isds551 exam2
Earned value management involves calculating three values for each activity or summary activity from a project's WBS. Describe each of these three values with examples.
(1) The planned value (PV), also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period. Suppose a project included a summary activity of purchasing and installing a new Web server. Suppose further that, according to the plan, it would take one week and cost a total of $10,000 for the labor hours, hardware, and software involved. The planned value (PV) for that activity that week is, therefore, $10,000. (2) The actual cost (AC) is the total direct and indirect costs incurred in accomplishing work on an activity during a given period. For example, assume that it actually took two weeks and cost $20,000 to purchase and install the new Web server. Assume that $15,000 of these actual costs were incurred during Week 1 and $5,000 was incurred during Week 2. These amounts are the actual cost (AC) for the activity each week. (3) The earned value (EV) is an estimate of the value of the physical work actually completed. It is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date. The rate of performance (RP) is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity. For example, suppose that the server installation was halfway completed by the end of week 1. The rate of performance would be 50 percent (50/100) because by the end of week 1, the planned schedule reflects that the task should be 100 percent complete and only 50 percent of that work has been completed.
What are some of the suggestions for improving the requirements process?
1. Develop and follow a requirements management process that includes procedures for initial requirements determination. 2. Employ techniques such as prototyping, use case modeling, and Joint Application Design to understand user requirements thoroughly. Prototyping involves developing a working replica of the system or some aspect of the system. These working replicas may be throwaways or an incremental component of the deliverable system. Prototyping is an effective tool for gaining an understanding of requirements, determining the feasibility of requirements, and resolving user interface uncertainties. Use case modeling is a process for identifying and modeling business events, who initiated them, and how the system should respond to them. It is an effective tool for understanding requirements for information systems. Joint Application Design (JAD) uses highly organized and intensive workshops to bring together project stakeholders—the sponsor, users, business analysts, programmers, and so on—to jointly define and design information systems. These techniques also help users become more active in defining system requirements. 3. Put all requirements in writing and keep them current and readily available. Several tools are available to automate this function. For example, a type of software called a requirements management tool aids in capturing and maintaining requirements information, provides immediate access to the information, and assists in establishing necessary relationships between requirements and information created by other tools. 4. Create a requirements management database for documenting and controlling requirements. Computer Aided Software Engineering (CASE) tools or other technologies can assist in maintaining a repository for project data. A CASE tool's database can also be used to document and control requirements. 5. Provide adequate testing to verify that the project's products perform as expected. Conduct testing throughout the project life cycle. 6. Use a process for reviewing requested requirements changes from a systems perspective. 7. Emphasize completion dates. 8. Allocate resources specifically for handling change requests.
List and briefly describe the six main processes involved in project scope management.
1. Planning scope management involves determining how the project's scope and requirements will be managed. The project team works with appropriate stakeholders to create a scope management plan and requirements management plan. 2. Collecting requirements involves defining and documenting the features and functions of the products produced during the project as well as the processes used for creating them. The project team creates stakeholder requirements documentation, a requirements management plan, and a requirements traceability matrix as outputs of the requirements collection process. 3. Defining scope involves reviewing the project charter, requirements documents, and organizational process assets to create a scope statement, adding more information as requirements are developed and change requests are approved. The main outputs of scope definition are the project scope statement and updates to project documents. 4. Creating the WBS involves subdividing the major project deliverables into smaller, more manageable components. The main outputs include a work breakdown structure, a WBS dictionary, a scope baseline, and updates to project documents. 5. Verifying scope involves formalizing acceptance of the project deliverables. Key project stakeholders, such as the customer and sponsor for the project, inspect and then formally accept the deliverables during this process. If the deliverables are not acceptable, the customer or sponsor usually requests changes. The main outputs of this process, therefore, are accepted deliverables, change requests, work performance information, and updates to project documents. 6. Controlling scope involves controlling changes to project scope throughout the life of the project—a challenge on many information technology projects. Scope changes often influence the team's ability to meet project time and cost goals, so project managers must carefully weigh the costs and benefits of scope changes. The main outputs of this process are work performance information, change requests, and updates to the project management plan, project documents, and organizational process assets.
What is a work breakdown structure? What are the inputs and tools used for creating one?
A work breakdown structure (WBS) is a deliverable-oriented grouping of the work involved in a project that defines the total scope of the project. Because most projects involve many people and many different deliverables, it is important to organize and divide the work into logical parts based on how the work will be performed. The WBS is a foundation document in project management because it provides the basis for planning and managing project schedules, costs, resources, and changes. Since the WBS defines the total scope of the project, some project management experts believe that work should not be done on a project if it is not included in the WBS. Therefore, it is crucial to develop a good WBS. The project scope statement, stakeholder requirements documentation, and organizational process assets are the primary inputs for creating a WBS. The main tool or technique is decomposition, that is, subdividing project deliverables into smaller pieces. The outputs of the process of creating the WBS are the WBS itself, the WBS dictionary, a scope baseline, and project document updates.
Describe critical path analysis. How is the critical path calculated?
Critical path analysis is a network diagramming technique used to predict total project duration. This important tool can help combat project schedule overruns. A critical path for a project is the series of activities that determine the earliest time by which the project can be completed. It is the longest path through the network diagram and has the least amount of slack or float. To find the critical path for a project, one must first develop a good network diagram, which, in turn, requires a good activity list based on the work breakdown structure. Once a network diagram is created, one must also estimate the duration of each activity to determine the critical path. Calculating the critical path involves adding the durations for all activities on each path through the network diagram. The longest path is the critical path.
What are milestones? Describe.
Milestones are the most important and visible events in a project and normally have no duration. It often takes several activities and a lot of work to complete a milestone, but the milestone itself is like a marker to help in identifying necessary activities. Milestones are also useful tools or setting schedule goals and monitoring progress. Not every deliverable or output created for a project is really a milestone.
What is a network diagram? Describe two network diagramming methods.
Network diagrams are the preferred technique for showing activity sequencing. They are a schematic display of the logical relationships among project activities and their sequencing. They represent activities that must be done to complete the project. Every activity on the network diagram must be completed in order for the project to finish. Two types of network diagramming methods are as follows: (1) The arrow diagramming method (ADM): This is a network diagramming technique in which activities are represented by arrows and connected at points called nodes to illustrate the sequence of activities. A node is simply the starting and ending point of an activity. The first node signifies the start of a project, and the last node represents the end of a project. (2) The precedence diagramming method (PDM): This is a network diagramming technique in which boxes represent activities. It is particularly useful for visualizing certain types of time relationships.
Describe the process of scope verification.
Scope verification involves formal acceptance of the completed project scope by the stakeholders. This acceptance is often achieved by a customer inspection and then sign-off on key deliverables. To receive formal acceptance of the project scope, the project team must develop clear documentation of the project's products and procedures to evaluate if they were completed correctly and satisfactorily. To minimize scope changes, it is crucial to do a good job of verifying project scope. The scope management plan, scope baseline, requirements documentation, requirements traceability matrix, validated deliverables, and work performance data are the main inputs for scope validation. The main tools for performing scope validation are inspection and group decision-making techniques. The customer, sponsor, or user inspects the work after it is delivered and decides if it meets requirements. The main outputs of scope validation are accepted deliverables, change requests, work performance information, and project documents updates.
Describe three tools used in developing a good cost estimate.
Several tools and techniques can be used to create a cost estimate. Three of such tools are as follows: (1) Analogous estimates: They use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. This technique requires a good deal of expert judgment and is generally less costly than other techniques, but it is also less accurate. Analogous estimates are most reliable when the previous projects are similar in fact, not just in appearance. In addition, the groups preparing cost estimates must have the needed expertise to determine whether certain parts of the project will be more or less expensive than analogous projects. (2) Bottom-up estimates: They involve estimating the costs of individual work items or activities and summing them to get a project total. This approach is sometimes referred to as activity-based costing. The size of the individual work items and the experience of the estimators drive the accuracy of the estimates. Using smaller work items increases the accuracy of the cost estimate because the people assigned to do the work develop the cost estimate instead of someone unfamiliar with the work. The drawback with bottom-up estimates is that they are usually time-intensive and therefore expensive to develop. (3) Parametric estimating: They use project characteristics (parameters) in a mathematical model to estimate project costs. Parametric models are most reliable when the historical information used to create the model is accurate, the parameters are readily quantifiable, and the model is flexible in terms of the project's size.
What are tangible and intangible costs? Distinguish between direct and indirect costs and give examples of each.
Tangible and intangible costs and benefits are categories for determining how well an organization can define the estimated costs and benefits for a project. Tangible costs or benefits are those costs or benefits that an organization can easily measure in dollars. Conversely, intangible costs or benefits are costs or benefits that are difficult to measure in monetary terms. Intangible benefits for projects often include items like goodwill, prestige, and general statements of improved productivity that an organization cannot easily translate into dollar amounts. Because intangible costs and benefits are difficult to quantify, they are often harder to justify. Direct costs are costs that can be directly related to producing the products and services of the project. One can attribute direct costs directly to a certain project. Project managers should focus on direct costs, since they can control them. For example, direct costs include the salaries of people working full time on the project and the cost of hardware and software purchased specifically for the project. Indirect costs are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project. For example, the cost of electricity, paper towels, and so on in a large building housing a thousand employees who work on many projects would be indirect costs. Indirect costs are allocated to projects, and project managers have very little control over them.
What is the Theory of Constraints? Describe critical chain scheduling, an application of the Theory of Constraints.
The Theory of Constraints (TOC) is a management philosophy developed by Eliyahu M. Goldratt and is based on the metaphor of a chain and its weakest link: Any complex system at any point in time often has only one aspect or constraint that limits the ability to achieve more of the system's goal. For the system to attain any significant improvements, that constraint must be identified, and the whole system must be managed with it in mind. Critical chain scheduling is a method that considers limited resources when creating a project schedule and includes buffers to protect the project completion date. An important concept in critical chain scheduling is the availability of scarce resources. For instance, if a particular piece of equipment is needed full time to complete each of two tasks that were originally planned to occur simultaneously, critical chain scheduling acknowledges that one must either delay one of those tasks until the equipment is available or find another piece of equipment in order to meet the schedule. Other important concepts related to critical chain scheduling include multitasking and time buffers.
List and briefly describe the four project cost management processes.
The four processes for project cost management are as follows: (1) Planning cost management involves determining the policies, procedures, and documentation that will be used for planning, executing, and controlling project cost. The main output of this process is a cost management plan. (2) Estimating costs involves developing an approximation or estimate of the costs of the resources needed to complete a project. The main outputs of the cost estimating process are activity cost estimates, basis of estimates, and project document updates. (3) Determining the budget involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. The main outputs of the cost budgeting process are a cost baseline, project funding requirements, and project document updates. (4) Controlling costs involves controlling changes to the project budget. The main outputs of the cost control process are work performance information, cost forecasts, change requests, project management plan updates, project documents updates, and organizational process assets updates.
List and briefly describe the main processes involved in project time management.
The main processes involved in project time management are as follows: (1) Planning schedule management involves determining the policies, procedures, and documentation that will be used for planning, executing, and controlling the project schedule. (2) Defining activities involves identifying the specific activities that the project team members and stakeholders must perform to produce the project deliverables. (3) Sequencing activities involves identifying and documenting the relationships between project activities. (4) Estimating activity resources involves estimating how many resources—people, equipment, and materials—a project team should use to perform project activities. (5) Estimating activity durations involves estimating the number of work periods that are needed to complete individual activities. (6) Developing the schedule involves analyzing activity sequences, activity resource estimates, and activity duration estimates to create the project schedule. (7) Controlling the schedule involves controlling and managing changes to the project schedule.
What are the three basic types of cost estimating? Describe each type.
The three basic types of cost estimating are as follows: (1) A rough order of magnitude (ROM) estimate provides an estimate of what a project will cost. This type of estimate is done very early in a project or even before a project is officially started. Project managers and top management use this estimate to help make project selection decisions. The timeframe for this type of estimate is often three or more years prior to project completion. A ROM estimate's accuracy is typically -50 percent to +100 percent, which means that the project's actual costs could be 50 percent below the ROM estimate or 100 percent above. For information technology project estimates, this accuracy range is often much wider. ROM estimates are also known as a ballpark estimate, a guesstimate, a swag, or a broad gauge. (2) A budgetary estimate is used to allocate money into an organization's budget. Many organizations develop budgets at least two years into the future. Budgetary estimates are made one to two years prior to project completion. The accuracy of budgetary estimates is typically -10 percent to +25 percent, meaning the actual costs could be 10 percent less or 25 percent more than the budgetary estimate. (3) A definitive estimate provides an accurate estimate of project costs. Definitive estimates are used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. Definitive estimates are made one year or less prior to project completion. A definitive estimate should be the most accurate of the three types of estimates. The accuracy of this type of estimate is normally -5 percent to +10 percent, meaning the actual costs could be 5 percent less or 10 percent more than the definitive estimate.
List and briefly describe five approaches for creating work breakdown structures
Using Guidelines If guidelines for developing a WBS exist, it is very important to follow them. Some organizations—the U.S. Department of Defense (DOD) for example—prescribe the form and content for WBSs for particular projects. Many organizations provide guidelines and templates for developing WBSs, as well as examples of WBSs from past projects. At the request of many of its members, the Project Management Institute recently developed a WBS Practice Standard to provide guidance for developing and applying the WBS to project management. Project managers and their teams should review appropriate information to develop their unique project WBSs more efficiently. The Analogy Approach In the analogy approach, you use a similar project's WBS as a starting point. Some organizations keep a repository of WBSs and other project documentation on file to assist people working on projects. Viewing examples of other similar projects' WBSs allows you to understand different ways to create a WBS. The Top-down and Bottom-up Approaches Most project managers consider the top-down approach of WBS construction to be conventional. To use the top-down approach, start with the largest items of the project and break them into their subordinate items. This process involves refining the work into greater and greater levels of detail. After finishing the process, all resources should be assigned at the work package level. The top-down approach is best suited to project managers who have vast technical insight and a big-picture perspective. In the bottom-up approach, team members first identify as many specific tasks related to the project as possible. They then aggregate the specific tasks and organize them into summary activities, or higher levels in the WBS. The bottom-up approach can be very time-consuming, but it can also be a very effective way to create a WBS. Project managers often use the bottom-up approach for projects that represent entirely new systems or approaches to doing a job, or to help create buy-in and synergy with a project team. Mind Mapping Mind mapping is a technique that uses branches radiating out from a core idea to structure thoughts and ideas. Instead of writing tasks down in a list or immediately trying to create a structure for tasks, mind mapping allows people to write and even draw pictures of ideas in a nonlinear format. This more visual, less structured approach to defining and then grouping tasks can unlock creativity among individuals and increase participation and morale among teams. After discovering WBS items and structure using the mind-mapping technique, you could then translate the information into chart or tabular form. Mind mapping can be used for developing WBSs using the top-down or bottom-up approach.