Fundamentals of Project Management. Who am I. Schedule
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1 Fundamentals of Project Management by Dr. George F. Jergeas, P.Eng Eng. University of Calgary ucalgary.ca Tel. (403) Who am I George F. Jergeas PEng MSc and PhD Construction Management Professor of Project Management Consultant and trainer Interests: Team alignment, avoidance and resolution of disputes, project performance and 2 auditing Schedule Lego game Introduction Define Plan Sequence activities Time estimate Cost estimate Organize Control Close 3
2 References This section is based on: The 5-Phased 5 Project Management- A Practical Planning and Implementation Guide by Joseph Weiss and Robert K. Wysocki Project Management Institute: PMBOK Guide, Instructors notes 4 Lego Game Your company is to build a single span bridge using Lego bricks. The span of the bridge is 70 cm and the centre point must be at least 10 cm higher than the base. Bridge must be self-standing standing and stable enough to be measured. Time is of the essence to the client (the instructor) and to your company. 5 What is a Project? A specific, finite task to be accomplished Can be of a long or short term duration Can be large or small task 6
3 Projects Vary in Size and Scope NASA shuttle launch Building a boat Building a hospital Building renovation and & space modification Planning a party or wedding Organizing the Olympic games Developing a new software program Building a new gas pipeline Company mergers 7 Project Characteristics Constant communication across organizational boundaries Many people involved, across several functional areas Sequenced events Goal oriented Has an end product or service Multiple priorities Complex and numerous activities Unique, one-time set of events Deadlines Start and end dates Identifiable stakeholders Risks Limited resources and budget 8 Project Management Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements (PMBOK p.6) Project management is the art of converting vision into reality (Turner p.3) 9
4 Business and Social Aspects of Project Management Hard skills Technical aspects of project management Tools and techniques Soft skills Interpersonal skills Influence Politicking Negotiation Teams, stakeholders, communications, expectations, business, and conflicts 10 Value of Project Management (Why are we doing this?) Improve project/program/firm performance as measured by efficiency and effectiveness Add competitive advantage Be more Successful Proactive vs. Reactive Root out ill-conceived, directionless projects 11 5-Step Project Management 12
5 5-Step Project Management PLANNING IMPLEMENTATION DEFINE State the Problem Identify Project Goal List the Objectives Determine Preliminary Resources Identify Risks and stakeholders Success criteria PLAN Identify project activities Estimate time and cost Risks and stakeholder impact Communication plan Write Project Proposal Decision ORGANIZE Determine Personnel Needs Recruit Project Manger Recruit Project Team Organize Project Team Bidding Assign Work Packages CONTROL Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule, cost, team reports Issue Change Orders CLOSE Obtain Client Acceptance Install Deliverables and Commissioning Document the Project Issue Final Report Conduct Post- Implementation Audit Project charter WBS Recruit Criteria Variance Reports Final Report Project schedule Define Work Packages Status Reports Audit Reports Project proposal Assign Work Packages 13 Step 1-1 Define the Project 14 Agenda State the problem/need/opportunity Develop project goal Develop project objectives Determine preliminary resources Identify assumptions and risks Identify stakeholders Identify criteria for project success Issue Project Charter 15
6 State the Problem / Need / Opportunity A need that must be addressed or opportunity to be explored New product, service, process, facility, system or technology It may involve opening a new market Identify and define in detail the investment opportunity, need or problem 16 State the Problem / Need / Opportunity Define client requirements and needs from the client s input Review and enhance the client s statement of needs: Identify appropriate policies,, standards, and jurisdictional requirements Identify and assess feasible alternatives of satisfying the client s statements 17 State the Problem / Need / Opportunity Advise the client of potential technology- related constraints Establish consensus on the requirements of the client Assemble information including any relevant designs, charts, or diagrams... 18
7 State the Problem / Need / Opportunity Short, crisp and to the point Understanding of team s methods and its mandate for proceeding Descriptor for those who indirectly involved in supporting the project 19 State the Problem / Need / Opportunity Training Example Membership in PM Association has declined in the past four years and attendance at conference has declined in the past three years. The viability and financial stability of the Association depends on maintaining membership and successful annual conference. 20 State Project Goal A statement of purpose and direction Initiates the project Serves as a point of reference for settling misunderstandings Clarifies expectations Helps in justifying requests for resources Action oriented Short and simple Understandable 21
8 Goal Statements: Examples Prepare and launch the International Space Station on April 21, 2000, from Cape Canaveral, Florida Connect France and England via a covered tunnel and railway under the English Channel, facility to be opened to traffic no later than September, Goal Statement: Training Example Reverse the downward trend in membership and annual conference attendance by organizing a highly successful conference 23 Develop Project Objectives Represent major scope components or milestones Sub-goals Roadmap to: Understand the purpose of the project Implement the project Determine project timeline and resource requirements To achieve the goal all objectives must be realized 24
9 Objectives: Training Example Develop the Program Set the Conference Site and Date Design and Implement the Marketing Plan 25 Resourcing Strategy For each objective: Determine which internal resources are available Determine which external resources will be required Take any preliminary steps required to engage external resources Expression of interest Project Organization Chart and RACI Roles and responsibilities Linkages between project and functional areas, other 26 business units etc. Project Organization Chart Sample Project Organization Project Sponsor Project Manager Project Lead Project Lead Project Lead Team memeber Team Memeber 27
10 RACI Chart Task Responsible Accountable Consulted Informed Identify Criteria for Evaluating Project Success Project expectations: Project on time Within budget According to specifications Happy client And 29 Success Criteria: Training Example At least 200 of 450 PM Association membership will register to attend At least 1.5% of the non-members receiving conference brochure will attend At least 5% of the non-member attendees will join PM Association At least $50,000 made Satisfied stakeholders 30
11 Identify Assumptions and Risks Each objective will have its own risks and assumptions Helps think through the project process and issues associated with execution Identifies resource needs and issues involving resource availability Identifies potential delays and the impact of these delays Potential cost overruns can be predicted and resolved 31 Identify Assumptions and Risks What could go wrong (harm, loss, opportunities and threats) Consider ALL knowledge areas Internal and external risks Sources of risk: product technology, people (misunderstandings, skills), project management etc. 32 Risk Management Risk Quantification Technique: Probability of occurrence and impact High, Medium, Low grid Focus on HHs and less on LLs Keep it simple 33
12 Risk Quantification Technique: High, Medium, Low (HML) H M HH Impact L L M H Probability 34 Assumption and Risks: Training Example Interest in PM Association can be renewed through the annual conference A quality professional program will attract members and non-members Key speaker(s) fail to show up or submit written paper 35 Identify Stakeholders Individual or organisations actively involved in the project or directly or indirectly affected by its execution or results. They can influence your success or decisions. Roles must be identified at the start of the project Needs and expectations must be communicated and influenced in a positive and constructive manner so that the project will be success for all 36
13 Stakeholders: Training Example Attendees Speakers Hotel PM Association Organizing team 37 Charter Document Used to formally recognize the existence of the project An early statement of the project goal and direction A statement of the problems and opportunities to be addressed by the project 38 Charter Document Includes the business need and product description, constraints and assumptions A tool in the initial go/no go decision by management Approval to proceed Funding, authority, sponsor A general information document for other managers 39
14 Project Charter Project Name - PM Conference Project Manager: Problem/Opportunity Membership in PM Association has declined in the past four years and attendance at conference has declined in past three years. The viability and financial stability of the organization depends on maintaining membership and successful annual conference. Goal Reverse the downward trend in membership and annual conference attendance Objectives 1. Develop the Program 2. Set the Conference Site and Date 3. Design and Implement the Marketing Plan Success Criteria 1. At least 50 of previous years conferences attendees will attend 2. At least 150 of 450 members will attend 3. At least 1.5% of the non-members receiving conference brochure will attend 4. At least 5% of the non-member attendees will join PM Assumptions and Risks 1. Interest in PM can be renewed through the annual conference 2. A quality professional program will attract members and non-members 3. Key speaker(s) fail to show up or submit written paper. Stakeholders 40 Attendees, Speakers, Hotel, PM Association, Organizing team Home Work Assignment #1 Develop a Project Charter document for one of your new/current projects: State project problem/need, common goal, objectives, and success criteria Identify preliminary resources List major risks List major stakeholders 41 Step 2 - Plan the Project 42
15 Agenda Work Breakdown Structures (WBS) Risks and Stakeholders Estimate Time and Cost Schedules Bar charts RACI 43 5-Step Project Management PLANNING IMPLEMENTATION DEFINE State the Problem Identify Project Goal List the Objectives Determine Preliminary Resources Identify Risks and stakeholders Success criteria PLAN Identify project activities Estimate time and cost Risks and stakeholder impact Communication plan Write Project Proposal Decision ORGANIZE Determine Personnel Needs Recruit Project Manger Recruit Project Team Organize Project Team Bidding Assign Work Packages CONTROL Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule, cost, team reports Issue Change Orders CLOSE Obtain Client Acceptance Install Deliverables and Commissioning Document the Project Issue Final Report Conduct Post- Implementation Audit Project charter WBS Recruit Criteria Variance Reports Final Report Project schedule Define Work Packages Status Reports Audit Reports Project proposal Assign Work Packages 44 Work Breakdown Structure (WBS) Reduces complex projects to a series of tasks that can be planned WBS represents the project in the form of a hierarchy of goal, objectives and activities Identifies activities to be done from beginning to completion of the project 45
16 Work Breakdown Structure Goal Objective Objective Objective Activities and Deliverables Activites and Deliverables Activities and Deliverables 46 Work Breakdown Structure Activities in the WBS are broken-down until the entire project is displayed as separately identified tasks The breakdown of activities continues until there are no overlapping 47 Work Breakdown Structure Each task (deliverable): Status and completion are easily measured Of a specific time duration with defined beginning and end Easy to derive time and cost estimates Of a single purpose and responsibility for completion clearly assigned 48
17 WBS Procedure: Training Example 1. Partition the project into its major objectives 1.1 Develop the Program 1.2 Set the Conference Site and Date 1.3 Design and Implement the Marketing Plan Partition the Objectives into Activities 1.1 Develop the Program Establish Theme and Topics Obtain Speakers Prepare Handout Materials 1.2 Set the Conference Site and Date Set Conference Date Select and Commit Conference Site Confirm Arrangements 1.3 Design and Implement the Marketing Plan Develop and Print Conference Brochure Obtain Label Sets for Direct Mail Mail Conference Brochures Receive and Acknowledge Registrations 50 WBS Procedure: Training Example 3. Check each activity for compliance with activity characteristics and further partition any that do not comply Prepare Handouts Obtain Handout Materials from Speakers Prepare and Print Conference Notebook 51
18 Hierarchical Representation CONFERENCE PLANNING PROGRAM SITE MARKETING THEME MATERIALS SPEAKERS DATE PLACE LISTS BROCHURE REGISTER OBTAIN MATERIALS PREPARE KITS DESIGN BROCHURE MAIL BROCHURE 52 Estimating Time Once the WBS is completed: Time estimates for each activity can be started. Sequence activities logically Consider dependencies Develop the Schedule (Network Analysis/Gantt Chart) Use project management scheduling software e.g. MS Project 53 Estimating Time Time to complete a task is uncertain: Skill levels and knowledge of the individuals Equipment variations Material availability Unexpected events Illness Employee turnover and accidents 54
19 Estimating Time We know unexpected events and occurrences will happen but are unable to predict the likelihood with any confidence We must however account for the possibility of the occurrence of these events Use range estimates and risk probability analysis. 55 Range estimate PERT estimates Expert opinion Estimating Time Consider resource capabilities Look at similar projects 56 Estimating formulae PERT Estimate (weighted average) [Pessimistic + (4 x Likely) + Optimistic]/6 Pessimistic time to get to work = 30 min Optimistic time to get to work = 10 min Likely time to get to work = 15 minutes PERT Estimate = 30 + (4x15) + 10/6 100/6=16.6 = 17 min Approximate [Worst + best + most likely]/3 55/3=18.3 min 57
20 Estimating Time Optimistic Completion Time - is the time the activity will take if everything goes right Pessimistic Completion Time - is the time the activity will take if everything that can go wrong does go wrong but the project is still completed Most Likely Completion Time - is the time required under normal circumstances. It can also be the completion time that has occurred most frequently in 58 similar circumstances Estimated Times for Conference Planning ACTIVITY A Set conference date B Establish theme & program C Select conference site D Obtain mailing labels E Develop brochure TIME IN WEEKS (O) (M) (P) (E) Estimated Times for Conference Planning ACTIVITY F Obtain mailing labels G Mail brochure H Obtain speaker materials I Receive registrations J Confirm arrangements K Prepare conference kits TIME IN WEEKS (O) (M) (P) (E)
21 Producing a Logical Network The sequencing identifies activities that must be completed before another activity can start and which activities can occur simultaneously. Three Different methods: 1. Low-tech approach: use Post-it labels Each label has one activity written on it Through iterative process the labels can be arranged and rearranged 61 Producing a Logical Network 2. Ask yourself the following: Which activities must be completed before this activity starts? Which activity cannot start until this activity is completed? Which activities have no logical relationship with this activity and therefore take place at the same time (concurrent activities)? 62 Producing a Logical Network 3. Identify immediate predecessor activities, which are activities that must be completed before another activity can begin 63
22 Activity Sequencing: Training Example ACTIVITY IMMED. PREDECESSOR TIME(WEEKS) (E) A Set conference date B Establish theme/program C Select conference site A 5.0 D Obtain speakers B 6.0 E F Develop brochure Obtain mailing labels G Mail brochure C,D 9.0 C,D 5.0 E,F 2.0 H Obtain speaker materials D 4.0 I J Receive registrations G 6.0 Confirm all arrangements H,I 1.0 K Prepare conference kits J Activity Sequencing: Training Example a c e start g i b d f h j k end 65 Activity Sequencing: Training Example Start a 2 c 5 e g 2 i f b5 d h j1 k2 End
23 Critical Path The longest path is the Critical Path Critical path is where there is zero slack time If an activity takes longer than estimated on the critical path then the project will be delayed The critical path can change if there is a delay that make an alternative path longer 67 Float (Slack) Slack or float time is amount of delay that could be tolerated in the start or completion time without causing a delay in completion of the project Total float or calculations to determine how long each activity could be delayed without delaying the project Total float = LF - ES - duration 68 CPM: Critical Path Method Graphic network based scheduling technique Arrow Diagrams (I-J J activity-on on-arrow, original method) Precedence Diagrams (activity-on on-node, node, most popular today, four types of relationship link P3) Use activities created by the WBS process Analysis of timing and sequencing logic Aids in identifying complex interrelationship of activities 69
24 Re-visit Risks and Stakeholders After all activities have been defined, they are graphically portrayed in a network diagram. View the the project in its entirety Consider Risks and their impacts - Use template Consider Stakeholders and their impacts - Use templates 70 Risks Develop risk response plan Opportunities and threats to respond to and opportunities and threats to accept Avoid eliminate cause Mitigate reduce risk occurrence Accept contingency plans, accept losses Its OK to do any of these Insurance, contingency plans, procurement, alternative strategies and contracts Use risk management template 71 RISK MANAGEMENT TEMPLATE C/U = Controllable/Uncontrollable Probability: H. = High M. = Medium L. = Low No. RISK PROBABILITY IMPACT RISK MITIGATION (add Actions to timeline) Description C/U H. M. L. $ Time Action 1 Action 2
25 Identify Stakeholders Identify stakeholders Understand their interests and needs Define their impact PM Action to: Influence in a positive and constructive manner Respond to concerns Manage expectations and make adjustments 73 STAKEHOLDER MANAGEMENT TEMPLATE STAKEHOLDER OBJECTIVES How They Operate Where They Their Gain Support Impact How to Manage Them: Action Plan (add Actions to timeline) Bar Charts/Gantt Chart Most projects, however complex, start by being depicted on a bar (Gantt) chart. The principles are very simple: Prepare list of project activities (all which end in deliverables) Estimate the time and resources needed Represent each activity by a bar Decide logical sequence Plot activities on a chart with horizontal time scale showing start and end 75
26 Project Schedule - Sample Project: Project Manager: Date: March April May 2/27 3/5 4/2 4/30 ID Task Name Duration 3/12 3/19 3/26 4/9 4/16 4/23 5/7 3/1 1 Develop the Program 0 days 2 Theme 1 wk 3 Obtain Material 4 wks 4 Speakers 3 wks 5 6 Conference Site 0 days 3/1 7 Set date 1 day 8 Select site 1 day 9 Confirm Arrangements 1 day Marketing 0 days 3/1 12 Obtain lists 2 wks 13 Design brochure 2 wks 14 Mail brochure 4 days 15 Register participants 8 days 76 RACI Charts Responsible for - Action by Communicate (two way) Informed (one way) Identify the roles of participants in each element of a project Effective communications road map Detailed Planning Horizon - 4 to 8 weeks look ahead 77 RACI Charts Update weekly to: Reset expectations Ensure right people involved in detailed planning Ensure everyone knows what needs to be done by whom 78
27 RACI Chart Task Responsible Action by Consulted Informed Home Work Assignment #2 Develop a complete project plan: WBS list all activities Use the risk and stakeholder templates Sequence Project tasks using Post-it notes Produce a project bar chart Produce a RACI(S) Chart(s) 80 Components of a Cost Estimate Direct Cost Labour: actual amount paid to field personnel Materials: essential to constructing and operating a facility including equipment installed permanently Equipment: used to perform a contract Subcontracts 81
28 Components of a Cost Estimate Indirect Costs Overhead Home office overhead Site overhead Taxes Risks Contingency Profit Escalation 82 Training Example: Estimated Conference Planning Budget CONFERENCE PLANNING $243,325 Program $41,100 Site $170,425 Marketing $31,800 Theme Materials Speakers Date Location Lists Brochure Registration $600 $13,300 $27,200 $1,000 $169,425 $2,000 $29,800 3 conf calls with pgm comm Obtain Speaker Materials $800 Travel/expenses for 16 $500 per speaker Prepare Conference Notebook $12,500 Deposit 3 site $800/visit per person/day for 3 days for 1100 meeting $225/day/room for 3 days for 3 rooms 25,000 $80/1000 Design Brochure $12,800 Mail Brochure $17,000 $50/speaker 1100 $5/binder photocopy materials 350,000 $0.02/page Layout: 16 $50/page Printing: 30,000 $0.40/copy 25,000 $0.68/piece 83 PM ANNUAL CONFERENCE REVENUE & EXPENSE BUDGET Revenues Registrations - $335...$368,500 Expenses Salary Graphic artist Total Salary Non-Salary Travel...21,600 Printing.19,000 Postage...17,000 Mailing Lists.2,000 Telephone.600 Supplies.6,300 Speaker Honoraria.8,000 Site Deposit...1,000 Food.. 165,000 Meeting Room Rental...2,025 Total Non-Salary..242,525 Total Expenses... $243,325 Gross Profit $125,175 Indirect (@ 40% of Total Expenses). $97,330 Net Profit. $27,845 84
29 Implement the project Control the project Close the project 85 86
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