Chapter 15 major characteristics of project: established objective, dominant form of business, functional departments are responsible for for
for for the use of best practices in strategic planning and control +Serve
requires completion of large number of interrelated activities, defined
lifespan with beg and end, usually requires across organization
participation typically involves doing something never done before
(or similar), has specific time, cost and performance requirements…5
process groups=initiate, plan, execute, monitor/control, closing.
Project constraints=Scope, Quality, Schedule, Budget, Resources and
risks. 4 stages of Project life cycle= define, plan, execute, close.
(monitor/control occurs in all stage) Program Defined-A series of
coordinated, related, multiple projects that continue over an extended
time and are intended to achieve a goal. A higher level group of
projects targeted at a common goal. Portfolio-A component collection
of programs, projects, or operations managed as a group to achieve
strategic objectives. Components may not necessarily be
interdependent or have related objectives. Components are
quantifiable, that is, they can be measured, ranked, and prioritized
PM desirable charac: strong technical background, hard-nose
manager, mature, currently available, on good terms with senior
executives, keeps project team happy, experience in several different
depts, walks on water. The Project Manager- Manages temporary,
non-repetitive activities and frequently acts independently of the
formal organization. -Marshals resources for the project -Is linked
directly to the customer interface-Provides direction, coordination,
and integration to the project team-Is responsible for performance and
success of the project-Must induce the right people at the right time to
address the right issues and make the right decisions- Good Project
Managers are always in demand. PM ger sensitivity-Political:
organizational and customer politics, Interpersonal: recognize &
resolve conflicts before they erupt, Detective: recognize cover-up of
failure by team members Drivers/Factors leading to the increased use
of project management: Compression of the product life cycle,
Knowledge explosion, Triple bottom line (planet, people, profit),
Corporate downsizing, Increased customer focus, Small projects
represent big problems. Integration of project management (project
management office) was to provide senior management with:
Overview of all PM activities, Big picture of how organizational
resources are being used, Assessment of the risk to their portfolio that
project represents, Rough metric for measuring improvement of
managing project relative to others in the industry, Linkages of senior
management with actual project execution management. Major
functions of portfolio management office: Oversee project selection,
Monitor aggregate resource levels and skills, Manage shared
resources across all projects, Identify and develop project
management methodology, best practices, and standards, Coaching,
mentoring, training, and oversight, Balance projects in the portfolio to
represent a risk level appropriate to the organization, Monitoring
compliance with project management standards, policies, procedures,
and templates by means of project audits, Coordinate and improve
communication among all stakeholders, Create a total organization
perspective that goes beyond silo thinking, Improve overall
management of projects Problems resulting from the uncoordinated
project management systems include: Projects that do not support the
organization’s overall strategic plan and goals, Independent
managerial decisions that create internal imbalances, conflicts and
confusion resulting in dissatisfied customers, Failure to prioritize
projects results in the waste of resources on non-value-added
activities/projects. Socio/technical approach :The Technical
Dimension (The “Science”)-Consists of the formal, disciplined,
purely logical parts of the process.-Includes planning, scheduling, and
controlling projects………The Sociocultural Dimension (The “Art”)-
Involves contradictory and paradoxical world of implementation.-
Centers on creating a temporary social system within a larger
organizational environment that combines the talents of a divergent
set of professionals working to complete the project.Chapter
3*System factors include but are not limited to: +Management
elements +Governance frameworks +Organizational structure*Some
principles about systems: +Dynamic +Can be optimized
+Components can be optimized +Systems and their components
cannot be optimized simultaneously +Systems are nonlinear in
responsiveness Management Elements: *Key functions or principles
of management include but are not limited to: + Division of work
using specialized skills and availability to perform work +Authority
given to perform work+Responsibility to perform work appropriately
assigned based on such attributes as skill and experience +Discipline
of action (respect for authority, people, and rules) +Unity of
command (one person gives orders for any action or activity to an
individual) +Unity of direction (one plan and one head for a group of
activities with the same objective) +General goals of the organization
take precedence over individual goals (As Spock said, “the needs of
the many outweigh the needs of the few”) +Paid fairly for work
performed Organizational Governance Frameworks: *Governance
Framework includes: +Rules +Policies +Procedures +Norms
+Relationships +Systems+Processes *This framework influences
how: +Objectives of the organization are set and achieved +Risk is
monitored and assessed +Performance is optimized Organization
Structure Types: +functional organization, +matrix structure
+dedicated project teams, and Projectized +Many use hybrids of these
basic forms *We examine what organizational culture is and the
impact it has on organizing and managing projectsProject
Management Structures: *Challenges to Organizing Projects +The
uniqueness and short duration of projects relative to ongoing longer-
term organizational activities +The multidisciplinary and cross-
functional nature of projects creates authority and responsibility
dilemmas Drivers of Project-Oriented Management Structures:
*Emphasis on speed to market *Need for specialized knowledge from
a variety of areas *Explosive rate of technological change
*Accountability of non-routine tasks Types of Project-Oriented
Management Structures *Functional Organization *Dedicated
Project Team *Projectized Organization*Matrix Organization 3
types? +Weak Matrix +Balanced Matrix +Strong Matrix *Organizing
Projects: Functional Organization +Different segments of the project
are delegated to respective functional units +Coordination is
maintained through normal management channels +Used when the
interest of one functional area dominates the project or one functional
area has a dominant interest in the project’s success *Organizing
Projects: Dedicated Teams & Projectized Organization +Project
Teams operate as separate units under the leadership of a full-time
project manager +In a projectized organization where projects are the
providing support for its teams +Primary Motivation of team is to
accomplish work of project! *Organizing Projects: Matrix Structure
+Hybrid organizational structure (matrix) is overlaid on the normal
functional structure -Two chains of command (functional and project)
-Project participants report simultaneously to both functional and
project managers -Violates principle of unity of command +Matrix
structure optimizes the use of resources -Allows for participation on
multiple projects while performing normal functional duties -
Achieves a greater integration of expertise and project requirements
Pros & Cons of Functional Org Structure * Advantages +No
structural change +Flexibility +In-depth expertise +Easy post-project
transition +Technological continuity +Quicker career advancement
*Disadvantages +Lack of focus +Poor cross-functional integration
+Slow +Lack of ownership +Variance of goals between project and
functional +Not a holistic PM approach Pros & Cons of the
Dedicated Team *Advantages +Simple—no disruption +Fast—
focused +Cohesive Team +Strong Cross-Functional Integration
*Disadvantages +Expensive—duplication +Internal strife—we/they
+Limited technological Expertise +Difficult post-project transition
Pros & Cons of Projectized Organizations *Advantages +PM has
full authority +Team accountable to PM +Shorter communication
lines +Higher project commitment +Faster decisions +Single
reporting channel *Disadvantages +Duplication of staff across
projects +Stockpiling of expertise and equipment +Experts with great
depth but little breadth +Inconsistency in carrying out policy
+Projectitis +Life after project ends.Pros & Cons of Matrix
Structure: *Advantages +Flexible and efficient use of resources
+Strong project focus +Specialists maintain ties to functional
organization making easier post-project transition +Sharing of critical
resources and technologies +Responsive to client *Disadvantages
+Decision making can get bogged down +Dysfunctional conflict and
infighting +Stressful due to many bosses +Slow—multiple
responsibilities and bosses +Projects resist shutdown +Over reliance
on negotiating skill of PM +Lack of unity of command *Factors in
organizational structure selection +Degree of alignment with
objectives / strategy +Specialization capabilities +Span of control,
efficiency, and effectiveness +Clear path for escalation of decisions
+Clear line and scope of authority +Delegation capabilities
+Accountability and responsibility assignment +Adaptability of
design +Simplicity of design +Efficiency of performance +Cost
considerations +Physical locations +Clear communications *Project
Considerations +Size of project +Strategic importance +Novelty and
need for innovation +Need for integration (number of departments
involved) +Environmental complexity (number of external interfaces)
+Budget and time constraints +Stability of resource requirements
Project Management Office or Project Office *PMO / PO may:
+Make recommendations +Lead knowledge transfer +Terminate
projects +Other actions as required *Primary function is to support
PMs and may include but not limited to: +Tracking project progress
and compliance +Promulgating best practices +Managing shared
resources across projects +Coaching, mentoring, training, consulting
services, and oversight +Developing and managing policies,
procedures, and templates +Integrating latest advances in field of
project management +Being an organizational advocate
+Coordinating communication across projects Organizational
Culture system of shared norms, beliefs, values, and assumptions
which bind people together, The “personality” of the organization that
sets it apart from other organizations-Provides a sense of identity to
its members -Helps legitimize the management system of the
organization -Clarifies and reinforces standards of behavior -Helps
create social order Project Oversight’s Purposes: +To ensure
projects meet the organizational needs for standards, procedures,
accountability, efficient allocation of resources, and continuous
improvement in the management of projects +To support the project
manager Oversight Activities *At the Organization Level +Project
selection +Portfolio management +Improving how all projects are
managed over time +Assessing and elevating the maturity level of the
organization’s project management system +Using balanced
scorecard approach to review progress on strategic priorities *At the
Project Level +Review projects’ objectives +Decide on issues raised
by the project manager +Track and assist the project to resolve
bottlenecks +Review status reports from the project manager +Audit
and review lessons learned +Authorize major deviations from the
original scope +Cancel the project Importance of Oversight to the
Project Manager *Oversight Functions: +Providing support and
help to the project manager where needed +Determining the
environment in which the project manager will implement his or her
project +Influence the performance measures used to hold the project
manager responsible and accountable +Reporting to the oversight
group at predetermined phases in the project *Portfolio Project
Management +The centralized management of projects to ensure that
the allocation of resources to projects is directed toward projects that
contribute the greatest value to organization goals *Project Office
(PO/PMO) +The unit responsible for continued support of consistent
application of selection criteria, standards, and processes; training of
and general assistance to project managers; and continued
improvement and use of best practices Key Responsibilities of
Project Portfolio Management *Senior executive oversight
committee +Reviews project options available by type (new,
operational, compliance) +Confirms business case and linkage to
organizational strategy +Selects, prioritizes, and balances the overall
risk of all organizational projects +Ensures availability of resources
and competencies +Sets macro time, cost, and requirements +Reviews
gating outcomes *Phase Gate Review Process +A structured process
to review, evaluate, and document outcomes in each project phase and
to provide management with information to guide resource
deployment toward strategic goals *Decision Gate Components
+Required deliverables +Gate criteria and specific outputs +A clear
yes/no decision on whether to go ahead Key Benefits of Using Phase
Gating *Provides excellent training for functional staff who serve on
oversight review groups *Encourages a larger perspective and role of
projects within the organization *Is a clear-cut process, easily
understood, and applicable to all projects in a portfolio *Provides a
structured process for a project office to follow on all projects
*Eliminates poor value projects *Supports faster decision making
with predefined deliverables for each gate Benefits of the Activities
of Project Offices (POs) +Support integration of project portfolios
as a bridge between senior management and project managers within
the social/cultural environment of the organization +Holds the keys to
the gate review process +Support integration of project management
processes from selection through project closure and lessons learned
+Provide training that supports the movement of the organization to a
higher level of project management maturity +Provide a “home room”
for Project Managers between assignmentsChapter 4Reasons for
Project Planning- *Establish directions for project team *Support
objectives of parent organization *Make allowance for risk *Put
controls on planned work Defining the Project *Analyzing the
Requirements (all sources) *Defining the Project Scope *Establishing
Project Priorities *Creating the Work Breakdown Structure *Coding
the WBS for the Information System Step 1: Requirements
Collection *Business requirements—higher level needs of the
organization including reasons project is being undertaken
*Stakeholder requirement—needs of stakeholders or stakeholder
groups *Solution requirements—description of features, functions,
and characteristics of the project +Functional requirements describe
behaviors of the product +Nonfunctional requirements describe
conditions or qualities required for product to be effective *Transition
and readiness requirements—temporary capabilities need to transition
from current to future state *Project requirements—actions,
processes, or other conditions the project needs to meet *Quality
requirements—any condition or criteria needed to validate the
successful completion of a project deliverable Requirements
Traceability *Tracing requirements includes but is not limited to:
+Business needs, opportunities, goals, and objectives +Project
objectives +Project scope and WBS deliverables +Product design
+Product development +Test strategy and test scenario +High-level
requirement to more detailed requirements Step 2: Defining the
Project Scope *Project Scope +A definition of the end result or
mission of the project *PMBOK Definition of Requirements
Collection (necessary to define scope) +Process of determining,
documenting, and managing stakeholder needs and requirements to
meet project objectives Project Scope Statement *Project objective
+Must include performance, schedule, and budget estimate (ROM
estimate)—maybe where *Deliverables +Top level and major
deliverables*Milestones +Mark beginning or end of series of work
packages *Technical requirements +Clarify deliverables or define
performance specs *Limits and exclusions +What others are doing—
subcontractors, owner, etc. +What is out of scope / limits placed upon
us *Reviews with customer Project Charter +An expanded version
of scope statement +A document authorizing the project manager to
initiate and lead the project and to expend resources Scope Creep +
project scope to expand over time due to requirements Project
Charter Content *Project purpose or justification*Measurable
project objective*High-levelrequirements*High-levelproject
escription, boundaries, and key deliverables *Overall project risk
*Summary milestone schedule *Preapproved financial resources
*Key stakeholder list Step 3: Project Priorities Project Trade-offs
+Shifts in the relative importance of criterions related to cost, time,
and performanc -Budget–Cost -Schedule–Time -Performance–Scope
*Managing the Priorities of Project Trade-offs +Constrain:fixed
requirement +Enhance: optimizing over others +Accept: reducing (or
not meeting) The Triple Constraint*Cost +cheap *Schedule
+quick*Performance/Scope (quality outcomes) +Exactly what needs
to be accomplished to what standards (scope) *Unfortunately,
tradeoffs are required between three imperatives Step 4: Creating the
Work Breakdown Structure *Project-deliv-subdeliv-lowest subdel-
cost account-workpackage +Clearly defines boundaries of work
packages Later in Planning: Integrating the WBS with the
Organization *Organizational Breakdown Structure (OBS) depicts
how firm is organized to discharge its work responsibility for a project
+Provides a framework to summarize organization work unit
performance +Identifies organizational units responsible for work
packages +Ties organizational units to cost/control accounts Q
WBS(to make 100p scope): defines scope/work, deliverable oriented,
contains 100scope,100 work from parent, for control, trackingProcess
Breakdown Structures *Process-oriented projects are driven by
performance requirements, not by product requirements *five major
phases +Analysis +Design +Construct +Test +Rollout *Deliverables
are defined as outputs with exit criteria that must be met before the
project moves to the next phase Responsibility Matrices +Used when
the project is too small -Lists project activities/participants -Clarifies
critical interfaces between units and individuals that need
coordination -Provide a means for all participants to view their
responsibilities and agree on their assignments -Clarifies the extent or
type of authority that can be exercised by each Project
Communication Plan *What information collected when? *Who
recieve? *What methods togather and store info*What limitsfor
access to certain kinds of information? *Whencommunicated? *How
be communicated? Developing a Communication Plan
*Stakeholder analysis *Information needs *Sources of information
*Dissemination modes *Responsibility and timing Information
Needs *Project status reports *Deliverable issues *Changes in scope
*Team status meetings *Gating decisions *Accepted request changes
*Action items *Milestone reportsChapter 6-Developing the Project
Plan *The Project Network -Provides basis for scheduling labor and
equipment- Enhances communication among project, participants-
Provides an estimate of project’s duration- Provides a basis for
budgeting cash flow- Highlights activities that are “critical” and
cannot be delayed- Help managers get and stay on plan How WBS
Differs From / Linked to Project Network: -WBS is hierarchical,
WBS identifieseach project deliverable/organization unit responsible
for its accomplishwithin budget and within time duration, WBS
provides framework for tracking costs to deliverables and
organization units responsible Network Project network is sequential,
Network provides project schedule by identifying sequential
dependencies and timing of project activities, Network sets all project
work, resource needs, and budgets into sequential time frame; WBS
does not provide this, The network uses time estimates found in the
work packages of WBS to develop project network., Time estimates,
budgets, and resources required for a work package in WBS are set in
time frames, but without dates., Dates are computed after project
network is developed Language of PERT/CPM Milestones *
significant progress *Have no time related to them Network *Diagram
of nodes and arcs *Used to illustrate technological relationships Path
Series of connected activities between two events Critical Path Set of
activities on a path that if delayed will delay completion of project
Critical Time Time required to complete all activities on critical path.
PERT/CPM Network Charts: Advantages *Allows visualization of
task relationships *Facilitates calculation of critical path *Clarifies
impact of decisions on downstream activities Disadvantages
*Complex, not easy to comprehend at a glance *Charts don’t readily
depict durations, dates, progress Constructing a Project Network
+Activity +Merge Activity +Parallel (Concurrent) Activities: +Path:
a sequence of connected, dependent activities +Critical path: -longest
path through activity network that allows for completion of all project-
related activities; -shortest expected time in which entire project can
be completed; -delays on critical path will delay completion of entire
project. +Event: a point in time when an activity is started or
completed. It does not consume time +Burst Activity: an activity that
has more than one activity following it Two Approaches Activity-
on-Node (AON) (CPM) +Uses a node to depict an activity *Activity-
on-Arrow (AOA) (last you will hear about it) (PERT) +Uses an arrow
to depict an activity Basic Rules to Follow in Developing Project
Networks *Networks typically flow from left to right *An activity
cannot begin until all preceding connected activities are complete
*Arrows indicate precedence and flow and can cross over each other
*Each activity must have a unique identify number that is greater than
any of its predecessor activities *Looping is not allowed *Conditional
statements are not allowed *Can use common start and stop .ONCE
we have a network, we can determine Critical Path by: +Path
Analysis—quick but doesn’t give any details +Network Analysis—
slower but gives us many details Network Computation Process
*Forward Pass—Earliest Times + (early start—ES) + (early finish—
EF) +How soon can the project finish? (expected time—ET)
*Backward Pass—Latest Times + (late start—LS) + (late finish—LF)
+Which represt critical path? +How long can be delayed? (slack—SL)
Forward Pass Computation * (ES + Duration = EF) *Carry the early
finish (EF) to the next activity where it becomes its early start (ES)
unless… +The next succeeding activity is a merge activity then
choose large EF Backward Pass Computation (LF - Duration = LS)
*Carry the late start (LS) to the next activity where it becomes its late
finish (LF) unless +The next succeeding activity is a burst activity, in
which case the smallest LF Determining Free Slack *Total slack
+Amount of time a task can be delayed without delaying project
(becoming critical) *Free Slack +Amount of time an activity can be
delayed without affecting the early start of the following activity. The
Critical Path * path withleast slack in common *Longest path
*Shortest expected time *Important because it impacts completion
time *Is where you put best people on *Is where you pay extra
extension when doing risk assessment *Is where you look when other
managers asking to ‘borrow’ people or equipment *Is where you look
when you don’t have time to monitor all activities Network
Sensitivity *Sensitivity +The likelihood the original critical path(s)
will change once the project is initiated -One or more near critical
paths + least slack in common + one critical path and noncritical
activitie= ‘insensitive’. Extended Network Techniques to Come
Close to Reality *Laddering +Activities are broken into segments so
the following activity can begin sooner and not delay the work *Lags
+The minimum amount of time a dependent activity must be delayed
to begin or end -Lengthy activities are broken down to reduce the
delay in the start of successor activities -Lags can be F-S,S-S,F-F,S-f.
Hammock Activities *Spans over a segment of a project *Has a
duration that is determined after the network plan is drawn *Is used to
aggregate sections of the project to facilitate getting the right amount
of detail for specific sections of a project *Is very useful in assigning
and controlling indirect project costs Chapter 7Managing
Contingency plans increase the chance that the project can be
completed on time and within budget. minimizes surprises, costs,
schedule delays, stress, and misunderstandingsSuccessful risk
management requires whereThreats are embraced—not
denied,Problems are identified—not hiddenRisk Management
ProcessWhat can go wrong (risk event),How to minimize the risk
event’s impact (consequences),What can be done before an event
occurs (anticipation),What to do when an event occurs (contingency
plans)Risk Management’s BenefitsA proactive rather than reactive
approach.Reduces surprises and negative consequences
Prepares the project manager to take advantage of appropriate
risks.Provides better control over the future.Improves chances of
reaching project performance objectives within budget and on time.
Good Risk mg Process: risk identicication(source of risk),Assess(-
severity,likelihood,controllability),RiskResp develop(devl strategy to
reduce, devl contig plan),RiskResp Control (implement risk strategy,
monitor/adjustfor new,change mang)Managing RiskStep 1: Risk
Identificationlistpossible risks through brainstorming, problem
identification and risk profiling.Use risk breakdown structure (RBS)
in conjunction with work breakdown structure (WBS) to identify and
analyze risks.Macro risks first, then specific eventsRisk profile=list of
questions addressing additional areas of uncertainty on a project
Risk and Contingency Planning-Technical Risks:Backup strategies
ifcurrentfails.Assessingwhether technical uncertainties can be
resolved.Schedule Risks:Use of slack increases the risk of a late
project finish.Imposed duration dates (absolute project finish
date).Compression of project schedules due to a shortened project
duration date.Costs Risks:Time/cost dependency links: costs increase
when problems take longer to solve than expected
Price protection risks (a rise in input costs) increase if the duration of
a project is increased.Funding Risks:Changes in the supply of funds
for the project can dramatically affect the likelihood of
implementation or successful completion of a project.Step 2: Risk
Assessment:analysis for event probability and impact.Assessment is
both qualitative and quantitative.Risk assessment form.Risk severity
matrix:Failure Mode and Effects Analysis (FMEA)Risk Value =
Impact x Probability x Detection
Probability analysis:Decision trees, NPV, and PERT
Failure Mode and Effects Analysis (FMEA)
Impact × Probability × Detection = Risk Value.Step 3: Risk
Response Development (threats/opportunities)
Strategies for Threats Escalate: Outside scope of project—elevate
to an appropriate level of management.Avoid/Exploit: Seeking to
eliminate the risk to protect the project from its impact
Mitigate/Enhance: Taking action to reduce the probability of
occurrence or the impact of the risk.Transfer/Share: Shifting the
impact of the threat to a third party, together with ownership of the events-Increases scheduling complexity-May make the traditional
response.Accept: Being willing to acknowledge the risk, but not critical path no longer meaningful-Can break sequence of events-May
taking action to reduce the probability or impact of it cause parallel activities to become sequential-Activities with slack
Strategies for Opportunities:Escalate-Outside scope of project— may become critical.Task Splitting:A scheduling techniquefor bette
elevate to an appropriate level of management.Exploit sche&resour utili.-interrup work on an activity to employ the resource
Seeking to eliminate the uncertainty associated with an opportunity to on another, then returning to finis interrp wrk-Is feasible
ensure that it definitely happens.Share-Allocating some or all of the whenstartupandshutdown costs=low-major reason why projects fail to
ownership of an opportunity to another party who is best able to meet schedule.Benefits of Scheduling Resources-Leaves time for
capture the opportunity for benefit of project consideration of reasonable alternatives(You know in advance where
Enhance-Taking action to increase the probability and/or the positive there are resource constraints)(Cost-time tradeoffs-Changes in
impact of an opportunity.Accept-Being willing to take advantage of priorities)--Provides information for time-phased work package
an opportunity if it occurs, but not taking action to pursue budgets to assess(Impact of unforeseen events)(Amount of flexibility
it.Contingency Planning- if a possible foreseen risk event actually in available resources)Assigning Project:Best people: tired of tough
occursA plan of actions that will reduce or mitigate the negative assign,Less experienced participants: never given opport to expand
impact (consequences) of a risk event. knowl.Factors to be considered in deciding who should work
Risks of Not Having a Contingency Plan-Having no plan may slow together.Experience: with new hires.Multiproject Resource
managerial response,-Decisions made under pressure can be Schedules Problems-Overall project slippage
potentially dangerous and costly.Contingency Funding and (Time (Delay on one project creates delays for other projects)-Inefficient
Buffers(time to compensen fordelay unplan)Contingency Funds resource application(The peaks and valleys of resource demands
(Reserves)-Funds to cover project risks—identified and create scheduling problems and delays for projects)-Resource
unknown.Budget reserve-Are linked to the identified risks of specific bottlenecks(Shortages of critical resources required for multiple
work packages (but funds held by PM).Included in the project cost projects cause delays and schedule extensions).Manag Multiproject
baseline (budget) but not distributed to WP they are associated with— Schedul:CreatePO to overseesch of resour, use proj prio to
sometimes withdrawn if risk is not realized.Management reservesAre allocate,Outsour(reduce proj slippage,improv utli of crt resou,avoid
large funds to be used to cover major unforeseen risks (e.g., change in resour bottleneck)
project scope) of the total project (Usually held by Senior Use a project priority queuing system: first come, first served for
ManagementNot part of the project cost baseline (budget)Cost resources
Estimating—Reserve AnalysisThe budget within the cost baseline Centralize project management: treat all projects as a part of a
=Budget reserve=Can be estimated as a percentage of estimated cost, “megaproject”
a fixed number, or using quantitative analysisManagement Reserves Outsourcing can reduce the three most common problems
=“unknown-unknown srisks”Normally not part of the project cost
associated with handling multi-projects internally
baseline but added per approval.Developing Contingency
Reduce project slippage
ReservesHow do we develop Budget Reserves—identify risk/cost
impact. The Probability and Cost Impact must correlate back to the Improve utilization of critical resources
likelihood and impact in the Risk Assessment Avoid resource bottlenecks
Form.DevelopingContingencyReservesManagement Using the Resource Schedule to Develop a Project Cost
reserves=normally guessed based on overall uncertainty of the Baseline
roject.make it a percentage of the total project.MR could be based on Why a Time-Phased Budget Baseline Is Needed
other criteria such as 3 times BR..MR >Budget To determine if the project is on, ahead, or behind schedule and
Reserves.Contingency Fund EstimateBut, both Budget Reserves over or under its budgeted costs?
and Management Reserves are part of the project budget.Step 4: Risk To know how much work has been accomplished for the
Response Control Exercise risk control by-Developing a risk allocated money spent—the project cost baseline (planned
register-Execution of the risk response strategy-Monitoring of value, PV)
triggering events-Initiating contingency plans-Watching for new To project cash flow requirements
risks-Establishing a Change Management System-Monitoring,
Creating a Time-Phased Budget
tracking, and reporting risk(-Fostering an open organization
Assign each work package to one responsible person or
environment-Repeating risk identification/assessment exercises-
Assigning and documenting responsibility for managing department and deliverable
risk).Change Management ControlSources of Change-Scope Compare planned schedule and costs using an integrative
changes in form of design or additions-Implementation of system called earned value (EV)
contingency plans-Improvement changes.Change Control System Work Breakdown Structure
Process-Identify proposed changes-List expected effects of proposed For each work package we said earlier in the course we needed
changes on schedule and budget-Review, evaluate, and approve or to develop:
disapprove of changes formally-Negotiate and resolve conflicts of Define the work (what)
change, condition, and cost-Communicate changes to parties Identify the time to complete a work package (how long)—can
affected.-Assign responsibility for implementing change-Adjust be CPM method or PERT method time estimates
master schedule and budget-Track all changes that are to be Identify a time-phased budget to complete a work package
implemented.Benefits of a Change Control System-Inconsequential (cost)
changes are discouraged by the formal process-Costs of changes are
Identify resources needed to complete a work package (how
maintained in a log-Integrity of the WBS and performance measures
much) (people, material, special tools/equipment)
is maintained-Allocation and use of budget and management reserve
funds are tracked.Responsibility for implementation is clarified- Identify the single person responsible for units of work (who)
Effect of changes is visible to all parties involved-Implementation of Identify monitoring points for measuring progress (how well)
change is monitored-Scope changes will be quickly reflected in Time-phasing the work package is critical for the final step of
baseline and performance measures.PERT= probabilistic creating a budget baseline
model.Assumes each activity duration has a range that statistically When the work package is placed into the schedule, the costs
follows a Beta Distribution.Uses three time estimates: optimistic, are distributed to a time-phased budget—fairly easy
pessimistic, and a most likely time to represent activity Some Work Packages make up the entirety of an activity
durations.Using the three time estimates to determine a weighted More difficult if an activity has multiple work packages
average time (50% probability point). Te=a+4m+b/6
(a=op,b=pes,m=likel).dev=(b-a/6),dev2=var. z=(ts-te/sq rt
(var)Chapter 8Resource Resource schedule provides reliable
baseline-developing a time-phased project cost budget baseline.-
measuring time differences between plan and actual.after resource
and timphased then it is project time/cost est.Resource Smoothing
(or Leveling)-Involves attempting to evenoutvaryingdemands on
resources by using slack (delaying noncritical activities) when
resources are adequate.Resource-Constrained Scheduling-Duration of
a project may be increased by delaying the late start of some of its
activities if resources are not adequate to meet peak
demands.Resource scheduling usually reduces flexibility-When
resources are considered, slack is used to get a more “efficient”
schedule.When slack is used up, flexibility is lost and risk of delaying
project increasesIf resource conflict occurs on critical path, project is
delayedTypes of Project ConstraintsTechnical or Logic
Constraints-Constraints related to the networked sequence in which
project activities must occur.Physical Constraints-Activities that
cannot occur in parallel or are affected by contractual or
environmental conditions.nospace/capability. Resource Constraints-
require a particular sequencing of project activities.3resource
constra:.People, materials, equipment.using a priority matrix will help
determine if the project is time, cost, or resource constrained
Time(smoothing,within slack,adq res),Resource Constraint(fixed res,
canuse outide slack).Risk Assumptions-Activities with the most slack
pose the least risk.-Reduction of flexibility does not increase risk-The
nature of an activity (easy, complex) doesn’t increase risk//Time-
Constrained Projects/advantg-Peak resource demands are reduced-
Resources over the life of the project are reduced-Fluctuation in
resource demand is minimized.Resource Demand Leveling
Techniques for Time-Constrained Projects Disadvtg-Loss of
flexibility that occurs from reducing slack-Increases in the criticality
of all activities.Resource-Constrained Projects-Activities are
scheduled using heuristics (rules-of-thumb) that focus on:Minimum
slack,Smallest (least) duration,Lowest activity identification
number.*The Parallel Method is used to apply above 3 rules
heuristics-An iterative process scheduling period by period using 3
above rule.The Impacts of Resource-Constrained Scheduling-
Reduces slack but also reduces flexibility-Increases criticality of