Final - Project Management
Options for reducing project duration when resources are not constrained
ADOSE Adding Resources Do it twice - fast and then correctly Outsourcing project work Scheduling Overtime Establishing a core project team
Percent Complete Rule
How much did we get done on the activity.
Impact of reducing duration on Flexibility and Cost
If we crash a week the direct cost does go up, and the more we crash the less flexible the project because we lose slack on activities where we had slack.
Project Direct Costs
Normal Costs that can be assigned directly to a specific work package or project activity like Labor, materials, equipment, and subcontractors. Crashing activities increases direct costs.
Triple Constraints
On time - On Cost - and Performance (scope)
PERT vs CPM
PERT - Program Evaluation Review Technique • Uses 3 estimates for each activity • Optimistic is a 1 in 100 chance that something will occur • Pessimistic is a 1 in 100 chance that something will not occur • "Most likely Time Estimate" • Doing these 3 give us the Weighted Average • Knowing the Weighted Average and Variances for each activity allows the project planner to compute the probability of meeting different project durations. CPM - Critical Path Method • Uses 1 estimate of activity duration. It assumes we know the duration of an activity. • Usually using this when we have experience and know the duration.
Scope Creep
Production and performance requirements increase over the time it takes to complete the project
Options for reducing project duration with constrained resources
RIFCC Reducing Project Scope Improving Project Team Efficiency Fast-Tracking Critical-Chain - using resources - People, Equipment, Physical Space Compromise Quality
Earned Value
Uses the baseline which is the budgeted cost for the individual task. Then gives it a % complete so we can measure the progress and compare the plan to the actual. It tells us if we are staying within budget. It takes the % complete x the budgeted cost for the activity.
Best practices in outsourcing project work
WWFFCEL Well Defined Requirements and Procedures Well established conflict management in place Frequent Review and Status updates Fair and intensive-laden contracts Co-location when needed Extensive Training and Team Building Long Term Outsourcing Relationships
Risk Management
• An attempt to recognize and manage potential and unforeseen trouble spots that may occur when the project is implemented. We proactively plan for trouble. • What can go wrong? (Risk Event) • How to minimize the risk event's impact (consequences) • What can be done before an event occurs (anticipation) • What to do when an event occurs (contingency plans)
Crashing Problem Calculation
1. Calculate Cost Slope (Crash Cost - Normal Cost) divided by (Normal Time - Crash Time) 2. Find the Critical Path in the Network Diagram 3. Shorten/Crash One Activity and add the cost slope for that one unit to the total cost of the project. 4. See if there is a new critical path after each crash. If all are on the critical path it makes it hard for a Project Manager, because all of the activities have to be finished on time. **Sum of all Normal Costs is the cost of the project- Also called the Direct Cost. The indirect costs is given and may say something like $50 per week crashed. **Indirect cost goes down with each week crashed so we'd subtract $50. The total cost of the project is each activities direct cost + the indirect cost. So it is possible for crashing to lower the project cost, depending on how much Indirect costs are lowered. **The cost of the project will go up each week crashed but the total duration of the project will go down. **You want to crash the cheapest cost slope, but it has to be on the critical path **Normal Time - Crash Time is the maximum # of weeks (units) you can crash something. **Again, can't be shortened if it's not on the critical path or if there is no room for crashing **If there is more than one critical path - following the arrows. You have to choose 1 week from each way the critical path can go. Once you do just add their slope costs up and add it to direct cost like normal. If there is an indirect cost you drop it, but just once. **Choose the lowest total cost after testing out different crashing points.
The Risk Management Process
1. Risk Identification - Brainstorm and think of what could go wrong - analyze the risk create a past checklist of what's gone wrong in the past. 2. Risk Assessment - Risk with a likelihood of occurring keep up the process don't stop. • Make an assessment. • We are trying to narrow down the number of risk events to further continue the risk management process and start preparing for the major to moderate risks leaving off the low risks. • To do this though we have to create a scoring system or scale (ex. Very low to Very High impact to cost, time, scope, quality) 3. Risk Response Development - Mitigate, Avoid, Transfer, Accept - Contingency Plan 4. Risk Response Control - Taking Action - Initiate Contingency plan
Tracking Gantt vs Baseline Gantt
A Gantt Chart is a bar chart. They are easy to read and provide a clear overview of the project schedule and progress. Baseline Gantt Chart - Lists duration and Slack only. The critical path is the activities with no slack. Tracking Gantt Chart - Show Actual start and end date and how much has already been done. You can tell if an activity started and ended on time. It also adds a monitoring point. We can see if we are on time or not and go in to find how we got behind.
Fixed Price Contract vs Cost Plus Contract
A fixed-price contract would be for a project where the deliverable happens over and over again. It can be detailed but shouldn't be too complicated with several parts as it would leave more room for something to go wrong. For small less detailed repetitive projects. For a cost-plus contract, I would recommend a project that has a specific deadline to be finished. For cost-plus contracts, the recommendation would be for any project where the importance of the project is higher than the importance of the cost. For bigger more detailed high cost projects.
Performance indexes-CPI, SPI, PCIB, PCIC
All of these are looking at historical data. Data in the past. Forecasting will give you future metrics CPI - Cost Performance Index - Meausres the cost efficiency of work accomplished to date. CPI = EV/AC. SPI - Scheduling Performance Index - Measures scheduling efficiency to date. SPI = EV/PV ***If >1 CPI is under cost and SPI Ahead of Schedule. <1 CPI over cost and SPI Behind Schedule. PCI - Percent Complete Indexes - Indicate how much of the work accomplished represents of the total budgeted (BAC) and actual (AC) dollars to date. PCIB - Percent Complete Index Budgeted Costs. PCIB = EV/BAC PCIC - Percent Complete Index Actual Costs. PCIC = AC/EAC Management Reserve Index (MRI) MRI = CV/MR • Reflects the amount of Management Reserve that has been absorbed by cost over-runs • Is popular in the construction industry
Disadvantages to Outsourcing
CCSLP Coordination Breakdown - We need communication Conflict Security Issues Loss of Control - May not have the same culture or loyalties Political Hot potato
Cost Slope
Cost per unit of time to produce duration for an activity. Formula is Cost Slope (Crash Cost - Normal Cost) divided by (Normal Time - Crash Time) - This tells you how much it will cost to crash/shorten the activity by 1 unit (week or whatever)
Crashing Definition
Cost per unit of time to shorten an activity. The only way to shorten a project is to find and shorten/crash the critical path. - Crashing is used to shorten an activity. Cost Slope is the formula that tells you how much it will cost to shorten the activity.
Project Indirect Costs
Costs that can't be associated with any particular work package or project activity like supervision, administration, consultations, and interest. Crashing activities decreases indirect costs. However, the longer the project goes, the more indirect costs increase.
EACf vs EACre - Estimating Future project costs
EACf - Forecasting cost at completion Uses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable. Assumes whatever happened in the past for CPI will hold true in the future. If we were over budget for work packages then EACf assumes that we will be over budget in the future. o EACre - Allows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurate. This is typically done by experts. It's a revised estimate forecasted by expert consultants for larger projects.
CV, SV, VAC, EAC
EV - Earned Value - % complete of an activity times the activities original budget. So if budget is $5000 and we completed 50%. We've earned $2500. PV - Planned value - value of worked scheduled up to a point. AC - Actual Cost - Comes form Information System, it's usually given. Labor, materials, resources. CV - cost variance is EV - AC. If it's positive it's a good thing our earned value is more than what it costs to produce those items SV - Schedule Variance is EV-PV, it provides general info as to whether we are behind, on, or ahead of schedule. Negative is not good. BAC - Budgeted Cost at completion - Baseline cost (sum cost of all work packages) EAC - Estimated cost at completion - if we are over budget now we'll be over budget later ETC - Estimated cost to complete remaining work VAC - Cost variance at completion - positive good negative means we're over budget
Advantages to Outsourcing
FFCH Faster project completion Flexibility Cost Reduction High Level of Expertise
PMI Code of Ethics
RRHF Responsibility • As a project manager choose projects that won't harm the public. • Only choose project that you have experience for. Don't lie. • Uphold the laws and policies of your expertise. • Report unethical or illegal conduct. • Only file complaints when backed up by facts. Respect • Respect ourselves and others entrusted to us • Inform ourselves about other customs and norms. • Listen to others point of view • If there is conflict try and sort it out with the person directly first • Work in a professional manner • Don't misuse your power and negotiate in good faith Honesty • We seek to understand the truth • We are truthful in communication and conduct - Don't do false reporting • We make commitments and promises in good faith. Don't promise rewards to finish a project that you can't fulfill. • Don't engage in behavior that deceives others. • Do not engage in dishonest behavior with the intention of personal gain. Fairness • Have transparency in decision making • Equal Access and opportunities to qualified people • Don't discriminate based on race, sex, etc. • Report conflict of interests • Even if we do have conflict of interests just be sure we let the stakeholders know • Don't give into favoritism, nepotism or bribery
Steps in the Control Process
SMCT 1. Set a Baseline - You have to have time phased costs. - A baseline plan is the final plan. It's when activities should start, when they should end and when costs should occur over the life of the project. "It's called time-phased cost, so that's our baseline plan that's what we compare actual performance against" Time Phased/Baseline Budget - Expected Cost over time periods for the project. 2. Measuring progress and performance - % complete or individual activities 3. Comparing plan against actual - How well did we do 4. Taking action - To bring the project back on time (if it's a large difference)
