International Project Management
Project definition
"Is a temporary endeavor undertaken to create a product, service or result only" Project Management Institute (PMI)
Project management definition
"Is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements" Project Management Institute (PMI)
Estimated (remaining cost) to completion (ETC)
(BAC-BCWP)/CPI
Expected task duration (formula)
(a+4m+b)/6
Risk assessment
-Description of risk -All the possible outcomes of the risk -The magnitude or severity of the outcomes -Likelihood (probability) of the risk occurring, and likelihood of each possible outcome -When the risk might occur during the project -Interaction of the risk outcomes with other parts of this project or other projects
Critical success factors
-Everyone must win with the project -Collaborative effort -Measurement -Gather lessons learned as you go -Cultural sensitivity and awareness throughout the project -Proactive resource allocation -Project organization, manager and team member selection
Risk management
-Identifying risks -Assessing and analyzing the likelihood and impacts of risks -Trying to reduce the uncertainties (by gathering more information or making different decisions) -Trying to lessen the impacts of risks -Developing contingency plans for critical risks -Monitoring risks as the project progresses
Complexity in international projects
-Lack of control due to different offices and organizations involved -Different cultures -Different time zones -Different currencies -Variety of regulations and rules -Political risks and stability -Visibility of the project to the outside world
Why project selection?
-Limited capacity -Limited money -Limited time -Low level of strategy matching -Low level of stakeholders interest -Opportunity costs with current business
Disadvantages of SWOT
-May persuade organizations to compile lists rather than think about what is important in achieving objectives. -Presents lists uncritically and without clear prioritization so, for example, weak opportunities may appear to balance strong threats. -Usually a simple list and not critically presented.
What are some risk analysis tools?
-Probability analysis -Decision tree analysis -Monte Carlo simulation analysis -Life-cycle cost analysis -Delphi techniques for consensus -Technology forecasting -Game theory analysis -PERT analysis -Sensitivity analysis -Expected value analysis
Advantages of SWOT
-Simple and only costs time to do. -Produces new ideas to help take advantage of an organization's strengths and defends against threats. -Awareness of political and environmental threats allows an organization to have response plans prepared.
Advantages of PESTEL
-Simple and only costs time to do. -Provides an understanding of the wider business environment. -Encourages the development of strategic thinking. -May raise awareness of threats to a project. -Can help an organization to anticipate future difficulties and take action to avoid or minimize their effect. -Can help an organization to spot opportunities and exploit them
Breakthroughs to make international projects possible
-Telecommunications -Networking technology -Mobile communications -HW & SW commoditization -Adaptation of SW systems to any local characteristic -Internet -Ability to clone the infrastructure and replicate it in many locations -Ability to control remote locations on a more or less real time basis -Ability to provide standardization in technology
Disadvantages of PESTEL
-Usually a simple list and not critically presented. -The rapid pace of change in society makes it increasingly difficult to anticipate developments that may affect an organization in the future. -Collecting large amounts of information may make it difficult to see the wood for the trees and lead to "paralysis by analysis." -The analysis may be based on assumptions that prove to be unfounded -only covers the external environment and the results need to be considered with other factors, such as the organization itself, competitors and the industry in which it is working
What are the rules of project crashing?
-only crash critical activities -crash the cheapest critical activity first -assume each task can be crashed one day at a time (simplifying assumption, but not necessary) -all critical paths must decrease by one day, in order for the project duration to decrease by one day
What are the 2 sources of delay for a project?
1. A delay of one or more activities in the critical chain 2. A delay in one or more of the activities on a noncritical or "feeder" chain because such delays could delay activities on the critical chain
What are the most common priority rules?
1. As soon as possible 2. As late as possible 3. Shortest task first 4. Most resources first 5. Minimum slack first 6. Most critical followers 7. Most successors
Project planning process
1. Clearly define project objective (scope) 2. Develop a Work Breakdown Structure (WBS) 3. Estimate time needed for each task 4. Determine resources needed for each task 5. Estimate cost needed for each task 6. Develop project schedule and budget (adjust as needed)
Operations characteristics
1. Continuous 2. No start date/completion 3. Repetitive 4. Tasks and their sequences are precisely defined -vehicle assembly
Parameters of a project
1. Cost: resources 2. Time 3. Specifications (scope and quality)
What are the elements of organizational culture for successful international projects?
1. Degree of internal integration 2. Autonomy and involvement 3. Adaptability, speed, innovation, risk 4. Employee welfare, fairness, and trust 5. Diversity
Comparative scope of international projects
1. Number of locations 2. Extent of purpose 3. Range of project 4. Number of organizations involved 5. Dependence of the organization on the project 6. Risk and complexity 7. Potential benefits 8. Cost of the project
Trends in project management
1. Push to use project management to achieve more strategic goals 2. Push to use project management to accomplish routine department tasks 3. Creation of a project management office to improve project effectiveness 4. Virtual projects: global teams with different members operating in different countries
What are the 6 subprocesses of risk management?
1. Risk management planning 2. Risk identification 3. Qualitative risk analysis 4. Quantitative risk analysis 5. Risk response planning 6. Risk monitoring and control
Project characteristics
1. Temporary 2. Defined start/end dates 3. Are completed when its objectives are achieved 4. Unique 5. Progressive Elaboration -design a new model -new marketing campaign
Brute force approach to finding critical path
1. identify all possible paths from start to finish 2. sum up durations for each path 3. largest total indicates critical path (This approach is inefficient, but is instructive)
ACWP
Actual cost of work performed (AC), cost of work actually performed so far
Project Charter (project master plan)
Agreed-upon, legally binding project plan (the final plan), Small or routine projects may not need all 9 of these elements in the project charter, but larger projects should have them. 1. Overview 2. Objectives 3. General approach 4. Contractual aspects 5. Schedules 6. Resources and budgets 7. Personnel 8. Evaluation methods 9. Potential problems
Success criteria
Agreement on how to define success -achievement of project results -success in project execution
Project crashing
Aka project accelerating, one way to exert project control, shortening project duration/speeding it up, almost always costs more
Project charter resource requirements
All capital and operating expenses • Cost monitoring and control procedures
Bottom-up estimate
An approach for estimating activity durations -Ask the person responsible for each low-level task how long they think it will take. This assumes a given amount of resources.
Top-down estimate
An approach for estimating activity durations -Based on the project due date, tell the person responsible for each low-level task how much time they are allotted to do the task. They must then determine how much resources are needed to meet the deadline.
Cost variance (CV)
BCWP-ACWP
Schedule variance (SV)
BCWP-BCWS
Cost performance index (CPI)
BCWP/ACWP (EV/AC)
Schedule Performance Index (SPI)
BCWP/BCWS (EV/PV)
Goldratt's Critical Chain
Best known attack on resource constrained scheduling problem and vicious cycle that makes projects substantially late -Theory of Constraints-new projects should be scheduled based on the availability of scarce resources -"time buffers" be added in the schedules of resources that feed bottleneck (scarce) resources, and the bottle- neck resources themselves. -helps the problems caused by poor multitasking, but does not lead to more realistic project duration estimates.
BAC
Budgeted cost at completion
BCWP
Budgeted cost of work performed (EV), budgeted cost of work actually performed so far
BCWS
Budgeted cost of work scheduled (PV), baseline cost of work scheduled
Resource allocation
Can be used as a control mechanism, allocating more, less, or different physical resources can affect the progress of activities/cost/quality/deliverables
Net present value
Compares the present value of money today to the present value of money in future, taking inflation and returns into account-the sum of the present values (PVs) of the individual cash flows of the same entity -can be described as the "difference amount" between the sums of discounted: cash inflows and cash outflows
Precontractual phase characteristics
Content- mission, products, scope, schedule, expected cost, sale price Product- contract represents the commitment of the project Highlights- project/benefits/costs/risks are determined, high degree of information sharing and negotiation with stakeholders
Contractual stage characteristics
Content- realization of the project Product- meeting needs of stakeholders, knowledge acquired, completion of project Highlights- good planning is necessary to control costs and manage schedule
Scope
Define project limits, main project activities, or deliverables of the project -Avoid scope creep: add elements to the project trying to solve problems of every one and making the project non-viable due to costs and calendar and ahead of the original one -scope creep is welcome if it lowers costs/enhances competitiveness
Organizational structure
Describes the management reporting relationships in the organization -organization charts
Project charter contractual aspects
Description of all agreements (client, others) • Reporting requirements, technical specs, delivery dates, penalties, process for changes
Project charter evaluation methods
Descriptions of all procedures and standards for evaluating project—how information will be collected, stored, monitored
Restrictions
Detail some restrictions along 3 dimensions: time, costs, specifications -max budget -main budget entries -start/end date -due dates for deliverables -specific resources needed
Objectives
Detailed project mission -must be Specific Measurable Attainable Realistic Timely
Cost/benefit
Divide benefits between costs -the higher results the more interesting a project is -costs and benefits may be calculated with present value formulas
Estimated (total cost) at completion (EAC)
ETC+ACWP
Pure project organization
Each project is organized as a separate division reporting to senior management -large projects -each project owns resources/personnel -breadth not depth
In which phase are the majority of costs incurred?
Execution phase
Threats
External factors Political influences Environmental factors Competitor activity Economy Seasonal effects
Opportunities
External factors Technology and infrastructure development Changing consumer behaviour Emerging and developing markets New innovations (R&D) Market demand
Project action plan
For each activity, this should at least show -activity name -time duration estimate -start date -immediate predecessor activity -resources needed (maybe finish date, WBS index, cost, slack, etc.)
Budgeting for contingencies
For each risk estimate the additional cost of implementing the contingency plan (when there's knowledge of the unknown) -expected value= cost * probability of risk -sum the values expected for each of the risks
Identification of risks
Identifying all of the possible events or conditions that might occur and may negatively impact project performance -brainstorming session -determining symptoms or warning signs that indicate when risk is about to occur -determining root cause of the risk
Student syndrome
If extra padding is built into activity time estimates, some people are likely to procrastinate getting started, and then the protection against risk is lost -students always want more time to complete a project -given more time, they delay starting the project until the last possible moment -high slack activities will be delayed and ignored until the slack is gone -if any problems arise with such activities they will be late
Reservations
Ignorance of the unknown, use historical data and experience -industries with high risk= 30% of budget -more predictable projects= 5% of budget
Project charter overview
Intended for senior management • Brief description of project & deliverables • List of major milestones • Likely profitability & competitive impacts
Weaknesses
Internal factors Gaps in knowledge and expertise Timescale and deadlines Budget and funding Competing projects Processes and systems
Strengths
Internal factors Track record (similar successes) Resource availability Skill levels Processes and systems Reputation
Project charter potential problems
List of potential risks to project progress • Contingency planning may prevent or soften the impacts of some problems
project team members
Main team members -Those professionals who will work from beginning to end -Review competences needed during the project and make sure that some team member have them -Complete team members -Contact details
Matrix project organization
Most common organizational structure, 2 bosses -team members may be assigned part-time to project and have less loyalty
Project name
Name and nickname Avoid ambiguity Descriptive or confidential
Responsibility chart
Often called Linear Responsibility Chart or Responsibility Matrix -Shows who has primary responsibility for each task -Can also show who provides support, who must be notified upon completion, who must give final approval, who is the backup person, etc. -It lets everyone see their roles throughout the project
Heuristic approach
One fundamental approach to constrained resource allocation problems Employ rules of thumb that have been found to work reasonably well in similar situations -they seek better solutions -start with the schedule and analyze resource usage period by period, resource by resource -uses priority rules Remember that the technological necessities always take precedence.
Optimization approach
One fundamental approach to constrained resource allocation problems Seek the best solutions but are far more limited in their ability to handle complex situations and large problems
Project charter schedule
Outline of all schedules and milestones • Project action plan, WBS
Precontractual stage
Phase 1: Initiation Phase 2: Concept development, preparation of tenders Phase 3: Negotiating deals
Contractual stage
Phase 4: Project planning Phase 5: Execution (and monitoring & control) Phase 6: Closure
Deliverables
Project outputs: must be tangible results -Intermediate: result of a phase as an input for another one -Final: to accomplish project objectives -Difficult to define in some projects -At least describe customer needs, wishes or requirements
Project charter objectives
Purpose of project • More detailed description of deliverables • Could be in the form of a project mission statement
Resource leveling
Re-scheduling some activities to eliminate resource overloading in certain time periods -Scheduling activities sequentially, assigning work to other employees, change the mix of resources in an activity -trying to delay activities that have extra slack time first (it won't delay the project) -project management software will help with this
Feeding buffer
Safety time just before where noncritical paths feed into the critical path (protects feeder paths)
Project buffer
Safety time placed at the end of the critical path (protects critical chain)
Interface map
Shows who each person or department must interface with and why -Shows participants how they fit in with other parts of the project -Facilitates coordination -Allows for early identification of potentially troublesome interfaces (personality clashes) -New interface maps can be developed for different phases of the project
What is a common project lifecycle?
Slow start- manager is selected, team is assembled, resources are allocated Quick momentum- work progresses, momentum builds Slow finish- many loose ends tie up
Project control
Taking corrective actions to keep the project on target toward meeting its performance goals (time, cost, deliverables) -project manager is responsible for this -resource allocation, funding decisions, personnel assignments, change in priorities 1. Measuring & monitoring- identifying and tracking KPI's 2. Evaluating- analyzing causes of problems and potential corrective actions 3. Correcting- taking corrective actions to bring project performance back in line with goals
Project charter general approach
Technical and managerial approaches • Relationship with other projects
Gantt Charts
The main purpose is to display the schedule of activities -easy to understand -flexible in that you can also show other information on the chart, such as resources required, who is responsible, critical activities, percent complete, etc. -All project management software packages will create these
Payback
Time needed to amortize project cost
Scorecard
Use of qualitative dimensions to evaluate and select projects -quantitative dimensions may be used in combination with qualitative ones -strategic match, competitive advantage, market, technical dimension, environmental dimension, financial dimension, project complexity, forecast risks
Project charter personnel
What types of personnel are needed and when • Skill requirements, necessary training, security clearances, nondisclosure agreements
Net Present Value considering scarce resources
When we have bottlenecks inside the firm we should take into account scarce resources into NPV -we must calculate NPV per unit of scarce resource
Mission
Why are we doing this project? Describe problem or opportunity Describe what we plan to do to solve it Descriptive and short
Variance of task duration (formula)
[(b-a)/6]^2
Project Portfolio Management (PPM)
a collection of projects managed under one umbrella -may be interrelated or not -purpose: maximize efficacy of projects in the light of strategy -2 main processes: selection/prioritization of tasks and management of the projects
Project selection
a process to assess each project idea and select the project with the highest priority. -Projects are still just suggestions at this stage, so the selection is often made based on only brief descriptions of the project -As some projects will only be ideas, you may need to write a brief description of each project before conducting the selection process
Uncertainty
a random chance that something will happen, with no way to control whether is happens or not
PESTEL Analysis
a strategic planning tool used to evaluate the impact political, economic, social, technological, environmental and legal factors might have on a project -involves an organization considering the external environment before starting a project
SWOT
a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats to a project -strengths and weaknesses usually arise from within an organization, and the opportunities and threats from external sources
change control system
allows the PM to assess the impacts and desirability of potential changes before deciding to implement them -review suggested changes -assess all impacts to project goals -evaluate advantages and disadvantages -consider alternative changes that are better -communicate changes to everyone involved -implement changes -summarize all changes and impacts in report
Critical activity
an activity on the critical path *If a critical activity is delayed, the entire project will be delayed. Close attention must be given to critical activities to prevent project delay. There may be more than one critical path.
Contingency planning
an alternative plan used if a risk event or condition occurs Examples: -Having a backup supplier for a key material -Carrying a safety stock for a key part -Having an alternate distribution channel to send products to China (air instead of boat) -Having hurricane evacuation plans
Risk
an uncertain event or condition that could negatively impact project performance
Earned value analysis
compares the current project status with the original (baseline) plan -It computes several performance metrics for individual activities and for the entire project -It focuses on cost and schedule performance -It's a useful tool for project control -Popular project management software computes these metrics -earned value of a task= budgeted cost of task * %completion of task -sum up all the earned value of tasks to find the earned value of the project
Economic factors PESTEL
economic growth, interest rates, exchange rates and inflation rate. Home economy situation Home economy trends Overseas economies and trends General taxation issues Taxation changes specific to product/services Seasonality/weather issues Market and trade cycles Specific industry factors Market routes and distribution trends Customer/end-user drivers International trade/monetary issues Disposable income Job growth/unemployment Exchange rates Tariffs (i.e. duties) Inflation Interest and exchange rates Consumer confidence index Import/export ratios Production level Internal finance Internal cash flow
Political factors PESTEL
include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability. Trading policies Funding, grants and initiatives International pressure groups Wars and conflict Government policies Government term and change Elections Inter-country relationships/attitudes Terrorism Political trends Governmental leadership Government structures Internal political issues Shareholder/ stakeholder needs/ demands
Baseline plan
lays out the target levels of progress and performance at the outset of the project execution phase -is the basis for assessing project performance throughout the project -finalized budget, time estimates, and project schedule are the basis
Technological factors PESTEL
look at elements such as R&D activity, automation, technology incentives and the rate of technological change.
Social factors PESTEL
often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Consumer attitudes and opinions Media views Law changes affecting social factors Brand, company, technology image Consumer buying patterns Major social events and influences Buying access and trends Ethnic/religious factors Advertising and publicity Ethical issues Demographics (age, gender, race, family size,) Lifestyle changes Population shifts Education Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Attitudes to work Attitudes to people doing certain types of work Leisure activities Occupations Earning capacity Staff attitudes Management style Organizational culture Changes to education system
Critical path
path with the longest total duration -the shortest time in which the project can be completed
functional directors
people that control firm employees and resources needed to execute the project
Stakeholders
person or group that will be influenced by the project or that will influence the project
customer
person that benefits from the project and its results
Project manager
person that leads project
sponsor
person with formal authority and responsibility of project
Functional project organization
project organized and controlled within a functional unit or department -smaller projects with a narrower focus
Padding
refers to inflating the original time or cost estimates for activities or for the project -easy to implement -protects against minor risks -leads to longer project durations and higher costs
Legal factors PESTEL
the impact of new laws and regulations on a company or project, eg: local authority regulations, national laws, EU and World Trade directives. Current/future legislation Local/national/international legislation Regulatory bodies and processes Environmental regulations Employment law Consumer protection Industry-specific regulations competitive regulations
Environmental factors PESTEL
the influences on a company or project that affect the environment, eg: disposal of waste, use of natural resources, pollution, environmental lobbying, eco-friendly policy, ISO 14000. Ecological Environmental issues Environmental regulations
Internal Rate of Return (IRR)
the rate that makes the net present value equal to zero -the discount rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment -the higher a project's IRR, the more desirable it is to undertake the project. -assuming all projects require the same amount of up-front investment, the project with the highest IRR would be considered the best and undertaken first -a firm should in theory, undertake all projects or investments available with IRRs that exceed the cost of capital
Organizational culture
the way an organization does things, strategy and culture need to be in tune for maximal success
Mind maps
tool to help identify all the necessary activities in a project -It's a type of brainstorming tool -the mind mapping process can bring out more ideas than simply making a list -It engages the team and generates enthusiasm -it brings out quieter team members -Mind mapping can be fast, compared to an outlining or listing approach
Project tracking
utilizes the baseline plan to provide the project manager with a control tool
Resource loading
when resources are overwhelmed or understaffed with workload -check resource constraints
