COB Senior Exit Exam - Quantitative Section

Global Project Management

-Globalization -Helpful Competencies

Project Management Associations

-Project Management Institute -Global Associations

Factors Constraining Project Success

-resources -risk -customer satisfaction -scope -quality -stakeholders -schedule -budget •Various resources are needed to perform the project tasks and accomplish the project objective. Resources include people, materials, equipment, facilities, and so on. •Risks adversely affect accomplishing the project objective. •Customer satisfaction goes beyond just completing the project scope within budget and on schedule or asking if the customer is satisfied at the end of the project. It means not only meeting the customer's expectations but also developing and maintaining an excellent working relationship throughout the project. •Project scope is all the work that must be done in order to produce the project deliverables (the tangible product or items to be provided), satisfy the customer that the deliverables meet the requirements or acceptance criteria, and accomplish the project objective. •Quality expectations must be defined from the onset of the project. The project work scope must be accomplished in a quality manner and meet specifications. •The schedule for a project is the timetable that specifies when each task or activity should start and finish. The project objective usually states the time by which the project scope must be completed in terms of a specific date agreed upon by the sponsor and the organization performing the project. •The budget of a project is the amount the sponsor or customer has agreed to pay for acceptable project deliverables. The project budget is based on estimated costs associated with the quantities of various resources that will be used to perform the project.

Some factors that a contractor might consider in making a bid/no-bid decision are:

1.Competition—which other contractors might also submit a proposal? 2.Risk—is there a risk that the project will be unsuccessful (either technically or financially)? 3.Mission—is the proposed project consistent with the contractor's business mission? 4.Extension of capabilities—would the proposed project provide the contractor with an opportunity to extend and enhance its capabilities? 5.Reputation—what is the contractor's reputation with the customer? 6.Customer funds—does the customer really have funds available to go forward with the project? 7.Proposal resources—are appropriate resources available to prepare a quality proposal? 8.Project resources—are appropriate resources available to perform the project if the contractor is selected as the winner? •If a contractor is not sure that it has the resources to perform the project, it needs a plan for securing the necessary resources to successfully perform the project.

Work Breakdown Structure (WBS)

A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables. •Assigning responsibility involves determining who will be the person or organization responsible for each work item in the WBS.

Issue Log

A project document used to document and monitor elements under discussion or in dispute between project stakeholders. •Maintain in issue log of specific issues or concerns or questions that various stakeholders identify so that the project manager, project team, or sponsor/customer can address them and make sure they are not forgotten or dismissed without an adequate follow up and response.

Planning for Information Systems Development

An information system (IS) is a computer-based system that accepts data as input, processes the data, and produces useful information for users. •Information systems include computerized order entry systems, e-commerce systems, automatic teller machines, and billing, payroll, and inventory systems. •The development of an IS is a challenging process that requires extensive planning and control to ensure that the system meets user requirements and is finished on time and within budget. A project management planning tool, or methodology, called the systems development life cycle (SDLC) is often used to help plan, execute, and control IS development projects. It consists of the following steps: •Problem definition -- Data are gathered and analyzed and problems and opportunities are clearly defined. •System analysis -- The development team defines the scope of the system to be developed, interviews potential users, studies the existing system (which might be manual), and defines user requirements. •System design -- Several alternative conceptual designs are produced and evaluated. The best is selected for further design and development. •System development -- The actual system is brought into existence. •System testing -- This step involves looking for logical errors, database errors, errors of omission, security errors, and other problems that might prevent the system from being successful. •System implementation -- The existing system is replaced with the new, improved, system and users are trained.

Customer Evaluation of Proposals

Customers evaluate contractors' proposals in many different ways. •Some customers first look at the prices and select only the three lowest-priced proposals for further evaluation. •Some screen out proposals with prices above their budget or those whose technical section does not meet all the requirements. •Others, especially on large projects, create a proposal review team that uses a scorecard to rate each proposal. •The figure above depicts a proposal evaluation scorecard. Have the students review the proposal evaluation scorecard and make suggestions of what could be done to raise the scores for the proposal submission. •The scorecard can be a valuable tool because it helps to have uniform comparison criteria for different proposals.

Balancing Project Constraints

During the project, it is sometimes challenging to balance these factors, which often constrain one another and can jeopardize accomplishing the project objective. To help assure the achievement of the project objective, it is important to develop a plan before starting the project work rather than starting without a plan. Lack of a plan decreases the chances of successfully accomplishing the full project scope within budget and on schedule.

Guidelines for Developing an RFP

Following are some guidelines for drafting a formal request for proposal to external contractors: •The RFP must state the project objective or purpose, including any rational or background information that may be helpful to contractors so that they can prepare thorough and responsive proposals. •An RFP must provide a statement of work (SOW). An SOW deals with the scope of the project, outlining the tasks or work elements the customer wants the contractor or project team to perform. •The RFP must include the customer requirements, which define specifications and attributes. Requirements cover size, quantity, color, weight, speed, performance, and other physical or operational parameters the contractor's proposed solution must satisfy. The customer may also use these requirements as acceptance criteria. •The RFP should state what deliverables the customer expects the contractor to provide. Deliverables are the tangible items that the contractor is to supply. Deliverables could include periodic progress reports or a final report as well as a final product. •The RFP should state the acceptance criteria the customer will use to determine if the project deliverables are completed according to the customer's requirements. •The RFP should list any customer-supplied items. •The RFP might state the approvals required by the customer. •Some RFPs mention the type of contract the customer intends to use. It could be fixed price, in which case the customer will pay the contractor a fixed amount regardless of how much the work actually costs the contractor. (The contractor accepts the risk of taking a loss.) Or the contract might be for time and materials. In this case, the customer will pay the contractor whatever the actual costs are. •An RFP might state the payment terms the customer intends to use. The customer may specify progress payments or pay when the entire project is finished. •The RFP should state the required schedule for completion of the project and key milestones. It might only state a completion date, or it might give a more detailed schedule. •The RFP should provide instructions for the format and content of the contractor proposals. Instructions might state the maximum number of pages, the number of details the customer wants the contractor to show regarding the costs, and other specifications. •The RFP should indicate the due date by which the customer expects potential contractors to submit proposals. •An RFP may include the evaluation criteria that will be used to assess proposals from competing contractors. •Criteria might include: the contractor's experience with similar projects; the technical approach proposed by the contractor; the schedule; or the costs. •In rare cases, an RFP will indicate the funds the customer has available to spend on the project. Contractors can then submit proposals that are appropriate to that level of funding.

Closing Phase

In the closing phase, project evaluations are conducted, lessons learned are identified and documented to help improve performance on future projects, and project documents are organized and archived. •This is the final phase of the project life cycle •It includes a variety of actions such as: •Collecting and making final payments •Staff recognition and evaluation •Conducting a post project evaluation •Documenting lessons learned •Archiving project documents •Using a knowledge base to record lessons learned and post-project evaluation •A knowledge base is helpful to retrieve the lessons and information that can help with doing business with the customer or other customers in the future.

Contracts

Just because the contractor has been selected as the winner does not mean the contractor begins the work right away. Before the project can proceed, a contract must be signed between the customer and the contractor. •A contract is a vehicle for establishing good customer-contractor communications and arriving at a mutual understanding and clear expectations to ensure project success. •It is an agreement between the contractor, who consents to provide a product or service (deliverables), and the customer, who agrees to pay the contractor a certain amount in return. •The contract must clearly spell out the deliverables the contractor is expected to provide. There are basically two types of contracts: fixed price and cost reimbursement.

Execute the Project Plan

Once a baseline plan has been established, the plan must be executed. The executing process involves performing the work according to the plan, monitoring and controlling the work, and controlling for changes so that the project scope is achieved within the budget and schedule, to the customer's satisfaction. •Perform the work -- all activities are performed to produce the deliverables and meet their acceptance criteria with regular communication with stakeholders and the customers •Monitor and control progress -- regularly monitor the project to see if progress is going according to plan, measure the actual progress, and take corrective action if activities are behind schedule •Control changes -- change to the work activities and to the project scope will occur for a variety of reasons. Changes need to be agreed upon by the sponsor and the contractor.

Project Charter

Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document. This document serves a number of purposes. •Provides sponsor approval to go forward with the project •Commits the funding for the project •Summarizes the key conditions and parameters for the project •Establishes the framework for developing a detailed baseline plan for performing the project The project charter includes many possible elements, including the ones seen on this slide. •Project title •Purpose •Description •Objective •Success criteria or expected benefits •Funding •Major deliverables •Acceptance criteria •Milestone schedule •Key assumptions •Constraints •Major risks •Approval requirements •Project manager •Reporting requirements •Sponsor designee •Approval signature

Soliciting Proposals

Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available. •One way for customers to notify potential bidders is by identifying a selected group of contractors in advance and sending each of them a copy of the RFP. •Another approach is to advertise in business newspapers and on websites that the RFP is available. •For example, federal government organizations advertise their RFPs in Commerce Business Daily. •Business customers and contractors consider the RFP/proposal process to be competitive. •Customers should be careful to provide the same information to all interested contractors. •Business or government customers may hold a bidders' meeting to explain the RFP and answer questions from interested contractors. •Not all project life cycles include the preparation of a written RFP. Some bypass the proposal steps and move right into planning and performing the project. •There are other projects in which requirements are not written down in a formal RFP, but are communicated verbally to several providers or suppliers (contractors). •Although projects can vary from very formal and businesslike to highly informal, all RFPs start with the identification of a need, problem, or opportunity.

Create Work Breakdown Structure

Once the project scope document has been agreed on and prepared, the next step in the planning phase is to create a detailed work breakdown structure (WBS). •This is a deliverable-oriented hierarchical decomposition of the project work scope into work packages, or activity groupings, that produce the project deliverables. •Creating a WBS is a structured approach for organizing all the project work and deliverables into logical groupings. This helps to subdivide the deliverables into more manageable components called work items, to help ensure that all tasks required to complete the project are identified and included in the baseline project plan. •The WBS should be deconstructed to a level that identifies individual work packages for each specific deliverable listed in the project scope document. •Dividing a project into work packages and work items helps a contractor increase the level of confidence that: •All the activities that need to be performed to produce the deliverable can be defined •The types and quantities of resources can be determined •The associated activity durations and costs can be reasonably estimated. •Work items should be broken down to the level at which a single organization (marketing communications, materials engineering, human resources, a subcontractor, etc.) or individual can be assigned responsibility and accountability for accomplishing the work package. •The WBS can be created using a graphic chart format or as a list.

Plan for Quality

Planning for quality is a necessary, yet often forgotten or dismissed, function on a project. It is essential to have a plan for assuring the quality of project deliverables and results, rather than waiting until the end of the project to check if the sponsor/customer requirements and expectations on project deliverables have been met. It is important to plan for quality in performing the project. This helps assure that the work is done according to specifications and applicable standards and that deliverables meet acceptance criteria. A project quality plan includes or references: •Project specifications and standards •Industry or government standards (for design, testing, safety, construction, etc.) •Codes that must be used and met during the performance of the project work •Written procedures for using various quality tools and techniques The key to quality control is to: •Monitor the quality of the work early and regularly throughout the performance of the project •Compare results with quality standards •Make any necessary corrective actions immediately, rather than waiting until all the work is completed before checking or inspecting for quality To ensure that a project is done right the first time, a project should focus on doing the work in accordance with quality standards, and therefore preventing quality problems.

Proposal Contents

Proposals are often organized into three sections: 1.Technical 2.Management 3.Cost •The amount of detail the contractor includes will depend on the complexity of the project and the requirements stipulated by the RFP.

Proposal Submission and Follow-up

Proposals should be: •Submitted on time •Late or incomplete proposals are often not accepted •Formatted properly •In the manner specified •Possibly deliver two sets by different delivery methods •Depending on the dollar value of the proposal, some contractors have been known to hand-deliver the proposal or send two sets of proposals by different express mail services. Contractors must continue to be proactive even after the proposal is submitted. Any follow-up needs to be done in a professional manner and in accordance with the RFP guidelines.

Contract Terms and Conditions

The following are some of the terms and conditions that are commonly included in project contracts: •Misrepresentation of costs—states that it is illegal for the contractor to overstate the hours or costs expended on the project. •Notice of cost overruns or schedule delays—outlines the circumstances under which the contractor must notify the customer of any schedule delays. •Approval of subcontractor—indicates when the contractor needs to obtain approval before hiring a subcontractor. •Customer-furnished equipment or information—lists the items that the customer will provide to the contractor throughout the project and the dates by which the customer will make these items available. •Patents—covers ownership of patents that may result from conducting the project. •Disclosure of proprietary information—prohibits one party from disclosing confidential information, technologies, or processes pertaining to the project. •International considerations—specifies accommodations that must be made for customers from other countries. •Termination—states the conditions under which the customer can terminate the contract, such as nonperformance by the contractor. •Terms of payment—addresses the basis on which the customer will make payments to the contractor. •Bonus/penalty payments—some contracts have a bonus provision, wherein the customer will pay the contractor a bonus if the project is completed ahead of schedule or exceeds other customer performance requirements. •On the other hand, some contracts include a penalty provision, wherein the customer can reduce the final payment to the contractor if the project is not completed on schedule or if performance requirements are not met. •Changes—covers the procedure for proposing, approving, and implementing changes to the project scope or schedule.

Cost Section

The objective of the cost section of the contractor proposal is to convince the customer that the contractor's costs for the proposed project are realistic and reasonable. The cost section usually consists of tabulations of the contractor's estimated costs for such elements as the following: •Labor—the estimated costs for the various classifications of people who are expected to work on the project •It might include the estimated hours and hourly rate for each person or classification. •Materials—the cost of materials the contractor needs to purchase for the project •Equipment—the cost of equipment that must be purchased to complete the project •Facilities—sometimes the contractor will have to rent special facilities or specialty space for the project team. •Subcontractors and consultants—when contractors do not have the expertise or resources to do certain project tasks, they may outsource some of the work to subcontractors or other consultants. •Travel—such as airfare, lodging, and meals if trips are required during the project •Documentation—some customers want the contractor to show separately the costs associated with the project documentation deliverables. •This would be the cost of printing manuals, drawings, reports, or the cost of DVDs. •Overhead—contractors will add a percentage to costs of the above items to cover the indirect costs of doing business (such as insurance, depreciation, accounting, general management, marketing, and human resources). •Escalation—for large projects that are expected to take several years to complete, the contractor needs to include the costs of escalation in wage rates and materials costs over the length of the project. •Reserve—the reserve (also referred to as contingency reserve or management reserve) is an amount the contractor may want to include to cover unexpected items that have been overlooked. •Fee or profit—all the above items are costs. The contractor must add an amount for its fee or profit. •The total cost plus the contractor's fee is the contractor's price for the proposed project. Cost estimates should be reasonable and realistic. If possible, it is good practice to have the person who will be responsible for the major work tasks estimate the associated costs.

Management Section

The objective of the management section is to convince the customer that the contractor can do the proposed work and achieve the intended results. The management section should contain the following elements: •Description of major tasks—the contractor should define the major tasks that will be performed in carrying out the project. •Deliverables—the contractor should include a list of all deliverables that will be provided during the project (such as reports, drawings, manuals, and equipment). •Project schedule—the contractor should provide a schedule for performing the major tasks required to complete the project. •The task schedule can be given in any one of several formats: a list of tasks with their estimated start and completion dates, a Gantt chart, or a network diagram. •Project organization—the contractor should describe how the work and resources will be organized to perform the project. •An organization chart, resumes of the key people, and a responsibility matrix are often helpful. •Related experience—the contractor should provide a list of similar projects it has completed and the dollar value of those contracts. •Equipment and facilities—the contractor may want to provide a list of the equipment and special facilities it has in order to convince the customer that it possesses the necessary resources.

Technical Section

The objective of this section is to convince the customer that the contractor understands the problem or need and can provide the least risky and most beneficial solution. The technical section should contain the following elements: •Understanding of the need—the contractor must show the customer that they thoroughly understand the problem to be solved. •Proposed approach or solution—the proposal should describe the approach or methodology that would be used in developing the solution. •Benefits to the customer—the contractor should state how the proposed solution or approach would benefit the customer and achieve the project's success criteria or expected outcomes, including cost savings; reduced processing time; reduced inventory; better customer service; reduced errors; improved safety conditions; more timely information; reduced maintenance, etc.

Establish Project Objective

The planning process is based on the project objective. •The project objective establishes what is to be accomplished. •Often the project objective is stated in the project charter or RFP. •It is the tangible end product that the project team or contractor must produce and deliver in order for the sponsor or customer to achieve the expected benefits from implementing the project. The project objective should include the following elements: •Expected benefits that will result from implementation of the project and define success •Primary project end product or deliverable •Date by which the project is required to be completed •Budget within which the project must be completed Situations can arise where the project objective needs to be modified as the project proceeds because of extenuating circumstances or new information. The project manager and the customer must agree on all changes to the project objective. Any such changes might affect the remaining work scope, deliverables, completion date, and final cost.

Sequence Activities

The process of identifying and documenting relationships among the project activities. •Sequencing activities involves creating a network diagram that shows the necessary sequence and dependent relationships in a project.

Define Project Scope

The project scope defines what needs to be done. •A project scope document includes many of the items contained in the project charter, RFP, or contractor's proposal, but in much greater detail. The document is valuable for establishing a common understanding among project stakeholders regarding the scope of the project. The project scope document usually contains the following sections: •Customer requirements define the functional or performance specifications for the project's end product and other project deliverables. •It should also include or reference applicable technical specifications, standards, and codes that must be used and met regarding quality and performance of the project work and deliverables. •Statement of Work (SOW) defines the major tasks that will need to be performed to accomplish the work that needs to be done and produce all the project deliverables. •Deliverables are the products or outputs that the project team or contractor will produce and provide to the customer during and at the completion of the performance of the project. •Acceptance criteria for all project deliverables must be described in greater detail than what is stated in the project charter or request for proposal •Work Breakdown Structure (WBS) is a hierarchical decomposition of the project work scope into work packages that produce the project deliverables. The agreed-upon project scope document establishes the baseline for any changes that may be made to the scope during the performance of the project. A change control system needs to be established to define how changes will be documented, approved, and communicated. The project team or contractor must avoid scope creep, which is informally making changes to the project scope without appropriate approval.

Define Activities

Using the WBS, the individual or team responsible for each work package must next define all the specific activities that need to be performed to produce the end item, or deliverable. •Breaking down each work package into its component activities reveals the level at which each activity must be performed to produce the deliverable. •Some activities may not be easily definable. When all the specific activities have been defined for all of the work packages, they should be consolidated into a comprehensive activity list. •Because of the allocation of resources, there may be wait time between the end of one activity and the start of another one.

Pricing Considerations

When contractors prepare a proposal, they are generally competing with other contractors. There are three main factors that contractors should consider when setting a price for a proposal: competition, prices compared to competitors, and other factors like risk and the customer's budget. •Contractors need to be careful not to overprice the proposed project, or else the customer may select a lower-priced contractor. •They must be equally careful not to underprice the proposed project; otherwise, the contractor may lose money. •The contractor must consider the following items when determining the price for the proposed project: •Reliability of the cost estimates—the level of confidence that the total cost for the proposed project is complete and accurate. •Risk—if the proposed project involves an endeavor that has not been undertaken before, it may be necessary to include a large amount of contingency funds. •Value of the project to the contractor—there may be situations in which the contractor is willing to live with a low price. •For example, in order to get a contract so it will not have lay off workers. •Customer's budget—a proposal should not exceed what the customer has available. •Competition—if many contractors are expected to submit, it may be necessary to submit a price that includes only a small profit to increase the chances of winning the contract.

Project

an endeavor to accomplish a specific objective through a unique set of interrelated activities and the effective utilization of resources.

The Project Life Cycle

has four general phases: initiating, planning, performing, and closing •The time span of each phase and the associated level of effort will vary depending on the specific project. •Project life cycles can vary in length from a few weeks to several years, depending on the content, complexity, and magnitude of the project in question.

Project stakeholders

individuals and entities involved in, or who may influence, or may be affected by a project, such as the customer/sponsor; project team, including the project manager, subcontractors, and consultants; end users or consumers; and advocacy groups. • Stakeholders include •Customer/sponsor and the project team including subcontractors and suppliers • Organizations or groups of people who may be supportive or adversarial or may want to be kept informed about the project because of potential impact

The Project Management Institute (PMI)

is a premier worldwide not-for-profit association for practitioners in the project management profession and individuals who want to learn more about the profession. •Founded in 1969, PMI is approaching 500,000 members in nearly 200 countries and has about 270 chapters in more than 80 countries. The association has over 30 online communities of practice. •The association has over 30 online communities of practice. •Publishes A Guide to the Project Management Body of Knowledge (PMBOK® Guide), which provides a framework of processes and guidelines for the application of project management concepts, practices, and techniques. •Created the PMI Code of Ethics and Professional Conduct, which sets standards and establishes expectations for professional behavior. •Offers a certification program that provides the opportunity to earn credentials in various project management disciplines.

Project management

planning, organizing, coordinating, leading, and controlling resources to accomplish the project objective.

Project Planning Process

process involves planning the work (establishing the plan) and then working the plan (executing that plan). There are many steps in the project planning process, as you can see on this slide. •Establish project objective -- agreed upon by sponsor and contractor •Define scope -- includes customer requirements, defines major work tasks, lists deliverables and associated acceptance criteria •Create a work breakdown structure, or WBS -- a hierarchical decomposition of the project scope into work elements to be executed by the project team and produce the project deliverables •Assign responsibility -- the person or organization responsible for each work item is identified •Define specific activities -- develop a list of detailed activities needed to perform each work package and produce any required documents •Sequence activities -- create a network diagram that shows the necessary sequence and dependent relationships •Estimate activity resources -- determine the types of resources needed for each activity. These may include people, materials, or equipment that are internal or external to the contractor. •Estimate activity durations -- time estimates for how long each activity will take to be completed based on the estimate of resources available applied to each activity •Develop project schedule -- determine the start and finish times for each activity to complete the project by its required completion date •Estimate activity costs -- use the appropriate labor cost or unit cost rate for each type of resource to determine the cost of each activity •Determine budget -- aggregate the costs associated with each activity and each work package and add indirect costs and profits to determine the costs of completing the project. Allocate the costs over time to determine the time-phased budget.

Sequence Activities

•A network diagram defines the sequence of how the activities will get done. It is a tool for arranging the specific activities in the best sequence and defining their dependent relationships. •The three most common techniques of network diagramming are program evaluation and review technique (PERT), the critical path method (CPM), and the precedence diagramming method (PDM). •In the past, there were distinguishable methodological differences between PERT and CPM. Today, however, when most people refer to a CPM diagram or PERT chart, they mean a generic network diagram.

Create Network Diagram

•A network diagram is a drawing of the activities for a project, displayed in boxes in their logical sequence and connected by arrows to indicate dependent relationships. The network diagram shows how the project should be performed from start to completion. •Three questions need to be answered regarding each activity. The network is based upon the answers: 1.Which activities must be finished immediately before this activity can be started? 2.Which activities can be done concurrently with this activity? 3.Which activities cannot be started until immediately after this activity is finished? •Guidelines for the level of detail in the network diagram are: 1.Based on the work breakdown structure for a project; specific activities should be defined for each work package. 2.It may be preferable to draw a summary-level network first that depicts a small number of higher level activities and then expand to a more detailed network. 3.The level of detail may be determined by certain obvious interface or transfer points such as a change in responsibility or if there is a tangible output or product or deliverable as a result of an activity. 4.Activities should not be longer in estimated duration than the project progress review. •It is not unusual to progressively elaborate the network diagram as the project progresses and more information becomes clear. •Sub-networks can be used to represent similar projects for different customers. Certain portions of projects may include the same types of activities in the same sequence and with the same dependent relationships.

The following attributes help define a project:

•A project has a CLEAR OBJECTIVE that establishes what is to be accomplished. It is the tangible end product that the project team must produce and deliver. The project objective is usually defined in terms of end product or deliverable, schedule, and budget. Furthermore, it is expected that the work scope will be accomplished in a quality manner and to the customer's satisfaction. •A project is carried out through a SERIES OF INTERDEPENDENT ACTIVITIES in a certain sequence in order to achieve the project objective. •A project utilizes VARIOUS RESOURCES to carry out the activities. •A project has a SPECIFIC TIME FRAME, or finite life span -- a start time and a date by which the objective must be accomplished. •A project may be a UNIQUE OR ONE TIME ENDOEVOR such as developing a new product, building a house, or planning a wedding. •A project has a SPONSOR OR CUSTOMER that provides the funds necessary to accomplish the project. In a business setting, the customer can be internal or external to your organization. •Finally, a project involves a DEGREE OF UNCERTAINTY and is based on certain assumptions and estimates for the project budget, schedule, and work scope.

Assign Responsibility

•A responsibility assignment matrix (RAM) defines who will be responsible for the work. It is a tool used to designate the individuals responsible for accomplishing the different work items in the work breakdown structure (WBS). •This figure depicts the RAM for the WBS in Figure 4.1, the community festival project. •The RAM often uses a P to designate primary responsibility and an S to indicate support responsibility for a specific work item. •The RAM shows all the individuals associated with each work item in the WBS, as well as all the work items associated with each individual. •Only one individual should be designated as the lead, or primary, person responsible for each work item.

Project Management Information Systems

•A wide variety of affordable project management information systems are available for purchase. •These systems allow the project manager and the project team to plan and control projects in a completely interactive mode. •Planning and testing different options for task durations, dependencies, constraints, resources, schedules, and costs can be completed in a project management information system. •Information systems help project managers to create reports, change management, network diagrams, and Gantt charts. •Project management information systems also interface with other software applications. Appendix A contains information related to project management information systems.

Loops

•An illogical relationship among activities is known as a loop. •In preparing a network diagram, drawing activities in a loop is not acceptable because it portrays a path of activities that perpetually repeats itself.

Measuring Proposal Success

•Contractors measure the success of their proposal efforts by the number of times their proposals are selected by customers or by the total dollar value of their proposals that are selected. •Win ratio: The percentage of the number of proposals a contractor won out of the total number of proposals the contractor submitted to various customers over a particular time period; gives equal weight to all proposals. •Total dollar value: Total dollar value of proposals that the contractor won as a percentage of the total dollar value of all the proposals the contractor submitted to various customers during a specific time period; gives more weight to proposals with larger dollar amounts. •Some contractors have a strategy of submitting proposals in response to as many RFPs as they can with the hope that they will eventually win their fair share. Their philosophy is that if they do not submit a proposal then they do not have any chance to win and by submitting more proposals they increase their chances of winning more contracts. •Other contractors are more selective in submitting proposals; they respond to only those RFPs where they think they have a better-than-average chance of winning the contract. These contractors seriously consider the bid/no-bid decision process in responding to RFPs and submit fewer proposals in an attempt to have a high win ratio.

fixed-price contract

•the customer and the contractor agree on a price for the proposed work. •The price remains fixed unless the customer and contractor agree on changes. •This type of contract is low risk for the customer, since the customer will not pay more than the originally agreed-upon price. •This type of contract is high risk for the contractor because, if the cost of completing the project is more than originally planned, the contractor will make a lower profit than anticipated—or may even lose money. •Fixed-price contracts are most appropriate for projects that are well defined and entail little risk.

Pre-RFP/Proposal Marketing

•Contractors whose business depends on creating winning proposals in response to business or government RFPs should not wait until formal RFP solicitations are announced by customers before starting to develop proposals. •Contractors need to develop relationships with potential customers long before the customers prepare RFPs. •Contractors should maintain frequent contacts with past and current customers and initiate contacts with potential new customers. •A contractor who is familiar with a customer's needs and requirements can prepare a better proposal in response to the customer's RFP. •These pre-RFP or pre-proposal efforts by a contractor are considered marketing or business development and are performed at no cost to the customer. •In some cases, the contractor may prepare an unsolicited proposal and present it to the customer. •If the customer is confident that the unsolicited proposal will solve the problem at a reasonable cost, the customer may simply negotiate a contract with the contractor to implement the proposal, thus eliminating the preparation of an RFP and the subsequent competitive proposal process. •Whether the goal is winning a competitive RFP or obtaining a noncompetitive contract from a customer, a contractor's pre-RFP/proposal efforts are crucial to establishing the foundation for eventually winning a contract from the customer to perform the project.

Different factors can create a dynamic, and even unstable environment, over the life of a project and include:

•Cultural differences •Currency fluctuations and exchange rates •Country-specific work codes and regulations, such as hours per day, holidays, and religious observances •Corporate joint ventures and partnerships create entities with a presence and facilities in multiple countries and can make international business more complication •Political relations between countries •Availability of high-demand workforce skills

Determine Budget

•Determining the budget involves aggregating all the costs associated with each activity and each work package and adding indirect costs and profits to determine the costs of completing the project. •Allocate the costs over time to determine the time-phased project budget.

Develop the Project Schedule

•Developing project schedule involves determining the start and finish times for each activity in order to complete the project by its required completion date.

Network Principles

•Each activity is represented by a box in the network diagram and the description of the activity is written within the box, as shown in this figure. •Activities consume time, and their description usually begins with a verb (such as get, wash, and dry in this example). •Activities have a dependent relationship—that is, they are linked in a logical sequence in a network diagram to show which activities must be finished before others can start. •Certain activities have to be done in serial sequence. •Some activities may be done concurrently.

Some competencies can be helpful, even required, for global project management success:

•Foreign language skills •Knowledge and understanding of other countries and cultures, geography, world history and contemporary events, and international economics •Awareness and understanding of cultures, customs, and etiquette and of the geopolitical environment are also very important to international project success. •Finally, technology adoption to international environments and use of good language translation software is also very important for international project management.

WBS

•Graphic Chart •Indentured List •For each of the work packages, the deliverable is listed. •This format is helpful for large projects where a diagram would become too large and unwieldy.

Preparing a Request for Proposal

•If an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, outsourcing the work to an external resource (such as a contractor) is a good choice. •An RFP helps the organization decide which contractor to use. •The purpose of preparing an RFP is to state, comprehensively and in detail, what is required, from the customer's point of view, to address the identified need. •A good RFP allows contractors or a project team to understand what the customer expects so that they can prepare a thorough proposal that will satisfy the customer's requirements at a realistic price. •It should be noted that in many situations a formal RFP might not be prepared; the need is instead communicated informally, sometimes orally, rather than in writing. •This is often the case when the project will be implemented by a firm's internal staff rather than by an external contractor.

Initiating Phase

•In the initiating phase, projects are identified and selected and then authorized using a document referred to as a project charter. •The first phase of the project life cycle: •Involves the identification of a need, problem, or opportunity and can result in the sponsor authorizing a project to address the identified need or solve the problem. •May take several months to identify the need, gather data, and define the project objective. •It is very important to define the right need. Needs are often defined as part of an organization's strategic planning process. •Organizations must have a project selection process to determine what projects to pursue. •The project charter includes: •Rationale, or justification, for the project •Project objective and expected benefits •General requirements and conditions such as the amount of funds authorized, required completion date, major deliverables, and required reviews and approvals; and key assumptions •If it decides to use external resources, an organization develops a request for proposals, or RFP, asking contractors to submit proposals describing how to address the need, associated costs, and schedule.

Performing Phase

•In the performing phase, the project plan is executed and work tasks are carried out to produce all the project deliverables and to accomplish the project objective. •The project progress is monitored and controlled to assure the work remains on schedule and within budget, the scope is fully completed according to specifications, and all deliverables meet acceptance criteria. •Any changes need to be documented, approved, and may be incorporated into an updated baseline plan. •This is the third phase of the project life cycle. •The project manager leads the project team to complete the project. •The pace of the project increases as more and various resources are involved in the project. •It is necessary to monitor and control the project's progress by comparing accomplishments to the baseline plan. •Corrective actions are taken if a project is off track. •Changes are managed and controlled through documentation, approval, and communication with agreement between the sponsor and the contractor. •Some change is trivial •The end of the phase, customer satisfaction, is achieved when the work and deliverables are accepted by the customer and the project objective is accomplished. •Several alternative actions may be evaluated to determine the best approach to bring the project back within the scope, schedule, and budget constraints of the project. •Determine if any sacrifices to scope, budget, schedule, or quality are necessary to accomplish the project. •The costs of changes vary with the timing in the project -- generally, the later in the project that changes are identified, the greater their effect on accomplishing the project objective.

Global Associations

•Many other project management associations exist around the globe. •Appendix C provides a list of approximately 60 such associations.

Project Manager Actions

•Prevent, anticipate, and/or overcome -- problems and limitations in order to complete the project scope on schedule, within budget, and to the customer's satisfaction. •Have good planning and communication -- they are essential to preventing problems from occurring and to minimize their impact. •Be responsible -- to make sure the customer is satisfied. This goes beyond merely completing the project within budget and on schedule. It requires ongoing communication with the customer.

Project Selection

•Project selection involves evaluating various needs or opportunities and then deciding which of those should move forward as a project to be implemented. •The benefits and consequences, advantages and disadvantages, plusses and minuses of each opportunity need to be considered and evaluated. They can be quantitative and qualitative, tangible and intangible. Each person's decision will be a combination of quantitative evaluation and "gut" feelings based upon experience. The steps in project selection are: •Develop a set of criteria against which the opportunity will be evaluated. For example: •Alignment with company goals •Anticipated sales volume •Increase in market share •Establishment of new markets •Anticipated retail price •Investment required •Estimated manufacturing cost per unit •Technology development required •Return on investment •Human resources impact •Public reaction •Competitors' reaction •Expected time frame •Regulatory approval •Risks •List assumptions that will be used as the basis for each opportunity. •If an opportunity is to build an on-site day care center for children and elderly relatives of company employees, one assumption might be that the company would be able to obtain a bank loan to build such a center. •Gather data and information for each opportunity to help ensure an intelligent decision regarding project selection. •It may be necessary to gather some preliminary financial estimates associated with each opportunity, such as estimated revenue projections and implementation and operating costs. •In addition to gathering hard data, it may also be necessary to obtain other information, such as opinions and reactions from various stakeholders who would be affected by the opportunity. •Evaluate each opportunity against the criteria. Once all the data and information has been collected, analyzed, and summarized for each opportunity, it should be given to all the individuals responsible for performing the evaluation. It is beneficial to have several individuals involved in the evaluation and selection decision in order to get a variety of viewpoints. These individuals will combine the collected data with their gut feelings regarding the project when making their decision.

Generally speaking, customers (clients) and partner organizations prefer to work with people they know and trust.

•Relationships establish the foundation for successful funding and contract opportunities. •Relationship building requires being proactive and engaged. •It requires face-to-face contacts; it cannot be done as effectively through e-mail or phone conversations. •Relationship building requires being a good listener and a good learner. When you are with clients, ask questions and listen. Make the client feel good. Empathize with their issues, whether they are business or personal. •Contacts with potential clients should be frequent and regular—not just when there is a current opportunity for funding or just before they will be issuing a RFP. During contacts, do not focus on discussing potential contract opportunities. •After meeting with a client, always express your appreciation and thank them for making the time to meet with you. •Establishing and building trust is key to developing effective and successful relationships with clients and partners. One way to foster this is to be reliable and responsive. •Ethical behavior in dealing with clients and partners is also imperative for building trust. •The first impression you make on a client is pivotal to developing a continuing and fruitful relationship. •Clients want to work with people who can solve problems, not with those who merely identify them. •Build credibility based on good performance. •Always put the client first. Clients want to be confident that any projects they undertake with the contractor will be successful, will involve a good working relationship with the contractor, and will help the clients achieve their business goals. •It is advisable not to rely on a good relationship with just one individual in a client or partner organization, but rather to build relationships with several key people in a client or partner organization, since key individuals may leave the organization while others become more influential.

Laddering

•Some projects have a set of activities that are repeated several times. •series of activities that must be done in serial sequence, which means that, for an activity with three people, at any one time only one person is working while two other people are waiting. •set of activities that can be performed concurrently. However, it is often not practical to perform the activities in this way because the organization would need triple the experts—one for each room. •laddering: This approach allows the project to be completed in the shortest possible time, while making the best use of available resources.

Simplified Project Proposal

•Sometimes a proposal is complex for a large multi-million dollar project. These proposals will be lengthy, with many defined sections, charts, figures and tables. •At other times, the proposal may not need to be complex. A simplified or basic proposal may be appropriate and sufficient.

All proposals should include the following elements as a minimum:

•Statement of the customer's need—should clearly describe the contractor's understanding of the customer's need or problem and reference any information or data to support the need. •Assumptions—state any assumptions that may affect the contractor's scope, schedule, or price. •Project scope—describe the contractor's approach to addressing the customer's need or solving the problem, define specifically what work tasks the contractor proposes to do, and outline how the contractor expects the customer to be involved throughout the project. •Deliverables—list all the tangible products or items it will provide to the customer during the performance of the project. •Resources—types of expertise and skills that the contractor will utilize on the project, including any key subcontractors, consultants, or suppliers. •Schedule—list of key milestones with their target dates or cycle time from the start of the project in sufficient detail to demonstrate a well-thought-out plan. •Price—indicate the bottom-line price to perform the project. Emphasize the value provided and not on how low, or "cheap," the price is. •Risks—identify potential concern about any risks that have a high likelihood of occurrence or a high degree of potential impact. Try to demonstrate that the contractor has experience with these risks and outline a realistic approach to dealing with them in the project. •Expected benefits—pull together information from the preceding sections and make a case to justify the "value" of the proposal in terms of expected quantitative benefits, such as return on investment, payback, cost savings, an increase in productivity, reduced processing times, faster time-to-market, and so on. The focus of the proposal should be on quality of the content—clear, concise, and convincing—rather than quantity or number of pages. •Many simplified project proposals range from 4 to 8 pages, and they are usually less than 20 pages. •It is appropriate to attach appendices for items such as resumes of key people who will be assigned to the project, back-up details for cost estimates, or a list of past related projects and associated references.

Decision to Develop a Proposal

•The development and preparation of a proposal can be costly and time-consuming. •Contractors interested in submitting a proposal must be realistic about the probability of being selected as the winning contractor. •Evaluating whether or not to go forward with the preparation of a proposal is sometimes referred to as the bid/no-bid decision. •Contractors need to be realistic about their ability to prepare proposals and about the probability of winning the contract because submitting a lot of non-winning proposals in response to RFPs can hurt a contractor's reputation. •Sometimes the hardest thing for a contractor to do is to decide to no-bid an RFP.

Project Identification

•The initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need. •Projects are identified in various ways: •During an organization's strategic planning •As part of its normal business operations •In response to unexpected events •The result of a group of individuals deciding to organize a project to address a particular need •It is important to clearly define the need. This may require gathering data about the need or opportunity to help determine if it is worth pursuing. •Sometimes organizations identify several or many needs, but have limited funds and people available to pursue potential projects to address all of those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.

Planning Phase

•The planning phase is the second phase of the project life cycle. It includes defining the project scope, identifying resources, developing a schedule and budget, and identifying risks, all of which make up the baseline plan for doing the project work. •Shows how the project scope will be accomplished within budget and on schedule •Plan the work and work the plan •The detailed plan results in a baseline plan =What needs to be done -- scope, deliverable =How it will get done -- activities, sequence =Who will do it -- resources, responsibilities =How long it will take -- durations, schedule =How much it will cost -- budget =What the risks are •Benchmark the baseline plan to allow for comparison with actual progress. •Include the people that will actually do the work in the planning process. •They have knowledge of detailed activities to be done. Participation also builds commitment.

Proposal Preparation

•The preparation of a proposal can be a straightforward task performed by one person, or it can be a resource-intensive effort requiring a team of organizations and individuals with various expertise and skills. •In large scale efforts, the contractor may designate a proposal manager who coordinates the efforts. •The proposal schedule must allow adequate time for writing, review, and approval by the management of the contractor's organization. •Proposals in response to RFPs can be as brief as a few pages or as long as hundreds of pages, including text and drawings. •Customers do not pay contractors to prepare proposals. Contractors absorb the costs of proposal development as part of normal marketing costs.

Creating a Winning Proposal

•The proposal process can be highly competitive and a proposal is a selling document—not a technical report. •In the proposal, the contractor must convince the customer that the contractor is the best one to solve the problem. •The contractor should highlight the unique factors of its proposal that differentiate it from competing contractors. •The proposal should always emphasize the benefits to the customer. •Proposals should be written in a simple, concise manner. •Proposals must be specific in addressing the customer's requirements as laid out in the RFP. Proposals must be realistic, in terms of the proposed scope, cost, and schedule, in the eyes of the customer.

Globalization

•adds a unique dimension to managing projects. •It changes the dynamics of the project and adds a layer of complexity that can adversely affect the project outcome if the project participants are not aware of what they might encounter regarding cultural differences and multinational economic transactions.

Create Stakeholder Register

•potential stakeholders are identified and include key contact information, role or specific topics of interest, expectations, any known issues, and areas of potential influence for each stakeholder.

cost-reimbursement contract

•the customer agrees to pay the contractor for all actual costs (labor, materials, and so forth), regardless of amount, plus some agreed-upon profit. •This type of contract is high risk for the customer, since contractor costs can overrun the proposed price. •In cost-reimbursement contracts, the customer usually requires that, throughout the project, the contractor regularly compare actual expenditures with the proposed budget and reforecast cost-at-completion. •This type of contract is low risk for the contractor because all costs will be reimbursed by the customer. The contractor cannot lose money on this type of contract. •Cost-reimbursement contracts are most appropriate for projects that involve a higher degree of risk.