliverables have finished Requirements documentation To check accomplishment of requirements Requirements traceability matrix To trace requirements to their origin OPAs Scope control policies, procedures Monitoring and reporting methods Control Scope Project Scope Management Variance analysis(comparing actual with what is planned) Assesses magnitude of variation TOOLS & TECHNIQUES 14 43 Assesses magnitude of variation Determines cause of variance from scope baseline. Decides if corrective or preventive action is required. Variance analysis Control Scope Project Scope Management Work performance measurements Planned vs. Actual technical OUTPUTS Work performance 14 44 Planned vs. Actual technical performance, or other scope performance measurements! Also informed to stakeholders! Work performance measurements OPAs updates PM Plan updates Change requests Project document updates Project Scope Management OPAs updates Lessons learned are posted in the organizations Lessons Learned database: 14 45 Lessons Learned database: 1) causes of scope variances, 2) logic behind action chosen, and 3) other types of lessons learned. This provides help to Current projects as well as Future projects! One can just access this database from OPAs! Project Scope Management Change Requests Analysis of scope performance can result in a 14 46 change request to scope baseline or other components of project management plan. Examples: Corrective action or preventive action or defect repair. Change requests are sent to ICC for approval. Project Scope Management Project management plan updates 1. Scope baseline updates 2. Other baseline updates 14 47 2. Other baseline updates If approved change request have an effect on project scope, then scope statement, WBS, and WBS dictionary are revised and reissued to show the approved changes.Corresponding cost baseline and schedule baseline are also revised and reissued to reflect the approved changes. Project Scope Management Scope changes result in corresponding updates to: Project Document 14 48 corresponding updates to: 1) Requirements documentation 2) Requirements traceability matrix. updates Project Time Management CONTROL SCHEDULE Involves: 14 49 Involves: 1) Influencing factors that create schedule changes 2) Control impact of those changes 3) To ensure that only approved changes are implemented by sending requested changes and recommended corrective actions to ICC. 4) To manage actual schedule changes when they happen and integrate them with other control processes Control Schedule process overview Project INPUTS TOOLS & TECHNIQUES OUTPUTS Project Time Management 14 50 Project management plan Project Schedule Work Performance information Organizational Process Assets TECHNIQUES Performance Reviews Resource Leveling Schedule Compression Project management software Variance analysis Schedule Tool Work Performance measurements Change requests OPAs updates Project Management plan updates Project documents updates Control Schedule process INPUTS Project management plan provides 1. Schedule baseline 2. Schedule management plan 14 51 2. Schedule management plan * Actual results are compared with schedule baseline to determine if a change, corrective or preventive action is necessary. * Schedule management plan tells how the schedule will be managed and controlled. Control Schedule process INPUTS Project schedule provides the most current version of the project schedule with notations to show updates, 14 52 schedule with notations to show updates, completed activities, and started activities as of indicated data date! Control Schedule process INPUTS Work Performance Information provides information on project progress Which activities have started, their progress, 14 53 Which activities have started, their progress, and which activities have finished. Organizational process assets provide - Schedule control policies, procedures - Schedule control tools - Monitoring and reporting methods to be used. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management software 14 54 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management Performance reviews Measure, compare, and analyze schedule performance 14 55 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool analyze schedule performance such as actual start and finish dates, percent complete, and remaining duration for work in progress. If we use EVM, then SV and SPI provide magnitude of variance. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management Performance reviews If we use Critical chain scheduling method, then we 14 56 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool scheduling method, then we compare the amount of buffer remaining to the amount of buffer needed to protect the delivery date. Buffer variance can decide whether corrective action required or not. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management Variance analysis SV and SPI help us to know magnitude of variance. Total 14 57 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool magnitude of variance. Total float variance also gives an idea of time performance. We then find causes of variances and necessary corrective or preventive action. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management PM Software Provides ability to track planned dates versus actual dates, and 14 58 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool dates versus actual dates, and to forecast the effects of changes to the project schedule. Resource leveling Used to optimize distribution of work among resources. We have talked about it. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management What-if scenario analysis Used to review various scenarios to bring the schedule 14 59 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool scenarios to bring the schedule into alignment with the plan. We have talked about this. Adjusting leads and lags Used to find ways to bring project activities that are behind into alignment with the plan Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management Schedule compression Used to find ways to bring project activities that are behind 14 60 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool project activities that are behind into alignment with the plan. 1. Crashing 2. Fast tracking We have talked about them. Control Schedule process TECHNIQUES Performance reviews Variance analysis Project management Scheduling tool Schedule data is updated and compiled into the schedule 14 61 Project management software Resource leveling What-if scenario analysis Adjusting leads and lags Schedule compression Scheduling tool compiled into the schedule to reflect actual progress of the project and remaining work. Scheduling tool and supporting data are used (in conjunction with manual methods or other PM Software) to perform network analysis and generate and updated schedule. Control Schedule process OUTPUTS OUTPUTS Work performance Work performance measurements The calculated SV and SPI values 14 62 performance measurements Organizational process asset updates Change requests Project management plan updates Project document updates The calculated SV and SPI values For WBS components, specially the Work Packages and Control Accounts, are documented and communicated to the stakeholders! Control Schedule process OUTPUTS OUTPUTS Work performance Organizational process assets updates With the entry of Lessons Learned: 14 63 performance measurements Organizational process asset updates Change requests Project management plan updates Project document updates With the entry of Lessons Learned: 1. Causes of variances 2. Corrective action chosen and reason 3. Other types of lessons learned. The calculated SV and SPI values Control Schedule process OUTPUTS OUTPUTS Work performance measurements Change requests Schedule variance analysis, review of progress reports, results of 14 64 measurements Organizational process asset updates Change requests Project management plan updates Project document updates of progress reports, results of performance measures, and modifications to the project schedule can result into change requests to schedule baseline and other components of the project plan!! Recommended to ICC for approval! Control Schedule process OUTPUTS OUTPUTS Work performance measurements Project management plan Updates after ICC approves 1. Schedule baseline 14 65 measurements Organizational process asset updates Change requests Project management plan updates Project document updates 1. Schedule baseline 2. Schedule management plan 3. Cost baseline Control Schedule process OUTPUTS OUTPUTS Work performance measurements Project management plan Updates after ICC approves Schedule baseline- changes to 14 66 measurements Organizational process asset updates Change requests Project management plan updates Project document updates Schedule baseline- changes to the schedule baseline are incorporated IN RESPONSE TO Approved Changes related to: a) Project scope changes b) Activity durations c) Activity resources Control Schedule process OUTPUTS OUTPUTS Work performance measurements Project management plan Updates after ICC approves Schedule management plan- 14 67 measurements Organizational process asset updates Change requests Project management plan updates Project document updates Schedule management plan- May be updated to reflect a change in the way the schedule is managed! Cost baseline- The cost baseline may be Updated to reflect changes caused by compression or Crashing techniques! Control Schedule process OUTPUTS OUTPUTS Work performance measurements Project document Updates 1. Schedule data 2. Project schedule 14 68 measurements Organizational process asset updates Change requests Project management plan updates Project document updates 2. Project schedule Schedule data update: New network diagrams may be developed to display approved remaining durations and modifications to the work plan. Control Schedule process OUTPUTS OUTPUTS Work performance measurements Please remember In some cases, project schedule delays can be so 14 69 measurements Organizational process asset updates Change requests Project management plan updates Project document updates schedule delays can be so severe that development of a new target schedule with forecasted start and finish dates is needed to provide realistic data for directing the work, and for measuring performance and progress!!! Control Schedule process OUTPUTS OUTPUTS Work performance measurements Project document Updates 1. Schedule data 2. Project schedule 14 70 measurements Organizational process asset updates Change requests Project management plan updates Project document updates 2. Project schedule Project schedule update: An updated project schedule will be generated from the updated schedule data to reflect the schedule changes and manage the project. Project Cost Management 14 71 CONTROL COST Project Cost Management CONTROL COST COST CONTROL THE CONCEPT 14 72 THE CONCEPT Cost control tracks expenditures versus budget to detect variances. It seeks to eliminate unauthorized or inappropriate expenditures, and to minimize or contain cost changes. It identifies WHY variances occur, WHERE changes to cost baselines are necessary, and WHAT cost changes are reflected in the budgets and cost baselines. Project Cost Management THE CONCEPT COST CONTROL CONTROL COST 14 73 THE CONCEPT Periodically, the project manager reviews actual and budgeted costs, and compares costs to assessments of the work completed, and prepares estimates of the completion cost and completion date of the project. It is accomplished both at work package level and the project level using the cost account structure. Project Cost Management THE CONCEPT COST CONTROL CONTROL COSTS 14 74 THE CONCEPT So, the key to cost control is to: Detect and understand variances from the plan by monitoring cost performance Prevent inappropriate, unauthorized, and incorrect modifications from inclusion in the cost baseline Project Cost Management THE CONCEPT CONTROL COST CONTROL COST 14 75 THE CONCEPT So, the key to cost control is to: Take action to get expected costs within acceptable range Report approved changes to the concerned stakeholders Search out REASONS for positive as well as negative variances Project Cost Management THE CONCEPT CONTROL COST CONTROL COST 14 76 THE CONCEPT So, the key to cost control is to: Thoroughly integrate cost control with other control processes as we have discussed during integrated change control: Scope change control Schedule control Quality control, and Others Project Cost Management THE CONCEPT CONTROL COST CONTROL COST 14 77 THE CONCEPT Remember improper responses to cost variances may lead to schedule or quality issues Project Cost Management THE CONCEPT CONTROL COSTS CONTROL COSTS 14 78 THE CONCEPT Remember improper responses to cost variances may lead to: Schedule problems or Quality problems or An unacceptable risk-level in future in the project Project Cost Management CONTROL COSTS HENCE, COST CONTROL PROCESS CONSISTS OF: CONTROL COSTS 14 79 HENCE, COST CONTROL PROCESS CONSISTS OF: 1) Impacting the factors that lead to schedule changes so that these changes are agreed upon. 2) Ascertaining that the schedule has changed. 3) Dealing with the actual changes as they happen. Control Costs process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Cost Management CONTROL COSTS 14 80 Project management plan Project funding requirements Work performance information Organizational process assets INPUTS TECHNIQUES Earned Value Management Forecasting To Complete Performance Index (TCPI) Performance reviews Variance analysis Project management Software OUTPUTS Work Performance measurements Budget Forecasts Change Requests Recommended corrective actions OPAs Updates PM Plan Updates Project Document Updates Project Cost Management Project Management Plan - cost baseline - cost management plan CONTROL COSTS Project management plan Project funding INPUTS 14 81 - cost management plan Cost baseline is Used for comparing actual expenditure with planned expenditure as mentioned in the cost baseline. Cost management plan tells how project cost will be managed and controlled! Project funding requirements Work performance information Organizational process assets Project Cost Management Project Funding requirements Are used as input here. CONTROL COSTS Project management plan Project funding INPUTS 14 82 Used for comparing actual expenditure with planned expenditure as mentioned in the cost baseline. Project funding requirements Work performance information Organizational process assets Project Cost Management Work performance information Costs incurred. Also tells which CONTROL COSTS Project management plan Project funding INPUTS 14 83 Costs incurred. Also tells which deliverables completed, work-in Progress 1) Deliverables completed and yet to be completed 2) Costs actually spent 3) Estimate to complete balance work 4) Percentage physically complete of schedule activities. Project funding requirements Work performance information Organizational process assets Project Cost Management Organization process assets - Cost-related policies, CONTROL COSTS Project management plan Project funding INPUTS 14 84 - Cost-related policies, procedures, guidelines - Cost control tools - Monitoring and reporting methods to be used. Project funding requirements Work performance information Organizational process assets Sample Change Control System CONTROL COSTS FLOW DIAGRAM OF COST CHANGE SYSTEM (Tracks and Documents Cost Change Issues) 14 85 Cost Change Request Cost Change Tracking system Has Cost Change Already Taken place? DOCUMENTATION 1) Cause 2) Cost 3) Parties involved 4) Decision Cost Change Approved? YES NO YES NO Project Cost Management Earned Value Management Integrates scope, time and cost CONTROL COSTS TOOLS & TECHNIQUES Earned Value Management 14 86 Integrates scope, time and cost measures to help assess and measure project performance and progress! Requires formation of an integrated baseline! Measures three dimensions for each work package and control account. Management Forecasting To Complete Performance Index (TCPI) Performance reviews Variance analysis Project management Software Project Cost Management 1) Earned value management Earned Value Concept Costs are budgeted period-by-period for each work CONTROL COSTS 14 87 Costs are budgeted period-by-period for each work package or cost account (time-phased budgeting). Once project begins, work progress and actual costs are tracked every period and compared to these budgeted costs. We measure and track work progress using the concept of earned value. Project Cost Management Earned Value Concept The earned value of work completed in a project is CONTROL COSTS 14 88 The earned value of work completed in a project is determined by the combined status of all work packages at a given time. Computed by taking: 1) The sum of the budgeted costs of all work packages thus far completed PLUS 2) The sum of earned value of all open work packages example Project Cost Management Earned Value Concept Say as of August 25, work packages A, B, C 14 89 Say as of August 25, work packages A, B, C had been completed and they were budgeted to cost Rs. 30 K, Rs. 15 K, and 10 K respectively. Work package D budgeted to cost Rs. 40 K was only 75% complete. Then, THE EARNED VALUE for the project as of August 25: Rs. 30 K + Rs. 15 K + Rs. 10 K + (0.75) Rs. 40 K = Rs. 85 K Project Cost Management Earned value management Do you know the purpose of EVM Control Account Plans (CAPs)? 14 90 Plans (CAPs)? Well, all these CAPs continuously measure project performance. HOW? By relating to three independent variables (we have discussed them and refresh again) Planned value (PV), Earned value (EV), and Actual value (AC) Project Cost Management Earned value management Planned value (PV) The sum cost of all work, plus apportioned effort, Control Costs 14 91 The sum cost of all work, plus apportioned effort, scheduled to be completed within a given time period as specified in the original budget. Earlier name BCWS (budgeted cost of work performed) EXAMPLE: (discussed during Performance Reporting process) In Essar Cargo Project in week 20 to date: Cumulative PV = Rs. 512,000 Weekly PV = Rs. 83,000 Project Cost Management Earned value management Earned value (EV) Is the budgeted value of the work actually completed 14 92 Is the budgeted value of the work actually completed as on the date of measurement . Earlier name BCWP (budgeted cost of work performed) EXAMPLE In Essar Cargo Project in week 20: Cumulative EV is Rs. 429,000 Project Cost Management Earned value management Actual costs (AC) The total of costs incurred in accomplishing work 14 93 The total of costs incurred in accomplishing work during a given time period. It is the sum of the costs for all completed work packages plus all open work packages and overhead. Earlier known as ACWP (actual cost of work performed) Example In Essar Cargo Project, as of week 20: AC is Rs. 530,000 Project Cost Management Essar Cargo Project: Performance Report Week 20 (cumulative to date) REAL LIFE EXAMPLE CPI SPI SV CV EV AC PV ACTIVITY H 100 100 100 0 0 1.00 1.00 Tabular form (Rs. 1000 s) (Rs. 1000 s) (Rs. 1000 s) 14 94 J K L M N O P Q I 64 96 16 36 84 40 20 24 32 512 PROJECT 70 97 12 30 110 45 28 22 16 530 64 96 14 18 33 40 24 24 16 429 0 0 - 2 - 18 - 51 0 4 0 - 16 - 83 - 6 - 1 2 - 12 - 77 - 5 - 4 2 0 - 101 1.00 1.00 0.88 0.50 0.39 1.00 1.20 1.00 0.50 0.84 0.91 0.99 1.17 0.60 0.30 0.89 0.86 1.09 1.00 0.81 Project Cost Management EVM in action Schedule Variance (SV) SV = EV PV At project level, Week 20: PV = INR 512 K EV = INR 429 K 14 95 = 429 K 512 K = - 83 K We are behind schedule as of week 20 Cost Variance (CV ) CV = EV AC = 429 K 530 K = - 101 K We have spent more than budgeted for the work done as of week 20 Project Performance (Essar Cargo Project) EV = INR 429 K AC = INR 530 K Project Cost Management EVM in action For knowing the status of the project, we need to have information on the Work package 14 96 we need to have information on the performance for all work packages and participating functional areas. In Essar Cargo Project as of week 20: 1) Work packages H, I, J have been completed and are closed accounts 2) Work packages K through Q are open and in progress Work package Analysis and Performance Indices Project Cost Management EVM in action Two types of indices are used to asses the schedule and cost performance of Work package 14 97 the schedule and cost performance of the work packages and the relative size of the problem areas: Schedule Performance Index (SPI) SPI = EV / PV Cost Performance Index (CPI) CPI = EV / AC Work package Analysis and Performance Indices Project Cost Management EVM in action YARD STICK Values of SPI and CPI Work package 14 98 Values of SPI and CPI 1) Greater than 1.0 indicate the work is ahead of schedule and under-budget 2) Lesser than 1.0 shows the work is behind schedule and over-budget SPI and CPI highlight trouble spots and their Relative Magnitude! Example: Essar Cargo Project, week 20 1) Work packages L, M, and Q have fallen the most behind schedule (have smallest SPI) Work package Analysis and Performance Indices Project Cost Management EVM in action 2) L and M had the greatest cost overruns relative to their size (they have smallest At project level, 14 99 CPI) The overall project is behind schedule and over cost: At project level, Week 20: PV = Rs. 512 K EV = Rs. 429 K AC = Rs. 530 K Schedule Performance Index (SPI) SPI = EV / PV = 429 K / 512 K = 0.84 Cost Performance Index (CPI) CPI = EV / AC = 429 K / 530 K = 0.81 Essar Cargo Project Project Cost Management EVM in action Focusing on only the project level or Work package 15 00 only the work package level to determine project status can be misleading! If the project manager looks only at the project level, good performance of some activities will overshadow and hide poor performance in others!! If the project manager focuses only on individual work packages, the cumulative effect from slightly Work package Analysis and Performance Indices Project Cost Management EVM in action poor performance on many activities Work package 15 01 can easily be overlooked Even small cost overruns on many individual work packages can add up to large overruns for the project!!! LESSON LEARNED? THE PROJECT MANAGER MUST SCAN BOTH PROJECT LEVEL AND WORK PACKAGE LEVEL, BACK AND FORTH Work package Analysis and Performance Indices example Project Status as of week 20 500 550 450 SV CV AV PV C o s t
R s .
1 0 0 0
s 15 02 Week 50 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 450 400 350 300 150 100 250 200 PV AC EV Status Date C o s t
R s .
1 0 0 0
s TV Project level analysis says that the project is about 1 week behind schedule. BUT Project Status as of week 20 BUT But work package level analysis tells that one of the 15 03 But work package level analysis tells that one of the Work packages (M) is behind Schedule. It is on critical path and appear to be 3 week behind schedule, hence project should also be 3 weeks behind, not 1 Week as shown by project level analysis. Example: Gantt chart Gantt Chart: Work Status as of week 20 Basic design H Hardware design A I Hardware design B J Drawings B K Software specs L M is on critical path, And behind schedule 15 04 Week 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36.48 Software specs L Parts purchasing B M Parts purchasing A N Drawings A O Installation drawings P Software purchasing Q Delivery B R Delivery A S Software delivery T Assembly A U Assembly B V Test A W Test B X Final installation Y Final test Z Completed work Pending work EVM in action The greatest problem: How to predict percentage complete? Solutions: 1) 50/50 Rule (most common) Half budget of each element is booked at the time the work is Resolving problems in calculating EV 15 05 Half budget of each element is booked at the time the work is scheduled to start and other half when it is scheduled to finish. Advantage: eliminates the necessity for continuous determination of percentage complete. 2) 100 percent Rule a) Used when work or materials will be planned and earned ON RECEIPT than usage, or b) when the start and finish of the efforts happens in a time span short enough to justify use of 50/50 rule 3) N percent completion Rule Used when we can identify meaningful criteria for reporting on work packages spanning several months Project Cost Management 2) Forecasting As the project progresses, the project team can develop a forecast for the estimate at completion 15 06 develop a forecast for the estimate at completion (EAC). This may differ from budget at completion (BAC). The project manager develops forecasted EAC if BAC is no longer viable. Project Cost Management Forecasting EAC is a prediction of conditions and events in future based on knowledge at the time of 15 07 future based on knowledge at the time of forecast. Forecasts are generated, updated, and re-issued based on work performance information. Project Cost Management Calculating EAC Actual cost for work completed plus a new estimate to complete remaining work. EVM work well in 15 08 complete remaining work. EVM work well in conjunction with manual forecasts of required EAC costs, most common, Bottom-up summation. But one has to stop work to do it and there is no separate budget or time included for this. Additional costs are incurred if you do so. Equation, EAC = AC + bottom-up ETC Forecasting (EVM in action) ORIGINAL PLAN BAC PV TODAY 15 09 PLAN BAC EAC ETC PV AC BAC = BUDGET AT COMPLETION (budget for the total project) ETC = ESTMATE TO COMPLETE (how much more balance it will cost to complete balance project work?) EAC = ESTMATE AT COMPLETION (what do we currently expect the total project to cost ? : A VERY NATURAL CONCERN OF STAKEHOLDERS) Forecasting (EVM in action) 1. EAC forecast for ETC work performed at budgeted rate SCENARIO ONE FORMULA EAC = AC + BAC - EV 15 10 When we find variances till date will not recur in future and we complete remaining work at the budgeted rate. In such a scenario, we find EAC by adding Actual Cost to date (AC) to balance budget (BAC EV). EAC = AC + BAC - EV Example Say for a project, AC = Rs. 10 K BAC = Rs. 150 K, EV = Rs. 15 K Then EAC will be EAC = AC + BAC EV = Rs.10 K + Rs.150 K 15 K = Rs. 145 K Forecasting (EVM in action) 1. EAC forecast for ETC work performed at budgeted rate SCENARIO ONE 15 11 CAUTION! WHEN ACTUAL PERFORMANCE IS UNFAVOURABLE, THE ASSUMPTION THAT FUTURE PERFORMNCE WILL IMPROVE SHOULD BE ACCEPTED ONLY WHEN SUPPORTED BY PROJECT RISK ANALYSIS! Forecasting (EVM in action) EAC forecast for ETC work performed at the present CPI SCENARIO TWO FORMULA EAC = AC + (BAC EV) / CPI 15 12 What project has experienced to date can be expected to continue in future! ETC work assumed to be performed at the same cumulative CPI to date! EAC = BAC/ cumulative CPI EAC = AC + (BAC EV) / CPI Example Say for a project, AC = Rs. 10 K BAC = Rs. 150 K, EV = Rs. 15 K, CPI = 0.87 Then EAC will be: AC + BAC EV Rs.10 K + Rs.150 K 15 K / 0.87 = Rs. 145 K / 0.87 = Rs. 167 K Forecasting (EVM in action) EAC forecast for ETC work performed at the present CPI ETC work will be performed at an efficiency rate that SCENARIO THREE 15 13 ETC work will be performed at an efficiency rate that considers both CPI and SPI. Assumes a negative cost performance to date and a requirement to meet a firm Schedule Commitment! This helps when schedule impacts ETC effort. Variances of this method weighs CPI and SPI in different values: 80/20, 50/50, etc., as per project managers judgment. EAC = AC + [ (BAC-EV) / (cumulative CPI x Cumulative SPI) ] Forecasting (EVM in action) ETC AND VAC ESTIMATE TO COMPLETE (ETC) 15 14 HOW MUCH MORE THE PROJECT WILL COST! CALCULATION FORMULA: ETC = EAC - AC VARIANCE AT COMPLETION (VAC) HOW MUCH MORE THE PROJECT WILL COST! CALCULATION FORMULA: VAC = BAC - EAC FORECASTS AS OF WEEK 20 ESSAR CARGO PROJECT BAC 1200 1100 1000 C O S T
(
R s .
1 0 0 0
s ) Forecast AC EAC Status Date ETC = BAC EV / CPI, EAC = AC + ETC BAC = Rs. 990 K, EV = Rs. 429 K, CPI = 0.81 AC = Rs. 530,000 ETC 15 15 WEEK BAC 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 900 800 700 600 500 400 300 200 100 C O S T
(
R s .
1 0 0 0
s ) PV AC EV Forecast EV ETC Initial target date Revised Completion date ETC 990 K 429 K / 0.81 = Rs. 692,593 EAC 530,000 + 692,593 = Rs. 1,222,593 Control Costs process techniques 3) To complete Performance Index (TCPI) It is the calculated projection of Cost Performance that must be achieved on the remaining work to meet 15 16 that must be achieved on the remaining work to meet the specified management goal. TCPI = work remaining / fund remaining TCPI = (BAC- EV) / (BAC AC) When BAC no longer viable, the project manager will make new estimate to complete balance work and once approved, the project will work to new EAC value. Project Cost Management 4) performance reviews What do they give us: 1) Compare cost performance over Control Costs 15 17 1) Compare cost performance over time, 2) Find schedule activities/work packages overrunning and underruning budget (PV), 3) Milestones met and due. These meetings must use one or more performance-reporting techniques Project Cost Management performance reviews performance-reporting techniques to use: Control Costs 15 18 use: 1) Variance analysis: comparing actual with planned. Cost and schedule variances are often analyzed but we must variances in scope, quality, resources, and risk are also equally or sometimes more important. Project Cost Management performance reviews performance-reporting techniques to use: Control Costs 15 19 use: 2) Trend analysis: examining project performance over time to see if performance is improving or deteriorating! 3) EV technique: compares actual performance with planned performance. Project Cost Management 5) Variance Analysis Cost performance measurements (CV, CPI) are used to assess the magnitude of variation to the CONTROL COSTS 15 20 used to assess the magnitude of variation to the original cost baseline! And then decide if any corrective or preventive action is needed! Vital part of cost control lies in: 1) Determining the cause of variance 2) Deciding if the variance warrants corrective action example Example: Variance Analysis Progress Measurement data date: October 1, 2004 Work package Planned Value Earned Value Actual cost Work package Schedule Cost Status H COMPLETED 100 100 0 100 0 15 21 H I J K L M O P COMPLETED COMPLETED COMPLETED Not started Not started COMPLETED Started Not started 100 50 40 90 70 50 50 0 450 340 0 50 0 90 0 50 50 100 0 360 0 25 0 140 0 40 55 100 0 - 100 0 - 100 0 0 - 55.5 ------- 20 -10 0 - 24.4 ----- - 5.9 ------- ------- 50 VAIANCE ANALYSIS RESULTS: AS OF OCTOBER, 2004 THE PROJECT IS BEHIND SCHEDLUE AND OVER BUDGET Project Cost Management 5) Variance Analysis please remember the percentage range of acceptable variances CONTROL COSTS 15 22 the percentage range of acceptable variances tend to decrease as more work is accomplished. The larger percentage variances permitted at the start of the project can decrease as the project nears completion! example 6) Project Management Software Used to monitor three EVM dimensions Project Cost Management CONTROL COSTS 15 23 Used to monitor three EVM dimensions (PV, EV, and AC) to display graphical trends and forecast a range of possible final results! Cost Costs process Outputs 1) Work Performance measurements Calculated Control Costs 15 24 Calculated CV, SV, CPI, SPI values for WBS components (work packages or control accounts). Are recorded and informed to stakeholders! Project Cost Management 2) Budget Forecast (EAC, ETC) Calculated Control Costs 15 25 Calculated or performing organization-reported EAC value. Is recorded and informed to stakeholders! Calculated or performing organization-reported ETC value. Is recorded and informed to stakeholders! Project Cost Management 3) Change Requests To some aspect of the project resulting from project performance 15 26 resulting from project performance analysis. Example: Increasing or decreasing the budget! Routed through ICC. Project Cost Management 4) OPAs Updates Lessons learned posted in database. Guide us on our current project as well as Control Costs 15 27 Guide us on our current project as well as Future ones. Such knowledge management leads to project management maturity of the performing organization and also helps us reinventing the wheel! Documents from cost control process: 1. Causes of variances, 2. Logic behind the chosen corrective action, and 3. Other types of lessons learnt from cost control Project Cost Management 5) PM Plan Updates Components of PM Plan are updated to reflect changes on account of Control Costs 15 28 to reflect changes on account of approved change requests of this process. Components that often get updated: 1) Cost estimates of Schedule activity, Work package or Planning package. 2) Cost baseline Project Cost Management 6) PM Document Update include 1) Cost Estimates Control Costs 15 29 1) Cost Estimates 2) Basis of Estimates Project Quality Management PERFORM QUALITY 15 30 PERFORM QUALITY CONTROL Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 31 THE CONCEPT QUALITY IS THE DEGREE TO WHICH A SET OF INHERENT CHARACTERISTICS FULFILL REQUIREMENTS STATED AND IMPLIED NEEDS ARE THE INPUTS TO DEVELOPING PROJECT REQUIREMENTS Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 32 THE CONCEPT A CRITICAL ELEMENT OF QUALITY MANAGEMENT IN PROJECT CONTEXT IS TO CONVERT STAKEHOLDER NEEDS, WANTS, AND EXPECTATIONS INTO REQUIREMENTS THROUGH STAKEHOLDER ANALYSIS DURING PROJECT SCOPE MANAGEMENT Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 33 THE CONCEPT Quality is synonymous with ability to conform to the requirements of the end- item and work processes and procedures. Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 34 THE CONCEPT Quality control is managing the work to achieve the desired requirements, specifications, taking preventive measures to keep errors and mistakes out of the work process, and determining and eliminating the sources of errors and mistakes as they occur. Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 35 THE CONCEPT Quality management plan plays a vital role as it describes necessary QUALITY CONDITIONS FOR EVERY WORK PACKAGE (prerequisites/stipulations about what must exist before, during, and after the work package to ensure quality). It also specifies the measures and procedures (tests, reviews, inspections, etc.) Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 36 THE CONCEPT Another important aspect is tracking project performance with respect to technical requirements, and modifying the work or the requirements as necessary. Variety of methods are used for testing and inspection to eliminate defects and ensure that end-items satisfy requirements. Project Quality Management PERFORM QUALITY CONTROL THE CONCEPT 15 37 THE CONCEPT Tests and inspections must be ongoing so that problems/defects are identified as early as possible. It is less costly to remedy the defects and problems if they are known early both in the project management life cycle and product life cycle. Project Quality Management PERFORM QUALITY CONTROL 15 38 THE CONCEPT FUNDAMENTAL PILLARS OF QUALITY 1) Customer Satisfaction 2) Prevention over inspection 3) Management Responsibility 4) Continuous Improvement Project Quality Management FROM OUR DISCUSSION ON THE CONCEPT, IT IS EVIDENT THAT QUALITY CONTROL PROCESS 15 39 THAT QUALITY CONTROL PROCESS requires us to: 1) Monitor specific project results to determine whether they comply with relevant quality standards 2) Identify ways to eliminate causes of unsatisfactory results Project Quality Management FROM OUR DISCUSSION ON THE CONCEPT, IT IS EVIDENT THAT QUALITY CONTROL PROCESS 15 40 THAT QUALITY CONTROL PROCESS requires us to: 3) Perform it throughout the project specific project 4) Quality standards consist of project processes and product goals 5) Project results include both product results and project management results Project Quality Management EXAMPLES of product results and project management results: 15 41 project management results: 1) PRODUCT RESULTS Deliverables 2) PROJECT MANAGEMENT RESULTS Schedule performance Cost performance Project Quality Management PREREQUISITES FOR PROJECT MANAGEMENT TEAM 15 42 PREREQUISITES FOR PROJECT MANAGEMENT TEAM In order to evaluate quality control outputs, the project management team must be aware of a working knowledge of SQC (statistical quality control), mainly: Sampling and Probability Project Quality Management PROJECT MANAGEMENT TEAM MUST KNOW THE DIFFERENCE between 15 43 between Prevention Keeping errors out of process! Inspection Keeping errors out of the hands of the customer! Attribute Sampling Implies either result conforms or it does not conform! Variable Sampling Implies the result is rated on a continuous scale that measures magnitude of conformity! Project Quality Management PROJECT MANAGEMENT TEAM MUST KNOW THE DIFFERENCE between 15 44 between Special Causes / Non-random Mean unusual occurrences! Common Causes / Random Causes Mean normal process variation Tolerances Mean the result is acceptable if it is within specified tolerance range! Control Limits Define variation range of a process. The process is said to be in control if the result falls within this range! Perform Quality Control process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Quality control Project Quality Management 15 45 Project Management Plan Quality metrics Quality checklists OPAs Work performance measurements Approved change requests Deliverables INPUTS Cause and effect diagram Control Charts Flowcharting Histogram Pareto charts Run chart Scatter diagram Statistical Sampling Inspection Approved Change Requests review Quality control measurements Validated Changes Change requests Recommended defect repair OPAs updates Validated deliverables PM Plan updates Project Document Updates Perform Quality Control process Project Quality Management 1) Project management plan It contains quality management plan which is used to control 15 46 INPUTS plan which is used to control quality. Guides us how quality control should be performed. 2) Quality metrics Also have been duly deliberated by us during Plan Quality We bring them for use here. Perform Quality Control Project Quality Management 3) Quality Checklists We have with us as an output of our discussion on quality planning. They 15 47 discussion on quality planning. They come in handy here. 4) OPAs Provide us quality control practices in use, plus standards we need to adhere to. Project Quality Management 5) Work performance Measurements Important inputs to QC: Perform Quality Control 15 48 Important inputs to QC: Technical performance measures Project deliverables completion status Implementation of required corrective actions Planned results and actual results Implemented change requests Project Quality Management 6) Approved change requests Timely implementation of approved change requests needs to be examined. Perform Quality Control 15 49 change requests needs to be examined. These change requests are modifications, such as: Revised work methods Revised schedule 7) Deliverables We have amply talked about them. We examine them here if they meet quality requirements. Project Quality Management 1) Cause and effect diagram (Ishikawa or fishbone diagrams) Show how how various factors could Perform Quality Control process TOOLS & 15 50 Show how how various factors could be linked to potential problems or effects! Help us find the causes of the quality problems. TOOLS & TECHNIQUES example SAMPLE CAUSE AND EFFECT DIAGRAM TIME MATERIAL METHOD MACHINE 15 51 Major Defect EFFECT CAUSES ENVIRONMENT PERSONNEL MEASUREMENT ENERGY Project Quality Management 2) Control charts Help us determine whether process is in control. Perform Quality Control process TOOLS & 15 52 control. They graphically display results, over time, of a process. COMPONENTS OF A CONTROL CHART: 1) Upper and lower control limits- the acceptable range of variation of a process, often shown as dotted lines. 2) Mean- a line in the middle showing the middle of the range of acceptable variation of the process. TOOLS & TECHNIQUES Project Quality Management Control charts COMPONENTS OF A CONTROL CHART: Perform Quality Control process TOOLS & 15 53 3) Data points- random and non-random data points. Their appearance and position determines whether process is in control or out of control. 4) Out of control- the process is out of a state of statistical control under two circumstances: a) A data point falls outside ULC or LCL b) Non-random data points still within UCL and LCL TOOLS & TECHNIQUES Project Quality Management Control charts COMPONENTS OF A CONTROL CHART: Perform Quality Control process TOOLS & 15 54 5) Rule of seven (heuristic)- nonrandom data points grouping in series on one side of the mean, signifying process is out of control. You must investigate such a situation, find cause, and take corrective action. TOOLS & TECHNIQUES Project Quality Management Control charts COMPONENTS OF A CONTROL CHART: Perform Quality Control process TOOLS & 15 55 6) Assignable cause- a random data point outside control limits, or non random data points (even though within control limits, such a rule of seven). You must determine the cause of the variation, find solution, and implement it to bring process back to normal. TOOLS & TECHNIQUES Sample Control Chart Center line: average of process data Upper line: Upper Rule of seven (out of control) Process out of control or unstable: 1) points outside UCL and LCL; 2) inside UCL & LCL nonrandom points (seven) 15 56 Assignable cause (out of control) Upper line: upper range of acceptable data Lower line: lower range of acceptable data X axis consists of sample numbers (time of sample) Upper control limit Lower control limit X Mean Project Quality Management Control charts Please do not adjust the process when it is in control. However, you may change the process to usher in 15 57 However, you may change the process to usher in improvements, but again remember that you will not adjust it when its in control! Any type of process output can be monitored by using control charts. Control charts are mostly used to monitor repetitive activities like production lots, but they can also be used to track if project management process is in control: Schedule and cost variances Frequency and volume scope changes Mistakes in project documents Any other project management results Project Quality Management 3) Flowcharting Helps to analyze how problems occur. Perform Quality Control process TOOLS & 15 58 occur. Styles are many but all process flowcharts show: 1) Activities, 2) Decision points, and 3) Order of processing Show how various elements of the process interrelate. TOOLS & TECHNIQUES Project Quality Management Flowcharting Helps the project management team anticipate: Perform Quality Control process TOOLS & 15 59 team anticipate: 1) What and where quality problems might occur 2) Hence, help develop approaches for dealing with them Example Flowcharting TOOLS & TECHNIQUES Example: Flowcharting (PROCESS FLOWCHART FOR DESIGN REVIEWS) 1 Project request 2 Compliance Copy 3 Develop Artwork 4 NO 15 60 6 Artwork out For proofs 5 Change control For specs 7 Vendors make proofs 10 Approved Proof back to Vendor 11 Specs signed (package & QA) 12 Order materials 8 Package Development Review & approval 9 QA review / approval 4 Artwork Approved NO YES YES YES NO NO Project Quality Management 4) Histogram A bar chart showing distribution of variables: Perform Quality Control process TOOLS & 15 61 variables: 1) Each column represents an attribute or characteristic of a problem or situation. 2) Helps identify the cause of problems in a process by the shape and width of the distribution. 3) Height of each column shows relative frequency of characteristic. TOOLS & TECHNIQUES Project Quality Management 5) Pareto charts Know 80/20 Rule? It says 80% Perform Quality Control process TOOLS & 15 62 Know 80/20 Rule? It says 80% problems are due to 20% causes! Well, it Paretos law which opines that a relatively small number of causes create a large majority of defects/problems. Pareto diagrams follow this concept. TOOLS & TECHNIQUES Project Quality Management Pareto diagrams It is a histogram ordered by Perform Quality Control process TOOLS & 15 63 It is a histogram ordered by frequency of occurrence. That means how many results were produced by category/type of identified cause. Such rank ordering helps project team take corrective action to eliminate the problems causing greatest number of defects first. TOOLS & TECHNIQUES Sample Pareto Diagram (Chart) 100 40 Cumulative P e r c e n t a g e
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Project Quality Management 6) Run chart Shows history or pattern of variation! Is a line diagram where data points Perform Quality Control process TOOLS & 15 65 Is a line diagram where data points are plotted in the order of occurrence!! Depicts TRENDS in a process over time, variation over time, declines or improvements in a process over time. Whats the advantage? Helps forecast future outcomes based on historical results!!! TOOLS & TECHNIQUES Project Quality Management Run chart Trend analysis often used to monitor: 1) Technical Performance: how many Perform Quality Control process TOOLS & 15 66 1) Technical Performance: how many defects have been identified and how many remain uncorrected? 2) Cost and Schedule Performance: How many activities (per period) were done with significant variances? TOOLS & TECHNIQUES Project Quality Management 7) Scatter diagram Shows pattern of relationship between two variables. Perform Quality Control process TOOLS & 15 67 two variables. Helps quality team examine and find possible relationship between changes observed in two variables! - Dependent variables and independent variables are plotted - Closer they are to a diagonal line, more closely they are related! TOOLS & TECHNIQUES Project Quality Management 8) Statistical sampling Inspecting by choosing only a part of population of interest (SAMPLE). Perform Quality Control process TOOLS & 15 68 population of interest (SAMPLE). Example: selecting 5 cabins out of 100 cabins built on An Office Building Project. Proper sampling reduces the cost of quality control. It is best to apply if the population under study is large and examining the whole population would cost a lot, take too long, and be too destructive. TOOLS & TECHNIQUES Project Quality Management 8) Inspection DETERMINE if a work product complies to requirements or not Perform Quality Control process TOOLS & 15 69 complies to requirements or not ACTIVITIES: testing, examining, measuring at any level - single activity level or final product level. KNOWN as: Audits, Walkthroughs, Product Reviews, Reviews. In certain application areas, these terms carry a specific or narrow meaning TOOLS & TECHNIQUES Project Quality Management Technical performance We have sufficiently discussed about schedule and cost performance. Besides them, project performance 15 70 performance. Besides them, project performance depends how well the project is meeting technical requirements!!! TECHNICAL PERFORMANCE is measured through tracking the history of a set of technical objectives or requirements over time. It provides management with the information about how well the project is progressing with respect to particular project objectives, targets, and requirements (Quality). Project Quality Management Technical performance The purpose of measuring technical performance is to monitor progress in performance measures and their 15 71 monitor progress in performance measures and their relationship TO GOALS AND TARGETS BY PROVIDING: 1) A best estimate of current technical performance or progress to date, and 2) An estimate of technical performance at project completion Project Quality Management Technical performance BOTH KINDS OF ESTIMATES ARE BASED ON THE RESULTS OF: 15 72 RESULTS OF: 1) Modeling, 2) Simulation, or 3) Tests, and 4) Demonstrations TO PERFORM IT, WE NEED TO HAVE CERTAIN TECHNICAL PERFORMANCE MEASURES AS KEY INDICATORS OF SUCCESS THESE MESURES SHOULD BE TIED TO USER NEEDS AND REPRESENT MAJOR PERFORMANCE DRIVERS!!! Examples of Technical Performance Measures Technical performance Availability Back-up Utility Size or space Reliability Power 15 73 Safety Speed Survivability Maintainability Flexibility Cycle Time Efficiency Output Rate Capacity Response Time Security Setup Time Durability Range Variance Cost Utilization Error / Defect Rate Power Interface Compatibility Interoperability Simplicity / Complexity Signal-to-noise Ratio Trip Time Idle Time Project Quality Management Technical performance MEASUREMENT: STEP 1 STEP 3 Current estimates and the 15 74 STEP 1 Periodically, current (actual) Performance Estimates are computed or measured STEP 2 And then, they are compared to objectives Initially, they are based on results from Modeling and Simulation Activities, and later on Test and Demonstration results Using actual Hardware and Software Current estimates and the Technical objectives are Charted on a time-phased TPM Chart which SIMPLIFIES determining the extent of progress made toward Achieving Objectives Project Quality Management 9) Approved Change Requests review Done to ensure that product Perform Quality Control process TOOLS & 15 75 Done to ensure that product defects are repaired and brought into compliance with requirements/specifications! TOOLS & TECHNIQUES Project Quality Management 1) Quality control measurements Are Results of QC. Perform Quality Control process OUPUTS 15 76 Are Results of QC. They are fed back to QA to reevaluate and analyze the efficiency and effectiveness of quality standards and processes of the performing organization! Please do remember!! OUPUTS Project Quality Management 2) Validated Changes Repaired items re inspected to confirm if they are ok now. Perform Quality Control process OUPUTS 15 77 to confirm if they are ok now. Rejection again may require further repair. Decision is notified after examination. OUPUTS Project Quality Management 3) PM Plan Updates Quality management plan (a component of PM Plan) needs to be Perform Quality Control process OUPUTS 15 78 component of PM Plan) needs to be updated to reflect approved changes resulting from QC. QC may lead to incorporation of approved changes in other components (subsidiary plans) of the PM Plan also. All changes are first reviewed by ICC for approval! OUPUTS Project Quality Management 4) OPA Updates include a) Completed Checklists, Perform Quality Control process OUPUTS 15 79 a) Completed Checklists, b) Lessons learned documentation. OUPUTS Project Quality Management 5) Validated Deliverables Quality Control is done to determine the correctness of Perform Quality Control process OUPUTS 15 80 determine the correctness of deliverables. The results of execution quality control processes are validated deliverables. They are an input to verify scope for formalized acceptance. OUPUTS Project Quality Management 6) Change Requests include a) defect repair Perform Quality Control process OUPUTS 15 81 a) defect repair b) corrective action c) preventive action 7) Project Document Updates may include - Quality Standards. OUPUTS Project communications management 15 82 REPORT PERFORMANCE Project communications management REPORT PERFORMANCE The process of Collecting and distributing performance 15 83 Collecting and distributing performance Information, including status reports, progress measurements, and forecasts. INVOLVES Periodic collection and analysis of baseline versus actual data to understand and communicate. REPORT PERFORMANCE The process of Performance reports need to be provide information at an appropriate level for each 15 84 information at an appropriate level for each audience. It may be a simple report or an elaborate one. A simple status report might show percentage complete or status dashboards for scope, schedule, cost, and quality. REPORT PERFORMANCE An elaborate report may include: 1) Analysis of past performance 2) Current status of risks and issues 15 85 2) Current status of risks and issues 3) Work completed during the period 4) Work to be completed next 5) Summary of changes approved for the period 6) Other relevant information which may be reviewed and discussed. A COMPLETE REPORT SHOULD ALSO INCLUDE FORECASTED COMPLETION INCLUDING TIME AND COST!! Project communications management CONSISTS OF REPORT PERFORMANCE 15 86 CONSISTS OF collecting and disseminating performance information to stakeholders about HOW RESOURCES ARE USED TO ACHIEVE PROJECT OBJECTIVES Project communications management 1. Status reporting REPORT PERFORMANCE 15 87 Where the project now stands Budget metrics Schedule achieved 2. Progress reporting Work packages complete Work packages in progress, Percentage complete Forecasting schedule and 3. Forecasting Estimating where it will land in future Forecasting schedule and cost based on the trends of current progress Project communications management Must provide information on: Scope 15 88 Many projects need information on Risk and Procurement also! Scope Schedule Cost Quality Report Performance process overview TOOLS & TECHNIQUES INPUTS OUTPUTS Project Communications Management 15 89 TECHNIQUES Variance Analysis Forecasting Methods Communication Methods Reporting systems Project Management Plan Work Performance measurements Budget Forecasts Project Management Plan Organizational Process Assets INPUTS OUTPUTS Performance Reports Change Requests OPAs updates Report Performance - INPUTS 1. Project Management Plan Provides information on project baselines. 15 90 Provides information on project baselines. Project execution is compared to these baselines And deviations are measured for management control. It typically integrates Scope, Schedule, and Cost parameters of a project but may also include Technical and Quality parameters. Report Performance - INPUTS 2. Work performance information (collected from execution) 15 91 1. Deliverables Status 2. Schedule progress 3. Costs incurred Report Performance - INPUTS 3. Work performance measurements Work performance information is used to generate project activity metrics to evaluate 15 92 generate project activity metrics to evaluate actual progress compared to planned progress. THE METRICS INCLUDE: 1. Planned versus actual schedule performance 2. Planned versus actual cost performance 3. Planned versus actual technical performance Report Performance - INPUTS 4. Work performance measurements Budget forecast information from Control Cost process give information on additional funds 15 93 process give information on additional funds are expected to be be required for the remaining work, and also estimates for the completion of the total project work. Report Performance - INPUTS 4. Organizational process assets provide: 15 94 a) Reporting templates b) Policies and procedures with measures and indicators for use c) Defined variance limits Report Performance TOOLS & TECHNIQUES 1. Variance Analysis An after-the-fact look at what caused a difference between the baseline and actual 15 95 difference between the baseline and actual performance! The process varies with application area, the standard used, and and the industry. COMMON STEPS a) Verify the quality of the information collected Report Performance TOOLS & TECHNIQUES 1. Variance Analysis COMMON STEPS 15 96 a) Verify the quality of the information collected to ensure it is complete, consistent with past data, and credible. b) Determine variances, and note all differences both favorable and unfavorable to project outcomes. c) Determine the impact of variances. Report Performance TOOLS & TECHNIQUES 1. Variance Analysis 15 97 ANALYZE THE TRENDS OF VARIANCES AND RECORD FINDINGS ABOUT SOURCES OF VARIATIONS AND IMPACT AREA. Report Performance TOOLS & TECHNIQUES 2. Forecasting Methods a) TIME SERIES METHODS: 15 98 a) TIME SERIES METHODS: Use historical data as the basis for estimating future outcomes. Examples: Earned Value, Moving Average, Extrapolation, Linear Prediction, Trend estimation, and Growth Curve. Report Performance TOOLS & TECHNIQUES 2. Forecasting Methods b) CASUAL/ ECONOMICAL METHODS: 15 99 b) CASUAL/ ECONOMICAL METHODS: Use the assumption that it is possible to identify the underlying factors that might influence the variable that is being forecasted. Sales of Umbrellas might be associated with weather conditions. Report Performance TOOLS & TECHNIQUES 2. Forecasting Methods b) CASUAL/ ECONOMICAL METHODS: 16 00 b) CASUAL/ ECONOMICAL METHODS: THE PROCESS: If the causes are understood, projections of the influencing variables can be made and used in the forecast! Example: Regression Analysis (using linear or non-linear regression), Autoregressive Moving Range (ARMA), and Econometrics. Report Performance TOOLS & TECHNIQUES 2. Forecasting Methods c) JUDGMENTAL METHODS: Use intuitive 16 01 c) JUDGMENTAL METHODS: Use intuitive judgments, opinions, and probability estimates. Composite forecast, Delphi, Scenario Building, Technology Forecasting, and Forecast By Analogy. d) OTHER MRTHODS: Simulation, Probabilistic Forecasting, and Ensemble Forecasting. Report Performance TOOLS & TECHNIQUES 3. Communication Methods Status Review Meetings used to exchange and 16 02 Status Review Meetings used to exchange and analyze information about the project progress and performance. The project manager generally uses a PUSH COMMUNICATION technique for distributing performance reports. Please remember this!. Report Performance TOOLS & TECHNIQUES 4. Reporting Systems A reporting system provides a standard tool for 16 03 A reporting system provides a standard tool for the project manager to: - capture, store, and distribute schedule, cost, progress, and performance to the stakeholders. Software packages help project manager to consolidate reports from several systems and facilitate report distribution. Examples of distribution formats: Table Reporting, Spreadsheet Analysis, and Presentations. Report Performance TOOLS & TECHNIQUES 2. Forecasting Methods Predicting future project performance based on 16 04 Predicting future project performance based on actual performance to date! Methods: a) TIME SERIES METHODS b) CASUAL/ ECONOMICAL METHODS c) JUDGMENTAL METHODS d) OTHER MRTHODS Report Performance - OUTPUTS 1. Performance reports You prepare performance reports by organizing and summarizing the performance information 16 05 and summarizing the performance information gathered by you and then presenting the results of the analysis in suitable formats: 1) Bar Charts (Gantt charts) 2) S-curves 3) Histograms 4) Tables Variance Analysis, Earned Value Analysis, Forecast Data are included in the report! Report Performance - OUTPUTS 1. Performance reports Reports must display the type of information and level of detail needed by various 16 06 and level of detail needed by various stakeholders (as defined in the communications management plan). Performance reports are issued periodically. They may a simple status report or an elaborate one. Elaborate reports include: Report Performance - OUTPUTS 1. Performance reports Elaborate reports include: - Analysis of past performance, 16 07 - Analysis of past performance, - Current status of risks and issues, - Work to be completed during the next reporting period, - Summary of approved changes for the period, - Results of variance analysis, - Forecasts, - Other information for review and discussion. Project Communications Management Example: Performance Report in bar chart Unit Projected Actual 16 08 Engineering Design Facility And so on Time Actual Project Communications Management Example: Performance Report in S-curve Date of measurement C u m u l a t i v e
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I N R Time Project Communications Management Essar Cargo Project: Performance Report Week 20 (cumulative to date) REAL LIFE EXAMPLE CPI SPI SV CV EV AC PV ACTIVITY H 100 100 100 0 0 1.00 1.00 Tabular form 16 10 J K L M N O P Q I 64 96 16 36 84 40 20 24 32 512 PROJECT 70 97 12 30 110 45 28 22 16 530 64 96 14 18 33 40 24 24 16 429 0 0 - 2 - 18 - 51 0 4 0 - 16 - 83 - 6 - 1 2 - 12 - 77 - 5 - 4 2 0 - 101 1.00 1.00 0.88 0.50 0.39 1.00 1.20 1.00 0.50 0.84 0.91 0.99 1.17 0.60 0.30 0.89 0.86 1.09 1.00 0.81 Report Performance - OUTPUTS 2. Organizational process assets updates 1) Report Formats, 2) Lessons Learned Documentation , including 16 11 2) Lessons Learned Documentation , including the causes of issues, reasoning behind corrective action, 3) Other type of lessons learned about performance reporting. Report Performance - OUTPUTS 3. Change Requests Analysis of performance often generates Change Requests. They are processed through the 16 12 Requests. They are processed through the Perform Integrated Change Control process as: a) Recommended corrective action to bring expected future performance in line with the plan. a) Recommended preventive action to reduce the probability of of incurring future negative performance. Project Risk Management MONITOR 16 13 MONITOR AND CONTROL RISKS Project Risk Management Monitor and control Risks THE CONCEPT Planned Risk Responses are executed during project 16 14 Planned Risk Responses are executed during project life cycle, but the Project Work MUST BE CONTINOUSLY MONITORED FOR NEW AND CHANGING RISKS! FOR THIS, YOU SHOULD: 1. IDENTIFY, ANALYZE, AND PLAN FOR NEWLY ARISING RISKS 2. KEEP TRACK OF THE IDENTIFIED RISKS AND THE ONES ON WATCHLIST Project Risk Management Monitor and Control Risks THE CONCEPT Planned Risk Responses are executed during project 16 15 Planned Risk Responses are executed during project life cycle, but the Project Work MUST BE CONTINOUSLY MONITORED FOR NEW AND CHANGING RISKS! FOR THIS, YOU SHOULD: 3. REANALYZE EXISTING RISKS 4. MONITOR TRIGGER CONDITIONS FOR CONTINGENCY PLANS Project Risk Management Monitor and Control Risks THE CONCEPT Planned Risk Responses are executed during project 16 16 Planned Risk Responses are executed during project life cycle, but the Project Work MUST BE CONTINOUSLY MONITORED FOR NEW AND CHANGING RISKS! FOR THIS, YOU SHOULD: 5. MONITOR RESIDUAL RISKS 6. REVIEW EXECUTION OF RISK RESPONSES WHILE EVALUATING THEIR EFFECTIVENESS Project Risk Management Monitor and Control Risks THE CONCEPT 16 17 APPLIES TECHNIQUES (VARIANCE ANALYSIS, TREND ANALYSIS, ETC) USING THE PERFORMANCE DATA GENERATED DURING PROJECT EXECUTION THE RISK MONITORING AND CONTROL (PLUS OTHER RISK MANAGEMENT PROCESSES) IS AN ONGOING PROCESS FOR THE LIFE OF THE PROJECT! Project Risk Management Monitor and Control Risks THE CONCEPT We also document risk metrics linked with 16 18 We also document risk metrics linked with executing contingency plans New risks develop or anticipated ones no longer exist with the progress of the project as it attains maturity by that time Project Risk Management Monitor and Control Risks THE CONCEPT Making effective decisions before risk occurs is 16 19 Making effective decisions before risk occurs is the crux of risk monitoring and control processes You must periodically ascertain the risk acceptability level of project stakeholders by reporting information to them! Project Risk Management Monitor and Control Risks THE CONCEPT HELPS US ENSURE WHETHER 16 20 HELPS US ENSURE WHETHER We have executed the risk responses as planned. Our risk response actions are effective as envisaged or we need to develop new ones. Project assumptions still holding good. Risk exposure (from earlier state) is steady or not. Project Risk Management Monitor and Control Risks THE CONCEPT HELPS US ENSURE WHETHER 16 21 HELPS US ENSURE WHETHER A risk trigger has taken place. Adequate policies are being observed. Any new risks have happened (the ones not identified by us earlier). Updated the risk register and risk identification checklists. Project Risk Management Monitor and Control Risks THE CONCEPT REQUIRES YOU TO 16 22 REQUIRES YOU TO 1) Choose Alternative Strategies 2) Execute a Contingency Plan or Fallback Plan 3) Take Corrective Action 4) Modify the Project Management plan Project Risk Management Monitor and Control Risks THE CONCEPT RISK RESPONSE OWNERS REPORTS PERIODICALLY 16 23 RISK RESPONSE OWNERS REPORTS PERIODICALLY TO THE PROJECT MANAGER The effectiveness of the plan, Any unexpected impacts, Any corrective action required in the mid- course for handling the risk appropriately. Monitor and Control Risks process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Risk Management 16 24 Project Management Plan Risk Register Work performance information Performance Reports INPUTS TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings OUTPUTS Risk register updates Change Requests OPAs updates PM Plan updates Project document updates Project Risk Management Project Management Plan Provides RMP that Defines procedure for structuring and performing the response Monitor and Control Risks INPUTS 16 25 for structuring and performing the response planning during the project life cycle. Risk Register (provides key inputs) Identified risks, risk owners, agreed- upon risk responses, specific implementation actions, symptoms, warning signals, residual and secondary risks, watchlist, time and cost contingency reserves. Project Management Plan Risk Register Work performance information Performance Reports INPUTS Project Risk Management Work performance information Including project deliverables status, INPUTS 16 26 Including project deliverables status, corrective actions, and performance reports serve as important inputs here! Project Management Plan Risk Register Work performance information Performance Reports INPUTS Project Risk Management Performance reports Provide us information on project work performance. INPUTS 16 27 performance. We need to know if any performance analysis impacts the risk management processes! Project Management Plan Risk Register Work performance information Performance Reports INPUTS Project Risk Management Risk reassessment We regularly identify new risks and reassess known ones! TOOLS & TECHNIQUES 16 28 and reassess known ones! Risk management must be an agenda in at project team status meeting! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Risk reassessment AS PROJECT PERFORMANCE TOOLS & TECHNIQUES 16 29 AS PROJECT PERFORMANCE MEASURED AND REPORTED POTENTIAL RISKS NOT IDENTIFIED EARLIER CYCLE OF RISK MANAGEMENT PROCESSES FOR THESE RISKS MAY SURFACE IMPLEMENT TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Additional risk response planning That was 1) Not anticipated in TOOLS & TECHNIQUES 16 30 A RISK EMERGES 1) Not anticipated in the Risk response plan, or 2) Its impact on objectives IS GREATER THAN EXPECTED ADDITIONAL RISK RESPONSE PLANNING Planned response not adequate TO CONTROL RISK TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Risk audits Conducted during the project life cycle TOOLS & TECHNIQUES 16 31 Risk Auditors EXAMINE AND RECORD EFFECTIVENESS OF RISK RESPONSE ACTIONS How much they have succeeded in avoiding, transferring, mitigating negative risks, and enhancing the opportunities for positive risks Effectiveness of the RM Process! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Variance & trend analysis Variance and trend in project execution is reviewed with the help TOOLS & TECHNIQUES 16 32 execution is reviewed with the help of: 1) Performance data, 2) EV Analysis, 3) Other means of project variance and trend analysis. WHY? Answer: Outcomes from these analyses may forecast cost and schedule potential deviations at project completion! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Variance & trend analysis WHY? Answer: TOOLS & TECHNIQUES 16 33 Answer: Outcomes from these analyses may forecast Cost and Schedule potential deviations at Project completion! 2) It may indicate potential impact of threats or opportunities! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings examples Project Risk Management BEWARE OF SCOPE CHANGES! TOOLS & TECHNIQUES 16 34 SCOPE CHANGES NEW RISK ANALYSIS NEW RESPONSE PLANS WE HAVE ALREADY DISCUSSED SCOPE CHANGES TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Earned value analysis EV analysis ( as already discussed ) used for tracking overall project TOOLS & TECHNIQUES 16 35 used for tracking overall project performance against a baseline plan Results tell us about potential deviation of the project at completion from schedule and cost objectives If a project deviates substantially from the baseline, updated risk identification and analysis must be conducted! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Technical performance measurement Compares technical performance TOOLS & TECHNIQUES 16 36 Compares technical performance accomplishments during execution to the project plans schedule for technical achievement. Example: If a functionality planned as a milestone is not demonstrated, it poses risk to attaining projects scope! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Reserve analysis Compares the amount of COST AND SCHEDULE contingency reserve left TOOLS & TECHNIQUES 16 37 SCHEDULE contingency reserve left to the amount of risks remaining AT ANY TIME IN THE PROJECT! To find out if the remaining contingency is sufficient for remaining risks! TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Status meetings VERY IMPORTANT TOOL! Risk reviews must be done regularly All meetings should have it as a TOOLS & TECHNIQUES 16 38 All meetings should have it as a necessary agenda! ALSO, PLEASE REMEMBER: 1) As the project advances, the risk ratings and prioritization may change. 2) These changes may need additional qualitative and quantitative analysis. TECHNIQUES Risk Reassessment Risk audits Variance and trend analysis Technical Performance Measurement Reserve analysis Status meetings Project Risk Management Risk register updates Two categories of updates: Results of risk reassessments, risk OUTPUTS 16 39 Results of risk reassessments, risk audits, and risk views. Examples: updates to Probability, Impact, priority, response plans, ownership, and other items of risk register. Risk register updates Change Requests OPAs updates PM Plan updates Project document updates Project Risk Management Risk register updates Two categories of updates: Actual outcomes of risks and risk 16 40 Actual outcomes of risks and risk responses which help us plan for risk throughout our organization (for future projects). This concludes the record of risk management on the project and serves as input to Close Project process and included in project closure documents! Project Risk Management Risk register updates Performing Risk Controls 16 41 RISKS Record and Evaluate Record and Close in risk register Controls reduces the impact or probability of identified - tive Risks and enhances opportunity for + tive risks Reassess Risk Ratings to properly control New, Important Risks Project Risk Management Change Requests Frequently, the implementation of contingency or workaround plans 16 42 contingency or workaround plans necessitates change to PM Plan! ICC reviews and approves them. Then, they become input to 1) Direct & Manage Project Execution process 2) Risk monitoring & control process Project Risk Management Change Requests Requirement to 16 43 Contingency or Workaround plans Implemented Requirement to Change the project Plan Change Request Often Results Into Integrated Change control Risk Monitoring & Control Direct & Manage Project Execution Approves the requested change Project Risk Management Include : Contingency plans and workaround Change Requests 16 44 plans Workaround plans must be properly recorded. They are included in both Direct & Manage Project Execution process and Monitor & Control Project Work process! Remember!! Project Risk Management Workaround plans Are Unplanned Responses to the emerging risks which were not Change Requests May lead to 16 45 emerging risks which were not identified or accepted passively. DOCUMENT WORKAROUNDS IN PM PLAN AND RISK RESPONSE PLAN WORKAROUNDS: Unplanned Responses RISKS ( not identified or accepted passively) May lead to Project Risk Management Recommended preventive actions Are actions taken to bring the project Change Requests May lead to 16 46 Are actions taken to bring the project into compliance with Project Management Plan. OPAs updates All the six risk management processes provide information that can help future projects, and hence must be entered in OPAs. examples May lead to Project Risk Management OPAs updates Examples: 1) Templates for the following can be 16 47 1) Templates for the following can be updated at Project Closure: risk management plan template P & I Matrix template risk register template 2) Risks can be documented and RBS updated. 3) Risk Lessons Learned can be entered in OPAs. Project Risk Management OPAs updates Examples: 16 48 OPAs updates Examples: 4) Data on actual costs and durations can be added to organizations database. 5) Final versions of risk register and risk management plan templates are included. Project Risk Management Risk database( a useful repository ) RISK REPOSITORY RISK DATA Assists risk management 16 49 RISK DATA COLLECTED, MAINTAINED, And ANALYSED RISK MANAGEMENT PROCESSES USED IN Assists risk management throughout the organization Over time, builds basis of A RISK LESSONS LEARNED PROGRAM ITS USE Project Risk Management Updates to risk identification checklist 16 50 1 2 3 4 5 6 7 8 9 Updated checklist ORIGINAL CHECKLIST 1. 2. 3. 4. 5. UPDATED BY EXPERIENCE WILL HELP RISK MANAGEMENT OF FUTURE PROJECTS Project Risk Management PM Plan updates When approved changes impact risk management processes, corresponding component documents of PM 16 51 processes, corresponding component documents of PM Plan are revised and reissued to reflect those changes. Project document updates - Assumptions log updates - Technical documentation updates Project Procurement Management ADMINSTER 16 52 ADMINSTER PROCUREMENTS Project Procurement Management Administer Procurements You have selected the seller 16 53 You have selected the seller who begins work as per contract. Now what is your prime responsibility from buyers side? Project Procurement Management Administer Procurements 16 54 Ensure that sellers performance meets contractual requirements Manage interfaces among various providers if you are procuring multiple products and services Be absolutely clear of the legal implications of the actions taken while administering the contract Project Procurement Management Administer Procurements 16 55 But how do you ensure that sellers performance meets your projects requirements? Well, you apply suitable project management processes and integrate outputs of these processes into overall management of the project! Project Procurement Management Administer Procurements 16 56 But how do you ensure that sellers performance meets your projects requirements? You also integrate and coordinate at many levels if your project involves many sellers and many products from them Project Procurement Management Sample: Application of project management processes to Administer Procurements process Contract administration PM Process used 16 57 Contract administration PM Process used Authorizing contractors work at appropriate time Project plan execution Monitoring contractors technical performance, schedule, and cost Performance reporting Inspecting and verifying the adequacy of contractors product Quality control Ensuring that changes are properly approved , and this information is distributed to the concerned stakeholders Change control Project Procurement Management Financial aspect Administer Procurements 16 58 Financial aspect Seller progress has direct linkage with seller payment as duly defined in the contract. Please remember this while administering the contract and Verifying sellers work! Otherwise, difference of opinion between you and the seller will give rise to claims, disputes, and appeals. Administer Procurements process overview Procurement INPUTS TOOLS & TECHNIQUES OUTPUTS Project Procurement Management 16 59 Procurement documents Project Management Plan Contract Performance reports Approved change requests Work Performance information Contract Change Control System Procurement Performance reviews Inspections & audits Performance reporting Payment Systems Claims administration Records management system Procurement documentation Change requests OPAs updates PM Plan updates Project Procurement Management Procurement documents provide complete supporting records for administration of procurement process and includes procurement Administer Procurements process INPUTS 16 60 of procurement process and includes procurement contract awards and SOW. Procurement management plan Guides us on how to administer the contract. We have discussed it already. Project Procurement Management Contract Is the main input. We have discussed it already. Administer Procurements process 16 61 discussed it already. Performance reports - Seller-developed technical documentation and other deliverables information given as per contract terms and conditions - Seller performance reports about scope, time, cost, and quality. process INPUTS Project Procurement Management Approved change requests INCLUDE approved modifications to contract terms and conditions Administer Procurements process 16 62 to contract terms and conditions (including SOW, Pricing, Product description of products, services, or results to be provided by contractor) All changes are formally recorded and approved before implementation! Verbally discussed or unrecorded changes MUST NOT be processed or allowed for implementation! process INPUTS Project Procurement Management Work performance information As contractor begins performing the Administer Procurements process 16 63 As contractor begins performing the work, we start getting the outcomes: 1) Which deliverables have been accomplished, which ones left. 2) Extent to which quality standards have been met. 3) What costs have been incurred or committed 4) Whether schedule has been met, etc Seller should give timely invoices as per contract. process INPUTS Project Procurement Management Seller invoices Yes, when seller is doing work, the Administer Procurements process 16 64 Yes, when seller is doing work, the invoices for the completed work, or as per the terms of the contract also come and serve as important inputs to contract administration. These invoices are accompanied by all supporting documents to help you approve payment. process INPUTS Project Procurement Management Contract change control system Administer Procurements 16 65 system Procedure for modifying the contract. Consists paper work, tracking system, dispute resolution procedures, approval levels necessary for authorizing changes. CAUTION: PLEASE DONT FORGET TO INTEGRATE THE CONTRACT CHANGE CONTROL SYSTEM WITH THE INTEGRATED CHANGE CONTROL SYSTEM!!! Procurements process Tools & Techniques Project Procurement Management Procurement performance reviews Consists Administer Procurements 16 66 Consists Sellers progress to deliver scope and quality, within cost and on schedule, compared to what is mentioned in contract! Includes review of seller documentation and inspections by buyer! Quality audits during work execution process Tools & Techniques Project Procurement Management Procurement performance reviews Administer Procurements 16 67 reviews Whats the objective? Answer: To identify performance successes or failures, To judge Sellers progress as compared to CSOW, Find contract non-compliance to quantify sellers demonstrated ability/inability to do work. Procurements process Tools & Techniques Project Procurement Management TOOLS & TECHNIQUES Contract Change Control System Inspection and audits Required by buyer, supported by seller 16 68 Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration Records management system seller (as mentioned in contract) To identify any weaknesses in sellers work processes or deliverables during execution. May include buyers procurement personnel if authorized by contract. Project Procurement Management TOOLS & TECHNIQUES Contract Change Control System Performance reporting How effectively seller is achieving contractual objectives! 16 69 Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration Records management system contractual objectives! You should not forget to integrate it into Performance Reporting Process of your project (buyer side). Payment system Buyer accounts payable system handles payments to the seller. On large projects, you can have your own payment system. Project Procurement Management TOOLS & TECHNIQUES Contract Change Control System Payment system The project management team reviews and approves payment and then the 16 70 Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration Records management system and approves payment and then the payment is made in accordance with the the contract terms. Claims administration Claims are those contested and constructive change requests for which buyer refuses to compensate or does not agree that change has happened. Claims are also called disputes and appeals. Project Procurement Management Claims administration Claims are recorded, processed, and managed throughout contract life cycle TOOLS & TECHNIQUES Contract Change Control System 16 71 managed throughout contract life cycle as per clauses of the contract. If parties are not able to resolve, it has to be then resolved as per Dispute Resolution Procedures mentioned in the contract, like: 1) Arbitration 2) Litigation It can happen before or after the contract closure! Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration Records management system Project Procurement Management TOOLS & TECHNIQUES Contract Change Control System Records management system A set of processes to manage contract documentation and records (S/W, PMIS). PURPOSE? Helps maintain an index of 16 72 Control System Procurement Performance reviews Inspections & audits Performance reporting Payment System Claims administration Records management system PURPOSE? Helps maintain an index of contract documents/correspondence. Helps their retrieval and archival! Information Technology Enhances efficiency and effectiveness of contract administration by automating portions of: records management system, payment system, claims administration, performance reporting, and exchange of data between parties! Project Procurement Management Procurement documentation INCLUDES: Contract itself with supporting schedules Approved contract change requests Outputs 16 73 Approved contract change requests Unapproved contract change requests Seller-developed technical documentation Other work performance information like Deliverables Seller performance reports Warranties Financial documents (invoices, payment records) Results of inspections Project Procurement Management Change Requests CONTRACT ADMINSTRATION MAY LEAD TO REQUESTED CHANGES TO PM PLAN, ITS COMPONENTS, LIKE Outputs 16 74 PLAN, ITS COMPONENTS, LIKE PROJECT SCHEDULE. ICC reviews before their approval. Examples: Can include directions from buyer, Actions taken by seller But the other party must deem it to be a beneficial change to the contract. Such constructive changes, if disputed, become claims! Project Procurement Management OPAs updates 1) Seller performance evaluation Outputs 16 75 1) Seller performance evaluation documentation 2) Payment schedules & payments 3) Correspondence Project Procurement Management OPAs updates Seller performance evaluation documentation records sellers Outputs 16 76 documentation records sellers ability to continue to perform work on the contract. Helps decide if seller should be given work on future projects and be included in qualified sellers list for future. These documents also help decide contract termination, penalties, fees, or incentives! Project Procurement Management OPAs updates Payment schedules and requests are received and disposed by Outputs 16 77 are received and disposed by buyers Accounts Payable System (assuming it is external to project). OPAs updates Correspondence is written record of buyer-seller communication, mainly: 1) warnings of unsatisfactory performance, requests for changes, or clarifications. Project Procurement Management OPAs updates Correspondence is written record of buyer-seller communication, mainly: Outputs 16 78 buyer-seller communication, mainly: 2) can include reported results of buyer inspections and audits that show weaknesses seller needs to correct. 3) A complete and accurate record of all written and oral communications and actions taken and decisions made. Project Procurement Management PM Plan updates Procurement management plan is updated to reflect approved change Outputs 16 79 updated to reflect approved change requests that impact it and so require its revision. Baseline schedule If there are slippages that impact overall project performance, the baseline schedule may require to be updated to show current expectations! CLOSING Closing Process Group 16 80 CLOSING PROCESSES Closing Process Group POSITION IN PROJECT MANAGEMENT LIFE CYCLE PLANNING INITIATING 16 81 CONTROLLING & MONITORING PROCESSES CLOSING PROCESSES EXECUTING PROCESSES PLANNING PROCESSES INITIATING PROCESSES Closing Process Group Process Groups Interactions (partial) Executing Process Group Organizational Process Assets 16 82 Closing Process Group M & C Process Group Customer Final product, Service, result Administrative closure procedure Contract closure procedure Approved change requests Rejected change requests Approved corrective actions/ preventive actions Approved defect repair PM Plan Updates Scope statement updates Recommended corrective actions Recommended preventive actions Recommended defect repair Forecasts Validated defect repair Approved deliverables Organizational process updates Closing Process Group THE CONCEPT Projects are have a definite beginning and a definite end. 16 83 definite end. The end is reached 1. When objectives are accomplished 2. When it is concluded that objectives will not be / cant be achieved 3. When the need for the project no longer exists, or 4. The project is terminated before completion ( for various reasons ) Closing Process Group THE CONCEPT During closing, it is the project manager who ensures that all project-related work has been completed and formally closed out by a specific 16 84 completed and formally closed out by a specific date. It is his / her responsibility to put an end to the project (sometimes through requirement when there is no follow-up project)! By the time the end-item has been delivered and installed, many people in the project will have lost the enthusiasm and be anxious to move on to another project. Closing Process Group THE CONCEPT As a result, the project closeout gets little attention as managers shift their emphasis to 16 85 attention as managers shift their emphasis to upcoming projects OR scan the environments FOR LEADS about potential projects. YET, CLOSING A PROJECT PROPERLY IS NO LESS IMPORTANT THAN ANY OTHER PROJECT ACTIVITY! The process of project closeout is so critical that it can determine whether ULITIMATELY project was A SUCCCESS OR FAILURE. Closing Process Group THE CONCEPT UNLESS formally closed, the projects have a tendency to drag on: 16 86 tendency to drag on: Sometimes unintentionally from neglect or insufficient resources Sometimes intentionally for lack of follow-up work Workers stay on project payroll for months after their obligations have been met, which can turn an otherwise successful project into financial failure Closing Process Group THE CONCEPT As long as the project has not been officially closed, work orders remain open and labor 16 87 closed, work orders remain open and labor charges continue to incur. The seeds of successful closeout are sown early in the project: Since closure requires customer acceptance, the Criterion of Acceptance SHOULD BE CLEARLY DEFINED, AGREED UPON, and DOCUMENTED at the beginning of the project. Closing Process Group THE CONCEPT Any subsequent changes to criteria (made during the project) must be approved both by 16 88 during the project) must be approved both by contractor and customer. Throughout all phases of the project, the project manager must emphasize achievement of customers acceptance criteria! Closing Process Group THE CONCEPT The Closing Process Group consists of THE PROCESSES USED TO FORMALLY 16 89 1) THE PROCESSES USED TO FORMALLY TERMINATE ALL ACTIVITIES OF THE PROJECT OR A PHASE 2) HAND OFF THE COMPLETED PRODUCT TO OTHERS, OR 3) CLOSE A CANCELLED PROJECT Closing Process Group THE CONCEPT The Closing Process Group (when completed) verifies 16 90 verifies 1) THAT THE DEFINED PROCESSES ARE COMPLETED WITHIN ALL PROCESS GROUPS TO CLOSE THE PROJECT OR A PHASE! 2) FORMALLY ESTABLISHES THAT THE PROJECT OR PHASE IS FINISHED! Closing Process Group THE CONCEPT The Closing Process Group processes Close Procurements CLOSE PROJECT or phase 16 91 1) COMPLETION AND SETTLEMENT OF THE CONTRACT, 2) RESOLUTION OF OPEN ITEMS IF ANY 1) GENERATING, GATHERING, AND DISSEMINATING INFORMATION TO FORMALIZE PROJECT OR PHASE COMPLETION 2) EVALUATING THE PROJECT 3) COMPILING LESSONS LEARNED FOR USE IN FUTURE PROJECTS OR PHASES Close Procurements CLOSE PROJECT or phase Project Procurement Management CLOSE 16 92 CLOSE PROCUREMENTS Project Procurement Management CLOSE PROCUREMENTS SUPPORTS the administrative closure of the project, 16 93 SUPPORTS the administrative closure of the project, as it involves verification that all work and deliverables were acceptable (contracted work being part of the total Project) ENTAILS administrative activities: 1) Updating of records to reflect final results 2) Archiving this information for future use Project Procurement Management ADDRESSES each contract applicable to the project CLOSE PROCUREMENTS 16 94 ADDRESSES each contract applicable to the project or its phase In multi-phase projects, the term of a contract may only be relevant to a concerned phase then this process closes the contract(s) relevant to the phase CONTRACT terms and conditions can mention: Specific Procedure for contract closure Project Procurement Management EARLY TERMINATION of a contract is a special CLOSE PROCUREMENTS 16 95 EARLY TERMINATION of a contract is a special case of contract closure that may happen from: 1) A mutual agreement between the parties 2) Default of one of the parties Each contract contains Termination Clause (in case early termination) detailing the rights and responsibilities of the parties Project Procurement Management TERMINATION CLAUSE may give buyer the right to CLOSE PROCUREMENTS 16 96 TERMINATION CLAUSE may give buyer the right to terminate entire contract or its portion for Cause or Convenience at any time! BUT, the buyer may have to compensate the seller for: 1) Sellers preparations, and 2) Any completed and accepted work UNRESOLVED CLAIMS LEAD TO LITIGATION AFTER CONTRACT CLOSURE! Project Procurement Management PROVIDES value to the performing organization and CLOSE PROCUREMENTS 16 97 PROVIDES value to the performing organization and the customer and must not be ignored under any Circumstances ALL CONTRACTS must be closed out no matter the circumstances under which they come to an end: 1) Whether completed, or 2) Terminated Project Procurement Management CLOSE PROCUREMENTS 16 98 UPDATING RECORDS To reflect final results To archive it for future use Contract performance Financial closure Contract file PRODUCT VERIFICATION ADMINISTRATIVE CLOSURE Was the work completed Correctly and Satisfactorily? Was the product of the project same as what was requested? Does it meet the needs? Close Procurements process overview INPUTS TOOLS & TECHNIQUES OUTPUTS Project Procurement Management 16 99 Procurement management plan Procurement documentation INPUTS TECHNIQUES Procurement Audits Negotiated settlement Records management system OUTPUTS Closed Procurements OPAs updates Close Procurements Project Procurement Management Project management plan Procurement INPUTS 17 00 Project management plan Provides directions for closing procurements! Procurement management plan Procurement documentation Project Procurement Management Procurement documentation Consists 1. Contract INPUTS Close Procurements 17 01 1. Contract 2. Supporting schedules 3. Requested and approved contract changes 4. Seller-developed technical documentation 5. Seller performance reports 6. Financial documents ( invoices, payment records ) 7. Inspection reports concerning the contract Contract terms may define procedure for contract closure and then such procedure has to be followed Procurement management plan Procurement documentation INPUTS Project Procurement Management Procurement audits STRUCTURED REVIEW Of N O T TOOLS & TECHNIQUES 17 02 Of the entire procurement process from procurement planning through contract administration LESSONS LEARNED Identify success and failures that GUIDE US on other procurement items or to other projects within the performing organization OBJECTIVE T A U D I T O F C O S T S Procurement Audits Negotiated settlement Records management system Project Procurement Management Procurement audits OTHER SPECIAL ACTIVITES: TOOLS & TECHNIQUES 17 03 1) Arranging for storage of contract records and drawings 2) Creating and delivering legal documents (release of lien documents and formal acceptance letters) 3) Return of property used on the contract to its owner Procurement Audits Negotiated settlement Records management system Project Procurement Management Negotiated Settlements 17 04 The final equitable settlement of all outstanding issues, claims, and disputes by negotiation! Any matter that can not be settled through direct negotiation may be resolved by Alternative Dispute Resolution (ADR), including mediation or arbitration. Lastly, court of law 9although least desirable option). Project Procurement Management Records management TOOLS & TECHNIQUES 17 05 Records management system We have discussed it already. Procurement Audits Negotiated settlement Records management system Project Procurement Management Closed Procurements Buyer (through authorized contract Close Procurements OUTPUTS 17 06 Buyer (through authorized contract administrator) gives Formal Written notice to seller that the contract has been completed. Requirements for contract closure are defined in the contract terms and conditions and also included in the contract management plan. Closed Procurements OPAs updates Project Procurement Management OPAs updates 1) Contract file Close Procurements OUTPUTS 17 07 1) Contract file IS THE COMPLETE SET of indexed records including closed contract, and it IS MERGED with the final project records. Closed Procurements OPAs updates Project Procurement Management OPAs updates 2) Deliverable acceptance Written formal notice from buyer to Contract Closure OUTPUTS 17 08 Written formal notice from buyer to seller about deliverables accepted or not accepted as per contract terms. 3) Lessons learned documentation Lessons learned analysis and process improvement recommendations for future procurement management. Closed Contracts OPAs updates Project Integration Management 17 09 ADMINISTRATIVE CLOSURE ADMINISTRATIVE CLOSURE CLOSE PROJECT or Phase Project Integration Management Close Project or Phase Process 17 10 Performing Close Project portion Of the project management plan! Project Integration Management Close Project or Phase Process 17 11 For what? Finalizing all activities completed across all PM Process Groups to Formally close the project or phase And transfer the completed project (or cancelled one) as appropriate. Project Integration Management Close Project or Phase Process How do we do it? 17 12 How do we do it? 1) Establish procedures to coordinate activities needed to verify and document the project deliverables 2) Coordinate and interact to formalize acceptance of those deliverables by customer/sponsor 3) Investigate and document reasons for actions taken if a project is terminated before completion Project Integration Management Close Project Process How do we do it? 17 13 How do we do it? We develop TWO PROCESSES for this purpose: Administrative closure procedure Close procurements procedure Project Integration Management Close Project or Phase Process How do we do it? 17 14 How do we do it? Administrative closure procedure details - all activities - interactions, and - related roles and responsibilities of the project management team involved in this process Project Integration Management Close Project or Phase Process How do we do it? 17 15 How do we do it? Administrative closure procedure also includes all activities needed to - collect project records - analyze project success or failure - gather lessons learned, and - archive project information for future use Project Integration Management Close Project or Phase Process How do we do it? 17 16 How do we do it? Close procurement procedure includes all activities and interactions needed to - settle and close any contract done for the project - define those related supporting activities the formal administrative closure of the project Project Integration Management Close Project or Phase Process How do we do it? 17 17 How do we do it? Close procurements procedure involves both PRODUCT VERIFICATION - all work completed correctly and satisfactorily ADMINSTRATIVE CLOSURE - updating contract records to reflect final results and archiving for future use Project Integration Management Close Project or Phase Process Please remember! 17 18 Please remember! Early termination of the contract is a special case of Close procurements May involve: 1) Inability to deliver the product 2) A budget overrun 3) Lack of required resources Project Integration Management Close Project or Phase process overview INPUTS TOOLS & OUTPUTS 17 19 Project Management Plan Organizational process assets Accepted Deliverables INPUTS TOOLS & TECHNIQUES Expert Judgment OUTPUTS Final product, service or result transition Organizational process assets (UPDATES) Project Integration Management Close Project process inputs INPUTS Project management 17 20 Project Management Plan Organizational process assets Accepted Deliverables INPUTS Project management plan We have already discussed about it. We take it as an important input here. Project Integration Management Close Project or Phase process inputs OPAs provides INPUTS 17 21 Project or phase closure guidelines or requirements (project audits, project evaluations, and transitions criteria). Historical information and lessons learned guides proper closure. Project Management Plan Organizational process assets Accepted Deliverables INPUTS Project Integration Management Close Project or Phase process inputs Accepted Deliverables INPUTS 17 22 Accepted Deliverables Refers to transition of final product (or case of phase closure, then intermediate product). Project Management Plan Organizational process assets Accepted Deliverables INPUTS Project Integration Management Close Project process tools & techniques TOOLS & Expert Judgment 17 23 TOOLS & TECHNIQUES Expert Judgment Expert Judgment Applied in developing and performing Used to both the administrative closure procedures. Project Integration Management Administrative closure: Three most important things! Actions and activities to define the stakeholder Approval 17 24 Actions and activities to define the stakeholder Approval Requirements for changes and all levels of deliverables Actions and activities that are necessary to confirm this, Verify that all deliverables have been PROVIDED AND ACCEPTED, and validate that completion and exit criteria are met Actions and activities necessary to satisfy Completion or Exit criteria for the project Project Integration Management Close Project process outputs OUTPUTS Final product, service, or 17 25 OUTPUTS Final product, service or result Organizational process assets (UPDATES) Final product, service, or result Formal acceptance and handover of the product, service, or result that the project was authorized to produce. Receipt of a statement that the terms and conditions of the contract have been met! Project Integration Management Close Project process outputs OUTPUTS OPAs updates 17 26 OUTPUTS Final product, service or result Organizational process assets (UPDATES) OPAs updates Development of the index and location of project documentation (using the configuration management system) Formal acceptance documentation Project files Project closure documentation Historical information Project Integration Management Close Project process outputs OUTPUTS OPAs updates 17 27 OUTPUTS Final product, service or result Organizational process assets (UPDATES) OPAs updates formal acceptance documentation Formal confirmation from customer or sponsor that customer requirements and specifications have been met. Indicates official acceptance. Project Integration Management Close Project process outputs OUTPUTS Organizational process 17 28 OUTPUTS Final product, service or result Organizational process assets (UPDATES) Organizational process assets updates project files Documents resulting from project management : Project management plan, scope, schedule, cost and quality baselines, project calendars, risk registers, planned risk response actions, and risk impact. Project Integration Management Close Project process outputs OUTPUTS Organizational process 17 29 OUTPUTS Final product, service or result Organizational process assets (UPDATES) Organizational process assets updates project closure documents Documents indicating completion of project and transfer of completed deliverables to others(operations). Project Integration Management Close Project process outputs OUTPUTS Organizational process 17 30 OUTPUTS Final product, service or result Organizational process assets (UPDATES) Organizational process assets updates historical information Historical information and lessons learned information are transferred to the LESSONS LEARNED KNOWLEDGE BASE for future use! Professional Responsibility AS PROJECT MANAGEMENT PROFESSIONAL We should 17 31 1. ENSURE INTEGRITY 2. CONTRIBUTE TO KNOWLEDGEBASE 3. APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE 4. BALANCE STAKEHOLDER INTERESTS 5. RESPECT DIVERSITY Professional Responsibility AS PROJECT MANAGEMENT PROFESSIONAL We should 17 32 Uphold and Support the integrity and ethics of the profession Professional Responsibility AS PROJECT MANAGEMENT PROFESSIONAL OUR ACTIONS must always be 17 33 In line with Legal requirements and Ethical standards Professional Responsibility AS PROJECT MANAGEMENT PROFESSIONAL We must always 17 34 Uphold the needs of the Project Stakeholders and the part of the Society impacted by our projects Professional Responsibility ENSURE INTEGRITY Of 17 35 The Project Management Process The Projects Product Your own Personal Conduct Professional Responsibility ENSURE INTEGRITY Of 17 36 The Project Management Process Follow the right process You must have a charter You must have a WBS Project manager must have clear and adequate authority You should not compromise on applying all the concepts, tools and techniques we have been discussing about during this course Professional Responsibility ENSURE INTEGRITY Of 17 37 The Projects Product A product that has integrity is the one that is complete and sound, or fit for use. The correct application of project management processes will ensure it. Professional Responsibility ENSURE INTEGRITY Of 17 38 Your own Personal Conduct Do not put personal gain over the needs of the project Tell the truth in reports, conversations and other communications Follow copyright and other laws Do not divulge company data to unauthorized parties Value and protect intellectual property Professional Responsibility ENSURE INTEGRITY Of 17 39 Your own Personal Conduct Prevent conflicts of interest or appearance of conflicts of interest and deal with them as they happen Do not give or take inappropriate gifts, favors, or bribes Report violations of regulations, laws, ethics, policies, etc. Do the right thing and follow the right process Professional Responsibility CONTRIBUTE TO KNOWLEDGE BASE Share lessons learned from the project with others 17 40 Share lessons learned from the project with others Write articles about project management Support education of other project managers and stakeholders about project management. Coach/mentor other project managers. Professional Responsibility CONTRIBUTE TO KNOWLEDGE BASE Perform research on projects done within your 17 41 organization for the purpose of calculating performance metrics. Perform research to discover best practices for use of project management and share the findings with other. Professional Responsibility APPLY PROFESSIONAL KNOWLEDGE / ENHANCE, INDIVIDUAL COMPETENCE 17 42 Professional knowledge means knowledge of project management practices and the technical knowledge needed to complete the project (specific to the application area). Train others to use correct techniques. Inform stakeholders of correct processes. Professional Responsibility APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE Constantly look for new information and practices 17 43 that will help the organization or its projects. Continue to learn about the industry where you work. Stick to the right processes throughout the project. Enhance individual competence by increasing and applying professional knowledge to improve services Professional Responsibility APPLY PROFESSIONAL KNOWLEDGE / ENHANCE INDIVIDUAL COMPETENCE 17 44 Work to understand your personal strengths and weaknesses. Continue to learn. Plan your own professional development. Professional Responsibility BALANCE STAKEHOLDER INTERESTS Determine and understand the needs and objectives of all stakeholders. 17 45 all stakeholders. Actively look for competing or conflicting needs and interests. Get the team and stakeholders. Involved as appropriate and get management involved when team can not resolve conflicting objectives. Determine options for fair resolution of conflict. Professional Responsibility RESPECT DIVERSITY Understand cultural differences 17 46 Understand cultural differences Uncover communication preferences when identifying stakeholders Prevent cultural shock by training and advance research Professional Responsibility RESPECT DIVERSITY Uncover and respect different work ethics and practices 17 47 Uncover and respect different work ethics and practices of the team members Provide training to team members from different cultural backgrounds to help them understand each other Follow the practices in other countries as long as they do not violate laws THE PROJECT MANAGEMENT WE WISH YOU ALL SUCCESS! 17 48 WE WISH YOU ALL SUCCESS! AND HOPE YOU WILL ACHIEVE HIGHER LANDMARKS! THE PROJECT MANAGEMENT 17 49 THANK YOU!