Work Breakdown Structure (WBS)

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1 Work Breakdown Structure (WBS) The building blocks of a schedule start with a Work Breakdown Structure (WBS). The WBS is a hierarchical reflection of all the work in the project in terms of deliverables. In order to produce these deliverables, work must be performed. A typical approach in developing a WBS is to start at the highest level, with the product of the project. For example, you are assigned as the project manager of a New Product Development project. The new product you are developing is a new toy for children age's five trough nine. The objective of this product development project is to increase the revenue of the organization by ten percent. Example of WBS: Above is an example of a WBS for this new toy. Each level of the WBS is a level of detail created by decomposition. Decomposition is the process of breaking down the work into smaller,

2 more manageable components. The elements at the lowest level of the WBS are called tasks. In the example above, brochures, advertising and commercials are all work packages or tasks. Marketing collateral is on a summary level called a control account in project management parlance. In Project Insight, project management software, control accounts are called 'summary tasks.' Summary tasks are roll ups of the tasks underneath them. The decomposition of a schedule will continue at varying rates. 'Brochures' is a task identified at the fourth level of decomposition, while the 'marketing plan' is also a task, but defined at the third level of decomposition. As a project manager, the level of decomposition will be dependent on the extent to which you will need to manage. Project Insight supports as many levels of hierarchy as are needed. The expectation is that each task will have a single owner and the owner is expected to manage and report on the work necessary to deliver the task. In Project Insight, this is called the 'task owner.' If you cannot assign a single owner, or you need to have additional visibility into the progress of that task, additional decomposition is recommended. Project Scheduling Project scheduling is concerned with the techniques that can be employed to manage the activities that need to be undertaken during the development of a project. Scheduling is carried out in advance of the project commencing and involves: Identifying the tasks that need to be carried out; Estimating how long they will take; Allocating resources (mainly personnel);

3 Scheduling when the tasks will occur. Once the project is underway control needs to be exerted to ensure that the plan continues to represent the best prediction of what will occur in the future: Based on what occurs during the development; Often necessitates revision of the plan. Effective project planning will help to ensure that the systems are delivered: Within cost; Within the time constraint; To a specific standard of quality. Two project scheduling techniques will be presented, the Milestone Chart (or Gantt Chart) and the Activity Network. Milestone Charts Milestones mark significant events in the life of a project, usually critical activities which must be achieved on time to avoid delay in the project. Milestones should be truly significant and be reasonable in terms of deadlines (avoid using intermediate stages). Examples include: Installation of equipment; Completion of phases; File conversion;

4 Cutover to the new system Gantt Charts A Gantt chart is a horizontal bar or line chart which will commonly include the following features: Activities identified on the left hand side; Time scale is drawn on the top (or bottom) of the chart; A horizontal, open oblong or a line is drawn against each activity indicating estimated duration; Dependencies between activities are shown; At a review point the oblongs are shaded to represent the actual time spent (an alternative is to represent actual and estimated by 2 separate lines); A vertical cursor (such as a transparent ruler) placed at the review point makes it possible to establish activities which are behind or ahead of schedule. Activity Networks The foundation of the approach came from the Special Projects Office of the US Navy in It developed a technique for evaluating the performance of large development projects, which became known as PERT - Project Evaluation and Review Technique. Other variations of the same approach are known as the critical path method (CPM) or critical path analysis (CPA). The heart of any PERT chart is a network of tasks needed to complete a project, showing the order in which the tasks need to be completed and the dependencies between them. This is represented graphically:

5 EXAMPLE OF ACTIVITY NETWORK The diagram consists of a number of circles, representing events within the development lifecycle, such as the start or completion of a task, and lines, which represent the tasks themselves. Each task is additionally labelled by its time duration. Thus the task between events 4 & 5 is planned to take 3 time units. The primary benefit is the identification of the critical path. The critical path = total time for activities on this path is greater than any other path through the network (delay in any task on the critical path leads to a delay in the project). Tasks on the critical path therefore need to be monitored carefully. The technique can be broken down into 3 stages: 1. Planning: Identify tasks and estimate duration of times; Arrange infeasible sequence; Draw a diagram. 2. Scheduling: Establish timetable of start and finish times. 3. Analysis: Establish float; Evaluate and revise as necessary PERT PERT, the Project Evaluation and Review Technique, is a network-based aid for planning and scheduling the many interrelated tasks in a large and complex project. It was developed during the design and construction of the Polaris submarine in the USA in the 1950s, which was one of

6 the most complex tasks ever attempted at the time. Nowadays PERT techniques are routinely used in any large project such as software development, building construction, etc. Supporting software such as Microsoft Project, among others, is readily available. It may seem odd that PERT appears in a book on optimization, but it is frequently necessary to optimize time and resource constrained systems, and the basic ideas of PERT help to organize such an optimization. PERT uses a network representation to capture the precedence or parallel relationships among the tasks in the project. As an example of a precedence relationship, the frame of a house must first be constructed before the roof can go on. On the other hand, some activities can happen in parallel: the electrical system can be installed by one crew at the same time as the plumbing system is installed by a second crew. PERT The PERT formalism has these elements and rules: Directed arcs represent activities, each of which has a specified duration. This is the activity on arc formalism; there is also a less-common activity on node formalism.note that activities are considered to be uninterruptible once started. Nodes are Events or points in time. The activities (arcs) leaving a node cannot begin until all of the activities (arcs) entering a are completed. This is how precedence is shown. You can also think of the node as enforcing a rendezvous: no-one can leave until everyone has arrived. There is a single starting node which has only outflow arcs, and a single ending node that has only inflow arcs. There are no cycles in the network. If an outflow activity cannot begin until all of the inflow activities have been completed, a cycle means that the system can never get started.

7 Resource management The process of using a company's resources in the most efficient way possible. These resources can include tangible resources such as goods and equipment, financial resources, and labor resources such as employees. Resource management can include ideas such as making sure one has enough physical resources for one's business, but not an overabundance so that products won't get used, or making sure that people are assigned to tasks that will keep them busy and not have too much downtime. Resource management is the efficient and effective deployment and allocation of an organization's resources when and where they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology. Resource management includes planning, allocating and scheduling of resources to tasks, which typically include manpower, machines, money and materials. Resource management has an impact on schedules and budgets as well as resource leveling and smoothing. In order to effectively manage resources, organizations must have data on resource demands forecasted by time period into the future, the resource configurations that will be required to meet those demands and the supply of resources, again forecasted into the future. Forecasts should be as far out as is reasonable. Resource leveling, as it relates to inventory, is a resource management technique aimed at keeping the stock of resources on hand level, reducing both excess inventories and shortages. In project management, resource leveling is scheduling decisions, which are driven by resource management concerns, such as limited resource availability. As opposed to leveling, resource smoothing may not delay the project completion date, only particular activities within their float. Many organizations use professional services automation software tools to make resource management tasks more efficient and effective. The automated tools may include timesheet software and employee time tracking software, which calculate skill sets, experience and workload in selecting the most skilled employee in an organization to handle any specific project. This enables the organization to forecast future staffing requirements prior to project implementation.

8 Corporate Resource Management Process Large organizations usually have a defined corporate resource management process which mainly guarantees that resources are never over-allocated across multiple projects. [4][5] Peter Drucker wrote of the need to focus resources, abandoning a less promising initiative for every new project taken on, as fragmentation inhibits results. [6] Techniques One resource management technique is resource leveling. It aims at smoothing the stock of resources on hand, reducing both excess inventories and shortages. The required data are: the demands for various resources, forecast by time period into the future as far as is reasonable, as well as the resources' configurations required in those demands, and the supply of the resources, again forecast by time period into the future as far as is reasonable. The goal is to achieve 100% utilization but that is very unlikely, when weighted by important metrics and subject to constraints, for example: meeting a minimum service level, but otherwise minimizing cost. The principle is to invest in resources as stored capabilities, then unleash the capabilities as demanded. A dimension of resource development is included in resource management by which investment in resources can be retained by a smaller additional investment to develop a new capability that is demanded, at a lower investment than disposing of the current resource and replacing it with another that has the demanded capability. In conservation, resource management is a set of practices pertaining to maintaining natural systems integrity. Examples of this form of management are resource management, soil conservation, forestry, wildlife management and water resource management. The broad term for this type of resource management is natural resource management (NRM). Definition of Project Controls : Project Controls can be defined as - Management action, either preplanned to achieve the desired result or taken as a corrective measure prompted by the monitoring process.

9 Project controls is mainly concerned with the metrics of the project, such as quantities, time, cost, and other resources; however, also project revenues and cash flow can be part of the project metrics under control. Thus, we believe an effective Project Controls process can be applied in a collaboration of its various sub-disciplines, such as: 1) Planning, Scheduling & Project Reporting Scope management; Project deliverables: Work breakdown / Cost breakdown structures; Schedule management; Schedule forecasting; Corrective action; Progress measurement / reporting; Productivity Analysis & Calculation; 2) Earned Value Analysis & Management 3) Cost Engineering & Estimating Estimating; Cost management; Cost control; Cost forecasting 4) Change Management & Controls Change order control; Trend Analysis; 5) Risk and Delay Claims Risk Assessment & management; Delay Claims Quantification Forensic Schedule Analysis

10 Put simply, Project Controls encompass the people, processes and tools used to plan, manage and mitigate cost and schedule issues and any risk events that may impact a project. In other words, Project control is essentially equivalent to the project management process stripped of its facilitating sub-processes for safety, quality, organizational, behavioral, and communications management. Project control may be considered the quantitative resource control subset of the project management process. Importance of Project Controls : The successful performance of a project depends on appropriate planning. The PMBOK Guide defines the use of 21 processes that relate to planning out of the 39 processes for project management, (Globerson & Zwikeal 2002). The execution of a project is based on a robust project plan and can only be achieved through an effective schedule control methodology. The development of a suitable Project Control system is an important part of the project management effort (Shtub, Bard & Globerson 2005). Furthermore, it is widely recognised that planning and monitoring plays a major role as the cause of project failures. Despite the continuous evolution in the project management field, it appears evident that the traditional approach still shows a lack of utilisation of Project Controls and there have been a number of articles published to support the importance of control in the achievement of project objectives. It has been proved time and again that Project performance can be improved if dedicated Project Controls systems are in place. An IBC 2000 Project Control Best Practice Study carried out by IPA identified that good Project Control practices reduce execution schedule slip by 15%. Project Controls cost range from 0.5% to 3% of total project, (including cost accounting), therefore, to break even, Project Control needs to improve cost effectiveness by around 2%. A sample study carried out by the IBC Cost Engineering Committee (CEC) in 1999, showed cost improvements for the projects in the study, was more than 10%. It is noted also that NP V (Net Project Value) also benefits from schedule improvements. Success factors are based on good Project Control practices, which result in good cost and schedule outcomes.

11 The project controls function is defined as: Project controls are the data gathering, management and analytical processes used to predict, understand and constructively influence the time and cost outcomes of a project or program; through the communication of information in formats that assist effective management and decision making. RISK INVOLVED IN PROJECT MANAGEMENT Clarify Ownership Issues Some project managers think they are done once they have created a list with risks. However this is only a starting point. The next step is to make clear who is responsible for what risk! Someone has to feel the heat if a risk is not taken care of properly. The trick is simple: assign a risk owner for each risk that you have found. The risk owner is the person in your team that has the responsibility to optimise this risk for the project. The effects are really positive. At first people usually feel uncomfortable that they are actually responsible for certain risks, but as time passes they will act and carry out tasks to decrease threats and enhance opportunities. Prioritise Risks A project manager once told me "I treat all risks equally." This makes project life really simple. However, it doesn't deliver the best results possible. Some risks have a higher impact than others. Therefore, you better spend your time on the risks that can cause the biggest losses and gains. Check if you have any show stoppers in your project that could derail your project. If so, these are your number 1 priority. The other risks can be prioritized on gut feeling or, more objectively, on a set of criteria. The criteria most project teams use is to consider the effects of a risk and the likelihood that it will occur. Whatever prioritization measure you use, use it consistently and focus on the big risks. Analyze Risks

12 Understanding the nature of a risk is a precondition for a good response. Therefore take some time to have a closer look at individual risks and don't jump to conclusions without knowing what a risk is about. Plan and Implement Risk Responses Implementing a risk response is the activity that actually adds value to your project. You prevent a threat occurring or minimize negative effects. Execution is key here. The other rules have helped you to morph, prioritize and understand risks. This will help you to make a sound risk response plan that focuses on the big wins. Register Project Risks This rule is about bookkeeping (however, don't stop reading). Maintaining a risk log enables you to view progress and make sure that you won't forget a risk or two. It is also a perfect communication tool that informs your team members and stakeholders what is going on (rule 3). Track Risks and Associated Tasks The risk register you have created as a result of rule 9, will help you to track risks and their associated tasks. Tracking tasks is a day-to-day job for each project manager. Integrating risk tasks into that daily routine is the easiest solution. Risk tasks may be carried out to identify or analyse risks or to generate, select and implement responses.

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