Module 1 - Introduction 1

PROJECT MANAGEMENTPresented by:

John Rakos, MSc, PMPPresident, John J. Rakos & Associates Consultants Ltd.

John J. Rakos is available to teach or consult in any topic presented in this

seminar.

Module 1 - Introduction 2

INTRODUCTION

Reference sources

A Guide to the Project Management Body of Knowledge (2003). The

Project Management Institute. http://www.pmi.org

Rakos, John J. et al, A Practical Guide to Project Management

Documentation, Wiley, 2004

Kerzner, Harold. Project Management: A Systems Approach to Planning,

Scheduling and Controlling. 6th ed. John Wiley & Sons, 1998.

Rakos, John J. Software Project Management for Small to Medium Sized

Projects. Prentice-Hall, 1990.

Module 1 - Introduction 3

INTRODUCTION

The Value of Project Management

• Allows for excellent organization and tracking

• Better control and use of resources

• Reduces complexity of inter-related tasks

• Allows measurement of outcome versus plans

• Early identification of problems and quick correction

Module 1 - Introduction 4

INTRODUCTION

PMBOKTM Knowledge Areas

• Based on the Project Management Institute’s Project Management Body of Knowledge: PMBOK1

• Nine knowledge areas:– This webinar:

Scope, Time, Cost, Risk, Integration -- Next webinar:

Quality, Procurement, Communications,

Human Resources, Integration

Module 1 - Introduction 5

INTRODUCTION

PMP Certification

Internationally accepted accreditation

Get certification3 (5 without degree) years experience35 hours training4 hour, 200 questions, multiple choice exam!

Have to be re-certified every 3 years60 PDUs

Attending a conference Attending course PMI membership Publications PM work

Module 1 - Introduction 6

INTRODUCTION

What is a Project?

A project is a temporary endeavor undertaken to create a unique product or service- A Guide to the Project Management Body of Knowledge (PMBOK™), Project Management Institute, 2003

One time Limited funds/time Specific resources utilized Performed by people - Single or multi-person team Planned, controlled Specific Deliverables

Module 1 - Introduction 7

INTRODUCTION

The Triple Constraint of Projects• On Time, Budget, Quality = Required Scope

Time

Cost Quality

•Integration•Trade – Off’s

Module 1 - Introduction 8

Project Life Cycle

INTRODUCTION

5%

20% 60%

15%

Concept Planning Execution/Control Closing

Percentages and graph refer to the amount of effort (people) In IT projects = 90-95% of cost!

Definition | Analysis |Design|Build|Test|Accept| Implement| Operation

Module 1 - Introduction 9

Write a Plan Containing1. Steps required to accomplish the project objectives2. Tasks needed to be done at each step (using Work Breakdown

Structures)3. Estimate of how much effort each task requires4. The resources required for each task5. (Given 3. and 4.) Calculation of how long each task/step will take6. (Given 4. and 5.) Calculation of task, step and project costs7. The inter-dependencies of tasks8. The schedule for each task and the whole project (Milstones,

Deliverables, payments)

Project Planning

Module 1 - Introduction 10

Stakeholders

Project Sponsor

Project Leader

Project Manager

FinanceProcure-

mentSystems

EngineeringSupport Sales Maintenance

IM/IT

UsersContractors

Project Planning: set expectations of Stakeholders

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Project Planning: Time and Cost Estimate

• Iterative

• Accuracy– Estimates become more accurate

Preliminary Plan Final Plan

0

+25%

-75%

+15

-50

+10

-25

Initiation Planning Execution Closing

Definition Analysis Design

Proposal Plan Revised Plan

Module 1 - Introduction 12

Project Management

Module 2:

Scope Management

Module 1 - Introduction 13

Project Scope Planning

Scope Management

• Ensuring that the project includes all the work required, only the work required.

• Dividing the work into major pieces, then subdividing into smaller, more manageable pieces.

Module 1 - Introduction 14

Work Breakdown Structure - Formats

1. Organization Chart Method

0. Title

1. Major Phase 1

1.1Section 1 of Phase 1

2. Major Phase 2

3. Major Phase 3

1.2Section 2 of Phase 1

1.3Section 3 of Phase 1

Module 1 - Introduction 15

2. Outline Method

0. TITLE

1. MAJOR PHASE 1

1.1 S1 OF PHASE1

1.2 S2 OF PHASE1

1.3 S3 OF PHASE1

2. MAJOR PHASE 2

...

etc.

Work Breakdown Structure - Formats

Module 1 - Introduction 16

WBS - Typical Tasks

Detailed WBS Example for procuring an

Equipment System

Module 1 - Introduction 17

Summary (Top Level) WBS

Work Breakdown Structure

Summary and Detail tasks, or

Parent and Child tasks (Work Package)

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Using the Work Breakdown Structure

1. Estimate and schedule the work (Durations, precedences on WBS)2. Organize and schedule resources (resource allocated WBS)3. Assign responsibilities – (Resource ramp-up, resource allocated

WBS)4. Estimate and allocate costs and budgets (costed WBS)5. Add up costs to different levels

– Task– Levels on the WBS (phase, account/contract)– Cost account– Total project

6. Get resource commitments7. Schedule start <--> end dates8. Track expenditures, schedules and performance

Work Breakdown Structure

Module 1 - Introduction 19

Project Management

Module 3:

Project Time Planning

Module 1 - Introduction 20

Project Time Planning

Estimating Effort: 3 Methods

1. Professional Judgment

– “Expert” picks a number (out of the air!)

– Requires an expert

– Requires experience

– Good memory

– May ignore people

– VERY RELIABLE FOR THEMSELVES

Module 1 - Introduction 21

Estimating Efforts (cont’d)

2. History– Look at tables of past actuals on major tasks– Interpolate– Requires professional judgment– Requires good history (which changes!)

3. Formula3.1 Variables

– Determine major variable factors (task, person)– Using measurement determine formula of factors– Interview and plug into formula

Project Time Planning

Module 1 - Introduction 22

Estimating Efforts (cont’d)

3.2 Function Points– Determine smallest pieces (function points) of project.– Using measurement establish time for each one.– For new project, break into function points; add up

times, then multiply for worker productivity.

(Possibly: Junior x 2, Average x 1, Senior x 0.5)

• FORMULA IS BEST (IN THEORY).

• IN REALITY,____________ BEST.

Project Time Planning

Module 1 - Introduction 23

Estimating – use of History

Ratios for Systems project

SYSTEMS ACTIVITIES DUR EFFORT

SYSTEM SPECIFICATIONS 11-15% 6-10%SYSTEM DESIGN 8-12% 6-10%SOFTWARE REQUREMENTS 2-4% 3-5%SOFTWARE PRELIMINARY DESIGN 5-7% 4-6%SOFTWARE DETAILED DESIGN 8-11% 9-12%CODE AND UNIT TEST 20-28% 24-32%SOFTWARE INTEGRATION & TEST 10-14% 11-15%SOFTWARE QUALIFICATION 5-7% 2-4%SYTEM INTEGRATION & QUAL. 8-12% 8-12%WARRANTY AND SUPPORT N/A 7-10%

MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES!

Module 1 - Introduction 24

If Estimate was Effort, must convert it to Duration

Duration = Effort/Resources (sometimes)

Taking into account:Resource availability

DesireSkill

Productivity

Scheduling

Module 1 - Introduction 25

Scheduling: Requires Duration and Precedents

Two Graphical tools for Scheduling:

1. PERT Chart

Plan (from WBS)

Task Precedent DurationA - 7dB A 3d C - 10dD C 5dE - 4dF E 6dG F 3d

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Ordering the Activities: PERT Chart

Arrow Diagramming Method (ADM)

Scheduling

1

2

3

4 5

6

A

C

E

B

D

F

G

7d3d

4d

6d

3d

10d 5d

Module 1 - Introduction 27

Scheduling - Gantt Chart

Order of building the Gantt Chart:• Work Breakdown• Estimates (duration)• Dependencies• Resource use

Gantt shows:• Critical Path• Non Critical Path(s)• Early Start/Finish• Late Start/Finish• Slack

Module 1 - Introduction 28

Scheduling - Gantt Chart

Module 1 - Introduction 29

Gantt (Schedule) Drives

1. Milestones• Clear, concrete, binary events implying progress• For example: Review (with approval), Sign off of a deliverable,

Funds approved• Shown as 0 length task

– Try for even frequency• Not too close• Not more than 2 - 3 months apart

– Major Point to communicate with• Client• Outside world• Management

Scheduling - Gantt Chart

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Gantt (Schedule) Drives

• Training

• Meetings

• Reviews

• Reports

• Site preparation

• Delivery dates (date to order) for external items

• Payment

Scheduling - Gantt Chart

Module 1 - Introduction 31

Project Management

Module 4:

Resource Assignment

and Cost Planning

Module 1 - Introduction 32

Availability Skills

• More experienced people• Less experienced people

Desire Similar tasks to one person to use learning curve Assign critical tasks to most reliable people Tasks that need interaction or are similar

• Same person• Two who communicate

Personality and team communication does matter and again, Availability

Assigning Resources

Module 1 - Introduction 33

Resource Loading and Optimizing

Gantt with Resource Histogram

Module 1 - Introduction 34

Resource leveling - possible rescheduling

Gantt with Resource Histogram

Manual resource leveling: fast vs good vs cheap

Automatic resource leveling: use only as ‘suggestion’

Module 1 - Introduction 35

Cost Estimating

• Similar to Time Estimating (usually done by the same person/group that does the Time Estimates)

Calculation of Cost for each WP: Example:If estimate was duration 10 daysAssign human resources 2 people

Need Effort = Duration x Resources E=2x10=20pd

e.g., Resource Cost (RC) = Effort x Rate(includes overhead)

RC=20x$1,000=$20,000

(Possible) Plus Fixed Cost (FC)

e.g., FC = $5,000

Total cost (TC) = Resource cost + Fixed Cost

TC=20,000 + 5,000 = 25,000

Module 1 - Introduction 36

Costed WBS

Use Software to roll costs up the WBS

Module 1 - Introduction 37

Cost Ramp-Up

$100,000.00

$200,000.00

$300,000.00

$400,000.00

Cumulative Cost:

Filtered resources Total:

CPM Total:

Q3 Q4 Q1 Q2 Q3 Q4 Q11997 1998

$53,920.00 $127,160.00 $274,360.00 $331,440.00 $349,920.00 $368,400.00 $376,500.00 $376,500.00

Use Software to report cash flow

Module 1 - Introduction 38

Cost - Sanity checks

Cost Estimate Error Range – same as Time Estimate

0

+75%

-25%

25

-10

10

-8

Indicative PPAInit Plan

Budget EPAFinal Plan

Definitive PDRDesign

PPA - Preliminary Project ApprovalEPA - EffectivePDR - Preliminary Design Review

Module 1 - Introduction 39

Project Management

Module 5:

Risk Management

Module 1 - Introduction 40

Risk Management

Planning and Control Processes

• Risk: anything not in the project plan that may occur and cause your project to be late, cost more or compromise its quality/performance.

• Risk is an opportunity as well as a threat:

“You don’t put power brakes on a car to slow it down - you do so to allow it to go faster.”

-Mark Davies, KPMG

• We will concentrate on the threat.

Module 1 - Introduction 41

Four Steps of Risk Management

1. Identification– Anticipate the risk– List the risks, event triggers, symptoms

2. Analysis– Evaluate probability, impact– Qualitative vs Quantitative

3. Risk Response– Strategy Development to mitigate the risk:

• Eliminate the risk or reduce impact• Contingency planning

4. Risk Control– Monitor– Update lists, strategies– Action the contingency plan– Fight the firesWhich is most important??

Module 1 - Introduction 42

Step 1: Risk Identification

Anticipate the Risk

Risk Checklist at Preliminary Planning Time (Risk Taxonomy)

Are we proposing the right solution? Any risk in technical components? Performance expectations reasonable? Is the hardware standard? How much experience do we have with it? Is the operating software standard? Well documented? How much experience do we have with it? Is the development method standard? Well documented? How much experience do we have with it? Any component availability risks?

Module 1 - Introduction 43

Step 1: Risk Identification

Risk Checklist at Preliminary Planning Time (Risk Taxonomy)(cont’d)

Does failure of this application affect the customer’s business? Is the project over 6 months? 12 months? 24 months? Does it need over 5 people? Are we dependent on third party resources? Internal? External? Who is the project manager? Who is the project leader/architect? Are the resources available when needed? Who is the client? Have we worked with this client? How is our relationship? Is client available when needed?

Module 1 - Introduction 44

Step 1: Risk Identification: Inputs

PROJECT/PM

ECONOMIC

& FINANCIAL

NATURALENVIRONMENTS

CORPORATEPROGRAMS

CORPORATEPOLICY

AND CULTURE

TECHNOLOGY

SENIORMANAGEMENT

POLITICAL

REGULATORYAND LEGAL

HUMAN FACTORSHEALTH & SAFETY

• Risk Checklists, The WBS, Environment:

History of past Similar Projects

Module 1 - Introduction 45

Step 2: Risk Analysis

Evaluate Probability and Impact into three levels: Low, Medium, High:

Probability Criteria:

Probability Rank Description

High

Medium

Low

Greater than 66% probability of occurring

34 to 65% probability of occurring

Less than 33% probability of occurring

Module 1 - Introduction 46

Step 2: Risk Analysis

Impact Criteria:

Impact Rank Description

High

Medium

Low

Could add more than 25% to the project budget

Could add between 10 and 25% to the project budget

Could add less than 10% to the project budget

High

Medium

Low

Schedule

Cost

Quality

Could add over 25% delay to the completion of the project

Could add over 10% delay to the completion of the project

Could add less than 10% delay to the completion of the project, or delays a non critical deliverable

Determine a combined impact level based on which constraint is most affected.

Module 1 - Introduction 47

Step 2: Risk Analysis

Draw a Risk Table to SummarizeWonderful Management Tool/Report

Prob.Impact

High

Medium

Low

HighMediumLow

3. Lack of skilled staff, organization slow to hire adequate staff; may delay implementation.

2. Time estimate and funds inadequate for the scope of this project; may be late and over budget.

1. Lack of commitment. Headquarters may have to assume more responsibility; will result in project delay, cost overruns.

6. Cannot get office space for staff; may cause communication problems, delaying the execution phase.

5. Expecting major scope changes from clients; may cause delay and cost escalation.

4. Not enough time spent planning, lack of understanding of problem; may take longer/cost more than anticipated.

Module 1 - Introduction 48

Step 3: Risk Response

Strategy Development:

Reduce the Probability and/or Impact of the Risk

Risk Mitigation: Reducing the probability and/or impact

• Take immediate action. Can be risk avoidance (if eliminated) or risk reduction (still there, but probability or impact is reduced).

Contingency Plans

• Take action only when the risk is imminent or has occurred

Or Acceptance (do nothing), depends on Risk Tolerance

Module 1 - Introduction 49

Risk as a Monetary Value

Tempering the Estimate

• Estimate range is

– ESTIMATE ESTIMATE + RISK– Try to work within the range, depending on how crucial

the accuracy has to be.

• If you can get several estimates– Use the Standard Deviations to give you confidence

levels:• Expected estimate +/- 1 SD gives you 68% confidence• Expected estimate +/- 2 SD gives you 95% confidence• Expected estimate +/- 3 SD gives you 99% confidence

Module 1 - Introduction 50

Project Management

Module 6:

Scope/ Time/ Cost Control

Module 1 - Introduction 51

Project Control – Scope Control

Scope Change Control• Formal change control• Evaluate cost/time impact

– Renegotiate, set expectations

– Implement or defer to next release

Configuration Management• Keep track of what changes were made to which

modules

• Versioning

• Interoperability of modules

Module 1 - Introduction 52

Project Control – Schedule and Cost

Step 1 - Take a baseline.

• Baseline plan: a copy of the plan (WBS with all dates, assignments, costs).

• Used to report progress against the baseline.

• Taken at a mutually agreed upon planning point:

• Proposal or Analysis completion

• +25% to -10% stage

• Baseline is (theoretically) not alterable

• Unless major scope change occurs.

Module 1 - Introduction 53

Project Control – Reporting Schedule using a Tracking Gantt

Double Gantt: Shows Project Schedule Progress vs baseline

ID Task Name Duration Start

1 Session 7 - write Pm course 101.4 days '99 Sep 01

2 Initiation 8.4 days '99 Sep 01

3 Interview client 3 days '99 Sep 01

4 Write Proj Concept 2 days '99 Sep 09

5 Concept approved 0 days '99 Sep 10

6 Planning 8 days '99 Sep 10

7 Interview users 5 days '99 Sep 10

8 Interview managers 5 days '99 Sep 10

9 Write plan 3 days '99 Sep 17

10 Funds approved 0 days '99 Sep 22

11 Development 61 days '99 Sep 22

12 Design 23 days '99 Sep 22

13 Design coursware 10 days '99 Sep 22

14 Design Case study 10 days '99 Oct 05

15 Walk through design 1 day '99 Oct 19

16 Revise design 2 days '99 Oct 20

17 Design done 0 days '99 Oct 21

99%

100%

100%

09-10

0%

0%

0%

0%

09-22

0%

0%

0%

0%

0%

10-21

0%

0%

0%

0%

0%

11-09

0%

31 03 06 09 12 15 18 21 24 27 30 03 06 09 12 15 18 21 24 27 30 02 05 08 11 14 17 20September October November

Module 1 - Introduction 54

Project Control – Cost Control/Reporting

Financial Report vs BaselineID Task Name Fixed Cost Total Cost Baseline Variance

1 Session 7 - write Pm course $0.00 $74,920.00 $74,120.00 $800.00

2 Initiation $0.00 $5,280.00 $4,480.00 $800.00

3 Interview client $0.00 $2,400.00 $2,400.00 $0.00

4 Write Proj Concept $0.00 $2,880.00 $2,080.00 $800.00

5 Concept approved $0.00 $0.00 $0.00 $0.00

6 Planning $0.00 $12,320.00 $12,320.00 $0.00

7 Interview users $0.00 $5,200.00 $5,200.00 $0.00

8 Interview managers $0.00 $4,000.00 $4,000.00 $0.00

9 Write plan $0.00 $3,120.00 $3,120.00 $0.00

10 Funds approved $0.00 $0.00 $0.00 $0.00

11 Development $0.00 $52,800.00 $52,800.00 $0.00

12 Design $0.00 $28,040.00 $28,040.00 $0.00

13 Design coursware $0.00 $12,400.00 $12,400.00 $0.00

14 Design Case study $0.00 $12,400.00 $12,400.00 $0.00

15 Walk through design $0.00 $2,040.00 $2,040.00 $0.00

16 Revise design $0.00 $1,200.00 $1,200.00 $0.00

17 Design done $0.00 $0.00 $0.00 $0.00

18 Write Course $0.00 $21,880.00 $21,880.00 $0.00

7%

99%

100%

100%

09-13

0%

0%

0%

0%

09-23

0%

0%

0%

0%

0%

0%

10-26

0%

0%

0%

0%

0%

11-12

0%

0%

11-16

0%

0%

0%

12-17

29 05 12 19 26 03 10 17 24 31 07 14 21 28 05 12 19 26 02 09 16 23September October November December January

Module 1 - Introduction 55

Project Management

Module 7:

Conclusions

Module 1 - Introduction 56

Resources Available

To help you Manage your Projects

• Training & Learning

– Universities• Project Management courses• Major/Masters in Project• Others – public

• Project Management Institute (PMI)• PMP Certification courses• PMI conferences• 250,000 members worldwide

• Your own Subject Matter Experts

Module 1 - Introduction 57

Resources Available

To help you Manage your Projects

• Training & Learning– Internet

• PMI.org• Many sites: search on Project Management • NASA• Software Engineering Institute• Software Productivity Center• DOD/Pentagon

• Project Management Software (WBS, Schedule, Cost, Resource usage, Multiple project roll-up, Internet reporting,...)

– Microsoft Project– Primavera– Open source: OpenProj

• John J. Rakos is available to teach or consult in any topic presented in this seminar.

Module 1 - Introduction 58

Final Details

Can you be a good project manager?

Ask yourself:

• Can I say 'NO'?

– Can I attack problems as soon as/even before they arise?

• Can I live unloved?

If you do your job well,people will wonder what you do!