Managing Effective Projects

What is a Project?

A Project is an interrelated set of activities with a definite starting and en

ding point, which results in a unique outcome for a specific allocation of
resources

Goals
On time completion
Budget constraints
Customer satisfaction

Project management: A systemized, phased approach to defining, organ

izing, planning, monitoring, and controlling projects

Defining and Organizing Projects

Defining the Scope and Objectives

Selecting the Project Manager and Team

Recognizing the Organizational Structure

Planning Projects

Defining the Work Breakdown Structure (WBS)

Diagramming the Network

Developing the Schedule

Analyzing Cost-Time Trade-Offs

Assessing Risks

Work Breakdown Structure

Work Breakdown Structure (WBS): A statement of all the work that has t
o be completed
Activity: The smallest unit of work effort consuming both time and resou
rces that can be planned and controlled
Relocation of St. Johns Hospital
Organizing and Site Preparation

Level 0

Physical Facilities and Infrastructure

Select administration staf

Purchase and deliver equipment

Site selection and survey

Construct hospital

Select medical equipment

Develop information system

Prepare final construction plans

Install medical equipment

Bring utilities to site

Interview applicants for
nursing and support staf

Level 1

Level 2

Train nurses and support staf

Diagramming the Network

Establishing Precedence Relationships

Estimating Activity Times

Using the Activity-On-Node (AON) Approach (c.f. AOA approach) sel

f study 1

PERT/CPM (Program Evaluation and Review Technique/ Critical Path Met

hod)

Developing the Schedule

Critical Path is the sequence of activities between a start and finish that t
akes the longest time to complete self study 2

Project Schedule
Earliest Start (ES) and Earliest Finish (EF) Times
EF ES t
Latest Start (LS) and Latest Finish (LF) Times

LS LF t

Activity Slack is the maximum length of time that an activity can be delay
ed without delaying the entire project
Slack LS ES or Slack LF EF

Gantt Chart

Gantt Chart

Analyzing Cost-Time Trade-Offs

Project Crashing is to shorten (or expedite) some activities within a proje

ct to reduce overall project completion time

Project Costs
Direct Costs labor, raw materials
Indirect Costs
Penalty Costs if project is not able to be completed in time

Analyzing Cost-Time Trade-Offs

Cost-Time Relationships
Normal time (NT) is the time
necessary to complete an ac
tivity under normal conditio
ns
Normal cost (NC) is the activ
ity cost associated with the n
ormal time
Crash time (CT) is the shorte
st possible time to complete
an activity
Crash cost (CC) is the activit
y cost associated with the cr
ash time

Cost to crash per period

CC NC
NT CT
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Analyzing Cost-Time Trade-Offs

Determining the project schedule that minimize total project costs

self study 3
Step 1. Determine the projects critical path(s)
Step 2. Find the activity or activities on the critical path(s) with the lo
west cost of crashing per week
Step 3. Reduce the time for this activity until
It cannot be further reduced or
Another path becomes critical, or
The increase in direct costs exceeds the savings that result from s
hortening the project (which lowers indirect costs)
Step 4. Repeat this procedure until the increase in direct costs is larg
er than the savings generated by shortening the project

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Assessing Risks

Risk-Management Plans
Strategic Fit
Service/Product Attributes
Project Team Capability
Operations

Simulation

Statistical Analysis
Optimistic time (a)
Most likely time (m)
Pessimistic time (b)

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Statistical Analysis

Area under curve

between a and b is
99.74%

Mean
Time

Beta distribution

te

a 4m b
6

ba

m
Mean
Time

Normal distribution
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Statistical Analysis

Analyzing Probabilities (independent activities, CLT) self study 4

TE Expected activity t imes on the critical path Mean of normal distributi on

P2 Variances of activities on the critical path

z

T TE
P

Near-Critical Paths (or competing paths)

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Monitoring and Controlling Projects

Monitoring Project Status

Open Issues and Risks
Schedule Status

Monitoring Project Resources

Controlling Projects

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