2What You Need to Know Some Basics Project ManagementWhat You Need to KnowSome Basics
3ProjectDefined as “a temporary endeavor undertaken to create a unique product, service, or result”Characteristics include:Time limited with a definite beginning and endEnd is achieved when one of the following occursProject objectives are metProject is terminatedNeed for the project no longer existsUndertaken for a purpose (to create a unique product, service or result)Often involves “progressive elaboration”Because you may not know everything about the product initially, you may have to plan and develop it in stepsOften called “rolling wave planning”First definition to memorize – project.Progressive elaboration – used to define or plan a project.Example – project scope starts out being defined at a high level, without much detail. As team gains better understanding of objectives and deliverables, incrementally refine the scope.
4Operations vs. Projects Operations management differs from project managementOperationsOngoing endeavorProduces repetitive output(s)Supports the business environment where projects are executedInteraction with projects is commonDoes not end when objectives are metNew objectives are set to support organizational needsProjectsTemporary endeavorProduces unique output(s)Can intersect with operations at various points of product life cyclePurpose of ongoing operations – keep the business goingPurpose of project – accomplish its objective and then stopProjects require project management while operations require business process management or operations managementProjects can intersect with operations at various points of product life cycleAt each closeout phaseWhen developing a new product, upgrading a product or expanding outputsImprovement of operations or the product development processUntil the divestment of the operations at the end of the product life cycle
5Product vs. Project Life Cycle Comparison Product Life CyclePhases are generally sequential, non-overlapping, and determined by organization’s control needLast phase is generally the product’s retirementFacets of the product life cycle are often run as a projectProduct may have many projects associated with itProject Life CycleOccur in one or more phases of the product life cycleWhen project output is related to a product, there are many possible relationships
6Project Life Cycle Characteristics Cost and Staffing LevelNo matter how small or large, simple or complex, all projects can be mapped to a life cycle structure.Starting the projectOrganizing and preparingCarrying out the workClosing the projectThis generic life cycle structure provides a common frame of reference for communicating with others who aren’t as familiar with the details of the project.It also can be used to compare projects, even if they are different.
7Project Life Cycle Characteristics The generic life cycle structure generally displays certain characteristics:Cost and staffing are low at beginning, increase as the project progresses, and drop off rapidly at the endStakeholder influences, risk, and uncertainty are greatest at the start but all decrease over the life of the projectAbility to influence the final product—without significantly impacting cost—is highest at the start of the project and decreases toward the end of the projectA Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fourth Edition, Figure 2-2
8Product Life CycleProduct life cycle describes phases in the life of a product, typically ending in product retirementProduct life cycle describes phases in the life of a product, typically ending in product retirementName and number of phases are determined by the manufacturing and control needs of the organizationExample of a Product Life Cycle
9Projects vs. Operational Work Projects and operations share characteristicsWork is performed by individualsWork is limited by constraintsWork is planned, executed, monitored and controlledWork is performed to achieve organizational objectivesProjects and operations differOperations are ongoing; produce repetitive products, services, or resultsProjects are temporary endeavors; produce a unique product, service, or resultOperations and projects interactOperations supplies resources to projectsProjects may produce deliverables that support operations
10Types of Organizations and Their Characteristics MatrixProjectCharacteristicsFunctionalWeak MatrixBalanced MatrixStrong MatrixProjectizedProject Manager’s AuthorityLittle or NoneLimitedLow to ModerateModerate to HighHigh to Almost TotalResource AvailabilityWho controls the project budgetFunctional ManagerMixedProject ManagerProject Manager’s RolePart-timeFull TimeProject Management Administrative Staff
11Project Management Processes Project manager—along with project team—is responsible for determining:Which processes are appropriate for the projectWhether processes should be tailoredAppropriate degree of rigor for each processMust understand that project management is an integrative undertakingRequires each process to be aligned and connected with the other processes to facilitate coordinationMust also understand that processes are iterative—many are repeated during the projectProject Managers are responsible for determining which processes are appropriate, and the appropriate degree of rigor for each process.Most experienced project managers recognize that there is more than one way to manage a project.
12This is not a Project Management Plan For the exam:remember the project plan is formal and approved,remember who creates the plan, (Project Manager)remember the components that make up the project management plan: Change management plan, communication management plan, configuration management plan, cost management plan, cost performance baseline, human resource plan, process improvement plan, procurement management plan, quality management plan, requirements management plan, risk management plan, schedule baseline, schedule management plan, scope baseline, scope management plan PMBOK page 82Project management plan will consist of the outputs of the other planning processes
13NO PLAN IS EVER EXECUTED AS WRITTEN; YOURS WON’T BE THE FIRST Change…It HappensManages changes to the project management plan, project scope statement, and other deliverablesAssures that only approved changes are incorporated into a revised baselineNO PLAN IS EVER EXECUTED AS WRITTEN;Take Heart!!YOURS WON’T BE THE FIRST
14Processes…They Are Iterative PlanDoCheckActDemingCycleChange control, and project management is an iterative act. PMBOK refers to the Deming Cycle (Although Deming never referred to this as such).I included this slide as reinforcement of a critical concept that is required throughout the program.
152 Kinds of Scope Project Scope Product Scope Work that needs to be accomplished to deliver a product, service, or result with the specified features and functionsMeasured against project management planProduct ScopeFeatures and functions that characterize a product, service, or resultMeasured against product requirementsGlossary DefinitionsProject (PMBOK pg 442) – A temporary endeavor undertaken to create a unique product, service or result.Product (PMBOK pg 442) – An artifact that is produced, is quantifiable, and can be either an end item in itself or a component item. Additional words for products are materials and goods. Contrast with result and service. See also deliverable.
16Decomposition WBS structure can be created using different methods Using phases of the project life cycle as the first level of decomposition; second level consists of the product and project deliverablesUsing major deliverables as the first level of decompositionUsing subprojects that may be developed by organizations outside the project team (e.g., contracted work); seller develops the supporting contract work breakdown structureWBS components represent verifiable products, services, or resultsWBS can be structured as an outline, organizational chart, fishbone diagram, etc.Decomposition may not be possible for a deliverable or subproject to be accomplished far into the futurePoint to page 119 – Figure 5-9 Sample Work Breakdown Structure Organized by Phase (1st bullet)Point to page 120 – Figure 5-10 Sample Work Breakdown Structure with Major Deliverables (2nd bullet)Glossary: page 449: Definition of Seller: a provider or supplier of products, services, or results to an organization
18Project Cost Management Cost management work follows planning (Develop PM Plan)Planning process produces a cost management plan that :Documents cost management processes, tools and techniquesCan establish:Level of accuracyUnits of measureOrganizational procedures linksControl thresholdsRules of performance measurementReporting formatsProcess descriptionsMay be formal or informal, highly detailed or broadly framed, based on project needsThe work involved in performing the three processes of Project Cost Management is preceded by a planning effort of the project management team.This planning effort is part of the Develop Project Management Plan process which produces a cost management plan that sets out the format and establishes the criteria for planning, structuring, estimating, budgeting and controlling project costs.The cost management processes and their associated tools and techniques are usually selected during the project life cycle definition and are documented in the cost management plan.Cost management plan can establish:Level of accuracy - rounding to a prescribed level of precision ($100, $1,000); may include an amount for contingenciesUnits of measure - staff hours, staff days, weeks, lump sump; defined for each resourceOrganizational procedures links – WBS is framework of the cost management plan; WBS used for project cost accounting is called the control account; each control account is assigned a unique code/account number that links to the organization’s accounting systemControl thresholds – variance thresholds that are indicate an agreed upon amount of variation that can occur before action needs to be taken; usually expressed as percentage deviations from the baseline planRules of performance measurement – EVM rules of performance measurement are setReporting formats –formats and frequencyProcess descriptions
19Budget Estimating Budget Estimates Bottom-Up EstimatingTop-Down Estimating (Rough Estimate)Rough Order of Magnitude (ROM) -50% to +100%Completed during initiation (not very accurate)Preliminary -20% to +30%Definitive- 15% to +20%Budget EstimatesMost AccurateConceptual -30% to +50%Less AccurateControl-10% to +15%
20Cost Performance Baseline Authorized, time-phased budget at completion (BAC) used to measure, monitor, and control over all cost performance on the projectSummation of the approved budgets by time periodIn EVM, referred to as the performance measurement baseline (PMB)Often displayed in the form of an S-CurveCost Performance Baseline
21Project Quality Management Recognizes the distinction between “precision” and “accuracy”Precision means that values of repeated measures are clustered and have little scatterAccuracy means that the measured value is very close to the true valuePrecise measurements are not necessarily accurateVery accurate measurements are not necessarily preciseThe project management team must determine appropriate levels of precision and accuracy and then control the project to those measures of quality.
22Cost of Nonconformance Cost of QualityCost of ConformancePrevention Costs(Build quality product)TrainingDocument processesEquipmentTime to do it rightAppraisal Costs(Assess the quality)TestingDestructive testing lossInspectionsCost of NonconformanceInternal Failure Costs(Failures funded by the project)ReworkScrapExternal Failure Costs(Failures found by the customer)LiabilitiesWarranty workLost businessLoss of customers!Refer students to PMBOK p. 195, figure Cost of QualityMoney spent during the project to avoid failuresMoney spent during and after the project because of failures
23Project Human Resource Management Human resource management includes processes that organize, manage, and lead the project teamProject team is comprised of individuals assigned/acquired to the roles and responsibilities for completing the projectType and number of project team members can change frequentlyProject team may also be referred to as the project’s staffEarly involvement of all team members in project planning and decision making can be beneficialThe earlier, the betterProject Human Resource Management includes the processes that organize, manage, and lead the project team. The project team is comprised of the people with assigned roles and responsibilities for completing the project. The type and number of project team members can change frequently as the project progresses.Project team members may also be referred to as the project’s staff.While specific roles and responsibilities for the project team members are assigned, the involvement of all team members in project planning and decision making can be beneficial.In this section we’ll be discussing the Project Human Resource Management processes.
24Project Communications Management Requires most of the project manager’s timeCovers tasks related to producing, compiling, sending, storing, distributing, and managing project records/informationDetermines what to communicate, to whom, how often and when to reevaluate the planHas many potential dimensions, including:Internal and externalFormal and informalVertical and horizontalOfficial and unofficialWritten and oralVerbal and non-verbalIncludes the processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of project information.Project managers spend the majority of their time (approximately 90%) communicating with team members and other project stakeholders (internal/external).Communication activity has many potential dimensions, including:Internal (project) and external (customer, other projects, media, public)Formal (reports, memos, briefings) and informal ( s, ad-hoc discussions)Vertical (up/down organization) and horizontal (peers)Official (newsletters, annual report) and unofficial (off-the-record communications)Written and oralVerbal and non-verbal (voice inflections, body language)
25Communication Model Encode Noise Message Sender Receiver Medium Decode MemorizeEncodeModifying a message so that it can be sentNoiseSomething that interferes with the messageMessageSenderMediumReceiverResponsible for making the information clear and complete so that the receiver can receive it correctly, and confirming that it is properly understoodResponsible for making sure that the information is received in its entirety and understood correctlyDecodeModifying a message that has been sent so that it can be understood…. ”if I understand you correctly, you are saying….Basic Communication ModelEncode: translate thoughts or ideas into a language that is understood by othersBug Exercise – If I had given my instructions in Chinese, how many would have understood the message?Message and feedback messageMedium (method used to convey the message)Noise: anything that interferes with the transmission and understanding of the message (distance, unfamiliar technology, lack of background information)Was there any Noise in the bug exercise? What were they?Decode: translate the message back into meaningful thoughts or ideas.Components of the communication model must be taken into account when discussing project communications.Sender is responsible for making the information clear and complete so that the receiver can receive it correctly and for confirming that it is understood.Receiver is responsible for making sure that the information is received in its entirety, understood correctly and acknowledged.Must also consider the communication challenges due to highly technical projects, multinational project teams, etc.NOTE: A communication failure can negatively impact the project.Feedback loop and potential barriers to communicationWhat was missing in the Bug Drawing exercise? The Feedback step was not available so the Receiver could not make sure that the information was understood correctlyFeedback
26Project Risk Management Project risk is always in the futureRisk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective (e.g., scope, schedule, cost, quality)Risk may have one or more causesRequirementAssumptionConstraintConditionRisk may have one or more impacts/outcomesRisk impact/outcome may be negative or positiveNegative event = threatPositive event = opportunitySome common risk conditions include:Immature project management practicesProject environment or your company’s environment (organizational)Lack of an integrated management systemConcurrent multiple projectsDependency on external participants who cannot be controlledThreats and OpportunitiesPMI views risk not only as just a threat (negative event) but also as an opportunity (positive event)With proper planning, risk can be effectively managed to substantially reduce the impact to the projectEffective risk management requiresThinking and talking about risksPlanningTrainingBeing proactive about managing riskThe objectives of Project Risk Management are to:INCREASE the probability and impact of positive events (opportunities)DECREASE the probability and impact of negative events (threats)
27Project Procurement Management Procurement Management consists of four processes:Plan ProcurementsConduct ProcurementsAdminister ProcurementsClose ProcurementsProcesses interact with each other and with processes from other Knowledge AreasEach process can involve effort from a group or person, based on project requirementsEach process occurs at least once in every project and occurs in one or more of the project phases, if the project is divided into phasesProcurement management processes involve contracts that are legal documents between a buyer and a sellerIn this section, we’ll be discussing the processes in the Project Procurement Management knowledge area.Plan ProcurementsConduct ProcurementsAdminister ProcurementsClose ProcurementsThe processes in this section interact with each other and with the processes in the other Knowledge Areas. Each process can involve effort from a group or person, based on the requirements of the project. Each process occurs at least once in every project and occurs in one or more of the project phases, if the project is divided into phases.The project procurement management processes involve contracts that are legal documents between a buyer and a seller.
28Finally, the Project Manager…. The Project Manager—responsible for everything required to make project a successNot like typical hierarchical line management roleProject Manager center of everything relating to projectExample, Controlling the contributions of seniors and peers is just as important as managing the work of the teamProject Manager needs to manageProject Manager—main focal point for liaison with other departments, projects and initiativesProject Manager—main point of contact for aspects requiring co-operation and co-ordination with external parties—making sure everything is in place to guarantee successProject Manager—direct responsibility for activities of all project participants, all project tasks and all deliverablesImportant!.... Project Manager needs to achieve this without direct control over participantsProject Manager has no power over the leadership, nor the internal and external contributors
29SummaryProper understanding of the tools and knowing how and when to use them is the key to effectively managing your projects.OMB requirements are going to be strongly focused on Project Management and Performance MeasurementBut Earned Value makes sense without OMB’s motivationOMB’s requirement applies specifically to contractors.