Engineering EconomicsEngineering Economics

Lecture 18Lecture 18Project ManagementProject Management6 January 20106 January 2010

What is a project? A Project is a temporary endeavor

undertaken to create a unique product or service.– Temporary– Unique

A project is a A project is a sequence of uniquesequence of unique, , complexcomplex, ,

and and connected activitiesconnected activities having having one goalone goal or or

purpose and that must be completed by a purpose and that must be completed by a

specific timespecific time, , within budgetwithin budget, and , and according according

to specificationsto specifications..

What is a Project?

Project characteristics Endeavors of any size may be a project

– Large and small projects demand different handling

Temporary– Distinguishes projects from operations

Unique– Not the same old thing

What is Project Management?

• a method for organizing tasks• a structured framework to help a group

work productively• tools to aid in task sequencing,

dependency analysis, resource allocation, scheduling, etc.

• tools to track progress relative to plan

• Project management is a set of Project management is a set of principles and tools forprinciples and tools for– DefiningDefining– PlanningPlanning– ExecutingExecuting– Controlling . . . and Controlling . . . and – Completing Completing aa PROJECT PROJECT

What is Project Management?

• Projects are Projects are orientedoriented towards a goal. towards a goal.• There is something There is something uniqueunique about every project. about every project.• Projects have a Projects have a finitefinite duration. duration.• Projects require coordination of Projects require coordination of interrelatedinterrelated

activities.activities.

Project Management Criteria

Why Need Project Management?

1.1. Multiple peopleMultiple people2.2. Multiple resources (labs, equipment, Multiple resources (labs, equipment,

etc.)etc.)3.3. Multiple tasks – some must precede Multiple tasks – some must precede

othersothers4.4. Multiple decision points – approvalsMultiple decision points – approvals5.5. Phased expenditure of fundsPhased expenditure of funds6.6. Matching of people/resources to tasksMatching of people/resources to tasks

Why Projects FailWhy Projects Fail

1.1. Failure to align project with organizational Failure to align project with organizational objectives objectives

2.2. Poor scopePoor scope3.3. Unrealistic expectationsUnrealistic expectations4.4. Lack of executive sponsorshipLack of executive sponsorship5.5. Lack of project managementLack of project management6.6. Inability to move beyond individual and Inability to move beyond individual and

personality conflictspersonality conflicts7.7. PoliticsPolitics

Why Projects Succeed!Why Projects Succeed!

1. Project Sponsorship at executive level2. Good project charter3. Strong project management4. The right mix of team players5. Good decision making structure6. Good communication7. Team members are working toward common goals

Laws of Project ManagementLaws of Project Management

No major project is ever on time, within No major project is ever on time, within budget, budget, Yours will not be the firstYours will not be the first. .

Projects progress quickly until they become Projects progress quickly until they become 90% complete, then they remain at 90% 90% complete, then they remain at 90% complete forever. complete forever.

When things are going well, something will When things are going well, something will go wrong. go wrong.

When things just cannot get any worse, When things just cannot get any worse, they will. they will.

Laws of Project Management

When things appear to be going better, you have When things appear to be going better, you have overlooked something. overlooked something.

No system is ever completely debugged. Attempts to No system is ever completely debugged. Attempts to debug a system inevitably introduce new bugs that are debug a system inevitably introduce new bugs that are even harder to find. even harder to find.

A carelessly planned project will take three times longer A carelessly planned project will take three times longer to complete than expectedto complete than expected

A carefully planned project will take only twice as long. A carefully planned project will take only twice as long. Project teams refuse progress reporting because it Project teams refuse progress reporting because it

manifests their lack of progress. manifests their lack of progress.

Core Project Management Tools

Project CharterProject Charter Work Breakdown Structure (WBS)Work Breakdown Structure (WBS) Project ScheduleProject Schedule Project BudgetProject Budget

Project Charter

What must be done?What must be done?– What are the required resources?What are the required resources?– What are the constraints?What are the constraints?– What are the short and long term implications?What are the short and long term implications?

Why do it?Why do it? When must it be done?When must it be done? Where must it be done?Where must it be done? Who does what?Who does what?

– Who is behind the project?Who is behind the project?– Who is funding the project?Who is funding the project?– Who is performing the work of the project?Who is performing the work of the project?

Project Charter

Who What Where Why When

Project Charter

Project Goal & ObjectiveSponsorStakeholdersTimelineResources requiredDeliverables

• Organize your approach• Generate a credible schedule• Track progress and control your project• Identify where to focus your efforts • Identify problems early – before they are crises• Saves you TIME….MONEY

Why is Project Management Important?

Five Phases of Project Management

Scoping the Project

Developing the Plan

Scoping the Project

Launching thePlan

Monitoring &ControllingClosing Out the

Project

Suggested Steps in Project Management

1.1. Generate a definition of project, goals, constraintsGenerate a definition of project, goals, constraints2.2. Identify project start/end dates, mandatory Identify project start/end dates, mandatory

milestones.milestones.3.3. List constraints – money, equipment, holidays, etc.List constraints – money, equipment, holidays, etc.4.4. Identify tasks to be accomplishedIdentify tasks to be accomplished5.5. Refine detailed task list, dropping/ combining, Refine detailed task list, dropping/ combining, 6.6. Estimate time (person hours, calendar period)Estimate time (person hours, calendar period)7.7. Identify resources (people, money, parts, etc.)Identify resources (people, money, parts, etc.)8.8. Monitor, record progress at least weekly Monitor, record progress at least weekly 9.9. Revise plan as needed to take into account changesRevise plan as needed to take into account changes

Proposal writing. Project planning and scheduling. Project costing. Project monitoring and reviews. Personnel selection and

evaluation. Report writing and presentations.

Management activities

Project Planning: Project Planning: ResourcesResources

• People - skills and value• Facilities• Equipment• Money• Materials• Time

The project plan

The project plan sets out:– The resources available to the project;– The work breakdown;– A schedule for the work.

PROJECT PLAN STRUCTURE

1.1. Introduction.Introduction.2.2. Project organisation.Project organisation.3.3. Risk analysis.Risk analysis.4.4. Hardware and software resource Hardware and software resource

requirements.requirements.5.5. Work breakdown.Work breakdown.6.6. Project schedule.Project schedule.7.7. Monitoring and reporting mechanisms.Monitoring and reporting mechanisms.

Planning the Project:Planning the Project:Work Breakdown Structure Work Breakdown Structure

(WBS)(WBS)

• A WBS is the functional decomposition A WBS is the functional decomposition of a systemof a system

• Breaks the project into chunks of work Breaks the project into chunks of work at a level of detail that meets planning at a level of detail that meets planning and scheduling needsand scheduling needs

Project scheduling

1.1. Split project into tasks and estimate time and Split project into tasks and estimate time and resources required to complete each task.resources required to complete each task.

2.2. Organize tasks concurrently to make optimal Organize tasks concurrently to make optimal use of workforce.use of workforce.

3.3. Minimize task dependencies to avoid delays Minimize task dependencies to avoid delays caused by one task waiting for another to caused by one task waiting for another to complete.complete.

4.4. Dependent on project managers intuition and Dependent on project managers intuition and experience.experience.

End