Project MGT

AON Network

Arrows show precedence relationships or sequence and nodes show activities.

Types of reserves

Budget reserves- are set aside to cover specific segments or deliverables or work packages. Management reserves- cover major unforeseen risks to the entire project.

Forward and backward slack

-Slack helps us to schedule scarce resources. -We tightly control activities on the critical -If we need to expedite the project, we know which activities that will impact project duration and will cost the least to shorten

Four steps in risk management process

1. Risk Identification 2. Risk Assessment 3. Risk Response Development 4. Risk Response Control

Organizational structures

A project management system provides a framework for launching and implementing project activities within a parent organization.

Triple Constraint

Manage trade-offs between time, cost, and performance Constrain- original parameter is fixed, due date cannot be missed, budget is set, goals must be met Enhance- parameter should be made better, finish sooner, be cheaper, improve value of scope Accept- ok not to meet original goals, ok to be late, cost can go over budget, ok is don't get planned content

Emergency projects

Rebuilding something destroyed - must do -rebuilding hotel destroyed by fire

Scope creep

The tendency for project scope to change over time - usually by changing requirements, specifications, and priorities.

Direct Costs

- Labor, materials, equipment, etc. - Direct costs are chargeable to a specific work package

Factors influencing the quality of estimates

- Planning horizon - Project duration - People - Project structure and organization - Padding estimates - Organization culture - Other factors - random events, project priority, etc.

PERT Problems

- Project activities on different paths are considered to be INDEPENDENT - Time estimates are subject to fudging. - Beta assumption and CLT assumption in PERT.

What if cost and not time is the issue?

- Reduce project scope - Have owner take on more responsibility - Outsource project activities or even entire project - Brainstorm cost saving options

Tracking Gantt Charts

- The Tracking Gantt chart is useful for communication project status - Shows percent complete to date of tasks in the project: 1. Is a particular task ahead of or behind schedule? 2. What is the impact of that on the remaining tasks?

Dedicated project teams - Projectized organization

- These teams operate as separate units from the rest of the parent organization. - Usually a full-time project manager is designated to pull together a core group of specialists who work full time on the project. Advantages: -Simple -Fast -Cohesive- espirt de corps -Cross-functional integration -Project manager has all necessary resources Disadvantages: -Expensive -Upsets regular organization, conflict, internal strife, and "projectitis" -Facilities are duplicated and resources are used inefficiently -Limited technological expertise to that of the team -Difficult post-project transition

Operational projects

- Those that are needed to support current operations. - Designed to improve efficiency of delivery systems, reduce product costs, and improve performance. - Some of these projects, given their limited scope and cost, require only immediate manager approval, while bigger, more expensive projects require more extensive review. - Total Quality Management (TQM) projects are examples of organizational projects. -introduce wifi

Compliance (emergency) Projects

- Typically, those needed to meet regulatory conditions required to operate in a region; hence they are called "must do" projects. - Usually have penalties if they are not implemented. -update all bathrooms that are old

Resource Smoothing (Time-contrained scheduling)

-If resources are adequate but demand varies widely over the life of the project -Adequate resources but demand is uneven. Goal: Reduce peak demand. -Resources required over the life of the project may be reduced. -Reduces both slack and flexibility. Advantages: -Resources may require less careful management because resource use is more constant. -You can create a JIT policy for subcontractors and other expensive resources. -There should be fewer problems and improved morale because of the more constant schedule.

Resource leveling (resource-constrained scheduling)

-If the resources are adequate, but demand varies widely over the life of the project, it may be desirable to even out resource demand by delaying non-critical activities (using slack) to lower peak demand -Scheduling resources in a resource constrained environment increases project duration. -Reduces slack and flexibility. -Typically (including Microsoft Project) use heuristics (rules) such as the parallel method where you schedule tasks by (1st) Minimum slack (2nd) Shortest duration (3rd) Lowest activity identification number

Addressing resource allocation

1) Determine whether you have a resource over-allocation problem. 2) Identify where and when those conflicts occur. 3) Resolve the problem by - replacing the over-allocated resource with other resources if available. If not, use level within slack. 4) If that doesn't work, consider splitting tasks. 5) If that doesn't help either (or you want to avoid splitting), then level outside of slack and see if you can live with the new completion date. If you can't, negotiate for additional resources or reduce scope.

Project Attributes

1. A specific scope (an established objective). 2. A schedule (a defined life span with a beginning and an end). 3. Required resources (usually, the involvement of several departments and professionals). 4. (Typically) something that has not been done before. 5. Specific time, cost, and performance requirements) 6. Someone must care

4 ways to respond to risk

1. Mitigating risk- by reducing the likelihood the event will occur or reducing the impact of the event on the project. 2. Avoiding risk- by changing the project plan to eliminate the risk. 3. Transferring risk- passing the risk to another party 4. Retaining risk- the decision made to accept the risk of the event occurring

10 most important skills of a project manager

1. People skills 2. Leadership 3. Listening 4. Good at verbal communication 5. Integrity, ethical behavior, consistency 6. Strong at building trust 7. Strong at building teams 8. Conflict resolution and conflict management skills 9. Understands and balances priorities 10. Critical thinking and problem-solving skills

Process Breakdown Structure (PBS)

A phase-oriented grouping of project activities that defines the total scope of the project. Each descending level represents an increasingly detailed description of the work. It is more difficult to apply WBS to less tangible, process-oriented projects in which the final outcome is a product of a series of steps or phases. Process projects are driven by performance requirements, not by plans/blueprints.

Program v. Project

A program is a group of related projects designed to accomplish a common goal of an extended period of time.

Project

A project is a temporary endeavor undertaken to create a unique product, service or result.

The need for an effective project portfolio management system

A project portfolio system can go a long way to reduce, or even eliminate, the impact of these problems: o Problem 1: The Implementation Gap Refers to the lack of understanding and consensus of organization strategy among top and middle-level managers. o Problem 2: Organization Politics Politics exist in every organization and can have a significant influence on which projects receive funding and high priority. o Problem 3: Resource Conflicts and Multitasking Most project organizations exist in a multi-project environment. This environment creates the problems of project interdependency and the need to share resources.

Organizational structure advantages and disadvantages

Advantages - No change in the organization - Maximum flexibility in the use of staff - In-depth expertise - Easy post-project transition Disadvantages - Lack of focus, lack of motivation, lack of ownership - Poor integration across functional units - Conflicts over project priorities in the competition for resources - Slow

Non-financial criteria for projects

An organization may have projects that do not have high profit margins for strategic reasons, including: - To capture larger market share - To make it difficult for competitors to enter the market - To develop an enabler product - To develop core technology - To reduce dependency on unreliable suppliers - To prevent government intervention - To restore corporate image or enhance brand recognition Multi-Weighted Scoring Models - each selection is assigned a weight (able to rank projects on importance of factors)

Direct Project Overhead Costs

Can be tied to specific project deliverables or work packages. Examples include the salary of the project manager or temporary rental space for the project team.

Refining estimates

Detailed work package estimates are aggregated by deliverable to estimate the total direct cost of the project. And estimated durations are added to the project network to establish the project schedule and determine overall duration of the project.

Strategic projects

Directly supports the organization's long run mission -Build 4-mile hiking trail

Financial criteria for projects

For most managers, financial criteria are the preferred method to evaluate projects. These models are appropriate when there is a high level of confidence associated with estimates of future cash flows. Payback period- how long it takes to get your money back, ignores time value of money, cash inflows only for investment period Net Present Value (NPV)- minimum desired rate of return, want positive Return on Investment (ROI)- measures the amount of return on an investment relative to the investment's cost. Internal Rate of Return (IRR)- the discount rate which makes NPV 0 . Present value of outflows is equal to inflows, higher IRR is better

Portfolio Operation

Group of investments - working on the right projects, areas and resources

Cost account

Grouping of WPs for monitoring progress and responsibility. The intersection of work packages and the organizational unit creates a project control point (or cost account) and integrates work and responsibility.

Free slack

How long an activity can be delayed without delaying any successor activity, the amount of time an activity can exceed its early finish date without affecting the early start of any successor.

Activity slack

How long an activity can be delayed without delaying the project; also, may be called total slack.

Resource constrained

If resources are not adequate to meet peak demand, then some activities may be delayed, and the duration of the project may be increased.

Oyster

Involve technological breakthroughs with high commercial payoffs. -embryonic DNA treatments and new kinds of metal alloys

Rationale for reducing project duration

Is reducing time worth the added cost? - Time to market - a 6-month delay in bringing a product to market can result in a gross profit loss of market share of about 35% - "Unforeseen" delays - Incentive contracts - Imposed deadlines, ex. politician's promise - Attempt to reduce high indirect costs associated with running the project - Key equipment or people are needed on new projects

Work Breakdown Structure (WBS)

Once the scope and deliverables have been identified, the work of the project can be successfully subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the WBS. The WBS defines all elements of the project in a hierarchical framework. The total project is the summation of all the smaller work packages. This hierarchical structure facilitates evaluation of cost, time, and technical performance over the life of the project.

Responsibility Matrix (RM)

One tool that is widely used by project managers and task force leaders of small projects is the responsibility matrix. The RM summarizes the tasks to be accomplished and who is responsible for what on a project.

Project v. (on-going) Operations

Operations are continuous and repetitive. A project is not routine, repetitive work.

Risk Breakdown Structure (RBS)

Organizations may use a RBS in conjunction with the WBS to help management teams identify and analyze risks. - For example, discussion of executive support may lead the team to identify the possibility that the budget may be cut after the project starts. - The RBS reduces the chance that the risk event will be missed.

Work Package (WP)

The lowest level of the WBS. Short-duration tasks that have a definite start and stop point, consume resources, and represent cost.

Project Communication Plan

The purpose of a project communication plan is to express what, who, how, and when information will be transmitted to project stakeholders so schedules, issues, and action items can be tracked.

General and Administrative Overhead Costs (reasons why estimates are off)

These are organizational costs that are not directly linked to a specific project.

Time constrained

Time estimates for work packages are made independently assuming that resources will be available. [This is the traditional project management independence assumption.]

Bread and Butter

Typically involve evolutionary improvements to current products or services. -software upgrades

Organizational Breakdown Structure (OBS)

- A structure used to assign responsibility for work packages - The OBS depicts how the firm has organized to discharge work responsibility.

Options when resources are not constrained

- Add resources, but see Brooks' law - adding manpower makes software projects later - Outsource and subcontract - Schedule overtime - Use a project team - recall from chapter 3 that one advantage is speed - Do it twice - fast (quick and dirty solution) and correctly

Contingency plans

- An alternative plan that will be used if a risk event becomes a reality. - A key difference between a risk response and a contingency plan is that a risk response is part of the actual project implementation plan and action is taken before the risk can materialize, while a contingency plan is not part of the implementation plan and only goes into effect after the risk occurs.

Matheson and Matheson's classifications of projects

- Bread and Butter - Pearl - White Elephant - Oyster

Classification of Projects

- Compliance - Emergency - Operational - Strategic

Drivers of the importance of project management

- Compression of the product life cycle - Knowledge explosion and complexity - Bottom line - planet, people, profit - Corporate downsizing and cost cutting - Increasing customer focus - International issues

Characteristics of a Work Package

- Defines work (what). - Identifies time to complete a work package (how long). - Identifies a time-phased budget to complete a work package (cost). - Identifies resources needed to complete a work package (how much). - Identifies a single person responsible for units of work (who). - Identifies monitoring points for measuring progress (how well).

Estimating guidelines- how to improve the accuracy of estimates

- Estimates should be made by the person(s) most familiar with the task. - Use several people to estimate. - All task items need to be in consistent time units. - Assume normal conditions and a normal level of resources. - Estimators should treat each task as independent of every other task. - Estimates should not include allowances for contingencies. - Adding a risk assessment to task time

What helps projects succeed?

- Executive support - User involvement - Experienced project manager - Clear business objectives - Controlled scope - Standardized software - Clear basic requirements - Formal methodology - Reliable estimates - Other criteria, such as small milestones, proper planning, competent staff and ownership

Options when resources are constrained

- Fast-tracking - rearrange the network, put in lags, allow things that were sequential to be done in parallel - Critical chain scheduling - Reduce project scope - Compromise quality

Matrix Arrangement

A hybrid organizational form in which a horizontal project management structure is "overlaid" on the normal functional hierarchy. Advantages: -Flexible with balance of objectives -Coordination across functional department lines and visibility of project objectives -Efficient- resources can be shared across projects and functional divisions -Strong project focus -Easier post project transition Disadvantages: -Conflicts and infighting -PM may have little authority with regard to function departments -Function departments may feel that the project manager is invading -Person in middle working for 2 bosses -Stressful- overloaded -Slow -Organization cannot create a matrix structure overnight- takes 3-5 years

Lags

A lag is the minimum amount of time a dependent activity must be delayed to begin or end. The use of lags in project networks occurs for two primary reasons: 1) When activities of long duration delay the start of finish of successor tasks. 2) To constrain the start or finish of an activity.

White Elephant

Projects that, at one time, showed promise but are no longer viable. -products for a saturated market or a potent energy source with toxic side effects

Pearl

Represent revolutionary commercial advantages using proven technical advances. -next-gen chip

What is in a project scope checklist?

Scope Statement - definition of the end result or mission of project 1) Project objective: sentence that defines what, when, how much 2) Deliverables: expected measurable outputs over life of project 3) Milestones: significant events that occur at a point in time 4) Technical requirements: clarify the deliverables or define performance expectations 5) Limits and exclusions: limits should be defines, exclusions further define boundaries of project by stating what is not included 6) Reviews with customer: name, title. specific persons that okay the scope.

Sensitivity

Sensitivity reflects the likelihood that the original critical path(s) will change once the project starts. It is a function of the number of critical and near critical paths.