Chapter 1. The World of Project Management. MEM 612 Project Management

Transcription

1 Chapter 1 The World of Project Management

2 WHAT IS A PROJECT?

3 Why the emphasis on project management? Many tasks do not fit neatly into businessas-usual. Need to assign responsibility and authority for achievement of organizational goals.

4 Characteristics of Projects Unique Specific Deliverable Specific Due Date

5 Other Common Characteristics of Projects Multidisciplinary Complex Conflict Part of Programs

6 PMI Definition A temporary endeavor undertaken to create a unique product or service Project Management Institute, 2000

7 PROJECT MANAGEMENT VS. GENERAL MANAGEMENT

8 Skill Requirements for Effective Project Management Conflict Resolution Creativity and Flexibility Ability to Adjust to Change Good Planning Negotiation win-win versus win-lose

9 WHAT IS MANAGED? THE THREE GOALS OF A PROJECT

10 Figure 1-1: Performance, Cost, and Time Project Targets

11 THE LIFE CYCLES OF PROJECTS

12 Figure 1-2 The Project Life Cycle

13 Figure 1-3 An Alternate Project Life Cycle

14 SELECTING PROJECTS

15 Nonnumeric Selection Methods The Sacred Cow The Operating/Competitive Necessity Comparative Benefits

16 Figure 1-4 The Q-Sort Method

17 Numeric Selection Methods Financial Assessment Methods payback period discounted cash flow Scoring Methods unweighted 0-1 factor method weighted factor scoring method

18 Payback Period Initial Fixed Investment Annual Net Cash Inflows

19 Discounted Cash Flow where NPV (project) = - I 0 + n t= 1 (1 + Ft k ) t I 0 = the initial investment F t = the net cash flow in period t k = the required rate of return or hurdle rate

20 The Weighted Scoring Model S i = n j= 1 s ij w j where S i = the total score of the i th project s ij = the score of the i th project on the j th criterion w j = the weight or importance of the j th criterion

21 Confronting Uncertainty The Management of Risk

22 What uncertainties are encountered in project management? Time required to complete a project Availability of key resources Cost of resources Timing of solutions to technological problems Actions taken by competitors

23 Can uncertainty surrounding projects ever be eliminated? No, but it can be managed

24 Risk Analysis Estimate probabilities or distributions associated with key parameters Develop analytic or simulation model Analyze distribution of outcomes generated by model

25 Risk Analysis with Crystal Ball Assumption Cells Distribution Gallery Forecast Cells

26 THE PROJECT PORTFOLIO PROCESS

27 The Project Portfolio Process Step 1: Establish a Project Council Step 2: Identify Project Categories and Criteria Step 3: Collect Project Data Step 4: Assess Resource Availability Step 5: Reduce the Project and Criteria Set Step 6: Prioritize the Projects within Categories Step 7: Select the Projects to be Funded and Held in Reserve Step 8: Implement the Process

28 The Aggregate Project Plan

29 Figure 1-12 An Example Aggregate Project Plan

30 Chapter 2 The Manager, the Organization, and the Team

31 THE PM S ROLES

32 Facilitator Manager-as-supervisor versus manageras-facilitator Systems approach versus analytical approach Suboptimization Must ensure project team members have appropriate knowledge and resources Micromanagement

33 Communicator Figure 2-1 Communication Paths Between a Project s Parties-At-Interest

34 Virtual Project Manager Geographically dispersed projects Communication via Web Telephone Video conferencing Never let the boss be surprised!

35 THE PM S RESPONSIBILITIES TO THE PROJECT

36 Three Overriding Responsibilities Acquiring resources Getting necessary quantity and quality can be key challenge Irrational optimism Fighting fires and obstacles Leadership and making trade-offs

37 Negotiation, Conflict Resolution, and Persuasion Necessary to meet three overriding responsibilities

38 SELECTION OF A PROJECT MANAGER

39 Key Criteria Credibility - The PM is believable technical credibility administrative credibility Sensitivity - Politically astute and aware of interpersonal conflict Leadership, Style, Ethics - Ability to direct project in ethical manner

40 PROJECT MANAGEMENT AS A PROFESSION

41 Project Management as a Profession Project Management Institute More than 64,000 members Project Management Body of Knowledge (PMBOK) Project-oriented organization

42 FITTING PROJECTS IN THE PARENT ORGANIZATION

43 More on Why Projects? Emphasis on time-to-market Need for specialized knowledge from a variety of areas Explosive rate of technological change Accountability and control

44 Figure 2-2 The Pure Project Organization

45 The Pure Project Organization Advantages Effective and efficient for large projects Resources available as needed Broad range of specialists short lines of communication Drawbacks Expensive for small projects Specialists may have limited technological depth May require high levels of duplication for certain specialties

46 Figure 2-3 Functional Project Organization

47 Functional Project Organization Advantages technological depth Drawbacks lines of communication outside functional department slow technological breadth project rarely given high priority

48 Figure 2-4 Matrix Project Organization

49 Matrix Project Organization Advantages flexibility in way it can interface with parent organization strong focus on the project itself contact with functional groups minimizes projectitis ability to manage fundamental trade-offs across several projects Drawbacks violation of the unity of command principle complexity of managing full set of projects conflict

50 Figure 2-5 Mixed Project Organization

51 THE PROJECT TEAM

52 Characteristics of Effective Project Team Members Technically competent Politically sensitive Problem orientation Goal orientation High self-esteem

53 Matrix Team Problems Weak (functional) matrix PM has no direct reports Ability to communicate directly with team members important Matrix projects Important to maintain good morale Project office

54 Intrateam Conflict Life cycle phase and source of conflict Name-only team Interpersonal conflict

55 Chapter 3 Planning the Project

56 Two Extremes Ready, Fire, Aim Paralysis by Analysis

57 CONTENTS OF A PROJECT PLAN

58 Elements of Project Master Plan Overview brief description of project deliverables milestones expected profitability and competitive impact intended for senior management Objectives detailed description of project s deliverables project mission statement

59 Elements of Project Master Plan continued General approach technical and managerial approaches relationship to other projects deviations from standard practices Contractual aspects agreements with clients and third parties reporting requirements technical specifications project review dates

60 Elements of Project Master Plan continued Schedules outline of all schedules and milestones Resource requirements estimated project expenses overhead and fixed charges Personnel special skill requirements necessary training legal requirements

61 Elements of Project Master Plan concluded Evaluation methods evaluation procedures and standards procedures for monitoring, collecting, and storing data on project performance Potential problems list of likely potential problems

62 THE PLANNING PROCESS

63 PM s First Job Understand the expectations that the organization has for the project. Identify who among senior managers has a major interest in the project. Determine if anything about the project is atypical.

64 Developing Invitation List At least one representative from senior management. Managers from functional areas that will contribute to the project. Perhaps highly specialized technical experts.

65 The Launch Meeting Senior management introduces PM PM chairs meeting develop general understanding of the functional inputs the project will need may brainstorm the problem may develop preliminary plan Important results scope understood and temporarily fixed functional managers understand their responsibilities and have committed to developing the initial plan

66 Sorting Out the Project Hierarchical planning process begin with project s objectives list major activities needed to achieve objectives (level 1 activities) delegate level 1 activities to individuals or functional areas to develop list of level 2 activities degree of detail should be same within a given level

67 Three Levels of Detail in Hierarchical Planning

68 The Project Action Plan Project activities identified and arranged in successively finer detail (by levels). Type and quantity of each required resource identified for each activity. Predecessors and durations estimated for each activity. Milestones identified. Individual or group assigned to perform the work identified for all activities.

69 Using the Project Action Plan Project master schedule created by combining milestones, durations, and predecessors used to compare actual and planned performance Use of templates

70 THE WORK BREAKDOWN STRUCTURE

71 Simple Approach for Creating the WBS Gather project team Provide team members with pad of stickynotes Team members write down all tasks they can think of. Sticky-notes placed and arranged on wall

72 A Partial WBS (Gozinto Chart) for an Annual Tribute Dinner Project

73 A Linear Responsibility Chart

74 MULTIDISCIPLINARY TEAMS - - BALANCING PLEASURE AND PAIN

75 Concurrent Engineering Carrying out steps concurrently rather than sequentially also referred to as simultaneous engineering Key advantages helps minimize conflict across functional groups reduces project duration

76 Interface Coordination -- Interface Management Key challenge facing PM is coordinating work of different functional groups. One approach is to identify and map the interdependencies between members of the project team.

77 An Interface Mapping of a Silicon Chip Design Project

78 A Coordination Structure Model for Project Management

79 Design Structure Matrix (DSM) Traditional project management tools tend to focus on which tasks have to be completed in order for other to start Another important question is what information is needed from other tasks to complete another task

80 Example DSM for Project with Six Activities a b c d e f a b X X c X X d X X X e X f X X X X -- information flow

81 Modified DSM to Show Activities to Be Completed Concurrently a b c d e f a b X O c X O d X X X e X f X X X tasks to be completed concurrently X -- information flow O -- potential rework situation

82 Comments on Empowerment and Work Teams Participatory management Success of empowered teams depends heavily on how team program implemented

83 Advantages of Empowerment High quality solutions Avoid micromanagement Team has accountability for part of project deliverable Synergistic solutions Tool for timely evaluation and feedback

84 Chapter 4 Budgeting the Project

85 Introduction Budgets are plans for allocating organizational resources to project activities. forecasting required resources, quantities needed, when needed, and costs Budgets help tie project to overall organizational objectives. Budgets can be used as tool by upper management to monitor and guide projects.

86 METHODS OF BUDGETING

87 Top-Down Budgeting Based on collective judgements and experiences of top and middle managers. Overall project cost estimated by estimating costs of major tasks Advantages accuracy of estimating overall budget errors in funding small tasks need not be individually identified

88 Bottom-Up Budgeting WBS or action plan identifies elemental tasks Those responsible for executing these tasks estimate resource requirements Advantage more accurate in the detailed tasks Disadvantage risk of overlooking tasks

89 COST ESTIMATING

90 Work Element Costing Determine resource requirements and then costs for each task costs (e.g., materials) labor time labor rate equipment time equipment rate overhead GS&A

91 The Impact of Budget Cuts Two project life cycles

92 Activity Versus Program Budgeting Activity oriented budgets are based on historical data accumulated through an activity-based accounting system. expenses assigned to basic budget lines With program budgets, each project has its own budget. expenses by task and time period are shown

93 IMPROVING COST ESTIMATES

94 Learning Curves where T = T n 1 T n = the time required to complete the n th unit T 1 = the time required to complete the first unit n r = log(learning rate)/log(2) r

95 Tracking Signals Used to determine if there is a systematic bias in cost or other estimates

96 Other Factors Changes in resource prices Increase all estimates by same percentage Estimate rate of price change individually for inputs that have significant impact on costs Waste and spoilage Team member turnover Mythical man-month Organization climate

97 BUDGET UNCERTAINTY AND RISK MANAGEMENT

98 Estimate of Project Cost: Estimate Made at Project Start

99 Three Basic Causes for Change in Projects Errors made by cost estimator about how to achieve tasks. New knowledge about the nature of the performance goal or setting. A mandate.

100 Risk Management Risk Management Planning Risk Identification Qualitative Risk Analysis Risk Response Planning Risk Monitoring and Control

101 Failure Mode and Effect Analysis (FMEA) List ways project might fail Evaluate severity (S) of each failure Estimate likelihood (L) of each failure occurring Estimate ability to detect each failure (D) Calculate Risk Priority Number (RPN) Sort potential failures by their RPNs

102 Other Approaches Game theory Expected value Simulation

103 Chapter 5 Scheduling the Project

104 PERT AND CPM NETWORKS

105 History Late 1950s Program Evaluation and Review Technique (PERT) U.S. Navy, Booz-Allen Hamilton, and Lockeheed Aircraft Probabilistic activity durations Critical Path Method (CPM) Dupont De Nemours Inc. Deterministic activity durations

106 The Language of PERT/CPM Activity task or set of tasks use resources Event state resulting from completion of one or more activities consume no resources or time predecessor activities must be completed

107 The Language of PERT/CPM continued Milestones events that mark significant progress Network diagram of nodes and arcs used to illustrate technological relationships Path series of connected activities between two events

108 The Language of PERT/CPM concluded 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 the critical path

109 Building the Network AOA Network AON Network

110 Table 5-1 A Sample Set of Project Activities and Precedences Task Predecessor a -- b -- c d e f g a b b c, d e

111 Figure 5-1 Stage 1 of a Sample AON Network

112 Figure 5-2 Stage 2 of a Sample AON Network

113 Figure 5-3 A Completed Sample AON Network

114 Figure 5-4 Stage 1 of a Sample AOA Network

115 Figure 5-5 Stage 2 of a Sample AOA Network

116 Figure 5-6a A Completed Sample AOA Network

117 Figure 5-6b A Completed Sample AOA Network Showing the Use of a Dummy Task

118 Table 5-2 A Sample Problem for Finding the Critical Path and Critical Time Activity Predecessor Duration a -- 5 days b -- 4 c a 3 d a 4 e a 6 f b, c 4 g d 5 h d, e 6 i f 6 j g, h 4

119 Figure 5-7 Stage 1 of a Sample Network

120 Figure 5-8 A Complete Network

121 Figure 5-9 Information Contents in an AON Node

122 Figure 5-10 The Critical Path and Time for Sample Project

123 Calculating Activity Slack Slack or Float LST - EST = LFT - EFT = Slack

124 Figure 5-11 An MSP Version of PERT/CPM Network

125 Figure 5-12 A Modified Version of MSP Network

126 PROJECT UNCERTAINTY AND RISK MANAGEMENT

127 Calculating Probabilistic Activity Times Three Time Estimates pessimistic (a) most likely (m) optimistic (b)

128 Figure 5-13 The Statistical Distribution of all Possible Times for an Activity

129 Activity Expected Time and Variance T E = ( a + 4m 6 + b) σ = ( b 6 a) Var = σ 2 ( b = 6 a) 2

130 95 Percent Level Task will be a or lower 5 percent of the time Task will be b or greater 5 percent of the time σ = ( b a) 3.3

131 90 Percent Level Task will be a or lower 10 percent of the time Task will be b or greater 10 percent of the time σ = ( b a) 2.6

132 95 Percent Level (Alternative Interpretation) Task will be between a and b 95 percent of the time σ = ( b a) 3.92

133 90 Percent Level (Alternative Interpretation) Task will be between a and b 90 percent of the time σ = ( b a) 3.29

134 Figure 5-14 An AON Network

135 Figure 5-15 An MSP Version of a Sample Problem Network

136 Figure 5-16 A Pert/CPM Network for the Day Care Project

137 Figure 5-17 An MSP Calendar for the Day Care Project, 4/16/00 to 5/27/00

138 The Probability of Completing the Project on Time Z ( ) = D µ σ 2 µ =NORMDIST(D,µ,σ µ,true)

139 Figure 5-18 The Statistical Distribution of Completion Times of the Path a-b-d-g-h

140 Selecting Risk and Finding D D = µ + Z 2 σ µ NORMINV(probability,µ,σ µ,true)

141 SIMULATION

142 Traditional Statistics Versus Simulation Similarities must enumerate alternate paths Differences simulation does not require assumption of path independence

143 THE GANNT CHART

144 Figure 5-23 A Gantt Chart of a Sample Project

145 Figure 5-24 A Gantt Chart of Sample Project Showing Critical Path, Path Connections, Slack, EST, LST, EFT, and LFT

146 Figure 5-25 A Gantt Chart of a Day Care Project Showing Expected Durations, Critical Path, Milestone, and Resource Requirements

147 Figure 5-26 A Progress Report on a Day Care Project Showing Actual Progress Versus Baseline

148 EXTENSIONS TO PERT/CPM

149 Precedence Diagramming Finish-to-start linkage Start-to-start linkage Finish-to-finish linkage Start-to-finish linkage

150 Figure 5-27 Precedence Diagramming Conventions

151 Other Methods Graphical Evaluation and Review Technique (GERT) combines flowgraphs, probabilistic networks, and decision trees allows loops back to earlier events and probabilistic branching

152 Chapter 6 Allocating Resources to the Project

153 Introduction Projects Compete With One Another for Resources resources that are not consumed resources that are consumed Goal of Resource Allocation is to Optimize Use of Limited Supply Requires making trade-offs time constrained resource constrained

154 EXPEDITING A PROJECT

155 The Critical Path Method Normal Duration Estimates Normal Costs Crash Duration Estimates Crash Costs Crash Cost Per Day Normal Duration - Crash Duration Crash Cost - Normal Cost

156 Figure 6-1(a) Gantt Chart Crash Problem Day Project

157 Figure 6-1(b) AON Network for Sample Crash Problem Day Project

158 Figure 6-2 Gantt Chart for 20- Day Solution to Crash Problem

159 Figure 6-3 Gantt Chart for 19- Day Solution to Crash Problem

160 Figure 6-4 Gantt Chart for 18- Day Solution to Crash Problem

161 Figure 6-5 Gantt Chart for 16- Day Solution to Crash Problem

162 Figure 6-6 Project Cost Versus Project Duration for Sample Crash Problem

163 Probabilistic Activity Durations Three time estimates made for both normal resource loading and crash resource loading Variance of normal activity may be different than variance of crash time

164 Using Excel s Solver to Crash a Project Target Cell minimize crashing costs By Changing Cells amount to crash activities time events occur Constraints amount each activity can be crashed precedence relationships complete project by specified time nonnegativity

165 Figure 6-7 AOA Network of Sample Crash Problem

166 Figure 6-9 Cost/Duration Graph for Sample Crashing Project

167 Fast-Tracking a Project Used Primarily in Construction Industry Building phase started before design and planning phases completed Particularly appropriate when large proportion of work is routine

168 RESOURCE LOADING

169 Resource Loading Amount of specific resources that are scheduled for use on specific activities or projects at specific times. Usually a list or table.

170 Figure 6-10 Action Plan and Gantt Chart for Production of a Videotape

171 The Charismatic VP Subordinates have hard time saying no to well liked boss. Leads to overcommitted subordinates. Problem further compounded because more experienced workers tend to be most over worked. One solution is to set specific limits on amount of overscheduling permitted.

172 RESOURCE LEVELING

173 Figure 6-11 Gantt Chart for Videotape Project, Adjusted for Client Availability

174 Figure 6-12 Resource Overallocation Report for Scriptwriter Showing all Activities

175 Figure 6-13 Graphic Resource Overallocation Report for Scriptwriter

176 Figure 6-14 Resource Leveled Report for Scriptwriter Showing all Activities

177 Figure 6-15 Graphic Resource Leveled Report for Scriptwriter

178 Figure 6-16 Daily Resource Loading Chart for Videotape Project, Scriptwriter Leveled

179 Figure 6-17 Final Videotape Project Gantt Chart Schedule, With Two Scriptwriters and Producer Leveled

180 Resource Loading/Leveling and Uncertainty 28,282 Hours Needed Group Capacity 21 (people) 40 (hrs/wk) 34 wk = 28,560 labor hrs Correction for Holidays 21 3 (days) 8 (hours) = 504 labor hrs Vacations 11 2 (weeks) 40 = 880 labor hrs

181 Resource Loading/Leveling and Uncertainty continued Hours Available 28, = 27,176 about 1100 less than needed 28,282/27176 = 1.04 What about Workers getting sick? Task not ready when worker is ready? Change orders?

182 Figure 6-18 Thirty-Four-Week Resource Loading Chart for a Software Engineering Group

183 ALLOCATING SCARCE RESOURCES TO PROJECTS

184 Use of Software Begin with Pert/CPM Schedule Activities examined period by period and resource by resource In cases where demand for resource exceeds supply, tasks considered one by one and resources assigned to these tasks based on priority rules

185 Some Comments about Constrained Resources Scarcity of resources rarely applies to resources in general Walts

186 Some Priority Rules As soon as possible As late as possible Shortest task duration first Minimum slack first Most critical followers Most successor Most resources first

187 Choosing a Priority Rule Schedule Slippage amount project or set of projects delayed Resource Utilization extent that resources are over or underworked In-Process Inventory amount of unfinished work in the system

188 ALLOCATING SCARCE RESOURCES TO SEVERAL PROJECTS

189 Pseudoactivities Used to link several project together Have duration but do not require any resources This approach allows a set of projects to be dealt with as though it were a single project use of MSP s resource loading and leveling charts and tables

190 Figure 6-19 Multiple Projects Connected with Pseudoactivities Shown on a Time Line

191 Resource Allocation and the Project Life Cycle Figure 6-20 Project or task life cycles

192 GOLDRATT S CRITICAL CHAIN

193 Introduction Similar issues that trouble people about working on projects regardless of type of project unrealistic due dates too many changes resources and data not available unrealistic budget These issues/problems related to need to make trade-offs To what extent are these problems caused by human decisions and practices?

194 Figure 6-21 Three Project Scenarios

195 Table 6-6 Project Completion Time Statistics Based on Simulating Three Projects 200 Times Scenario 1 Scenario 2 Scenario 3 Average Std Dev Max Min Median

196 Observations Average Completion Times Implications of Assuming Known Activity Times Shape of the Distribution Worker Time Estimates Impact of Inflated Time Estimates Student Syndrome

197 Multitasking Figure 6-24 Two Small Projects

198 Figure 6-25 Alternative Gantt Charts for Projects A and B

199 Common Chain of Events Underestimate time needed to complete project assumption of known activity times and independent paths Project team members inflate time estimates Work fills available time student syndrome early completions not reported

200 Common Chain of Events continued Safety time misused Misused safety time results in missed deadlines Hidden safety time complicates task of prioritizing project activities Lack of clear priorities results in poor multitasking

201 Common Chain of Events concluded Poor multitasking increases task durations Uneven demand on resources also results due to poor multitasking More projects undertaken to ensure all resources fully utilized More projects further increases poor multitasking

202 Reversing the Cycle Reduce number of projects assigned to each individual Schedule start of new projects based on availability of bottleneck resources Reduce amount of safety time added to individual tasks and then add some fraction back as project buffer activity durations set so that there is a high probability the task will not be finished on time

203 The Critical Chain Longest chain of consecutively dependent events considers both precedence relationships and resource dependencies Project Buffer Feeding Buffer

204 Figure 6-26 Sample Network Diagram

205 Figure 6-27 Project and Feeder Buffers

206 Chapter 7 Monitoring and Controlling the Project

207 Introduction Monitoring and Control are opposite sides of selection and planning bases for selection dictate what to monitor plans identify elements to control Monitoring is collection, recording, and reporting of information Control uses monitored information to align actual performance with the plan

208 THE PLAN-MONITOR- CONTROL CYCLE

209 Plan-Monitor-Control Cycle Closed loop process Planning-monitoring-controlling effort often minimized to spend time on the real work

210 Figure 7-1 Project Authorization and Expenditure Control System Information Flow

211 Designing the Monitoring System Identify special characteristics of performance, cost, and time that need to be controlled performance characteristics should be set for each level of detail in the project Real-time data should be collected and compared against plans mechanisms to collect this data must be designed Avoid tendency to focus on easily collected data

212 DATA COLLECTION AND REPORTING

213 Formats of Data Frequency Counts Raw Numbers Subjective Numeric Ratings Indicators and Surrogates Verbal Characterizations

214 Data Analysis Aggregation Techniques Fitting Statistical Distributions Curve Fitting Quality Management Techniques

215 Figure 7-2 Number of Bugs per Unit of Test Time

216 Figure 7-3 Percent of Specified Performance Met During Successive Repeated Trials

217 Figure 7-4 Ratio of Actual Material Cost to Estimated Material Cost

218 Reporting Reports Project Status Reports Time/Cost Reports Variance Reports Not all stakeholders need to receive same information Avoid periodic reports Impact of Electronic Media Relationship between project s information system and overall organization s information system

219 Report Types Routine Exception Special Analysis

220 Meeting Guidelines Meetings should be help primarily for group decision making avoid weekly progress report meetings Distribute written agenda in advance of meeting

221 Meeting Guidelines continued Ensure everyone is properly prepared for meeting Chair of meeting should take minutes avoid attributing remarks to individuals in the minutes Avoid excessive formality If meeting is held to address specific crisis, restrict meeting to this issue alone

222 Virtual Reports, Meetings, and Project Management Use of the Internet Use of Software Programs Virtual Project Teams

223 EARNED VALUE

224 Earned Value task budgeted cost all tasks task % completition Percent of task s budget actually spent not good indicator of percent completion

225 Conventions Used to Estimate Progress on Tasks % complete when task started and other 50% added when task finished 100% 100% complete when finished and zero percent before that Ratio of Cost Expended to Cost Budgeted

226 Variances Cost/Spending Variance EV - AC Schedule Variance EV - PV CPI EV/AC SPI EV/PV

227 Additional Items of Interest Estimated (Remaining Cost) to Completion ETC = (BAC - EV)/CPI (Total Cost) Estimated at Completion EAC = ETC + AC

228 PROJECT CONTROL

229 Background Acts which seek to reduce differences between plan and actuality Difficult Task human behavior involved problems rarely clear cut

230 Purposes of Control Stewardship of Organizational Assets physical asset control human resources financial control Regulation of Results Through the Alteration of Activities

231 DESIGNING THE CONTROL SYSTEM

232 Background Purpose is to correct errors, not punish the guilty Investments in control subject to diminishing returns Must consider impact on creativity and innovation Be careful not emphasize short-run results at the expense of long-run objectives Dangers of across the board cuts

233 Primary Mechanisms by Which PM Exerts Control Process Reviews Personnel Assignments Resource Allocations

234 Components of a Control System Sensor Standard Comparator Decision Maker Effector

235 Types of Control Systems Go/No-Go Controls predetermined standard must be met for permission to be granted to continue Post-Control done after project completed purpose is to allow future projects to learn from past project experience

236 Figure 7-7 Sample Project Milestone Status Report

237 Tools for Control Variance Analysis Trend Projections Earned Value Analysis Critical Ratio actual progress scheduled progress budgeted cost actual cost

238 Figure 7-8 Trend Projection

239 Figure 7-9 Critical Ratios with Control Limits

240 Figure 7-10 Cost Control Chart

241 SCOPE CREEP AND CHANGE CONTROL

242 Scope Creep Coping with changes frequently cited by PMs as the single most important problem Common Reasons for Change Requests Client Availability of new technologies and materials

243 Purpose of Change Control System Review all requested changes Identify impact of change Evaluate advantages and disadvantages of requested change Install process so that individual with authority may accept or reject changes

244 Purpose of Change Control System continued Communicate change to concerned parties Ensure changes implemented properly Prepare reports that summarize changes made to date and their impact

245 Rules for Controlling Scope Creep Include in contract change control system Require all changes be introduced by a change order Require approval in writing by the client s agent and senior management Consult with PM prior to preparation of change order Amend master plan to reflect changes

246 Chapter 8 Evaluating and Terminating the Project

247 EVALUATION

248 Background A project evaluation appraises the progress and performance relative to the project s initial or revised plan. Also appraises project against goals and objectives set for it during selection process. Projects should be evaluated at a number of crucial points. Purpose is to improve process of carrying out project.

249 Evaluation Criteria Original criteria for selecting and funding project Success to date Business/Direct Success Future Potential Contribution to Organization s Goals Contribution to Team Member Objectives

250 Measurement Measuring performance against planned budgets and schedules straightforward Earned value analysis more complicated

251 PROJECT AUDITING

252 The Audit Process Timing depends on purpose Three Levels general audit detailed audit technical audit

253 Steps in Project Audit Familiarize audit team with requirements of project Audit project on-site Write up audit report Distribute report

254 Behavior Aspects Audit team must have free access to anyone with knowledge of the project Project team members rarely trust auditors Audit team must understand politics of project team Information must be confirmed Project team should be made award of inprocess audit No judgmental comments

255 The Audit Report Introduction description of project and its goals Current Status comparison of work completed and planned Future Project Status conclusions regarding project progress recommendations for changes

256 The Audit Report continued Critical Management Issues issues senior management should monitor Risk Analysis and Risk Management potential for project failure and monetary loss Final Comments caveats, assumptions, limitations

257 PROEJCT TERMINATION

258 When to Terminate a Project Sunk Cost Approach whether organization is willing to invest the time and cost required to complete the project Two Other Criteria the degree to which the project has met its goals the degree to which the project qualifies against a set of factors associated with success or failure

259 Types of Project Termination Project Extinction project activity suddenly stops either successfully completed or high expectation for failure Termination-By-Addition becomes a new formal part of organization Termination-By-Integration becomes standard part of operating systems

260 Types of Project Termination continued Termination-By-Starvation a project in name only

261 The Termination Process Decision made by broad based committee of senior managers Termination process should be specified in project plan Termination manager

262 Figure 8-3 A Termination Project

263 The Project Final Report Project Performance what was achieved and reasons for resulting performance Administrative Performance review of how well administrative practices worked Organizational Structure identify modifications to help future projects

264 The Project Final Report continued Project Management Techniques recommendations for improvements in future projects