MS Project 2007 Page 1 of 18

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1 MS Project 2007 Page 1 of 18 PROJECT MANAGEMENT (PM):- There are powerful environment forces contributed to the rapid expansion of the projects and project management approaches to the business problems and opportunities. A project is defined as a non routine, one time effort limited by time, resources and performance specification designed to meet customer needs. One of the distinguish characteristics of PM is that it has both a beginning and an end and typically consists of four phases: defining, planning, executing and delivering. Effective PM begins with selecting and prioritizing projects that support the firm s mission and strategy. Project Managers have to plan and budget of projects. PROJECT LIFE CYCLE:- The project life cycle is an important tool for the project manager. The project life cycle recognizes that projects have a limited life span and that there are predictable changes in level of effort and focus over the life of the project. The project life cycle typically posses sequentially through four stages defining, planning, executing and delivering. Project effort starts slowly & builds to a peak and then declines to the delivery of the project to the customer. 1. Defining Stage: - Specification of the projects is defined, project objectives are established, teams are formed& major responsibilities are assigned. 2. Planning Stage: - The level of effort increases in this stage and plans are developed to determine when it will be scheduled, whom it will provide benefit, what quality level should be maintained and what the budget will be. 3. Executing Stage: - A major portion of the project work takes place both physical and mental. The physical product is produced time; cost and specification measures are used for control. 4. Delivering Stage: - It includes delivering the project product to the customers. Delivery of the project might include customer training and transforming components.

2 MS Project 2007 Page 2 of 18 Defining Planning Executing Delivering Goals Schedule Status report Train Customers Specification Budgets Changes Transfer Tasks Resource Quality Responsibilities Risks Forecasts Staffing ROLE OF PROJECT MANAGEMENT IN ORGANIZATION S COMPETITIVE STRATEGY:- Actually Strategy is implemented through project management. Every project manager has a clear link to the organization s strategy. There are too many organization s in which many managers can not identify a project priority and link it with the strategic plan. This is not good project management. Every one should contribute value to the organization s strategic plan which is designed to meet the future need of its customers. Ensuring a strategy linkage between the strategic plan and project is a difficult task that demands constant attention from top and middle management. The larger and more diverse organization have not developed a process that clearly aligns projects selection to the strategic plan. The result is poor utilization of organization s resources. People, money, equipment and core competencies. Conversely organization s that have good coherent link of project management to the strategy have more cooperative access the organization. So it is clear now that project management play a vital role in the organization s competitive strategy. The intended outcome are clear organization focus best use of

3 MS Project 2007 Page 3 of 18 source, resources (people, equipment, capital) and improved communication across the project management and other departments. The following are the causes due to which project management focusing on organization s competitive strategy. Focusing on problems and solutions that have low priority strategically. Focusing on the immediate customers rather than whole market place and value chain. Overemphasizing technology. Tries to solve customer issues. Engaging in a never-ending search for perfection. STANDARD METHODOLOGY FOR MANAGING PROJECTS: - One of the best ways to meet the needs of customer and major project stakeholders is to use an integrated project planning and control system that requires selective information. The standard methodology for managing the projects is consists on following steps. Step 1:- Defining the project. I. Defining the project scope. II. Establishing project priorities. III. Creating WBS( Work breakdown structure) or PBS( process breakdown structure) IV. Integrating the WBS with the organization. V. Coding WBS for the information system. Step 2: - Estimating project times and costs. I. Estimating time, cost and resources. II. Developing budget. III. Creating database for estimating. Step 3: - Developing & project planning. I. Constructing and project network. II. Using backward and forward pass information. III. Practical consideration. Step 4: - Managing Risk. I. Risk identification. II. Risk assessment. III. Risk response control. Step 5: - Scheduling Resources. I. Classification of scheduling problem. II. Resource allocation. III. Assigning project work. IV. Multi project resource scheduling. Step 6: -Reducing Project Duration. I. Managing project teams. II. Progress and performance measurement and evaluation.

4 MS Project 2007 Page 4 of 18 DEFINING THE PROJECT: - There are five generic steps for the definition of the projects, which are necessary for the project planning, scheduling and controlling. 1. Defining the project scope: Defining the project scope sets the stage for developing project plan which includes a) project objective ( Answers for 5Ws and 1H) b) Deliverables (Expected outputs over PLC) c) Milestones (Rough cut estimates of 4Ms) d) Technical requirement (To ensure performance) e) Limits & exclusions f) Reviews with customer 2. Establishing Project Priorities:- One of the primary job of the project manage the trade-offs among time, cost and performance. To do so project managers must defined and understand the nature of priority of the project. One technique that is useful for this purpose is a project priority matrix that identifies which criteria is constrained (i-e parameter must be fixed). Which should be enhanced (i-e adding the value in project), and which can be accepted (i-e not to meet original parameters) the project priority matrix for the time, cost and performances is as under: 3. Creating the WBS/PBS: - Once the deliverables have been identified, the work of project can be divided into smaller and smaller work elements. The outcomes of this hierarchical process are called WBS/PBS. The WBS/PBS is the map of the project. Basically WBS/PBS is an outline of the project with different levels of details. The WBS facilitates evaluation of cost, time and technical performance at all levels in yje organization over the PLC. For example top management only deals with major deliverables while first line supervision deals with smaller sub deliverables and work packages. The difference between WBS and PBS is only,

5 MS Project 2007 Page 5 of 18 WBS is used for tangible project (for e.g equipment design) while PBS is used for non tangible project (for e.g software development project). Hierarchical breakdown (HBD) of WBS. Level HBD Description 01 Project Complete Project 02 Deliverable major deliverable 03 Sub deliverable Support deliverable 04 Lowest sub deliverable lowest management responsibility level 06 Work Packages Activities 4. Interacting WBS with OBS:- In this stage the WBS of the project will be assigned to the OBS in order to control the project from cost and performance point of view. 5. Coding the WBS for the information System:- The codes are used to define levels and elements in the WBS also budget and cost information. ESTIMATING PROJECT TIMES AND COSTS:- Estimating is the process of forecasting an approximating the time and cost of completing project delivered. However, in practice estimating processes are frequently classified as top-down (Macro) or bottom up (Micro). Top-down estimates usually derived from analogy, group consensus or mathematical relationships. Bottom-up estimates are typically based on estimates of elements found in the work break down structure (WBS). FACTORS INFLUENCING THE QUALITY OF ESTIMATES:- Past experience is a good starting point for developing time and cost estimates. Factors related to the uniqueness of the project will have a strong influence on the accuracy of estimates. Project, people and external factors all need to be considered to improve quality of estimates for project times and costs.

6 MS Project 2007 Page 6 of Project Duration:- long duration projects increase the uncertainty in the estimates. 2. People:- The people factor because of staff turnover, skills of the people making the estimates and also peoples performance to the work affects the estimating times and cost. a) Project Structure & organization:- Which project structure is chosen to manage the project will influence time & cost estimates. If the structure is dedicated project term, the major advantage is speed in the project. This speed comes at an additional cost of trying up personnel full time. Conversely if the structure is matrix, it may reduce the cost by more effectively sharing personnel across project but may take longer time to complete. 3. Planning horizon:- The quality of estimate depends on the planning horizon. Estimate of current activities are more accurate than more distant activities. 4. Project Priority:- Project priority also influences on time & cost estimation because of resources assignment. 5. Other Factors:- Non project factors also influence on time cost estimates for example: equipment downtime, national holidays, vacations etc. ESTIMATING GUIDELINES FOR TIME, COSTS AND RESOURCES:- As poor estimates are a major contributor to project that failed. Therefore every effort should be made to see that initial estimates must be accurate as possible. Even though a project has never been done before, a manager can follow seven guidelines to develop useful work packages estimates as under, 1) Responsibility:- At the work package level, estimates should be made by the person(s) most familiar with task, so first- line supervisors or technicians who are experiences and familiar with the type of work must be responsible for the other estimate package. 2) Use Several People to estimate:- It is well known that a cost or time estimates has a more accuracy when several peoples with relevant experience knowledge of work package are used. 3) Normal Conditions:- When task times, cost and resource estimates are determined should be based on normal condition efficient methods and normal level f resources. For Example: If the normal work day is eight hours, the time estimate should be based on eight hours a day. Similarly if the normal work day is two shifts, the estimates should be based on two shifts workday. Also estimate should be representing normal level of resources, people or equipment.

7 MS Project 2007 Page 7 of 18 4) Time units:- All the task time estimates need consistent time units. For example:- Calendar days, workdays, work weeks, single shifts, hours, minutes etc. 5) Independence:- Estimates should treat each task as independent of other tasks that might be integrated by the WBS. 6) Contingencies:- Work packages estimates should not include allowances for contingencies. 7) Adding risk:- The degree of risk time and cost to task estimates vary from task to task. So identify the risk and adding accordingly is more important. For Example: new technology carries more time and cost risks than manpower, material etc. 1. Developing the project network Project network is the tool used for planning, scheduling and monitoring project progress. Project network are developed from the WBS. The important networks are as follows: 1. PERT= program evaluation and review technique 2. CPM= Critical path Method 3. GERT= Graphical evaluation review technique 4. Gantt chart 2. Construction Project Network Basic rules for constructing project. 1. Network flow typically from left to right. 2. And activity can not begin until all preceding connected activities have been completed. 3. Arrow on network indicates flow. Arrow can cross each other. 4. Each activity should have a unique identification number. 5. An activity identification number must larger than that of any activities that precede it. 6. Looping is not allowed.

8 MS Project 2007 Page 8 of 18 Terminologies ACTIVITY: It is an element of project which required time. It may or may not require recourse. It is denoted by arrow. EVENT: This term is used to represent a point in time when an activity is started or completed. It does not consume time. It is denoted by circle. CRITICAL ACTIVITY: It is longest path through the network, if an activity on the path is delayed, the project will be delayed by some amount of time. SYMBOL: 1. Activity 2. Event 3. Dummy Activity 4. Critical Path Scheduling techniques Network Computation Process Critical Path Method 1. Forward Pass:- To compute forward pass The computation process used to determine earliest event time such as; i. How soon can the activity start (i.e. early time ES) ii. iii. How soon the activity can finish ( i.e. early finish), EFT=EST+D How soon can the project be finished (i.e. expected time) Is called forward Example 1:-

9 MS Project 2007 Page 9 of 18 Example 2:- 2. Backward Pass: - The computation process of CPM used to determine latest finishing event times such as: i. How late can the activity finish (i.e. late start LF) ii. iii. iv. LFT=LET How late can the activity start (i.e. LST) LST=LFT-D How long can the activity be delayed (i.e. float) Float= LST-EST Critical path (i.e. all activities with zero float) Example 1:- PERT: - Program Evaluation Review Technique I. Expected time of an activity Te = (a+4m+b)/6 Where Te= expected time of an activity a= optimistic time of an activity m= most likely time of an activity b=pessimistic time of an activity II. Variance of an activity a 2 = {(b-6)/6} III. Standard deviation of an activity

10 MS Project 2007 Page 10 of 18 IV. Probability of meeting schedule found from statistical table Z= (Ts Te)/ ( 2 ) Where Te= critical path duration Ts= scheduled project duration Z= probability of meeting schedule Example: The planning department of an electronics firms has set up the activities for developing a production of a new CD player. Given information below Compute expected time of each activity, variance, standard deviation, also probability of meeting schedule. To determine the probability Z= (Ts Te) / ( a 2 ) = (67-64) / ( ) = 3/ 36 =3/6 =0.69 The probability of meeting schedule is = 69%

11 MS Project 2007 Page 11 of 18 Problem 1:- The project information for business centre (design dept.) is presented here. Compute the early and late activity times and the float times. Identify the critical path. X Y Solution:- Activity Duration EST EFT LST LFT Float (LFT- -EST A B C D E F G H

12 MS Project 2007 Page 12 of 18 X Y Assignment 1 Problem 1:- The project information for the custom order project of the air contact company is presented here. Find 1. All expected activity time s variances. 2. The critical path & expected completion time. 3. The probability that the project will be done in 23 days. 4. The completion time corresponding to 95% probability. Problem 2:- The project information given by J. world project manger of print software is

13 MS Project 2007 Page 13 of 18 presented here. Find early, late, float times. Also identify critical path. GERT: - GRAPHICAL EVALUATION AND REVIEW TECHNIQUE It is a network model developed to deal with more complex situations than can be handled by PERT/CPM. GERT is combination of signal flow graph theory, probabilistic network PERT/CPM and decision tree, all in signal framework. Its component consist of logical nodes, directed arcs (branches) with two parameters, the parameter that the given arc is taken (or realized) and distribution function describing the time required by the activity. Evaluation of GERT network yields the probability of each node being related and elapsed time between all nodes. At this point it may be useful to compare GERT and PERT/CPM to focused on what is difficult about GERT. GERT Branching from a node is probabilistic Flexibility in node realization Looping back to earlier event is acceptable Difficult to use as a control tool Arcs may represent time, cost reliability etc. PERT/CPM Branching from a node is deterministic No Flexibility in node realization Looping back is not allowed Easy to use for control Arcs represent time only There are steps employed in using GERT. 1. Convert the qualitative description of the project action plan into a network. (I.e. PBS) 2. Collect necessary data to describe the arcs of the network. Managing Risk:- Every project manager under stands risks is inherent in projects. In the context of projects, risk is uncertain condition, that if it occurs, has a positive are negative effect on project objectives. Risk Management Process The chance of risk event occurring (e-g an error in time estimate, cost estimate or design technology) are greatest in the concept planning and start up phases of project. The cost impact of risk event in the project is less if the event occurs earlier rather later. So risk management identifies as many risk events as possible (i-e what can go wrong) minimizes their impact (I-e when can be done about the event before the project begins), manager responses to those events that do metalize (I-e contingency plan) and

14 MS Project 2007 Page 14 of 18 provides contingency funds to cover risk events. The following model represents the risk management process. RISK IDENTFICATION Analyze the project to identify sources of risk. Known RISK ASSESSMENT Assess risks in term of: Likelihood of occurring Controllability Severity of impact Risks RISK RESPONSE DEVELOPMENT Develop the strategy to reduce possible damage Develop contingency plan Risks on it Plan RISK RESPONSE CONTROL Implement Risk Strategy Monitor an adjust plan for new risks Change management Risk Identification The risk management process begins by trying to generate and list of all possible risks that could affect the project. During the planning phase project manager pulls to risk management team that uses brain storming and other process identifying technology to identify the potential problems. Participants are encouraged to keep an open mind and generate as much possible risk as possible.

15 MS Project 2007 Page 15 of 18 One common mistake that is made in the risk identification process is to focus on consequences not on the events. The focus in the begging should be on risks that can affect the whole project rather than specific section of the project. Risk Assessment When list of potential risks available. Note: All of these risks some are trivial and can be ignored while others are serious to the welfare of the project. So if is the responsibility of project manager have to develop methods for eliminating trivial risks in terms of importance and need for attention. Common used techniques are as under. Scenario Analysis Probability Analysis Risk Response Development When risk event is identified an assessed, a decision must be made concerning which response is appropriate for the specific event. Responses to risk can be classified as mitigating, avoiding, transferring, sharing or retaining. Risk Response Control The last step in risk management process is risk control. Executing the risk response strategy, monitoring, triggering, events initiating contingency plans and watching for new risks. Establishing a change management system to deal with events that requires formal changes in the scope budget and / or schedule of the project in order risk response control. Scheduling Resource: The network analysis (I-e PER & CPM) are useful only for the allocation of time, but fail to deal with allocation of recourses I-e 4M s (man, machine, material & money). If resources are adequate but the demand varies undelay over the life of the project it may be desirable to even out resources demand by delaying non critical activities (by using float) to lower pert demand and increase resources utilization. The process is called resources leveling or smoothing. On the other hand resources are not adequate to meet peak demand, the Late Start Time (LST) of activities must be delayed and the duration of the project must be increased. The process is called resources constrained scheduling. Resources Methods Time- Constrained Project (I-e Something Resources Demand) Scheduling time-constrained projects focuses utilization. When demand for specific resources type is erotize. It is difficult to manage and utilization may be very poor. Practitioners have attacked the utilization problem using recourse leveling techniques that balance or smooth demand for resources y basically all leveling techniques delay noncritical activities by using positive sleek to reduce peak demand and fill in the valleys for the resources.

16 MS Project 2007 Page 16 of 18 Resources- Constrained Projects: When number of people end/or equipment is not adequate to meet peak demand requirements and it is impossible to obtain move the project manager falls in resourcesconstrained problem. The tried is to specify and allocates resources to minimize project delay the resources limit or altering the technical network relationship scheduling activities using following pointing rules. 1. Minimum Float 2. Smallest Duration 3. Lowest Activity identification Number. In any period when two are more activities require its same resource, the priority rule applied. Rule one is by the pointing. However, if all activates here the same sleek, the next rule (I-e smallest duration) would be placed in schedule first. In very cases when all eligible activities has the same sleek and same duration the priority should be given to the rule 3 i-e lowest identification number. Types of Project Constraints Project constraints impede or delay the start of activity. There project constraints need to be considered in scheduling. Technical of Loses Constraints These Constraints usually address the sequence is which project activity must occur. The project network deposits technical constraints. For example. 1. Design 2. Test 3. Technology etc Physical Constraints In rare situation there are physical Constraints that cause activities that would normally occur in parallel to be constrained by contractual or environmental conditions. Resource Constraints Resource is people, equipment and material that can the drawn on to accomplish something. In project the availability or unavailability of resources will often influence the way projects are managed. Critical Chain in Projects:- Critical chain (C-C) was introduced by doldratt in order to develop the strategies for accelerating the completion of projects, when projects are constrained by both resource and technical dependencies critical chain refers to longest string of dependencies that exist in the projects to represent time constrained resource constrained and technical or logical constrained in the project. Time Estimates in C-C:- In critical chain the estimate, activity time provide an estimate that has about on % chance of being completed on or before the estimated time.

17 MS Project 2007 Page 17 of 18 Critical Chain in Action:- Critical chain in practice requires time suffering in the schedule to act as Shock Absorber to protect the project completion date. Critical Chain and multi tasking:- Critical chain has three recommendations that will help to reduce the impact of multi tasking. 1. Reduce the number of projects so people are not assigned to as many projects concurrently. 2. Control start dates of projects to accommodate, resource shortages. Do not start projects until sufficient resources are available to work full time on project. 3. Contract for resources before the project begins. Critical chain and project performance monitor:- C-C method uses buffers to monitor project time performance. For monitoring purpose, this buffer is typically divided into three zones OK; watch (Alarm set off and Act (take corrective actions). Cost budgeting and cost base line:- cost estimates are not budgets. A cost estimate becomes a budget when it is time- phased. Time phasing project work is important for the project cost control. Perception of costs and budgeting vary depending on their users. The project manager must be very aware of these differences when setting up the project budget. The project manager can commit on budgets before the resource is used. This information is useful to the financial officer of the organization in forecasting future cash outflow. The project manager is interested in when budgeting cost is expected to occur, when the budget cost actually is charged (earned) and when actual cost emerges. Cost Base Line:- The cost baseline serves as an anchor point for measuring performance. The cost baseline is concrete documentation and commitment; it is the planned cost and expected schedule performance against which actual cost is measured. It can also serve as base for developing cash flow and awarding progress payments. Development of cost baseline is properly part of the planning process. The cost baseline is major input to the cost/ schedule system to be described. Rules for placing costs in baseline:- the major reasons for creating a baseline are to monitor and report process and to estimate cash flow. Costs are placed in the baseline; exactly as manager expect them to e earned. Percent complete rule:- this rule is heart of any earned value system. The best method for assessing costs to baseline under this rule is to evaluate work packages over the duration of work and assign completion percentages in monetary terms. Methods of variance analysis:- Generally variance analysis base on two key computations. 1. Company earned value with the expected schedule value. 2. Company earned value with actual costs. Earned Value Analysis:- Earned value (EV) for a task is simply the percent complete times its original budget stated differently, EV is the percent of the original budget that has been earned by actual work completed.

18 MS Project 2007 Page 18 of 18 Although the percent complete rule is most used method of assessing budgets to baseline and for coast control, but earned value rules are very useful for reducing the overhead costs of collecting detailed data on percent complete of individual work packages. Earned value rules are classified as 1. 0/100 percent rule:- This rule assumes credit is earned for having performance f the work once it is completed. Hence 100 % of the budget is earned when the work package is completed. This rule is used for work package having very short duration /50 Rule:- This approach allows 50 % of the value of the work package budget to be earned when it is started and 50 % to be earned when the package is completed. This rule is popular for work packages of short duration and small total costs.