Proj. Mgmt II

Main Processes of Proj Time Management

Defining activities Sequencing activities Estimating activity resources Estimating activity durations Developing the schedule Controlling the schedule

5 phases in the DMAIC process

Define Measure Analyze Improve Control

Measure

Define measures, then collect, compile, and display data. Measures are defined in terms of defects per opportunity.

Lack of estimating experience

The people who develop software cost estimates often do not have much experience with cost estimation, especially for large projects. There is also not enough accurate, reliable project data available on which to base estimates. If an organization uses good project management techniques and develops a history of keeping reliable project information, including estimates, it should help improve the organization's estimates. Enabling information technology people to receive training and mentoring on cost estimating will also improve cost estimates.

Control

Track and verify the stability of the improvements and the predictability of the solution. Control charts are one tool used in the control phase.

Rework

action taken to bring rejected items into compliance with product requirements or specifications or other stakeholder expectations. Rework often results in requested changes and validated defect repair, resulting from recommended defect repair or corrective or preventive actions. Rework can be very expensive, so the project manager must strive to do a good job of quality planning and quality assurance to avoid this need.

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.

earned value (EV)

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 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.

Intangible costs or benefits

categories for determining how definable the estimated costs and benefits are for a project. , intangible costs or benefits are costs or benefits that are difficult to measure in monetary terms. Suppose Juan and a few other people, out of personal interest, spent some time using government-owned computers, books, and other resources to research areas related to the study. Although their hours and the government-owned materials were not billed to the project, they could be considered intangible costs. 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.

Tangible costs or benefits

categories for determining how definable the estimated costs and benefits are for a project. Tangible costs or benefits are those costs or benefits that an organization can easily measure in dollars. For example, suppose the Surveyor Pro project described in the opening case included a preliminary feasibility study. If a company completed this study for $100,000, the tangible cost of the study is $100,000. If Juan's government estimated that it would have cost $150,000 to do the study itself, the tangible benefits of the study would be $50,000 if it assigned the people who would have done the study to other projects.

Process adjustments

correct or prevent further quality problems based on quality control measurements. Process adjustments are often found by using quality control measurements, and they often result in updates to the quality baseline, organization process assets, and the project management plan.

External failure cost

cost that relates to all errors not detected and not corrected before delivery to the customer. Items such as warranty cost, field service personnel training cost, product liability suits, complaint handling, and future business losses are examples of external failure costs.

INdirect costs

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.

Direct Costs

costs that can be directly related to producing the products and services of the project. You can attribute direct costs directly to a certain project. For example, the salaries of people working full time on the project and the cost of hardware and software purchased specifically for the project are direct costs. Project managers should focus on direct costs, since they can control them.

Discretionary dependencies

defined by the project team. For example, a project team might follow good practice and not start the detailed design of a new information system until the users sign off on all of the analysis work. Discretionary dependencies are sometimes referred to as soft logic and should be used with care since they may limit later scheduling options.

Acceptance decisions

determine if the products or services produced as part of the project will be accepted or rejected. If they are accepted, they are considered to be validated deliverables. If project stakeholders reject some of the products or services produced as part of the project, there must be rework.

Mandatory dependencies

inherent in the nature of the work being performed on a project. They are sometimes referred to as hard logic. For example, you cannot test code until after the code is written.

External dependencies

involve relationships between project and non-project activities. The installation of a new operating system and other software may depend on delivery of new hardware from an external supplier. Even though the delivery of the new hardware may not be in the scope of the project, you should add an external dependency to it because late delivery will affect the project schedule.

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 performance baseline, project funding requirements, and project document updates.

Developing the schedule

involves analyzing activity sequences, activity resource estimates, and activity duration estimates to create the project schedule. Outputs include a project schedule, a schedule baseline, schedule data, and project document updates.

Controlling the schedule

involves controlling and managing changes to the project schedule. Outputs include work performance measurements, organizational process assets updates, change requests, project management plan updates, and project document updates.

actual cost (AC)

the total direct and indirect costs incurred in accomplishing work on an activity during a given period. For example, suppose 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.

budgetary estimate

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.

Internal failure cost

A cost incurred to correct an identified defect before the customer receives the product. Items such as scrap and rework, charges related to late payment of bills, inventory costs that are a direct result of defects, costs of engineering changes related to correcting a design error, premature failure of products, and correcting documentation all contribute to internal failure cost.

3 main outputs of quality control

Acceptance decisions Rework Process adjustments

Define

Define the problem/opportunity, process, and customer requirements. Important tools used in this phase include a project charter, a description of customer requirements, process maps, and Voice of the Customer (VOC) data. Examples of VOC data include complaints, surveys, comments, and market research that represent the views and needs of the organization's customers.

The relationship between Six Sigma and Statistics. What statistical concepts are involved in the Six Sigma philosophy?

An important concept in Six Sigma is improving quality by reducing variation. The term sigma means standard deviation. Standard deviation measures how much variation exists in a distribution of data. A small standard deviation means that data clusters closely around the middle of a distribution and there is little variability among the data. A large standard deviation means that data is spread out around the middle of the distribution and there is relatively greater variability. Statisticians use the Greek symbol s (sigma) to represent the standard deviation. A normal distribution is a bell-shaped curve that is symmetrical regarding the mean or average value of the population (the data being analyzed). In any normal distribution, 68.3 percent of the population is within one standard deviation (1s) of the mean, 95.5 percent of the population is within two standard deviations (2s), and 99.7 percent of the population is within three standard deviations (3s) of the mean. Standard deviation is a key factor in determining the acceptable number of defective units found in a population. Being plus or minus six sigma in pure statistical terms means only two defective units per billion. However, the target for Six Sigma programs is 3.4 defects per million opportunities. Based on Motorola's original work on Six Sigma in the 1980s, the convention used for Six Sigma is a scoring system that accounts for more variation in a process than you would typically find in a few weeks or months of data gathering. In other words, time is an important factor in determining process variations.

Estimates are done too quickly

Developing an estimate for a large software project is a complex task requiring a significant amount of effort. Many estimates must be done quickly and before clear system requirements have been produced. Rarely are the more precise, later estimates less than the earlier estimates for information technology projects. It is important to remember that estimates are done at various stages of the project, and project managers need to explain the rationale for each estimate.

4 problems with IT cost estimates

Estimates are done too quickly Lack of estimating experience Human beings are biased toward underestimation Management desires accuracy

3 project cost management processes.

Estimating costs Determining the budget Controlling costs

Human beings are biased toward underestimation

For example, senior information technology professionals or project managers might make estimates based on their own abilities and forget that many junior people will be working on a project. Estimators might also forget to allow for extra costs needed for integration and testing on large information technology projects. It is important for project managers and top management to review estimates and ask important questions to make sure the estimates are not biased.

Improve

Generate solutions and ideas for improving the problem. A final solution is verified with the project sponsor, and the Six Sigma team develops a plan to pilot test the solution. The Six Sigma team reviews the results of the pilot test to refine the solution, if needed, and then implements the solution where appropriate.

Management desires accuracy

Management might ask for an estimate, but really desire a more accurate number to help them create a bid to win a major contract or get internal funding. It is important for project managers to help develop good cost and schedule estimates and to use their leadership and negotiation skills to stand by those estimates.

Basic reasons for creating dependencies in proj activities

Mandatory dependencies Discretionary dependencies External dependencies

Critical path analysis, how is it calculated?

Many projects fail to meet schedule expectations. Critical path method (CPM)—also called critical path analysis—is a network diagramming technique used to predict total project duration. This important tool will help you 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. Slack or float is the amount of time an activity may be delayed without delaying a succeeding activity or the project finish date. There are normally several tasks done in parallel on projects, and most projects have multiple paths through a network diagram. The longest path or path containing the critical tasks is what is driving the completion date for the project. You are not finished with the project until you have finished all the tasks. To find the critical path for a project, you must first develop a good network diagram, which, in turn, requires a good activity list based on the WBS. Once you create a network diagram, you 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. The critical path shows the shortest time in which a project can be completed.

What is a network diagram? What formats exist for creating network diagrams?

Network diagrams are the preferred technique for showing activity sequencing. a schematic display of the logical relationships among, or sequencing of, project activities. Some people refer to network diagrams as project schedule network diagrams or PERT charts. The network diagram represents activities that must be done to complete the project. It is not a race to get from the first node to the last node. Every activity on the network diagram must be completed in order for the project to finish. Not every single item on the WBS needs to be on the network diagram.

3 project quality mgmnt processes

Planning quality includes identifying which quality standards are relevant to the project and how to satisfy those standards. Incorporating quality standards into project design is a key part of quality planning. For an information technology project, quality standards might include allowing for system growth, planning a reasonable response time for a system, or ensuring that the system produces consistent and accurate information. Quality standards can also apply to information technology services. For example, you can set standards for how long it should take to get a reply from a help desk or how long it should take to ship a replacement part for a hardware item under warranty. The main outputs of quality planning are a quality management plan, quality metrics, quality checklists, a process improvement plan, and project document updates. A metric is a standard of measurement. Examples of common metrics include failure rates of products produced, availability of goods and services, and customer satisfaction ratings. Performing quality assurance involves periodically evaluating overall project performance to ensure that the project will satisfy the relevant quality standards. The quality assurance process involves taking responsibility for quality throughout the project's life cycle. Top management must take the lead in emphasizing the roles all employees play in quality assurance, especially senior managers' roles. The main outputs of this process are organizational process asset updates, change requests, project management plan updates, and project document updates. Performing quality control involves monitoring specific project results to ensure that they comply with the relevant quality standards while identifying ways to improve overall quality. This process is often associated with the technical tools and techniques of quality management, such as Pareto charts, quality control charts, and statistical sampling. You will learn more about these tools and techniques later in this chapter. The main outputs of quality control include quality control measurements, validated changes, validated deliverables, organizational process asset updates, change requests, project management plan updates, and project document updates.

5 major cost categories related to quality

Prevention cost Appraisal cost Internal failure cost External failure cost Measurement and test equipment costs

Analyze

Scrutinize process details to find improvement opportunities. A project team working on a Six Sigma project, normally referred to as a Six Sigma team, investigates and verifies data to prove the suspected root causes of quality problems and substantiates the problem statement. An important tool in this phase is the fishbone or Ishikawa diagram.

What is the Theory of Constraints? What is Critical Chain Scheduling?

The Theory of Constraints (TOC) is a management philosophy developed by Eliyahu M. Goldratt and discussed in his books The Goal and Critical Chain. The Theory of Constraints is based on the fact that, like a chain with its weakest link, any complex system at any point in time often has only one aspect or constraint that limits its ability to achieve more of its 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 of scheduling 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. Some projects cannot be done unless a particular resource is available to work on one or several tasks. For example, if a television station wants to produce a show centered around a particular celebrity, it must first check the availability of that celebrity. As another example, 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 you 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.

Measurement and test equipment costs

The capital cost of equipment used to perform prevention and appraisal activities.

Appraisal cost

The cost of evaluating processes and their outputs to ensure that a project is error-free or within an acceptable error range. Activities such as inspection and testing of products, maintenance of inspection and test equipment, and processing and reporting inspection data all contribute to appraisal costs of quality.

Prevention cost

The cost of planning and executing a project so that it is error-free or within an acceptable error range. Preventive actions such as training, detailed studies related to quality, and quality surveys of suppliers and subcontractors fall under this category. Detecting defects in information systems during the early phases of the systems development life cycle is much less expensive than during the later phases. One hundred dollars spent refining user requirements could save millions by finding a defect before implementing a large system. The Year 2000 (Y2K) issue provides a good example of these costs. If organizations had decided during the 1960s, 1970s, and 1980s that all dates would need four characters to represent the year instead of two characters, they would have saved billions of dollars.

Controlling costs

involves controlling changes to the project budget. The main outputs of the cost control process are work performance measurements, budget forecasts, organizational process asset updates, change requests, project management plan updates, and project document updates.

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. A cost management plan is created as part of integration management when creating the project management plan. It should include information related to the level of accuracy for estimates, variance thresholds for monitoring cost performance, reporting formats, and other related information.

Estimating activity resources

involves estimating how many resources—people, equipment, and materials—a project team should use to perform project activities. The main outputs of this process are activity resource requirements, a resource breakdown structure, and project document updates.

Estimating activity durations

involves estimating the number of work periods that are needed to complete individual activities. Outputs include activity duration estimates and project document updates.

Sequencing activities

involves identifying and documenting the relationships between project activities. The main outputs of this process include project schedule network diagrams and project document updates.

Defining activities

involves identifying the specific activities that the project team members and stakeholders must perform to produce the project deliverables. An activity or task is an element of work normally found on the work breakdown structure (WBS) that has an expected duration, a cost, and resource requirements. The main outputs of this process are an activity list, activity attributes, and milestone list

3 values calculated for an activity in earned value management.

planned value (PV) actual cost (AC) earned value (EV)

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.

rough order of magnitude (ROM) estimate

provides an estimate of what a project will cost. ROM estimates can also be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge. 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, meaning 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. Many information technology professionals automatically double estimates for software development because of the history of cost overruns on information technology projects.

3 basic types of cost estimating

rough order of magnitude (ROM) estimate budgetary estimate definitive estimate