cpm & pert excercises - bu

8/10/2019 Cpm & Pert Excercises - Bu

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Project Management


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PROJECT MANAGEMENT

Times of India dt 29thoct 2007.

An air port in Assam,a bridge in Orissa, a

highway in Karnatakawhat they have incommon?all running behind schedule.


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PROJECT MANAGEMENT.

Total no of projects (Rs 20crores &above)

866.

No of delayed projects=297.

Cost over-run=Rs 24,389 cr

Total anticipated cost=3,75,888cr

Expenditure till Dec 2006 =1,38,905 cr

Scale of time over run =1-196 months.


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PROJECT MANAGEMENT.

Out of a total of 866 projects, each costingRs 20cr or more ,297 projects- spawned by13 ministries GOVT of Indiaare running

badly behind schedule. More than 24,000 crwill be spent additionally, because of delayan amount sufficient for many more

projects.

---- Quarterly report by the ministry ofstatistics and program implementation.


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PROJECT MANAGEMENT.

By the time we build the airports, theyhave become obsolete.

By the time we build the roads, theyhave already become over crowded.

- Mr Ratan Tata.


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PMBOK GUIDE

Project body of knowledge (PMBOK), is the sum ofknowledge within the profession of project

management.


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PURPOSE OF PMBOK

The primary purpose of the PMBOK guide is toidentify that subset of project management body ofknowledge that is generally recognized as good

practice.

PMBOK Guide provides guide lines for managing

individual projects. It defines project management

and related concepts and describes projectmanagement life cycle and related processes.


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PROJECT MANAGEMENT Project Management Institute, USA

(PMI) was founded in 1969 to provide ameans for project managers to

associate, share information, anddiscuss common problems.

Making project managementindispensable for business results.

www. pmi.org.


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PROJECT MANAGEMENT

Project management is application ofknowledge, skills, tools & techniques toproject activities to meet projectrequirements.


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PROJECT MANAGEMENT

PMI standards are developed, by teamsof hundreds of volunteers from around

the world with expertise, enthusiasmand dedication to advancing thepractice of project management and the

profession.


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PROJECT MANAGEMENT

Over its almost 40 years history, PMI hascreated standards and practices that areglobally recognized.

Through its credential programs andpublications, which include A guide to theproject management body of knowledge

(PMBOK Guide), PMI identifies, defines,documents, and champions valuedapproaches.


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PURPOSE OF PMBOK

The PMBOK guide also provides and promotes acommon lexicon for discussing,writing and applyingproject management. Such a standard lexicon is anessential element of a profession.


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PURPOSE OF PMBOK

Generally recognizedmeans the knowledge and

practices described are applicable to most projects,most of the time, and there is consensus about theirvalues and usefulness.

Good practicemeans that there is general

agreement that the correct application of theseskills, tools and techniques can enhance the

chances of success over a wide range of differentprojects.


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PROJECT MANAGEMENT.

Does project control the project manager? Or project

manager controls the project?


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PROJECT MANAGEMENT A project is a temporary endeavor undertaken to

create a unique product, service or result.


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Two Major Risks come to forewhile talking about Projects

Time Slippage / Delay

Cost Overrun


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Mega ProjectsUnderground

Railways in Calcutta 20 years

Moonidih Coal Mine 25 years

Salal Power Project in

J&K > 18 years

Vizag Steel Plant 8 years

Like these 135 projects have been delayed


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Projects successfully completed

Nehru Stadium in Chennai Abu Dhabi Airport

Bahai Temple in Delhi

Vijaipur Project was completed on Time

NTPC Projects, Asian Games in 1982.DELHI METRO

General Elections


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When projects are

considered failure?


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In your opinion

why do projects

often fail?


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Project mgt & operation mgt.

Projects can interact with operations at variouspoints during product life cycle:

At close out.

When developing a new product, upgrading aproduct, or expanding outputs; or

Until the divestment of the operations at the endof the product life cycle.


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Project management

Examples of project include, but are

not limited to:

Developing a new product or service.

Effecting a change in structure, staffing, or styleof an organization.

Designing a new transportation vehicle.

Developing or acquiring a new or modified

information system. Constructing a building or facility.

Building a water supply system for a community.


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Project management

Running a campaign for a political office.

Implementing a new business procedure or process.

Responding to contract solicitation.

Conducting a wedding ceremony. Project to facilitate payments of tax through internet.

Service to collect garbage from homes.

Presenting a budget papers to the board.


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Ongoing

and

Repetitive

Operation work is: Project work is:

temporary endeavor

undertaken to create a

uniqueproduct, serviceor result

What are the basic characteristics ofoperation & project work


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1. Temporary endeavor means

project is having: Definite beginning Definite end, and Clear defined Project Objectives

Or when it becomes clear that the projectobjectives will or cannot be met, or the needfor the project is no longer exists and theproject is terminated

Milestone is an agreed end or starting of aspecific event or deliverable and has a duration ZERO


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Projects creates unique deliverables, i.e.,

products, services, or results that has not

been done exactly the same way before and

which is, therefore, unique and distinct

2. Unique Product, Service

or Result means:


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PROJECT MANAGEMENT

Uniqueness is an importantcharacteristics of project deliverables.

For example: many thousands of office buildingshave been developed, but each individual facilityis uniquedifferent owner, different design,different location, different contractors and so on.

The presence of repetitive elements does notchange the fundamental uniqueness of the projectwork.


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High-level designRequirements

General

Detailed

Level

ofdetail

3. Progressive Elaboration

Progressive elaboration means developing in steps,and continuing steadily by increments


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What is subproject?

Sub-projects are often contracted:

1.to an external enterprise, or

2.to another functional unit in theperforming organization

Project managers of the sub-projects areaccountable to the project manager of a project.


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Performed by people

Constrained by limited resources

Planned, executed&

controlled

What is common to both

operation and project work?


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PROJECT MANAGEMENT

The purpose of a project to attain its objectives andthen terminate.

Conversely, the objective of an ongoing operation isto sustain the business.


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ProjectQuality is

affected by

Triple constraints influence projects

Q

SCOPE constraints limits project team to define scope and manage

scopeTIME constraints limits team to determine & manage time lines

COST constraints limits team to estimate life cycle cost i.e., projectcost plus operating and implementation costs

balancingtriple

constraints

If any one of the triple constraint factors is affected, atleast one other factor is likely to be effected, e.g.,Deliver high quality product, service or result within scope, time and budgetIf scope is increased, it has a likely effect on time, and cost as wellIf time or scope is increased, cost is most likely to be effected

Organizational Project


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35

Organizational ProjectManagement (OPM)

Implementations should fit theOrganizational Environment: the

structure, policies, processes and culture of

the organization.

Right combination of right projects,

done right.

Portfolio: projects and programsgrouped for effective management andfocused on meeting specific strategicobjectives

Program: related projects grouped and

managed to optimize benefits, control

and outcomes, not available from

managing individually.

Projects: temporary endeavorsundertaken to create a unique product,

service or result


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PROJECT MANAGEMENT

The projects or programs of the portfolio may notnecessarily be interdependent, or directly related.

For ex: An infrastructure company that has the strategic

objective of maximizing the return on investmentmay put together a portfolio that includes a mix ofprojects in oil and gas, power, roads, rail, andairports.

From this mix, the firm may choose to managerelated projects as one program. All of the powerprojects may be grouped together as a powerprogram.Similarly , all of the water projects may begrouped together as water program.


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Projects and strategic planning

Projects are often utilized as a means of

achieving an organizations strategic plan: Market demand.

Strategic opportunity/business need.

Customer request.

Technological advance.

Legal requirement.

Social need


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ROLE OF PROJECT MANAGER

PM is the person assigned by the performingorganization to achieve the project objectives.(S.M.A.R.T.)

The role of PM is distinct from a functional manager,or operation manager.

Typically the functional manager is focused on

providing management oversight for anadministrative area, and operations managers areresponsible for a facet of the core business.


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ROLE OF PROJECT MANAGER In addition to any area-specific skills and general management

proficiencies required for the project, effective project

management requires that the PM possess the followingcharacteristics:

Knowledge:- this refers to what the PM knows about project management.

Performance:- this refers what PM is able to do or accomplish while applying

their project management knowledge.

Personal:-

this refers to how the PM behaves when performing theproject. The personal effectiveness encompasses attitudes,core personality characteristics and leadership.


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Why do we

undertake Projects?

Project Characteristics

NEED


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NEED


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Projects are undertaken tosuccessfully implement organizational

strategies under uncertainties andsuccessfully meet the

expectations as visualized

NEED


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C = f (Q, T, S)

COSTis a function of

QUALITY, TIME, & SCOPE

How project objectives are related?

1. Triple constraints influence projects


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Knowledge of project mgmt.,processes to initiate, plan,execute, control, & closeprojects does influence thesuccess of projects

Effective communicationLeadershipInfluencing the organizationMotivationNegotiating & conflict mgmt.

Problem solving

1. Cultural & social environmentfactors

2. International & politicalenvironmental factors

3. Physical environmentalfactors

1. A standard is a documentedestablished by consensus andapproved by the recognizedbody

2. A regulation is a government-imposed requirement

General managementencompasses planning,organizing, staffing,executing, and controlling theoperations of the ongoing organd project operations.

PMBOKProject Mgmt.Methodology

Areas ofexpertiseby project

team

2. Project teams areas of expertiseinfluence projects


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Product life cycle includes following projects:1. Curtain Raiser, Idea Generation

2. Market Research

3. Research and Development

4. Feasibility Analysis -5. Product Development

6. Marketing of a project product -

7. Installation of a User friendly product

8. Operation and Maintenance of a product

9. Disposition of product -

3. Product-life-cycle expectationsinfluence project


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The Internal-Business-Process

CustomerNEEDIdentified

CustomerNEED

SatisfiedProject Life Cycle Phases

Need to upgradeOperation

Needto

Discard

BusinessPLAN

need

PROJECT LIFE CYCLE


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What is importance of project phase?

Project phases are the description of

What project or technical work need to bedone, and describes what deliverables are

to be planned and managed in each project

phase of the project-life-cycle?

PROJECT MANAGEMENT


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CHARACTERISTICS OF PHASES

The completion and approval of one or moredeliverables characterizes a project phase.

A project phase is not a project managementprocess group.


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Project Phases.

The phases:- Example:

Requirements gathering.

Design.

Construction.

Testing.

Implementation.


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Project Phases.

Design documents. Deliverables at kill points.

Test plans. Exit gates.

Architectural design.

Low level design.

Coding standards

User interface approvals.

Planning phase Construction phase


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Characteristics of project life cycle Projects vary in size and complexity.

No matter, how large or small, simple or complex, allprojects can be mapped to the following life cyclestructure:

Starting the project. Out put: charter. Organizing and preparing. Out put: project mgt

plan.

Carrying out the project work. Out put: accepted

deliverables Closing the project. Out put: archived

project documents.


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Characteristics of project life cycle

A DELIVERABLE IS A MEASURABLE, VERIFIABLEWORK PRODUCT, SUCH AS A SPECIFICATION,FEASIBILITY STUDY REPORT, DETAILED DESIGNDOCUMENT, OR WORKING PROTOTYPE.


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Entry criteria & exit criteria (kill points).

Each phase contains all the five process groups.

If project has five phases, the closing is done sixtimes.


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Life cycle is from start to end.

All projects have a purpose or objective, but in thosecases where the objective is a service or result,there may be life cycle for the service or result, not aproduct life cycle.


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Phase to phase relationships.

Sequential relationship:

A phase can only start once the previous phase iscomplete.

Step by step approach reduces uncertainty, but

may eliminate options for reducing the schedule.

Over lapping relationship:

A phase can start, prior to the completion of theprevious one. Fast tracking. Reduces theschedule, quality may be the victim.


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Phase to phase relationships.

Iterative relationship.

Is used where one phase is planned at any givenpoint of time and the planning for the next iscarried out as the work progresses on the current

phase and deliverables.

This is useful in largely undefined, uncertain , orrapidly changing environment, such as research.


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High

LowProject Life Cycle (Time)

Cost to make change, and

Amount of stake

Influence of Stakeholders,Opportunity to add Value, andUncertainty of success

PROJECT MANAGEMENT

Project Cost and staffing levels


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Project Cost and staffing levels


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Project Management Life Cycle describes whatwe need to deliver in order to

successfully manage, integrate the

project life cycle deliverables tomeet customer expectations.

Project management life cycle include:

Initiating, Planning, Executing, Controlling, and Closingprocess groups. Process groups are also known as

project life cycle phases

PROJECT MANAGEMENTLIFE CYCLE


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A stakeholder is someonewhose interests may bepositively or negatively

impacted by the project.

They may also include thosewho may exert influenceover the project but wouldnot otherwise be consideredstakeholders.

Performanceorganization

Proj. Team

sponsor

Projectmgmt team

Proj.

Mgr

STAKE HOLDES INFLUENCE ON PROJECT

Sponsor is a person orgroup that provides thefinancial resources, in

cash or kind, for theproject

Project managementteam are the membersof the project team whoare directly involved inthe project managementactivities

Project manager isresponsible to:

1. Accomplish project objectives,2. Identify & quantify risks,

response to the uncertainties, &

control risks during execution3. Continuously utilize

progressive elaborationtechnique throughout theproject life cycle,

4. Adhere to code of professional

conduct


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Values, norms, beliefs, & expectations

Policies & Procedures,

View of Authority relationships Work ethic & Work hours

Organizationculture

Performanceof

work

7. Organization culture & style influences project

Project Management knowledge areas


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Supports the variouselements of the project

mgmt, which areidentified, defined,

combined & coordinated

To ensure that the projectincludes all the work

required, and only work tocomplete the project

successfully

To ensure timelycompletion of project

Planning, controlling, &

managing costs so thatproject is completedwithin the approved

budget

To ensure that the projectwill satisfy the NEEDS forwhich it was undertaken

To make the mosteffective use of the peopleinvolved with the project

To ensure timely andappropriate generation,

collection, dissemination,storage & disposition of

project information

Concerned withidentifying, analyzing, and

responding to projectrisks

To acquire material, goodsand services from outsidethe performingorganization

Project Scope mgmt

Project Time mgmt

Project Quality mgmt

Project H.R mgmt

Project Risk mgmt

Project Procurement mgmt


Project Cost mgmt Project Comm. mgmtProject Integration mgmt



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Develop project charter

Develop project mgt plan

Direct & manage project execution

Monitor & control

Perform intergated change control

Close project /phase

Collect requirements

Define scope

Create WBS

Verify scope

Control scope

Define activities

Sequence activities

Estimate activity resources

Estimate activity durations

Develop schedule

Control schedule

Estimate costs

Determine budget

Control costs

Plan Quality

Perform Quality assurance

Perform quality control

Develop Human resourceplan

Acquire project team

Develop project team

Manage project team

Identify stakeholders

Plan communications

Distribute information

Manage stakeholder expecations

Report Performance

Plan risk management

Identify risks

Perform qualitative risk analysis

Perform quantitative risk analysis

Plan risk responses

Monitor and control risks

Plan procurementsConduct procurements

Administer procurements

Close procurements

Project Scope mgmt

Project Time mgmt

Project Quality mgmt

Project H.R mgmt

Project Risk mgmt

Project Procurement mgmt


Project Cost mgmt Project Comm. mgmtProject Integration mgmt


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Introduction toProject Management

Processes

Project management


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Project managementprocesses

Project Integration Management:-

Develop project charter:- is the process ofdeveloping a document that formally authorizes aproject or a phase and documenting initial

requirements that satisfy the stakeholders needsand expectations.

Develop project management plan:- is the process ofdocumenting the actions necessary to define,prepare, integrate, and coordinate all subsidiaryplans.

Direct and manage project execution:- is the processof performing the work defined in the projectmanagement plan to achieve project objectives.

Project management


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Project management Monitor and control project work:- is the process of

tracking , reviewing, and regulating, the progress tomeet the performance objectives defined in theproject management plan.

Perform integrated change control :- is the processof reviewing all change requests, approvingchanges, and managing changes to the deliverables,organizational process assets, project documents,and the project plan.

Close project or phase: is the process of finalizing

all activities across all of the project managementprocess groups to formally to complete the projector phase.

Project scope mgt


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Project scope mgt Collect requirements:- is the process of defining and

documenting stake holders needs to meet the

project objectives. Define scope:- is the process of developing a

detailed description of the project and product.

Create WBS:- is the process of subdividing projectdeliverables and project work into smaller, moremanageable components.

Verify scope:- is the process of formalizingacceptance of the completed project deliverables.

Control scope:- Is the process of monitoring thestatus of the project and product scope and

managing changes to the scope base line

Project time mgt


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Project time mgt Define activities:- is the process of identifying the

specific actions to be performed to produce theproject deliverables.

Sequence activities:- is the process of identifyingand documenting relationships among the projectactivities.

Estimate activity resources:- is the process ofestimating the type and quantities of material,people, equipment, or supplies, required to performeach activity.

Estimate activity durations:- is the process ofapproximating the no of work periods needed tocomplete individual activities with estimatedresources.

P j t ti t


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Project time mgt Develop schedule:- is the process of analyzing

activity sequences, durations, resourcerequirements, and schedule constraints to create athe project schedule.

Control schedule:- is the process of monitoring the

status of the project to update project progress andmanaging changes to the schedule base line.

P j t t t


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Project cost mgt Estimate costs:- is the process of developing an

approximation of monitory resources needed tocomplete project activities.

Determine budget:- is the process of aggregating the

estimated costs of individual activities or workpackages to establish an authorized cost base line.

Control costs:- is the process of monitoring the

status of the project to update the project budgetand managing changes to the cost base line.

Project quality mgt


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Project quality mgt Plan quality:- is the process of identifying quality

requirements and / or standards for the project andproduct, and documenting how the project willdemonstrate compliance.

Perform quality assurance:- is the process ofauditing the quality requirements and results fromquality control measurements to ensure appropriatequality standards and operational definitions areused.

Perform quality control:- is the process ofmonitoring and recording results of executing thequality activities to assess performance andrecommend necessary changes.

Project HR mgt


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Develop human resource plan :- is the process ofidentifying and documenting project roles,

responsibilities, required skills, reportingrelationships, and creating a staffing managementplan.

Acquire project team:- is the process of confirming

human resources availability and obtaining the teamnecessary to complete the project assignments.

Develop project team:- is the process of improvingthe competencies, team interactions, and the overallteam environment to enhance project performance.

Manage project team:- is the process of trackingteam member performance, providing feed back,resolving issues, and managing changes, tooptimize project performance.

Project communication mgt


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Project communication mgt Identify stakeholders:- is the process of identifying

all people, or organizations, impacted by the project,

and documenting relevant information regardingtheir interest, involvement, and impact on the projectsuccess.

Plan communications:- is the process of determining

the project stakeholders information needs anddefining a communication approach.

Distribute information:- is the process of makingrelevant information available to project stake

holders as planned. Manage stakeholder expectation:- is the process of

communicating and working with stakeholders tomeet their needs and addressing issues as they

occur.


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Project communication mgt

Report performance:-

Is the process of collecting and distributingperformance information, including status reports,

progress measurements, and forecasts.

Project risk mgt


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Project risk mgt Plan risk management:- is the process of defining

how to conduct risk management activities for aproject.

Identify risks:- is the process of determining whichrisk may affect the project and document their

characteristics. Perform qualitative risk analysis :- is the process of

prioritizing risks, for further analysis or action byassessing and combining their probability and

impact. Perform quantitative risk analysis: - is the process of

numerically analyzing the effect identified risks onover all project objectives.

Project risk mgt


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Project risk mgt

Plan risk responses:- is the process of developing

options and actions to enhance opportunities andreduce threats to project objectives.

Monitor and control risks:- is the process of

implementing risk response plans, trackingidentified risks, monitoring residual risks, identifyingnew risks, and evaluating risk process effectivenessthrough out the project.

Project procurement mgt


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Project procurement mgt

Plan procurement:- is the process of documentingproject purchasing decisions, specifying theapproach , and identifying potential sellers.

Conduct procurements :- is the process of obtainingsellers responses, selecting a seller, and awarding acontract.

Administer procurements :- is the process of

managing procurement relationships, monitoringcontract performance, and making changes andcorrections as needed.

Close procurements:- is the process completing

each project procurement.

PROJECT MANAGEMENT


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PROJECT MANAGEMENTPROCESS GROUPS

INITIATION. PLANNING.

EXECUTING.

MONITORING & CONTROLLING.

CLOSING.

Project management process groups are not projectphases.

Each phase will have these five process groups.


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inputs outputs

PROCESS

tools &

techniques

information monitorplan

control

Project Management Process Groups


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j g p

Initiation process group


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DevelopProjectCharter

Identify stakeHolders.

p g p

Projectobjective

+40%ROI

Sponsor

Projectmgr.

Projectstake-holders

Planning process group


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g p g p

Execution process group


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Time

Controlling process group


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Closing process group


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g p g p

Interaction between


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InitiatingProcess

PlanningProcess

ExecutingProcess

Closing

ProcessControllingProcess

Phase

Start PhaseFinishtime

Activities

Project mgmt. process groups


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LINKS IN PROCESS GROUPS


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PROJECT MANAGEMENT

Project Management Office :

A PMO is an organizational unit to centralize andcoordinate the management of projects under itsdomain.

PMO


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PMO

The responsibilities of PMO, can range fromproviding project management support functions toactually being responsible for the directmanagement of a project.

A primary function of a PMO is to support projectmanagers in a variety of ways which may include,but are not limited to:

Managing shared resources across all projects. Identifying and developing project management

methodology, best practices, and standards.

PMO


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PMO

Coaching, mentoring, training and oversight.

Monitoring compliance with project managementstandards policies, procedures, and templates via

project audits.

Developing and managing project policies,procedures, templates, and other shareddocumentation.

Coordinating communication across projects.

KNOWLEDGE AREAS TO PROCESSESKnowledge Initiatio Planning Executing Monitoring Closing


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Knowledge

areas

Initiatio

n

Process

group

Planning

Process

group

Executing

Process

group

Monitoring

&

controlling

Process

group

Closing

Process

group

4.Project

Management

Integration

4.1Devel

op

Project

Charter.

4.2 Develop

Project

Management

plan.

4.3 Direct

& Manage

Project

execution

4.4 Monitor

& control

Project

work4.5

Perform

Integrated

Change

control

4.5 Close

project or

Phase.

5. Project

scope

management.

5.1 Collect

requirements.

5.2 Define

Scope.

5.3 Create

WBS

5.4 Verify

Scope.

5.5 Control

Scope.

6. ProjectTime

Management

6.1 Defineactivities.

6.2 Sequence

Activities.

6.3 Estimate

Activity

Resources.

6.4 Estimate

activity

durations.

6.5 Develop

Schedule.

6.6 Controlschedule

7. ProjectCost

Management.

7.1 EstimateCosts.

7.2 Determine

Budget.

7.3 ControlCosts.

8.Project

Quality

Management

8.1 Plan

Quality.

8.2

Perform

Quality

assurance.

8.3

Perform

Quality

Control

9. Project

Human

Resource

Management.

9.1 Develop

Human

resource plan.

9.2 Acquire

Project

Team.

9.3Develop

Project

Team

9.4 Manage

KNOWLEDGE AREAS TO PROCESSES


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KNOWLEDGE AREAS TO PROCESSES10. Project

Communicati

on

Management

10.1

Identif

y

Stakeholder

s.

10.2 Plan

Communicatio

ns

10.3

Distribute

Information

.10.4

Manage

Stake

holder

Expectation

s.

10.5 Report

Performanc

e

11. Project

Risk

Management.

11.1 Plan Risk

Management.

11.2 IdentifyRisks.

11.3 Perform

Qualitative

Risk Analysis.

11.4 Perform

Quantitative

Risk Analysis.

11.5 Plan Risk

Responses.

11.6

Monitor

and ControlRisks.

12. Project

Procurement

Management.

12.1 Plan

procurements.

12.2

Conduct

procuremen

ts

12.3

Administer

procuremen

ts

12.4 Close

Procuremen

ts.

2 20 8 10 2

Total = 42 processes.

Process group


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1. Initiation process group: 2 processes2. Planning process group: 20 processes3. Execution process group:

8processes

4. Controlling process group: 10 processes5. Closing process group: 2 processes

TOTAL PROJECT MGMT. PROCESSES 42

g pbreak up


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Chief Executive

Functionalmanager

Functionalmanager

Functionalmanager

staff

staff

staff

staff

staff

staff

staff

staff

staff

Chief Executive

Functionalmanager

Functionalmanager

Functionalmanager

staff

staff

staff

staff

staff

staff

staff

staff

staff

Chief Executive

Functionalmanager

Functionalmanager

Functionalmanager

staff

staff

staff

staff

staff

staff

staff

staff

P.Mgr

Function organization Weak Matrix Org.

Balanced Matrix Org.

People havethe loyalty

towards theirfunctionmanager & notto the projects

People splitfocus between

project andfunctionalresponsibilitiesin weak matrix

In balancedmatrix, the

power isbalancedbetween PMs &functional mgrs

Organization culture & style influences project


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Chief Executive

Functionalmanager

Functionalmanager

Functionalmanager

staff

staff

staff

staff

staff

staff

staff

staff

staff

Projecthead

P.Mgr

P.Mgr

P.Mgr Strong matrix organization

Projectized organization

Chief Executive

Projectmanager

Projectmanager

staff

staff

staff

staff

staff

staff

Projectmanager

staff

staff

staff

In strong

matrix, thepower isbalanced restswith the projectmanagers

In projectized

organizationpeople develoployalty to theproject & not toa function mgr.

Organization culture & style influences project

Composite Organization


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Project Roles


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j Project Manager:

Is the person ultimately responsible for the outcome of the project.

Found in balanced, strong matrix and projectized organization.

Project coordinator: Is weaker than project manager, may not be allowed to make

budget decisions or over all project decisions, but may have someauthority to reassign resources.

Usually found in weak matrix or functional organizations

Project expeditor: Is the weakest among the project roles. Is staff assistant who has little or no formal authority. Reports to the executive who ultimately has responsibility of the

project. Responsibility lies in making sure that things arrive in time and thetasks are completed on time.

Part time role --- found in functional organizations.

Project Selection Methods


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Project Selection Methods

Benefit Measuring Methods:

BCR

Pay Back Period

Discounted Cash Flow

IRR

ROI

Economic Value Added Method

PROJECT SELECTION


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METHODS

Mathematical methods: Constrained optimization methodslinear, dynamic,

integer, non linear, and/or multi objective programming.

Benefit measuring methods:

Benefit cost ratio: is the ratio of benefits to costs.

For example: if you expect a construction project to cost$10 million and you expect to be able to sell that completedbuilding for $15 million, then your BCR is 1.5

SCORING MODEL


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SCORING MODEL

SCORING MODEL:

criteria weight proj-A proj-B proj-C

profit potential 5 5 5 3marketability 3 4 3 4

ease to produce 1 4 3 2

weighted score 41 37 29

project -A is the obvious choice.

PAY BACK PERIOD


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PAY BACK PERIOD EXAMPLE: say initial investment on a project is

$200,000, with expected cash inflows of $25,000 perquarter for the first two years and $ 50,000 perquarter then on. What is the pay back period?

Initial investment=$200,000.

Cash inflows=($25,000)*(4) /year.=$100,000.

Pay back period = initial investment/ cash inflow peryear.=($200,000)/($100,000)=2 years.

Pay back period does not consider time value ofmoney-- serious draw back.

DISCOUNTED CASH FLOWS


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DISCOUNTED CASH FLOWS

FV= future value of money.

PV= present value of money.

i=interest rate. n= no of years.

PV=FV/(1+i)^n.

Rs1,three years from now is worth

1/(1+0.09)^3=1/(1.09)^3=1/1.29=0.77 Rs.

NET PRESENT VALUE


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NET PRESENT VALUE With NPV, you bring the value of the future money

into todays dollars.

12% is cost of capital.

Project A:

Year. inflows. P V

1 10,000 8,929 2 15,000 11,958 3 5,000 3,559 Total 30,000 24,446

Less investment 24,000 NPV 446


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NET PRESENT VALUE

Project B: Year inflows PV

1 7,000 6,250

2 13,000 10,364

3 10,000 7,118

Total 30,000 23,732

Less investment 24,000

NPV

NET PRESENT VALUE


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Project A has NPV greater than zero and should beaccepted.

Project B has NPV less than zero and should berejected.

When NPV >0 means that the project will earn at

least or greater than the cost of capital.


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DISCOUNTED CASH FLOWS Project A is expected to make $100,000 in two years. Project B is expected to make $120,000 in three

years.

If the rate interest is 12%, which should you

choose?. Using the PV formula:

The PV of project A=$79,719.

The PV of project B=$85,414.

The project B is the project that will return highestinvestment to the company and should be chosenover Project A.

INTERNAL RATE OF RETURN


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INTERNAL RATE OF RETURN

IRR is the discount rate when the PV of the cashinflows equals original investment.

For the exam, you need three things concerning IRR:

IRR is the discount rate when NPV=0

IRR assumes the cash inflows are reinvested at theIRR.

You should choose project with highest IRR value.


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RETURN ON INVESTMENT

Is a % that shows what return you make by makingin something.

Ex: a company invests in a project that costs$200,000. The benefits of doing the project save the

company $230,000 in the first year alone.

ROI = (benefit-cost)/cost=30,000/200,000

15%.

For the exam: ROI , bigger is better.

BEP


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BREAK EVEN POINT: BEP analysis is done for a predefined for future time

periods ( years, months, or weeks ).

It evaluates the time period when total cash inflowequals fixed cost.

If calculated BEP value is less than expected value,investment is considered justified.

BEP


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A club is planning a dance party for its members.

The tickets will be sold for $30 each. Fixed costs (band & hire hall etc, ) $1500.

The variable costs (food etc, ) will be $10, for each

ticket sold.

(x)*(30)= (x)*(10)+1500.

X=75

no of tickets to be sold for BEP.

Economic value add (EVA)


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It takes into account the fact that there are opportunity costs toevery financial expenditure, and that if a project does not makemore money than those opportunity costs, it has not trulyadded economic value to the organization.

A company XYZ, invested $175,000 in a project, and that projectreturned a net profit of $10,000 in the first year operation.

Assume cost of capital 6%.

If the organization could have put the same $175,000 in thebank and earned 6% return.

$10,000-(06*175,000)=-$500.

$ 10,000-10,500 = -$500.

They would have earned $10,500 in interest if they had investedin the bank, instead of project.

Project Management


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Project Management

Charter.

Scope Statement.

Work Break Down Structure.

Project Scope Management


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j p g Manages the work involved in the project.

Understand requirements.

Define the scope.

Break down the scope in the form of WBS. Control the scope of the project.

Verify that the project is completed correctly.

Scope Management Processes


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p g

Collect requirements:-

This is the process of understanding what is needed tosatisfy the stakeholders and creating a document to reflectthat understanding, for both product and the project.

Deliverables :-

Requirements documentation.

The root business problem being solved.

The source of the requirements.

The way each requirement addresses the problem.

How business processes interact with the requirements.Associated measurements for each requirement.

Business, legal, ethical compliance.

Constraints and assumptions.

Anticipated impact of the requirement on other.



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g

Requirements management plan:

Defines what activities the team will perform to gather andmanage project requirements.

Shows how requirements will be gathered, how decisionswill be made, how changes to the requirements will behandled, and how the requirements will be documented.

Requirements trace ability matrix:

It is important to identify the source of the requirement.

The source could originate from a stake holder or

departmental request, a legal, contractual, or ethical need,an underlying requirement.

Who owns the requirement so that it is fulfilled.

Status of the requirements.

Define scope


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p

.

Product analysis.

Product breakdown.

System analysis.

Requirement analysis.

System engineering.

Value engineering.

Define scope


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Define scope

Alternatives identification:

Brainstorming.

Lateral thinking. (Shift in paradigm)


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Define scope:

Defines the total work and only the work to be executed bythe project team , so that all the requirements of the projectare fulfilled and the final deliverable is created.

Scope of the project. Scope of the product.

The scope statement.

Product scope description, product acceptance criteria, projectdeliverables, project exclusions, project constraints, projectassumptions.



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Create WBS:- Is the process of subdividing project deliverables and project work

into smaller, more manageable components.

Is deliverable oriented hierarchical decomposition of the work tobe executed by the project team, to accomplish the projectobjectives and create the required deliverables.

Each descending level of the wbs, representing an increasinglydetailed definition of the project work.

Organizes and defines the total scope of the project. Planned work is contained within the lowest level WBS component

, which are called work packages.

A work package can be scheduled, cost estimated, monitored andcontrolled.

Work packages contain the deliverables, i.e the result of the effortand not the effort it self.

Travel Abroad

Create WBSFirst we need to organize project work


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Passport Visa Ticketing &Boarding

GetPassport

ObtainPolice

verification

Apply forPassport

SubmitApplication

Form

GetApplication

Form

FillApplication

Form

Travel Abroad

Passport

Apply forPassport

Work Breakdown Structureorganizes and defines the

total scope of the project

WBS subdivides the project deliverables into smaller, moremanageable deliverables, with each descending level of WBSrepresenting an increasingly detailed definition of the projectwork. Lowest level of WBS components or deliverables are

called work packages.

WPs can be scheduled, cost estimated,monitored, & controlled


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Identify stake holders.

The process of identifying all people or organizationsimpacted by the project, and documenting relevantinformation regarding their interests, involvement,

and impact on project success.

Identify stake holders.


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What it is?

Keep in mind that a stakeholder may be any one with aninterest in the project.

And that interest may be positive or negative.

Why it is important?.

If the stakeholders are not properly identified on the projectand their needs are understood, then there is little chance ofmeeting their expectations.

Many projects are derailed because they did not understand

the needs of stakeholders and address them on the project.

Identify stakeholders


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de t y sta e o de s

power

high

Interest. high

low

low

Manage

closely.Keep

satisfied.

Monitor(mini

mum effort).

Keep

informe

d.

Stake holder analysis

tool.



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Group Exercise:-

Using Mind Map & M.S.Words

Create a WBS for wedding ceremony.

Create a WBS for a house construction.

Create a WBS for cycle.

Stake holder analysis of these projects?

VERIFY SCOPE.


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Verifying the project scope includes reviewingdeliverables with the customer or sponsor, to ensurethat they are completed satisfactorily and obtainingformal acceptance of deliverables by the customer

or sponsor.

VERIFY SCOPE


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If the project is terminated early, the project scopeverification process should establish and documentthe level and extent of completion.

Control Scope


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Control scope:

Is the process of monitoring the status of the project

and product scope and managing changes to thescope base line.

It ensures all requested changes and recommended

corrective or preventive actions are processedthrough the perform integrated change controlprocess.

Control Scope.


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Is also used to manage actual changes when theyoccur and is integrated with other change controlprocesses.

Uncontrolled changes are termed as Scope Creep:

Avoid scope creeps.

PROJECT TIME MANAGEMENT


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INCLUDES THE PROCESSES

REQUIRED TO ACCOMPLISH TIMELYCOMPLETION OF THE PROJECT.



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Fundamentals:

ACTIVITY ON ARROW DIAGRAM (AOA)/ADM.Dummy activity. Finish to start relationship.

ACTIVITY ON NODE DIAGRAM(AON)/PDM.

FS, SS, FF & SF RELATIONSHIPS Lead & lag between activities. Early start, early finish & late start, late finish Float , free float, critical path.

Forward pass and back ward pass. Project float. Crashing and fast tracking.

ESTIMATIONS


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Analogous estimation:

top down estimate. It is a form of expert judgment.

Parametric estimating / Quantitative method : it uses a mathematical model to calculate projected

times for an activity based on historical records fromprevious projects. Such as time per line of code,time per linear meter or time per installation.

Learning curve: the 100throom painted will take less time than the

first room because of improved efficiency.

Project Time Management


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Define activities:-

The process of identifying the specific actions to beperformed to produce the project deliverables.

Sequence activities:-

The process of identifying and documentingrelationships among the project activities.

Estimate activity resources:-

The process of estimating the type, and quantities ofmaterial, people, equipment, or supplies, required toperform each activity.

Project Time Management


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Estimate activity durations:-

The process of approximating the number of workperiods needed to complete individual activities withthe estimated resources.

Develop schedule:-

The process of analyzing activity sequences,durations, resource requirements, and scheduleconstraints to create the project schedule.

Control schedule:-

The process of monitoring the status, of the projectto update the project progress, and managingchanges to the schedule base line.

Scheduling Techniques


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Activity on arrow (AOA) also known as ADP( arrowdiagramming method).

Activity on Node (AON) also known as PDM (predecessor diagramming method).

CPM & PERT.

CPM-EXERCISE-1


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Sl.no act dur pred.

1.Estimate cost to complete project. 7 d ---- 2.Bid job& get order. 15 d 1

3.Build system 7d 2 4.Dev-training 4d 2 5.Implement. 5d 3,4 Find critical path, float/slack, free float/free

slack for each activity.

CPMEXERCISE-2


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SL. NO. ACTIVITY. DUR. PRED.

1 A 2 DAYS.

2 B 6 DAYS. 1

3 C 8 DAYS. 1

4 D 4 DAYS. 2,3

FIND CRITICAL PATH . FLOATS. , OF ALLACTIVITIES.

CPM-3


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SL Activity Dur(Hrs) Pred.

A Remove & dis mantle motar. 8 ----

B. Clean & Paint frame. 7 A.

C. Rewind armature. 12 A.

D. Replace armature. 9 A.

E. Assemble & Install

Motar. 4 B,C,D

Calculate the total time of the ovehaul.

CPM-Exercise.


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Sl no activity dur pred.

1 Get equipment. 5 d 2. hire people. 4 d 3. develop system. 15 d 1,2

4. training. 3 d 3 5. documentation. 6 d 3 6. install system. 9 d 4,5

Find critical path. What are floats for each activity?.

CPMEXERCISE-3


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Sl no. Act dur pred.

1. project dels 12 d ----

2.procure h/w 2 1

3.test h/w 8 2

4.procure s/w tools. 10 1

5.write programs 45 4

6.test & debug 22 5

7.install 8 3,6

8.training 3 7

9.acceptance 1 8.

Find critical path, float/slack, free float/free slack foreach activity.

CPM-EXERCISEHOUSECONSTRUCTION.


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CONSTRUCTION. Sl.no activity duration pred

1 lay foundation 3w nil 2 erect frame 4w 1 3 install mill works 3w 2

4 install wiring 1w 2 5 install plumbing 1w 2 6 plaster walls 4w 2 7 decorate interior 1w 3,4,5,6 8 install siding 3w 2 9 finish exterior 4w 8 10 finish 0 7,9

CPM EXERCISE-6


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Sl no act dur pred

1 specs 15d nil

2 design data base part. 45d 1

3 design GUI part. 30d 1 4 code data base part. 105d 2

5 code GUI part. 45d 3

6 integrate & test. 120d 4,5

7 write user manual. 60d 1

8 finish. 0d 7,6

CPM


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Sl no activity Dur Predecessor.

1 Remove & Dismantle motar. 8hrs ------

2 Clean & paint frame. 7hrs 1

3 Rewind armature. 12 hrs 1

4 Replace bearing. 9 hrs 1 5 Assemble & Install motar. 4 hrs 2,3,4

CRASHING Sl no activity duration pred


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Sl no activity duration pred

A. Get import license. 5 days. ----- B. Ship 7days A

C. Train users. 11days ----

D. Train on system. 2 days B,C.

You have agreed to get the system running in 12 days. If youare late, you will pay penalty $500/day, beyond 12 days.

Options for activity B :

Slow boat: 7days. (current option). $100.

Fast boat: 6days. $300.

Air plane: 5days. $400.

CRASHINGTask Pred Nor Crash Crashing cost/day


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Task Pred Normaldur

Crashtime

Crashing cost/day

1 A 3 1 4$/D

2 B 1 7 3 1$/D

3 C 1 4 2 4$/D

4 D 3 5 2 2$/D

5 E 2,4 0 0 COST OF OVERHEAD$4.5/D

CPM-7

A small engineering company intends to produce a batch of machines


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to be used by a shoe manufacturer in the mass production of shoes.

The activities required in the design and manufactures of themachines are

listed below: A. Draw up estimate. --- 2w. B. Agree estimate. A 1w. C. Purchase internal m/c. B. 4w.

D. Prepare design drawings. B. 6w. E. Construct main frame. D. 3w. F. Assemble machinery. C,E 3w. G. Test machinery. F 4w. H. Determine model type. D 2w. I. Design outer casing. D 3w.

J. Construct outer casing. H,I, 8w. K. Final assy. G,J, 2w. L. Final check. K. 2w.

Find duration of the project. What would be the effect of strike at the factory supplying the internal

machinery, there by delaying its delivery by 4 weeks?

PERT FORMULA. Pert duration: p+(4)*(M)+0 divided by 6


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Pert duration: p+(4) (M)+0 divided by 6.

Standard deviation of an activity of

an activity=(p-o)/6.= s.d.

Variance of an activity = (s.d) squared.

Confidence = NORMDIST(D, PERT TIME, SD, TRUE ).Duration needed at a confidence level = NORMINV

(PROB, PERT DUR, SD ).

PERTEXERCISE-1


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SL.NO pred O M P 1 ESTIMATE 5 7 15

2 BID 1 10 15 25

3 BUILD 2 4 7 10

4 TRAIN 2 4 4 4

5 IMPLEMET. 3,4 3 5 10

Find PERT duration of the project.

Probability of completing the project?

PERTEXERCISE- 2


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Sl no Activity OMP Pred. pert dur

1 A 2 4 6 nil 4 2 B 5 13 15 1 12

3 C 13 18 35 2 20

PERTEXERCISE- 2


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Project PERT duration :36 days.

Project std dev:4.08

36+/- 1 std dev=36+/-4.08=40.08 to 31.92 days.

There is 68% chance (0.68 prob ) of completing the

project in 31.92 to 40.08 days. There is 34% chance (0.34 prob ) of completing the

project in 36 days to 40.08 days.

There is 34% chance (0.34 prob ) of completing the

project in 31.92 days to 36 days.Duration needed at a confidence level = NORMINV

(PROB, PERT DUR, SD )= ((0.34+0.50), 36, 4.08 )

PERTEXERCISE- 2


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If two tail statistical table is referred:

68% confidence = 68/2 = 34% confidence for 36 daysto 40.08 days.

34% confidence for 31.92 to 36 days.

So for confidence of 0.34 , z= 1.0

Z= (x- pert dur of project )/ s.d = 1= (x-36)/4.08 , x=40.08 days.

If single tail statistical table is referred:

Add 0.5 to 0.34 i,e 0.84 that corresponds to z valueof 1.0 x=40.08 days.

If excel is used prob =0.84 excel uses single tail

PERTEXERCISE: 3 Sl no Act dur (d) pred


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Sl no. Act dur (d) pred. 1. project dels 10- 12 -14 ----

2.procure h/w 2 -2 -2 1 3.test h/w 8 -8 -8 2 4.procure s/w tools. 8 -10 -14 1 5.write programs 38 -45 -57 4 6.test & debug 20-22 -30 5

7.install 5-8-10 3,6 8.training 3-3 -3 7 9.acceptance 1 -1-1 8. Find critical path, float/slack, for each activity. There is 68% chance that write program activity will be

completed in ------ days to -------- days.

Variance of the project? Standard deviation of the project? Project dur=103 days. Variation of project=14.98 s.d= 3.87

PERTEXERCISE: 3


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PERT duration of activity write program =

(p+4*m+o)/6 = (38+4*45+57)/6 = 45.83 Standard deviation = (p-o)/6 = (57-38)/6 =3.17

Now we can say:

There is 68% chance that write program activity

will be completed in 42.66 days to 49 days


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Monitor & Control Schedule


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Tracking:

Set project review date.

Project update.

Show progress line at status date.

Save base line.

Project progress reports.

Critical chain


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Critical chain method:

Dr Goldratt.

Managing systems through constraints: TOC

Weakest link is the strongest, because it can breakit.

1. Identify the constraint of the system.

2. Decide how to exploit the constraint of the system.

3. Subordinate every thing else to the decision taken

regarding the constraint. 4. Elevate the constraint.

5. Go back to focusing step-1

Critical chainP j t t i TOC


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Project management using TOC:-

Students syndrome --- Law of Murphy.

Law of Parkinson.

Multitasking.

Feeding buffers.

Project buffer.

Critical chain:

In addition to task dependent, is resource dependent

longest path.

RESOURCE LEVELLING


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Sl.no activity duration pred Reso. 1 A1 3 D nil. Ram.

2 A2 2 D 1 Lax.

3 B1 2 D nil Lax. 4 B2 2 D 3 Lax.

5 C1 3 D nil Sita.

6 C2 3 D 5 Sita. 7 C3 2 D 2,4,6 Sita.

Project Cost Management Includes processes that make the project completion within

d b d t


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approved budget.

Estimate cost:

The process of developing an approximation of the monetaryresources needed to complete project activities.

Determine budget:

The process of aggregating the estimated costs of individualactivities or the work packages to establish an authorized costbase line.

Control costs:

The process of monitoring the status of the project to update

the project budget, and managing changes to the cost baseline.

Earned Value 4-fences. Each fence/day. Rs1000/fence. One fence


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after another.

Report at Day-3.

Completed one wall. spent Rs1000.(D-1)

Completed one wall. Spent Rs1200(D-2)

Completed 50%wall.spent Rs600 (D-3)

Pv=1000+1000+1000=3000

Ev=1000+1000+500=2500 Ac=1000+1200+600=2800

Earned Value BAC =Rs4000.


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Cost variance = EV-AC=2500-2800=-300

Cost performance index =EV/AC=2500/2800=0.893

Over budget. Getting 89 paise for every rupee.

Schedule variance =EV-PV=2500-3000=-500

Schedule performance index=SPI=2500/3000=0.833

Behind schedule & progressing @83% of the rateoriginally planned.

Exercise - EV Problem


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164

The project: 5 software package installs on 5 existingPCs in 5 weeks (1 installation /week ) for a totalconsulting fee of $5,000. After two weeks only 1 installhas been done for a cost of $1,500.

Determine PV, AC, EV.

Calculate SV, CV, SPI, CPI.

Assume the rate of progress continues and calculateEAC .

Exercise Solution


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165

Earned Value You have planned for a project to write a software


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application to take 1 year. The costs to this project

are budgeted at $12,500 per month.

Six months into the project, you find that softwareapplication is 50% completed, & spent $70,000

Calculate CV, CPI, SV, SPI, VAC.

Earned Value BAC =(12 MONTHS)*($12,500/MONTH)= $150,000


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PV=(6MONTHS)*($12,500)/MONTH=$75,000.

EV= SW IS 50% COMPL = $75,000. AC=$70,000

CV=EV-AC=$75,000-$70,000=$5000.

SV=EV-PV=$75,000-$75,000=$0.

CPI=EV/AC=75,000/70,000=1.O7 SPI=EV/PV=75,000/75,000=1

EAC=BAC/CPI=$150,000/1.07=$140,186.91

ETC=EAC-AC=$140,186.91-$70,000=$70,186.91

VAC=BAC-EAC=$150,000-$140,186.91=$9813.09

Earned Value Management


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168

EVM

Consider a company that took earned value


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Consider a company that took earned value

measurements at monthly intervals for the past threemonths:

EV AC

Month-1 $22,000 $13,700

Month-2 $151,000 $ 137,900

Month-3 $ 107,000 $98,400

CPI cum? At the end of 3-months.

EVM

EV EV AC AC CPI CPI


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EV EVc AC ACc CPI CPIc

Month-1, 22000 22000 13,700 13700 1.61 1.61

Month-2, 151000 173000 137,900 151,600 1.09 1.14

Month-3, 107,000 280,000 98,400 250,000 1.09 1.12

PROJECT HUMAN RESOURCE


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PROJECT HUMAN RESOURCE

MANAGEMENT

INCLUDES THE PROCESSES THAT ORGANIZE ANDMANAGE THE PROJECT TEAM.

Project human resourceprocesses

Develop human resource plan:


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Develop human resource plan:

Identifying, and documenting project roles,responsibilities, and required skills, reportingrelationships, & creating staffing managementplan.

Acquire project team:

Confirming human resource availability and

obtaining the team necessary to complete projectassignments.

.

Project human resourceprocesses

Develop project team:


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Develop project team:

The process of improving the competencies, teaminteraction, and the overall team environment to enhanceproject performance.

Manage project team:

The process of tracking team member performance,providing feed back, resolving issues, and managingchanges to optimize project performance

RACI


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174

RACI Chart Person

Act iv ity Krishna Ram

Define A R I I I

Design I A R C C

Develop I A R C C

Test A I I R I

Legend: R = Responsible, A = Accountable, C = Consult , I Inform

Sita Karthik Vinay

PROJECT QUALITYMANAGEMENT


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INCLUDES ALL THE ACTIVITIES OF THEPERFORMING ORGANIZATION THAT DETERMINE

QUALITY POLICIES, OBJECTIVES, ANDRESPONSIBILITES SO THAT THE PROJECT WILLSATISFY THE NEEDS FOR WHICH IT WASUNDERTAKEN.

QUALITY


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Quality is the degree to which a set of inherentcharacteristics fulfill requirements.

Stated and implied needs are inputs to developing

project requirements.

QUALITYPlan quality:


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The process of identifying quality requirements and how

the project will demonstrate compliance /or standardsfor the project and product, and documenting.

Perform quality assurance:The process of auditing quality requirements and the

results from quality control measurements to ensureappropriate quality standards and appropriateoperational definitions are used.

Perform quality control:

The process of monitoring and recording results ofexecuting the quality activities to assess performanceand recommend necessary changes.

Project communication management

Identify stake holders:


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Identify stake holders:

The process of identifying all people, or organizationsimpacted by the project and documenting relevantinformation, regarding their interest, involvement, andimpact on the project success.

Plan communications:The process of determining the project stakeholder

information needs and defining a communication approach.

Distribute information:The process of making relevant information available to the

project stakeholders as planned.

Project communication management

Manage stakeholder expectation:


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Manage stakeholder expectation:

The process of communicating and working withstakeholders, to meet their needs and addressing theirissues.

Report performance:

The process of collecting and distributing performanceinformation, including status reports, progressmeasurements, and forecasts.


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Project RiskManagement.


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probability isthe languageof uncertainty

Risk management is


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Risk management isthe means by which

uncertainty issystematic managed

Key word is systematic

Uncertain

Project Risk management


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Uncertainevent

or

conditionthat if

occurs

effect on the Project Objectives

Risk

+ ve - vehas

Project Risk Management

Includes the processes of conducting riskt l i id tifi ti l i


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management planning, identification, analysis,

response planning, and monitoring and control on aproject.

The objective:

To increase the probability and impact of positive events,and decrease the probability and impact of negative eventsin the project.

Project Risk Management Project risk is always in the future.


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Risk is an uncertain event or condition, that if it occurs, has an

effect on at least one project objectives.

Objectives can include scope, schedule, cost, and quality.

A risk may have one or more causes and if it occurs, it mayhave one or more impacts.

A cause may be a requirement, assumption, constraint, orcondition that creates a possibilityof negative or positiveoutcomes.

Risk --- cause--- event/condition ---- impact (on projectobjectives)

Project Risk Management Project risks can be substantially decreased.


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j y

Some studies quote a 90% decrease in projectproblems, through the use of risk management.

Through the process of risk management, wechange from the project controlling PM, to PMbeing in control of the project.

It focuses on proactively preventing things that cango wrong and helping things to go right.

Project Risk Management Individuals and groups adopt attitudes towards risk that


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influence the way they respond.

These risk attitudes are driven by perception, tolerances, andother biases.

These factors must be made explicit whenever possible.

Risk responses reflect an organizations perceived balance

between risk - taking and risk - avoidance .

Moving forward on project, without a proactive focus on riskmanagement can potentially lead to project failure.

PROJECT RISK MANAGEMENT


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A cause :

May be requiring an environmental permit to dowork.

Risk event: (probability)

Is permitting agency may take longer time thanplanned to issue a permit.

Project objective:( impact) Time over run.

PROJECT RISK MANAGEMENT A cause:


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Having limited personnel assigned to designa project.

Risk event / condition: The design personnel available and assigned

may not be adequate for the activity. Impact on project objective: Cost, schedule ,or performance (quality).

Risk score=(probability)*(impact) forprioritization.

Definition conditions for Impact Scales of a Risk onFour Major Project Objectives

(examples are shown for negative impacts only)

Risk management planning


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Very low.05

Low.1

Moderate.2

High.4

Very high.8

Projectobjective

Cost

Schedule

Scope

Quality

Insignificantcost increase

Insignificantsch slippage

Barely scopechange affect

noticeable

Low quality

barelynoticeable

20%sch slippage

Effectsprojectproduct

Effects

projectproduct

(examples are shown for negative impacts only)

probability and impact matrix

Risk management planning


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Low impact Moderate impact High impact

Risk score (probability x impact) for a specific risk

0.18 0.36 0.72

0.28 0.56

0.20 0.40

0.24

0.04

0.03

0.02 0.03

0.01 0.01 0.02 0.04

0.05 0.09

0.07 0.14

0.05 0.10

0.06 0.12

0.08

0.05 0.10 0.20 0.40 0.80

ThreatsProbability0.9

0.7

0.5

0.3

0.1

Impact (Ratio scale) on an objective - cost, time, scope of quality

0.18 0.09 0.05

0.07 0.04

0.05 0.03

0.02

0.56

0.40

0.24 0.12

0.08 0.04 0.02 0.01

0.72 0.36

0.28 0.14

0.20 0.10

0.06 0.03

0.01

0.80 0.40 0.20 0.10 0.05

Opportunities

RISK SCORE


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Risk event : govt may increase commercial tax. Likely Impact on the project objective: cost increase


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Risk event: there may be strike on port.

Likely impact on the project objective: cost . Thecost of out put of the project may increase >20%.

Ref impact scale : very high (0.8)

The team assess the prob of this event happening=

0.4 The risk score of this event =(0.8)*(0.4)=0.32

This score is on RED. To be taken on top priorityfor response planning.

Risk Breakdown Structure(RBS)Project


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Organizational Project Mgmt

Requirements

Technology

Complexity &Interfaces

Quality

Performance& Reliability

Subcontractors& Suppliers

Regulatory

Market

Weather

Customer

Projectdependencies

Resources

Funding

Prioritization

Estimating

Planning

Controlling

Communication

ExternalTechnical

Project Risk Management

The major steps of risk management are:-


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The major steps of risk management are:

Creating a risk management plan. Identifying risks.

Analyzing risks.

Creating a risk response plan.

Monitoring and controlling risks through out theproject.

Project Management Risk can be threat or opportunity.


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Responses for threat: Avoid, transfer, mitigate.

Responses for opportunity: Accept, enhance, share.

Passive acceptance and active acceptance.

Contingency plans.

Risk monitoring & control:

Work around plan to deal with secondary risks.

Project procurement management Plan procurements:

The process of documenting project purchasing decisions,


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The process of documenting project purchasing decisions,

specifying the approach, and identifying potential sellers.

Conduct procurements:

The process of obtaining seller responses, selecting a seller,and awarding a contract.

Administer procurements:

The process of managing procurement relationships,monitoring contract performance, and making changes, andcorrections as needed.

Close procurements:

The process of completing each project procurement.

RFP Guide lines for drafting a formal request for proposal

for an contractor:


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for an contractor:

An RFP must provide statement of work. Customer requirements.

What deliverables the customer expects the contractor orthe project team to provide.

Should list any customer- supplied items.

RFP might state approvals required by the customer.

Some RFP mention the type of contract the customer

intends to use.

An RFP might state the payment terms the customer

intends to use. Should state the required schedule for completion of the

project.

RFP

Should provide instruction for the format and the content ofthe contractors proposal


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the contractor s proposal.

Should indicate the due date by which the customer expectspotential contractors to submit proposals.

May include evaluation criteria.

In rare cases an RFP will indicate the funds the customerhas available to spend on the project.

Preparing proposal Ensure that the proposal process is competitive.

A customer uses RFP to solicit competing proposals from


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A customer uses RFP to solicit competing proposals from

contractors.

Submitting a proposal that meets the SOW of work andrequirements in the RFP is not sufficient to guarantee selection as thewinning contractor.

The customer will select the one that it expects will provide the bestvalue.

A proposal is a selling document.

In the proposal the contractor must convince the customer that thecontractor :

Understands what the customer is looking for. Can carry out the proposed project. Is the best contractor to solve the problem. Will provide the greatest value to customer. Will capitalize on its successful experience with previous related projects.

Preparing proposal

Will do the work professionally.

Will achieve intended results


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Will achieve intended results.

Will complete the project within budget and on schedule.

Will satisfy the customer.

In the proposal the contractor must highlight the

unique factors that differentiate it from competingcontractors.

Must stress the benefits to the customer if the

customer selects the contractor to execute theproject.

Preparing proposal Proposal contents:

Technical.


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Management. Cost.Technical section:

Objective is to convince the customer that the contractor understandsthe need or problem and can provide least risky and most beneficialsolution.

Understand the problem.

Proposed approach / solution.Benefits to the customer.

Management section:Description of work tasks.Deliverables.Project schedule.

Project organization.Related experience.Equipment and facilities.

Preparing proposal Cost section: The objective is to convince the customer that the contractors

price for the proposed project is realistic and reasonable


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price for the proposed project is realistic and reasonable.

In some cases, the customer may want only the bottom line totalcost of the project.

Some customers also want to see the cost of optional items. Government RFP s usually require contractors to provide a

detailed breakdown of various costs. Labor. Materials. Subcontractors and consultants. Equipment and facilities rental. Travel. Documentation.

Overhead costs. Escalation. Contingency. Fee or profit.

Now I havean authorityto direct the

assigned


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ProjectCHARTER,

resources on

project to:

manage

milestonesBudget

scope

Triple

Constraints

Project Integration Management


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CONSISTS OF:

Develop project charter.

Develop project management plan.

Direct and manage project execution.

Monitor and control project work.

Integrated change control.

Close project.

Global project management

Globalization adds a unique dimension on projectmanagement


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management. Cultural differences.

Multinational economic transactions.

Currency fluctuations and exchange rates.

Country-specific work codes and regulations, such as hoursper day, holidays, religious observances.

Interdependence of economies.

Corporate joint ventures and partnerships creating entitieswith a presence and facilities in multiple countries.

Political relations between countries.

Availability of high-demand work force skills.

Global project management Requires additional set of competencies:

To have foreign language skills.


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Knowledge and understanding of other countries and cultures,geography, world history, and international economics (currencies, exchange rates, export /import transactions ).

Culture and customs ( meal times, eye contact, possible differing

roles of men and women, dress codes, religious practices, lines ofauthority, communication protocol etc. )

Etiquette (in some countries sitting with crossed leg is consideredas insult, or shaking hand, or touching some one of the oppositesex is frowned upon )

To have awareness of geo- political environment of the countriesof various project participants, in particular the country of thecustomer.

Global project management

Learning and understanding the culture and


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customs of other project participants demonstratesrespect, helps build trust, aids in developing aneffective project team.

It is critical for the successful global projectmanagement.

Benefits of Project management

Project management is essential to business results.


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Having a satisfied customer.

If youre a PM, you have the satisfaction of knowing you led asuccessful project effort.

You have enhanced your reputation as successful project managerand positioned your self for expanded career opportunities.

If you are a team member, you feel satisfaction of being on a winningteam.

You not only contributed to the projects success, but also probablyexpanded your knowledge and enhanced your skills along the way.

When th

cpm & pert excercises - bu

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