OPMA 407 Final

Project Life Cycle

Project formation Project buildup Main program Project phase-out Conceptualization Planning Execution Termination

How does the discounted cash flow method answer some of the criticisms of the payback period and average rate of return methods?

1) A payback-type model ignores cash flows beyond the payback period. Discounted cash flow method does not ignore cash flows beyond the payback period. 2) The payback-type model and rate of return model do not include discounting, ignores the timing of the cash flows and time-value of money. The discounted cash flow method is a model that includes discounting and does not ignore the timing of the cash flows and the time-value of money.

Name the categories of skills that should be considered in the selection of a project manager.

1) A project manager should have the emotional maturity to deal with others in a tenacious but politically sensitive manner. 2) A project manager should have both administrative and technical credibility in the eyes of key project stakeholders. 3) The project manager should have the broader vision and imagination expected of a leader while also possessing the ability to correctly execute duties (manage) that require him/her to integrate and coordinate multiple resources. 4) Most important of all, the project manager should have the ability to get the job done without destroying the performing organization and/or its relationships with important stakeholders.

Identify the four reasons for project termination.

1) A project organization is not required. 2) Insufficient support from senior management. 3) Naming the wrong person as project manager. 4) Poor planning.

When might a firm choose to crash a project? What factors must be considered in making this decision?

1) Delay in predecessor activities requires compression in successors to maintain the project schedule. 2) A risk event can be mitigated or avoided by crashing. For example, hurrying a project to completion in order to avoid a hurricane. 3) Resources need to be freed up sooner to allow taking on a new and more profitable project. 4) The customer may provide financial incentives for completing the project sooner than originally planned. 5) Early project completion may be critical for political or economic reasons. The repair of the LA freeway system is an example of this situation. The bottom line to a business is that crashing has to make economic sense. The benefit must outweigh the added cost.

What are the three main requirements of project negotiation?

1) Do not cause irreparable harm to the project's objectives. 2) Methods must support honesty among the parties in negotiation. 3) Solutions must satisfy the needs of stakeholders represented by the negotiators.

What are the primary duties of a termination manager?

1) Ensure completion of the approved scope of work. 2) Gain formal acceptance of the project's outcome by the client. 3) Prepare the final project report based on an evaluation of the project. 4) Complete the contractual administration of the project to include closing out final invoices and rendering payments as appropriate. 5) Redistribute project resources as appropriate. 6) Conduct legal reviews as necessary and file for patents as appropriate. Take actions to protect intellectual property, once the project has been terminated. 7) Create the project's archive and ensure that it is properly stored. 8) Establish requirements and support procedures for the project's products as appropriate and necessary. 9) Close the project's books.

What should be accomplished at the initial coordination meeting?

1) Establish the technical scope for the project. 2) Participants accept responsibility for specific areas of performance. 3) Establish tentative, high-level schedules and budgets. 4) Create a risk management group for the project.

List and briefly describe the ways projects may be terminated.

1) Extinction: All activity of substance stops even though some organizational activities may continue. The project is stopped because: a) It has achieved its goals b) It has failed or been superseded c) It has been "murdered." 2) Addition: The project is institutionalized as a formal part of the parent organization. 3) Integration: The project is segmented and distributed among existing elements in the parent organization. 4) Starvation: Budget decrements terminate the project's progress.

What are some of the essential characteristics of effective project team members?

1) High-quality technical skills 2) Political, and general, sensitivity 3) Strong problem orientation 4) Strong goal orientation 5) High self-esteem

Give some examples of ancillary project objectives.

1) Improve understanding of the ways in which projects may be of value to the organization 2) Improve the processes for organizing and managing projects, better known as the firm's project management "maturity" 3) Provide information and experience for entering new markets 4) Provide a congenial environment in which project team members can work creatively together 5) Identify organizational strengths and weaknesses in project-related personnel, general management, and decision-making techniques and systems 6) Identify and improve the response to risk factors in the firm's use of projects 7) Allow access to project policy decision making by external stakeholders 8) Improve the way projects contribute to the professional growth of project team members 9) Identify project personnel who have high potential for managerial leadership

What items should be included in the audit status -report?

1) Introduction: Describes the project. Delineates the project's objectives. 2) Current Project Status: Includes measures of performance for cost, schedule, progress, and quality. 3) Future Project Status: Recommends changes in technical approach, schedule, or budget for the remaining tasks as appropriate for work that is presently underway. 4) Critical Management Issues: Identifies items for senior management's attention in relationship to the attainment of project objectives. Provides a brief discussion of trade-offs in time/cost/performance. 5) Risk Management: Reviews the major risks in the project and their potential impact on cost/time/performance. 6) Caveats, Limitations, and Assumptions: The auditor states any limitations on the accuracy or validity of the audit report.

What occurs in each stage of the audit life cycle?

1) Project Audit Initiation: Start the audit process. Define the audit's purpose and scope. Gather data to determine the proper audit methodology. 2) Project Baseline Definition: Identify the performance areas to be evaluated. Establish performance standards for evaluating the project's performance and accomplishments. Develop a program to measure and assemble the required data. 3) Project Audit Database: Create a database for use by the audit team. 4) Preliminary Analysis of the Project: Analyze the data. Brief the project manager on findings of the audit. Then present the analysis to managers in a way that communicates the audit's findings. 5) Audit Report Preparation: Prepare the audit report. Gain support for recommendations prior to publishing the report, or modify the recommendations until supported by key stakeholders. 6) Project Audit Termination: Review the audit process. Formally disband the audit team upon completion of the audit review.

In preparing a budget, what indirect costs should be considered?

1) Sales, general, and administrative expenses (SG&A) 2) Contract penalties 3) Contingency allowances 4) Waste and reduction to fair market value (defects, spoilage, and obsolescence) 5) Turnover costs (replacement and training of personnel)

Describe the four points of principled negotiation.

1) Separate people from the problem. 2) Focus on interests rather than on positions. 3) Invent options for mutual gain. 4) Use objective criteria to settle disputes.

Discuss each of the four fundamental issues for potential conflict during the project formation stage.

1) Technical objectives must be sufficiently detailed to enable the detailed planning required during the build-up phase of the project. Initially, the conflict at this stage is that the various parties simply don't understand the objectives of each other. The objectives can be difficult to state, and some of them may be hidden or assumed. The first goal is to get all the objectives out in the open and clearly understand them. Then the real conflict resolution can start as the differences in the goals are resolved. 2) Resources must be committed to execute the project. This is the first conflict the PM deals with during the life of the project: identifying, obtaining and retaining the needed resources. In my experience, this particular conflict is less evident at this stage because it's easy to make promises that are later hard to keep. 3) The project's priority should be established. This conflict is related to how decisions about resource conflicts are made. Again, at this early stage many assurances will be given that often don't pan out in fact. 4) Selecting the project organizational structure must be done as well. The proper structure helps to align with the goals of the project as well as provide the proper management infrastructure within which to operate the project.

Identify the key factors that need to be considered when setting up a monitoring system.

1) The characteristics of scope, cost, and time that should be controlled by the project team. 2) The need to focus on output rather than activity when creating measures for the dimensions of project success. A project should seek to get the job done; it should not seek to sustain project-related activity. 3) The need to minimize the use of resource consumption as a measure of outputs. 4) The appropriate level of precision required of monitoring measures. 5) The stakeholders who require monitoring data and the formats needed to deliver timely, relevant, and consistent information that can be accurately used to support project objectives.

List some of the pitfalls in cost estimating. What steps can a manager take to correct cost overruns?

1) Uncertainty 2) Assumptions 3) Learning Curves 4) Bad Data 5) Missing Scope

What should the postcontrol report include?

1. Project objectives 2. Milestones and budgets 3. Final project results 4. Recommendations for improvement

Identify the disadvantages of the matrix form of organization.

1. The functional division is the focus of decision-making power. 2. While the ability to balance time, cost, and scope between several projects is an advantage of matrix organizations, that ability has its dark side. The set of projects must be carefully monitored as a set, a tough job 3. For strong matrices, problems associated with shutting down a project are almost as severe as those in standalone project organizations 4. For the operating PM the division of authority and responsibility inherent in matrix management is complex. 5. The project team members are subject to conflict because they have two bosses; the functional manager and the project manager.

Identify the advantages of the matrix form of organization.

1. The project is a point of emphasis. 2. The project has access to technical experts and administrative support. 3. There is less anxiety about what happens when the project is completed than is typical of the standalone project organization. 4. Response to client needs is as rapid as in the standalone project case, and the matrix organization is just as flexible. 5. With matrix management, the project will have—or have access to—representatives from the administrative units of the parent firm. 6. Where there are several projects simultaneously under way, matrix organization allows a better companywide balance of resources to achieve the several different time/cost/scope targets of the individual projects. 7. Flexibility in precisely how the project is organized

What is a champion?

A champion is the person who takes up a cause and advocates its adoption throughout the organization. Usually, the champion sees a set of benefits linked to taking up the cause and is, therefore, motivated to see the vision realized by the organization.

Describe the approach of agile project management and how it differs from the normal approach.

APM is distinguished by close and continuing contact between clients (users) and staff working on the project, and an iterative and adaptive planning process. This approach is best suited for situations in which the scope of the project cannot be sufficiently determined in advance. The scope is progressively determined as the project progresses. It can be viewed as a flow process where work is performed for short "sprints" and then the project members gather to discuss the progress thus far and what work should be completed next. It differs from the traditional approach, where there is significant planning initially to define the entire project including all of the tasks to be completed.

What is the purpose of control? To what is it directed?

Control seeks to reduce the difference between a plan and reality. Control is focused on the areas of performance, time, and cost. The two fundamental objectives of control are: 1) The regulation of results through the alteration of activities. 2) The stewardship of organizational assets.

Describe the learning curve phenomenon.

In the basic learning curve, each time the number of repetitions for a task is doubled, a predictable percentage of improvement in productivity will be observed.

Define monitoring. Are there any additional activities that should be part of the monitoring function?

Monitoring is collecting, recording, and reporting information concerning all aspects of project performance that the project manager or others in the organization wish to know. Monitoring, as an activity, should be kept distinct from controlling (which uses the data supplied by monitoring to bring actual performance into approximate congruence with planned performance), as well as from evaluation (through which judgments are made about the quality and effectiveness of project performance).

Project Charter Elements

Purpose Objectives Overview Schedules Resources Stakeholders Personnel Risk Management Plans Evaluation Methods

Project Selection Criteria

Realism Capability Flexibility Ease of Use Cost Easy Computerization

Four parts of a technical proposal

Technical Approach Implementation Plan Plan for Logistic Support and Administration Past Experience

Characteristics of Projects

Unique One-time occurrence Finite duration

Five strategies to deal with conflict

o Competing o Avoiding o Accommodating o Collaborating o Compromising

How to Collect Data

o Frequency counts - How often an event occurs. o Raw numbers - Amount of something, like hours spent on a task. o Subjective numeric ratings - Subjective estimates often applied to quality measures. o Indicators - Indirect measures, such as transaction processing speed, being used to suggest customer satisfaction. o Verbal measures - Descriptions of characteristics like the morale of the team.

Five telltale signs of project trouble to monitor

o Muddy waters - a project plan that is unduly long or confusing in its goals, scope, deliverables, and processes o Mysterious stakeholders - incomplete documentation of all stakeholders o Unconstrained constraints - knowing how much leeway there is in your schedule and budget for each task, and where delays or cost overruns can be made up, keeps a project out of trouble o Suspicious status reports - status reports that are unclear, inconsistent, late, or lack specific measures o Discord and drama - unhappy team members

Nine Segments of the Project

• Concept evaluation • Requirements identification • Design • Implementation • Test • Integration • Validation • Customer test and evaluation • Operations and maintenance

Identify several resources that may need to be considered when scheduling projects.

• Machine time/capacity • Facility availability • Transportation

Seven Risk Management Processes

• Risk Management Planning • Risk Identification • Qualitative Risk Analysis • Quantitative Risk Analysis • Risk Response Planning • Risk Monitoring and Control • The Risk Management Register