BMIS2551: Project Management

Spring 2015; Narayan Ramasubbu

Class 2: 1/14/2015
Case: Bank of America TrustWeb Project
Topics: WBS, Scheduling

What the class wants

About 50% split between exam and project
Project folks, please start discussing topic with me
Topics
PM framework, PMP, MS Project, problem-solving,
decision-making, dealing with people We should cover all
of this

Anxieties

Group work, time management, course load, wikis,

Group of 1 is fine; I am here to help!
class discussion

Suggestions for me
Interactive, engaging, flexible, timely feedback, let go
early!, be thorough, speak slowly, jokes
Help me do all of this (and laugh too!)
BMIS2551; Spring 2015; Narayan Ramasubbu

Admin stuff
Group formation and Wiki
Let us settle groups now
Try out the wiki

MS Project
Katz IT will provide licenses for all interested students
enrolled in course
We need to wait for the course drop deadline
Meanwhile, download evaluation copy from MS and
get started

Any other matters?

BMIS2551; Spring 2015; Narayan Ramasubbu

Optional guest speaker Info

Mr. Fred Koos
Program manager at UPMC
VP / President elect of PMI

Talk in the evening section (6:20-7:30pm)

Please feel free to attend

Will share slides from talk

BMIS2551; Spring 2015; Narayan Ramasubbu

Class1-Section7

PM OVERVIEW: FORMALLY
STRUCTURED VS. ADAPTIVELY
AGILE
BMIS2551; Spring 2015; Narayan Ramasubbu

PM approaches spectrum
Formal structured approach emphasizes
discipline, plans, control, and track and trace
Contracts and documentation aplenty

Adaptive agile approach values

individuals and interactions over processes and tools

working artifacts over comprehensive documentation
customer collaboration over contract negotiation
responding to change over following a plan

see: http://agilemanifesto.org/

BMIS2551; Spring 2015; Narayan Ramasubbu

Examine structure vs. agile PM approaches

What are the pros and cons of the approaches?
Think about delusion and deception in each of these
approaches

Is one more preferable than the other?

When? For what type of projects?

Which type of approach would you prefer?

As a project sponsor?
As a project manager?
As a project member?

Group
Activity #2

Dont forget to document your answers!

BMIS2551; Spring 2015; Narayan Ramasubbu

Structured-agile: striking a balance

Tension between structured and agile
approaches
becomes efficiency OR flexibility choice
extremes are often sub-optimal

Seeking balance for ambidexterity

Structural approaches
Different projects/units, different approaches

Contextual approaches
Individuals are empowered to be entrepreneurs, brokers, and
multi-taskers and make the call.

Read more: Birkinshaw, J., and Gibson, C., Building ambidexterity into an
organization, MIT Sloan Management Review, Summer 2004, pp. 47-55.
BMIS2551; Spring 2015; Narayan Ramasubbu

Structured-agile gives rise to process diversity

Process diversity
Simultaneous presence of multiple process designs
(often differing in their philosophies)

For discussion: Is diversity good or bad?

From my research
Fit or alignment between process diversity and
process compliance crucially affects performance
outcomes
Process deviations by project insiders need to be
carefully monitored, tracked, and assessed with the
help of outsiders.
BMIS2551; Spring 2015; Narayan Ramasubbu

Class2-Section1

BANK OF AMERICA TRUSTWEB

PROJECT

BMIS2551; Spring 2015; Narayan Ramasubbu

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Case Discussion
Setting up
What is the overall context in which the project is situated in?
How would you characterize the integration process at BOA?

What are the key issues of the TrustWeb project?

Why does Mike Morris think the presentation was a failure in
content and presentation?
What are the deeper issues?

Where there any delusion and deception issues?

How would you compare this project with the characteristics of
great projects we saw in class 1?

How to get the project back on track?

What are the big takeaways from the case?
BMIS2551; Spring 2015; Narayan Ramasubbu

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Class2-Section2

PROJECT DIVISION OF LABOR (WBS),

SCHEDULING

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Work Breakdown Structure

Break project down to tasks
To the lowest unit of time that matters
Multiple levels of aggregation
Typically 3-6 levels that matches the team
hierarchy

Involve everyone in designing and verifying

the WBS
Mitigate delusion and deception
Get commitment

BMIS2551; Spring 2015; Narayan Ramasubbu

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Time and Resource Estimates

For every task in the WBS
Who is doing the task?
How much time will it take to complete?
How much will it cost?

From estimates to reality

Which estimation model?
Learning effects
Uncertainty

Extent of built-in buffer

BMIS2551; Spring 2015; Narayan Ramasubbu

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Scheduling at work
Modeling task relationships: A, B, C, D, E, F, G, H
B

Duration of tasks given as:

A:5, B:5, C:6, D:13, E:6, F:4, G:9, H:2 (hours, days, weeks, etc.)

BMIS2551; Spring 2015; Narayan Ramasubbu

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Task relationship in a Gantt chart

SLACK

ability to delay a task without affecting the whole project

Critical path: task completion path with no slack

BMIS2551; Spring 2015; Narayan Ramasubbu

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Task relationship: task network

Modeling task relationships
B, 5

E, 6

D, 13

A, 5

C, 6

F, 4

H, 2

G, 9

Path 1: A-B-E-H: 18
Path 2: A-B-D-F-H: 29

Slack: ability to delay a task without affecting

the whole project

Path 3: A-C-D-F-H: 30

Critical path: task completion path with no

slack

Path 4: A-C-G-H: 22

BMIS2551; Spring 2015; Narayan Ramasubbu

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Scheduling at work: handling uncertainty

Likelihood or probabilities get into the
picture
Scenario planning is playing with
probabilities
Optimistic, most likely, pessimistic values for
estimates

Modeling: how are these estimates

distributed?

BMIS2551; Spring 2015; Narayan Ramasubbu

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Modeling uncertainty
An empirical trend: estimates are often
asymmetrically distributed

likely
optimistic

BMIS2551; Spring 2015; Narayan Ramasubbu

pessimistic

19

Modeling uncertainty: assumptions and

formulas for beta distribution
Range of estimations is often within 6 standard
deviations of the expected value
Expected value is estimated as a weighted average:
1/6th of optimistic (a), 4/6th of likely value (m), and
1/6th of pessimistic value (b)

Formulas:
Standard deviation = (b a)/6
Expected completion time = (a + 4m + b)/6
BMIS2551; Spring 2015; Narayan Ramasubbu

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Deriving expected values

B, 5

E, 6

D, 13

A, 5

C, 6

Task
A
B
C
D
E
F
G
H

F, 4

H, 2

G, 9

Optimistic Most likely Pessimistic

(a)
(m)
(b)
Expected Variance
3
4
11
5
1.777778
2
5
8
5
1
3
6
9
6
1
8
12
20
12.66667
4
3
5
12
5.833333
2.25
2
4
7
4.166667 0.694444
6
9
14
9.333333 1.777778
1
2
4
2.166667
0.25

BMIS2551; Spring 2015; Narayan Ramasubbu

Expected time =
(a + 4m + b) / 6
Variance =
[ (b-a) / 6 ] 2

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Handling project uncertainty: variance

Variance of a project provides the degree of
uncertainty
Additive variance of tasks in critical path
=
Task
A
B
C
D
E
F
G
H

Optimistic Most likely Pessimistic

(a)
(m)
(b)
3
4
11
2
5
8
3
6
9
8
12
20
3
5
12
2
4
7
6
9
14
1
2
4

Expected Variance
5
1.777778
5
1
6
1
12.66667
4
5.833333
2.25
4.166667 0.694444
9.333333 1.777778
2.166667
0.25

Project variance = 7.72 (1.78 + 1 + 4 + 0.69 + 0.25)

Standard deviation = sqrt (variance) = sqrt (7.72) = 2.78
BMIS2551; Spring 2015; Narayan Ramasubbu

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Handling project uncertainty: decision-making

How likely is that a project would finish on time?
Assume probabilities are drawn from a normal distribution (aka
bell curve)
Use area under the curve or Z score to estimate likelihood of
completion
Example
Let us say it is absolutely necessary to finish the example project in 32
days.
The critical path is 30 days, with variance 7.72 (and SD=2.78)
Z score = (32-30) / 2.78 = 0.72
Lookup table: 76% likelihood that the project will be completed on time.
Excel: NORMDIST (value, mean, SD, TRUE)
=NORMDIST (32, 30, 2.78, TRUE) = 0.76

BMIS2551; Spring 2015; Narayan Ramasubbu

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Including uncertainty buffer in planning

We need 95% confidence that the project would finish on
time. How much extra time should the team be given?
Time needed = (expected) + (Z score * Standard deviation)
Example

Let us say we need to plan for project with 95% probability

95% probability yields a Z score of 1.65 (lookup tables)
Time needed = (30) + 1.65 * 2.78 = 34.59
So plan to provide an extra 4.59 days for the project team.

Excel: NORMINV (probability, mean, SD)

=NORMINV (0.95, 30, 2.78) = 34.57

BMIS2551; Spring 2015; Narayan Ramasubbu

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Optimizing a schedule
Tweaking estimation
Different model
Cut buffer
Cut oversights

Parallelize
Remove bottlenecks
Improve productivity
Level overcommitments
BMIS2551; Spring 2015; Narayan Ramasubbu

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From schedule to budget

Top down vs. bottom up
Activity based costing

Budget contingencies
Scenario planning
Provision to raise money?

BMIS2551; Spring 2015; Narayan Ramasubbu

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Elements of project planning

WBS

Project
Plan
Schedule

BMIS2551; Spring 2015; Narayan Ramasubbu

Budget

27

Tollgate check
Can we afford this project?
Time, skills, and money

Is it worth it?
Making it succeed
Risking failure

BMIS2551; Spring 2015; Narayan Ramasubbu

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Summary
Thoroughness of planning needs
Fine-grained WBS
Scenario planning for task estimations
Handling uncertainty
Avoiding delusion and deception
PM is a facilitator
Commitment from all stakeholders

BMIS2551; Spring 2015; Narayan Ramasubbu

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Looking forward to class 3

Topics: tracking, controls, and tradeoffs
Required reading before class
Case 2: Teradyne Corporation: The Jaguar
Project

Groups firmed up
Wikis up to date (both group and individual)

BMIS2551; Spring 2015; Narayan Ramasubbu

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Practice problem
A marketing project manager has developed a project with the following tasks for a
new campaign. In addition, the manager has gathered the time information for
each task, as shown in the table below.
1. Calculate the expected task completion times.
2. What is the total project length?
3. Identify the critical path. What are the alternative paths and how much slack time is
associated with each path?
4. Given the task time variances, what is the likelihood of the project finishing on week 24?
5. Suppose you wanted to have a 99% confidence in the project finishing on time. How
many additional weeks would your project team need to negotiate for in order to gain this
99% likelihood?
Task

Group
Activity
#3

A
B
C
D
E
F
G

Time Estimates (week)

Immediate
Optimistic
Most likely
predecessor task
-1
4
-2
6
B
3
3
A
6
13
A,C
4
6
B
6
8
D, E, F
2
5

BMIS2551; Spring 2015; Narayan Ramasubbu

Pessimistic
7
10
9
14
14
16
8
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