Project management titus test 2

Planning horizon

Generally, the longer the project the more uncertainty, making accurate estimates more difficult than with shorter projects

responsibility

Have people familiar with the tasks make the estimate

template methods

If a project is similar to past projects, those costs can be used as a starting point (building, event)

Resource Demand Leveling Techniques for Time-Constrained Projects-Disadvantages

Loss of flexibility that occurs from reducing slack •Increases in the criticality of all activities

use of computers to develop networks

Many different kinds of applications available.

As the project progresses risk...

declines as questions are answered. However, the cost impact of a risk event increases.

successor activities

must be completed immediately after.

predecessor activities

must be completed immediately before.

RCF

referenceclass forecasting

the database

serves as feedback for estimates and as benchmarks for cost and time for each project.

risk register

the backbone of risk control

the project network

-A flow chart that graphically depicts the logical sequences, interdependencies, and start and finish times of the project activities along with the longest path(s) through the network —the critical path•Provides the basis for scheduling labor and equipment. •Enhances communication among project participants. •Provides an estimate of the project's duration. •Provides a basis for budgeting cash flow. •Identifies activities that are critical. •Highlights activities that are "critical" and should not be delayed. •Help managers get and stay on plan.

splitting

-A scheduling technique for creating a better project schedule and/or increase resource utilization •Involves interrupting work on an activity to employ the resource on another activity, then returning the resource to finish the interrupted work. •Is feasible when startup and shutdown costs are low. •Is considered the major reason why projects fail to meet schedule. -Greater time required because of efficiency loss in switching tasks -Costs may not be obvious but they are real

laddering

-Activities are broken into segments so the following activity can begin sooner and not delay the work. -The assumption that all immediate preceding activities must be 100% complete is too restrictive in practice for some situations. -An activity of long duration can delay the start of an activity immediately following it, so the activity can be broken into segments.

physical constraints

-Activities that cannot occur in parallel or are affected by contractual or environmental conditions. Examples: construction is next to a residential area so work can't be done early or late in the date, or the construction site is small and can't fit equipment needed to work on everything at the same time.

two approaches when constructing a project network

-Activity-on-Node (AON) -Activity-on-Arrow (AOA)

share

-Allocating some or all of the ownership of an opportunity to another party who is best able to capture the opportunity for the benefit of the project

time buffers

-Amounts of time used to compensate for unplanned delays in the project schedule -The more amount of time is dependent on the uncertainty of the project -The strategy is to assign more time to critical moments in the project. Examples:•Activities with severe risk •Merge activities prone to delays because of preceding activities not completing on time •Extra time for noncritical activities to reduce the likelihood they will create another critical path •Extra time for activities requiring scare resources to ensure they are available when needed. Example: construction equipment for company working on many developments at the same time

contingency plan

-An alternative plan that will be used if a possible foreseen risk event actually occurs -A plan of actions that will reduce or mitigate the negative impact (consequences) of a risk event

risk management

-An attempt to recognize and manage potential and unforeseen trouble spots that may occur when the project is implemented •Identify as much as possible 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)

mega projects

-Are large-scale, complex ventures that typically cost $1 billion or more, take many years to complete, and involve multiple private and public stakeholders. •High-speed rail lines, airports, healthcare reform, the Olympics, development of new aircraft -Often involve a double whammy. •Cost much more than expected but underdelivered on benefits they were to provide. -Are sometimes called "White Elephants"•Over budget, under value, high cost of maintaining (exceeds the benefits received) •White elephant refers to an extravagant but ineffectual gift that cannot be easily disposed of, based on the legend of the King of Siam giving rare albino elephants to courtiers who had displeased him, so that they might be ruined by the animals' upkeep costs.

top-down estimates

-Are usually derived from someone who uses experience and/or information to determine the project duration and total cost. -Are sometimes made by top managers who have little knowledge of the processes used to complete the project .-Often used when there is little information and the estimates are typically very generic. Example: cost for building a new car

Creating a Time-Phased Budget

-Assign each work package to one responsible person or department and deliverable -Compare planned schedule and costs using an integrative system called earned value

accept

-Being willing to take advantage of an opportunity if it occurs, but not taking action to pursue it

Reasons why we should not always assign the best people the most difficult tasks

-Best people: resent to the fact that they are always given the toughest assignments -Less experienced participants: resent to the fact that they are never given the opportunity to expand their skill/knowledge base

bottom-up approach

-Can serve as a check on cost elements in the WBS by rolling up the work packages and associated cost accounts to major deliverables at the work package level. -Better accuracy but it can be expensive because you're getting a detailed estimate for work package.

funding risks

-Changes in the supply of funds for the project can dramatically affect the likelihood of implementation or successful completion of a project. -Economic, political, business environment, change in leadership and/or priorities can all affect funding

technical or logical constraints

-Constraints related to the networked sequence in which project activities must occur

direct (project) overhead costs

-Costs incurred that are directly tied to project deliverables or work packages .•Project manager salary, rents, supplies, specialized machinery

direct costs

-Costs that are clearly chargeable to a specific work package. •Labor, materials, equipment, and other directly related

managing multiproject scheduling:

-Create project offices or departments to oversee the scheduling of resources across projects -Use a project priority queuing system: first come, first served for resources -Centralize project management: treat all projects as a part of a "megaproject" -Outsource projects to reduce the number of projects handled internally

enhance vs exploit

-Enhance tries to increase the probability of the opportunity happening, but with the exploit risk response strategy you increase the opportunity to 100% -Depending on the opportunity likelihood, importance, effort/cost to achieve, you would make decision to go with either enhance or exploit

excessive detail is costly

-Fosters a focus on departmental outcomes rather than on deliverable outcomes -Creates unproductive paperwork

contingency funds

-Funds to cover project risks —both identified and unknown •Size of funds reflects overall risk of a project. •If it is known funds are allocated, how likely is it they will be used? •Example: RS inventory and theft percentages

Step 1: Risk Identification

-Generate a list of possible risks through brainstorming, problem identification and risk profiling -Use risk breakdown structure (RBS) in conjunction with work breakdown structure (WBS) to identify and analyze risks •Macro risks first, then specific events •Macro risks affect the entire project e.g. project budget •Specific events affect only a portion e.g. staff turnover -Risk profile is a list of questions addressing additional areas of uncertainty on a project.

risks of not having contingency plan

-Having no plan may slow managerial response -Decisions made under pressure can be potentially dangerous and costly 1.Technical 2.Schedule 3.Cost 4.Funding

reasons for adjusting estimates

-Interaction costs are hidden in estimates. -Normal conditions do not apply. -Things go wrong on projects. -Changes in project scope and plans -Overly optimistic -Strategic misrepresentation

resource smoothing

-Involves attempting to even out varying demands on resources by using slack (delaying noncritical activities) to manage resource utilization when resources are adequate over the life of the project.

Resource-Constrained Project

-Is one in which the level of resources available cannot be exceeded. •Resources are fixed, time is flexible: inadequate resources will delay the project. -Resources are limited in quantity or availability. -Activities are scheduled using heuristics(rules-of-thumb) that focus on: 1.Minimum slack 2.Smallest (least) duration 3.Lowest activity identification number

free slack (or float)

-Is the amount of time an activity can be delayed after the start of a longer parallel activity or activities. -Is how long an activity can exceed its early finish date without affecting early start dates of any successor(s). -Allows flexibility in scheduling scarce resources. -Only activities that occur at the end of a chain of activities, where you have a merge activity, can have free slack.

insufficient data is costly

-Lack of focus on goals -Wasted effort on nonessential activities

step 3: risk response development

-Mitigating Risk •Reducing the likelihood an adverse event will occur •Reducing the impact of an adverse event -Avoiding Risk •Changing the project plan to eliminate the risk or condition -Transferring Risk •Paying a premium to pass the risk to another party •Requiring Build-Own-Operate -Transfer (BOOT) provisions -Accepting Risk •Making a conscious decision to accept the risk •What are your risk tolerances?

time-constrained project

-Must be completed by an imposed date. •Time is fixed, resources are flexible: additional resources are required to ensure project meets schedule. -Require use of leveling techniques that focus on balancing or smoothing resource demands. -Use positive slack (delaying noncritical activities) to manage resource utilization over the duration of the project.

general and administrative overhead costs

-Organization costs indirectly linked to a specific package that are apportioned to the project. -Not directly part of the project but without them the project couldn't be completed.

resources and priorities

-Project network times are not a schedule until resources have been assigned. •The implicit assumption is that resources will be available in the required amounts when needed. •Adding new projects requires making realistic judgments of resource availability and project durations. -Cost estimates are not a budget until they have been time-phased.

Step 4: risk response control

-Risk control •Execution of the risk response strategy •Monitoring of triggering events •Initiating contingency plans •Watching for new risks -Establishing a Change Management System •Monitoring, tracking, and reporting risk •Fostering an open organization environment •Repeating risk identification/assessment exercises •Assigning and documenting responsibility for managing risk -Risk Register •Details all identified risks, including:-Descriptions, category, probability of occurring, impact, responses, contingency plans, owners, and current status. •It is the backbone of risk control

exploit

-Seeking to eliminate the uncertainty associated with an opportunity to ensure that it definitely happens

hammock activity

-Spans over a segment of a project. -Has a duration that is determined after the network plan is drawn. -Is very useful in assigning and controlling indirect project costs. -Is used to aggregate sections of the project to facilitate getting the right level of detail for specific sections of a project. -Calculated as the difference between the EF for the last activity and the ES of the first activity.

enhance

-Taking action to increase the probability and/or the positive impact of an opportunity

total slack (or float)

-Tells us the amount of time an activity can be delayed and not delay the project. -Is how long an activity can exceed its early finish date without affecting the project end date or an imposed completion date .-Is simply the difference between the LS and ES (LS - ES = SL) or between LF and EF (LF - EF = SL).

resource constraints

-The absence, shortage, or unique interrelationship and interaction characteristics of resources that require a particular sequencing of project activities •People, materials, equipment

Resource-Constrained Scheduling

-The duration of a project may be increased by delaying the late start of some of its activities if resources are not adequate to meet peak demands. -Resources are usually overcommitted and seldom line up by availability and need.

network sensitivity

-The likelihood the original critical path(s) will change once the project is initiated. -It is a function of the number of critical or near critical paths. -A network schedule that has only one critical path, and the other noncritical activities enjoy significant slack, would be labeled 'insensitive'. -A network schedule where all the paths are similar to the critical path would be 'sensitive'.

lags

-The minimum amount of time a dependent activity must be delayed to begin or end. •Lengthy activities are broken down to reduce the delay in the start of successor activities .•Lags can be used to constrain finish-to-start, start-to-start, finish-to-finish, start-to-finish, or combination relationships.

adjusting estimates

-Time and cost estimates of specific activities are adjusted as the risks, resources, and situation particulars become more clearly defined.

cost risks

-Time/cost dependency links: costs increase when problems take longer to solve than expected. -Price protection risks (a rise in input costs) increase if the duration of a project is increased. -Example: Southwest Airlines - fuel futures contracts:

Why a Time-Phased Budget Baseline Is Needed

-To determine if the project is on, ahead, or behind schedule and over or under its budgeted costs? -To know how much work has been accomplished for the allocated money spent—the project cost baseline (planned value, PV)

risk

-Uncertain or chance events that planning cannot overcome or control -Can have a positive or negative effect on project objectives •Positive: unexpected price reduction on supplies -Potential to impact, cost, schedule, and quality of the project

classification of problem

-Using a priority matrix will help determine if the project is time or resource constrained

technical risks

-What if a system, technology, process, etc., doesn't work? -Backup strategies if chosen technology fails -Assessing whether technical uncertainties can be resolved

schedule risks

-What if there is a delay and the project won't complete on time? -Use of slack increases the risk of a late project finish -Imposed duration dates (absolute project finish date) -Compression of project schedules due to a shortened project duration date -Contingency funds to help expedite or "crash" the project (crashing will be discussed in chapter 9)

forward pass computation

1.Add activity times along each path in the network (ES + Duration = EF). 2.Carry the early finish (EF) to the next activity where it becomes its early start (ES) unless... 3.The next succeeding activity is a merge activity, in which case the largest early finish (EF) number of all its immediate predecessor activities is selected.

most change management systems are designed to:

1.Identify proposed changes 2.List expected effects of proposed changes on schedule and budget 3.Review, evaluate, and approve or disapprove of changes formally 4.Negotiate and resolve conflicts of change, condition, and cost 5.Communicate changes to parties affected 6.Assign responsibility for implementing change 7.Adjust master schedule and budget 8.Track all changes that are to be implemented

benefits of a change control system

1.Inconsequential changes are discouraged by the formal process. 2.Costs of changes are maintained in a log. 3.Integrity of the WBS and performance measures is maintained. 4.Allocation and use of budget and management reserve funds are tracked. 5.Responsibility for implementation is clarified. 6.Effect of changes is visible to all parties involved. 7.Implementation of change is monitored. 8.Scope changes will be quickly reflected in baseline and performance measures.

Estimating Projects: Preferred Approach

1.Make rough top-down estimates 2.Develop the WBS/OBS 3.Make bottom-up estimates 4.Develop schedules and budgets 5.Reconcile differences between top-down and bottom-up estimates Ideally done before final negotiation with the customer, with enough time for top-down and bottom-up estimates to be completed for more reliable project plan estimates.

Activity-on-node fundamentals

1.Networks typically flow from left to right. 2.An activity cannot begin until all preceding connected activities are complete. 3.Arrows indicate precedence and flow and can cross over each other. 4.Each activity must have a unique identify number. 5.An activity identification number must be greater than that of any predecessor activities. 6.Looping is not allowed. 7.Conditional statements are not allowed: if B then C. Decisions should be made by the PM and team. 8.Use common start and stop nodes.

Multiproject Scheduling Problems

1.Overall project slippage •Delay on one project create delays for other projects. Shared resources can result in a ripple effect 2.Inefficient resource application •The peaks and valleys of resource demands create scheduling problems and delays for projects 3.Resource bottlenecks •Shortages of critical resources required for multiple projects cause delays and schedule extensions. Example all projects need the same thing at the same time

-Mitigating Risk

1.Reducing the likelihood an adverse event will occur 2.Reducing the impact of an adverse event •What are your risk tolerances? •When do you start to do something on the issue? •Examples: -Upgrade business software to new version»Upgrade on test server (multiple times?)»Verify from users data is correct»Perform upgrade at time that if something goes wrong there will be time to work on the issue»Perform the upgrade when the vendor has support available

To help make the process more objective, an external view based on similar projects previously completed called RCF

1.Select a reference class of projects similar to your potential projects. 2.Collect and arrange outcome data as a distribution. Create a distribution of cost overruns as a percentage of the original project estimate. 3.Use the distribution data to arrive at a realistic forecast. Compare the original cost estimate for the project with the reference class projects.

backward pass computation

1.Subtract activity times along each path starting with the project end activity (LF - Duration = LS). 2.Carry the late start (LS) to the next preceding activity where it becomes its late finish (LF) unless... 3.The next succeeding activity is a burst activity, in which case the smallest late start (LS) number of all its immediate successor activities is selected.

The project network

A tool used for planning, scheduling, and monitoring project progress -Developed from the WBS and is a graphic flow chart of the project job plan. -The network shows project activities that must be completed, the logical sequences, interdependencies, and often times for the activities.

parallel activities

Activities that can occur independently and, if desired, not at the same time

kill criteria

Add wording to the charter to outline on what conditions a project would go to management for review for termination

calendar dates

Assign dates to project activities. Clearly stating tasks to reduce ambiguity.

normal conditions

Base estimates on normal conditions, efficient methods, and a normal level of resources

phase estimating

Begins with a top-down estimate and refines for phases as the project is implemented. Used when if large amounts of uncertainty and it is not practical to estimate time and costs for the entire project

avoiding risk

Changing the project plan to eliminate the risk or condition •How risk averse is the culture of your organization •Many insurance companies won't offer home insurance in Florida •You do this all the time -If you have a drink and let someone else drive or call an Uber to avoid the possibility of getting a DUI -Do you golf in the rain?

function point methods for software and system projects

Weighted macro variables

use several people to make estimates

Discussion to give a consensus which tends to eliminate extreme errors

contingencies

Do not make allowances for contingencies - Assume normal or average conditions, risk is considered later (happy path - default scenario featuring no exceptional or error conditions)

beta or PERT

E = (O + 4M + P)/6 Weighted average to give more weight to the most likely estimateE = (3 + (4x6) + 12)/6 = 6.5

triangular distribution

E = (O + M + P)/3E is estimate, O is optimistic, M is most likely, P is pessimistic Example: O = 3 hours, M = 6 hours, P = 12 hoursE = (3 + 6 + 12)/ 3E = 21 / 3E = 7 hours

activity numbering

Each activity needs a unique identification code (letter or number.) A general rule is numbering systems should be ascending and as simple as possible so people can easily follow work and find what is needed.

Activity

Element/task in the project that consumes time -Typically WBS work packages are used to identify activities

multiple starts and multiple projects

Many software applications require a common start and end event (node) for projects. Otherwise you may get dangler paths. If there are more than one activity that can begin when the project starts, tie them to a single common project start or finish node

Factors to be considered in deciding who should work together

Minimize unnecessary tension; complement each other -Experience: veterans team up with new hires

padding estimates

Most people are inclined to add padding to reduce the risk of being late/over budget. If everyone does this cost/time can be severely overstated

project complexity

New technology or a very large scope as a lot more variables versus a simple project done before

other factors

Non-project factors: equipment down-time, vacations, holidays, legal limits, project priority can influence resource assignment, etc

organizational culture

Organizations vary on the importance they attach to estimates (do they think it is worth it or even possible?)

benefits of RCF

Outside empirical data mitigates human bias •Project promotors have difficulty ignoring outside RCF information •Serves as a reality check •Helps avoid unsound optimism •Improved accountability •Provides basis for project contingency funds

Factors influencing the quality of estimates

Planning horizon, project duration, people, project structure and organization, padding estimates, organization culture, other (nonproject) factors

learning curves

Projects with similar task(s) repeated several times. Times are reduced through efficiency gains

Step 2: Risk Assessment

Risks need to be evaluated in terms of how likely they will occur and the impact if they do -Scenario analysis for event probability and impact -Risk assessment form -Risk severity matrix •Failure Mode and Effects Analysis (FMEA)Risk Value = Impact x Probability x Detection -Probability analysis •Decision trees, NPV, and PERT

Parametric Procedures Applied to Specific Tasks

Similar to top down, but applied to specific task. Example: for a new tile floor calculate cost per square foot for labor and materials-(100sq ft. x $2.50 labor)+(100sq ft. x $2.00 tile), $250+$200= $450

people

Skill level of the people making the estimates and how familiar are they with aspects of what is being done in the project

network logic errors

The assumption is the network will materialize as planned so there are no conditional statements e.g. if X then Y, else Z. There are also no loops. If something needs to happen again it should be a new activity.

critical path

The longest path through the network -A delay of any activity on the critical path delays the project

3-points estimating

Three figures are produced initially for every required distribution based on prior experience or best-guesses.

time units

Time units selected early and are consistent. Example: if one area uses days they should all use days instead one with days, another with weeks or hours

independence

Treat each task as independent, don't aggregate - Tendency to take multiple consecutive steps as one task, but this can ignore uncertainties with individual activities

ratio methods (sometimes called parametric)

Use ratios, formulas, etc. to estimate project time or costs. Example: New house construction can be estimated at $150 per sq. ft., 2,000 sq. ft. X $150 = $300,000

consensus methods

Used pooled experience of managers to estimate the total project cost and duration

apportion method

Used when projects closely follow past projects in costs and features. Costs are apportioned as a percentage of the total costs

-Activity-on-Node (AON)

Uses a node to depict an activity.

.-Activity-on-Arrow (AOA)

Uses an arrow to depict an activity.

project structure and organization

Which project structure used will influence time and cost estimates (functional, projectized, matrix). Are people dedicated to this project or splitting time?

range estimates for the WBS work packages

Works best when work packages have significant uncertainty associated with time or cost

path

a sequence of connected, dependent activities

pessimistic (p)

amount if negative factors identified happen

optimistic (o)

amount if positive risks identified happen

burst activity

an activity that has more than one activity immediately following it (more than one dependency arrow flowing from it)

merge activity

an activity that has two or more preceding activities on which it depends (more than one dependency arrow flowing into it)

activity

an element of the project that requires time but may not require resources

the parallel method is used to

apply heuristics •An iterative process starting at the first time period of the project and scheduling period-by-period the start of any activities using the three priority rules.

most-likely (M)

average amount of work

parallel or concurrent

can occur while the activity is taking place (can happen at the same time.)

he best way to improve estimates is to ...

collect and archive data on past project estimates and actual costs.

The chances of a risk event occurring are greatest during...

the early stages of a project. This is when uncertainty is highest and many questions remain unanswered.

baseline budget

the estimate of project costs that you start with at the beginning of your project.

Research suggests in most cases project promoters ....

use deception for personal gain (economic or political) and not public good.

preparing initial estimates

use people familiar with the tasks, use several people to make estimates, assume normal conditions, use consistent time units, assume tasks are independent, make no allowance for contingencies, include a risk assessment

risk management in simple terms:

your best attempt at making sure you're never surprised

forward pass

—Earliest Times-How soon can the activity start? (early start—ES) -How soon can the activity finish? (early finish—EF) -How soon can the project finish? (expected time—TE) -Starts with the first project activity(ies) and traces each path through the network to the last activity. -As you trace along the path you add the activity times.

backward pass

—Latest Times-How late can the activity start? (late start—LS) -How late can the activity finish? (late finish—LF) -Which activities represent the critical path? -How long can the activity be delayed? (slack or float—SL) -Starts with the last project activity(ies) on the network .-You trace backwards on each path subtracting activity to find the late start (LS - LF)

risk management benefits

•A proactive rather than reactive approach •Reduces surprises and negative consequences Prepares the project manager to take advantage of appropriate risks •Provides better control over the future •Improves chances of reaching project performance objectives within budget and on time

management reserves

•Are large funds to be used to cover major unforeseen risks (e.g., change in project scope) of the total project.

budget reserves

•Are linked to the identified risks of specific work packages.

PERT (program evaluation and review technique)

•Assumes each activity duration has a range that statistically follows a beta distribution. •Uses three time estimates for each activity: optimistic, pessimistic, and a weighted average to represent activity durations. -Knowing the weighted average and variances for each activity allows the project planner to compute the probability of meeting different project durations.

Network Computation Process

•Drawing the project network places the activities in the right sequence for computing start and finish times of activities. •Activity time estimates are taken from the task times in the work package and added to the network •Performing some computations allows the making of forward pass and backward pass.

Accepting risk

•Making a conscious decision to accept the risk•What are your risk tolerances? •Does everyone agree on what risk will be accepted? -Is it clearly specified? -Is it clearly docuented? •Kill Criteria-Add wording to the charter to outline on what conditions a project would go to management for review for termination

risk and open communication

•Open communication is very important in identifying risks. Are you and the organization willing to look at and discuss everything to identify risks? •What if you are doing medical research and you're concerned one of the people on your project team has in the past come to work intoxicated. Would you bring it up as a risk? •What if it might cost that person their job?•Emergency procedures require getting medical supplies from a tall storage cabinet. •Team members for a class project and you're worried about their performance •The project has very sensitive information and there are people working on it from Russia or China, etc. •Retail theft

transferring risk

•Paying a premium to pass the risk to another party •Requiring Build-Own-Operate-Transfer (BOOT) provisions •Using subcontractors and transferring risk to them•Car insurance

Resource Demand Leveling Techniques for Time-Constrained Projects-Advantages

•Peak resource demands are reduced. •Resources over the life of the project are reduced. •Fluctuation in resource demand is minimized.

Like leveling schedules, the limited resource schedule usually:

•Reduces slack; reduces flexibility•Increases criticality of events (what if there is an issue on a an activity that previously had slack) •Increases scheduling complexity •May make the traditional critical path no longer meaningful •Can break sequence of events •May cause parallel activities to become sequential •Activities with slack may become critical

are the WBS and project network the same thing?

•The WBS is hierarchical and the project network is sequential •The WBS is used to identify project deliverables and who is responsible for the work •The network uses the time estimates from WBS work packages develop the network

critical path

•The longest path through the activity network that allows for the completion of all project-related activities •The shortest expected time in which the entire project can be completed. •Delays on the critical path will delay completion of the entire project