CNIT 480 Exam 2

Simulation

· Monte Carlo simulation was introduced back in Chapter 6 as an aid in building accurate time estimates for WBS activities. · It can also be used during quantitative risk analysis to simulate the impact a risk may have on project goals. · Based on the probabilities of various outcomes, similar to the decision tree analysis example, the simulation can be run multiple times based on the frequency distribution to determine the expected outcomes with probabilities. · Monte Carlo Analysis: o Simulation during the risk management process is generally used to determine cost and schedule outcomes using three point estimates of task durations

Resource Leveling Activities

· Move activities - manually move activities by changing the discretionary dependencies or entering hard dates · Split - manually spit activities such that only part of the activity is done at one time · Reduce resource availability - change the resource so they are not working full time on the task which will have the affect of lengthening the activity duration · Change/add resources to the task · Authorizing the resource to work overtime

Quantitative Risk Analysis

· Much like qualitative risk analysis, quantitative risk analysis attempts to estimate the impact a risk may have on a project as well as the probability. · The key difference between the two is that quantitative analysis is based on mathematical or statistical techniques to model the behavior of a particular risk. · The decision whether to use quantitative or qualitative analysis techniques is made on a project by project basis can be made on a risk by risk basis. · Techniques include: o Decision trees with expected monetary value analysis o Simulation (Monte Carlo)

Maturity Model Warnings

· No guarantees they produce quality product just that they follow a standard process · No "silver-bullet" · No auditing agencies exist to review claims after the fact

Mitigation Strategies

· The final step after the risk response has been chosen; update the risk register with the mitigation strategy: o Fallback plans are used if the project can not be completed as originally planned. o Contingency plans are put in place to allow for fluctuations that will allow the project to finish as originally planned. o Contingency reserves are excess amounts of time, dollars, and resources etc. used if necessary, in order for the project to finish as originally planned. · Contingency plans use the contingency reserves to meet project objectives.

Critical Path Method (CPM)

· Uses the sequence and duration of activities to determine the total project duration · A critical path for a project is the series of activities that determines the earliest time by which the project can be completed · Produces two key pieces of information: 1) the amount of slack or also referred to as float for each activity in the schedule and 2) the longest path through the schedule or said another way - the shortest time the project can be completed

Contract Types Versus Risk

Establishing the correct set of terms and conditions, regardless of contract type, is crucial for the success of the buyer/seller relationship!

Capability Maturity Model Integrated (CMMI)

§ Federally funded research and development center sponsored by the U.S. Department of Defense through the Office of the Under Secretary of Defense for Acquisition and Technology § The SEI contract was competitively awarded to Carnegie Mellon University in December 1984 § The U.S. Department of Defense established SEI to advance the practice of software engineering because quality software is a critical component of U.S. defense systems § The quality of a system is highly influenced by the quality of the process used to acquire, develop, and maintain it

Importance of Good Communications

· Effective communications is paramount to success on all projects especially IT projects due largely to the language gap · Strong verbal skills are a key factor in career advancement for IT professionals · It has been estimated that as much as 90% of a project manager's time is spent in some form of communication · Medium - communication transport (email, phone, ...) · Encode - translate thoughts into language · Message - output of encoding · Noise - anything that interferes with the transmission and understanding of the message · Decode - translate message into meaningful thoughts or ideas

Risk Management Process

1. Build/choose the risk management plan format 2. Identify risks 3. Risk assessment 4. Complete the risk register 5. Complete the risk management plan (budget, schedule of activities, any specific tools needed)

2 Method to Finding the Critical Path

1. Calculate slack for each activity on the WBS using a network diagram, or 2. Find the longest path through the network diagram

Time & Cost Planning Process

1. Define project activities to the "right" level of detail in the WBS (decomposition), so that they are assignable, assessable, and controllable 2. Define the sequence of activities and also the type of dependency (mandatory, discretionary, external) between all tasks on the WBS 3. Assign the right resources to work on each activity based on the skills needed to perform the work, resource availability and budget restrictions 4. Create time estimates for each activity; accuracy dependent on need and capabilities of the estimator 5. Build the project schedule and understand and identify the critical path, critical chain, and available slack for each activity 6. Perform resource leveling to ensure a workable schedule and maximize worker productivity 7. Assign costs for all resources throughout the project schedule 8. Build and finalize the initial project budget (including all elements of the budget) which will establish your project baseline 9. Obtain sponsor approval to proceed

Procurement Planning Process

1. Review of Requirements, WBS, schedule, etc. 2. Decision on what needs to be procured, how, when 3. Make-or-buy decision 4. Develop SOW and SLA requirements 5. Develop Procurement Documents (RFQ, RFP, etc.) 6. Build the Procurement Management Plan 7. Review examples from text.

2 Procurement Planning Tools and Techniques

1. Subject Matter Experts, both internal and external, can provide valuable inputs in procurement decisions. 2. Make-or-buy analysis, determine whether it makes more sense to perform the activities within the project team or to contract with a seller. Key decision points include: cost, human resources, time, strategic direction, and risk.

Project Quality Management Processes - PMBOK

Quality Planning - identifying which quality standards are relevant to the project and organization and determining the activities necessary to meet the established standards in order to deliver the product fit for customer use

Free Slack

The difference between the earliest time an activity can begin and the latest time an activity can begin without changing the completion date of any successor task

Schedule Development

Use results of the other time management processes (activity definition, sequencing, estimating) to determine the start and end date of the project Determines the planned start and completion dates for each activity listed on the WBS

Balanced Scorecard

o An approach for managing and measuring business performance which takes into consideration factors beyond the typica financial metrics o The key new element of this approach is focusing on the human issues that drive financial outcomes to force organizations to focus on the future o The balanced scorecard suggests viewing organizational activity from four perspectives: § 1. Learning and growth - training, continuous improvement, investment § 2. Business process - reduce non-value-added activities, number of opportunities and success rates § 3. Customer perspective - customer satisfaction and needs, delivery performance § 4. Financial - ROI, shareholder value, return on equity, cash flow o Organizations should list each metric, establish goals and objectives for each, measure results, and establish initiatives to adjust results if issues are found o The key issue with implementing a balanced scorecard is to make sure you pick the right metrics

ISO 9000

o Based in Geneva Switzerland, consortium of approx. 100 world's industrial nations. The American National Standards Institute (ANSI) represents the US o Quality system standard applicable to any product, service, or process anywhere in the world o The ISO 9000 family of standards addresses various aspects of quality management. The standards provide guidance and tools for companies who want to ensure their products and services consistently meet customer's requirements, and that quality is consistently improved o Issues: § Can be a paperwork nightmare when starting from scratch § Does not guarantee that an organization will produce quality products or services. It only confirms that the appropriate system/process is in place § Time consuming at first and cost money

Philip Crosby

o Best known for the phrase "zero defects" or "doing it right the first time" or "quality is free" o He spent most of his career educating managers that preventing defects was cheaper than fixing them later o He believed that quality is free because the cost of conformance should be counted as the normal cost of doing business and that the cost for nonconformance is the only cost of quality

Kaoru Ishikawa

o Created quality circles and development of the Ishikawa Diagram or commonly referred to as a Fishbone diagram because of its resemblance to the skeleton of a fish o The Fishbone diagram is a "cause-and-effect" tool to aid workers in discovering the true root cause for quality issues

W. Edwards Deming

o Deming estimated that as much as 85% of all quality problems could be corrected by changed in the process and only 15% could be controlled by the workers on the line o 14 points: § 1. Create constancy of purpose toward improvement of products and services, with the aim to become competitive, and to stay in business, and to provide jobs § 2. Adopt the new philosophy of cooperation (win-win) from management on down to all employees, customers, and suppliers § 3. Cease dependence on inspection to achieve quality. Reduce the need for inspection by building the product right the first time. § 4. End the practice of awarding business on the basis of price tag alone. Instead minimize total cost over the long run. Move toward a single supplier for any one item and a long-term relationship of loyalty and trust. § 5. Improve constantly and forever every process for planning, production, and service. This will improve quality and productivity and thus, continually reduce costs. § 6. Institute training on the job. § 7. Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspirations. § 8. Drive out fear and build trust so that everyone may work effectively. § 9. Break down barriers between departments. Abolish competition and build a win-win system of cooperation. § 10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects or new levels of productivity. § 11. Eliminate numerical quotas for the work force and numerical goals for management and substitute leadership. § 12. Remove barriers that rob people of workmanship. Eliminate the annual rating or merit system and create pride in the job being done. § 13. Institute a vigorous program of education and self-improvement for everyone in the organization. § 14. Put everybody in the company to work to accomplish the transformation.

Walter A. Shewhart

o In 1924, Shewhart created the "control chart" to better understand variation and to distinguish between "assignable-cause" and "chance-cause" o In order to aid a manager in making scientific, efficient, economical decisions, he developed Statistical Process Control methods o He also believed that quality must be a continuous process and developed what is referred to as the PDSA cycle: Plan, Do, Study and Act which was later extended and made famous by W. Edwards Deming

Watts Humphrey

o In the late 1960s, Humphrey headed the IBM software team that introduced the first software license. Humphrey was previously a Vice President at IBM. o In the 1980s at the Software Engineering Institute (SEI) at Carnegie Mellon University § This program was aimed at understanding and managing the software engineering process because this is where big and small organizations or individuals encounter the most serious difficulties and where, thereafter, lies the best opportunity for significant improvement § The program resulted in the development of the Capability Maturity Model, published in 1989 and inspired the later development of the Personal Software Process (PSP) and the Team Software Process (TSP)

Joseph Juran

o Often been credited with adding the human element to quality control as well as statistical methods o In 1951 he published the Quality Control Handbook, which put forth the view that quality should be viewed more from the customer's perspective "fitness for use" as opposed to the manufacturer's adherence to specifications o Dr. Juran has also been credited with the Pareto Principle or 80/20 rule. As a general rule, a small amount of issues cause the most problems on a project § For example, 80% of the rework time spent on the product was caused by 20% of the requirements or 80% of the software bugs caused by 20% of the code. o 10 steps: § 1. Build awareness of the need and opportunity for improvement § 2. Set goals for improvement § 3. Organize to reach the goals (establish a quality council, identify problems, select projects, appoint teams, designate facilitators). § 4. Provide training § 5. Carry out projects to solve problems § 6. Report progress § 7. Give recognition § 8. Communicate results § 9. Keep score § 10. Maintain momentum by making annual improvement part of the regular systems and processes of the company

Tools used for schedule development

o PERT o Critical Path Method (CPM) o Critical Chain Method (CCM) o Resource Leveling

Genichi Taguchi

o Quality should be designed into the product and not inspected into it o Quality is best achieved by minimizing the deviation from a defined target reducing the affect of uncontrollable environmental factors o Cost of quality should be measured as a function of deviation from the standard and collected system-wide (Scrap, rework, inspection, returns, warranty service calls, product replacement)

Six Sigma

o The main purpose is to reduce variation in the product thus reducing the number of product or service defects o Uses data and statistical analysis to measure and improve a company's operational performance by identifying and eliminating defects o The Greek letter Sigma is used in the field of statistics to represent the standard deviation to measure variability from the mean or average o A small standard deviation means that data cluster closely around the middle (mean) and there is little variability among the data o A normal distribution is a bell-shaped curve that is symmetrical about the mean o Using a normal curve, if a process is at six sigma, there would be no more than two defects per billion items produced. A defect is any instance where the product or service fails to meet customer requirements o Six sigma for IT projects is calculated based on the number of defects per million opportunities o A simple invoice produced from the accounting system's accounts receivable module may have 50 opportunities for defects in just one document o To reach six sigma you would have no more than 3.4 defects per million opportunities on your IT projects o Six Sigma Process: § Referred to as DMAIC (dee-may-ic) · Define - determine customer quality goals · Measure - setup relevant metrics based on customer goals and collect data · Analyze - evaluate data results for trends, patterns, relationships. · Improve - make changes based on facts · Control - don't slip backwards once targets are reached but set up control methods to maintain performance

Total Quality Management (TQM)

o Total Quality describes the culture, attitude and organization of a company that strives to provide customers (internal and external) with products and services that satisfy their needs o It is a combination of quality tools and management specific tools to achieve increased business while reducing costs and waste o Continuous improvement - eliminate waste and non-value-added activities, quality improvement is never complete, data is continuously collected, continually refine standards o Customer-driven - customer comes first, continued assessment of satisfaction and needs, strive to meet and exceed customer requirements o Culture - establish an open, cooperative, trusting, communicative environment where information can be easily shared up the management chain and back down o Employee empowerment - training, commitment, full participation with reward and recognition programs tied to quality performance o Management involvement - leadership, commitment, involvement, lead by example, support workers o Decisions based on facts - Statistical Process Control, rational vs. emotional decision making, accurate and timely data collection

Schedule Development deliverable

project schedule

Quality Planning Process

· 1. Obtain commitment and shared understanding from stakeholders on the quality standards to be used on this specific project. · 2. Conduct training for all on the Organization's quality initiative (Six Sigma, TQM, CMMI) · 3. Define the quality standards which consist of metrics (goals) to be measured and the acceptable result parameters · 4. Determine how each metric result will be collected and who is responsible for collecting each data item. · 5. Conduct Project Team training on the chosen metrics and the defined process for control and monitoring. · 6. Build checklists to aid the project team in collecting and monitoring quality standards · 7. Define and report the current baseline of metrics for the organization · 8. Build process improvement plans, disseminate and execute · 9. Finally, accumulate information from previous steps an

Communication & Stakeholder Planning Process

· 1. Review the stakeholder analysis and add information if necessary pertaining to communications management and complete the stakeholder communications matrix. · 2. Define content for status reports and timing · 3. Establish who on the project team is responsible for collecting data for status reports · 4. Establish who on the project team is responsible for creating the reports and disseminating the reports · 5. Establish key project team contacts for each stakeholder to serve as first contact references · 6. Finally, accumulate information from previous steps and build the Communications Management plan

Fixed Price Contracts

· A Fixed-price or lump-sum contract is appropriate when the Statement of Work (SOW) is sufficiently detailed and stable such that the seller can prepare an accurate fixed price · The seller is obligated to complete 100% of the work at the negotiated contract value. · Presents risks for both buyer and seller?

Buffers and Critical Chain

· A buffer is additional time to complete a task · Murphy's Law states that if something can go wrong, it will, and Parkinson's Law states that work expands to fill the time allowed. In traditional estimates, people often add a buffer and use it if it's needed or not · Critical chain schedule removes buffers from individual tasks and instead creates o A project buffer, which is additional time added before the project's due date o Feeding buffers, additional time added before tasks on the critical path

Statement of Work (SOW)

· A document which describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item and potentially at what cost. · A document which describes 100% of the work or services required to be completed under contract by the seller. · The language used should be written in a manner understandable by all project participants. · Requirements should avoid words which allow for multiple interpretations. Use active voice "shall" whenever a provision is mandatory. Follow "best practices" for requirements definition · Also, avoid using jargon and slang which may not be understood by a seller in a different part of the country or in a different part of the world.

SLA

· A set of specific quality metrics within the contract are created and monitored which is generally referred to as a Service Level Agreement . o Specific times that a service must be available, such as an application that the buyer is using from an application service provider (Cloud). o Response times and latency parameters o Mean time to respond to issues o Mean time to repair o Problem notification/escalation procedures · Application maintenance upgrades · Number of users that can be served simultaneously · Reporting content and frequency · Change management procedures · Security provisions · Data backup procedures · The specific requirements are dependent on the actual service being provided and the size and strategic importance of the service. · The key is first determining what levels of service the organization actually needs to do its business. o Requiring too much may create unneeded complexity and cost. The more service guarantees requested from the seller the higher the cost. · Finally, along with each service level requirement there must be an associated cost to the seller if they fail to deliver.

Risk Response Planning

· After identifying and quantifying risk, you must decide how to respond to them. · Four main strategies: o Risk avoidance: eliminating a specific threat or risk, usually by eliminating its causes. o Risk acceptance: accepting the consequences should a risk occur without trying to control it. o Risk transference: shifting the consequence of a risk and responsibility for its management to a third party internal or external to the organization. o Risk mitigation: reducing the impact of a risk event by reducing the probability of its occurrence.

Organizational Project Management Maturity Model

· An MM is a structured collection of elements that describe characteristics of effective processes; it provides: o A place to start o The benefit of a community's prior experiences o A common language and a shared vision o A framework for prioritizing actions o A way to define what improvement means for your organization · A maturity model can be used as a benchmark for assessing different organizations for equivalent comparison

Risk Utility

· An organization's approach to risk management is driven by their risk utility or tolerance for risk · Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff: o Utility rises decreasing rate for a person who is risk-averse o Those who are risk-seeking have a higher tolerance for risk and their satisfaction increases when more payoff is at stake o The risk-neutral approach achieves a balance between risk and potential payoff

Procurement Management

· Based on the current trends, the procurement process is becoming a major competency that organizations must become proficient in and excel at! · The term procurement has several synonyms such as purchasing or outsourcing.

Risk Identification Techniques

· Broad Organizational Categories: o People (human resources) o Technology (changes) o Quality and performance issues o Customers o Vendors o Management o Funding o Political Issues or Legal Issues o Market Forces · Analogy: o Uses information from past similar projects or the experience of team members to look for risks. o Previous projects must be up to date! · Brainstorming: o Brainstorming is a non-structured or semi-structured method of eliciting ideas from a group with the goal of generating a complete list of ideas. o The key to running a successful brainstorming session is to foster an atmosphere that allows all ideas to be spoken regardless of likelihood. o If everyone feels able to contribute to the discussion free from persecution or harassment a better more complete list of ideas will be generated. § If not possible other techniques to brainstorming are available such as Delphi Technique or "Post-it Notes" · Interviews: o The project leader and other key members of the team with interview skills, conduct personal one-on-one discussions with key stakeholders. o The crucial aspect to successful interviewing is to make sure the stakeholders feel comfortable sharing ideas with the interviewer. o The success of this technique is heavily dependent on the skills of the interviewer. · Delphi Technique: o Using this technique the participants are unknown to each other so ideas can be generated without fear of ridicule. o A moderator presents the question electronically to each participant who then generates ideas and sends them electronically to the moderator. o The moderator accumulates all responses into one list which is then distributed for team comment. The comments are returned to the moderator for accumulation and dissemination. o This process continues until a general consensus is reached · SWOT Analysis: o SWOT is an acronym which stands for Strengths, Weaknesses, Opportunities, and Threats which was first defined and used during project selection in Chapter 4. o SWOT analysis offers a framework with which to conduct a brainstorming session, sticky-note exercise, or a Delphi Technique session. o A key benefit of this technique is a focus on both sides of each issue; strengths versus weaknesses and opportunities versus threats. o Strengths - patents, strong brand name, reputation, cost advantages from proprietary know-how, access to distribution networks o Weaknesses - lack of patent, weak brand name, poor reputation, lack of access to distribution networks o Opportunities - an unfilled customer need, arrival of new technologies, better regulations, international trade barriers o Threats - shifts in consumer tastes away from, substitute products, worse regulations, trade barriers · Post-it Notes: o During a short time interval such as five minutes, have each participant write down on post-it notes as many ideas as they can think of putting one idea per post-it. o Participants then hand their notes to the moderators who stick them on a chalk or white board. duplicate ideas are stuck on top of each other to reduce the number of entries. A list of ideas is then quickly generated and the team discusses the merits of each. o Ideas which have close to zero probability of occurring or zero impact to the project are removed from the board. o The ideas that remain must then be rated for likelihood and impact. A large matrix is drawn on the board similar to the probability and impact matrix (Figure 8-2). The post-it notes can then be moved around inside the matrix until the team agrees on each placement. o Finally, generate the start of the risk register (figure 8-1) from the remaining post-it notes.

The Program Evaluation and Review Technique (PERT)

· Developed by the U.S. Navy in cooperation with the consulting firm Booz-Allen Hamilton for the Polaris missile/submarine project in 1958 to help organize the activities of 11,000+ contractors · Uses a weighted average approach or beta probability distribution to capture the three-point estimates discussed in previous lecture (optimistic, most likely, and pessimistic) for activity duration · The weighted averages for each activity are added to the network diagram to show the start dates and finish dates for each and the final project end date

What is Risk?

· Dictionary definition of risk: "the possibility of loss or injury" · A function of the: {likelihood, and impact} · An event if it occurs will have a negative impact on one or more of: project scope, time (schedule), cost, quality, or resources

Basic Principles of Cost Management

· Burden Rate - the cost of a human resource which takes into consideration more than just his/her salary or hourly rate, for things such as benefits, vacation, holidays, etc. · Direct vs. Indirect Costs - direct costs are directly attributable to the activities of the project (purchasing hardware or software, labor cost of workers on the team. Indirect costs, the opposite of direct, are costs that are not directly attributable to the activities of the project (overhead rates such as management salaries, energy costs, rents, etc.) · Recurring vs. Nonrecurring Costs - recurring costs appear more than once throughout the life of the project (annual hardware and software maintenance). Nonrecurring costs appear only once (initial purchase cost of hardware and software). · Fixed vs. Variable Costs - fixed costs are expenses whose total does not change in proportion to the activity of a business or project, within the relevant time period or scale of production (rent, insurance). Variable costs change based on the activity of a business or project (project employee costs). · Opportunity Costs - a measure of the anticipated return against the anticipated return an organization would receive on a highest yielding alternative investment that contains a similar risk assessment · Sunk Cost - cost expended that cannot be retrieved on a product or service. Money already spent that can not be recovered · Life Cycle Costs - all costs incurred over the life-time of the product or service · Reserves - dollars included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict (critical chain buffers) o Contingency reserves - allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline o Management reserves - allow for future situations that are unpredictable (sometimes called unknown unknowns)

Art of Communications

· Communication definitions: o An exchange of information, o A verbal or written message, o A technique for expressing ideas effectively, o A process by which meanings are exchanged between persons through a common-system of symbols and/or sounds

Project Communications Management Processes

· Communications Planning: determining the information and communications needs of the stakeholders · Plan Stakeholder Engagement: develop appropriate management strategies to effectively engage stakeholders

Project Cost Management

· Concerned with the planning, estimating, budgeting, and control of the costs of project resources needed to complete 100% of the activities of the project

Project Cost Management Processes

· Cost estimating: developing an estimate of the costs and resources needed to complete a project · Cost budgeting: allocating the overall cost estimate to individual work items to establish a baseline for measuring performance

Cost

· Cost is a resource sacrificed or fore-gone to achieve a specific objective or something given up in exchange · Costs are usually measured in monetary units like dollars

Quality Management Terms

· Cost of quality - total costs incurred to prevent a faulty product or development of a system that does not meet system requirements. Costs include - assessments, rework, lost time, injury, and death. o Prevention costs - up-front costs associated with satisfying customer requirements (design reviews, all forms of system testing, training, surveys, etc.) o Appraisal costs - costs associated with assuring that all requirements have been met (customer acceptance tests, demonstrations, lab tests, etc.) · Cost of non-conformance - total costs incurred by an organization because the product does not meet user requirements for example, rework or poor user productivity · Internal failure costs - costs associated with system defects before a system if fully deployed (scrap and rework) · External failure costs - costs associated with system defects after fully deployed (scrap, rework, returns, market share, lawsuits, etc.) · Rework - due to poor quality the same task must be repeated to correct an identified error · Fitness for use - the product can be used as it was originally intended · Conformance to requirements/specifications - the product conforms to the written specifications · Reliability - the probability of the product performing as specified without failure over a set period of time · Maintainability - the time and expense needed to restore the product to an acceptable level of performance after the product has failed or began a trend toward failure

Tools and Techniques

· Cost-benefit analysis - is used to determine the trade-off between the costs of building a quality product or service and the benefits obtained from a product that meets defined quality standards · Brainstorming · Benchmarking - study a competitor's product, service, or business practice · Design of experiments - is a statistical method to help identify which factors have influence on the quality of product or process. It allows you to change certain parameters (> one at a time) and observe the results

Schedule Benefits

· Creates a consistent framework which can be followed from project to project and during the execution of the project · Illustrates the interdependencies of each activity on the WBS · Facilitates communication within the project team and between the team and stakeholders · Aides in the identification of "Critical" activities · Aides the project manager to evaluate all alternatives and their impact when making scheduling changes during the project · Reduces the amount of resource scheduling conflicts · Provides visibility to those tasks that can or must be run in parallel to keep the project on track · Facilitates "what if" analysis (Mandatory/discretionary activities)

ISO Quality Management Principles

· Customer Focus - organizations rely on their customers, they must understand customer needs, they must meet customer requirements, and they must exceed customer expectations · Provide Leadership - leaders must establish a unity of purpose and set the direction for the organization using a unified mission and vision. They must create an environment that encourages people to achieve the organization's objectives · Involvement of People - the organization must involve people from all levels to promote ownership and support · Use a Process Approach - each and every activity within the organization must be managed as a process leading to a more predictable outcome lowering costs and cycle time · Take a Systems Approach - approach each activity with the knowledge of how each and every process affects and is affected by other processes in the organization · Encourage Continual Improvement - organizations must create a permanent process which encourages continual improvement not a one and done approach · Factual Approach to Decision Making - decision making should be based on actual, reliable, and current data · Mutually Beneficial Supplier Relationships - organizations are dependent on their suppliers to be successful so they should foster a relationship built on trust and information sharing to create value for both parties

Critical Chain Scheduling

· Developed by Eliyahu Goldratt in his book The Goal · Technique that addresses the challenge of meeting or beating project finish dates and an application of the Theory of Constraints (time, resources, cost, scope, etc.), one aspect that limits a project's ability to achieve more of its goals, looking for weakest links · Critical chain is a method of scheduling that takes constraints into account when creating a project schedule and includes buffers to protect the project completion date unlike CPM which is only based on time

The Importance of Project Risk Management

· Every IT project regardless of size, complexity, location, or organization contains some measure of risk · To aid the project team in assessing the impact a negative event will have on the project and how likely (generally expressed as a percentage or qualitative term) is the event to occur · The PM's objective is not the removal of all risk, this simply cant be done, but to identify and manage risk to the benefit of the project · Risks on a project can be a good thing if managed appropriately · The main objectives of risk management are to increase the probability and impact of positive outcomes and decrease the probability and impact of negative outcomes · Unfortunately, many organizations don't follow a formal risk management process and operate in a perpetual state of "crisis management" · Crisis management - is the opposite of good risk management - organizations find themselves trying to figure out what to do about a problem after it has occurred instead of planning for issues in advance o Draining the swamp or closing the barn door? · Also referred to as perpetual "fire-fighting"

Communications Planning

· Every project should include some type of communications management plan, a document that guides project written and oral communications · Much of the information contained in this plan is taken from the stakeholder analysis already competed in an earlier process · The plan must answer the following questions: o Who are the stakeholders? o What information do the stakeholders need, when do they want it, at what level of detail do they need, and in what form? o Who on the project team is responsible for collecting data, creating the reports, and disseminating the reports? o Who on the project team is the first contact for external vendors with questions and issues?

Decision Trees and Expected Monetary Value (EMV)

· Generally used along with its graphical representation that describes a set of options under consideration along with estimated implications of each option. · The analysis consists of costs, revenues (or benefits), and probabilities for each option path. · The EMV analysis technique is a statistical concept that calculates the average outcome when dealing with unknown future scenarios

The Importance of Project Cost Management

· IT projects have a poor track record for meeting cost goals · Average cost overrun from 1995 CHAOS study was 189% of the original estimates; o Improved to 45% in the 2001 study o 43% in 2003 and 59% in 2012

Critical Path Info

· If one or more activities on the critical path takes longer than planed, the whole project schedule will slip unless corrective action is taken o Misconceptions: § The critical path is not the one with all the critical activities; it only accounts for time § The critical path(s) can change as the project progresses

Project Quality Management

· International Organization for Standardization (ISO) definition" the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs · The American Society for Quality and the PMBOK define quality as "the degree to which a set of inherent characteristics fulfill requirements." · Text: the degree to which the product satisfies both stated and implied requirements

Final Point

· Know the purpose and audience of the estimate before communicating the results or selecting the method of estimating o One-time only project vs. follow on potential o Will you be held to this estimate, what are the ramifications for being wrong

Techniques for shortening a Project Schedule

· Knowing the critical path helps you make schedule trade-offs: o Shortening durations of critical tasks by adding more resources or changing their scope o Crashing tasks by obtaining the greatest amount of schedule compression for the least incremental cost o Fast tracking tasks by doing them in parallel or overlapping them

Make-or-Buy Decision

· Make - What to consider? o Labor costs - internal cost of human resources. o Human resource knowledge, if needed knowledge is not present training will be needed. o Cost to prepare and maintain all product artifacts (progress reports, testing, schedules, etc.). o Rework costs - requirement changes, bugs. o On-going support costs - day-to-day maintenance and updates after implemented. o Opportunity costs - while working on this project, other items are not getting done. · Buy (what to consider?) o Cost associated with the procurement process itself. o Cost to manage the relationship. o Initial purchase cost along with on-going support costs. o Other Risks (associated with the vendor itself).

Reasons for doing Risk Management

· Makes aggressive risk-taking possible · Decriminalizes risk · Good chance for success with honest evaluation of issues · Bounds uncertainty · Provides minimum-cost downside protection · Protects against invisible transfer of responsibility · Save part of a failed effort · Maximizes opportunity for personal growth · Protects management from getting blindsided · Focuses attention where it is needed

Best Practices

· Manage projects by managing their risks. · Create and maintain a census of risks for each project. · Track the causal risks, not just the ultimate undesirable outcomes. · Assess each risk for probability and likely cost. · Predict for each risk the earliest symptom that might indicate materialization. · Appoint a risk officer, just one person who is not expected to maintain a "Can-Do" attitude a company runs the risk of bad information not getting communicated. · Establish easy (perhaps anonymous) channels for bad news to be communicated up the hierarchy.

Major Reasons for Communication Issues

· Many conflicts caused by poor communication; misunderstanding, poor word choice, not thinking before speaking · Culture ignorance · Poor listening skills · Mode (F2F, email, IM...) · Interference (not having direct communications) · Honesty · Generational understanding

Risk Management Plan Contents

· Methodology - approaches (process steps), tools, and data sources that may be used to perform risk management. · Roles and responsibilities to manage risks throughout the entire project. · Budgeting for risk management activities (mitigation strategies). · Timing of risk management activities (how often are the risks reviewed, when will mitigation strategies be implemented). · Risk categories - high level used during identification (Technology, Customers, Performance, etc.). · Risk probability and impact scales · (very likely to very unlikely 5 levels) or (just three low, medium, high) these scales need to be defined for consistency across projects and project managers. · Format for the risk register and its use; how are risks communicated and tracked.

Quality Management Plan

· Philosophies and principles: o Authority levels of each individual o The organization's quality process defined on its own or one of the popular methodologies identified earlier in the chapter (Six Sigma, TQM, etc.) o Overall objectives, timing of corrective actions · Standards & Metrics: o "-ilities": Adaptability, Flexibility, Generality, Install-ability, Interoperability, Maintainability, Modifiability, Portability, Reliability, Replace-ability, Reusability, Scalability, Testability, Understand-ability, Usability o Return on Investment goals (economy) o Efficiency o Documentation o Customer satisfaction criteria o Performance criteria o Number of change requests and time to implement o Earned value; definition coming later in semester · Data Acquisition and validation: o Sampling o Surveys o Outside assessments o System test results o When should data be gathered, stored and by who o Automated testing tools being used or needed o Configuration Management Plan · Roles and Responsibilities: o Who collects information and who verifies the accuracy of the data o Who is to receive and act on the data o Who makes final decisions on changes · Status Reports: o Who is responsible for producing them, what do they look like and how often · Who receives which reports

Project Procurement Management Prcoesses

· Planning Activities are: o Plan Procurements: Determining what to procure. when, and how · Future activities are: o Conduct Procurements: obtaining quotations, bids, offers, or proposals, as appropriate, and choosing solutions from among potential sellers. o Control Procurements: making sure both sides (seller and buyer) meet their contractual obligations

PMBOK: Project Risk Management

· Planning Activities are: o Risk management planning: deciding how to approach and plan the risk management activities for the project o Identify Risks: determining which risks are likely to affect a project and documenting their characteristics o Perform Qualitative risk analysis: characterizing and analyzing risks and prioritizing their effects on project objectives o Perform Quantitative risk analysis: measuring the probability and consequences of risks o Plan Risk responses: taking steps to enhance opportunities and reduce threats to meeting project objectives · Future Activities: o Risk monitoring and control - monitoring known risks, identifying new risks, reducing risks, and evaluating the effectiveness of risk reduction

Critical Chain Scheduling

· Powerful tool that involves: o Critical path analysis o Resource constraints, and o Changes in how task estimates are made in terms of buffers (reduce the over/under estimating game) o Focus attention on critical tasks · Another issue presented by Goldratt which adds to the benefit of using buffers is the problem of resources multitasking with the idea of reducing idle time between tasks

Cost Budgeting Process

· Presents to the stakeholders, management, and project team the entire picture of costs for the project taking into account all of the following cost categories: o Direct and indirect, o Recurring and nonrecurring, o Fixed and variable, o And all life cycle costs

Importance of Project Procurement Management

· Procurement means acquiring goods and/or services from an outside/external source · In 2017, outsourcing accounted for 11.9% of the total IT budget on average an increase from the 10.6% in 2016. · "In terms of the outsourcing frequency (how often departments are outsourcing), organizations are reducing the outsourcing of only two functions - application maintenance and disaster recovery - while all other functions are rising" (Comp. Econ, 2017). · The article goes on to say that IT security outsourcing is increasing at the fastest rate of all outsourced functions. · Global IT outsourcing will experience a compound annual growth rate of close to 6% through 2019 (Bradshaw, 2017).

RFP & RFQ

· Request for Proposal: Used to solicit proposals from prospective sellers. · Requests for Quote: Used to solicit quotes or bids from prospective suppliers.

Resource Loading and Leveling

· Resource Loading defines the amount of time a specific resource is needed over each time period · Project software is great at highlighting issues of overloading a resource - having a resource working more time in a day than is available · Resource Leveling is the process of rescheduling activities on the project schedule that have available slack to achieve a more balanced distribution of resource usage · Project software will do this for you... within limits!

Qualitative Risk Analysis

· Subjective methods for qualifying each risk for impact and probability of occurrence. · This usually involves a method which can be done quickly in a short period of time with little resources. · Risk qualitative tools and techniques include o Interviews with Subject Matter Experts o Probability/Impact matrix

Leveling Benefits

· Team productivity · Team morale · Reduced costs (less overtime and less multitasking) · Leveled costs, less erratic swings from period to period · Less management · Especially important when hiring outside help to fully utilize them while assigned · Better use of resources across projects

Calculating ES, EF, LS, LF

· The calculation is performed for each activity in two passes through the entire network diagram for each path o The first pass through starts at the begin node and moves to the end node through each path calculating the ES and EF o The second pass through starts at the end node and moves to the beginning node through each path calculating LS and LF · Those activities with zero slack are on the critical path

Cost Estimating

· The cost estimating process develops accurate cost estimates for the resources needed to complete each activity of the project · The HR time estimates 'Effort' have already been done, so next simply apply the relevant burden rate for each selected resource · Next, create estimates for all types of resources not just human resources such as: materials equipment, and facilities · Remember cost estimating should be done in a progressive elaboration manner

Importance of updating critical path data

· The critical path may change as you enter actual start and finish dates during project execution · As soon as you know the project completion date will change, negotiate/communicate with the project sponsor

Slack

· The difference between the earliest time an activity can begin and the latest time an activity can begin without changing the completion date of the project · In most projects of any size, there is typically one critical path which means that all of the other paths have tasks with slack but, o Theoretically a project can have multiple critical paths

Evaluation Criteria

· The final step in the plan contracting process is to develop and communicate the proposal evaluation criteria. The evaluation criteria are used to rate and evaluate seller proposals. · "The criteria should be included in the procurement documents delivered to potential sellers" as per your professor's preference! o Providing this information will make clear exactly how their proposals will be judged. It will also help the seller determine if they can even supply the product or service. · Initial and life cycle Price · Seller's ability to address the SOW · Seller's experience with similar projects · Seller's customer references · Seller's financial stability · Seller's Technical approach · Seller's Production capacity and interest · Who owns Intellectual property rights if applicable

Risk Idenification

· The first step is to identify as many risks as possible for the upcoming project with the knowledge that you can never see them all. · Risk identification is not a one-time process; but should be a continuous process of team members and stakeholders looking for new issues that may affect the success of the project.

Plan Procurements

· The key goal of this process is to determine which project needs may best be met by sellers or vendors outside of the project team. It includes deciding: o Should we or shouldn't we procure 'buy' o How to procure o What to procure o How much to procure o When to procure

Risk Management Planning

· The main deliverable of risk management planning is the risk management plan · The organization identifies, in the risk management plan, the approach, plan, and who will execute the risk management activities. · The risk management plan is created early in the planning phase of the project and updated throughout the life of the project.

Probability/Impact Matrix

· The probability and impact matrix aids the project team in prioritizing which risks need more attention based on either their probability of occurring or the size of the impact to the project or both. · The columns represent the degree of impact to the project's scope, time, cost, and quality goals. · This example using a five level scale: zero to low impact, low to medium, medium, medium to high, and high impact. The scores are determined by subject matter experts and historical data. · The next step determine the probability that a risk will materialize again using expert judgment and historical data. · Once the risk has been given both a probability score and an impact score it should be placed in the proper cell in the matrix. · If the risk falls into one of the shaded areas, the team should prepare mitigation strategies and monitor them closely. · The number of shaded cells is dependent on the organization's culture and risk utility. · The key issue with qualitative risk assessment centers on the issue of estimator bias.

Quality Planning

· The quality management plan consists of: metrics (thresholds such as the number of software bugs allowed, missed requirements, system response time, failure rates, etc.), checklists (verify that a required set of steps was completed), improvement plan (identify non-value added steps and remove or improve them), and finally a baseline of where the organization is currently operating · Important to pick the correct metrics, what gets measured is what gets attention · Metrics: simple and easy to understand, inexpensive to use, robust, consistent, easily collected, and easily accessible by all stakeholders

Risk Register

· The risk register is a dynamic document that must be continually updated as the project progresses · Risk Register Contents: o Risk - name of the risk along with short description. Some like to include a numbering scheme to make it easier to reference. o Trigger event - Explanation of the event or events that signal to the person monitoring that this risk is about to happen or has happened; looking at the root cause of the risk. o Responsible - name of the person (preferred) or group/department responsible for monitoring the risk and executing mitigation activities. o Consequence - explanation of the impact to the project if the risk occurs. o Probability - an estimation of the likelihood the risk will materialize and affect the project. The probability is often a qualitative rating (low, medium, high) or could be a more quantitative number. o Mitigation - explanation of the strategy being activity used to lessen the chances the risk will occur.

Cost-Plus-Percentage of Cost

· The seller is reimbursed for allowable (agreed to by buyer) costs plus a fee calculated as a percentage (again agreed to by the buyer) of the actual costs. · The extra fee will vary based on the actual cost of the project. · This type of contract does not provide much of an incentive for the seller to reduce costs because the buyer has agreed to pay a percentage of them above the fixed amount.

Cost-Plus-Fixed-Fee

· The seller is reimbursed for allowable costs plus a fixed fee calculated as a percentage of the allowable costs. · For example: o A project that was originally estimated to cost $50,000 was also given a fixed fee of $5,000. If the project was completed by the Seller at a cost of $60,000 they would only receive the $50,000 plus the $5,000 for a total of $55,000.

Cost-Plus-Incentive-Fee

· The seller is reimbursed for allowable costs plus a predetermined fee, an incentive bonus, based upon meeting certain time and cost objectives. · CPIF offers a seller more profit if costs are reduced or performance is improved and less profit if costs are raised or if performance goals are not met.

Contracts

· The seller/buyer relationship is based on a signed contract. · Class Discussion: who has ever entered into a contract for their services? · A mutually binding agreement entered into by two or more parties enforceable in a court of law. It obligates the seller to provide the specified products, services, or results. It also, obligates the buyer to provide in most cases monetary compensation. · Contracts generally fall into one of three broad categories: o Fixed-price or lump-sum o Cost-reimbursable o Time and material

Cost Reimbursable Contracts

· This category involves the reimbursement (payment) of the seller's actual costs, plus a fee typically representing the seller's profit. · Include incentive clauses based on the seller meeting certain project objectives such as schedule or cost targets. o Cost-plus-fee or cost-plus-percentage of cost o Cost-plus-fixed fee o Cost-plus-incentive fee

Time and Material

· Time and material contracts assign all of the risk to the buyer and virtually none to the seller. · The seller is reimbursed for all previously defined costs and additional material costs of the seller to complete the product.