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Fall 2005 Tim Eiler CE 4101W-01 Project Management and Economics.

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Presentation on theme: "Fall 2005 Tim Eiler CE 4101W-01 Project Management and Economics."— Presentation transcript:

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2 Fall 2005 Tim Eiler CE 4101W-01 Project Management and Economics

3 Class Roll If you are NOT officially enrolled in this class, see me at break or at end of class tonight All students sign the sheet being passed around All students obtain and complete an information sheet – turn in at class end

4 Agenda Why are we here tonight? Expectations – of the class, of me, of you Course mechanics – how it all will work What is PM and Why is it important? Starting out with basic PM Homework 1 assigned

5 Why are you in this class? Open PM Discussion What questions do you have about PM?

6 For those of you who see themselves as future PM’s… –Figure out what PM is and isn’t –More importantly, figure out why PM is important to your businesses and careers For those who see themselves as engineers, but not PM’s… –It’s the soft stuff that’s hard, the hard stuff is easy (Doug Wilde, quoted in Leifer, 1997) –“Those organizations that take project management seriously as a discipline, as a way of life, are likely to make it into the 21st century. Those that do not are likely to find themselves in good company with dinosaurs.” (Tom Peters) –In the new economy, all work is project work. (Tom Peters; The Wow Project ;Fast Company, 24, 116) What’s The Point of This Class?

7 Why is any business in business? $ € £ ¥

8 Increases profit (margin) by reducing cost/unit output –Increasing work output by the same resources –Reducing cost of work done Why Project Management (PM)? Drives Innovation –In how individual contributor & management (mgmt) work is done –In product

9 Why PM? “The difference between a company and its competitor is the ability to execute. If your competitors are executing better than you are, they’re beating you in the here and now…Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success…” Ram Charan & Larry Bossidy, Execution: The Discipline of Getting Things Done, 2002, Crown Business Increases sales –Improved quality –Ability to be a price leader –Differentiates your company

10 Why PM? In short: Project Management (PM) strives to achieve success from entropy-driven chaos…

11 A recent survey of technology projects in the United States by the Project Management Institute reveals some startling percentages: Close to half of the projects started were never finished 30% were completed but took at least twice as long - some took 5 times as long Only 10% of the projects were finished on time Why Is PM Important?

12 This course has wide breadth with less topic depth Secret 1 About This Course

13 Secret 2 About This Course Project Management (PM) isn’t rocket science

14 Secret 3 About This Course This class is yours if you choose to own it. If you choose not to get involved in it, you only have yourself to blame at the end for not getting something from it. Being involved means joining in discussions, doing the work, understanding why things are done the way they are "Learning occurs when people engage in complicated undertakings and find a way to reflect on how they're doing it - and perhaps engage a coach or mentor who has some tools and methods for learning. Those tools are different from answers. Answers are for lazy people who don't want to learn how to use a thinking method to learn how to deal with a practical problem. I have zero respect for trying to find an "answer". There is a profound difference between having an answer and having an approach you can use to deal with a complicated and difficult practical problem. " Peter Senge

15 Secret 4 About This Course “Simple is Sexy. Complex Sucks.” Rob Thomsett, Radical Project Management The Story of The Skilcraft Method…

16 This is an application-level course –Needs critical thinking… not just formulaic regurgitation What You Can Expect… –Process: 3 rd – Apply 2 nd – Practice 1st – Know –5 th - Explain –4 th - Synthesize –3 rd - Challenge –2 nd - Listen –1 st - Read This is a PRACTICAL Course

17 Getting new knowledge… –Interactive, Socratic-style Lecture Listen Ask questions Answer questions Discuss topics What You Can Expect… – Examples The right way (we hope) first One planned for crucial or difficult topics More as you require

18 Practicing to solidify new knowledge… –Facilitated Practice Use the knowledge you have Apply it to new situation –In class assignment Given information Do (use a tool, create a document, etc.) –Group-style work Ask questions Help each other What You Can Expect…

19 Applying what you know… –Requires melding of appropriate concepts Given in the class “Common sense” and practical experience Readings –You WILL NOT always have everything spelled out to you in checklist format –Sometimes you will have to MAKE ASSUMPTIONS to fill in the missing pieces What You Can Expect…

20 This is a Civil Engineering course It will use mostly examples and homework related to Civil Engineering It is also a course in Project Management It is not exclusive to Civil Engineering –Not all the examples, homework, etc will be exactly in the CE domain –You are to focus on PM 1 st and CE second…I will not be evaluating you on your CE prowess What You Can Expect…

21 I Expect of You… Do the readings Attend class Ask questions & challenge the instructor Actively participate in discussions & groups Speak up when you have a question or concern Satisfactorily complete (on time) all writing assignments, examinations, projects, homeworks & exams. Be An Active Learner

22 Syllabus is posted at course site on WebCT You are responsible for printing it if you want a printout You are responsible to keep up with revision updates Syllabus Review

23 Course Objectives Teaching Team Textbook(s) Computer Use Homework Grading Calendar Attendance Academic Honesty Etc… Syllabus Review READ THE SYLLABUS

24 Syllabus Review - Slide Decks Available via WebCT You are responsible for printing if you want a printout All slides are posted already

25 Syllabus – Cont’d Demonstrate knowledge of the concepts and principles of project management and economics Formulate and analyze project management and engineering economics problems Use project management and communications software Demonstrate knowledge of teamwork and interpersonal skills Process group work and the overall functioning of the course Demonstrate written and verbal skills Actively reflect on and process your learning in the course Apply concepts, principles, methods, algorithms, and heuristics

26 Teaching Team –Instructor: Tim Eiler –Office: CE 147 –Phone 1: (cell) –Phone 2: (home) – 1: – 2: Syllabus – Cont’d Rhetoric Consultant: Dave Kmiec Office: Phone: , (c ) Office Hours: As Needed Teaching Assistant: Ryan Owen Office: Phone:

27 Program Manager GMAC-RFC, Bloomington, MN (current) Manage software development program office and staff of project managers and technical resources (6) Adjunct Professor of Project Management U of MN, Minneapolis, MN (current) Manage and deliver project management course content Partner RocketScienz Group LLC, Rosemount, MN Graphic Design, Web Development and Hosting, Software Development, Training, PM Consulting Release Manager Tellabs, Plymouth, MN Led $300M, 36-month project to develop optical broadband switch Manager of Project Management Digi International, Minnetonka, MN Managed project management office/project management staff Project Manager ADC Telecommunications, Minnetonka, MN Managed broadband access equipment product development projects Project Manager Microwave Network Systems, Houston, TX Managed microwave radio/radio network equipment development projects Astronaut Instructor Rockwell Space Operations, Houston, TX Provided multi-discipline technical training to US & foreign astronauts PMP (Project Mgmt Professional) Certification Project Mgmt Institute (PMI) MBA University of Houston BS ME/IEOR University of Minnesota CTM Certification Toastmasters International National Board of Directors Triangle Fraternity Teaching Team – Tim Eiler

28 Syllabus – Cont’d Computer Use –WebCT This course uses WebCT for disseminating and collecting information If you don’t know how to use WebCT, contact the department office for further instructions –MS-Project and Other Tools You will be required to perform work using MS-Project and other software applications If you do not now have access to MS-Project, please arrange to get it

29 Syllabus – Cont’d Calendar –See Syllabus –Shows week numbers and date of Monday of each week –Explains lecture material to be covered in class week –Identifies prep. reading assignments for each class: PMBOK 2004 edition Other Note that reading assignments and/or homework assignments may not seem 100% synchronous with lecture material –Identifies work to be assigned in each class –Identifies work to be submitted in each class (or week)

30 Academic Honesty –Expectation: All students are expected to complete coursework responsibilities with fairness and honesty. –Definition: Scholastic dishonesty means plagiarizing; cheating on assignments or examinations; engaging in unauthorized collaboration on academic work; taking, acquiring, or using test materials without faculty permission; submitting false or incomplete records of academic achievement; acting alone or in cooperation with another to falsify records or to obtain dishonestly grades, honors, awards, or professional endorsement; altering forging, or misusing a University academic record; or fabricating or falsifying data, research procedures, or data analysis. –Consequences: Scholastic dishonesty WILL result in disciplinary action. Within this course, a student responsible for scholastic dishonesty can be assigned a penalty up to and including an "F" or "N" for the course.

31 Reasonable Accommodation If you have a special need that requires any additional reasonable accommodation, I encourage you to please see or contact me at any time

32 Contract Grading NOTE: In cases of conflict between these slides and the syllabus, the syllabus will have precedence To Receive an ATo Receive a BTo Receive a C Abide by all Class Policies Actively engage in class discussions – small group and whole class Actively engage in class discussions – small group Submit 100% of homework Receive P grade on Problem/Solution Memo Receive P grade on Project Proposal Receive P grade on 100% quizzes and assignments given in class Receive P grade on 90% quizzes and assignments given in class Receive P grade on 80% quizzes and assignments given in class Receive a cumulative mean score of >= 90% for 2 exams Receive a cumulative mean score of >= 80% for 2 exams Receive a cumulative mean score of >= 70% for 2 exams Receive P grade on Project Plan Complete Writing Interview Form

33 Grading – Cont’d Assignments Exams  3 Out of class assignments  In class assignments  TBD Quizzes  TBD Mastery Learning – you may, at my discretion only, resubmit homework NLT one week following receipt of graded work Quality Quantity

34 Attendance Incredibly important in a class of this type You lose much more than your grade by not coming I will be flexible with attendance and assignments IFF…

35 Form groups of 6 Each person to collect contact information (phone, , etc) from ALL 5 other people on the team – also submit your group’s info to me Class Group is your first line of defense. Call them 1st to: –Get info you need if you missed class –Get help obtaining or using a tool –Etc. Class Group is your team for assignments If your group shrinks < 4 people, see me Class Groups

36 The literature says that classes should be broken up to have a break after roughly every minutes of class. I assume you’re all adults, though, and you can make your own choices and follow through on those choices. Do you want 1 or 2 breaks during each class period? Breaks

37 General Course Organization 1.PM Planning 2.PM Execution 3.PM Leadership and Ethics 4.Project Closure

38 Project Management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. It is accomplished through the use of processes such as initiating, planning, executing, controlling, and closing. (PMBOK, 2000, PMI) What Is Project Management? Project Management is the intersection of: Tools People Systems (Lewis, James P Project Planning, Scheduling & Control, 3rd ed. McGraw ‑ Hill)

39 What Employers Want Learning to Learn Listening and Oral Communication Competence in Reading, Writing, and Computation Adaptability: Creative Thinking and Problem Solving Personal Management: Self-Esteem, Goal Setting/Motivation, and Personal/Career Development Group Effectiveness: Interpersonal Skills, Negotiation, and Teamwork Organizational Effectiveness and Leadership Workplace basics: The skills employers want American Society for Training and Development and U.S. Department of Labor. Why Is PM Important To You?

40 Employer’s Checklist C: Boeing Company [1] [1]  A good grasp of these engineering fundamentals: Mathematics (including statistics), Physical & life sciences, Information technology  A good understanding of design & manufacturing processes (i.e. understanding of engineering concepts and practice)  A basic understanding of the context in which engineering is practiced, including: Economics and business practice, History, The environment, Customer and societal needs  A multidisciplinary systems perspective  Good communication skills: Written, Verbal, Graphic, Listening  High ethical standards  An ability to think critically, creatively, and independently & cooperatively  Flexibility--an ability and the self-confidence to adapt to rapid/major change  Curiosity and a lifelong desire to learn  A profound understanding of the importance of teamwork [1] [1] ASEE Prism, December 1996, p. 11. Why Is PM Important To You?

41 Desired Attributes of a Global Engineer A good grasp of these engineering science fundamentals, including: Mechanics & dynamics, Math (including statistics), Physical & life sciences, Information science/technology A good understanding of the design & manufacturing process (i.e., understands engineering and industrial perspective) A multidisciplinary, systems perspective, along with a product focus A basic understanding of the context in which engineering is practiced, including: Customer & societal needs/concerns, Economics & finance, The environment & its protection, The history of technology & society Awareness of the boundaries of one’s knowledge, along with an appreciation for other areas of knowledge & their interrelatedness with one’s own expertise Awareness & appreciation of other cultures & their diversity, distinctiveness, & inherent value Commitment to teamwork, including extensive experience/understanding with team dynamics Good communication skills, including written, verbal, graphic, and listening High ethical standards (honesty, sense of personal and social responsibility, fairness, etc) An ability to think both critically and creatively, in both independent and cooperative modes Flexibility: the ability and willingness to adapt to rapid and/or major change Curiosity and the accompanying drive to learn continuously throughout one’s career An ability to impart knowledge to others [ 1] [ 1] A Manifesto for Global Engineering Education, Summary Report of the Engineering Futures Conference, January 22-23, The Boeing Company & Rensselaer Polytechnic Institute. Why Is PM Important To You?

42 Professional skills – memos, reports, directives, plans, proposals, etc. Critical element of engineering and project management –Key to project management effectiveness (90% rule) –Employers concerned about communication skills Writing Intensive Curriculum Requirement Why Writing In this Course?

43 Why Writing Intensive? ABET Criteria Criteria for Accrediting Engineering Programs –Engineering programs must demonstrate that their graduates have: –(a) ability to apply knowledge of mathematics, science, and engineering –(b) ability to design and conduct experiments, & to analyze and interpret data –(c) ability to design a system, component, or process to meet desired needs –(d) an ability to function on multi-disciplinary teams –(e) an ability to identify, formulate, and solve engineering problems –(f) an understanding of professional and ethical responsibility –(g) an ability to communicate effectively –(h) the broad education necessary to understand the impact of engineering solutions in a global and societal context –(i) a recognition of the need for, and an ability to engage in life-long learning –(j) a knowledge of contemporary issues –(k) an ability to use the techniques, skills, and modern engineering tools necessary for engineering practice. Source: ABET Criteria for Accrediting Engineering Programs. Accessed June 12, available:

44 Meeting the ABET criteria Interviewing a Practicing Engineer in your Area –(f) an understanding of professional and ethical responsibility –(g) an ability to communicate effectively Writing and Peer Reviewing a Problem-Solution Memo –(d) an ability to function on multi-disciplinary teams –(f) an understanding of professional and ethical responsibility –(g) an ability to communicate effectively Writing a Proposal in a Collaborative Team –(d) an ability to function on multi-disciplinary teams –(g) an ability to communicate effectively

45 Writing as a Process –To succeed in these assignments, you will need to think of writing as a process, not a product. –Be sure to follow the steps specified in the assignment for the purposes of this course. As you write in your career, you can find ways to adapt this basic process to the needs in your organization. - Your writing assignments are graded pass/fail based on whether you: * follow the writing process * apply the writing process effectively to your subject

46 Critical element of project management –economics used in making decisions related to engineering projects –Even if you aren’t the decision maker, you will be a participant in some form –same principles are used for many other types of decisions Life skills – loans, mortgages, etc. FE, PE Exam Why Engineering Economics?

47 Is a 3-year payback on your project sufficient to meet company objectives? If you have competing repeatable projects with different lives, you can use the lowest common multiple of their project lives as the period of analysis…True or False? You just heard through the grapevine that the company is changing the way it handles depreciation expense. You shouldn’t worry about how that will affect how your project is accepted…True or False? (FE exam problem) A bank uses the following formula to compound interest in a passbook savings account F = P (1 + i/4)4n. Interest is stated as an annual rate. How are they compounding? (1) Daily, (2) Weekly, (3) Monthly, (4) Quarterly, (5) Annually Engineering Econ - Examples

48 Earlier, we saw these definitions: Project Management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. (PMBOK, 2000) Project management focuses on a project. Management, bringing together and optimizing the resources necessary to successfully complete the project. These resources include the skills, talents, and cooperative efforts of a team of people; facilities, tools and equipment; information, systems and techniques; and money. (Haynes, 1989) What Is Project Management? So, if Project Management (PM) “focuses on a project,” what is a project?

49 “A temporary endeavor undertaken to create a unique product or service” A Guide to the Project Management Body of Knowledge, Project Management Institute What Is A Project? A project is a one-time, multitask job with a definite starting point, definite ending point, a clearly defined scope of work, a budget, and (usually) a temporary team. Lewis (2000). … a combination of human and nonhuman sources pulled together in a temporary organization to achieve a specified purpose. (Cleland and Kerzner, 1985; Nicholas, 1990)

50 Characteristics Of A Project? Temporary, with specific endpoint Unique Specific Deliverable Specific Spending Limit (Typically) Involve groups, across organizational lines Element of Risk

51 TRIPLE CONSTRAINT Defining a Project - Old

52 Budget = Cost Schedule = Time Performance = Itself Client Acceptance a.k.a Customer Satisfaction Defining a Project – Current QUADRUPLE CONSTRAINT

53 Science –Tools-based –Process-based –Some things are essentially same across projects & time Art –Relies on Heuristics (Rules of Thumb) –Many aspects not consistent across time or projects –Critical decisions require experience basis Is PM Art, Science, or Both?

54 Fundamental tools for the new generation of engineers and project managers… Basic Thinking (Occam’s Razor) Systems/ systems thinking/ systems engineering Models Teamwork Quality Fundamental Tools

55 Customer Request Planning Execution Closure customerinternal PM Process at the High-Level

56 The PM Process – Detail Level SOWProject Charter Requirements Document WBS Network Diagram Duration EstimationResource Assignment ScheduleBudget Stakeholder Analysis Critical Path Assessment Comm PlanQuality Plan Admin Plan Project Plan customerinternal

57 Predictors of Lowered Project Success Unrealistic project work plans Inability to deal early with suspected problem issues Technical complexities not well communicated to team members Conflict between client expectations and the state of deliverables Insufficient involvement on the part of senior management early in the life cycle

58 Project Management Function 1Function 2Function n Other Project

59 Program Management Project 1Project 2Project n Other Program Function 1Function 2Function n Other

60 Wild enthusiasm Disillusionment Total confusion Search for the guilty Punishment of the innocent Praise and honors for the non-participants It’s only funny because it’s so true… Project Life Cycle

61 Feasibility, Planning/Design, Construction, Turnover/Startup Project Life Cycle

62

63 Early: ensure project is defined correctly to: –Meet the needs of the client –Fit the abilities of the team –Be consistent with goals, objectives, values of the firm –Speculation Middle: keeping project “on” triple constraint targets, negotiating project trade-offs End: “Punch list” mentality…ensuring everything is done and done correctly PM Attention/Methods over PLC

64 Planning Organizing Staffing Directing Controlling PM’s Role Over PLC

65 Planning Establish project objectives and performance requirements Involve key participants in the process Establish well-defined milestones with deadlines Build in contingencies to allow for unforeseen problems Prepare formal agreements to deal with changes Clearly define responsibilities, schedules, and budgets 1 Oberlender, G.D Project management for engineering and construction. New York: McGraw-Hill. PM Role Over PLC - Planning

66 Organizing Develop a WBS that divides project into units of work Create a project organization chart Clearly define responsibilities, schedules, and budgets Staffing Select team members using work requirements and input from appropriate managers’ input Orient team members to overall project Seek each team members’ input to define & agree upon scope, budget, and schedule Set specific performance expectations with each team member PM Role Over PLC – Organizing/Staffing

67 Directing Coordinate all project components Display positive attitude Be available to team members Investigate potential problems as soon as they arise Research and allocate necessary resources Recognize good work of team members & guide necessary improvement Controlling Measure project performance using record of planned & completed work Chart planned and completed milestones chart Chart monthly project costs Document agreements, meetings, telephone conversations Communicate regularly with team members PM Role Over PLC – Directing/Controlling

68 The PM Process – Planning Detail SOWProject Charter Requirements Document WBS Network Diagram Duration EstimationResource Assignment ScheduleBudget Stakeholder Analysis Critical Path Assessment Comm PlanQuality Plan Admin Plan Project Plan customerinternal

69 SOW – what the customer wants Charter – turns the project “ON”, identifies project rules Requirements Doc – Details of the customer “wants” WBS – breaks work into manageable “packages” Stakeholder Analysis – identifies who can impact project Network Diagram – identifies dependencies of tasks Duration Estimation – estimates task length Critical Path Assessment – finds the longest schedule Resource Assignment – assigning the right people to tasks Schedule – ND + Duration Estimates + Resources Communication Plan – who needs to know what, when, how Budget – based on estimates, how many & for project Quality Plan – how quality of project output will be ensured Admin Plan – how mundane aspects of the project will be handled Project Plan – single location of most of the above (and more) The Process Steps - Overview

70 What it takes to be successful PM Relentless Planning Vision Servant Leadership Approach Delegation Communication Support Optimism Tenacity Balance Listening Accountability

71 PM: A Different Way of Thinking Required PM (indeed, management in general) requires a different way of thinking that most engineers are taught to use. YOU have to figure out how to make the transition. The good thing is that the shift is not as difficult as it might first seem.

72 Where Do Projects Come From? It is not only all about the customer… It all starts with the customer! Customer’s need Internal vs external customer

73 Where Do Projects Come From? So how does the customer tell the “do-er” what is needed (and constraints)? The Statement of Work (SOW)

74 What is the purpose of an SOW? Is an SOW created before or after charter? Who is accountable for creating the SOW? What are the “typical” contents of a SOW? Narrative description of the work/deliverables required for the project contract Before OR After…depends on type of project and who the “vendor” is The “customer” who requires the final output Statement of Work (SOW) User-level requirements

75 Constraints –Procedural –Methodology –Materials Documentation Rules –What documentation is required Testing results Manufacturers’ literature Samples Product data Color selections Etc. –When documentation is required –Format required for documentation SOW

76 There is no “official standard version” of an SOW An example (paper airplane) Statement of Work (SOW)

77 Where Do Projects Come From? 1.Every project a company executes either contributes to that company's success of that company's failure. There is no in-between. A project that "does no harm" uses resources that could be better spent on a project that contributes to the company's objectives 2.All projects are not created equal. Every project contributes differently. In is not in the company's best interests to treat projects equally. 3.There are more good projects than there are resources with which to accomplish them. The corollary is "you can not do them all." Many foolish companies try to do too much and the result of this is poor quality, missed dates, cost overruns, and dissatisfied customers. 4.Not all projects contribute to all corporate objectives. It would be nice if everything we did contributed to every company objective, but the do not and will not. It is acceptable to have a project that does not contribute to one or more company objectives. It is even acceptable from time to time to have a project that actually goes against an objective!

78 Case Study Used In Course The Situation: The Avanti Motors Corporation of Norcross, GA, has begun production of the Studebaker XUV and needs a new parts warehouse (depot) in the midwest. They’ve chosen Bloomington, MN, have purchased the land, and have solicited bids. Your company (your group) submitted a bid and won. Further Definition To Be Available In: SOW Homework Instructions

79 Case Study Used In Course Statement Of Work Parts Depot 333 W 78th St Bloomington, MN Avanti Motor Corporation of America Inglewilde Dr Norcross, Georgia Mark Ross, Customer Representative

80 Case Study Used In Course 1.General Requirements Not Applicable 2.Site work 2.1 Excavation Flat and compacted to support slab foundation and building 2.2 Landscaping Turf 3.Concrete 3.1 Footing and Slab Poured, reinforced concrete 3.2 Parking lot and street edging Curb and gutter 3.3 Walls Precast, reinforced concrete

81 Typical Project Documents Request For Information (RFI) A memo requesting specific information from someone Transmittal A memo that introduces/outlines/explains the material being sent (much like a fax cover sheet)

82 1.Genuinely and sincerely thank at least one person who performs routine cleaning maintenance on a building in which you work or live. Doing this activity in person is strongly recommended. If you choose to do this activity other than in person, you must include a copy of any correspondence you use to accomplish it. You must provide the name of this person and the building in which s/he works. You must also provide me with some way of remotely contacting this person (phone number or address preferred). Submit via hardcopy Submit in next class (no late homework accepted) Your signature must be on the submitted version Homework 1

83 2. Find 2 examples of SOWs to study and submit as part of the assignment. Answer the following questions: What is the expected outcome required by each SOW (describe briefly)? Were the formats similar? If not, what were some of the major differences between them? Was the content of each similar even if the formats were not? What were some of the similar content items? What were some of the different content items? Who (organization) wrote each SOW? Who was the SOW being given to do the work to develop the expected outcome (if you can tell)? Submit by hardcopy a copy of each SOW and the answers to the questions. Submit in next class (no late homework accepted) Homework 1

84 What is the purpose of an SOW? Who is accountable for creating the SOW? What are the “typical” contents of a SOW? Narrative description of the work/deliverables required for the project contract The “customer” who requires the final output Statement of Work (SOW) User-level requirements

85 What is a User-Level Requirement? – I (the customer) want the output to do x – I (the customer) want the output to be like y User-Level Requirements How is a User-Level Requirement different than other requirements? – Focus on the need rather than the how need fulfilled – Often less detailed than requirements used to design/develop output

86 Who is accountable for creating project charter? The Project Charter – There is a project (formal authorization) – The project’s output will be “x” (product description) – The business need fulfilled by the project is “y” – The project manager will be – The project manager has accountability & responsibility – The project will have listed constraints & assumptions – The Project Sponsor What does charter tell the project team & others?

87 Break into support groups In 10 minutes, create a project charter for the paper airplane project If you have a question the answer to which all groups might need to know, please ask it Turn in a copy of the charter with all group members’ names affixed Project Charter

88 Detailed description of the external perceptions of the desired outcome of project (triple constraint…transforming into quadruple constraint) Can be several “levels” or “layers” of requirements, each with successive levels of detailed (recommended) or tailored to a different audience (be careful). One of most reliable methods of ensuring project success is to have (& widely communicate) correctly & fully documented requirements Requirements

89 Need to be clear, complete, reasonably detailed, cohesive, attainable, and testable Take care to involve as many of a project’s stakeholders in requirements development as feasible. Anyone who could later derail the project should her/his expectations not be met should be included as a customer here. Quality Function Deployment (QFD) is a good tool for requirements development if you have available time to use it Requirements

90 Will: Shall: Should: Requirements Semantics Used to indicate a factual statement or assumption “This class will end” “This class will end on time” Used to direct mandatory action “The student shall complete the homework” Synonyms include must, required to, necessary to Used to request non-mandatory work “The student should purchase supplementary reading materials”

91 Your design/build firm has been contracted to act as general contractor design and install a new parts depot at 333 W 78th St in Bloomington, MN for the Avanti Corporation of America. The company is based in Norcross, GA and has just launched the Studebaker XUV into the American automobile market. It also currently sells two models of the Avanti sports car originally introduced in 1963 by the original Studebaker Corporation of South Bend, IN. At the initial meeting with your team, the client told you that it already has chosen the site. The rough particulars of site and building are: Facility to be used for automobile parts (14,000 parts) warehousing & some light assembly 100,000 total square feet – 200’ x 500’ (lot size is 500’ x 1000’, details as attached) One story Steel frame Concrete pre-fabricated exterior Steel stud & drywall interior Two closed offices (each 15’ x 15’) One conference room (20’ x 20’) Lunch room (20’ x 20’) Restrooms (1 each for male and female) Loading dock (2 delivery stalls) Air conditioning & heating plant required to support entire space Security & fire suppression systems required to support entire space On-site parking required – 2 visitor spaces, 5 employee spaces Statement of Work (SOW)

92 Break into support groups In 5 minutes, create as detailed an SOW as possible for building a 3-car residential garage Statement of Work (SOW)

93 Project Evaluation Criteria These are the measurements which the Project Manager (and hopefully others) will use to judge whether the project has been successful: –Along the way –When the project is complete Why is this important? If you have: –a car that gets 30 mpg, –10 gallons of gas in the car –$50 for $2/gallon –One day How far could you go? To what city could you get?

94 Project Evaluation Criteria To be manageable, criteria must originate from project goals & objectives (there is an important difference between those concepts, by the way) –Goal –Objective From where do the goals and objectives – and then eval criteria - come? What manageable targets should the evaluation criteria cover? (hint: TC) Do they need to be approved once they’ve been identified? If so, by whom?

95 PM gather personnel on the internal team Meet to discuss the initial requirements- generation part of the project (a mini-project of its own, for the most part) –Establish objectives –Review the process to be followed –Determine the information to be obtained –Establish team member data-gathering/other roles to perform Small Team Kickoff Meeting

96 What’s the difference? –Goal: very broad in scope, only the final outcome measurable –Objective: a clearly measurable outcome, typically related to triple/quadruple constraint –Task: A specific, measurable activity required to accomplish the objective(s) Determining which is which is often as much art as science Goals, Objectives (and Tasks)

97 Requirements are the detailed description of the external perceptions of the desired outcome of the project (triple constraint…transforming into quadruple constraint) Requirements need to be clear, complete, reasonably detailed, cohesive, attainable, and testable Defining Requirements

98 One of the most reliable methods of ensuring project success is to have (and widely communicate) correctly and fully documented requirements Take care to involve as many of a project’s stakeholders in requirements development as feasible. Anyone who could later derail the project should her/his expectations not be met should be included as a customer here. Quality Function Deployment (QFD) Defining Requirements

99 Project Planning Project Planning is Extremely ITERATIVE Why? Because projects are progressively elaborated! Concept Note: Rolling Wave Planning

100 SOW, Requirements Documents, and charter (and other documents) “talk to each other” Acceptance Criteria – how will the customer/you know when the project is done? Reflective Listening

101 Requirements Analysis/Agreement Review SOW, specs, drawings for completeness Document issues in Requests For Information (RFI) Get customer addendums and do it all again until you’re satisfied

102 SOW says: “3.0 No more than three folds” Requirements Document (Rdoc) says: “Requirement 3.0: No more than three folds 3.1 Direction of folds not specified 3.2 That any/all folds must be in parallel direction not specified 3.3 That folds must be all in same direction not specified ” From where did the Rdoc get the added detail? Reflective Listening Example

103 Differentiated by: –Whether PM coordination is vertical or horizontal –How much authority a PM has On a linear continuum from functional to projectized –Functional: silos, staff reports to a mgr, PM reports to a mgr –Matrix: staff report to both mgr and PM Weak Matrix Balanced Matrix Strong Matrix –Composite: same as matrix, but there is a “functional” PM group –Projectized: everyone reports to a PM (but…) –Mixed: Some projectized, some matrix Important because it affects how a PM manages Organization Types

104 Project control CEO EngineeringManufacturingHuman Resources Finance Staff Organization Types - Functional

105 Advantages –technological depth –High degree of standardization and control in each silo Drawbacks –lines of communication outside functional department slow –technological breadth –project rarely given high priority Organization Types - Functional

106 Project control CEO EngineeringManufacturingHuman Resources Finance Staff In a Balanced Matrix, one staff is replaced by a PM In a Composite Matrix, PM has its own functional organization Organization Types - Matrix

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

108 Project control CEO PM 1PM 2PM 3PM 4 Staff There is likely to be a separate network of functional managers A Mixed Organization is a mix of projectized, matrix/functional Organization Types - Projectized

109 Advantages –Effective and efficient for large projects –Resources available as needed –Broad range of specialists –short lines of communication Drawbacks –May require high levels of duplication for some specialties –Expensive for small projects –Specialists may have limited technological depth –No “home” for staff at end of project Organization Types - Projectized

110 Project Management Office (PMO) –Not very standard in objective/work –May be responsible for providing support functions (project coordination, other admin functions), to providing “process ownership” and training, to actually being responsible for project results Sometimes known by other names –Project Management Process Group –Project Management Center Of Excellence Organization Types - PMO

111 FunctionalWeak MatrixBalanced Matrix Strong MatrixProjectized PM Authority Little/NoneLimitedLow/ModerateModerate/HighHigh/Total % assigned personnel full-time on project work Virtually None0-25%15-60%50-95%85-100% PM Role Part-time Full-time Common PM Titles Project Coordinator/ Project Leader Project Manager/ Project Officer Project Manager/ Program Manager PM Admin Staff Part-time, if any Full-time Project Management Institute, 2000, PMBOK, p. 19 Organization Types - Summary

112 Organization types typically evolve, rather than get “selected” Some factors influencing the evolution 1.Technology 2.Finance and accounting 3.Communication 4.Responsibility to a project/product 5.Coordination 6.Customer relations Organization Types - Selection

113 Why would an organization choose functional form over projectized form? Why would an organization choose strong matrix from the matrix options? Organization Types - Selection

114 Once the SOW and charter are available, PM begins the process of creating the Project Plan. The Project Plan is a document that essentially: Helps organize the project planning process Helps communicate project planning information Puts all project planning information into one, easily-obtained location Why is is important to have a PM process? Project Plan

115 Overview –brief description of project –deliverables –milestones –expected profitability and competitive impact –intended for senior management Objectives –detailed description of project’s deliverables –project mission statement General Approach –technical and managerial approaches –relationship to other projects –deviations from standard practices Contractual Aspects –agreements with clients and third parties –reporting requirements –technical specifications –project review dates Elements of a Project Plan

116 Project Plan Now that you know what a Project Plan is, is for, and what specific concept areas make up its contents, we’re going to move on. Keep those concepts in mind, however, as we move along. The tools you learn during the next few weeks feed the Project Plan (they become the contents).

117 What is a WBS? –deliverable-oriented grouping of project components that organizes and defines the total scope of the project What is a DELIVERABLE? Work Breakdown Structure

118 What a WBS does: –Break the work down into smaller, more manageable parts (what does “more manageable” mean?) –Clearly/visually show the full scope of the project Work not in the WBS is OUTSIDE scope of the project Aids development/confirmation of common scope definition/understanding Work Breakdown Structure

119 Break down the project level either by functional area/activity or by timeline area/activity (Gozinto Analysis) Can be graphical or numbered text (outline) format Each descending level represents an increasingly detailed description of project deliverables Work Breakdown Structure

120 How to create it: –Break the work down (decompose the work) into smaller, more manageable parts (Identify deliverables) Until sub/deliverables are defined in sufficient detail to support mgmt (can adequate duration & cost estimates be developed?) Each descending level represents an increasingly detailed description of project deliverables ID tangible, verifiable constituent components of deliverables (to facilitate performance measurement) Verify correctness of the decomposition Work Breakdown Structure

121 The following activities must be accomplished to complete an office remodeling project: Activity Estimated Duration (Days) Procure Paint 2 Procure New Carpet 5 Procure New Furniture 7 Remove Old Furniture 1 Remove Old Carpet 1 Scrub Walls 1 Paint Walls 2 Install New Carpet 1 Move in New Furniture 1 Create a WBS using this information WBS Exercise

122 1.0 Office Remodel Project 1.1 Procure Procure Paint Procure New Carpet Request Bids Purchase Receive Carpet Procure New Furniture 1.2 Prepare Remove Old Furniture Remove Old Carpet Scrub Walls 1.3 Install Paint Walls Install New Carpet Move in New Furniture WBS Exercise 1. Create a WBS 2. Is this (at right) organized by project life cycle phase or by function? 3. What would happen when decomposing deliverables far in the future?

123 WBS Exercise 1.0 Office Remodel Project 1.1 Procure1.2 Prepare1.3 Install Procure Paint Procure New Furniture Procure New Carpet Request Bids Purchase Receive Carpet Remove Old Furniture Scrub Walls Remove Old Carpet Paint Walls Move In New Furniture Install New Carpet

124 Ok, up to now you’ve learned to: 1.Receive the customer specification 2.Officially start the project 3.Get the requirements right 4.Figure out who the project stakeholders are and what they want 5.Break the work down So now what? Network Diagrams  Put the work into a flow/logical sequence  Identify and assign resources  Create a schedule plan

125 How does PM put activities in logical order? –Activities progressively dependent upon each other –Start at the project end and work backward –Start at the project start and work forward Purpose –Gives schematic display of the logic relationships of project activities Note: Sequence order – NOT time order –Helps find which activities most important according to current plan Network Diagrams

126 The Language of Network Diagrams: –Task: specific work items that require resources –Activity: Synonymous with task, but may also be task groups –Event: Zero-time, zero-resource state resulting from completion of one or more predecessor activities –Milestone: Zero-time, zero-resource marking point (significant progress, etc) –Network: Diagram of nodes & lines (arrows) showing work flow logic –Path: Series of connected activities between 2 or more nodes Network Diagrams

127 Dependencies –Finish-Start: successor can’t start until predecessor finishes –Finish-Finish: successor cannot finish until predecessor finishes –Start-Start: successor can’t start until predecessor starts –Start-Finish: successor can’t finish until predecessor starts AON vs AOA –AON = Activity on Node (Precedence Diagramming – PDM) –AOA = Activity on Arrow (Arrow Diagramming – ADM) Network Diagrams

128 Network Diagram Example - AON

129 Network Diagram Example - AOA

130 It really ISN’T project planning, but… –It is what is often done in practical settings –It is network diagramming –It leads to the initial stages of scheduling How To: –Group (project team) activity –One task per sticky note Task name Task description Estimated duration (see estimating duration) –Arrange sticky notes in network diagram form –Draw/string arrows to indicate dependencies –Rearrange, add tasks as required Sticky Note Project Planning

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132 The following activities must be accomplished to complete an office remodeling project: Activity Estimated Duration (Days) Procure Paint 2 Procure New Carpet 5 Procure New Furniture 7 Remove Old Furniture 1 Remove Old Carpet 1 Scrub Walls 1 Paint Walls 2 Install New Carpet 1 Move in New Furniture 1 Network Diagram Example

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134 Estimating Activity Duration THE WORK: Tim shall walk across the room, turning off the projector along the way, & then write “The Instructor Is Only As Good As His or Her Students” on the chalkboard YOUR TASK: A) Individually estimate (write it) how long (seconds) the work will take (30 seconds) B) In Groups, estimate (write it) how long the work will take (3 minutes) How did your individual estimates compare to group estimates? Why? What strategies did you use to derive the estimates? Consistency of estimate…

135 1.Heuristic: Activity length between 0.5% and 2% of project duration. E.G. If an activity takes a year, each activity should be between a day and a week. 2.Critical activities that fall below this range should be included. 3.If the number of activities is very large (say, above 250), consider dividing the project into subprojects, and individual schedules developed for each. Why? Estimating Activity Duration

136 A next step beyond WBS for process of assignment of resources Must have a good “catalog” or “database” of resource capabilities Use functional managers to assign resources Responsibility Assignment

137 CPM = Critical Path Method -Method used to determine the longest time for the project to take according to plan Critical Path –Path that, if delayed, will delay completion of project –The series of activities that determines project duration –The longest path through the project –Change in start or finish time of a critical task will affect project end Critical Time –Time required to complete all activities on the critical path Network Diagrams - CPM

138 Calculate float to determine which activities have the least scheduling flexibility Float = amount of time a task may be delayed without impacting project finish date (a/k/a total slack) Visual Method: –Find EVERY path –Add each path –Longest path is critical path Network Diagrams - CPM

139 CPM Example Find the critical path and the critical time

140 Bus Shelter Construction Example Job Name Duration Resources Predecessor(s) 1 Shelter Slab Shelter Walls Shelter Roof 2 2 2,4 4 Roof Beam Excavation Curb and Gutter Shelter Seat 12 4,6 8 Paint Signwork 12 2,6 CPM - Practice

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143 Since critical path activities cannot be delayed without causing the project to be delayed, it follows that activities not on the critical path CAN be delayed without delaying the project. Slack BUT – only within limits.

144 Critical Path activities have 0 slack The amount of time a non-critical path task may be delayed without delaying the project end (or internally to the network, a later task) is called slack or float. Slack Task 1 Task 2 Task 3 Star t End 3 3 3

145 Calculated by: LST – EST = LFT – EFT = slack Where: LST = Latest Start Time EST = Earliest Start Time LFT = Latest Finish Time EFT = Earliest Finish Time Slack Task LSTLFT EFTEST Displayed by: STARTSTART Task ATask B Task C ENDEND Forward Pass Backward Pass Number Convention

146 PERT = Program Evaluation Review Technique Formula calculation using std dev of project completion date using weighted averages of the durations Uses 3 input estimates of duration to counter uncertainty in the individual activity durations (CPM only uses 1) –Low duration (fastest likely) –Medium duration (most likely) –High duration (longest likely) PERT

147 Sometimes called “Method of Moments” Network Diagrams often mistakenly called PERT Charts Examples of projects in which PERT is good? PERT

148 Network Diagrams - PERT MS Project PERT representation

149 Questions Knowing what you have learned up to this point in the course: What are some likely things that can cause project failure? (Impact, Probability) What are some things you can try as PM to overcome the possible, typical causes of project failure?

150 What is scheduling? Bringing together as much information as is known at a given time regarding tasks, tasks sequence, and task durations Scheduling

151 What is the purpose of scheduling? –Helps PM/Team determine project task order, time requirements, personnel requirements/choices, budget, etc. –“Whole project” big picture –Visual representation –“One Stop” Convenience –Monitor/Control What If? Analysis Risk ID/Assessment Scheduling

152 How is scheduling done? –What do we know already? – What do we need to find out? – How should we go about getting that info? Scheduling

153 What do we know already? – Activities Identified (WBS) – Activities Sequenced (Network diagram) Scheduling

154 What do we need to find out? – Estimates of how long the tasks will take How should we go about getting the info? –Personnel assignments –Expert input –Historical information Can/should PM do this on her/his own? Scheduling

155 Who/What else could/should be involved? –Impacted by Organizational Structure –Functional Managers? –Expert Staff? –Resource skills database? –Other PMs? –Historical records? Resource Planning

156 At what level should PM’s schedule be? –Top-down estimation –Bottom-up estimation How do you think the organizational structure of the company affects this effort? Scheduling

157 A next step beyond WBS for process of assignment of resources Must have a good “catalog” or “database” of resource capabilities Use functional managers to assign resources Responsibility Assignment

158 Used as a high-level summary Typically Zero-Time Events Easier to understand for managers Sometimes also called Waterfall Diagram because of the way the milestones tend to “flow” downward over time in the chart Milestones may be events “inside” or “outside” schedule Milestone Chart

159 Class start Exam 2 Exam 3 Grades posted Exam 1 JanFebMarMayApr CE 4101W-01: Spr 2005

160 Milestone Chart Class start Exam 2 Exam 3 Grades posted Exam 1 SepOctNovJanDec CE 4101W-01: Fall /4 10/7 11/4 12/9 12/19 Labor Day 9/3

161 Break into support groups 5 minutes Using the course syllabus, create a milestone chart of the course assignments and exams Milestone Chart - Example

162 Gantt Chart Used to represent the timing of tasks Column 1 = task, each additional column is a time period Each task on its own row Expected time for each task represented by a horizontal bar < Left end of the bar marks the expected beginning of the task > Right end of the bar marks the expected end of the task Tasks may run sequentially, in parallel, or overlapping Milestones (tasks with no time) may be included (represented by diamonds, triangles, etc)

163 Gantt Schedules Task 1 Task 3 Task 4 Task 5 Task 2 t1t2t3 10/7

164 Gantt Schedules Task 1 Task 3 Task 4 Task 5 Task 2 t1t2t3 Project progress is marked by filling in a task bar 75% 10/7

165 Modified Gantt Chart Possible Modifications: Show dependencies (this example) Show resource assignments Task roll-ups (this example)

166 Modified Gantt Chart Better way to do task ID notation

167 Draw two network diagrams (AON, AOA) Determine the critical path (CPM) Scheduling - Practice Draw a Gantt AND a Modified Gantt chart Break into support groups…In 10 minutes:

168 Scheduling Computer Tools Which ones are there? Microsoft Project ABT Project Manager Workbench Primavera Tools (SureTrak, Expedition, etc) MS-Office tools (Exel, Word, Access, etc) What are they good for? Automation of tasks Handling large numbers of tasks Resource leveling “Any form of network analysis in which scheduling decisions are driven by resource management concerns (e.g. limited resource availability or difficult to manage changes in resource levels).” Resource Histogram AMS RealTime Scitor Project Scheduler Artemis Many Others Power to handle complex tasks “What if” Analysis

169 Example Schedule in Microsoft Project Use information from previous exercise Scheduling Computer Tools

170 Project Calendars Project Scheduling Tools have the option of setting project calendars –Number of hours/workday –Number of workdays/week –Default setting is *usually* 7 8-hour days/week

171 Project Calendars 1.Why is it important to set your calendar for the correct days of the week, correct hours per day, and correct holidays? 2.How should overtime be factored into the project (tool) calendar?

172 Theory Of Constraints What is it (TOC)? Real systems must have at least one constraint – a factor that limits the system from getting more of whatever it is trying to achieve To achieve more, one must manage the constraint(s) TOC models system as a chain. To improve strength of a chain, must identify weakest link & concentrate efforts on strengthening weakest link

173 Theory Of Constraints TOC Goals: Increase system throughput Reduce work in process (WIP) Decrease costs Reduce lost income by achieving schedule prediction 90+% of time

174 Theory Of Constraints Processes & Tools Problem-solving tools - the Thinking Processes (TP) – logically/systematically answer 3 questions needed for process of on- going improvement: "What to change?", "To what to change?" & "How to cause the change?"; Daily management tools - taken from Thinking Processes - can be used to significantly improve vital management skills, such as communication, effecting change, team building and empowerment Proven solutions - created by applying Thinking Processes to specific application areas, such as production (as introduced in The Goal), distribution (Its Not Luck), Marketing/Sales (Its Not Luck), project management, & setting company direction, to name only a few.

175 Theory Of Constraints How does it work? 1.Identify the System's constraints. Analyze process to identify task/activity limiting system productivity 2.Decide how to exploit the system's constraints. Modify/redesign task/activity to perform work more effectively/efficiently 3.Subordinate everything else to the step 2 decision. Direct all efforts to improving performance of constraining task/activity & other tasks/activities directly affecting constraining task/activity 4.Elevate the system's constraint. Add capacity to increase (elevate) output of constraining task/activity 5.If a constraint has been broken in previous step, go back to step 1 but do not allow inertia to cause a new constraint This sets up a process of ongoing improvement

176 Theory Of Constraints How to identify constraints? 1.Look for bottlenecks 2.Can stem from physical constraints or policy constraints Physical: Machine, people, facilities, tangible sources Easier to identify and break Policy: Rules, training, measures (RTM) More difficult to identify and break Identify possible constraints in a building project

177 Critical Chain Get realistic Commitments Eliminate multi-tasking Manage constraints Manage Uncertainty

178 Critical Chain Rules: Aggressive estimates  Planned pad hierarchy  Parkinson’s Law  Student Syndrome Include dependencies other than time in management focus No multi-tasking on critical chain Relay-runner ethic/system Report early finishes Aggregate safety (buffers) and manage to the buffers

179 Planned Pad Hierarchy Feeder Task 1 Feeder Task 2 C.C. Task 1 C.C. Task 3 Feeding Buffer C.C. Task 2 C.C. Task 4 Project Buffer End

180 Communication Planning What is Project Communication? Exchanging project-specific information from sender to recipient Communication is best done when it is: Recipient-focused Done to serve an end

181 Communication Planning What is Communications Planning? Determining the information and communications needs of the stakeholders: Who needs information? What information do they need? When will they need that information? What options do you have to give them the information and which way(s) are best?

182 Communication Planning What’s the purpose of it? How is it done? Why not just do it “on the fly” instead of early/in the project planning stages? Does it change with scale (duration, cost, complexity) of project? Other scales?

183 Communication Planning Who needs information? Do internal stakeholders need more or different information than external stakeholders? Explain…

184 Communication Planning What data/information do they need? What’s the difference between “data” and “information?”

185 Communication Planning Communication Management Plan: –Methods/procedures for info collection/storage structure –Details of data/info distribution structure for various data/info types –Description of data/info to be distributed –Schedules showing when each type of communication is anticipated to be produced –Methods for accessing data/info between scheduled communications –Methods for updating/refining the CMP over time Review PMBOK Chapter 10!

186 Communication Planning When will they need that information? –Before “event” –During “event” –After “event” –Periodically vs. ad hoc

187 Communication Planning What options do you have to give them the information and which way(s) are best? –Reports –Briefings –Status meetings – –Others?

188 Communication Planning What options do you have to give them the information and which way(s) are best? –Reports –Briefings –Status meetings – –Others?

189 Communication Planning - Example Project: Student going to school Stakeholder 123n Data/Info Needed? Main Distrib Method(s)? When Distrib? How Distrib? Methods/Procedures for info collection/storage Methods for data access between scheduled communications Methods for updating/refining CMP over time Who is responsible? When will it be done?

190 Typical Project Documents Submittal A specific artifact/item to be reviewed for approval, archived, etc. Transmittal A memo that outlines/explains submittals included with the transmittal and the actions required by the recipient

191 Typical Project Documents There are no world-wide formats for these documents. Formats will be: –Company specific –Recipient specific –Industry specific –Project specific

192 Procurement Planning Is it likely that you will be able to do all the work with internal resources? How do you decide what to outsource? How do you procure the outsourced work?

193 Procurement Planning Procurement Management Plan: Describes how procurement process – from solicitation planning through contract closeout – will be managed Types of contracts to be used If independent estimates to be used, who will prepare them and when If there is a procurement organization in your company, what actions PM/Project Team can take independently Where procurement documents can be found How each contractor will be managed How procurement processes will coordinate with other PM processes Includes your SOW to the contractor

194 Make or Buy Analysis Expert Judgment Do you have the right resources for the job? Do you have the right skills to do a quality job? Experts might include: internal experts, other units, consultants, professional and technical associations, other industry groups, etc. Opportunity Cost Analysis & Cost/Benefit Analysis Can we use internal resources more productively than this job? Lease vs. Buy Analysis

195 Opportunity Cost What is it? Why is important? A well run business or project doesn’t have a great deal of excess (i.e. unallocated) cash/other resources lying around Projects compete with one another for resources Goal is to optimize use of limited supply Requires making trade-offs The cost of making a trade-off

196 Cost/Benefit Analysis Cost Benefit Analysis is a tool to evaluate options  Is it worth spending $5000 to crash a schedule and gain 5 days?  Is it worth dropping a product feature from this software release in order to be able to achieve the baseline schedule release or would it be better to keep the feature and slip the scheduled release by 20 days? You first need to have the costs and benefits  Costs and benefits must be in a quantifiable unit (dollars, production units gained or lost, days, etc.)  Costs do NOT have to be in equivalent units to Benefits You also need to know the acceptable target tradeoff range(s) if there are absolute values (otherwise, rely on relative comparisons)  I once caught a fish this big | 

197 Buy vs. Lease Lessee: The one receiving the capital Lessor: The one who owns the capital A lease “acts like” an amortized purchase – for both lessor and lessee Why lease instead of buying? Avoid technical obsolescence Tax advantages Asset/payment flexibility Why buy instead of leasing? Possibility of salvage value + value obtained from asset use being greater than amortized cost Tax advantages

198 Main Types of Contract Firm Fixed Price Buyer pays seller a set amount regardless of seller costs Fixed Price Incentive Fee Buyer pays seller a set amount & seller can earn additional fee if performance criteria are met Cost Plus Fixed Fee Buyer reimburses seller costs plus a fixed profit fee Cost Plus Incentive Fee Buyer reimburses seller costs & seller earns profit if performance criteria met Time & Material (T&M) “Hybrid” of cost reimbursement and fixed fee Purchase Order Who has the risks in each type?

199 Solicitation 1.Send bid/proposal request documents to prospective vendors oPresumes you have a sufficient list of applicable vendors oDistribution may be direct, via bidder conference, via advertising, etc. oBid & Quote used when selection based on price oProposal used when other than price (tech skills, etc) paramount oRequest for Bid (RFB), Invitation to Bid (IFB) oRequest for Quote (RFQ), Invitation to Quote (IFQ) oRequest for Proposal (RFP), Invitation for Proposal (IFP) oInclude SOW, description of required response/response format, explanation of pro forma contract terms and agreement structure

200 Solicitation 2.Obtain bids/proposals from sellers 3.Evaluate bids/proposals & cycle thru SOW updates 4.Select bidder (based on criteria), negotiate, & award contract

201 Contracts You are the owner of a small excavation contracting business that has a multi-year T&M contract with a customer. The contract specifies the rate of pay for personnel types on the project. 1.Qualify the risks you face related to management of the contract. 2.Qualify the risks the buyer faces.

202 What does the word “quality” mean? –Features and functionality Scope requirements filled and working properly Conformance to specification or design –Fitness for use Degree of excellence at an acceptable price Control of variability at an acceptable cost How well the product fits patterns of user preferences Why is it important for the PM to focus on quality? –Driver of customer satisfaction: Triple/Quadruple Constraint Time (schedule) Cost (budget) Performance (specifications/quality) Quality For Project Managers

203 What is the cost of quality?  Prevention costs – costs incurred to prevent failure and minimize appraisal costs  Appraisal costs – discovering the condition of the process or product  Internal Failure costs – costs due to raw materials, WIP, or finished goods not being manufactured right 1st time  External Failure costs – costs from customer discovering a lack of product quality Quality For Project Managers

204 Management’s Role:  Ask questions: oWhat is next? oWhat can I do?  Preach  Teach  Be an example  Provide resources  Seek never-ending improvement  Follow Deming’s 14 points It is the PM’s role to be a leader of quality in your projects Quality For Project Managers

205 Quality Systems  TQM (Kaizen/Continuous Improvement)  Six Sigma  ISO standards  Quality Circles  Minnesota Quality Award  Baldrige Award  Deming Prize Quality Systems You Can Use

206 TQM (Total Quality Management) –Objective: Improve quality by analyzing the whole “production process” using quantitative and qualitative information –Method: Clear, visible leadership from top Ensure that the system is ‘known’ Use statistical measurements to monitor the system Use statistical measurements to make changes only when needed and relatively predictable Use statistical measurements to monitor the changes (PLAN, DO, CHECK, ANALYZE) Total Quality Management

207 1.Create constancy of purpose toward improvement 2.Adopt the new philosophy 3.Cease dependence on inspection. 4.Minimize total costs 5.Constant and perpetual improvement 6.Institute training 7.Institute leadership 8.Drive out fear 9.Break down internal barriers 10.Eliminate slogans, targets etc. 11.Eliminate management by objective 12.Remove barriers 13.Institute program of education and self-improvement. 14.Everybody’s job is to accomplish the transition. - W. Edwards Deming Fourteen Points of Quality

208 1.Lack of constancy of purpose to improve products & services by providing resources for long-term planning, for research, & for training 2.An emphasis on short-term profits & quarterly dividend 3.Individual performance evaluations through merit ratings & annual reviews 4.Managers who are highly mobile & hop from company to company 5.Management use of numbers & figures that are visible & available with no thought of info that may be needed, but unknown or hidden 6.Excessive medical costs 7.Excessive legal liability costs, which can be swelled by lawyers who work on “contingency” fees Deming’s 7 Deadly Diseases

209 Four Basic Principles 1.Develop a Strong Customer Focus 2.Continually Improve All Processes Identify Them Improve Them (Plan, Do Check, Act) 3.Involve Employees 4.Mobilize Both Data & Team Knowledge to Improve Decision Making (The Memory Jogger: A Pocket Guide of Tools for Continuous Improvement and Effective Planning) Continuous Quality Improvement

210 Six Sigma –Objective: A comprehensive and flexible system for achieving, sustaining, and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes. Encompasses a broad array of business best practices and skills (some advanced, some common sense) that are essential ingredients for success and growth. Applicable to all types of organizations As much about people excellence as technical excellence –Method: There are many “Six Sigma Ways.” – there is no fixed prescription Sort of a culmination/combination of various other systems Six Sigma

211 1.A genuine focus on the customer 2.Data- and fact-driven management 3.Process focus, management & improvement as an engine for growth & success 4.Proactive management 5.Boundaryless collaboration 6.A drive for perfection, and yet a tolerance for failure Six Sigma – Essential Themes

212 Mc-Graw Hill, 2000 Six Sigma

213 1.Identify core processes & key customers 2. Define customer Requirements 3. Measure current Performance 4. Prioritize, analyze & implement improvements 5. Expand & integrate six sigma system DMAIC: Define, Measure, Analyze, Improve, Control Six Sigma Roadmap

214 Continuous Improvement Process Design/Redesign Analysis of Variance Balanced Scorecard Voice of the Customer Creative Thinking Design of Experiments Process Management Statistical Process Control Six Sigma – Methods/Tools

215 –ISO standards (900x, 1400x, etc.) –Objective: Improve processes & reduce process variation –Method: “Tell me what you’re going to do. Do it. Show me that you did it.” Set requirements for process performance in various operational areas Company establishes process to comply with the ISO specifications Registrar evaluates company ISO system ISO system meets/exceeds ISO standard, company is “certified”/”registered” ISO system does not meet/exceed, company goes back to previous step Company uses periodic audits to validate process validity and adherence Internal External (registrar) Failures found during audits must be dealt with via a process established as part of the company’s ISO system ISO Standards

216 –Objective: Improve product quality by soliciting group input from workers (and sometimes customers and/or users) in order to improve product process, features, etc. –Method: Bring teams together to brainstorm solutions to a problem, then implement the ones that seem logical, are generally desirable, and are economically feasible and see what happens. Quality Circles

217 Quality Tools  Inspection  Benchmarking  Process flowcharting  Run chart  Histogram  Scatter diagram  Ishikawa Diagram  Pareto analysis  Fault-tree analysis/FMEA  Control Charts (X-bar, R)  Auditing  Simulation (Monte Carlo, What-if)  QFD Quality Tools

218 Procurement Planning Is it likely that you will be able to do all the work with internal resources? How do you decide what to outsource? How do you procure the outsourced work?

219 Procurement Planning Procurement Management Plan: Describes how procurement process – from solicitation planning through contract closeout – will be managed Types of contracts to be used If independent estimates to be used, who will prepare them and when If there is a procurement organization in your company, what actions PM/Project Team can take independently Where procurement documents can be found How each contractor will be managed How procurement processes will coordinate with other PM processes Includes your SOW to the contractor

220 Make or Buy Analysis Expert Judgment Do you have the right resources for the job? Do you have the right skills to do a quality job? Experts might include: internal experts, other units, consultants, professional and technical associations, other industry groups, etc. Opportunity Cost Analysis & Cost/Benefit Analysis Can we use internal resources more productively than this job? Lease vs. Buy Analysis

221 Opportunity Cost What is it? Why is important? A well run business or project doesn’t have a great deal of excess (i.e. unallocated) cash/other resources lying around Projects compete with one another for resources Goal is to optimize use of limited supply Requires making trade-offs The cost of making a trade-off

222 Cost/Benefit Analysis Cost Benefit Analysis is a tool to evaluate options  Is it worth spending $5000 to crash a schedule and gain 5 days?  Is it worth dropping a product feature from this software release in order to be able to achieve the baseline schedule release or would it be better to keep the feature and slip the scheduled release by 20 days? You first need to have the costs and benefits  Costs and benefits must be in a quantifiable unit (dollars, production units gained or lost, days, etc.)  Costs do NOT have to be in equivalent units to Benefits You also need to know the acceptable target tradeoff range(s) if there are absolute values (otherwise, rely on relative comparisons)  I once caught a fish this big | 

223 Buy vs. Lease Lessee: The one receiving the capital Lessor: The one who owns the capital A lease “acts like” an amortized purchase – for both lessor and lessee Why lease instead of buying? Avoid technical obsolescence Tax advantages Asset/payment flexibility Why buy instead of leasing? Possibility of salvage value + value obtained from asset use being greater than amortized cost Tax advantages

224 Main Types of Contract Firm Fixed Price Buyer pays seller a set amount regardless of seller costs Fixed Price Incentive Fee Buyer pays seller a set amount & seller can earn additional fee if performance criteria are met Cost Plus Fixed Fee Buyer reimburses seller costs plus a fixed profit fee Cost Plus Incentive Fee Buyer reimburses seller costs & seller earns profit if performance criteria met Time & Material (T&M) “Hybrid” of cost reimbursement and fixed fee Purchase Order Who has the risks in each type?

225 Solicitation 1.Send bid/proposal request documents to prospective vendors oPresumes you have a sufficient list of applicable vendors oDistribution may be direct, via bidder conference, via advertising, etc. oBid & Quote used when selection based on price oProposal used when other than price (tech skills, etc) paramount oRequest for Bid (RFB), Invitation to Bid (IFB) oRequest for Quote (RFQ), Invitation to Quote (IFQ) oRequest for Proposal (RFP), Invitation for Proposal (IFP) oInclude SOW, description of required response/response format, explanation of pro forma contract terms and agreement structure

226 Solicitation 2.Obtain bids/proposals from sellers 3.Evaluate bids/proposals & cycle thru SOW updates 4.Select bidder (based on criteria), negotiate, & award contract

227 Contracts You are the owner of a small excavation contracting business that has a multi-year T&M contract with a customer. The contract specifies the rate of pay for personnel types on the project. 1.Qualify the risks you face related to management of the contract. 2.Qualify the risks the buyer faces.

228 What does the word “quality” mean? –Features and functionality Scope requirements filled and working properly Conformance to specification or design –Fitness for use Degree of excellence at an acceptable price Control of variability at an acceptable cost How well the product fits patterns of user preferences Why is it important for the PM to focus on quality? –Driver of customer satisfaction: Triple/Quadruple Constraint Time (schedule) Cost (budget) Performance (specifications/quality) Quality For Project Managers

229 What is the cost of quality?  Prevention costs – costs incurred to prevent failure and minimize appraisal costs  Appraisal costs – discovering the condition of the process or product  Internal Failure costs – costs due to raw materials, WIP, or finished goods not being manufactured right 1st time  External Failure costs – costs from customer discovering a lack of product quality Quality For Project Managers

230 Management’s Role:  Ask questions: oWhat is next? oWhat can I do?  Preach  Teach  Be an example  Provide resources  Seek never-ending improvement  Follow Deming’s 14 points It is the PM’s role to be a leader of quality in your projects Quality For Project Managers

231 (some) Quality Systems  TQM (Kaizen/Continuous Improvement)  Six Sigma  ISO standards  Quality Circles Quality Systems You Can Use

232 TQM (Total Quality Management) –Objective: Improve quality by analyzing the whole “production process” using quantitative and qualitative information –Method: Clear, visible leadership from top Ensure that the system is ‘known’ Use statistical measurements to monitor the system Use statistical measurements to make changes only when needed and relatively predictable Use statistical measurements to monitor the changes (PLAN, DO, CHECK, ANALYZE) Total Quality Management

233 1.Create constancy of purpose toward improvement 2.Adopt the new philosophy 3.Cease dependence on inspection. 4.Minimize total costs 5.Constant and perpetual improvement 6.Institute training 7.Institute leadership 8.Drive out fear 9.Break down internal barriers 10.Eliminate slogans, targets etc. 11.Eliminate management by objective 12.Remove barriers 13.Institute program of education and self-improvement. 14.Everybody’s job is to accomplish the transition. - W. Edwards Deming Fourteen Points of Quality

234 1.Lack of constancy of purpose to improve products & services by providing resources for long-term planning, for research, & for training 2.An emphasis on short-term profits & quarterly dividend 3.Individual performance evaluations through merit ratings & annual reviews 4.Managers who are highly mobile & hop from company to company 5.Management use of numbers & figures that are visible & available with no thought of info that may be needed, but unknown or hidden 6.Excessive medical costs 7.Excessive legal liability costs, which can be swelled by lawyers who work on “contingency” fees Deming’s 7 Deadly Diseases

235 Four Basic Principles 1.Develop a Strong Customer Focus 2.Continually Improve All Processes Identify Them Improve Them (Plan, Do Check, Act) 3.Involve Employees 4.Mobilize Both Data & Team Knowledge to Improve Decision Making (The Memory Jogger: A Pocket Guide of Tools for Continuous Improvement and Effective Planning) Continuous Quality Improvement

236 Six Sigma –Objective: A comprehensive and flexible system for achieving, sustaining, and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes. Encompasses a broad array of business best practices and skills (some advanced, some common sense) that are essential ingredients for success and growth. Applicable to all types of organizations As much about people excellence as technical excellence –Method: There are many “Six Sigma Ways.” – there is no fixed prescription Sort of a culmination/combination of various other systems Six Sigma

237 1.A genuine focus on the customer 2.Data- and fact-driven management 3.Process focus, management & improvement as an engine for growth & success 4.Proactive management 5.Boundaryless collaboration 6.A drive for perfection, and yet a tolerance for failure Six Sigma – Essential Themes

238 Mc-Graw Hill, 2000 Six Sigma

239 1.Identify core processes & key customers 2. Define customer Requirements 3. Measure current Performance 4. Prioritize, analyze & implement improvements 5. Expand & integrate six sigma system Six Sigma Roadmap

240 Continuous Improvement Process Design/Redesign Analysis of Variance Balanced Scorecard Voice of the Customer Creative Thinking Design of Experiments Process Management Statistical Process Control Six Sigma – Methods/Tools

241 –ISO standards (900x, 1400x, etc.) –Objective: Improve processes & reduce process variation –Method: “Tell me what you’re going to do. Do it. Show me that you did it.” Set requirements for process performance in various operational areas Company establishes process to comply with the ISO specifications Registrar evaluates company ISO system ISO system meets/exceeds ISO standard, company is “certified”/”registered” ISO system does not meet/exceed, company goes back to previous step Company uses periodic audits to validate process validity and adherence Internal External (registrar) Failures found during audits must be dealt with via a process established as part of the company’s ISO system ISO Standards

242 –Objective: Improve product quality by soliciting group input from workers (and sometimes customers and/or users) in order to improve product process, features, etc. –Method: Bring teams together to brainstorm solutions to a problem, then implement the ones that seem logical, are generally desirable, and are economically feasible and see what happens. Quality Circles

243 Quality Tools  Inspection  Benchmarking  Process flowcharting  Run chart  Histogram  Scatter diagram  Ishikawa Diagram  Pareto analysis  Fault-tree analysis/FMEA  Control Charts (X-bar, R)  Auditing  Simulation (Monte Carlo, What-if)  QFD Quality Tools

244 –ISO standards (900x, 1400x, etc.) –Objective: Improve processes & reduce process variation –Method: “Tell me what you’re going to do. Do it. Show me that you did it.” Set requirements for process performance in various operational areas Company establishes process to comply with the ISO specifications Registrar evaluates company ISO system ISO system meets/exceeds ISO standard, company is “certified”/”registered” ISO system does not meet/exceed, company goes back to previous step Company uses periodic audits to validate process validity and adherence Internal External (registrar) Failures found during audits must be dealt with via a process established as part of the company’s ISO system ISO Standards

245 –Objective: Improve product quality by soliciting group input from workers (and sometimes customers and/or users) in order to improve product process, features, etc. –Method: Bring teams together to brainstorm solutions to a problem, then implement the ones that seem logical, are generally desirable, and are economically feasible and see what happens. Quality Circles

246 Quality Tools  Inspection  Benchmarking  Process flowcharting  Run chart  Histogram  Scatter diagram  Ishikawa Diagram  Pareto analysis  Fault-tree analysis/FMEA  Control Charts (X-bar, R)  Auditing  Simulation (Monte Carlo, What-if)  QFD Quality Tools

247  Inspection –OLD WAY: Check at the end of a process to see if it meets specified parameters. Throw away or rework (and check again) output that doesn’t meet specifications. Inspection YOU CAN’T INSPECT QUALITY INTO A PRODUCT –NEW WAY: –Confirm the process is in statistical control by checking planned random samples of output at planned stages of the process –Feedback to the production process to correct the process for future revisions –Throw away or rework (and check again) output that doesn’t meet specifications  Where will you find inspection during your typical projects?

248 –Systematized, planned method of looking at processes other than the one in which you’re interested to a)Compare the process in question to the comparable processes b)Find out new ways to make the process in question better (Best Practices) –Be very careful with benchmarking…It seems easy, but without proper analysis, it is very easy to fool oneself into thinking that a = b = c and that is NOT ALWAYS THE CASE. Benchmarking

249 –Can’t improve a process until all understand and agree what the process actually is –Flowchart is a model of the process –Improvement can come in the form of: Whole team working in concert rather than against each other Make changes to the process steps –Eliminate –Shorten –Rearrange Flowcharting Start End Step A Step B Step C Pass? Yes No

250 –The 80/20 chart –Used to determine priorities –May be able to determine what you can do to fix the problem directly from this chart –May need to subsequently use other tools to figure out what to fix –Once you’ve corrected the first priority problem, may need to go through subsequent rounds Pareto Analysis Process step A Process step B Process step C Process step D Defects

251  Also known as Cause & Effect Diagram, Fishbone Diagram –The process of chart creation is itself useful (discussion that causes people to learn) –Helps keep focus on issue at hand, reducing complaints & irrelevant discussion –Results in an active search for the cause –Data often must be collected for study –Demonstrates the level of understanding…more complex the diagram, the more sophisticated the users are about the process –Problem Agnostic Ishikawa Diagram Problem to solve Major Cause 1 Major Cause 4Major Cause 3 Major Cause 2 Minor Cause May also be situation desired

252 Fault Tree Analysis/FMEA A.0 A.1 A.2 A.3 A.3.1A.3.2 –“What happens if” chart –Study causes and effects of failures –Focuses thinking on system functioning and interaction of system component parts –Define all ways that a system can fail –Decomposes potential faults through several fault ‘layers’ –Allows assignment of risk factors to the possible faults –Next probable step is a Pareto

253  Run Chart Trend analysis  Histogram Trend analysis  Scatter Plot Trend analysis Should use some statistical validation as well as visual Statistical Process Control

254  Control Charts –Sometimes called Statistical Process Control (SQC) or Statistical Quality Control (SQC) –A run chart with statistically determined upper and lower control limits drawn on either side of the process average. (limits are NOT specifications) –Every process has variation. Once the process is in statistical control (i.e. it is running on its own – no special correcting influence from humans – and there are very few points beyond the control limits), it is possible to more economically and scientifically decrease variation in the process output –Special cause: 90%. easier to eliminate. Show up as points outside the limits –Common cause: 10%. changeable only by management Statistical Process Control Lower Control Limit (LCL) Upper Control Limit (UCL) Average timeMeasurement (# defective, etc) – Rule of 7: a process can be out of control even if there are no outliers…for instance, when there are 7 contiguous points on either side of the line. – You’ll never eradicate variation…(“average” will get in your way), but see Deming point 5

255  Auditing -Independent, objective review of the effectiveness of a system Process Product System Management -Identify whether process failure is common cause or special cause -Provide for tracking of appropriate corrective actions to process -Everyone dislikes being criticized, but REMEMBER that the audit function is intended to help the company be better at what it does. -Being better can mean a competitive advantage (cha-ching) or, as in most cases, it can simply mean that you are able to remain competitive (like the ante into a poker game). -Don’t hate the auditor…unless he comes to deserve it! Process Auditing

256 –Set up models of a process or situation and vary parameters to see what outcome will be after simulating what might happen –“What if” Analysis Once the model is established and verified, varying a parameter by a specified amount and see what happens to the outcome parameter(s) –Monte Carlo Simulation Once the model is established and verified, vary a parameter or parameters through use of randomized (statistically distributed histogram randomization) trials to see what happens to the outcome parameter(s). Simulation

257 –Focus on creating a connection between quality, from the perspective of the user, through the ENTIRE process of creation –QFD matrices are used to show the links between the user’s quality concepts and technical quality. Successive decompositions of needs- related quality into quality associated with subsystems allows relation of every important aspect of project quality to competitive quality Quality Function Deployment Product PlanningCustomer Requirements Design Requirements Product Design Design Requirements Component Characteristics Process Planning Component Characteristics Key Processes Process Control Planning Key Processes Control Methods

258 Please Remember: 1) No chart or equation will ever improve a process… People improve processes 2) Think before you decide. Numbers are only models of reality. Garbage In…Garbage Out (GIGO) Quality For Project Managers

259 Project Budgeting “It’s hard to predict, especially the future” – Niels Bohr “Life is what happens when you’re making other plans” – John Lennon If it’s so hard to predict and everything is already obsolete by the time it’s “on paper,” why budget?

260 Project Budgeting Budgets are plans for allocating organizational resources to project activities –Must forecast required resources, quantities needed, when needed, and costs Budgets help tie project to organizational objectives ­Requires decisions of priority Budgets can be used as tool by upper management to monitor and guide projects ­We anticipated spending $100M by this time. How much did we actually spend?

261 Most budgeting is done by multiplying a factor x “last year’s budget data” ZBB calls for starting from a “clean sheet of paper” and then estimating the necessary functions from educated “scratch.” Often goes hand-in hand with Activity Based Costing Practice. This can be tedious, but is very useful because it requires you to think about each budget line item more clearly Zero Base Budgeting

262 Non ZBB: –This year’s budget had $5000 for employee project management training –For next year’s budget, because we know that we are intending to continuously move toward PM practice at our company (but don’t have everything planned out yet), we’ll “bump” the budget up from last year by 1.5 ZBB: –Throw out last year’s budget –Start over with a total replanning effort using more distinct, factual analysis Zero Base Budgeting

263 Top Down Budgeting Based on collective judgements and experiences of top and middle managers. Overall project cost estimated by estimating costs of work packages/major tasks from WBS Advantages –Accuracy of estimating overall budget –Errors in funding small tasks need not be individually identified Disadvantages –May miss a material, though small-appearing, item

264 Project Budgeting How Top-Down Budgeting works (a very, very basic example): WBS Task Cost 2.0 Design $50, Concrete $500, Frame $200, Electrical $ 75,000

265 Bottom Up Budgeting WBS identifies elemental tasks Those responsible for executing these tasks estimate resource requirements Technical Estimation Time & Cost Estimation Advantage –More accuracy from detailed lower-level analysis Disadvantage –Tedious, long –Not focused on larger picture; can get lost in details –GIGO

266 Project Budgeting How Bottom-Up Budgeting works (a very, very basic example): WBS Task Resource Duration (day) Cost 2.0 Design $44, Site Survey 4 3$ 7, Architectural Design 1 20$24, Drafting 2 12$12, Concrete 3.1 Excavation 3.2 Pour Concrete 3.3 Test Concrete 4.0 Frame 4.1 Arrange Materials 4.2 Erect Walls 5.0 Electrical 5.1 Arrange Materials 5.2 Run Circuit Wiring 5.3 Test Electrical Systems

267 Determine resource requirements, then task costs –fixed costs (e.g., materials) –labor time & labor rate –equipment time & equipment rate –Overhead/G&A Levels of Estimate –ROM = Rough Order of Magnitude (~20% accurate, 10 minutes) –System Estimate (~10% accurate, 1 day) –Unit Estimate (~5% accurate, 1-3 weeks) Work Element Costing

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269 Engineering News Record, http//:www.enr.com/cost/cost1.asp ENR publishes both a Construction Cost Index and a Building Costs Index that are widely used in the Construction Industry. This web site contains an explanation of the indexes methodology and a complete history of the 20-city national average for the CCI and BCI. Both indexes have a material and labor component. In the second issue of each month ENR publishes the CCI and BCI, materials index, skilled labor index and common labor index for 20 cities and the national average. The first issue also contains an index review of all five national indexes for the latest 14 month period. ENR also publishes various materials prices in each issue for the 20 US cities and 2 Canadian cities. The first issue of the month contains prices for paving asphalt, portland cement, ready-mix concrete, concrete block, brick and aggregates. The second issue for the month has prices for various pipe including reinforced concrete pipe, corrugated steel pipe, PVC water and sewer pipe, ductile iron pipe and copper water tubing. The third issue of the month contains prices for lumber, plywood, plyform, particle board and gypsum board. The fourth issue of the month has prices for structural steel reinforcing bar, aluminum, and stainless steel sheet and plate. If a month has 5 Mondays, the fifth issue will have union wage rates for 21 trades in all 20 cities. The 20 US cities that ENR maintains cost data on are: Atlanta, Baltimore, Birmingham, Boston, Chicago, Cincinnati, Cleveland, Dallas, Denver, Detroit, Kansas City, Los Angeles, Minneapolis, New Orleans, New York, Philadelphia, Pittsburgh, St. Louis, San Francisco, Seattle. ENR also tracks cost data for Montreal and Toronto, Canada. In addition, ENR publishes four quarterly cost reports in the last issue of March, June, September and December. These issues analyze cost trends from ENR’s data base and explain the movement in the indexes. They also contain various other cost data including open-shop wage rates, workers compensation rates and international prices, wages and cost indexes just to name a few. Tim Grogan, Senior Editor, Costs, Data & Material Prices. Work Element Costing

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271 ENR - Building Cost Index History How ENR builds the Index: hours of skilled labor at the 20-city average of bricklayers, carpenters and structural ironworkers rates, plus 25 cwt of standard structural steel shapes at the mill price prior to 1996 and the fabricated 20-city price from 1996, plus tons of Portland cement at the 20-city price, plus 1,088 board.ft of 2X4 lumber at the 20-city price (cwt = hundred weight kg, tons). YEARJANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDECAVER YEARJANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDECAVER YEARJANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDECAVER

272 There is no evidence of mystical inborn talent for cost- estimating. ‘Expertise’ is not a universal phenomenon, but rather very project-specific. The most crucial attributes of good estimators are knowledge and care. Good estimators have exactly the same attributes as good gamblers: they research selectively and thoroughly. they weigh each decision against possible outcomes & behave accordingly Different building types demand different approaches. Special attention is required for complexity of the project. The easiest projects to estimate are the industrial factories and residential houses. Office construction projects are hardest to estimate, due to design/option variety Skitmore, R.M., Stradling, S.G., & Tuohy, A.P Human effects in early stage contract price forecasting. IEEE Transactions on Engineering Management, 41 (1), Estimating Expertise

273 Hybrid Budgeting Best of both Top-down and Bottom-up mixed Can be conflict (in fact, you want it) If you have the time and the expertise available, this is, IN MY OPINION, the best approach

274 Find FV of $1 today invested for n years at i%/year Future Value (FV) FV 1 = PV 1 (1 + i) $PV i% FV 1 FV 2 FV 5 FV 4 FV 3 FV = PV (1 + i) n Generic Case Equation Timeline Method

275 Find PV of $1 today of FV dollars received n years in the future, assuming i%/year PV = FV x 1 FV (1+i) n (1+i) n = Present Value (PV)

276 Compounding What is it? Why is important?

277 Use Timeline Method: How much money will be your return at the end of 5 years with 5% annual interest on a deposit of $500 Think of 3 specific examples when you might need to know the concept of PV/FV and how to calculate it. How would the situation change if you had a second investment of $250 in the third year? How would the formulaic calculation change? Group Work

278 Annuity What is it? A series of equal payments at fixed intervals for a specified number of periods E.G. – marketing tells you that Project X, of which you’ll be the PM, will generate $1M per year for 5 years starting at project release in January 2005 How is it calculated? FVAn = PMT/(1+i) + PMT/(1+i) 2 + … + PMT/(1+i) t = PMT Σ 1/(1+i) t t=1 n

279 Why is it important? Couldn’t we just do an FV analysis on a $5M payback at the end of 5 years in the 5 year, $5M project example? In the example above, what amount of money would you want to receive now to be able to turn down the $1000/year for 3 year deal? Example Annuity Promise to pay $1000/year for 3 years. If you were to receive this money and invest it with a 4% return, how much would you have at the end of 3 years? i% $1000 i = t = n = PMT = Are we solving for PV or FV? Answer?

280 Net Present Value (NPV) NPV = Σ (FV t / (1+i) t ) - I t=1 n FV t = incremental, after tax net cash flow in year t I = the investment (capital outlay), which is assumed to all happen in year 0) NPV > 0 is good (project or activity may be chosen)

281 Depreciation Paying the equipment Suppose you buy a machine for $100k, use it for 5 years to do “your thing,” and then scrap it. The cost of the work produced by the machine must include a charge for the machine (depreciation). As depreciation increases, net income decreases Unlike paying the staff, depreciation is NOT a cash charge – cash flows are not decreased… Methods Straight Line Double declining balance Sum of the years’ digits Accelerated Cost Recovery System (ACRS) Modified Accelerated Cost Recovery System (MACRS) Depreciation actually increases cash flow!!!

282 Depreciation (Purchase Amount – Salvage Value) / Depreciation life Straight Line Method Depreciation Life determined by the estimated useful life of the asset Salvage Value = value the asset is expected to have at end of depreciation life Year 1Year 2 Year 3Year 4 Purchase Value Salvage Value What is the effect on cash flow of changing the salvage value?

283 Modified Accelerated Cost Recovery System Sum of purchase price for any year x the depreciation % for that year MACRS Depreciation Life determined by Asset Class rules ClassAsset Type 3 yearComputers & research equipment 5 yearAutomobiles, tractors, light duty trucks, computers 7 yearIndustrial equipment, furniture, fixtures 10 yearCertain long-lived equipment 27.5 yearResidential rental property 31.5 yearNon-residential property

284 MACRS Continued 21.5 and 31.5 year class property uses straight line method 3, 5, 7, 10 year class property uses accelerated method in table below (or alternative straight line method for very small businesses) Ownership year %20%14%10%

285 MACRS Continued Salvage Value: Add the difference of (actual sale price – undepreciated value) to normal operating income for taxation at the normal rate E.G. - $100k equipment with 5 year class life sold at end of year 4 for $25k $25,000 – ($100,000( )) = $8000 to add to operating income Depreciable basis: Purchase price + shipping and installation costs [NOTE: NO classes allow salvage value as part of depreciable basis] Half-year convention: Assumes property put in service in middle of first year – extends recovery period by one more year (3 year class property is depreciated over 4 years)

286 MACRS Example Excellanz buys a computer for $150k. It requires an additional $15k for delivery and $15k for installation. The company expects to be able to sell the equipment for $25k at the end of the straight line depreciable life. What is the depreciable basis? What is the depreciation for each year and the total depreciation?

287 How are they used? Baselines What is a baseline? “snapshot” of project schedule, cost (budget), or scope Used as the basis for measuring and reporting actual performance against the plan (schedule, cost, scope) Used to manage project changes to scope, schedule, cost (i.e. – get rid of the “creep”) When are the “snapshots” taken? When the plan (schedule, scope (budget), scope) is considered feasible technically and in terms of resources

288 Homework 4 Posted via WebCT  Project Control and Configuration Mgmt  Risk Mgmt  Project Budgeting Due 7/18 via hardcopy Work in support groups (only)

289 –Set up models of a process or situation and vary parameters to see what outcome will be after simulating what might happen –“What if” Analysis Once the model is established and verified, varying a parameter by a specified amount and see what happens to the outcome parameter(s) –Monte Carlo Simulation Once the model is established and verified, vary a parameter or parameters through use of randomized (statistically distributed histogram randomization) trials to see what happens to the outcome parameter(s). Simulation

290 What is it? –Risk is anything that affects triple constraint objectives –PMBOK: Systematic process of identifying, analyzing, and responding to project risks –AKA: Crossing bridges before you get to them Risk Management

291 Why do it? –The future is uncertain –When those unplanned, unplannable good or bad things happen to a project, the PM must be ready to deal with them and their consequences in order to meet the triple/quadruple constraint Risk Management

292 How do you manage risks? –Initiate the process, –Identify the risks, –Assess/analyze the risks, –Organize (rank) the risks, –Plan responses to the important risks, –Implement the RMP (Risk Management Plan), Monitoring Reporting Responding –Review (cyclical) Risk Management

293 How you do it? - The Risk Mgmt Plan table Risk Identifier Risk Probability of risk occurrence (P) Impact if risk occurs (I) Risk “Rank” Risk Owner Monitoring Plan Response Strategy Response Plan (outline) The RMP Table

294 Risk Identifier Helps you track the risk Helps you communicate the risk May be nothing more than a sequential system May be something other than sequential What do you do with the risk ID when the risk “goes away?” Risk Management 1.Critical person lost time injury 2.Fire damages structure 3.Rain delay to critical path task 1.Critical person lost time injury 2.Fire damages structure 3.

295 Risk (Identification) Something that affects triple constraint objectives Negative Positive (Examples?) Measurable/Quantifiable is best, but sometimes there will be qualifiable-only risks Risks can be identified with use of many tools, methods Project Plan, Network Diagram, Schedule, Policies, Expert Opinion, Historical Information, WBS, FMEA, etc. Risk identified by a group effort Risk identified At project start Over and over, repeatedly, again and again, until project end Risk Management

296 Probability of risk occurrence (P) How likely is the risk event? Can be classified by judgment Can be classified by statistical tools Risk Management

297 Impact if risk occurs (I) What will happen if the risk event occurs? Can be classified by judgment Can be classified by statistical tools Risk Management

298 Risk Rank You can’t have everything…where would you put it? P x I Group all the equally ranked items together There can be multiple 1, 2, 3, etc. If multiple 1’s, 2’s, etc, can rank inside each group (use time of likely occurrence, relative impact, etc) May have to go through several rounds of successively detailed analysis to get top (10, 20, 50, 75, 100) Risk Management

299 Risk Owner Handles monitoring & responding (within constraints) Why doesn’t the PM just do the risk monitoring? Who can the PM assign to be a risk monitor? Risk Management

300 Monitoring Plan How/what will you/r team watch to see if the risk may be happening? Discuss some examples Risk Management

301 Response Strategy Avoid: Do something to ensure risk won’t occur (100% mitigation) Mitigate: Accept that risk might happen, but do something to alleviate the either/both the P or I if it does Accept: What’s left when there’s nothing feasible to do Transfer: Do something to allocate the risk onto someone else Risk Management AcceptMitigateAvoid

302 Response Plan What do you intend to do if the risk starts happening/happens? In outline form – things change too rapidly, frequently to warrant more Who is responsible for keeping the Risk Management Plan (RMP)? Risk Management

303 Example: Project: Create a lighted sign for a new building into which an engineering forensics company will be moving in 2 months. RMP creation example/discussion Risk Management

304 In support groups: Project: Build a four-car garage Constraints: Cost not to exceed $10,000, Construction to be completed NLT 2 months from project initiation Complete an RMP with 10 risks. At least 3 must be cost-related, 3 must be quality- related, and 4 must be schedule-related Risk Management

305 How can you use a project schedule to actually manage (not just plan) a project? Schedule Management How do you collect status from the people doing the work? GIGO Reporting/data gathering systems use of % complete

306 Scheduling is extremely iterative process –In fact, changes during last few days are likely! –Management always wants it done faster and/or cheaper! So how can you shorten the schedule? –Scope Modification: Delete task(s) –Crashing: Adding more resources to task(s) –Fast Tracking: Doing more tasks in parallel Schedule Compression

307 Scope Modification –Eliminate task(s) –Shrink work required to do particular task(s) –Not always viable – why not? Schedule Compression

308 Crashing –Add more resources to shorten time required to do the work (1+1=2) Schedule Compression – Appropriate resources may not be available at all or only with equal or worse impact – Learning curves can actually result in 1+1=0.5 – Can increase cost more than budget allows Not always feasible/viable option – why not?

309 Fast Tracking –Reworking task sequencing so more activities are done in parallel rather than sequentially Schedule Compression Not always feasible/viable option – why not? – Often results in rework – Increases risk (often dramatically) – Increases confusion

310 Can we agree that getting the project done late (after pre-agreed time) is BAD? Is it BAD to come in ahead of schedule: –By a little bit? –By a lot? –Why/Why not? Schedule Compression

311 What is it? Establish revision control and change control methods Similar to baseline Why is it done? Communication – keeping everyone on the same page Limit unnecessary scope creep Change impact estimation Work billing Configuration Management

312 How does it work? Written process (per project, per company, etc) Identify change possibility (acceptable person?) If CR accepted, evaluate Decide outcome of change If outcome is to proceed, create/publish ECN Update plan information Configuration Management

313 This page intentionally left blank Configuration Management

314 What is it? Exception Management for the Manager(s) of the Project Manager Management by Stage Gates Reqmts Gathering SolicitationPre-solicitation Bid Award Buildout Completion Do you suppose your (PM) manager will just say “go at it and let me know when you’re done”? Project Planning Project Execution

315 Compounding What is it? Why is important?

316 Find FV of $1 today invested for n years at i%/year Future Value (FV) FV 1 = PV 1 (1 + i) $PV i% FV 1 FV 2 FV 5 FV 4 FV 3 FV = PV (1 + i) n Generic Case Equation Timeline Method

317 Find PV of $1 today of FV dollars received n years in the future, assuming i%/year PV = FV x 1 FV (1+i) n (1+i) n = Present Value (PV)

318 Use Timeline Method: How much money will be your return at the end of 5 years with 5% annual interest on a deposit of $500 Think of 3 specific examples when you might need to know the concept of PV/FV and how to calculate it. How would the situation change if you had a second investment of $250 in the third year? How would the formulaic calculation change? Group Work

319 Annuity What is it? A series of equal payments at fixed intervals for a specified number of periods E.G. – marketing tells you that Project X, of which you’ll be the PM, will generate $1M per year for 5 years starting at project release in January 2005 How is it calculated? FVAn = PMT/(1+i) + PMT/(1+i) 2 + … + PMT/(1+i) t = PMT Σ 1/(1+i) t t=1 n

320 Why is it important? Couldn’t we just do an FV analysis on a $5M payback at the end of 5 years in the 5 year, $5M project example? In the example above, what amount of money would you want to receive now to be able to turn down the $1000/year for 3 year deal? Example Annuity Promise to pay $1000/year for 3 years. If you were to receive this money and invest it with a 4% return, how much would you have at the end of 3 years? i% $1000 i = t = n = PMT = Are we solving for PV or FV? Answer?

321 Net Present Value (NPV) NPV = Σ (FV t / (1+i) t ) - I t=1 n FV t = incremental, after tax net cash flow in year t I = the investment (capital outlay), which is assumed to all happen in year 0) NPV > 0 is good (project or activity may be chosen)

322 Depreciation Paying the equipment Suppose you buy a machine for $100k, use it for 5 years to do “your thing,” and then scrap it. The cost of the work produced by the machine must include a charge for the machine (depreciation). As depreciation increases, net income decreases Unlike paying the staff, depreciation is NOT a cash charge – cash flows are not decreased… Methods Straight Line Double declining balance Sum of the years’ digits Accelerated Cost Recovery System (ACRS) Modified Accelerated Cost Recovery System (MACRS) Depreciation actually increases cash flow!!!

323 Depreciation (Purchase Amount – Salvage Value) / Depreciation life Straight Line Method Depreciation Life determined by the estimated useful life of the asset Salvage Value = value the asset is expected to have at end of depreciation life Year 1Year 2 Year 3Year 4 Purchase Value Salvage Value What is the effect on cash flow of changing the salvage value?

324 Modified Accelerated Cost Recovery System Sum of purchase price for any year x the depreciation % for that year MACRS Depreciation Life determined by Asset Class rules ClassAsset Type 3 yearComputers & research equipment 5 yearAutomobiles, tractors, light duty trucks, computers 7 yearIndustrial equipment, furniture, fixtures 10 yearCertain long-lived equipment 27.5 yearResidential rental property 31.5 yearNon-residential property

325 MACRS Continued 21.5 and 31.5 year class property uses straight line method 3, 5, 7, 10 year class property uses accelerated method in table below (or alternative straight line method for very small businesses) Ownership year %20%14%10%

326 MACRS Continued Salvage Value: Add the difference of (actual sale price – undepreciated value) to normal operating income for taxation at the normal rate E.G. - $100k equipment with 5 year class life sold at end of year 4 for $25k $25,000 – ($100,000( )) = $8000 to add to operating income Depreciable basis: Purchase price + shipping and installation costs [NOTE: NO classes allow salvage value as part of depreciable basis] Half-year convention: Assumes property put in service in middle of first year – extends recovery period by one more year (3 year class property is depreciated over 4 years)

327 SL Example Excellanz buys a computer for $150k. It requires an additional $15k for delivery and $15k for installation. The company expects to be able to sell the equipment for $25k at the end of the straight line depreciable life. What is the depreciable basis? What is the depreciation for each year and the total depreciation?

328 How are they used? Baselines What is a baseline? “snapshot” of project schedule, cost (budget), or scope Used as the basis for measuring and reporting actual performance against the plan (schedule, cost, scope) Used to manage project changes to scope, schedule, cost (i.e. – get rid of the “creep”) When are the “snapshots” taken? When the plan (schedule, scope (budget), scope) is considered feasible technically and in terms of resources

329 Earned Value Management –Performance measurement system: A methodology used to measure & communicate the real, physical progress of a project. –Integrates scope, cost, & schedule measures: Takes work complete, time taken, and costs incurred to complete that work into account. –Useful as a risk management monitoring tool EV helps evaluate & control project risk by measuring project progress using a standard measure (monetary terms). Earned Value

330 Earned Value Management –How it works: We plan how we will accomplish a task(s) –How long it will take –Resources required –Estimated costs We spend time and materials in completing a task. –If we are efficient, we complete task with time to spare & minimum wasted materials. –If we are inefficient, we take longer than planned and waste materials. Take a snapshot of the project and calculate EV metrics to: –Compare planned vs actual and use that to make a subjective assessment of progress –Extrapolate the information to estimate future costs & probable completion date Earned Value

331 Planned Value (PV – aka BCWS) –Budgets for each activity planned (Portion of cost estimate planned to be spent on an activity during a given period) Actual Cost (AC – aka ACWP) –Real, Total cost incurred during work on an activity during a given period –Must correspond to budgeted value for the PV and EV Earned Value (EV – aka BCWP) –Value of work actually completed (The planned costs of the work allocated to the completed activities) Cost Variance (CV) = EV – AC Schedule Variance (SV) = EV – PV Cost Performance Index (CPI) = EV/AC (CPI < 1 is bad) Schedule Performance Index (SPI) = EV/PV (SPI < 1 is bad) Estimate at Completion (EAC) = ACWP + ((BAC-BWCP)/CPI) Earned Value

332 You’re having a problem on your project – when do you tell the stakeholders? You’re *not* having a problem on your project – when do you tell the stakeholders? Is there such a thing as overcommunication? An example of the communication balance Communications During Execution

333 From: Eiler, Timothy Sent: Wednesday, August 31, :27 AM To: Bob Jones (contractor) Subject: Communication Bob, When a customer-affecting release does not go as planned, you need to call the appropriate Account Manager to let her know that it failed, even if you don't yet know why that happened. They need to know so that they can decide what communication is needed with the customer's business contacts to smooth feathers, etc. This is particularly critical now as we try to assuage hurt customer feelings so that we can keep relationships with them alive for loan purchases. Depending on the impact scope, of course, you probably don't need to call them seconds after the failure or anything, but they do need to know fairly soon. After you've let them know about the initial failure, as you learn more and have updates to status and correction plans and progress, call them again as judgment dictates. Even if the failure is corrected fairly quickly, you should let them know it occurred so they can be aware of what happened. Essentially, after any customer-affecting release, call them to let them know an executive summary of how it went - success or failure. I'm assuming, given the time of day most releases happen, that they will each want to be called at their desk phones, with you leaving voice mail, but you need to work that out with each of them individually, and probably for individual releases, as well. You also need to call me to let me know of the failure, though I have less need for late night calls about correction plans and progress. I can generally, depending on the impact of the failure, of course, wait until morning to know about correction plans and progress. Calls to my cell, with voice mail left if I don't answer, are what I need. Overall, the goal is to rationally over communicate this information - while not being passive-aggressive, of course. :-) Tim Communications During Execution

334 Use of examples – how could I have used an example to help Bob understand and accept? Use of analogies – how could I have used an analogy to help Bob understand and accept? Other ways storytelling can be an aid Storytelling for Communication

335 Typical Project Documents Dunning Letter A memo identifying specific things done wrong/currently late/etc and the ramifications of continuing to fail to address the issues Transmittal A memo that outlines/explains submittals included with the transmittal and the actions required by the recipient

336 Is the plan right? –Are things going as they should? –If not, how far off are we? –Does it need changes? What do we need to do to be where we need to be? –What changes or corrections are needed? –When do the changes need to be made? –Who on the project team needs to make “course corrections” in order to achieve the plan? Iterate! Managing

337 What do you watch? How often? How? Managing

338 Managing Project Teams “Design team failure is usually due to failed team dynamics.” (Leifer, Koseff & Lenshow, 1995). “It’s the soft stuff that’s hard; the hard stuff is easy.” (Doug Wilde, quoted in Leifer, 1997) In order to make sense out of leading project teams, you need to understand the concept of “team,” the concept of “lead,” and the concept of “manage.”

339 Be Pro-Active: Be Pro-Active: Take initiative & the responsibility to make things happen. Begin With an End in Mind: Begin With an End in Mind: Start with a clear destination to understand where you are now, where you're going, & what you value most. Put First Things First: Put First Things First: Manage yourself. Organize & execute around priorities. Think Win/Win: Think Win/Win: See life as a cooperative, not a competitive arena where success is not achieved at the expense or exclusion of the success of others. Seek First to Understand: Seek First to Understand: Understand then be understood to build the skills of empathic listening that inspires openness and trust. Synergize: Synergize: Apply the principles of cooperative creativity and value differences. Renewal: Renewal: Preserving and enhancing your greatest asset, yourself, by renewing the physical, spiritual, mental and social/emotional dimensions of your nature. Seven Habits Of Highly Effective People Steven Covey, 1989

340 Managing Project Teams A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable SMALL NUMBER COMPLEMENTARY SKILLS COMMON PURPOSE & PERFORMANCE GOALS COMMON APPROACH MUTUAL ACCOUNTABILITY (to project, to team, to each other) --Katzenbach & Smith (1993) The Wisdom of Teams

341 Is there a difference? Leadership vs Management Hey!!! Wrong Forest!!!

342 Leadership vs Management MANAGEMENT FUNCTIONS Tracking Operational Performance Aligning Operations with Customers' Values Maintaining Operational Practices & Standards Implementing Operational Plans & Projects Solving Operational Problems Procuring Operational Resources Accounting for Resource Performance LEADERSHIP FUNCTIONS Assessing Organizational Performance Aligning Organizational Practices with Values & Vision Altering Organizational Practices & Standards Initiating Organizational Improvements Facilitating Quality Interactions Integrating Organizational Systems & Processes Educating for Quality Performance

343 Leadership vs Management

344 Managing Project Teams Six Basic Principles of Team Discipline 1.Have and develop a common purpose 2.Keep team membership small 3.Ensure team members have complementary skills 4.Set common goals 5.Establish agreed-upon ground-rules and approach 6.Integrate team and individual accountability Katzenbach & Smith (2001) The Discipline of Teams

345 Leadership is any action that helps a group achieve its goals AND maintain cooperative relationships among members of the group. Leading Project Teams List as many characteristics in 2 minutes that come to mind for followers you admire List as many characteristics in 2 minutes that come to find for followers you admire

346 1. Ability to think in terms of systems & knowing how to lead systems. 2. Ability to understand the variability of work in planning & problem solving. 3. Understanding how people learn, develop, & improve; leading true learning and improvement. 4. Understanding people & why they behave as they do. 5. Understanding the interaction & interdependence between systems, variability, learning, and human behavior; knowing how each affects the others. 6. Giving vision, meaning, direction, & focus to the organization. The Leader's Handbook (Scholtes, 1998) New Leadership Competencies

347 (Kouzes & Posner, 1987) Challenging the Process 1. Search for Opportunities 2. Experiment and Take Risks Inspiring a Shared Vision 3. Envision the Future 4. Enlist Others Enabling Others to Act 5. Foster Collaboration 6. Strengthen Others Modeling the Way 7. Set the Example 8. Plan Small Wins Encouraging the Heart 9. Recognize Individual Contribution 10. Celebrate Accomplishments Ten Commandments of Leadership

348 1.Quality information must be used for improvement, not to judge or control people 2.Authority must be equal to responsibility 3.There must be rewards for results 4.Cooperation, not competition, must be the basis for working together 5.Employees must have secure jobs 6.There must be a climate of fairness 7.Compensation should be equitable 8.Employees should have an ownership stake 8 Crucial Elements of System Leadership

349 Managing Project Teams What’s involved in managing teams? What are the obstacles a PM must overcome to create and manage a successful project team?

350 Managing Project Teams Team Charter Team name, membership, roles Team Mission Statement Anticipated results (goals) Specific tactical objectives Ground rules/guide principles for team participation Shared expectations/aspirations

351 Communication Skills (84%) Listening Persuading Organizational skills (75%) Planning Goal-setting Analyzing Team Building Skills (72%) Empathy Motivation Esprit de Corps Leadership Skills (68%) Sets Example Energetic Vision (big picture) Delegates Positive Coping Skills (59%) Flexibility Creativity Patience Persistence Technological Skills (46%) Experience Project Knowledge Managing Project Teams What it takes to be a good project manager (Posner, 1987) Percentages represent the percentage of respondents to a Posner survey who included the skill in the list of importance

352 Skills necessary for effective project managers Planning Work breakdown Project scheduling Knowledge of PM software Budgeting and costing Organizing Team building Establishing team structure and reporting assignments Define team policies, rules and protocols Leading Motivation Conflict management Interpersonal skills Appreciation of team members' strengths and weaknesses Reward systems Controlling Project review techniques Meeting skills Managing Project Teams Pinto and Kharbanda (1995):

353 Characteristics of Admired Leaders 1 Characteristic 1993 U.S. Percentage of People Selecting 1987 U.S. Percentage of People Selecting Honest 8783 Forward-looking 7162 Inspiring 6858 Competent 5867 Fair-minded 4940 Supportive 4632 Broad-minded 4137 Intelligent 3843 Straightforward 34 Courageous 3327 Dependable 32 Cooperative 3025 Imaginative 2834 Caring 2726 Mature 1423 Determined 1320 Ambitious 1021 Loyal 1021 Self-controlled 5 13 Independent 5 13 James M. Kouzes & Barry Z. Posner Credibility: How leaders gain and lose it, why people demand it. San Francisco: Jossey-Bass.

354 Managing Project Teams Group Task and Maintenance Roles Group Task Roles Group Maintenance Roles Initiating Encouraging Seeking Information Expressing Feelings Giving Information Harmonizing Seeking Opinions Compromising Giving Opinions Facilitating Communications Clarifying Setting Standards or Goals Elaborating Testing Agreement Summarizing Following

355 Managing Project Teams Five Top Criteria of a Competent Project Manager 1.They have enthusiasm 2.They have high tolerance for ambiguity 3.They possess high coalition and team-building skills 4.They have client-customer orientation 5.They have a business orientation Graham, Robert J. & Englund, Randall L Creating an environment for successful projects. San Francisco: Jossey-Bass

356 5 Types of Power for Leaders and Managers Power Tools TypePeople do what you ask because… FormalOrganization tells them to ExpertYou are perceived as an expert in “x” ReferentThey like or trust you RewardYou can give them something in return CoerciveYou can take something from them/hurt them Situational!!

357 Communicate regularly in person with key team members Keep management informed Keep informed on all aspects of the project Delegate tasks to team members Listen to input from team members Be able to take criticism Respond to and/or act on suggestions for improvement Develop contingency plans Address problems Make decisions Learn from past experience Run an effective meeting Set up and manage the project file Use project management tools to generate reports Understand trade-offs involving schedule and budget Have a sense of humor --Lientz and Rea (1996) Keys For PM Success

358 Meetings and More Meetings “I used to think, ‘oh no, not another meeting’ until I worked for you.” - A former employee of mine People hate meetings. People think meetings are a waste of time - The sad part is that most of them are You will spend a good portion of your work in meetings. Fool people – make them gain respect for you by making your meetings an EFFECTIVE use of their time

359 Some reasons that people think badly of meetings: Purpose is unclear Participants are unprepared Key people are absent or missing The conversation veers off track Participants don’t discuss issue but instead dominate, argue, or take no part at all Meeting decisions not followed up Meetings and More Meetings

360 Hold meetings for group decision making –avoid weekly progress report meetings If meeting is held to address a specific issue, restrict meeting to this issue alone Ensure everyone properly prepared –Distribute written agenda in advance of meeting –Tell where and when –State and repeat the objective of the meeting Avoid excessive formality Chair and participants control Meeting – use groundrules Guidelines for Holding Meetings

361 BEFORE Plan: Clarify meeting purpose & outcome, Identify meeting participants, Select methods to achieve purpose, Develop & distribute agenda, Set up room DURING Start: Check-in, Review agenda, Set/review ground rules, Clarify roles Conduct: Cover one item at a time, Manage discussions, Maintain focus & pace Close: Summarize decisions, Review action items, Solicit agenda items for next meeting, Review time & place for next meeting, Evaluate the meeting, Thank participants AFTER Follow-up: Distribute or post meeting notes promptly, File agendas, notes, & other documents, Do and/or check up on action items/assignments. Meetings – The Right Way

362 Five Meeting Roles Chair Recorder Timekeeper Presenter Participant NO ONE SHOULD PLAY MORE THAN 2 ROLES AT ONCE!!!!! Meetings – The Right Way

363 Virtual PM – what’s different? –Virtual Project Teams –Use of the Technology to meet –Use of Software Programs How does the new situation change PM processes? Meetings and More Meetings

364 Groups without conflict where there is a strong norm of “Concurrence Seeking” Groupthink

365 1. Know the Symptoms of Groupthink Overestimation of the Group Illusion of invulnerability Belief in group morality Closed Mindedness Rationalization Stereotyping Outgroups Pressures Toward Uniformity Self-censorship Direct pressure Mindguards Illusion of unanimity Avoiding Groupthink

366 2. Strategies for avoiding Groupthink Promote an open climate Avoid the isolation of the team Appoint critical evaluators Avoid being too directive Avoiding Groupthink

367 Controversy exists when one person’s ideas, information, conclusions, theories, and opinions are incompatible with those of another person and the two seek to reach an agreement. Controversy

368 “... Controversy is a great thing. Unfortunately, controversy gets a bad rap. Most people scurry about their lives trying to avoid controversy, avoiding disagreements with others, avoiding messy debates...Our world is awash in controversy. And rightly so... We need it. We need to discuss controversial subjects. We need to settle differences of opinion... Acknowledging and resolving issues that divide us is a good thing. It’s what separates us from the apes... “ Vernon Felton, Frame of Mind -- Bike, 8 (4), May 2001 Controversy

369 “The work life of a project manager is a life of conflict. Although conflict is not necessarily bad, it is an issue that has to be resolved by the project manager. Without excellent negotiation skills, the project manager has little chance for success.” Taylor, J A survival guide for project managers. AMACON. Managing Conflict

370 Mitigating The Bad Effects of Controversy Cooperative Context Positive Interdependence – Commitment to a Common Goal Individual and Group Accountability Face-to-Face Promotive Interaction Teamwork Skills Group Processing Heterogeneity Among Members Distribution of Information Skilled Disagreement Managing Controversy

371 Rules for Constructive Controversy 1.I am critical of ideas, not people. I challenge & refute the ideas of the opposing group, but I do not personally reject them. 2.I remember that we are all in this together, sink or swim. I focus on coming to the best decision possible, not on winning. 3.I encourage everyone to participate & to master all relevant info. 4.I listen to everyone’s ideas, even if I don’t agree. 5.I restate what someone has said if it is not clear. 6.I first try to bring out all the ideas & facts supporting both sides, and then I try to put them together in a way that makes sense. 7.I try to understand all sides of the issue. 8.I change my mind when evidence clearly indicates I should Managing Controversy

372 EVERY member is responsible for the team ’ s progress and success. Attend all team meetings and be on time, Come prepared. Carry out assignments on schedule. Actively l isten to & show respect for contributions of other members CONSTRUCTIVELY criticize ideas, not persons. Resolve conflicts constructively, Pay attention, avoid disruptive behavior like holding side conversations Only one person speaks at a time. Everyone participates, no one dominates. Be succinct, avoid long anecdotes and examples. No rank in the room. Respect those not present. Ask questions when you do not understand. Attend to your personal needs at any time but minimize team disruption. HAVE FUN!! ? Adapted from Boeing Aircraft Group Team Member Training Manual BOEING Code of Cooperation

373 Help each other be right, not wrong. Look for ways to make new ideas work, not for reasons they won't. If in doubt, check it out! Don't make negative assumptions about each other. Help each other win, and take pride in each other's victories. Speak positively about each other & your organization at every chance. Maintain positive mental attitude no matter what the circumstances. Act with initiative and courage, as if it all depends on you. Do everything with enthusiasm; it's contagious. Whatever you want; give it away. Don't lose faith. Have fun FORD Code of Cooperation

374 Strategies for Dealing With Conflict Withdrawing: Neither the goal nor the relationship are important - withdraw from the interaction. Forcing: The task is important but not the relationship - use all your energy to get the task done. Smoothing: The relationship is more important than the task. - work to be liked and accepted. Compromising: Both task & relationship important but there is lack of time - you both gain and lose something. Confronting: Task & relationship are equally important. - define conflict as a problem-solving situation and resolve through negotiation. Managing Conflict

375 Which strategies do effective team members use? Ineffective team members? Under what conditions are each of these conflict strategies important? What words and phrases are needed to set up each strategy? Managing Conflict

376 Blake & Mouton Conflict Model - Importance of the Goal - Importance of the Relationship

377 Heuristics for dealing with conflicts : 1.Do not withdraw from or ignore the conflict. 2.Do not engage in "win-lose" negotiations. 3.Assess for smoothing. 4.Compromise when time is short. 5.Confront to begin problem-solving negotiations. 6. Use your sense of humor. Managing Conflict

378 A confrontation is the direct expression of one's view of the conflict and one's feelings about it while inviting the opposition to do the same. Suggested guidelines for confrontation are: 1. No "hit-and-run": confront only when there is time to jointly define the conflict and schedule a negotiating session. 2. Openly communicate: express feelings about & perceptions of issues involved in the conflict, & try to do so in minimally threatening ways. 3. Seek 1 st to understand: accurately & fully comprehend opponent's views of the feelings about the conflict. A successful confrontation sets up opportunity to negotiate. Managing Conflict

379 Skilled Disagreement 1.Define Decision as a mutual problem, not as a win- lose situation. 2.Be critical of ideas, not people (Confirm others' competence while disagreeing with their positions). 3.Separate one's personal worth from others' reactions to one's ideas. 4.Differentiate before trying to integrate. 5.Take others' perspectives before refuting their ideas. 6.Give everyone a fair hearing. 7.Follow the canons of rational argument. Managing Conflict

380 Escalation of Conflicts – Strategies for Resolving Informal Negotiation Formal Negotiation Mediation Third-Party Mediation Arbitration Binding Arbitration Litigation Managing Conflict

381 Negotiation is a conflict resolution process by which people who want to come to an agreement, but disagree about the way to resolve, try to work out a settlement. Managing Conflict

382 Recommended steps in conflict negotiation: 1.Define the conflict mutually. 2.Communicate feelings and positions. 3.Communicate cooperative intentions. 4.Take the other person's perspective. 5.Coordinate the motivation to negotiate. 6.Reach agreement satisfactory to both sides -- SEEK WIN-WIN OR DON’T NEGOTIATE. Managing Conflict

383 Negotiating Guidelines 4 Steps in Principled Negotiation 1.Separate the people from the problem 2.Focus on interests, not positions 3.Create options 4.Insist on standards Fisher & Ury - Getting to Yes Managing Conflict

384 Promoting Controversy 1. Present Viewpoints. 2. Highlight Disagreements. 3. Be Impartial and Rational. 4. Require Critical Evaluation. 5. Assign Devil’s Advocate Role. 6. Use Advocacy Subgroups 7. Have “Second Chance” Meetings Managing Conflict

385 Star Tribune 12/3/98

386 Job-related fatalities up in '04 John Vomhof Jr.John Vomhof Jr. Staff Writer, The Business Journal – 8/25/2005 There were 80 fatal work-related injuries recorded in the state in 2004, the Minnesota Department of Labor & Industry reported Thursday. That is up from 72 in 2003, and one less than in The state averaged 74 work-related deaths from 1999 to 2003.Minnesota Department of Labor & Industry In 2004, the agriculture industry recorded the most worker fatalities, with 18; the industry had 19 deaths in 2003 and 21 in Construction had 16 fatalities in 2004, an increase from 10 in 2003 and 15 in Nine government workers were fatally injured in 2004, up from three in 2003, but down from 12 in Transportation incidents accounted for 29 of the 80 work-related deaths in That compares to 30 in 2003 and 44 in Contact with objects and equipment led to 18 fatalities in 2004, while assaults and violent acts killed 11. Falls also led to 11 work-related deaths. Women accounted for seven of the 80 people fatally injured on the job in The Census of Fatal Occupational Injuries is conducted annually by the U.S. Department of Labor's Bureau of Labor Statistics. There were a total of 5,703 fatal work injuries recorded nationwide in Health & Safety

387 Cause Deaths Falls 377 Transportation 283 Contact with Objects, Equipment 200 Harmful Substances, Environment 186 Violence 32 Other 29 Source : U.S. Department of Labor, Star Tribune 12/3/98 Causes of Constr. Deaths

388 Star Tribune, 12/3/98, Two killed in accident at Piper Site, By Joy Powell Two electricians were killed at a downtown Minneapolis construction site on 12/2/98, after a 10,000-pound steel column being moved by a crane slipped off its mark and slammed into a beam. That apparently dislodged a storage bin weighing more than a 1,000 pounds that was resting on the beam. The bin, full of nuts and bolts and studs, crashed through eight floors to the ground. Darryl J. Hilgendorf, 49, of Minneapolis, and a second worker whose name wasn’t released died in the 9:20 a.m. accident. They were working on the 6 th floor of the Piper Jaffray Center under construction at S. 8 th St. and Nicollet Mall when they were either hit by the bin or fell through the hole alongside it. “We’re just sick about this”, said Robert Cutshall, vice president of construction for Ryan Companies, the general contractor. ”We feel terrible, and our hearts go out to the families of these two men killed today”. A Minneapolis building inspector is also expected to tour the site today, and state investigators will continue to look into the case. Workers were building the 8 th story of a 30 story tower. They had laid decking, sheets of corrugated steel 1/16 th of an inch thick, that will have concrete poured on them to make floors. Health & Safety

389 History: Other Construction Fatalities in the Twin Cities June 1992, Minnesota Zoo: A worker on the zoo’s amphitheater was fatally injured when a 400-pound fixture holding 8 bird cages fell on him. May 1991, Mall of America: One man died and another was injured when scaffolding they were on collapsed. April 1991, Mall of America: One man died and two other workers were injured when concrete flooring collapsed in a mall parking garage. April 1990, Lake St. Marshall Av. bridge: A worker fell 90 feet to his death when a concrete arch span of the new bridge collapsed into the Mississippi river. April 1990, Minneapolis Veterans Medical Center: A construction worker was killed when a section of crane he was helping dismantle collapsed on him October 1989, Cray Research, Inc.: A fall from a scaffold killed a worker at the Eagan site of a Cray building. Star Tribune 12/3/98, by Linda Scheimann and James Walsh Health & Safety

390 Workers Workers – 100,000s Deaths Deaths – 100s Health & Safety Death rate Death rate – per 100,000 workers Disabling injury rate Disabling injury rate – per 1,000 workers

391 What responsibilities do engineers and PMs have for health and safety? What can PMs do to minimize risks and make the workplace safer? Health & Safety

392 What is ethics? –Definition –Fundamentals –Codes of ethics Why do we care about ethics? Ethics Outline

393 Ethics provide a systematized framework for making decisions where values conflict What Is Ethics??

394 EthicalEthical – decision-making in a systemic manner that conforms to accepted professional standards of conduct MoralMoral – decision-making based on principles of right and wrong behavior LegalLegal – decision-making conforming to rules of the law Source: WWWebster Dictionary Differentiating the Confusion

395 Trust is defined as “certainty based on past experience” …. ethics concerns concepts of the individual or group by which actions are judged “right” or “wrong.” Source: J Campbell Martin Systems of ethics are used to guide our decision-making and behavior in human-to-human relationships Why Is Ethical Behavior Important??

396 There are many systems of ethics The two major theories: –Decisions are made on the basis of the consequences of an act or decision –Decisions are made on the basis of the morality of acts (is act right or wrong?) Systems of Ethics

397 Is the commonly made decision always the right one ? Is the legal decision always the morally right decision? Is the morally right decision always the one in your best interest? Is the morally right decision always the most economical? Is following orders that are not proper a legal or a moral defense? Ethics – What Guides Your Choices?

398 Attributed to Kohlberg Preconventional level - Moral behavior or actions are judged by the person the behavior or actions benefits. e.g. to a child taking a toy from another child is moral (ethical.) Behavior can be modified by desire to avoid punishment or to seek approval. Fundamentals – Moral Development

399 Conventional level - behavior is based on the norms of the family, group or society that are accepted. Most adults do not go beyond this level. Postconventional level - At this level the individual is autonomous and can ask “what is best?” Individuals are guided by integrity, self respect and respect for others. Fundamentals – Moral Development

400 Attributed to Mill Balance between good and bad consequences. Utilitarianism - acts should always maximize utility. Utility Theory

401 Attributed to Kant Duties - honesty, fairness, commitment, gratitude, Duties –show respect for others, –express moral imperatives, and –are universal. Duty Theory

402 Attributed to Kant. Duties exist because of the rights of others. Rights are to –life, –liberty, and –property gained by one’s labor. Human Rights Theory

403 Attributed to Aristotle Moral virtues represent a balance between extremes between excess and deficiency in conduct, emotion, desire and attitude. Virtues Theory

404 A dilemma is a choice between two (or more) options that are fundamentally opposed and which carry generally equal weight. “Engineers are always confronted with two ideals, efficiency and economy, and the world’s best computer could not tell them how to reconcile the two. There is never ‘one best way.’ Like doctors or politicians or poets, engineers face a vast array of choices every time they begin work, and every design is subject to criticism and compromise.” Source: Billington, D.P., 1986, “In defense of engineers,” The Wilson Quarterly, January. Ethics – The Dilemma

405 “Treat others as you would want them to treat you” Engineering ethics is important in –interpersonal relationships –developing products and facilities –impacting future generations Ethics in Practice

406 If a builder builds a house for man and does not make its construction firm and the house collapses and causes the death of the owner of the house - that builder shall be put to death. it destroys property, he shall restore whatever is destroyed, and because he did not make the house firm he shall rebuild the house which collapsed at his own expense. If a builder builds a house for a man and does not make its construction meet the requirement and a wall falls - that builder shall strengthen the wall at his own expense. The Code of Hammurabi (2250 BCE) Ethics in Practice

407 I recognize academic integrity as essential to the University of Minnesota’s and its students’ equitable and uncompromised pursuit of their joint endeavors. As a student I promise to practice it to the best of my ability and to do nothing that would give me unfair advantage at the expense of my fellow students. If I cheat in spite of making this declaration, I expect to be penalized according to the offense, up to and including notation of cheating recorded on my transcript and permanent expulsion from the University of Minnesota. (accessed 4/25/00) University of MN Honor Code

408 Our Ethical Values (Lockheed-Martin) HONESTY: to be truthful in all our endeavors; to be honest and forthright with one another and with our customers, communities, suppliers and shareholders. INTEGRITY: to say what we mean, to deliver what we promise, and to stand for what is right. RESPECT: to treat one another with dignity and fairness, appreciating the diversity of our workforce and the uniqueness of each individual. TRUST: to build confidence through teamwork and open, candid communication. RESPONSIBILITY: to speak up – without fear of retribution – and report concerns in the work place, including violations of laws, regulations and company policies, and seek clarification and guidance whenever there is doubt. CITIZENSHIP: to obey all the laws of the United States and the foreign countries in which we do business and to do our part to make the communities in which we live a better place to be.

409 PM Ethics Preamble: Preamble: In the pursuit of the PM profession, it is vital that PMI members conduct their work in an ethical manner in order to earn & maintain the confidence of team members, colleagues, employees, employers, clients, the public, & the global community Member Code of Ethics: Member Code of Ethics: As a professional in the field of PM, I pledge to uphold and abide by the following: I will maintain high standards of integrity & professional conduct I will accept responsibility for my actions I will continually seek to enhance my professional capabilities I will practice with fairness & honesty I will encourage others in the profession to act in an ethical & professional manner Project Management Institute

410 Engineering Ethics Engineers, in the fulfillment of their professional duties, shall: Hold paramount the safety, health and welfare of the public. Perform services only in areas of their competence. Issue public statements only in an objective and truthful manner. Act for each employer or client as faithful agents or trustees. Avoid deceptive acts. Conduct themselves honorably, responsibly, ethically, and lawfully so as to enhance the honor, reputation, and usefulness of the profession. National Society of Professional Engineers (NSPE)

411 Ethical Decision Evaluation Possible Process 1.Problem Definition Identify ethical issues Determine relevant facts Identify/Gather required missing data 2.Determine relevant ethical principles 3.Discuss practical constraints 4.Identify possible solutions Seek ways to avoid the original problem List action items 5.Make preliminary judgments (apply evaluation tests) 6.Review decisions and synthesize discussion into a solution

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413 Ethics Evaluation Tests Harm Test: Does this option do less harm? Publicity Test: Would I want my choice to appear in the newspaper next to my name? Mother Test: What if my mom knew about the choice I made? Defensibility Test: Could I defend my choice before a committee of my peers (or others)? Reversibility Test: Would I think the choice was good if I were the one affected by it? Colleague Test: What do my colleagues say when I describe the problem and my solution? Professional/Organizational Test: What might ASCE (IIE, IEEE, ASME, etc) say about my choice?

414 Ethics EvaluationTests Is it honorable (would you hide this action from anyone)? Is it honest (does it betray a trust)? Does it fall within your area of competence? Does it avoid a conflict of interest (will your judgment be biased)? Is it fair (does it violate the legitimate interests of others)? Is it considerate (does it violate privacy or confidentiality)? Is it conservative (in terms of time and resources required)?

415 You're sitting across from a peer of yours, who is also a good friend on a professional level, who you know is trying to get a small business up and running "on the side." You already have recognized that he is, frankly, not the highest performer. Over the past several weeks, you have also noticed that he is doing things for his business while at work. Today, you notice that he has been holding a phone call with someone about his side business (not chatting, but actually conducting business) and that call is now just into the start of the second hour. What do you do?

416 You are attending a conference in the U.S. as a representative of your company. A supplier passes out a small electronic gadget, valued at about $40, to everyone at the meeting. What do you do? 1.Accept the thoughtful gesture – since the gift is valued under $50, there is no need to report it. 2.Accept the gift, but be sure and report it to your manager. If your manager tells you to return it, you are required to comply. 3.Accept the gift, if declining puts you or the company in a awkward position. Then, immediately consult the Ethics Office for disposition. 4.Politely refuse to accept the gift. (Ethics Challenge -- Case 6)

417 You work in Quality Assurance. You rejected some parts as non- conforming to specifications, but your manager told you to accept the part “As Is.” You don’t agree with the decision. What do you do? a)Do nothing. It’s the manager’s decision to make. b)Discuss it with your manager. c)Call the Ethics HelpLine. d)Ask the engineers who are responsible for the specification to clarify the situation. (Ethics Challenge -- Case 18)

418 Employees in the department have noticed that your supervisor spends a good portion of his day doing homework for a company-sponsored college course. He also spends a significant amount of time making phone calls that they suspect are personal, and may be made a company expense. What should you do? a)Tell the employees to just do their work & mind their own business. b)Tell the employees that you don’t want to risk your job by becoming involved. c)Suggest that your fellow employees contact the Ethics Officer or another company official. d)Raise the issue directly with your supervisor. (Ethics Challenge -- Case 24)

419 In a department meeting, your supervisor takes credit for some excellent work done by an absent colleague. What do you do? a)Put the word out to your fellow workers as to who really did the work. b)Seek a private meeting with the supervisor in order to make sure your colleague gets proper credit. c)During an informal conversation with “the big boss,” casually let it slip that your colleague did not get the credit he deserved on a recent project. d)Inform your colleague as to what took place, and let him take whatever action he desires. (Ethics Challenge -- Case 29)

420 A co-worker is injured on the job. You are a witness and what you saw reflects poorly on the company. What do you do? a)Don’t get involved b)Contact the injured co-worker and offer to testify on her behalf. c)Report what you saw to the company. d)Protect the company by refusing to testify as a witness for the injured person. (Ethics Challenge -- Case 30)

421 When a particular male supervisor talks to any female employee, he always addresses her as “Sweetie.” You have overheard him use this term several times. As the supervisor’s manager, what should you do? a)Nothing, since no one has complained. b)Talk to the supervisor and explain that, while he may have only good intentions, his use of “Sweetie” could be offensive to employees and must stop. c)Order the supervisor to call an all-hands meeting to discuss the company policy on sexual harassment. d)At the next staff meeting, remind all supervisors of their obligation to maintain a professional work environment, free of discrimination or harassment of any kind. (Ethics Challenge -- Case 42)

422 You work in Production Control. You plan to add a porch to your house, and you visit a lumberyard to get ideas and a price. During the discussion, the sales manager says, “Oh, you work for the XYZ company. They buy a lot from us, so I’m going to give you a special discount.” What do you do? a)Like finding a $20 bill on the street, take the discount. When you get back to the office on Monday, ask the supervisor if all employees were eligible for the discount. b)Say “I work for a different division of the XYZ Company – am I still eligible for the discount?” c)Ask for clarification – “Is that special discount available to all XYZ employees?” d)If a deal sounds too good to be true, it probably is. (Ethics Challenge -- Case 44)

423 A subordinate (direct report) on one of your projects has trouble getting along with others. What do you do? a)Don’t get involved. b)Confront the worker, indicating what needs to change, how it needs to change, how you will monitor for improvement, and working with the employee to come up with solutions, etc. c)Report what you saw to your manager. d)Protect the company by documenting the problem.

424 As a senior research scientist, you receive a research paper for peer review. The paper essentially duplicates research you are writing for publication. If this paper is published before your paper you will be “scooped” in the profession. Christmas holidays are coming – and you had planned to use the free time to complete your paper and submit it for open literature review. Reviewing the competing paper will take valuable time, and allowing it to be published first will drastically affect your career. What do you do? a)Without reading the paper, and knowing its contents could affect your conclusions, you return the manuscript to the journal editor, explaining your situation. Then you quickly finalize your paper and submit it. b)Let Christmas holidays “conveniently” delay the review, then provide negative review comments, knowing that this will delay publication. c)With the editor’s permission, contact the other author to see if you might combine efforts and produce an even better paper. d)Review the paper, provide objective comments and return it promptly. (Ethics Challenge -- Case 47)

425 As an engineer, you have a duty to protect the safety of workers and the public As an engineer, you also have a duty to respect the interests/desires of your employer or client At times, these two goals may be at odds Having a basis on which to evaluate the ethics of decisions is extremely important Ethics Summary

426 Project Closure Also known as: Project Termination Project Administrative Closure Project Feedback Project Audit Why should this be a formal, pre-planned activity rather than just an ad hoc, deal with it as it happens situation?

427 Project Closure Closure activities?  Verify product/service output  Closeout financial system  Gather lessons learned  Update records  Complete final project performance reporting  Archive records Closure results/outputs?  Project Closure/Formal Acceptance  Lessons Learned Documents  Project Archives  Released Resources

428 Project Closure Verify product/service output Does/Did it do everything you said it would? As judged by the CUSTOMER Partly objective judgment based on hard metrics Is the customer satisfied? As judged by the CUSTOMER Partly subjective judgment What might make customer dissatisfied even though the objective evidence says it was good?

429 Project Closure - Financial Closeout financial system “Collect” revenue What do you do if revenue is to be paid you over a time period? Pay final bills How do you “close out” a long term bill? Complete cost records What records? How does organization structure affect how this is handled?

430 Project Closure – Post Mortem Gather lessons learned Sometimes called “post mortem” Analyze what went right and what went wrong on project Analyze what would have been done differently in hindsight Quite a few companies fail to do this at all Most companies try to do this in one meeting at the end Best practice: Plan for “interim” evaluation along the way Have the meetings necessary to evaluate outcome Get information via “non meetings” also

431 Project Closure - Archiving Update and Archive records Finalize project records Put all files, letters, correspondence, and other records of the project into an ORGANIZED file Ensure the organized file is in a place that is accessible by the appropriate people for future projects How would you protect the records for future use? Update skill set information for resources

432 Project Closure Complete final project performance reporting Analyze, document, and report success and effectiveness of project

433 Project Closure Closure results/outputs?  Project Closure/Formal Acceptance “Last minute” documents to customer As Builts Manuals A formal document of acceptance  Lessons Learned Documents  Project Archives  Released Resources Final resources need formal leave from the project The PM can check out but can never leave

434 Project Management Office (PMO) –Not very standard in objective/work –May be responsible for providing support functions (project coordination, other admin functions), to providing “process ownership” and training, to actually being responsible for project results Sometimes known by other names –Project Management Process Group –Project Management Center Of Excellence –Program Management Office Project Management Office

435 PM Miscellaneous - PMI Project Management Institute (PMI) and Various Engineering Discipline Institutes Valuable education and extra insight Help make you that extra bit competitive Benchmarking opportunity Networking, Networking, Networking

436 PM Miscellaneous - PMMM Project Management Maturity Model (PMMM) Organizations with a solid project management infrastructure achieve an average of 20 % improvements in productivity, customer satisfaction, cost reductions, & ROI. From "The Value of Project Management in Organizations," a report based on research conducted by Project Management Solutions Inc. & The Center for Business Practices

437 PM Miscellaneous - PMMM Project Management Maturity Model (PMMM) Progressive development of an enterprise-wide project management approach, methodology, strategy, and decision-making process. Appropriate level of maturity will vary by organization based on specific goals, strategies, resource capabilities, scope, needs, etc. Maturity to which an organization should strive is determined during a detailed assessment conducted by a professional PM consulting team. The organization has achieved full project management maturity when it has met the requirements and standards for project management effectiveness as defined by the Project Management Maturity Model and can demonstrate improvements like organizational efficiency, on-time project delivery, cost control/controlled cost reductions, and profitability.Project Management Maturity Model

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439 My PM Words To Live By Learn how your business works! How the business makes money How what you do contributes to making money How you can do things better to make money How you can avoid doing things that will hurt other parts of the business’ ability to make money

440 In order to win the game, you must score more than your opponent. Knowing that even the best athlete only scores a certain percentage of the times s/he makes an attempt, to increase the number of points s/he scores, s/he must take more shots and/or improve her/his skills. Those are the only choices available. A new player, particularly one without a great deal of natural talent, can improve his/her percent of shots scored to shots taken through diligent practice. Practice with the help of an experienced coach can increase the percentage even further. There comes a point where the athlete will score fewer and fewer additional points for every hour spent practicing (the law of diminishing returns). Her/his gains from learning fall off more and more drastically. That doesn’t mean the athlete should stop practicing! It only means s/he needs to find another way of increasing the chances of scoring. Short of cheati