Boston University Metropolitan College

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1 Project Cost, Risk, Procurement Management AD644 OL Spring 2013 Instructor: Alexandra Zouncourides- Lull, MA, MBA, PMP Adjunct Professor, Administrative Sciences Administrative Sciences Department Metropolitan College, Boston University 808 Commonwealth Avenue Boston, MA E- Mail: 1. Course Overview This course is an introduction to the fundamental concepts, methods, and problems of project cost management, project risk management, and project procurement management, including their interrelated dependencies. The course explores different cost estimating techniques, as well as managing and controlling costs in terms of Earned Value Management (EVM). The course also looks at project risk management in both quantitative and qualitative methods and their effects on the project and budget. The different contract options used on a project, as well as discuss some vendor management issues are also reviewed. While the concepts are being presented, theory is put to practice using a project management simulation. 1.1 Course Description from Catalog This course introduces the art and science of project risk as well as continuity management and cost management. Managing the risk of a project as it relates to a three- part systematic process of identifying, analyzing, and responding is examined through actual case studies. Students learn how to manage the components of a project to assure it can be completed through both general and severe business disruptions on local, national, and international levels. Students learn the process of cost management, early cost estimation, detailed cost estimation, and cost control using earned value method. Students study in depth the issues of project procurement management and the different types of contracts for various scope scenarios. [ 4 cr.] 1.2 Pre- requisites: Courses: AD642 Student Competencies: Students are expected to be proficient in the use of Microsoft Word, Microsoft Excel and Microsoft Power Point programs. Students will be expected to complete all homework assignments in APA Format (see Homework Assignment Requirements below). 1

2 2. Basic Information 2.1 Schedule The course will be conducted online January 16 March 5, Delivery Mode The course will be conducted online. 2.4 Academic Research What constitutes academic research? Academic articles have a proven provenance. Articles are submitted to journals and evaluated anonymously by referees who are subject matter experts. The author typically revises a manuscript based on the referees questions and comments. Publication of the refereed article disseminates the information. Mistakes are corrected, excellent and useful work becomes accepted, and progress is made. Over time, a body of work emerges that is validated and accepted. Academic journal articles are what you are aiming for in your research. It is tough going early on to read this stuff. Read the abstract. If it looks interesting and you understand it, read the article. After a while, you get better at skipping over the stuff that is not relevant to your assignment. In other words, for the purposes of this course, a Google search returns junk. (Actually, of course, a Google search gets you going and we all do it. It is just not polite to mention it.) 3. Text & Materials 3.1 Required Texts 1. "Applying PMI methodology to translation and localization projects" by Professor Zouncourides- Lull. 2. The Time Dependence of CPI and SPI for Software Projects by Professor Roger Warburton. 3. Project Management, A Step- by- Step guide to Reducing Project Risk, by Professor Vijay Kanabar. 4. Contingency Misuse and other Risk Management Pitfalls by Dr. Noor and Robert Tichacek. 5. TDRSS: Working with Different Contract Types, NASA Case Study GSFC C(composite) A Guide to the Project Management Body of Knowledge, 2008 (PMBOK Guide) Fourth Edition Project Management Institute, Newton Square, PA. The last text is called the PMBOK Guide. The easiest and cheapest way to get the PMBOK Guide is to join the Project Management Institute (PMI) as a student member. Then you can download the PMBOK Guide for free. If you have any interest in PM, there is a lot of great stuff available at PMI and you need the PMBOK anyway, so it makes sense to join PMI ASAP. 3.2 Other Required Materials Double Masters Simulation: Project Integration Management Microsoft Word, Excel & Power Point 2

3 4 Course Learning Objectives 4.1 Course Goals and Objectives By the end of the course, students will be able to: Define major terms and concepts related to project cost, risk and procurement management Apply project management tools and techniques to case situations Estimate, manage and control project costs and risks Understand procurement needs and identify contract types Measure the progress of projects Analyze project data using project management tools, and present conclusions and recommendations about the project. 4.2 Course Learning Objectives In pursuing these objectives, the course will: 1. Use the text and cases, including simulation 2. Combine theory and practice 3. Combine the strategic with the tactical 4. Use relevant concepts to analyze and assess complex project management situations 5. Use project management software tools to aid in making management decisions 4.3 Course Expectations and Delivery Mode The course will be conducted online. There will be two project management lectures each week. Students will be expected to work through each of the lectures, along with the relevant sections of the reading materials, on their own. Each week there is one or two discussion topics. Every student will be expected to research and contribute to the discussion throughout the week. Students are expected to make multiple regular contributions to the discussions. Students are encouraged to conduct research and to seek out cases beyond the text and lecture topics. Each week there are homework assignments. Every student will be expected to conduct research in the completion of these assignments. All assignments are due in APA format. APA format is described in detail in the course documents. Project management is both an art and a science. While there are some technical aspects that have textbook answers, much of project management cannot easily be characterized by the right way. Therefore, students are expected to critically interpret the text, challenge assumptions, and use data from several sources (beyond the text) to make their case and support their arguments. 4.4 Class Schedule All schedule information and assignments can be found in the table below. 4.5 Schedule of Assignments All schedule information and assignments can be found in the table below. 3

4 In the table below, AZL refers to Alexandra Zouncourides- Lull PDF; VK refers to Vijay Kanabar PDF; RW refers to Roger Warburton PDF; N&T refers to Dr. Noor and Robert Tichacek PDF; PMBOK refers to PMI s A Guide to the Project Management Body of Knowledge; and PP refers to your Party (Personal) Project. Important Note: The table below gives you a week- by- week schedule. The content is available elsewhere, but the schedule tells you what to do when Homework Each week there are written homework assignments, which students are expected to complete. Assignments are due at the end of the last day of the week. That is, week #1 homework assignments are due on day #7 of week #1. Each week there are also assigned discussion topics. Students are expected to research the topic and to contribute comments in the discussion forums. Students are expected to contribute to discussions throughout the week Proctored Final Exam There will be one Final Exam course that takes place in the seventh week of this course.. Comprised of multiple- choice and true/false questions, it will cover information from the entire course, including online lectures, the textbook and PDF readings, and from the online discussions. The exam is closed- book; this means no use of the textbook or other offline readings, your notes, or any of the online material. You will be responsible for setting up your own appointment with an ACT testing center or an independent proctor. Further information about setting up an appointment will be forthcoming from your instructor and student services. Course Schedule Week Lecture No. & Topics Readings Discussion Topics Assignments & Exams Simulation/Other 1 Lecture 1: Course Introduction And Overview of Content Lecture 2: Cost Estimating Syllabus AZL PMBOK Chapter 7, pp Introduce Yourself 3. Cost Estimation Formula Small Beer Calculation Lecture 3: Cost Estimating (cont.) N&T Cost of Quality Register for Double Masters Simulation 2 Lecture 4: Determine Budget PMBOK Chapter 7, pp Cut the bid reserves Car budget 4

5 Lecture 5: Control Costs RW 5. EVM dilemma EV Road Problem 3 Lecture 6: Control Costs (cont.) PMBOK Chapter 7, pp Nano EVM 4 Lecture 7: Double Masters Simulation Lecture 8: Double Masters Simulation 6. Simulation budget 7. Euro launch Lessons Learned Report Run Introduction, Lessons 1, 2 and 3 Run Simulation Lessons 4, 5, 6, and 7 Lecture 9: Risk Management VK Probability and Impact Matrix 5 Lecture 10: Risk Management (Cont.) PMBOK Chapter Managing Risks Cause and Effect Diagram Lecture 11: Procurement Management PMBOK Ch. 12 Decision Tree 6 Lecture 12: Procurement Management (Cont.) TDRSS Case Study 8. TDRSS Contract Types TDRSS Contract Value 7 Proctored Final Exam Important Notice: The lecture content of this course will be inaccessible during the exam period. Final Exam: 8 AM, Thursday, February 28 to 11:59 PM Sunday, March 3, Grading You can expect to be challenged in this course, and excellent, research quality work will be rewarded with an A. An A grade requires research- quality excellence in all aspects of the course: homework, discussions, and the final exam. This is a Boston University course; that means something. One thing it means is that we recognize and reward excellence. Excellence is uncommon, even rare. Your grade, then, will reflect the standards of excellence set by Boston University, in which only truly distinguished work will receive the highest grade. 5

6 The course will consist of homework, contributions to the discussion forums, and final exams weighted as follows: Evaluation Measures Homework Discussions Final Exam 40% 30% 30% Discussion Grading Rationale This is to provide some guidance on how online discussions will be graded. First, let's distinguish between feedback and grading. We have a duty to provide clear guidance to you, our students, as you partake in discussions. However, that is not the same as your grade. Please note that we expect you to participate in the weekly online discussions, as we would expect you to participate in a classroom discussion. This means posting more than one discussion item. Remember that online discussions should be like classroom discussions; they should be a discourse that is ongoing throughout the week. Often students ask, "When should I post my discussion to the board?" The answer to that is you should be active throughout the week and post early to stimulate discussion, and then post several additional times to respond to others. If everyone waited until the end of the course week, there certainly would not be much of a discussion. There would be a list of single postings. It would also not be possible to give much thought to someone else's contributions. This would leave the discussion board without much enthusiasm or interactive spirit. I truly want you to be part of the Boston University community and the community of my classroom. Your fellow students and I look forward to reading your postings and learning from them. Your weekly discussions are graded in the following manner: 3 points Exceptional level of discussion that brings value to the discussion while building on others' insights. It is a highly valued added discussion that brings in new insights, material, and references. Author has explored the comments of many others and made contributions to their postings. This is an original contribution that stimulates a lot of interesting discussion. It explicitly includes academic research or relevant anecdotal evidence. It certainly requires inquiry external to the class textbook and readings, which must be correctly referenced. An example might be the contribution of scholarly research to the topic. 2 points Discussion builds on others insights, is a highly valued added discussion that brings in new insights, material and references. Author builds on discussions of others and has made several high level contributions during the week and is the top 25% for the week. This is a significant contribution that does more than move the discussion along; it sharpens or even refocuses the conversation and adds new information or interpretive strategies to the topic at hand. It may also lead the discussion onto a new path. An example might be a comparison of two major case studies or two assignments from the course. 1 point Author has been in the discussion during the week but tends to repeat others comments or makes opinion related statements without backing them up. Average to below average postings. Author does not tend to respond to others postings and contributions. However, a 1 is better than no postings, which is a zero. 0 Points did not post or participate in the discussion that week Calculating Discussion Grades In the weekly grade, a student could receive a maximum grade of 3 for each discussion. In the six weeks of class there are a total of seven (7) graded discussion, so your maximum grade will be 7 x 3 = 21 points. The 21 points will in turn be converted to a 100 point scale at the end of the course as shown in the table below. Your 6

7 facilitator should explain how she or he arrived at the grade, and so the purpose of this chart is to explain the method in use. Point Conversion Table Points Final Discussion Grade The discussion and homework grades are converted to the following scale: A A B B B C C C D Below 60 1 and 0 F 7

8 5. Requirements, Policies and Standards 5.1 Attendance The class is conducted online, so students may complete the work at their own schedule as long as all assignments and discussions are completed on time Student Participation Student participation is required in all aspects of the course. Participation in discussions is defined very clearly as contributing throughout the week to all of the discussions in each week. Minimal preparation is reading the material, and being able to summarize what it is about, what the issue is, and what you would recommend. Superior preparation involves being able to: (i) summarize the situation/problem presented by the case (ii) recommend a solution to the discussed problem (iii) support your recommendation with relevant details and analyses (iv) back up your sources with correctly formatted references (v) discuss innovative solutions, or why obvious solutions might be discounted. 5.3 Homework Assignment Requirements You are to complete the homework assignments using the American Psychological Association (APA) writing style and guideline for references format. Proper attribution is required for all sources. You can download the student style guide from the American Psychological Association web site or you can purchase the APA style guide from the book store. As most referencing information is available either on the APA web site or in the course documents- - the purchase of the guide is not essential. The guide will inform you as how to reference your paper correctly. Correct APA citations and APA reference formatting are essential. Homework assignments in this class are to be mini RESEARCH PAPERS. Remember that work that you use from other authors MUST be referenced. Since it is assumed that you know little about the topic that you are writing on it is expected that your assignment will reference information from many different sources. These must be attributed to their original author, using the American Psychological Association format. This is your paper and not the cut and paste of someone else's work. The internet has led to a false sense of what research is all about. Those new to research tend to think that it means spending a few hours surfing the internet and then an afternoon cutting from material available. Keep in mind the internet is: 1. Not quality oriented, as it has good stuff and not so good stuff. The internet does not know the difference. 2. The internet should NOT be the sole source location for your research. That is to say I expect to see materials that are not available on the internet. Use the library! As an online student, you have access to many sources, including academic journals. Academic research is far more valuable than random internet searches Lateness Policies Timely Presentation of Materials Due All assignments (papers, homework, etc.) have due dates. Instructors maintain the right to refuse, or downgrade, any materials presented after the due dates. This is not a subject for discussion. 8

9 We suggest that you organize your time and work so as to turn in your work early. This way, should some unforeseen problem arise, the timely presentation of your work is not in jeopardy Requests For Make- Up Examinations In general, make- up exams are not given. It is almost impossible to schedule a make- up exam with the software we use. The exam can be taken on one of several days, so there is plenty of room for a normal life. Schedule the dates in your calendar now. I regard it as manifestly unfair to allow extensions of exams. However, I recognize that very infrequently extraordinary situations do occur that make fulfilling requirements impossible and, as such, I review requests for make- up exams on a case- by- case basis. I hope that you will appreciate that I do not do this to penalize any individual student but to attempt to assure that there is a level playing field and that everyone in the class feels confident that no one has a unique advantage. 6. Academic Honesty Boston University considers plagiarism (any attempt by a student to represent the work of another as his or her own) and other forms of cheating serious offenses and enforces serious penalties when they occur. Any Plagiarism will be reported to the Dean. The Metropolitan College Student Academic Conduct Code is at: Students are expected to read and understand the above document. The key points are summarized below. However, students must be familiar with the entire document. BU has made available to all faculty members the software entitled Turnitin.com. This software has a database of millions of papers, articles, internet sites, and student assignments. I have used this software in cases of suspected cheating. If you copy paragraphs from a variety of sources, TurnItIn will find them all and explain precisely where you copied it from. Turnitin.com proves cheating, so beware. Actually, there is no excuse for plagiarism. If you reference where you stole your paragraphs from, you might be downgraded for not thinking up original work, but you will not be prosecuted for plagiarism. So always cite everything! 9

10 Summary of the Academic Conduct Code Academic Conduct Code I. Philosophy of Discipline The objective of Metropolitan College in enforcing academic rules is to promote the kind of community atmosphere in which learning can best take place. This atmosphere can be maintained only so long as every student believes that his or her academic competence is being judged fairly and that he or she will not be put at a disadvantage because of the dishonesty of someone else. Penalties imposed should be carefully determined so as to be no more or no less than required to maintain the desired atmosphere. In defining violation of this code the intent is to protect the integrity of the educational process. II. Academic Misconduct Academic misconduct is conduct by which a student misrepresents his or her academic accomplishments or impedes other students' chances of being judged fairly for their academic work. Knowingly allowing others to represent your work as theirs is as serious an offense as submitting another's work as your own. III. Violations of this Code Violations of this code are acts that constitute an attempt to be dishonest or deceptive in the performance of academic work in or out of the classroom. To alter academic records, or to collaborate with another student or students in an act of academic misconduct. Violations include but are not limited to: A. Cheating on examinations. Any attempt by a student to alter his or her performance on an examination in violation of that examination's stated or commonly understood ground rules. B. Plagiarism. Any attempt by a student to represent the work of another as his or her own. Plagiarism includes each of the following: copying the answers of another student on an examination, copying or substantially restating the work of another person or persons in any oral or written work without citing the appropriate source, and collaboration with someone else in an academic endeavor without acknowledging his or her contribution (see below for a more detailed definition of plagiarism). C. Misrepresentation or falsification of data presented for surveys, experiments, etc. D. Theft of an examination. Stealing or otherwise discovering and/or making known to others the contents of an examination that has not yet been administered. E. Unauthorized conversation is not allowed during examinations. Any unauthorized conversation may be considered prima facie evidence of cheating. F. Knowingly allowing another student to represent your work as his or her own. G. Forgery, alteration, or knowing misuse of graded examinations, grade lists, or official University records or documents, including but not limited to transcripts, letters of recommendation, degree certificates, alteration of examinations or other work after submission. H. Theft or destruction of examinations or papers after submission including purposefully altering possible poor performance. I. Submitting the same work in more than one course without the consent of the instructors involved. J. Altering or destroying another student's work or records, altering records of any kind, removing materials from libraries or offices without consent, or in any way interfering with the work of others so as to impede their academic performance. K. Failure to comply with the sanctions imposed under the authority of this code. 10

11 A Definition of Plagiarism "The academic counterpart of the bank embezzler and of the manufacturer who mislabels products is the plagiarist: the student or scholar who leads readers to believe that what they are reading is the original work of the writer when it is not. If it could be assumed that the distinction between plagiarism and honest use of sources is perfectly clear in everyone's mind, there would be no need for the explanation that follows; merely the warning with which this definition concludes would be enough. But it is apparent that sometimes people of goodwill draw the suspicion of guilt upon themselves (and, indeed, are guilty) simply because they are not aware of the illegitimacy of certain kinds of "borrowing" and of the procedures for correct identification of materials other than those gained through independent research and reflection." "The spectrum is a wide one. At one end there is a word- for- word copying of another's writing without enclosing the copied passage in quotation marks and identifying it in a footnote, both of which are necessary. (This includes, of course, the copying of all or any part of another student's paper.) It hardly seems possible that anyone of college age or more could do that without clear intent to deceive. At the other end there is the almost casual slipping in of a particularly apt term which one has come across in reading and which so aptly expresses one's opinion that one is tempted to make it personal property. Between these poles there are degrees and degrees, but they may be roughly placed in two groups. Close to outright and blatant deceit- but more the result, perhaps, of laziness than of bad intent- is the patching together of random jottings made in the course of reading, generally without careful identification of their source, and then woven into the text, so that the result is a mosaic of other people's ideas and words, the writer's sole contribution being the cement to hold the pieces together. Indicative of more effort and, for that reason, somewhat closer to honest, though still dishonest, is the paraphrase, and abbreviated (and often skillfully prepared) restatement of someone else's analysis or conclusion, without acknowledgment that another person's text has been the basis for the recapitulation." The paragraphs above are from H. Martin and R. Ohmann, The Logic and Rhetoric of Exposition, Revised Edition. Copyright 1963, Holt, Rinehart & Winston. 11

12 Project Integration Management Simulation 2010 How this simulation relates to the course The purpose of this simulation is to supplement your coursework with a hands- on tool that allows you to put project management industry standards to practice. This simulation utilizes a project scenario of localizing a software product into multiple languages for international markets. The focus of the simulation is on project management fundamentals and does not require domain knowledge. The simulation provides you with the opportunity to apply the PMBOK Guide framework to a real world project, using various metrics to gauge the effectiveness of your decisions. Goal of the Simulation Up until recently, the only effective way for aspiring and current project managers to practice their project management skills has been to work on real, live projects. Although this is the best way to learn, not everyone has the opportunity to lead complex projects. Even when the opportunity is available to lead a project, lack of training or experience can lead to failure that can have a negative effect on the project and the project manager's career. Just like flying an airplane, managing a large project is comprised of hundreds - if not thousands - of interrelated, complex tasks that must be managed in concert to ensure success and prevent failure. As pilots are trained to fly an array of aircraft and read different types of flight instruments, project managers need to be exposed to different project scenarios and learn to use different tools and techniques to manage those projects. For example, airline pilots undergo hundreds of hours training on simulators before they can start logging their flight time in order to gain experience as a pilot. Since you would never board an airplane with an inexperienced pilot, taking on a project without the proper training or experience could be disastrous. Double Masters envisions a future where all project managers, just like airplane pilots, will train on virtual simulators to improve their skills, reduce the potential for costly errors, and successfully deliver projects on time and on budget. Accessing the Simulation Before you can access the simulation, you must 1) create a user account with Double Masters and 2) register for this simulation session. You will be provided credentials within the course to register for the simulation. Once registered, your instructor will be able to monitor your simulation activity and view your scorecard results. Please refer to the Student s User's Guide to the Project Integration Management Simulation 2010 for instructions on how to get started ( Simulation Details Project Integration Management Simulation: Run time, approximately 8 hours It should take you no longer than the estimated 8 hours to complete the simulation. You are encouraged to take your time when navigating through each scene. You can always suspend your session by clicking on Suspend Simulation at the top right hand corner of any simulation page, and return to complete the simulation at another convenient time. 12

13 Simulation Lesson Introduction Lesson 1 Lesson 2 Lesson 3 Lesson 4 Lesson 5 Lesson 6 Lesson 7 Objectives At the conclusion of this course you will be able to: 1. Describe the processes in project integration management 2. Identify project stakeholders 3. Identify project requirements, constraints, concerns and expectations 4. Balance competing project constraints; budget, schedule, risk, quality, resources and scope 5. Explain the contractor contract and selection process 6. Apply stakeholder needs to a communication plan 7. Interpret proposed project changes for feasibility 8. Understand lessons learned At the conclusion of this lesson you will be able to: 1. Understand the purpose of undertaking the project 2. Define the high level priorities of the project based on preliminary planning 3. Recognize the major stakeholders and their needs At the conclusion of this lesson you will be able to: 1. List the project priorities 2. Select a localization vendor based on profile criteria 3. Identify the components in the WBS At the conclusion of this lesson you will be able to: 1. Identify the critical path in the project schedule 2. Practice manipulating the schedule and budget 3. Recognize the interconnectedness of cost, schedule and risk 4. Illustrate how contingency and management reserves are applied At the conclusion of this lesson you will be able to: 1. Identify the enterprise environmental factors impacting this project 2. Calculate the number of communication channels 3. Determine the contract type being used At the conclusion of this lesson you will be able to: 1. Demonstrate the management of a schedule slip and its impact 2. Analyze a scope change proposal for financial feasibility 3. Create a communication dealing with a conflict 4. Decide if the human resources assignments in this organizational structure impact the requirements for your project team At the conclusion of this lesson you will be able to: 1. Demonstrate how management reserves are used 2. Determine communication needs for your project's stakeholders 3. Apply knowledge of a vendor contract to management of a deliverable delay (conditional) At the conclusion of this lesson you will be able to: 1. Determine how to resolve a culturally- related conflict 2. Determine appropriate team rewards 3. Recognize the phase for project closure Scorecard At the end of the simulation, a Scorecard view will appear under the Simulation Overview tab, detailing your project management performance within the simulation. The scorecard will also tabulate the results of your performance and assign a score out of

14 Simulations run Forward Only This means that the simulation does not allow you to return to a previous screen to change a decision. Once you advance to the next screen, you cannot undo any decision you have made. A virtual calendar progresses and therefore you cannot go back in time to change your decisions. You can always visit the Previously Viewed Scenes view within the History tab, which lists all of the screens you have viewed. You can replay any scene as many times as you like. Help The Help tab contains information on how the user interface functions as well explaining the various components of the simulation. Visit this tab if you don't understand how to proceed in the simulation. Note that Help contains all of the same information presented in the Tutorial, but is presented in a purely textual format. System Requirements Supported Browsers Double Masters simulations have been tested under the following browsers on both the Windows and Mac OS X platforms: Internet Explorer 7.0 or greater (Windows Only) Safari 4.0 or greater (Mac OS X only) Firefox 3.0 or greater (Windows and Mac OS X) Chrome 5.0 or greater (Windows and Mac OS X) Browser Settings Regardless of your browser, you are also required to have the following browser capabilities: Cookies must be enabled JavaScript must be enabled Adobe Flash Player 9.0 or greater must be installed Depending on how your browser is configured for security, you may also have to explicitly enable pop- ups since they are used in several places in the Double Masters website Hardware Considerations The following hardware capabilities are assumed: Simulation scenes are designed to work with a minimum screen resolution of 1024 X 768. While the simulation will run on lower resolution screens, it will require more scrolling to review all content. The simulation contains many Flash components that include audio, so your computer should have working speakers. The use of some of the newer browsers listed above may not be compatible with the Vista learning management system, so you may need to use a different browser for the simulation from the one that you are using for your online class in Vista. 14